Scipio v. Wright - 101 U.S. 665 (1879)
U.S. Supreme Court
Scipio v. Wright, 101 U.S. 665 (1879)
Scipio v. Wright
101 U.S. 665
1. An act authorizing a town to borrow money for aiding in the construction of a railroad provides that
"All moneys borrowed under the authority of this act shall be paid over to the president and directors of such railroad company (now organized, or such company as may be organized, according to the provisions of the general railroad law, passed April 2, 1850) as may be expressed by the written assent of two-thirds of the resident taxpayers of said town, to be expended by such president and directors in grading, constructing, and maintaining a railroad or railroads passing through the City of Auburn, and connecting Lake Ontario with the Susquehanna and Cayuga or the New York and Erie Railroad:"
Held that the taxpayers were not thereby required to
"express -- that is, designate -- the company by name, and that an assent authorizing the money to be paid to the president and directors of a railroad company organized according to the requirements of the general railroad laws for the purpose of constructing a railroad connecting Lake Ontario with the Susquehanna and Cayuga Railroad and passing through the City of Auburn,"
2. A prerequisite to the issue of bonds by town authorities that the written assent of two-thirds of the resident persons taxed in said town, as appearing on the assessment roll made next previous to the time such money may be borrowed, shall be obtained, verified, and filed in the clerk's office of the county, is intended as a protection against a town debt, rather than against the form it might assume after it had been incurred, or when the security for it should be given. And where such prerequisite was coupled with authority to subscribe to the capital stock of a railroad company a sum equal to the amount of the bonds issued, held that they are not invalid because not issued until after the date when the assessment roll referred to was by law required to be completed, the assent having been filed, and the subscription for the stock of the company made, the bonds executed and some of them sold and the proceeds paid on account of the subscription before that date.
3. A statute of New York authorizing towns to subscribe to the capital stock of railroad companies and issue bonds for the purpose of borrowing money therefor, prescribed the manner in which the power conferred should be exercised. It appearing to be the settled construction given by the courts of that state to this statute, under which certain bonds now in suit were issued, and to other similar statutes, that they do not authorize an exchange of bonds for shares of stock, and that a purchaser, with notice that such a disposition of the bonds was made by the town officers, cannot recover in a suit brought upon them, this Court follows this construction of the state statute.
This was an action brought by William P. Wright against
the Town of Scipio, on twenty-five instruments in writing, numbered from 1 to 25, both inclusive, all being alike, except as to their number, and also except that eight of them, being those numbered from 1 to 8, both inclusive, are payable to Slocum Howland or bearer. The others are payable to bearer, no payee being named therein. To all were annexed coupons for the sum of thirty-five dollars each, differing only as to the time when payable, there being one coupon for each installment of semiannual interest on each bond, the first being due July 1, 1858, and the last, Jan. 1, 1873. One of which instruments is in the words and figures following, viz.:
"No. 2] STATE OF NEW YORK, COUNTY OF CAYUGA [$1,000"
"Seven percent loan, not exceeding $25,000"
One thousand dollars
"Be it known that the Town of Scipio, in the County of Cayuga and State of New York, in pursuance of an act of the legislature of said state, entitled"
"An Act to authorize any town in the County of Cayuga to borrow money for aiding in the construction of a railroad or railroads from Lake Ontario to the New York and Erie or Cayuga and Susquehanna Railroad,"
"passed April 16, 1852, and for the purpose of aiding the construction of the Lake Ontario, Auburn, and New York Railroad, owes and promises to pay to Slocum Howland or bearer one thousand dollars, with interest at the rate of seven percent, payable semiannually on the first days of January and July in each year, on surrender of the coupons hereto attached, at the Bank of the State of New York, in the city of New York, the principal to be reimbursable at the same place at the expiration of twenty years from the first day of January, 1853."
"In testimony whereof, the supervisor and commissioners of the Town of Scipio have, pursuant to the provisions of the act aforesaid, and the written assent of two-thirds of the resident taxpayers of said town, obtained and filed in the office of the clerk of the County of Cayuga, hereunto subscribed their names this twentieth day of May, A.D. 1853."
One of the coupons next to said instrument No. 2 is in the words and figures following:
"The Town of Scipio, in the County of Cayuga, hereby acknowledges that there will be due the bearer thirty-five dollars, payable at the Bank of the State of New York, in the City of New York, on the first day of July, 1858, being interest due on that day on bond No. 2."
Wright recovered judgment, and the town removed the case here.
The remaining facts and the statutes bearing upon the case are stated in the opinion of the court.