Blair v. Cuming County - 111 U.S. 363 (1884)
U.S. Supreme Court
Blair v. Cuming County, 111 U.S. 363 (1884)
Blair v. Cuming County
Argued April 8, 1884
Decided April 21, 1884
111 U.S. 363
Bonds issued by the county commissioners of a county in Nebraska, on behalf of a precinct in that county, to aid a company in improving the water power of a river for the purpose of propelling public grist mills are issued to aid in constructing a "work of internal improvement" within the meaning of the Act of Nebraska of February 15, 1869, as amended by the Act of March 3, 1870, Laws of 1869, p. 92, and Laws of 1870, p. 15, and Gen.Stat. of 1873, c. 35, p. 448.
Although, in such a bond and its coupons, the precinct is the promisor, a suit to recover on such coupons is properly brought against the county.
Where such bonds purport on their face to be issued by the board of county commissioners on behalf of the precinct and are signed by the chairman of the board and attested by its clerk, who is also the clerk of the county, and are sealed with the seal of the county, and the coupons are signed by such clerk, and the bonds refer to the coupons as annexed, the bonds and coupons are issued by the county commissioners.
This was an action brought in the Circuit Court of the United States for the District of Nebraska by the plaintiff in error against the County of Cuming, a body corporate of the Nebraska, to recover the money due on coupons cut from certain bonds. The case was tried on a petition and a demurrer thereto, the latter alleging, as cause of demurrer, that the petition did not state facts sufficient to constitute a cause of action.
By an act of the Legislature of Nebraska, which was passed and took effect February 15, 1869, entitled
"An Act to enable counties, cities and precincts to borrow money on their bonds, or to issue bonds to aid in the construction or completion of works of internal improvement in this state, and to legalize bonds already issued for such purpose,"
as amended by an act passed March 3, 1870, Laws of 1869, p. 92, and Laws of 1870, p. 15, and Gen.Stat. of 1873, c. 35, p. 448, it was provided as follows:
"Section 1. That any county or city in the State of Nebraska is hereby authorized to issue bonds to aid in the construction of any railroad, or other work of internal improvement, to an amount to be determined by the county commissioners of such county or the city council of such city, not exceeding ten percent of the assessed valuation of all taxable property in said county or city, provided the county commissioners or city council shall first submit the question of the issuing of such bonds to a vote of the legal voters of said county or city in the manner provided by chapter nine of the Revised Statutes of the State of Nebraska for submitting to the people of a county the question of borrowing money."
Section 2 enacted that the proposition of the question must be accompanied by a provision to levy a tax annually for the payment of the interest on the bonds as it should become due, and that an additional amount should be levied and collected to pay the principal of the bonds when it should become due; section 3, that the proposition should state the rate of interest the bonds should draw, and when the principal and interest should be made payable; section 4, that if a majority of the votes cast should be in favor of the proposition submitted, the county commissioners or the city council should enter the proposition and result of record, and publish notice of its adoption, and thereupon issue the bonds, which should continue a subsisting debt against the county or city, until they should be paid, and section 5, that the proper officers of the county or city should cause to be annually levied, collected, and paid to the holders of the bonds a special tax on all taxable property in the county or city, sufficient to pay the annual interest, as it should become due, and, when the principal should become due, such officers should, in like manner, collect an additional amount to pay the same as it should become due. Section 7 was in these words:
"Any precinct in any organized county of this state shall have the privilege of voting to aid works of internal improvement, and be entitled to all the privileges conferred upon counties and cities by the provisions of this act, and in such cases the precinct
election shall be governed in the same manner as is provided in this act, so far as the same is applicable, and the county commissioners shall issue special bonds for such precinct, and the tax to pay the same shall be levied upon the property within the bounds of such precinct. Such precinct bond shall be the same as other bonds, but shall contain a statement stating the special nature of such bonds."
The petition counts on 188 coupons for $25 each, cut from bonds of the following tenor:
"No. 43 UNITED STATES OF AMERICA $500"
"Dated July 1, 1875"
"County of Coming, State of Nebraska:"
"(West Point Precinct Bond)"
"Know all men by these presents, that the West Point Precinct, in the County of Cuming and State of Nebraska, acknowledges itself indebted to the bearer hereof in the sum of five hundred dollars for value received, which said sum the said West Point Precinct promise and agree to pay to the bearer hereof at the National Park Bank, in the City of New York, on the first day of July, Anno Domini 1895, and also interest thereon at the rate of ten percent per annum semiannually, on the first days of January and July in each and every year ensuing the date hereof, on presentation of the annexed coupons or interest warrants, as they severally fall due at the National Park Bank, in the City of New York, in lawful money of the United States."
"This bond is one of a series of sixty bonds of five hundred dollars each, amounting in the aggregate to thirty thousand dollars, issued by the West Point Precinct, of Cuming County, and State of Nebraska, as authorized by a vote of its legal voters, and in accordance with chapter 35 Rev.Gen. Stat., approved February 15, 1869, and (an) act setting aside the revenue arising from the taxation of works of internal improvements to pay the bonds issued to construct or complete the same."
"These bonds are issued to aid the West Point Manufacturing Company in improving the water power of the Elkhorn River for the purpose of propelling public grist mills, and other works of internal improvement of a public nature in said West Point Precinct. To secure the payment of the principal and interest of
said bonds, the annual revenue and all the taxable property of said West Point Precinct is pledged."
"In testimony whereof, the Board of County Commissioners of Cuming County, State of Nebraska, have caused this bond to be signed on behalf of West Point Precinct, in the County of Cuming and State of Nebraska, by its chairman, attested by its clerk, who has affixed thereto the seal of the said county at the clerk's office in West Point, in the said county, this first day of July, A.D. 1875."
"THOMAS ROEH, Clerk C. L. SIECKE, Chairman"
"[Cuming County seal, Nebraska]"
Each coupon was in the following form:
"The West Point Precinct, Cuming County, State of Nebraska, will pay the bearer twenty-five dollars at the National Park Bank, in the City of New York, on the first day of July, 1877, on bond No. 43."
"No. 43 THOMAS ROEH, Clerk"
The coupons fell due as follows: 16 on July 1, 1877, 43 on January 1, 1878, 43 on July 1, 1878, 43 on January 1, 1879, and 43 on July 1, 1879. The petition alleges that on the first of September, 1875, the defendant made, executed, and delivered the coupons, each of them being signed by the clerk of the county, for semiannual interest on the bond, and that the bonds are special bonds of the county, issued by its board of county commissioners, in behalf of West Point Precinct, a voting district within and a part of the county, in accordance with the provisions of chapter 35, Gen.Stat.Neb. It sets out a copy of one of the bonds and copies of five of the coupons. It avers that on the first of January, 1876, the plaintiff became the purchaser of all of the coupons, in good faith and for a valuable consideration, before they became due and payable; that the only works of internal improvement of a public nature, for which the bonds were so issued to said company, "were the improvement of the water power of the said Elkhorn River, for the purpose of propelling public grist mills" in said precinct in said county; that the improving of said water power
for said purpose
"would and did render the water power of said river available and useful for propelling other works of internal improvement of a public nature, which were or thereafter might be constructed and located upon the said river in said precinct;"
that at the time of the sale and delivery of the bonds to the plaintiff, he had
"no notice or knowledge of any other works of internal improvement of a public nature in aid of which the said bonds were so issued, except the said works specially mentioned and described in said bonds, viz., the improvement of the water power of the Elkhorn River for the purpose of propelling public grist mills"
in said precinct; that the bonds and their attached coupons were
"issued and negotiated by the defendant under and by virtue of a majority vote of the qualified voters of West Point Precinct, a local subdivision of said Cuming County, and in pursuance"
of said Act of February 15, 1869, and that
"the improvement of the water power of the Elkhorn River, to aid which said bonds were issued and negotiated, consisted in constructing a canal for water power purposes in said West Point Precinct."
The circuit court sustained the demurrer, to which ruling the plaintiff excepted, and, as he refused to amend the petition, the court dismissed the action and entered a judgment for the defendant, for costs, and the plaintiff excepted to the judgment. To review the judgment the plaintiff sued out a writ of error.