Harshman v. Bates County
92 U.S. 569 (1875)

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U.S. Supreme Court

Harshman v. Bates County, 92 U.S. 569 (1875)

Syllabus

1. Sec. 14 of art. 11 of the Constitution of Missouri, adopted in 1865, declaring that

"The general assembly shall not authorize any county, city, or town, to become a stockholder in, or to loan its credit to, any company, association, or corporation unless two-thirds of the qualified voters of such county, city, or town, at a regular or special election to be held therein, shall assent thereto,"

extends as well to townships as to counties, cities, and towns.

2. Although a subscription for stock of a railroad company be duly authorized by the requisite number of the qualified voters of a township, if the company, before the subscription he actually made, becomes consolidated with another, thereby forming a third, the county court is not empowered to subscribe, on behalf of the township, for stock of the new company, and issue bonds in payment therefor.

3. The holder of coupons attached to the bonds in question in this suit is not entitled to recover thereon, as sufficient notice of the objection to the validity of the bonds is contained in their recitals.

Page 92 U. S. 570

This is an action against the County of Bates, upon a large number of coupons originally attached to bonds issued by the county court of that county.

The following is a copy of one of the bonds and coupons:

"[No. 90 UNITED STATES OF AMERICA [$1,000"

"STATE OF MISSOURI, County of Bates:"

"Issued pursuant to articles of consolidation in payment of stock due the Lexington, Lake & Gulf Railroad Company, consolidated Oct. 4, A.D. 1870."

"Know all men by these presents, that the County of Bates, in the State of Missouri, acknowledges itself indebted and firmly bound to the Lexington, Lake & Gulf Railroad Company in the sum of $1,000, which sum the said County of Bates, for and in behalf of Mount Pleasant Township, therein promises to pay to the said Lexington, Lake & Gulf Railroad Company, or bearer, at the Bank of America, in the City and State of New York, on the eighteenth day of January, A.D. 1886, together with the interest thereon from the eighteenth day of January, 1871, at the rate of ten percentum per annum, which interest shall be payable annually on the presentation and delivery at said Bank of America of the coupons of interest hereto attached."

"This bond being issued under and pursuant to an order of the County Court of Bates County, by virtue of an act of the General Assembly of the State of Missouri, approved March 23, 1868, entitled 'An Act to facilitate the construction of railroads in the State of Missouri,' and authorized by a vote of the people taken May 3, 1870, as required by law, upon the proposition to subscribe $90,000 to the capital stock of the Lexington, Chillicothe & Gulf Railroad Company, and which said railroad company last aforesaid and the former Pleasant Hill Division of the Lexington, Chillicothe & Gulf Railroad Company were, on the fourth day of October, 1870, consolidated, as required by law, into one company, under the name of the Lexington, Lake & Gulf Railroad Company; and which said last-named railroad company, as provided by law, and under the terms of said consolidation thereof, possesses all the powers, rights, and privileges, and owns and controls all the assets, subscriptions, bonds, moneys, and properties whatever, of the two said several companies forming said consolidation, or either one of them. "

Page 92 U. S. 571

"In testimony whereof, the said County of Bates has executed this bond, by the presiding justice of the county court of said county, under the order thereof, signing his name hereto, and the clerk of said court, under the order thereof, attesting the same, and affixing the seal of said court."

"This done at the city of Butler, County of Bates, this eighteenth day of January, A.D. 1871."

"{COUNTY COURT OF"

"[SEAL]"

"BATES CO., MO.}"

"B. H. THORNTON"

"Presiding Justice of the County Court of Bates County, Mo."

"Attest:"

"W. J. SMITH"

"Clerk of the County Court of Bates County, Mo."

"$100] Coupon [$100"

"BUTLER, BATES COUNTY, MO."

"Jan. 18, A.D. 1871"

"The County of Bates acknowledges to owe the sum of $100, payable to bearer on the eighteenth day of January, 1872, at the Bank of America, in the City of New York, for one year's interest on bond No. 90."

"W. J. SMITH"

"Clerk County Court Bates County, Mo."

The plaintiff alleges that on the eighteenth day of January, 1871, the defendant issued its several bonds by which it bound itself to pay to the Lexington, Lake & Gulf Railroad Company, and for and on behalf of Mount Pleasant Township in said county, $1,000 payable to said company at the Bank of America &c., and that he is the holder of certain coupons of said bonds.

That, prior to the fifth day of April, 1870, certain taxpayers of Mount Pleasant Township petitioned the County Court of Bates County setting forth their desire to subscribe $90,000 to the stock of the Lexington, Chillicothe & Gulf Railroad Company, and thereupon the court ordered an election in said township for the 3d of May, 1870, which was held, and two-thirds of the qualified voters of said township voting thereat voted for it.

That on the eighteenth day of July, 1870, another corporation was formed by the name of the Pleasant Hill Division of the

Page 92 U. S. 572

Lexington, Chillicothe & Gulf Railroad Company, and that these two corporations, one being the Lexington, Chillicothe & Gulf Railroad Company and the other being the Pleasant Hill Division of the Lexington, Chillicothe & Gulf Railroad Company, were, on the fourth day of October, 1870, consolidated under the name of the Lexington, Lake & Gulf Railroad Company.

That thereafter -- to-wit on the 18th of January, 1871 -- the County Court of Bates County, in pursuance of the authority conferred upon it by the vote of the people of said township, subscribed the said sum of $90,000, in behalf of said township to said Lexington, Lake & Gulf Railroad Company (the consolidated company), and that said bonds (to which the coupons in suit were annexed) were, among others, issued by the said court in payment for said subscription.

The defendant demurred to the petition on the ground that it shows that the county court had no authority in law to make the subscription recited in the bonds or to issue the bonds in payment therefor, and because it also shows that the question of making the subscription to the new or consolidated company was never submitted to a vote of the people of Mount Pleasant Township nor assented to by them as required by the constitution and laws of the state. The court sustained the demurrer and gave judgment accordingly, whereupon the case was brought here.

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