Walnut v. Wade

• Decision Date: 01 October 1880
• Citation: 26 L.Ed. 526,103 U.S. 683
• Parties: WALNUT v. WADE
• Court: U.S. Supreme Court

103 U.S. 683

103 U.S. 683

26 L.Ed. 526

WALNUT v. WADE.

October Term, 1880

ERROR to the Circuit Court of the United States for the Northern District of Illinois.

The facts are stated in the opinion of the court.

Mr. William C. Goudy and Mr. Allan C. Story for plaintiff in error.

Mr. Thomas S. McClelland and Mr. George A. Sanders for the defendant in error.

MR. JUSTICE WOODS delivered the opinion of the court.

This suit was brought upon one thousand and ten coupons for ten dollars each, representing the annual interest on three hundred and twenty-one bonds for the sum of one hundred dollars each, purporting to be executed by the township of Walnut. It was claimed that the bonds were issued in aid of the Illinois Grand Trunk Railway Company, and in payment of stock in that company subscribed for by the plaintiff in error and delivered to it.

The coupons bore the following numbers: From 1 to 200 inclusive, 258, and from 281 to 400 inclusive, and were cut from bonds bearing corresponding numbers.

Before final judgment in the court below the defendant in error took a nonsuit as to all coupons sued on bearing numbers from 301 to 400 inclusive, and withdrew the same from consideration by the court, and left, as the cause of action, only those coupons which bore numbers under 301.

The declaration set out a copy of one of the coupons sued on and averred that all the others were of the same tenor and effect except as to their numbers and date of payment respectively. The copy was as follows:——

'No. 251. Series 4, due January 1, 1875, for $10.

'$10.] WALNUT TOWNSHIP. [No. 251.

'Railroad Bond.

'Interest Warrant.

'Supervisor of Walnut Township pay to bearer, January 1, 1875, ten dollars, at the office of the State treasurer, Springfield, Illinois.

'WM. SANDERS, Town Clerk

'M. KNIGHT, Supervisor.'

The parties waived a trial by jury and submitted the causo to the court upon the issues of fact as well as of law. The court made a special finding of facts, as follows:——

'First, That said defendant town, by its town clerk and supervisor, did, some time in the month of October, A.D. 1870, make its four hundred bonds for the sum of one hundred dollars each, and numbered consecutively from one to four hundred, inclusive, amounting in the aggregate to the sum of forty thousand dollars, said bonds bearing interest at the rate of ten per cent per annum, payable annually, and the principal thereof payable to the Illinois Grand Trunk Railway or bearer on the first day of January, A.D. 1881, and dated January 1, 1871, said interest being evidenced by ten interest-warrants or coupons for ten dollars each, payable to bearer and attached to said bonds, as set out in the declaration in this case. That said bonds recited on their face that they were issued to said Illinois Grand Trunk Railway by authority of an act of the legislature of the State of Illinois, approved March 25, 1869, entitled 'An Act to amend an act entitled 'An Act to incorporate the Illinois Grand Trunk Railway," and 'in pursuance of a vote of the people of said town, had and taken June 25, 1870,' being the same bonds described in plaintiff's declaration. That the coupons described in said declaration were cut from the first three hundred of said bonds, and are all due and unpaid.

'Second, That at some time in the month of January, A.D. 1871, the supervisor and town clerk of said town, acting for and in behalf of said town, subscribed for forty thousand dollars of the capital stock of said Illinois Grand Trunk Railway, and issued and delivered said four hundred bonds to said railway in payment of said subscription, and that within ten or fifteen days therefrom the said railway corporation sold said bonds for value, and applied the proceeds to the construction of its railroad through said town; and that said plaintiff, on the ___ day of September, A. D. 1871, bought the bonds from which the coupons sued on were detached, and also all the coupons thereto attached and unpaid, in good faith, in the New York market, and paid therefor in money at the rate of ninety-two and one-half cents on the dollar, without actual notice of any defence whatever against said bonds or coupons.

'Third, That the said act of the legislature of the State of Illinois, approved March 25, 1869, entitled 'An Act to amend an act to incorporate the Illinois Grand Trunk Railway,' was duly and constitutionally passed by the General Assembly of said State of Illinois.

'Fourth, That the voters of said town, at an election duly called and held in said town, pursuant to the provisions of said act, on the twenty-fifth day of June, 1870, voted that said town would subscribe for thirty thousand dollars of the capital stock of said railway, and in payment therefor issue the bonds of said town for the amount of said stock, bearing ten per cent interest annually, and the principal sum payable in ten years from their date.

'That on the sixth day of August, 1870, at another election called and held in pursuance of the requirements of said act, the electors of said town voted to subscribe for ten thousand dollars of the capital stock of said railway in addition to the thirty thousand dollars voted on the twenty-fifth day of June, 1870, to be paid for in bonds of said town, bearing the same rate of interest and payable at the same time as the bonds to be issued for said thirty thousand dollars subscription.

'Fifth, That the coupons offered in evidence and upon which judgment is rendered in this case were cut from bonds of said issue numbered from one to three hundred.'

Besides this special finding the record contained a bill of exceptions which embodied all the evidence submitted by both parties in the case.

Upon the special finding the court rendered judgment for the plaintiff below for the principal sum due on the coupons, and for interest thereon from the date when they were payable respectively.

The alleged act of the legislature, by authority of which it was claimed the bonds were issued, is as follows:——

'An Act to amend an act entitled 'An Act to incorporate the Illinois Grand Trunk Railway.'

'SECTION 1. Be it enacted by the people of the State of Illinois, represented in the General Assembly, that any city, incorporated town, or township which may be situated on or near the route of the Illinois Grand Trunk railway, west of the city of Mendota, via Prophetstown, to the Mississippi River, may become subscribers to the stock of said railway, and may issue bonds for the amount of such stock so subscribed, with coupons for interest thereto attached, under such limitations and restrictions and on such conditions as they may choose, and the directors of said company may approve the proposition for said subscription, having been first submitted to the inhabitants of such city, town, or township, and approved by them; and upon application of any ten voters of any city, town, or township, as aforesaid, specifying the amount to be subscribed, and the conditions of such subscription, it shall be the duty of the clerk of such city, town, or township immediately to call an election, in the same manner that other elections for said city, town, or township are called, for the purpose of determining whether said city, town, or township will subscribe to the stock of said railway; and if a majority of said votes shall be 'for subscription,' then the corporate authorities of said city, town, or township, and the supervisor and town clerk of said township so voting, shall cause said subscription to be made; and upon its acceptance by the directors of said company shall cause bonds to be issued in conformity with said vote, which bonds shall not be of less denomination than one hundred dollars, and in no case bear a higher rate of interest than ten per cent, provided no such election shall be held until at least thirty days' previous notice thereof shall be given in the manner prescribed by law.

'SECT. 2. It shall be the duty of the proper authorities of any city, town, or township, issuing bonds as aforesaid, to make all necessary arrangements, and provide for the prompt payment of all interest and other liabilities accruing thereon, and to levy such taxes as may be necessary therefor as other taxes are levied by them.

'SECT. 3. This act shall be liberally construed for the purposes intended and expressed therein, and shall be held to be a public act, and shall be in force from and after its passage.' Approved March 25, 1869.

This act was passed while the Constitution of Illinois of 1848 was in force.

That Constitution contained the following provision (sect. 23 of art. 3):——

'Every bill shall be read on three different days in each House . . . and every bill having passed both Houses shall be signed by the speakers of their respective Houses; and no private or local law which may be passed by the General Assembly shall embrace more than one subject, and that shall be expressed in the title.'

On July 2, 1870, a vote was taken by the voters of the State of Illinois, which resulted in the adoption of a new constitution and of certain separate articles, one of which reads as follows, and it took effect that day:——

'No county, city, town, township or other municipality shall ever become subscriber to the capital stock of any railway or private corporation, or make donation to or loan its credit in aid of such corporation: Provided, however, that the adoption of this article shall not be construed as affecting the right of such municipality to make such subscriptions where the same have been authorized under existing laws by a vote of the people of such municipalities prior to such adoption.'

The first assignment of error relates to the finding of the court, that the act by authority of which the bonds in question were issued 'was duly and constitutionally passed.' The pa intiff in error disputes this finding.

A question arises here whether this finding is open to challenge.

One thing is...