Empire v. Darlington
101 U.S. 87 (1879)

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U.S. Supreme Court

Empire v. Darlington, 101 U.S. 87 (1879)

Empire v. Darlington

101 U.S. 87

Syllabus

1. Pursuant to the provisions of an Act of the General Assembly of Illinois approved Feb. 28, 1867, and to the result of a popular election duly called, and held June 3, 1867, a township subscribed $50,000 to the capital stock of a railroad company, created under the laws of that state, and it issued its bonds in payment therefor. On Aug. 20, 1869, that company was consolidated with another in Indiana, the new company assuming another name, and, in harmony with the object of said act, providing for the construction of a continuous line of road from a point in Indiana to the initial point of the road in Illinois. An election held in the township, Oct. 12, 1869, for the purpose of ascertaining the sense of its people upon the proposition to subscribe, upon certain conditions, $25,000, for additional stock in aid of the construction and completion of the road of the consolidated company, resulted in favor of the subscription, which being made, bonds to that amount in the customary form, bearing date March 20, 1870, and signed by the supervisor and clerk, were issued in the name of the township and delivered to the company. Each contains a recital that it is issued under and by virtue of a law of the State of Illinois approved Feb. 28, 1867, and in accordance with the vote of the electors of said township, at the special election held Oct. 12, 1869, in accordance with said act, and it pledges the faith of the township for the payment of the said principal sum and interest as aforesaid. The twelfth section of the Act of Feb. 28, 1867, declares that

"To further aid in the construction of said road by said company, any incorporated town or townships in counties acting under the township organization law, along the route of said road may subscribe to the capital stock of said company in any sum, not exceeding $250,000."

Held: 1. That the power of the township to subscribe to the capital stock of the company was not exhausted by the subscription first made after the election held

Page 101 U. S. 88

June 3, 1887. 2. That under said section the power of the township to subscribe was limited in amount only. 3. That the consolidation of the company was authorized by the general statute of Illinois of Feb. 28, 1854. 4. That the power of the township to make the additional subscription was, in its essence, a right and privilege conferred upon the company chartered by the act of 1867 which, under the act of 1854, passed to the consolidated company.

2. The court affirms its ruling in Brooklyn v. Insurance Company,99 U. S. 382, that a decree rendered in a county court in a suit against a railroad company and others declaring that municipal bonds and coupons issued to the company are null and void does not affect the holders of them who did not appear and had only constructive notice of the suit.

Under the provisions of an Act of the Legislature of Illinois, approved Feb. 28, 1867, and in conformity to the result of a popular election duly called and held on the 3d of June, 1867, the Township of Empire in McLean County in that state made a subscription of $50,000 to the capital stock of the Danville, Urbana, Bloomington, and Pekin Railroad Company, a corporation created under the laws of Illinois. That company had by its charter power to locate, construct, and complete a railroad from Pekin through or as near as practicable to certain designated towns to the eastern boundary of the state.

In payment of the subscription, bonds of the township of like amount were issued and delivered to the company.

On the twentieth day of August, 1869, that company consolidated with the Indianapolis, Crawfordsville, and Danville Railroad Company, an Indiana corporation, the consolidated company assuming the name of the Indianapolis, Bloomington, and Western Railway Company. The consolidated railroad formed a continuous line of road from Indianapolis, Ind., to Pekin, Ill.

On the 12th of October, 1869, an election was held in the Township of Empire for the purpose of ascertaining the sense of its people upon the proposition to subscribe, upon certain conditions, the sum of $25,000, as additional stock in aid of the construction and completion of the Indianapolis, Bloomington, and Western Railroad. The election resulted in favor of the subscription, which being made, bonds to that amount

Page 101 U. S. 89

were issued in the name of the township and delivered to the company.

The bonds were in the customary form, dated March 20, 1870, and signed by the township supervisor and clerk. Each one contained a recital that it was issued

"under and by virtue of a law of the State of Illinois entitled"

"An Act to amend the articles of association of the Danville, Urbana, Bloomington, and Pekin Railroad Company, and to extend the powers of and confer a charter upon the same,"

"approved Feb. 28, 1867, and in accordance with the vote of the electors of said township, at the special election held Oct. 12, 1869, in accordance with said act. And the faith of the Township of Empire is hereby pledged for the payment of the said principal sum and interest as aforesaid."

Darlington, who is the holder of some of the bonds and coupons issued March 20, 1870, brought this action against the township to recover thereon. It was admitted in the court below that on April 29, 1878, the Circuit Court of McLean County, Illinois, upon the application of certain taxpayers of the said township, enjoined the further payment of the principal or interest, or any part of the bonds or coupons issued in payment of the said subscription of $25,000; that the bondholders were made parties to that suit by the name of unknown owners and holders; that they were notified of its pendency by publication only; and that subsequently a decree was rendered declaring said bonds and coupons void and perpetually enjoining the assessment and collection of taxes for the purpose of paying them.

The defenses set up by the township are stated in the opinion of the court.

A jury having been waived, the court below rendered a judgment in favor of the plaintiff for $8,178.05 and costs, whereupon the township sued out this writ of error.

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