1. The Township of Montclair in the County of Essex, New Jersey,
had authority to issue bonds to be exchanged for bonds of the
Montclair Railway Company.
2. The Constitution of New Jersey provides:
"To avoid improper influences which may result from intermixing
in one and the same act such things as have no proper relation to
each other, every law shall embrace but one object, and that shall
be expressed in the title."
Held:
1. That this provision does not require the title of an act to
set forth a detailed statement, or an index or abstract, of its
contents; nor does it prevent uniting in the same act numerous
provisions having one general object fairly indicated by its
title.
2. That the powers, however varied and extended, which a
township may exercise constitute but one object, which is fairly
expressed in a title showing nothing more than the legislative
purpose to establish such township.
3. The conflict between the constitution and a statute must be
palpable to justify the judiciary in disregarding the latter upon
the sole ground that it
Page 107 U. S. 148
embraces more than one object or that, if there be but one, it
is not sufficiently expressed in the title.
4. The holder of the bonds is presumed to have acquired them in
good faith and for value. But if, in a suit upon them, the defense
be such as to require him to show that value was paid, it is not in
every case essential to prove that he paid it, for his title will
be sustained if any previous holder gave value.
The judgment below was in accordance with the verdict in an
action brought by the defendant in error on certain bonds, payable
to Samuel Holmes or bearer, and coupons thereof payable to the
holder, all dated March 17, 1870, and alleged to have been issued
by the Township of Montclair, Essex County, New Jersey. They are
negotiable in form and purport to have been executed in pursuance
of an act approved April 9, 1868, entitled "An act to authorize
certain townships, towns, and cities to issue bonds, and to take
the bonds of the Montclair Railway Company" -- a corporation
created with authority to construct a railway from the Village of
Montclair to the Hudson River at Pavonia or Hoboken ferries or
between those points. On the margin of each bond is the certificate
of the County Clerk of Essex County that it is registered in his
office.
The first section of the foregoing act -- which was declared to
be a public act to take effect immediately upon its passage --
provides:
"SEC 1. That on the application in writing of twelve or more
freeholders, residents of any township, town, or city along the
route of the Montclair Railway Company or at the terminus thereof
(
except the township of Bloomfield, in the County of
Essex,
which township is hereby excepted from the operation of
all the provisions of this act), it shall be the duty of the
judge of the circuit court of the county wherein such freeholders
shall reside, within ten days after receiving such application, to
appoint under his hand and seal not more than three freeholders,
residents of such township, town, or city, to be commissioners
thereof, to carry into effect the purposes and provisions of this
act; said commissioners shall hold their offices respectively for
the term of five years, and until others shall have been appointed.
"
Page 107 U. S. 149
The second and third sections are as follows:
"SEC. 2. That it shall be lawful for said commissioners to
borrow, on the faith and credit of their respective township,
towns, or cities such sums of money, not exceeding twenty percent
of the valuation of the real estate and landed property of such
township, town, or city, to be ascertained by the assessment rolls
thereof, respectively, for the year 1867, for a term not exceeding
twenty-five years at the rate of interest not exceeding seven
percent per annum, payable semiannually, and to execute bonds
therefor under their hands and seals respectively. The bonds so to
be executed may be in such sums and payable at such times and
places as the said commissioners and their successors may deem
expedient, but no such debt shall be contracted or bonds issued by
said commissioners of or for either of said townships, towns, or
cities until the written consent of the persons owning or
representing as agent or president at least two-thirds of the real
estate and landed property of such township, town, or city, borne
on the last assessment roll thereof at the valuation thereon
appearing, shall have been obtained."
"Such consent shall state the amount of money authorized to be
raised in such township, town, or city, and that the same is to be
invested in the bonds of said railway company, and the signatures
shall be proved by one or more of said commissioners. The fact that
the persons signing such consent own or represent as aforesaid at
least two-thirds of the taxable, real, and landed property of such
township, town, or city shall be proved by the affidavit of the
assessor of such township, town, or city, endorsed upon or annexed
to such written consent, and the assessor of such township, town,
or city is hereby required to perform such service. Such consent
and affidavit shall be filed in the office of the clerk of the
county in which such township, town, or city is situated, and a
certified copy thereof in the office of the clerk of such township,
town, or city, and the same, or a certified copy thereof, shall be
evidence of the facts therein contained and shall be received as
evidence in any court of this state and before any judge or justice
thereof."
"SEC. 3. And be it enacted that the said commissioners
authorized by this act may, in their discretion, dispose of such
bonds, or any part thereof, to such persons or corporations and
upon such terms as they shall deem most advantageous for their said
townships, towns, or cities, but not for less than par, and the
money that shall be raised by any loan or sale of bonds shall be
invested in the
Page 107 U. S. 150
bonds of the said railway company for the purpose of building
the railway thereof, and said money shall be applied and used in
the construction of said railway, its buildings, equipments, and
necessary appurtenances, and for no other purpose. The
commissioners, respectively, in the corporate name of each of their
said townships, towns, or cities shall subscribe for and purchase
bonds of said railway company to the amount that they severally may
have borrowed as aforesaid."
After providing that the commissioners shall execute their
official bonds, with security to be approved by the judge (all of
which was done in this case), and that they shall be a board to act
for their respective townships, towns, and cities, with power, by a
majority, to do any business authorized by the act, the twelfth and
fourteenth sections declare:
"SEC. 12. That all bonds issued in accordance with the
provisions of this act shall be registered in the office of the
county in which the township, town, or city so issuing is situated,
and the words 'registered in the county clerk's office' shall be
printed or written across the face of each bond, attested by the
signature of the county clerk when so registered, and no bonds
shall be valid unless so registered."
"SEC. 14. That in case any new township, town, or city
shall
have been created, or the boundaries of any township, town, or
city shall have been enlarged on the routes of the said railway, or
at the termini thereof, so that there is no assessment roll for the
year 1867 for such township, town, or city so created or enlarged,
the said commissioner for such
new or enlarged township,
town, or city shall cause to be prepared an assessment roll for the
purposes of this act, by extracting from any assessment roll or
rolls for said year all that relates to any assessment of persons
or property in the territory embraced in the said
new
township, town, or city so enlarged or created, or in said
enlargement."
On the 15th day of April, 1868, the Legislature of New Jersey
passed another act, the provisions of which are important. It is
entitled "An act to set off from the township of Bloomfield, in the
County of Essex, a new township, to be called the township of
Montclair." The first section defines the boundary of the new
township, and the second constitutes its inhabitants a body politic
and corporate in law by the name of
Page 107 U. S. 151
"
The inhabitants of the Township of Montclair," with
all the rights, powers, privileges, and advantages, and subject to
all the regulations, government, and liabilities to which the
inhabitants of the other townships in said County of Essex are or
may be entitled or subject by the laws of the state.
The third section, after prescribing the time and place at which
the first town meeting of Montclair should be held, and that the
voting thereat should be by ballot until otherwise determined by
law, declares:
"That all the provisions and restrictions of an act entitled 'An
act to authorize the inhabitants of the several townships of this
state to vote by ballot at their town meetings,' approved March 22,
1860, and of the supplements thereto, shall apply to the
inhabitants of the said Township of Montclair, and all acts and
parts of acts in force in the said Township of Bloomfield at the
time of the passage of this act are hereby extended to and shall be
in force in the said Township of Montclair, but the provisions of
any act or acts from the operation of which the Township of
Bloomfield has, by any proviso or exception contained therein been
specially excepted, shall apply to and be in force in said Township
of Montclair from and after the time this act shall go into effect,
the same as if the Township of Bloomfield had not been specially
excepted therein."
MR. JUSTICE HARLAN delivered the opinion of the Court, and,
after stating the foregoing facts, proceeded as follows:
In behalf of the Township of Montclair it is contended that the
bonds and coupons in suit were executed and issued without
legislative authority, and consequently are not enforceable. This
proposition being fundamental in the case will be first
considered.
It has been observed that the first section of the Act of April
9, 1868 -- the one referred to in the bonds -- expressly excepts
from its operation the Township of Bloomfield. The circuit court
was of opinion, and so ruled, that Montclair, upon
Page 107 U. S. 152
being set off from Bloomfield Township and made a separate
municipal corporation, with all the rights, powers, and privileges
of other townships in the same county, was no longer embraced in
the exception of Bloomfield Township made by the Act of April 9,
1868, but, as a distinct independent body politic and corporate,
became entitled, in virtue of the fourteenth section of that act
(and without reference to the proviso in the third section of the
Act of April 15, 1868), to take advantage of all the provisions of
the original or bonding act. Some of the members of this Court
prefer not to rest the determination of the question of legislative
authority upon that interpretation of the original act. But we are
of opinion that the proviso of the third section of the act
creating the Township of Montclair -- declaring in force, as to
that township,
"the provisions of any act or acts from the operation of which
the Township of Bloomfield has by any proviso or exception
contained therein been specially excepted"
-- must be construed as taking Montclair out of the exception in
the first section of the Act of April 9, 1868, and adding it to the
class of townships which, by the act, were authorized to raise
money upon bonds to be invested in bonds of the railway company.
Thenceforward, the Township of Bloomfield, within the meaning of
the Act of April 9, 1868, embraced only such territory and
inhabitants as remained after Montclair Township was set off as an
independent municipality. The recital in the bonds that they were
issued in pursuance of that act must therefore be taken as
referring to it as enlarged or extended by the Act of April 15,
1868.
It is the duty of the Court to give effect, if possible, to
every clause and word of a statute, avoiding, if it may be, any
construction which implies that the legislature was ignorant of the
meaning of the language it employed. We should assume that the
legislature was aware, when the Act of April 15, 1868, was passed,
that a previous statute had expressly excepted Bloomfield Township
from all of its provisions. When, therefore, they declared that the
new township should come under the operation of any act from which
Bloomfield had been specially excepted by any proviso thereof, the
established canons of statutory construction require us to presume
that the legislature understood the full legal effect of such a
declaration. The purpose
Page 107 U. S. 153
manifestly was to relieve the new township from the disabilities
imposed by the bonding act upon the Township of Bloomfield as then
established.
This would close the discussion of the question of legislative
authority but for another proposition which counsel have pressed
with great earnestness. They insist that this construction of the
Act of April 15, 1868, brings it, or so much thereof as constitutes
its third section, in conflict with sec. 7 of art. 4 of the New
Jersey Constitution, which declares that
"To avoid improper influences which may result from intermixing
in one and the same act such things as have no proper relation to
each other, every law shall embrace but one object, and that shall
be expressed in the title."
The argument is not simply that the authority given by the Act
of April 9, 1868, to issue township bonds in aid of the Montclair
Railway Company (which authority we have seen is imported into the
Act of April 15, 1868), is an object distinct and separate from
others embraced by the Montclair Township act, but that such object
is not expressed in the title of the latter act. The purpose of
this constitutional provision was declared by the Supreme Court of
New Jersey in
State v. Town of Union, 33 N.J.L. 350, to
be
"to prevent surprise upon legislators by the passage of bills
the object of which is not indicated by their titles, and also to
prevent the combination of two or more distinct and unconnected
matters in the same bill."
Further, said the court:
"It is not intended to prohibit the uniting in one bill of any
number of provisions having one general object fairly indicated by
its title. The unity of the object must be sought in the end which
the legislative act proposes to accomplish. The degree of
particularity which must be used in the title of an act rests in
legislative discretion, and is not defined by the constitution.
There are many cases where the object might with great propriety be
more specifically stated, yet the generality of the title will not
be fatal to the act, if by fair intendment it can be connected with
it."
The case in which these remarks occurred involved the
constitutionality of an act, entitled "An act to amend "An act to
incorporate the Town of Union, in the Township of Union, in the
County of Hudson," approved March 29, 1864." The body of the act
declared
Page 107 U. S. 154
valid a certain ordinance passed by the Town of Union without
the formalities required by its charter, but under which a sewer
had been constructed. In response to the objection that the object
of the act -- the construction of sewers -- was not expressed in
its title, the court said:
"The validity of acts with general titles has been so long
recognized by our courts that it cannot be questioned that under
the title, 'An act to
incorporate the Town of Union,' a
government for the town could be established, including taxation
for its support, courts for the trial of offenders, authority for
laying out streets, building sewers, and making assessments. Under
any other rule, it would be impossible to organize a city
government without a large number of distinct acts. If, under that
general title, the formalities for building a sewer and making
assessments may be prescribed, there is no reason why a
dispensation from the use of the required forms may not be granted
by an act entitled 'An act to
amend an act to incorporate
the Town of Union.'"
"If this objection,' continued the court, 'was sustained, it
would annul a large portion of the legislation of this state."
The doctrines of that case were approved in
State v. City of
Newark, 34 N.J.L. 236. In the earlier case of
Gifford v.
New Jersey Railroad Co., 2 Stock. (N.J.) 172, an act
supplemental to a former act was sustained upon the ground that the
objects of both acts "were parts of the same enterprise, and cannot
be said to have any improper relation to each other."
Our attention is called by counsel for the defendant to
Rader v. Township of Union, 39 N.J.L. 509, and
Pennsylvania Railroad Co v. Rational Railway Co., 23
N.J.Eq. 441, 457. But these do not in the slightest degree impinge
upon the doctrines of the other cases. Referring, in the
Rader case, to the constitutional provision under
examination, Chief Justice Beasley observed that its purpose is
plainly twofold:
"First, to secure a separate consideration for every subject
presented for legislative action; second, to ensure a conspicuous
declaration of such purpose. By the former of these requirements,
every subject is made to stand on its own merits, unaffected by
'improper influences' which might result from connecting it with
other measures having no proper relation to it, and by the latter,
a notice is provided so that the public,
Page 107 U. S. 155
or such part of it as may be interested, may receive a
reasonable intimation of the matters under legislative
consideration."
In the same case, he said that the constitution required
"substantial unity in the statutable object." We do not understand
these remarks of the court as announcing any different rule from
that established in the cases in 33 and 34 N.J.L. What was said in
23 N.J.Eq. is clearly in line with other cases. And the doctrines
of the New Jersey court are in harmony with decisions of the
highest courts of other states when construing similar provisions
in the constitutions of their respective states.
See
authorities cited in Cooley, Const.Lim. 146, n. 1.
Upon the authority of these decisions and upon the soundest
principles of constitutional construction, we are of opinion that
the objection taken to the Act of April 15, 1868, as being (when
construed as we have indicated) in conflict with the Constitution
of New Jersey cannot be sustained. The powers which the Township of
Montclair is authorized to exert, however varied or extended,
constitute, within the meaning of the constitution, one object,
which is fairly expressed in a title showing the legislative
purpose to establish a new or independent township. It is not
intended by the Constitution of New Jersey that the title to an act
should embody a detailed statement, nor be an index or abstract of
its contents. The one general object -- the creation of an
independent municipality -- being expressed in the title, the act
in question properly embraced all the means or instrumentalities to
employed in accomplishing that object. As the state constitution
has not indicated the degree of particularity necessary to express
in its title the one object of an act, the courts should not
embarrass legislation by technical interpretations based upon mere
form or phraseology. The objections should be grave, and the
conflict between the statute and the Constitution palpable, before
the judiciary should disregard a legislative enactment upon the
sole ground that it embraced more than one object or, if but one
object, that it was not sufficiently expressed by the title.
The assignments of error, unusually large in number, raise other
questions. Such of them as we deem necessary to examine relate to
the rejection as well of evidence offered as of instructions asked
in behalf of the township.
Page 107 U. S. 156
The main provisions of the bonding act will be found in the
statement which precedes this opinion. As preliminary to an issue
of township, town, or city bonds, by such commissioners as might be
appointed on the petition of freeholders, the statute requires the
written consent of persons owning, or representing as agent or
president at least two-thirds of the real estate of the
municipality -- the bonds so issued not, however, to exceed twenty
percent of the value of its landed property and the consent so
obtained stating the amount to be raised, and that it is to be
invested in the bonds of the railway company. The statute further
provided, as we have seen, that the signatures of consenting
freeholders should be proved by one or more of the commissioners;
that the fact that the consenting freeholders owned or represented
the requisite amount of landed property should be proved by the
assessor, who was required to perform such service, and that the
consent and affidavit should be filed in the office of the clerk of
the county in which the municipality is situated, and a certified
copy thereof in the office of the clerk of the township, town, or
city -- the originals, or a certified copy thereof, to be received
as evidence of the facts therein contained in any court of the
state or before any judge or justice thereof.
The declaration in each count, whether on bond or coupon,
expressly avers that in pursuance of the statute such consents were
obtained; also that the commissioner, duly appointed and sworn as
directed by the statute, issued the bonds in suit; that thereafter,
and before they respectively matured, a certain named bank became,
for a valuable consideration, in public market paid, the holder and
bearer thereof, and that thereafter, and before the commencement of
suit, the plaintiff became for a valuable consideration by him paid
to said bank, and still is, the holder and bearer thereof.
The only plea in behalf of the township to the special counts on
the bonds and coupons is
non est factum; to the common
count for interest,
nil debit.
At the trial, the plaintiff introduced evidence tending to show
that the commissioners were duly appointed in the mode prescribed
by statute. If their due appointment was put in issue by the
general plea of
non est factum, if is sufficient
Page 107 U. S. 157
to say that the question was properly submitted to the jury.
The plaintiff also produced at the trial, from the county
clerk's office, the original consents with the affidavits connected
therewith, and also certified copies from the office of the
township clerk. They show that the freeholders consented to an
issue of bonds, to an amount not exceeding $200,000, under the Act
of April 9, 1868, to "be exchanged for, or their proceeds invested
in, the income bonds" of the railway company. Upon each is endorsed
the affidavit of Van Giesen, assessor, showing that the consenting
freeholders owned or represented at least two-thirds of the landed
property of the township. These papers in form met all the
requirements of the statute.
Numerous offers to introduce evidence in behalf of the township
were denied. They were made in every form which the ingenuity of
able counsel could suggest. Without encumbering this opinion with a
detailed statement of them, it is enough to say that the township
was denied the privilege of proving that the consents did not in
fact represent the required amount of landed property; that Van
Giesen, the assessor, made his affidavit without having extracted
from any assessment roll the taxable value of the real estate to
enable him to determine whether the consents represented sufficient
real estate, and that the commissioners acted on that affidavit
before Van Giesen had taken the oath of office. Upon the occasion
of these offers, or some of them, counsel for defendants, in
response to inquiries by the court, disclaimed any ability to bring
home to plaintiff knowledge of these departures from the
requirements of the statute. Upon the same view of the law, as we
suppose, counsel asked the court to give, but the court refused,
the following instructions to the jury:
"If the evidence satisfies the jury that there were
circumstances of fraud or illegality in the inception of the bonds
or in the circumstances under which they were issued and disposed
of by the commissioners, then the plaintiff cannot recover on the
bonds without some proof that he purchased them for value, or gave
some consideration for them."
"
* * * *"
Page 107 U. S. 158
"That, by the issue presented by the pleadings in the case, the
burden of showing that he was a purchaser for value, or claims
title through such a purchaser, was on the plaintiff."
As to the last of these instructions, there is no ground
whatever upon which it could stand. The pleadings did not of
themselves impose upon plaintiff the necessity of showing either
that he or any prior holder of the bonds was a purchaser for value.
As holder, he is presumed to have acquired them in good faith and
for value.
Goodman v.
Simonds, 20 How. 343;
Murray v.
Lardner, 2 Wall. 110;
Shaw v. Railroad
Company, 101 U. S. 557;
Swift v. Smith, 102 U. S. 442. The
plea of
non est factum did not put in issue the fact that
he was the holder. Legislative authority for an issue of bonds
being established by reference to the statute, and the bonds
reciting that they were issued in pursuance of the statute, the
utmost which plaintiff was bound to show to entitle him,
prima
facie, to judgment, was the due appointment of the
commissioners and the execution by them in fact of the bonds. It
was not necessary that he should in the first instance prove either
that he paid value, or that the conditions preliminary to the
exercise by the commissioners of the authority conferred by statute
were in fact performed before the bonds were issued. The one was
presumed from the possession of the bonds and the other was
established by the statute authorizing an issue of bonds and by
proof of the due appointment of the commissioners and their
execution of the bonds with recitals of compliance with the
statute. So we have often ruled in numerous cases with which the
profession are familiar and which need not be cited.
But the contention of counsel is that it was competent under the
plea of
non est factum to prove either fraud or illegality
in the inception of the bonds in order to remove the presumption of
bona fide ownership for value which arises from the mere
possession of the bonds, and thus compel plaintiff to show that he
paid value for them. Consequently, it is argued, the first of the
foregoing instructions should have been given.
It is not necessary to extend this opinion by a review of the
adjudications in the American and English courts to which our
attention has been called, or to deduce therefrom a general
rule
Page 107 U. S. 159
to govern every case in which it may be claimed that the proof
upon the part of a defendant, in a suit upon a negotiable security,
requires the holder before he can recover to show that he paid
value. Without entering upon a critical examination of the
authorities upon this important question of commercial law, and
assuming, for the purposes of this case merely, that the proof of
the exclusion of which the township complains was competent
evidence for some purposes under the plea of
non est
factum, we are of opinion that the instruction in question
ought to have been refused. Its rejection was proper for the
reason, if there were no other, that it required the jury, if they
believed either fraud or illegality in the inception of the bonds
to have been established, to find for the township, unless the
plaintiff proved that
he purchased for value or gave some
consideration for them. Such is not the law, for if any previous
holder of the bonds in suit was a
bona fide holder for
value, the plaintiff, without showing that he had himself paid
value, could avail himself of the position of such previous holder.
In Byles on Bills 119, 124, it is correctly said that "if any
intermediate holder between the defendant and the plaintiff gave
value for the bill, that intervening consideration will sustain the
plaintiff's title." In
Hunter v. Wilson, 19 L.J.N.S., the
plea was that the bill of exchange was drawn by a named person at
the request and for the accommodation of the defendant, without any
consideration or value whatever, and that it was endorsed by that
person without any consideration or value given by the plaintiff
for such endorsement either to the defendant of to said person, or
to any other person whatsoever. It was held that the plea ought to
have contained a statement equivalent to an allegation that none of
the previous parties to the bill had given value for the
endorsement. One of the judges remarked that "some party to the
bill may have given value for it so as to vest a valid title in the
plaintiff. We cannot tell through how many hands it may have
passed." It is not necessary in this case to hold that the plea in
such a case should aver that no previous holder of a negotiable
security paid value. But the case last cited is authority for the
proposition that the present plaintiff may be protected by showing
that some previous holder paid value.
Page 107 U. S. 160
This question was directly adjudged in
Commissioners v.
Bolles, 94 U. S. 109.
One of the issues there was whether the plaintiff was a
bona
fide holder of certain municipal bonds. After stating that the
legal presumption was that they were, the Court, speaking by
Justice Strong, said:
"But the plaintiffs are not forced to rest upon mere presumption
to support their claim to be considered as having the rights of
purchasers without notice of any defense. They can call to their
aid the fact that their predecessors in ownership were such
purchasers. To the rights of those predecessors they have
succeeded. Certainly the railroad company paid for the bonds and
coupons by paying an equal amount of their stock, which the county
now holds, and nothing in the special facts found show that the
company knew of any irregularity or fraud in their issue."
The court proceeded:
"And still more: the contractor for building the railroad
received the bonds from the county in payment for his work, either
in whole or in part, after his work had been completed. There is no
pretense that he had notice of anything that should have made him
doubt their validity. Why was he not a
bona fide purchaser
for value? The law is undoubted that every person succeeding him in
the ownership of the bonds is entitled to stand upon his
rights."
When the instruction in question was asked, the proof was that
the bonds had been issued by the commissioners and exchanged with
the railroad company for a like amount of the company's income
bonds. That exchange was a substantial compliance with the statute.
It was made under a contemporaneous agreement between the
commissioners, the railway company, and certain trustees, mutually
selected, whereby the bonds passed, upon the exchange, under the
control of those trustees and were deposited in the Union Trust
Company, to be surrendered -- $10,000 at a time -- only as the work
of constructing the railroad progressed, to the company or the
contractor on their order. The receipt of the trust company shows
that it agreed to deliver them to the contractor or his agents or
assigns, on the joint order of the trustees or any two of them. And
it was proven that the bonds were delivered to the contractor or
upon his order between May 10, 1870, and August 4, 1871. The road
was constructed as contemplated,
Page 107 U. S. 161
and the income bonds of the company remained in the hands of the
commissioners or of some of them. Whether those bonds ultimately
proved to be of any value is of no consequence as between the
township and the plaintiff.
It thus appears that when the court was asked to give an
instruction upon the basis that plaintiff could not recover unless
it was proven that he paid value for the bonds, it was established
beyond question that the bonds had previously passed into the
hands, or become pledged for the benefit, of the contractor who
built the road. He acquired an interest or a lien on the bonds, to
secure payment of the amount due him for his work and labor. He
therefore became a holder for value in the sense that he paid real,
in contradistinction from apparent, value, without notice of any
fraud or illegality affecting the bonds. Story on Notes, sec. 195;
Railroad Company v. National Bank, 102 U. S.
14; Byles on Bills 117. No evidence was introduced or
offered which in any degree impeached his good faith or proved
knowledge on his part that the preliminary conditions prescribed by
statute had not been fully performed. The character of the bonds as
negotiable securities, free from defenses which might have been
available as between the original parties, was established by their
being pledged for the benefit of the contractor. So that even if
there was fraud or illegality in the inception of the bonds (apart
from such illegality as would have made the bonds absolutely void
by whomsoever held), a defense upon that ground would not have been
good against the contractor, and consequently is not available
against the plaintiff. The latter, in virtue of the new and
independent title derived from or traced to a prior
bona
fide holder for value, could stand upon the rights of such
holder.
In any view of the case, no error was committed to the prejudice
of the township in excluding any of the evidence offered or in
refusing any of the instructions asked in its behalf.
Other questions in the case we pass by as not necessary to be
examined. We have considered all that seemed to affect the
substantial rights of the parties.
Judgment affirmed.
