Texas v. Hardenberg - 77 U.S. 68 (1869)
U.S. Supreme Court
Texas v. Hardenberg, 77 U.S. 10 Wall. 68 68 (1869)
Texas v. Hardenberg
77 U.S. (10 Wall.) 68
1. Under a bill by a state praying that a defendant may be enjoined from asking payment of certain United States bonds belonging to it unlawfully taken some time before from its treasury and now redeemable, and for such other and further relief as the court may deem proper, equity will follow a substituted security (new bonds bearing interest) given by the United States, the substitution having been made after the issue of process under the bill, though before service, by agreement between the holder of the bonds and the United States, in order that the party properly entitled, whoever he might be finally under the bill decided to be, should not lose interest; and the new bonds being held by a trustee for this purpose.
2. A party buying bonds of the United States with overdue and unpaid coupons, is to be taken as affected with knowledge of prior equities when he purchases them after the date when they are redeemable, and for which the coupons run, knowing that the government, paying promptly all its bonds generally, objects at that time to redeeming these, and does not in fact redeem them or the overdue coupons, and where notice has been given in public papers of great circulation that payment of the bonds was forbidden, and that there was difficulty about them.
This case, which, in its principal aspect, has been already reported, [Footnote 1] was now here upon an additional part of it, and
under an order made when the main decree was given for further hearing on that additional part, if such hearing should be demanded. The case as presented by that part -- a presentation of which, in a full and consecutive way, makes necessary a repetition of some parts of the original case -- was thus:
In 1851, the United States issued five thousand bonds for $1,000 each, and numbered successively from No. 1 to No. 5,000, to the State of Texas. The bonds, which were dated January 1, 1851, were coupon bonds, payable, by their terms, to the State of Texas or bearer, with interest at five percent semiannually, and "redeemable after the 31st day of December, 1864." Each bond contained a statement on its face that the debt was authorized by act of Congress and was "transferable on delivery," and to each were attached six-month coupons, extending to December 31, 1864, but no further.