1. The circuit court has jurisdiction of suits by or against a
national bank without regard to the citizenship of the parties.
2. A bond, whereby a county acknowledges its indebtedness in a
certain sum, payable, at a time therein mentioned, to company A. or
the holder, if it "be transferred by the signature" of its
president, is negotiable, and, on his transfer thereof by
endorsement to "bearer," the latter may in his own name sue
thereon.
3. The County Court of Wilson County, Tennessee, had, after
certain preliminary proceedings were taken, lawful authority to
subscribe, on behalf of the county, for stock in the Tennessee and
Pacific Railroad Company, and to issue bonds of the county in
payment therefor.
Page 103 U. S. 771
4. It was not essential to the validity of the popular election,
ordered and held on the question of subscription to the stock, that
there should have been a final and definite survey and location of
the entire line of the company's road. All that was required was a
substantial location, designating the termini and general direction
of the road, and an estimate of the cost of constructing it.
The facts are stated in the opinion of the Court.
MR. JUSTICE WOODS delivered the opinion of the Court.
On Dec. 16, 1867, the Legislature of the State of Tennessee
passed "An Act to incorporate the Lebanon and Gallatin Railway, and
for other purposes."
Sec. 3 of the act provided that the twenty-six persons named in
sec. 1 should select by ballot five of their number to open books
for subscription to the stock of the Lebanon and Gallatin Railway
Company, and to apply to counties and municipalities for
subscriptions thereto. Sec. 4 declared that such subscriptions
might be payable in county and municipal bonds.
Sec. 19 declared as follows:
"The five commissioner provided for in the third section may
apply to the county courts of Sumner and Wilson Counties, and to
the corporate authorities of the Towns of Lebanon and Gallatin for
subscription to the capital stock of the company, payable in the
bonds of said counties and towns, running not less than ten nor
more than thirty years, bearing six percent interest payable
semiannually, and upon said application being made in writing the
county courts and corporate authorities shall cause an election to
be held under the laws now in force regulating elections for county
and corporate officers, first causing thirty days' notice of the
day of such election, the amount of stock to be subscribed, for
what purpose and how and when payable, to be given as required in
county and corporate elections."
Sec. 35 declared
"That the provisions of chapter 3, article 3, of the code [of
Tennessee] shall be in force, and said company shall have the
benefit of the same except so far as modified or changed by this
act. "
Page 103 U. S. 772
These provisions were by sec. 40 extended to the Tennessee and
Pacific Railroad Company.
Chap. 3, art. 3, of the Code of Tennessee provides as
follows:
"SEC. 1142. Any county . . . may subscribe to stock to an amount
not exceeding in the aggregate one-fifteenth of its taxable
property nor more than one million dollars in railroads running to
or contiguous, thereto, upon the following terms and
conditions."
"SEC. 1143. The approbation of the legal voters of the county .
. . to the proposed subscription must be first obtained by election
held by the sheriff in the usual way in which popular elections are
held."
"SEC. 1144. The election may be ordered by the county court upon
the application in writing of the commissioners appointed to open
subscription books for the stock of such road, or of the board of
directors if the company is organized."
"SEC. 1145. Before such application can be made, the entire line
of the road in which the stock is proposed to be taken, shall be
surveyed by a competent engineer, and substantially located by
designating the termini and approximating the general direction of
the road, and an estimate of the grading, embankment, and masonry
made by the engineer under oath, and filed with the
application."
"SEC. 1149. The money raised under the provisions of this
article shall be expended within the county in which such stock is
taken, or as near thereto as practicable."
"SEC. 1150. As soon as the stock is subscribed it is the duty of
the county court to levy a tax upon the taxable property,
privileges, and persons liable by law to taxation within the
county, sufficient to meet the installments of subscription as made
and the cost and expenses of collection, which tax shall be levied
and collected like other taxes."
"SEC. 1151. The revenue collector or any other person may be
appointed by the county authorities to collect the railroad tax,
who shall first give bond with good security in double the amount
of the installment proposed to be received, payable to the state
and conditioned to discharge the duties of the office and
faithfully collect and pay over to the railroad company such
railroad tax."
The suit was brought by the Third National Bank of Nashville,
Tennessee, upon two hundred and ninety-four bonds for $50 each,
issued, as the plaintiff claimed, by the County of
Page 103 U. S. 773
Wilson under authority of the laws above cited. The bonds were
all of the same tenor and effect. The following is a copy of one of
them:
"
UNITED STATES OF AMERICA"
"
State of Tennessee County of Wilson"
"
Six percent Bond"
"Subscription to the Tennessee and Pacific Railroad
Company."
"Know all men by these presents, that the County of Wilson, in
the State of Tennessee, is indebted to the Tennessee and Pacific
Railroad Company, or the holder hereof, if this bond is transferred
by the signature of the president of said company, at the office of
the treasurer of said county, in the City of Lebanon, on the first
day of January, 1879, with interest thereon at the rate of six
percent per annum, on the first day of January and July ensuing the
date hereof, until the principal sum is paid, upon the presentation
and surrender of the interest warrants hereto attached at the said
office of the treasurer of Wilson County, State of Tennessee --
this being one of a series of bonds in all amounting to $300,000
issued for stock in the Tennessee and Pacific Railroad
Company."
"In testimony whereof, the county judge of said county hereunto
sets his name and causes the seal of the said county of Wilson to
be affixed, with the attestation of the clerk of said county, this
first day of January, 1869."
"W. H. GOODWIN,
Judge County Court"
"J. S. McCLAIN,
Clerk"
The bonds were all endorsed as follows:
"For value received, this bond is transferred to bearer."
"GEO. MAURY,
President Tenn. & Pacific R. R.
Co."
The defendant demurred to the declaration. The grounds of
demurrer were, first, because the court had no jurisdiction of the
case, and second, because no right of action on said bonds was
shown by the declaration to have accrued to the plaintiff.
The demurrer was overruled.
The defendant thereupon filed twelve pleas. Demurrers were filed
to all of them, and were sustained as to the fourth, fifth, sixth,
seventh, eighth, ninth, and tenth, and overruled as to the
others.
Page 103 U. S. 774
The ninth plea, upon which the defendant specially relied, and
which contains the substance of all the other pleas to which the
demurrer was sustained, reads as follows:
"And for a further plea to said first count in plaintiff's
declaration, defendant says that before application was made by any
authorized commissioners or by the president and directors of the
Tennessee and Pacific Railroad Company to the county court of said
county of Wilson, to order an election to obtain the approbation of
the legal voters of said Wilson County to any proposed subscription
of stock in said company, no survey of the entire line of said road
had been made by a competent engineer, and the said road had not
been substantially located by designating the termini thereof and
approximating the general direction thereof, and no estimate of the
grading, embankment, and masonry by a competent engineer of the
entire road had been made, and of all said facts the plaintiff had
actual notice when it obtained the said bonds; and it does not
appear upon the face of said bonds or any of them upon what
authority they were executed and delivered to the said company
other than that of the ministerial officers whose signatures appear
thereto; and this defendant is ready to verify."
The ground of demurrer to this plea was that it was virtually
the plea of
non est factum and was not sworn to.
Upon the trial of the case the plaintiff offered in evidence the
bonds on which the suit was brought, and proved their execution by
the officer whose official signature was appended to them, and by
the impression on them of the county seal, and proved the
endorsement of them by George Maury, the president of the Tennessee
and Pacific Railroad Company. The plaintiff also read the acts of
the Legislature of Tennessee above mentioned, and rested.
Thereupon the defendant introduced one Falconett, who testified
that he was engineer of the Tennessee and Pacific Railroad Company;
that as such he had made an experimental survey of the entire line
of the road from Nashville to Knoxville, before any application was
made to the county to order an election, as provided by the
statute, to determine whether it should subscribe to the capital
stock of the company, and, if so, on what terms the subscription
should be
Page 103 U. S. 775
made; that the survey of one hundred and eighty-one miles was
not final, but that by it the line was substantially, and the main
points of said road definitely, located, and an approximate
estimate of the cost of the road made; that he afterwards had
located finally and definitely about one-half of the entire line,
and made a report thereof to the directors of the company.
It was after this report that application was made to the
defendant as per statute in that case made and provided, to order
an election and subscribe stock, &c., for the payment of which
the bonds sued on were issued.
The plaintiff proved in rebuttal the payment of interest on the
bonds by the county for several years. This was all the evidence in
the case.
The court charged the jury as follows:
"1. That the defendant county had legislative authority to issue
the bonds declared on, upon the conditions prescribed in the acts
having reference to the matter, and that if the jury find from the
evidence adduced in the case that said bonds had been issued by the
county judge and clerk as alleged and verified by the county seal,
and that plaintiff was a
bona fide holder for value
without notice, that the same was issued by virtue of an election
ordered and held before a final and definite survey and location of
the line of said road had been made, the same would be valid in the
plaintiff's hands, and the jury ought to find a verdict against
defendant."
"2. That if the evidence of Falconett were true, the condition
contained in the acts aforesaid, requiring a survey and location of
the line of said road, and an estimate of the cost thereof made
before an election to determine whether the county should subscribe
stock in said railroad, &c., could be lawfully ordered and
held, had been substantially complied with, and there was nothing
in Falconett's testimony militating against plaintiff's right to
recover."
The jury found a verdict for the plaintiff, on which judgment
was rendered. To reverse this judgment, this writ of error is
brought.
The plaintiff in error claims that it is apparent on the face of
the declaration that the circuit court was without
jurisdiction,
Page 103 U. S. 776
because both the parties were citizens of the state of
Tennessee.
Sec. 629 of the Revised Statutes of the United states declares
that the circuit courts shall have original jurisdiction as
follows: . . .
"Tenth. Of all suits by or against any banking association
established in the district in which the court is held, under any
law providing for national banking associations."
This section gives the circuit courts jurisdiction of suits
brought by or against a national bank, without regard to the
citizenship of the parties, and it has been so held by this court.
Kennedy v.
Gibson, 8 Wall. 498.
The jurisdiction of the circuit court was therefore clear.
It is next claimed that the bonds sued on were not negotiable
paper, and that, therefore, the plaintiff below showed no right of
action in itself.
In order to make a promissory note or other obligation, for the
absolute payment of a sum certain, on a certain day, negotiable, it
is not essential that it should in terms be payable to bearer or
order. Any other equivalent expressions demonstrating the intention
to make it negotiable will be of equal force and validity.
Com.Dig., Merchant, F. 5; 3 Kent, Com., lect. 44, p. 77; Chitty,
Bills, c. 5, p. 180 (8th ed.); Bayley, Bills, 120 (5th ed.); Story,
Prom. Notes, sec. 44.
The purpose of the plaintiff in error that the bonds on which
the suit is brought should be negotiable is perfectly clear. They
are payable to the railroad company or holder if the bond is
transferred by the signature of the president of the company.
This is equivalent to making the bonds payable to the company or
order, provided the "order" or endorsement is made by the president
of the company. They bear his endorsement transferring them to
bearer. On what ground their negotiability can be denied it is
difficult to imagine. They are in precisely the same plight as a
promissory note payable to order and endorsed in blank, or to
bearer, the title to which passes by mere delivery. Chitty, Bills
252, 253 (8th ed.); Bayley, Bills, c. 1, sec. 10, p. 31 (5th
ed.).
It is next objected that the court erred in sustaining the
Page 103 U. S. 777
demurrer of the plaintiff to the fourth, fifth, sixth, seventh,
eighth, ninth, and tenth pleas.
It is quite evident, however, from the record that all the
defenses set up in these pleas were allowed to be made under the
other pleas, to which the demurrers were overruled. Whether the
court was right or wrong in its judgment on the demurrers is,
therefore, entirely immaterial. "There must be some injury to the
party to make the matter generally assignable as error."
Greenleaf's Lessee v.
Birth, 5 Pet. 132;
Randon v.
Toby, 11 How. 493.
It is next alleged as error that the court instructed the jury
that the county of Wilson had legislative authority to issue the
bonds sued on, upon compliance with the conditions prescribed by
the law.
There is certainly no express provision in chap. 3, art. 3, of
the code which authorizes the issue of bonds. It has been so held
by the Supreme Court of Tennessee.
Justices of Campbell Co. v.
Knoxville & Kentucky Railroad Co., 6 Cold. (Tenn.) 598.
The implication against the power to issue bonds is very
persuasive. The act contemplates the payment of the stock
subscribed for in installments, and provides the means of payment,
as they fall due, by a special tax. The bond of the officer who
collects this tax requires him to pay it over to the railroad
company. If the purpose of the act had been to authorize the
payment of the stock in bonds, the county, after paying in bonds,
would not have been required to pay over to the railroad company
the railroad tax collected to satisfy the bonds. In other words,
the county would not have been required to pay twice for its stock
-- once in bonds and once in money.
See Wells v.
Supervisors, 102 U. S. 625.
But the Act of Dec. 16, 1867, to incorporate the Lebanon and
Gallatin Railway Company, some of the provisions of which have been
stated, clearly implies the power in the county authorities to
subscribe stock in the Tennessee and Pacific Railroad Company, and
to issue bonds in payment therefor.
Sec. 4 declares that subscriptions to the capital stock of the
railroad company may be taken in county bonds, and sec. 19
authorizes the commissioners provided for in sec. 3 to apply for a
subscription to the capital stock of the railroad company,
Page 103 U. S. 778
payable in the bonds of the county, whereupon the county
authorities are required to cause an election to be held, first
causing thirty days' notice of such election, the amount of stock
to be subscribed, for what purpose, and how and when payable, to be
given, as required in county elections.
There can scarcely be a stronger implication of the power to
issue bonds.
What is implied in a statute is as much a part of it as what is
expressed.
United states v.
Babbit, 1 Black 55;
Gelpcke v.
City of Dubuque, 1 Wall. 175.
We think therefore that the power of the county, under the act
of Dec. 16, 1867, to issue bonds in payment of stock taken by it in
the Tennessee and Pacific Railroad Company is beyond question, and
that the circuit court did not err in saying to the jury that such
power existed.
Plaintiff in error claims next that there was evidence tending
to show that the bonds in suit were issued by virtue of an election
ordered and held before a final and definite survey and location of
the railroad had been made, and that the court erred in instructing
the jury that, if plaintiff was a
bona fide holder without
notice of that fact, the bonds would be valid in his hands, and
there should be a verdict against defendant.
The charge was not erroneous, because the law does not require
that there shall be a final and definite survey and location of the
road before an election is held to decide whether or not the county
shall subscribe stock. Its requirement is that the entire line of
the road shall be surveyed by a competent engineer, and
substantially located by designating the termini and approximating
the general direction of the road. The evidence of Falconett, the
engineer, showed that this had been done.
The law even contemplated that this survey might be made before
the railroad company was organized, for it declared that the
application to the county authorities to order an election might be
made by the commissioners appointed to open subscription books for
the stock of such road, or by the board of directors if the company
was organized. It would be a strange enactment, indeed, which
should require a final and definite
Page 103 U. S. 779
survey and location of the line of a railroad before any company
had been organized to construct it.
The next complaint of the plaintiff in error has reference to
the charge of the court to the effect that, if the evidence of
Falconett, the engineer, were true, the election to decide whether
the county would subscribe to the stock of the railroad company was
lawfully held.
The contention seems to be that before an application could be
made to the county authorities to order an election to decide
whether or not the county should subscribe to the stock of the
railroad company, an estimate in linear and cubic feet and yards of
the embankment, grading, and masonry should be made, on oath, and
filed with the application. It is asserted that no such estimate of
quantity was made, but merely an estimate of the cost, and that
this was not a compliance with the law.
We think the circuit court gave a correct construction of the
law in instructing the jury substantially that it was an estimate
of the cost and not of the quantity of the grading, embankment, and
masonry that was required to be made by the engineer. The point
upon which information was necessary to enable the people of the
county to vote intelligently on the question whether or not they
should subscribe to the stock of the railroad company was what
would the road cost, and not how many yards of embankment or
excavation or what quantity of masonry would be required to
construct it.
If we are right in these views, then all the conditions
precedent upon authority of which the power to issue bonds depended
were performed, and there being legislative authority for the issue
of the bonds upon such performance, no valid objection can be
raised to their enforcement.
Judgment affirmed.