113 U.S. 227 (1885)


Supreme Court of United States.

Decided January 26, 1885.

Attorney(s) appearing for the Case

Mr. A. Bergen for plaintiff in error. —

Mr. Wallace Pratt and Mr. Jefferson Brumbach for defendant in error.

MR. JUSTICE BLATCHFORD delivered the opinion of the court. He recited the facts, as above stated, and continued:

It is not disputed that the recital, in the bond, that it was issued under the act of February 26, 1866, Sess. Laws of Kansas, 1866, ch. 24, p. 72, was an error. That act authorized county subscriptions to the stock of railroad companies, when authorized by a majority of the votes cast at a county election, if twenty days' notice of the election had first been given "in some newspaper published and having general circulation in the county, or, in case there be no paper published in the county, then by written or printed notices posted up in each election precinct, twenty days previous to the day of such election;" and it authorized bonds of the county to be issued in payment for the stock. But it was repealed by the enactments of sections 1 and 2 of chapter 119 of the General Statutes of Kansas, of 1868 (pp. 1123, 1127), and for it were substituted sections 51, 52 and 53 of chapter 23 of such General Statutes of 1868, entitled "An Act concerning private corporations," pp. 203, 204. Those sections authorized subscriptions by counties to the stock of railway companies created by Kansas, if the subscription was first assented to by a majority of the qualified voters of the county, at an election of which notice should be given "at least sixty days before the holding of the same." By the act of February 27, 1869, Sess. Laws of Kansas, 1869, ch. 29, p. 108, sections 51, 52 and 53 of chapter 23 of the General Statutes of 1868, were repealed, and the following sections were substituted:

"SEC. 51. The board of county commissioners of any county, the city council of any city, or the trustees of any incorporated town, may subscribe for and take stock, for such county, city or town in, or loan the credit thereof to, any railway company duly organized under this or any other law of the State or Territory of Kansas, upon such conditions as may be prescribed by the aforesaid county, city or town authorities; Provided, however, that a majority of the qualified voters of such county, city or town, voting upon such question of subscribing and taking such stock, shall, at a regular or special election to be held therein, first, assent to such subscription and the terms and conditions prescribed as aforesaid, upon which the same shall be made; and provided, further, that when such assent shall have been given, to such subscription as aforesaid, it shall be the duty of the said county, city or town authorities, as the case may be, to make such subscription.

"SEC. 52. A special election may be ordered by the county commissioners of any county, the city council of any city, or the corporate authorities of any town, at any time, for the purpose of ascertaining the sense of the voters of such county, city or town, as contemplated in the preceding section. Notice of such election shall be given at least thirty days before the holding of the same, and the question or questions to be submitted thereat shall be set forth in such notice.

"SEC. 53. Upon the making of such subscription, such county, city or town shall thereupon become, like other subscribers to such stock, entitled to the privileges granted, and subject to the same liabilities imposed by this act, or by the charter of the company in which such stock is taken, except as the same shall be varied and limited by the terms and conditions upon which the said subscriptions shall have been authorized and made. And it shall be the duty of the board of county commissioners or city council or trustees of the town, making such subscription as aforesaid, to pay for the same and the stock thereby agreed to be taken by such county, city or town, by issuing to the company entitled thereto, the bonds of such county, city or town at par, payable at a time to be fixed, not exceeding thirty years from the date thereof, bearing interest at the rate of seven per cent. per annum, and with interest coupons attached."

It is very clear that there was legislative authority, under the act of 1869, for the issuing of the bonds in question. There was an election, and the requisite majority of those who voted assented to the proposition for the subscription to the stock and the issue of the bonds, and the subscription was made by the proper officers, and they issued the bonds, and when it was certified to them that the road was completed to Garnett they authorized the bonds to be delivered to the company, and the bonds were delivered in payment for the subscription and for the stock agreed to be taken. The only question made is as to the notice of the election.

It is contended that the recital in the bond, that it is issued under the provisions of the act of 1866, is a recital that only twenty days' notice of the election was given. But the meaning of the act of 1866 was, that at least twenty days' notice should be given, and even if the recital amounted to a statement that the notice prescribed by that act had been given, it would not necessarily mean that exactly twenty days' notice, or only twenty days' notice, had been given.

In the case of McClure v. Township of Oxford, 94 U.S. 429, cited by the defendant, the bonds were issued under an act which took effect only eighteen days before the election was held, and, as the act required thirty days' notice of the election, it was held that the face of the bond, with the act recited in it, showed that the statute had not been complied with. Wherever the want of legislative authority appears by the face of the bond, taken in connection with the act which the bond mentions, every taker of the bond has notice of the want of power. But no such case is here presented.

The bond recites the wrong act, but if that part of the recital be rejected, there remains the statement, that the bond "is executed and issued" "in pursuance to the vote of the electors of Anderson County, of September 13, 1869." The act of 1869 provides, that when the assent of a majority of those voting at the election is given to the subscription to the stock, the county commissioners shall make the subscription, and shall pay for it, and for the stock thereby agreed to be taken, by issuing to the company the bonds of the county. The provision of section 51 is, "that when such assent shall have been given," it shall be the duty of the county commissioners to make the subscription. What is the meaning of the words "such assent"? They mean the assent of the prescribed majority, as the result of an election held in pursuance of such notice as the act prescribes. The county commissioners were the persons authorized by the act to ascertain and determine whether "such assent" had been given; and necessarily so, because, on the ascertainment by them of the fact of "such assent," they were charged with "the duty" — that is the language — of making the subscription, and the duty of issuing the bonds. They were equally charged with the duty of ascertaining the fact of the assent.

The record evidence of their proceedings shows, that their order for the election was made thirty-three days before the election was to be held; that they met "pursuant to law for the purpose of canvassing returns of the election;" that they discharged that duty and certified that there was a majority of votes in favor of the proposition; that, in November, 1869, they resolved that, "in accordance with the vote, heretofore had and taken, of the electors of said county to that effect," they subscribed for the stock; and that, in July, 1870, in their order authorizing the bonds to be delivered by Joy to the company, they recited that the bonds were issued "according to the provisions of the vote of the electors of said county." In view of all this, the statement by the commissioners, in the bond, that it is issued "in pursuance to the vote of the electors of Anderson County, of September 13, 1869," is equivalent to a statement that "the vote" was a vote lawful and regular in form, and such as the law then in force required, in respect to prior notice. The case is, therefore, brought within the cases, of which there is a long line in this court, illustrated by Town of Coloma v. Eaves, 92 U.S. 484, 491, and which hold, in the language of that case, that, "where legislative authority has been given to a municipality or to its officers to subscribe for the stock of a railroad company, and to issue municipal bonds in payment, but only on some precedent condition, such as a popular vote favoring the subscription, and where it may be gathered from the legislative enactment, that the officers of the municipality were invested with the power to decide whether the condition precedent has been complied with, their recital that it has been, made in the bonds issued by them and held by a bona fide purchaser, is conclusive of the fact, and binding upon the municipality; for the recital is itself a decision of the fact by the appointed tribunal." This doctrine is adhered to by this court. Dixon County v. Field, 111 U.S. 83, 93, 94.

In the present case, there was nothing shown to rebut the presumption arising from the production of the coupons, that the plaintiff was prima facie the holder of them for value. The defendant did not show any want, or failure, or illegality, of consideration. By the passage of the first resolution of November 5, 1869, the board thereby subscribed for the stock. The transactions between the board, on the one side, and Mr. Joy, as president of the company, and the company, on the other side, before and at the time the bonds were finally delivered to the company, were an acceptance of the subscription. The statute, § 53, provided, that, on the making of the subscription, the bonds should be issued to the company, to pay for the subscription and for the stock agreed to be taken. When the bonds were delivered to the company, the transaction was complete, and the bonds, as they afterwards passed to bona fide holders, passed free from any impairment by reason of any dealing by the board with the stock subscribed for, to which the county became entitled by the issuing and delivery of the bonds. The board may have committed an improper act in parting with the stock, but that is no concern of a bona fide holder of the bonds or coupons.

It is further to be said, that if there was, in fact, any want of proper notice of the election, the omission was only an irregularity in the exercise of an express power to issue the bonds, an irregularity in respect to a step forming part of preliminary conditions, and that the failure of the municipality and of the tax-payers to enjoin the issue or use of the bonds, during the long period from the day of the election, September 13, 1869, until the bonds were registered in March, 1872, when they still belonged to and were in the hands of the company, coupled with the annual payment by the county, for ten years, of the interest on the bonds, are sufficient grounds for holding that the municipality is estopped from defending on the ground of such non-compliance with a condition precedent as is set up in this case, after the bonds have been negotiated for value by the company. The record of the proceedings of the board shows that a tax was levied to pay the interest which fell due January 1, 1871, while the company still held the bonds.

There was no error in overruling the demurrer to the evidence which the plaintiff had given to sustain his case at the time the demurrer was interposed, or in overruling the motion to instruct the jury at that time, that, upon the pleadings and proofs he was not entitled to recover. Upon such evidence, all of which was record evidence, admitted without objection, and involving no disputed question of fact, but only matters of law, the plaintiff was entitled to recover, as has been shown. For the same reasons, it was not error to instruct the jury, at the close of the trial, to find a verdict for the plaintiff. The only defences set up in the answer were those as to the notice of the election and as to the transfer of the stock to Joy. The first resolved itself into a question of law, and the latter was immaterial. The defendant did not ask to go to the jury on any question of fact, and, if a verdict had been rendered for the defendant, it would have been the duty of the court, under the views of the law above laid down, to set it aside.

In Pleasants v. Fant, 22 Wall. 116, 120, this court said, by Mr. Justice Miller, citing Improvement Co. v. Munson, 14 Wall. 442, 448, that "in every case, before the evidence is left to the jury, there is a preliminary question for the judge, not whether there is literally no evidence, but whether there is any upon which a jury can properly proceed to find a verdict for the party producing it, upon whom the onus of proof is imposed." Those cases were cited in Herbert v. Butler, 97 U.S. 319, 320, and this court there said, by Mr. Justice Bradley: "Although there may be some evidence in favor of a party, yet if it is insufficient to sustain a verdict, so that one based thereon would be set aside, the court is not bound to submit the case to the jury, but may direct them what verdict to render." It is true, that, in the above cases, the verdict was directed for the defendant. But where the question, after all the evidence is in, is one entirely of law, a verdict may, at the trial, be directed for the plaintiff, and, where the bill of exceptions, as here, sets forth all the evidence in the case, this court, if concurring with the court below in its views on the questions of law presented by the bill of exceptions and the record, will affirm the judgment.

In Bevans v. United States, 13 Wall. 56, a verdict was directed for the United States, in a suit by them on the official bond of a public officer, and the ruling was sustained, the evidence for the plaintiff being all of it documentary, this court saying by Mr. Justice Strong: "The instruction was, therefore, in accordance with the legal effect of the evidence, and there were no disputed facts upon which the jury could pass."

The same rule was applied in Walbrun v. Babbitt, 16 Wall. 577, to the direction of a verdict for the plaintiff, after oral evidence which this court states "was received without objection, and about which there is no controversy," and on which it says it bases its decision. That was a suit to recover the value of goods transferred in fraud of the bankrupt law.

In Hendrick v. Lindsay, 93 U.S. 143, the Circuit Court directed the jury to find for the plaintiffs, in an action on a bond of indemnity, the plaintiffs' evidence being all of it documentary, and the defendant giving no evidence. This court said, by Mr. Justice Davis: "There were no disputed facts in this case for the jury to pass upon. After the plaintiffs had rested their case, the counsel for the defendant announced that he had no evidence to offer; and thereupon the court, considering that the legal effect of the evidence warranted a verdict for the plaintiffs, told the jury, in an absolute form, to find for them. This was correct practice where there was no evidence at all to contradict or vary the case made by the plaintiffs; and the only question for review here is, whether or not the court mistook the legal effect of the evidence."

In Arthur v. Morgan, at this term, 112 U.S. 495, after oral evidence for the plaintiff, there being no evidence for the defendant, the court below had directed a verdict for the plaintiff for the recovery of excessive duties paid under protest, to which direction the defendant had excepted, and this court, treating the question as one of law, as to the proper rate of duty, on undisputed facts, affirmed the judgment.

These decisions are controlling on the point.

Judgment affirmed.


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