Commissioners of Douglas County v. Bolles - 94 U.S. 104 (1876)
U.S. Supreme Court
Commissioners of Douglas County v. Bolles, 94 U.S. 104 (1876)
Commissioners of Douglas County v. Bolles
94 U.S. 104
1. Where a railroad company has been a corporation de facto from the date of its organization, its existence and its ability to contract cannot be called in question in a suit brought upon evidences of debt given to it.
2. Under the act of the Legislature of Kansas, to authorize counties and cities to issue bonds to railroad companies, approved April 10, 1865, and that of Feb. 25, 188, the board of commissioners of a county is authorized to determine whether the condition precedent to the lawful issue of such bonds has been complied with.
3. A recital by the board in the bonds, showing that such condition has been complied with, is, when they are in the hands of a bona fide holder for value, binding upon the county, and he is bound to look for nothing behind the recital except legislative authority for the issue of them.
This was an action by Matthew Bolles and M. Shepard Bolles against the Board of County Commissioners of the County of Douglas, Kansas, upon sundry coupons attached to certain bonds issued by the county. The facts are stated in the opinion of the Court.
The following questions of law arose, upon which the judges of the court below were divided in opinion:
1. Whether, as respects the bonds dated July 1, 1869, and the coupons in suit originally attached to said bonds, there was authority and power in the board of county commissioners of the county to issue said bonds under the Act of Feb. 10, 1865, recited in the bonds and other acts of the Legislature of the State of Kansas, including the Act of Feb. 25, 1868.
2. Whether the bonds mentioned in the preceding question are void in the hands of a holder for value without actual
notice, because the vote on the question of subscribing stock and issuing bonds was had Sept. 12, 1865, before the organization of the company known as the St. Louis, Lawrence & Denver Railroad Company was made in 1868, to which company the stock was subscribed in 1868, and the bonds were issued and delivered in 1871.
3. Said bonds having been issued upon the facts as found, was the issue of them illegal and invalid in such a sense as to devolve upon the plaintiffs the burden of showing that they, or those whom they represented, were holders of them for value?
4. Whether, as respects the bonds dated July 1, 1872, and the coupons in suit originally attached to said bonds, there was power and authority in the board of county commissioners of the county to issue the same.
5. Whether, upon the facts found, said bonds and coupons last named are void in the hands of a holder for value without actual notice of the orders for and facts connected with the election therefor, and with the organization of the said railroad company.
6. Said bonds having been issued under the facts as found, was the issue of them illegal and invalid in such a sense as to devolve upon the plaintiffs the burden of showing that they, or those whom they represented, were purchasers or holders of them for value?
7. Whether the facts found constitute or show a defense to the bonds of July 1, 1869, or the said bonds of July 1, 1872, the said bonds or coupons attached thereto in suit being in the hands of the plaintiffs, without affirmative proof that they were holders thereof for value without notice of said facts.
There was a judgment for the plaintiffs below, whereupon the defendants brought the case here.