Town of East Lincoln v. Davenport - 94 U.S. 801 (1876)
U.S. Supreme Court
Town of East Lincoln v. Davenport, 94 U.S. 801 (1876)
Town of East Lincoln v. Davenport
94 U.S. 801
1. In a suit by a bona fide holder against a municipal corporation to recover the amount of coupons annexed to bonds issued by it, under authority conferred by law, questions of form merely, or irregularity, or fraud, or misconduct on the part of its agents, cannot be considered.
2. Where an act of the legislature, authorizing a town to subscribe to the capital stock of a certain railroad company, provides that if a majority of the legal voters, voting at an election held for that purpose, shall be found to be in favor of such subscription, it shall be deemed and held that such town had taken stock in said company according to the proposals made, held that the statute makes such a majority vote equivalent to, and a substitute for, a subscription by the town upon the books of the company.
3. Where it was provided by a general law or the charter of the company when such subscription was made that the company might consolidate with other companies, in order to carry out the object of its charter, and that its franchises, rights, subscriptions, and credits might be transferred, and where such consolidation was effected, and a subsequent transfer by the consolidated company was lawfully made to a new company engaged in the construction of a connecting road, thus forming a continuous line, the stockholders in the former companies becoming stockholders in the new company, held that a delivery by the town to such new company of the bonds for the payment of the original subscription, and a receipt of a certificate of stock in it, were warranted by law.
The facts are stated in the opinion of the Court.