Oregon v. Jennings
119 U.S. 74 (1886)

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U.S. Supreme Court

Oregon v. Jennings, 119 U.S. 74 (1886)

Oregon v. Jennings

Submitted October 19, 1886

Decided November 15, 1886

119 U.S. 74

Syllabus

Bonds issued by a town in Illinois, signed by its supervisor and town clerk, as a donation to a railroad company, stated that the faith, credit, and property of the town were thereby pledged, "under authority of" an Act of the General Assembly of the state, giving its title and date, and each bond also stated that it and other bonds, giving their numbers and amounts, were "the only hoods issued by said town . . . under and by virtue of said Act." The Act prescribed the general route of the road, and authorized the town to make a donation to the company to aid in constructing and equipping the road, if the donation should be voted for as prescribed. It provided for a written application by voters to the town clerk to have an election held, and the giving by him of notice of the election; that the election should "be held and conducted and return thereof made as is provided by law," and that if a majority of the legal voters voting should vote for the donation, the town should, "by its proper corporate authorities," make the donation as should "be determined at said election," and should issue to the company its bonds, "signed by the supervisor and countersigned by the clerk," and should, "by its proper corporate authority," levy an annual tax to pay interest and principal. The application was made, and the notice given, and the election was held and presided over not by the election judges of the town, but by a moderator and the town clerk, in the manner required for the election of town officers, and resulted in a majority for the donation. The terms of the vote were that the bonds should not be issued, and the vote should be void, unless the road was completed by a day specified. The road was not completed by that day. The supervisor and one of the two justices of the town having resigned, the other justice and the town clerk, on the day before an election for a justice was to be held, appointed a new supervisor, antedating the appointment papers more than three months to the day after the supervisor resigned, and the new supervisor and the town clerk, on the same day, signed the bonds and delivered them to the company. The next day, a new justice and a new supervisor were elected by the people. In a suit against the town to recover on coupons cut from the bonds, by a bona fide holder of the bonds and coupons for a valuable consideration, without notice, it was set up in defense that the officers of the company conspired with the justice and the town clerk and their appointee to have the bonds issued before a new supervisor should be elected by the people.

Held:

Page 119 U. S. 75

(1) The bonds were not void as having been executed through "fraud or circumvention" under the statute of Illinois, Gross' Stat., 1869, vol. 1, 3d ed., c. 73, p. 462, § 11.

(2) The appointment of the supervisor was valid.

(3) The bonds were issued in compliance with a vote of the people held prior to the adoption of the Illinois Constitution of 1870, in pursuance of a law providing therefor within the meaning of section 12 of article 9 of that constitution, although the condition as to the completion of the road was not complied with, because, as against the plaintiff, the recitals in the bonds were made by officers entrusted under the statute with the duty of determining whether the condition had been complied with, and the town was thereby estopped from asserting the contrary.

(4) The election was properly held, though presided over by a moderator, and the donation was therefore authorized under existing laws by a vote prior to the adoption of additional section or article 2 to the Constitution of Illinois within the meaning of that section.

This is an action at law, brought in the Circuit Court of the United States for the Northern District of Illinois by Eliza Jennings against the Town of Oregon, a municipal corporation in the County of Ogle and State of Illinois, to recover $13,510, the amount payable by 193 coupons of $70 each, cut from 24 bonds for $1,000 each, purporting to have been issued by that town. The following is a copy of one of the bonds, all being alike except as to the number and the time when due:

"UNITED STATES OF AMERICA"

"No. 29 State pf Illinois, County of Ogle $1,000"

"OREGON TOWN BOND"

"Know all men by these presents that the Town of Oregon, in the County of Ogle and State of Illinois, is indebted to the Ogle and Carroll County Railroad Company in the full and just sum of one thousand dollars, which sum of money said town agrees and promises to pay on or before the first day of July, 1883, to the said Ogle and Carroll County Railroad Company, or bearer, with interest at the rate of seven percent per annum, payable annually, on the first day of July at the office of the Farmers' Loan and Trust Company of New York, in the City of New York, upon the delivery of the coupons severally hereto annexed, for which payment of principal and

Page 119 U. S. 76

interest, well and truly to be made, the faith, credit, and property of said Town of Oregon are hereby solemnly pledged under authority of an act of the General Assembly of the State of Illinois entitled "An act to amend an act entitled An act to incorporate the Ogle and Carroll County Railroad Company,'" which said act was approved March 30, 1869."

"This bond is one of a series, numbering from 21 to 60, inclusive, for $1,000 each, which bonds, so numbered, together with another series numbered from 1 to 20, inclusive, for $500 each, are the only bonds issued by said Town of Oregon under and by virtue of said act."

"In witness whereof the supervisor and town clerk of the said Town of Oregon have hereunto set their hands this thirty-first day of December, A.D. 1870."

"FRED. H. MARSH, Town Clerk E. S. POTTER, Supervisor"

The date in each bond, "thirty-first day of December, A.D. 1870," is lithographed, like the body of the bond.

On the back of each bond is the following certificate:

"AUDITOR'S OFFICE, ILLINOIS"

"SPRINGFIELD, June 5, 1871"

"I, Charles E. Lippincott, Auditor of Public Accounts of the State of Illinois, do hereby certify that the within bond has been registered in this office this day, pursuant to the provisions of an act entitled 'An act to fund and provide for paying the railroad debts of counties, townships, cities, and towns,' in force April 16, 1869."

"In testimony whereof I have hereunto subscribed my name, and affixed the seal of my office, the day and year aforesaid."

"[Seal] C. E. LIPPINCOTT, Auditor P.A."

The coupons are in the following form, varying as to number of bond and date of payment:

"State of Illinois, County of Ogle. The Town of Oregon will pay to the Ogle and Carroll County Railroad Company, or bearer, seventy dollars at the office of the Farmers' Loan

Page 119 U. S. 77

& Trust Company of New York, in the City of New York, on the first day of July, 1873, on presentation, being one year's interest on bond No. 29."

"F. H. MARSH, Clerk E. S. POTTER, Supervisor"

The action was tried by a jury, which, under the instruction of the court to do so, found a verdict for the plaintiff for $20,823.68, and a judgment in her favor was rendered for that amount, with costs. The defendant has sued out a writ of error.

On the 30th of March, 1869, the Legislature of Illinois passed an act, Private Laws of Illinois of 1869, vol. 3, p. 324, with the title set forth in the bonds, and providing as follows:

"SECTION 1. Be it enacted by the People of the State of Illinois, represented in the General Assembly, that the several acts entitled 'An act to incorporate the Ogle and Carroll County Railroad Company,' approved February 18, 1857, and the act entitled 'An act to amend an act entitled An act to incorporate the Ogle and Carroll County Railroad Company,' approved February 24, 1859, be, and they are hereby, so amended that the said railroad company shall be authorized and empowered to construct, maintain, and operate their said railroad, with such appendages as may be deemed necessary by the directors, in accordance with the following provisions."

"§ 2. That the first division of said road shall commence on the east bank of Rock River, opposite the Town of Oregon, in said County of Ogle; from thence, on the most eligible route, to a connection with the Chicago and Northwestern Railway, or with any other railroad leading to the City of Chicago, and the second division, commencing at said point, opposite the said Town of Oregon, and running thence, in a westerly direction, on the most eligible route, to the Mississippi River."

"§ 5. That the several towns, villages, and cities, organized or incorporated under any laws of this state, along or near the route of said railroad, as authorized to be constructed under the original act and amendment thereto, or under this act, or that are in anywise interested in having said road or any branch or division thereof constructed, may, in their corporate capacities, subscribe to the stock of said company, or may

Page 119 U. S. 78

make donations thereto, or may lend its or their credit to said company, to aid in constructing and equipping said road, or any division or branch thereof, provided that no such subscription, donation, or loan shall be made until the same shall be voted for as hereinafter provided."

"§ 6. That whenever twenty legal voters of any such towns, villages, or city shall present to the clerk thereof a written application, requesting that an election shall be held to determine whether such town, village, or city shall subscribe to the capital stock of said company, or make a donation thereto, or loan money or bonds, or its credit, to aid in the construction of said road, or any branch or division thereof, stating the amount, and whether subscribed, donated, or loaned, and the rate of interest, and the time of payment, such clerk shall receive and file such application, and immediately proceed to post written notices of an election to be held by the legal voters of such town, village, or city, which notices shall be posted in ten of the most public places in such town, village, or city for thirty days preceding such election, and shall state fully the object of such election, and such election shall be held and conducted, and return thereof made, as is provided by law, and, in any village or city, as is provided by the law under which the same is incorporated, and an additional return shall be made to one of the directors of said company. Each elector at such election shall deposit a ballot for said subscription, donation, or loan, and if a majority of the legal voters of such town, village, or city, voting at such election, shall vote for such subscription, donation, or loan, then such town, village, or city shall, by its proper corporate authorities, subscribe to the stock of said company, or donate or loan thereto, as shall be determine at said election, and shall issue to the said railroad company its bonds, in such denominations as said company may designate, not less than one hundred dollars, and bearing interest as may be determined at such election, not to exceed ten percent per annum, payable annually at such place as such company may designate, which bonds shall be signed by the supervisor and countersigned by the clerk in towns organized under the township organization law, and

Page 119 U. S. 79

in incorporated villages or cities signed by the president of the board of trustees, and countersigned by the clerk or by the officers having similar powers and duties in any such village or city, and any such town, village, or city so subscribing, donating, or loaning, as aforesaid, shall, by its proper corporate authority, annually thereafter, assess and levy a tax upon the taxable property of said town, village, or city, sufficient to pay and liquidate the annually accruing interest on such bonds, and so much of the principal thereof as, from time to time, shall become due, which taxes shall be levied and collected in the same manner as other corporation taxes in such town, village, or city, provided that for the payment of the principal thereof such tax shall not exceed two percent per annum."

The Town of Oregon was and is an incorporated town or township, situated on both sides, east and west, of Rock River, which village was and is what is called "the Town of Oregon" in the second section of the above act. The town was such a town as is described in the fifth section of the act.

On the 24th of May, 1870, more than twenty legal voters of the town presented to the clerk of the town the following written application, signed by them, in conformity with section six of the act.

"To the Town Clerk of the Town of Oregon, in the County"

"of Ogle, and State of Illinois:"

"The undersigned, legal voters of the said Town of Oregon, in the county and state aforesaid, do hereby make application to you and request that an election shall be held in said town under the provisions of an act of the General Assembly of the State of Illinois entitled 'An act to amend an act entitled An act to incorporate the Ogle and Carroll County Railroad Company,' approved March 30, A.D. 1869, to determine whether said town shall, in its corporate capacity, make a donation to the said Ogle and Carroll County Railroad Company of the sum of forty thousand dollars in the bonds of said town, in such denominations as said company may designate,

Page 119 U. S. 80

not less than one hundred dollars each, payable at the option of said town, within twenty years from the date of their issue, bearing interest from date at the rate of seven percent per annum, payable annually, and principal and interest payable at such place as said company may designate, to aid in the construction of the first division of said Ogle and Carroll County Railroad, said bonds not to be issued, dated, or delivered until said company shall have completed said first division of said railroad, with a T rail weighing not less than forty-five pounds to the yard, in condition to run trains thereon from a connection or intersection with the Chicago and Northwestern Railway to a point at and within said Town of Oregon, within one-half mile of the east bank of Rock River, and shall have equipped the same with rolling stock sufficient to operate a daily train to and from said town for the accommodation of passengers and freight, nor until said company shall have released said town from all liabilities on account of donations heretofore voted, except a donation of ten thousand dollars voted by said town on the ninth day of December, A.D. 1869, said vote and donation of forty thousand dollars to be null and void unless said first division of said railroad shall be completed and equipped as aforesaid on or before the first day of January, A.D. 1871, but in case the same shall be so completed and equipped within the time aforesaid, and said company shall execute and deliver said release, then the said bonds to be deliverable upon the demand of said company, and to bear date of the day of delivery."

"And we request that immediate notice be given of such election, and that the same be held on the 23d day of June, A.D. 1870."

"Dated this 24th day of May, A.D. 1870."

The clerk received and filed the application, and gave the notice required by section six of the act, of an election to be held June 23, 1870, the notice being as follows:

"Election Notice"

"Whereas, more than twenty legal voters of the Town of Oregon, in the County of Ogle, and State of Illinois, have

Page 119 U. S. 81

presented to me, clerk of said town, a written application requesting that an election be held in said town under the provisions of an act of the General Assembly of the State of Illinois entitled 'An act to amend an act entitled An act to incorporate the Ogle and Carroll County Railroad Company,' approved March 30, A.D. 1869, to determine whether said town shall, in its corporate capacity, make a donation to the said Ogle and Carroll County Railroad Company of the sum of forty thousand dollars in the bonds of said town, in such denominations as said company may designate, not less than one hundred dollars each, payable at the option of said town, within twenty years from the date of issue, bearing interest from date at the rate of seven percent per annum, payable annually, and principal and interest payable at such place as said company may designate, to aid in the construction of the first division of said Ogle and Carroll County Railroad, said bonds not to be issued, dated, or delivered until said company shall have completed said first division of said railroad, with a T rail weighing not less than forty-five pounds to the yard, in condition to run trains thereon from a connection or intersection with the Chicago and Northwestern Railway to a point at and within said Town of Oregon, within one-half mile of the east bank of Rock River, and shall have equipped the same with rolling stock sufficient to operate a daily train to and from said town for the accommodation of passengers and freight, nor until said company shall have released said town from all liability on account of donations heretofore voted except a donation of ten thousand dollars voted by said town on the ninth day of December, A.D. 1869, said vote of forty thousand dollars to be null and void unless said first division of said railroad shall be completed and equipped as aforesaid on or before the first day of January, A.D. 1871, but in case the same shall be so completed and equipped within the time aforesaid, and said company shall execute and deliver said release, then the said bonds to be deliverable upon demand of said company, and to bear date of the day of delivery."

"The inhabitants, legal voters of the said Town of Oregon, are therefore hereby notified that an election will be held by

Page 119 U. S. 82

the legal voters of said town at the courthouse in said Town of Oregon on Thursday, the 23d day of June, A.D. 1870 at 9 o'clock in the forenoon of said day, for the object and purpose of voting upon and determining the matters and questions hereinbefore and in said written application set forth and contained."

"Given under my hand at my office in said Town of Oregon, this 24th day of May, A.D. 1870."

"F. H. MARSH, Town Clerk of said Town"

The election was held on the day, in the manner, and with the result stated in the following record on file in the office of the town clerk:

"Pursuant to notice given according to law, the voters of the Town of Oregon, County of Ogle, and State of Illinois, assembled at the courthouse in Oregon at 9 o'clock A.M. on Thursday, the 23d day of June, A.D. 1870. The meeting was called to order by the town clerk, and, on motion of W. J. Mix, E. J. Reiman was chosen moderator of said meeting, and was duly sworn by the town clerk. Proclamation was then made of the opening of the polls, which were kept open until 12 o'clock M., when, on motion of O. Wilson, they were closed for one hour, until one o'clock, for dinner, by proclamation of the town clerk. At one o'clock, the polls were again proclaimed open, and were kept open until six o'clock P.M., proclamation being made half hour before the closing of the polls. At the hour of six P.M., the moderator proceeded to count out the ballots, until they were all counted, which number equaled the numbers on the poll list. The ballots were then read by the moderator, and resulted as follows, there being for donation, as stated in the notice, one hundred and sixty-three votes, against donation, as stated in the notice, twelve votes. The result being publicly read, the meeting was then closed."

"E. J. REIMAN, Moderator"

"Attest: F. H. MARSH, Town Clerk"

Page 119 U. S. 83

A defense set up to the validity of the bonds in the amended second plea is that their execution was obtained by fraud and circumvention. This is founded on the following facts:

The first division of the road was not completed or equipped in accordance with the application, and the notice of election, and the vote, on or before the 1st of January, 1871, but was completed by the 1st of April, 1871. On the 30th of December, 1870, Mortimer W. Smith, supervisor of the town, gave to the town clerk of the town his written resignation of the office of supervisor, and it was placed among the records of the town clerk's office. He never afterwards acted as supervisor. The town had by law one supervisor and two justices of the peace and one town clerk. They were all of them, by statute, town officers. William Schultz was elected one of the justices of the town April 5, 1870, and duly qualified as such April 9, 1870. He continued to reside in the town until after April 3, 1871, and during the year 1871, but was absent from the town, and in the City of New York, from December 26, 1870, till about January 6, 1871. He resigned his office on March 2, 1871, by filing his resignation in the office of the clerk of the county, who entered it of record according to law. After that, he did not act as a justice. A successor to Schultz as a justice was elected by the people at the annual town meeting held April 4, 1871, and not before, and such successor qualified April 8, 1871, and was commissioned April 15, 1871. James H. Cartwright was the other justice of the peace. Frederick H. Marsh was the town clerk.

The following statutory provisions were in force in Illinois in 1870 and 1871:

"§ 16. Resignations of the office of justice of the peace and constable shall be made to the clerk of the court of the proper county, who shall immediately enter the date of every such resignation in the book above provided for [that is, a book to be kept by the clerk of the county in which he was required to enter the name of every justice of the peace and constable sworn into office, together with the date of his commission or certificate, and the time of his being sworn into office], which book, or a certified copy of an

Page 119 U. S. 84

entry in the same, shall be received in evidence in all courts within this state."

Gross' Stat., 1869, 3d ed., c. 59, p. 394.

"1. Whenever any town shall fail to elect the proper number of town officers to which such town may be entitled by law, or when any person elected to any town office shall fail to qualify as such, or whenever any vacancy shall happen in any town office from death, resignation, removal from the town, or other cause, it shall be lawful for the justices of the peace of the town, together with the supervisor and town clerk, to fill the vacancy or vacancies occasioned or occurring in consequence of either or any of the causes above specified, by appointment by warrant under their hands and seals, and the persons so appointed shall hold their respective offices during the unexpired term of the persons in whose stead they have been appointed, and until others are chosen or appointed in their places, and shall have the same powers, and be subject to the same duties and penalties, as if they had been duly chosen by the electors."

"2. Whenever a vacancy shall occur, from any cause, in any or either of the offices enumerated in the foregoing section, as composing the board of appointment for the appointment of town officers, in case of vacancy, it shall be lawful for the remaining officers of such appointing board to fill any vacancy or vacancies thus occurring, except in cases of vacancy in the office of justice of the peace, which shall be filled only by election."

"3. When any appointment shall be made as provided in the two preceding sections, the officers making the same shall cause the warrant of appointment to be forthwith filed in the office of the town clerk, who shall forthwith give notice to each person appointed."

Gross' Stat., 1869, vol. 1, 3d ed., c. 103d, art. 7, pp. 750, 751.

On the 3d of April, 1871, Cartwright (the remaining justice) and Marsh (the town clerk) met at the office of the town clerk and, by a paper then signed by each of them, appointed Elias S. Potter to fill the vacancy in the office of supervisor caused by the resignation of Smith, and ordered the clerk to give the certificate of appointment to Potter. The paper bore date the 31st of December, 1870, and was filed in the office of the town clerk on the 3d of April, 1871. On the same 3d of April,

Page 119 U. S. 85

a proper official bond, executed on that day by Potter and two sureties but bearing date the 31st of December, 1870, was filed in the office of the town clerk, with an oath of office signed and sworn to by Potter before Cartwright on the same 3d of April, but purporting to have been subscribed and sworn to on the 31st of December, 1870. On the same 3d of April, Potter, as supervisor, and Marsh, as town clerk, signed the bonds and the coupons, and delivered them to the President of the railroad company. One Dwight was elected supervisor of the town at the regular annual town meeting held on April 4, 1871, and assumed the office, April 10, 1871, and held it for the ensuing year. It was known to all parties that this town meeting was to be held, and it is alleged that the officers of the railroad company conspired with Cartwright and Marsh to procure the appointment of Potter as supervisor so that the bonds might be issued before the election by the people of a new supervisor on April 4, 1871.

The statute of Illinois as to fraud and circumvention set up and relied on, is as follows:

"11. If any fraud or circumvention be used in obtaining the making or executing of any of the instruments aforesaid [that is, any note, bond, bill, or other instrument in writing, for the payment of money or property, or the performance of covenants or conditions], such fraud or circumvention may be pleaded in bar to any action to be brought on any such instrument so obtained, whether such action be brought by the party committing such fraud or circumvention, or any assignee or assignees of such instrument."

Gross' Stat. 1869, vol. 1, 3d ed., c. 73, p. 462.

Page 119 U. S. 89

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