1. Where the amount involved is sufficient, the citizen of a
state other than Michigan who holds bonds of a municipal
corporation in Michigan may, in the proper circuit court of the
United States, maintain an action against
it on them, or on the coupons thereto attached, although each is
payable to a citizen of the state or bearer, or to bearer.
2. By the terms of the Act of Michigan of March 22, 1869,
township bonds in aid of a railroad company are not invalid because
they were issued after the expiration of sixty days from the date
when the vote in favor of issuing them was cast by the
electors.
3. In Michigan, where the execution of the instrument sued on is
not put in issue by an appropriate plea, verified by affidavit,
proof thereof is not required. The effect of the pleadings in this
suit is to raise the question whether the bonds, if issued after
such period of sixty days, are valid.
4. Such bonds may be delivered to a corporation lawfully formed
by the consolidation of a corporation with that to which they were
voted.
This was an action by Carpenter against the Township of
Chickaming, Michigan. The declaration alleges that under an act of
the legislature of that state of March 22, 1869, the township,
pursuant to a vote of the electors thereof, issued certain bonds
and coupons to the Chicago and Michigan Lake Shore Railroad
Company, and delivered them to the treasurer of state; that the
latter delivered them to the company; that Carpenter is the lawful
holder of them for value, and that they are due and unpaid.
The following is a copy of one of the bonds:
"JUNE 1st, 1869"
"
UNITED STATES OF AMERICA. STATE OF MICHIGAN"
"
No. 7] COUNTY OF BERRIEN, TOWNSHIP OF CHICKAMING
[1,000"
"
Authorized by a vote of the people of the Township of
Chickaming"
"Know all men by these presents that the Township of Chickaming
hereby acknowledges to owe and promises to pay to the Chicago and
Michigan Lake Shore Railroad Company or bearer one thousand dollars
lawful money of the United States of America on the first Monday of
February in the year of our Lord one thousand eight hundred and
seventy-two at the office of the Treasurer
Page 106 U. S. 664
of the County of Berrien, with interest at the rate of ten
percentum per annum, payable annually on the first Monday of
February in each year on the surrender of the annexed coupons as
they severally become due."
"This bond is executed and issued under the provisions of and in
conformity to an act of the Legislature of the ate of Michigan
entitled"
"An Act to enable any township, city, or village to pledge its
aid by loan or donation to any railroad company now chartered or
organized or that may be hereafter organized under and by virtue of
the laws of the State of Michigan in the construction of its
road,"
"approved March 22, 1869."
"In testimony whereof, the supervisor of said township and the
township clerk thereof have signed their names hereto, as required
by the act aforesaid, and dated the bond as authorized by the vote
of the people."
"OLIVER L. NEWKIRK"
"
Supervisor of Chickaming Township"
"O. C. GILLETTE,
Township Clerk"
The following is a copy of a coupon attached to the bond:
"
$100] [No. 7"
"The Township of Chickaming will pay to the bearer, at the
office of the Treasurer of the County of Berrien, on the first
Monday of February, 1875, one hundred dollars, interest due on
their bond."
"OLIVER L. NEWKIRK"
"
Supervisor of Township"
"O. C. GILLETTE,
Township Clerk"
MR. CHIEF JUSTICE WAITE delivered the opinion of the Court.
The assignments of error in this case present the following
questions:
Page 106 U. S. 665
1. Whether an action at law can be maintained in the circuit
court of the United States against a municipal corporation of
Michigan upon municipal bonds or the coupons for interest attached
thereto.
2. Whether the circuit court of the United States has
jurisdiction of a suit brought by a citizen of state other than
Michigan to recover the amount due on an obligation of a municipal
corporation of Michigan, for the payment of a sum of money to a
corporation of Michigan or bearer, or to bearer.
3. Whether the obligations and coupons sued on in this case
could be introduced in evidence, under the pleadings, without proof
that the person who signed them as township clerk actually held
that office at the time his signature was affixed and the
obligations were delivered, and
4. Whether, since the obligations were not delivered to the
corporation to which they were voted by the township, but to a
corporation created by the consolidation of that corporation with
another, they are valid.
1. As to the right to sue a municipal corporation of Michigan in
the courts of the United States on an obligation for the payment of
money.
If we understand correctly the cases in the courts of Michigan
to which our attention has been directed, they decide no more than
that in the courts of the state, the remedy for the recovery of
money from a municipal corporation on a liquidated demand is by
mandamus against the proper officer to require him to do his duty
under the law with respect to the discharge of the obligation which
has been entered into, and that for such purposes, in that
jurisdiction, an independent judgment in an action at law against
the corporation is not necessary. There is no law of the state
prohibiting such a suit. All that has been determined is that, in
the courts of the state, a judgment is not necessary to lay the
foundation for a writ of mandamus to require the officer to do his
duty.
In the courts of the United States, however, a mandamus can only
be granted in aid of an existing jurisdiction, and in this class of
cases a judgment against the corporation is an essential
prerequisite to such a writ, although in the courts of
Page 106 U. S. 666
the state it is not. This whole subject was fully considered at
the last term in
Davenport v. County of Dodge,
105 U. S. 237,
where the other cases establishing the rule are cited.
2. As to the jurisdiction of the courts of the United States, in
a suit by the assignee of an obligation of a municipal corporation
of a state payable to a citizen of the same state or bearer, or to
bearer.
This question was decided at the present term in
Thompson v.
Perrine, ante, 106 U. S. 589. The
Act of March 3, 1875, c. 137, which provides, sec. 1, that the
district and circuit courts of the United States shall not
"have cognizance of any suit founded on a contract in favor of
an assignee unless a suit might have been prosecuted in such court
to recover thereon if no assignment had been made, except in cases
of promissory notes negotiable by the law merchant and bills of
exchange,"
is certainly not a limitation on the Judiciary Act of September
24, 1789, c. 20, which provided sec. 11 that the same courts should
not
"have cognizance of any suit to recover the contents of any
promissory note or other chose in action in favor of an assignee
unless a suit might have been prosecuted in such court to recover
the said contents if no assignment had been made, except in cases
of foreign bills of exchange."
Under the act of 1789, it was always held that an obligation
payable to bearer, or to an individual or bearer, did not come
within the prohibition of suits by assignees.
Bank of
Kentucky v. Wister, 2 Pet. 318;
Bushnell
v. Kennedy, 9 Wall. 387;
City of
Lexington v. Butler, 14 Wall. 282.
3. As to the necessity for proving that the township clerk whose
signature appears on the bonds and coupons was in fact township
clerk when he affixed his signature.
The name of the person who signed the bonds as clerk is O. C.
Gillett. That O. C. Gillett signed the bonds was admitted, but it
was denied under oath that he was clerk of the township prior to
the end of the summer of 1869, which was more than sixty days after
the bonds were voted by the town. The statutes of Michigan and the
rules of the circuit court in force when this cause was tried,
provided that upon the plea of the general issue in an action upon
any written instrument, under seal or without seal, the plaintiff
should not be put to the
Page 106 U. S. 667
proof of the execution of the instrument or the handwriting of
the defendant unless the plea was verified by affidavit. In this
case, the suit was on a written instrument, and the plea was the
general issue. This plea, however, was not verified in broad terms,
but an affidavit was filed to the effect, argumentatively, that the
township clerk, whose signature was necessary under the law to the
due execution of the bonds, could not have signed them before the
end of the summer of 1869, because he was not clerk until after
that time. The law under which the bonds were issued provided that
if any township voted the aid to railroads which was authorized,
it
"shall, within sixty days after the question of aid is
determined by a vote of the electors, . . . issue its coupon bonds
for the amount so determined to be granted."
The effect of the affidavit was to raise the question whether
the bonds were valid if issued after the sixty days. The
affirmative of showing that they were issued within the sixty days
was probably put by the pleadings on the plaintiff. This showing he
did not make. Consequently the objection to the admissibility of
the bonds resolved itself into the question of their validity,
issued as they were after the time.
We see nothing in the statutes which takes away from the
township authorities the right to execute and deliver bonds if for
any reason it is not done within the time named. The word "shall,"
as used in the statute, undoubtedly gives the township officers the
whole of the sixty days to get the bonds out, but it certainly does
not imply that if they fail to do it voluntarily within the time,
they cannot be compelled to do so afterwards. And if they can be
compelled to do so, it necessarily follows that they should do it
voluntarily. We have not been referred to any decisions by the
courts of Michigan to the contrary, and, construing the statute for
ourselves, we think that valid bonds may be issued after the time.
This being so, the antedating does not invalidate the bonds. In
this suit, no attempt is made to recover for interest accruing
before actual delivery.
4. As to the issue to the consolidated company.
This precise question was before us at the last term in the case
of
New Buffalo v. Iron Company, 105 U. S.
73, and decided adversely
Page 106 U. S. 668
to the claim of the plaintiff in error. We see no reason for
reconsidering that case, and this cannot be distinguished from
it.
Judgment affirmed.
