Knox County v. Ninth National Bank
147 U.S. 91 (1893)

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U.S. Supreme Court

Knox County v. Ninth National Bank, 147 U.S. 91 (1893)

Knox County v. Ninth National Bank

No. 78

Argued December 2, 5, 1892

Decided January 3, 1893

147 U.S. 91

Syllabus

The question under what statute of Missouri the bonds were issued which form the subject of this controversy was properly determinable in a suit on the bonds.

An order of court directing a notice of an election which was to take place in thirty-four days to be given by publication in a designated newspaper for five weeks, must he construed to mean a publication in each of the five weeks.

Where an act is done which can be done legally only after the performance of some prior act, proof of the later carries with it a presumption of the due performance of the prior act.

Decisions of state courts upon the requirements of state statutes for validating issues of municipal bonds in the state, when made subsequent to an issue of such bonds, are not controlling in litigations in federal courts, involving the validity of such issue.

When the matter in dispute is whether a particular issue of municipal bonds was made under one statute of the state in which the municipality is situated or under another, the whole conduct of the municipality, both before at the time and after the issue of the bonds, may be shown to aid in determining the question.

In a subscription by a municipal corporation to aid in the construction of a railroad, it is sufficient if the route is designated, leaving to the municipal authorities to designate the particular corporation to be the recipient of the subscription.

The bonds issued by Knox County, Missouri, to the Missouri and Mississippi Railroad Company were issued in pursuance of the general laws of the state, and not under the Act of the Legislature of Missouri of February 20, 1865, to incorporate that company, and the county powers of taxation are not limited by the provisions of section 13 of the act incorporating the company.

On February 20, 1865, the Legislature of the State of Missouri passed an act to incorporate the Missouri and Mississippi Railroad Company. Session Acts 1865, p. 86. Section 7, prescribing the route of said road, reads:

"SEC. 7. Said board of directors shall haven full power and

Page 147 U. S. 92

authority to survey, mark out, locate, and construct a railroad from the Town of Macon, in the County of Macon, in the State of Missouri, through the Town of Edina, in the County of Knox, in said state, and thence to or near the northeast corner of said state, in the direction of Keokuk, in Iowa, or Alexandria, Missouri."

By section 13 it was provided:

"SEC. 13. It shall be lawful for the corporate authorities of any city or town, the County Court of any county desiring so to do, to subscribe to the capital stock of said company, and they may issue bonds therefor and levy a tax to pay the same, not to exceed one twentieth of one percent upon assessed value of taxable property for each year."

Chapter 63 of the General Statutes of Missouri of 1866 is a general statute in reference to railroad companies. Section 17 of that chapter is as follows:

"SEC. 17. It shall be lawful for the County Court of any county, the council of any city, or the trustees of any incorporated town, to take stock for such county, city, or town in, or loan the credit thereof to, any railroad company duly organized under this or any other law of the state, provided that two-thirds of the qualified voters of such county, city, or town at a regular or special election to be held therein, shall assent to such subscription."

General Statutes of Missouri of 1866, page 338; 1 Wagner's Stats. 1870, page 305.

On October 1, 1867, and on February 1, 1868, the County of Knox issued $100,000 in ten-year bonds to the Missouri and Mississippi Railroad Company. The body of the bond is in these words:

"Know all men by these presents, the County of Knox, State of Missouri, acknowledges itself indebted to the Missouri and Mississippi Railroad Company (organized by an act of the General Assembly of the State of Missouri) or bearer, in the sum of $500.00, which said sum the said county promises to pay at the National Bank of Commerce in the City of New York, . . . with interest at 7 percent per annum, which interest shall be payable annually on presentation of the coupon hereto annexed at said National Bank of Commerce

Page 147 U. S. 93

in the City of New York; this bond being issued under and pursuant to order of the County Court of Knox County, for subscription to the stock of the Missouri and Mississippi Railroad Company, as authorized by an act of the General Assembly of the State of Missouri, entitled 'An act to incorporate the Missouri and Mississippi Railroad Company,' approved February 20, 1865."

On June 14, 1884, the defendant in error, claiming to be the owner of certain of these bonds, brought suit in the Circuit Court of the United States for the Eastern District of Missouri. In the petition it was alleged that

"all of said bonds and coupons were authorized, issued, and negotiated by said defendant county under and by authority of orders of the County Court of said county, duly entered on the records of said court, and under and by the authority of a special election of the qualified voters of said Knox County, duly ordered and held under and according to the laws of Missouri, in said county, on the 12th day of March, 1867 at which election five hundred and ten votes were duly and legally cast in favor of making the subscription to the said company, and of issuing therefor the bonds herein described, and only ninety-eight votes were cast against the said subscription and issue of bonds."

The answer admitted the issue of the bonds, but alleged that they were issued under the authority conferred upon the County Court of Knox County by the thirteenth section of the act incorporating the Missouri and Mississippi Railroad Company, and expressly denied that they were

"issued to said Missouri and Mississippi Railroad Company in payment of said subscription in compliance with a vote of the people of said county, as alleged in said petition."

Upon these pleadings, the case went to trial before a jury, which resulted in a verdict and judgment on March 7, 1888, in favor of the plaintiff for the amount due on the bonds and coupons, and an adjudication

"that the bonds and coupons sued upon by plaintiff were duly issued by the defendant county under and by authority of order of the county court for the purpose, and under and by authority of a special election of the qualified voters of said county, duly ordered and held in said county for that purpose at which

Page 147 U. S. 94

more than two-thirds of such qualified voters voting at said election voted for the subscription of stock and issue of said bonds and coupons, as charged in plaintiff's petition, and further, said bonds and coupons, together with the subscription aforesaid, were duly authorized by a vote of the qualified voters of said county, taken according to the laws of the State of Missouri."

To reverse which judgment, the county sued out this writ of error.

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