McClure v. Township of Oxford - 94 U.S. 429 (1876)
U.S. Supreme Court
McClure v. Township of Oxford, 94 U.S. 429 (1876)
McClure v. Township of Oxford
94 U.S. 429
1. A municipality must have legislative authority to subscribe to the capital stock of a bridge company before its officers can bind the body politic to the payment of bonds purporting to be issued on that account.
2. If any of the essential proceedings prescribed by law for investing municipal officers with power to subscribe for stock and issue bonds in payment thereof be dispensed with, the bonds will be invalid in the hands of all who cannot claim protection as bona fide holders.
3. Every dealer in municipal bonds which upon their face refer to the statute under which they were issued is bound to take notice of all its requirements.
4. Where, upon their fact, the coupons refer to the bonds to which they were attached, and purport to be for the semiannual interest accruing thereon, the purchaser of them is charged with notice of all which the bonds contain.
5. The bonds issued by the Township of Oxford, Kansas, bearing date April 15, 1872, and reciting that they are issued under an Act of the Legislature of Kansas approved March 1, 1872, authorizing the township to subscribe for stock in the Oxford Bridge Company, and, in pursuance of a vote of the qualified electors of said township at an election held therein April 8, 1872, are void because, as that act by its terms took effect only from its publication in the Kansas Weekly Commonwealth, and it was not published until March 21, the election was not held pursuant to a notice of thirty days, as required by the act.
This was an action by the plaintiff to recover upon twenty overdue interest coupons detached from bonds held by him and issued by the defendant.
The following is a copy of one of the bonds and coupons, all of which were set forth in the declaration:
"No.___] OXFORD TOWNSHIP BRIDGE BOND [$500"
"The Township of Oxford, in the County of Sumner and State of Kansas, hereby promises to pay to _____ _____, or bearer, the sum of $500, on the fifteenth day of April, A.D. 1882, with interest thereon at the rate of ten percent per annum, payable semiannually on the fifteenth day of October and April of each year upon the presentation of the coupons therefor hereto attached. Both principal and interest payable at the American Exchange National Bank, in the City of New York. This bond is one of an issue of $10,000 made for the purpose of aiding in the building of a bridge across the Arkansas River at the Town of Oxford in the county of Sumner and State of Kansas, and in pursuance of an Act of the Legislature of the State of Kansas entitled"
" An Act authorizing the trustee, treasurer, and clerk, or any two of them, of the Township of Oxford, in the County of Sumner and State of Kansas, to subscribe for stock in the Oxford Bridge Company to the amount of $10,000, to aid in the construction of a bridge across the Arkansas River at Oxford, in said county and state and to issue the bonds of said township in payment therefor,"
"approved March 1, 1872, and in pursuance of a vote of the qualified electors of said township, had at an election held therein on the eighth day of April, A.D. 1872, which said election resulted in a majority of 112 in favor of issuing said bonds in a total vote of 140."
"The faith of said township and the receipts for toll of said bridge are pledged to the payment of this bond and interest."
"In testimony whereof, the township trustee, clerk, and treasurer of said township have caused this bond to be issued, duly certified, attested, an countersigned, this fifteenth day of April, A.D. 1872."
"GEORGE T. WALTON, Trustee"
"Attest: JOHN H. FOLKS, Clerk"
"Countersigned: T. E. CLARK, Treasurer"
"I, A. Thoman, Auditor of the State of Kansas, do hereby certify that this bond has been regularly and legally issued, that the signatures thereto are genuine, and that such bond has been duly registered in my office in accordance with an act of the legislature
"An Act to authorize counties, incorporated cities, and municipal townships to issue bonds for the purpose of building bridges, aiding in the construction of railroads, or other works of internal improvements, and providing for the registration of other bonds, and the repealing of all laws in conflict therewith,"
"approved March 2, 1872."
"Witness my hand and official seal, this twenty-fifth day of April, 1872."
"A. THOMAN, Auditor of State"
"[SEAL OF AUDITOR OF STATE. KANSAS, April 25, 1873]"
"$25] Oxford Township"
"On the fifteenth day of April, 1875, the treasurer of the town ship of Oxford, in the county of Sumner and State of Kansas, will pay to bearer to sum of $25, at the American Exchange National Bank in the city of New York, being the semiannual interest due on bond No. 1, issued April 15, A.D. 1872."
"GEORGE T. WALTON, Trustee"
"Attest: JOHN H. FOLKS, Clerk"
The fifth and seventh sections of the act under which the bonds were issued are as follows:
"SEC. 5. Before any of the bonds hereinbefore mentioned shall be issued, the question of issuing said bonds shall be submitted to the legal voters of said township at an election to be held for that purpose, which said election shall be conducted in all respects in conformity with the general election laws of this state. The time and place of holding said election shall be designated by the said trustee, treasurer, and clerk, or any two of them, by giving at least thirty days' notice by posting written or printed notices thereof in three of the most public places in said township. The ballots to be used at said election shall be written or printed, 'For the bridge and bonds,' or, 'Against the bridge and bonds,' and if at said election a majority of said votes shall be for the bridge and bonds, the said bonds shall be issued, and not otherwise."
"SEC. 7. This act shall take effect from and after its publication in the 'Kansas Weekly Commonwealth.'"
"Approved March 1, 1872"
Annexed to the act is the following certificate:
"I hereby certify that the foregoing is a true and correct copy of the original enrolled bill now on file in my office, and that the
same was published in the 'Kansas Weekly Commonwealth,' March 21, 1872."
"W. H. SMALLWOOD, Secretary of State"
The defendant demurred to the declaration on the ground that it did not set forth a good cause of action. The demurrer was sustained and judgment rendered for the defendant. The plaintiff sued out this writ of error.