1. Where, upon the performance of certain conditions precedent,
the issue of bonds to a railroad company by the board of
commissioners of a county in Kansas is authorized by law, the
bonds, when issued, if they recite such performance, are, in the
hands of a bona fide
holder for value, binding upon the
2. The acceptance and holding by the county of the certificate
of stock of the company, the issue and delivery of the bonds to the
company, and the payment of interest on them for a time, cured the
defects, if any existed, as to the order for submitting the
question of subscription to a popular vote, and authorized a
taker of the bonds to presume that everything
necessary to their validity had been properly done.
3. The fact that the act under which the bonds were issued is
erroneously referred to in their recitals does not render them
The case is stated in the opinion of the Court.
Page 94 U. S. 203
MR. JUSTICE SWAYNE delivered the opinion of the Court.
This is an action brought to recover the amount of certain
coupons taken from bonds issued by the plaintiffs in error to the
St. Louis, Lawrence & Denver Railroad Company, of which bonds
the defendant in error was the holder.
By consent of parties, the case was tried by the court without a
jury. The court found the facts and gave judgment for the
Page 94 U. S. 204
defendant in error. The plaintiffs in error thereupon brought
the case to this Court for review.
There is no dispute between the parties as to the leading facts
of the controversy. The proper authorities submitted the question
to the electors of the county whether the county should subscribe
for $100,000 of the stock of the company, to be paid for by issuing
its bonds to that amount. The election was ordered on the 25th of
January, 1869, and took place on the 6th of April, 1869. The
proposition was sanctioned by a majority of more than two to one.
The bonds were thereafter executed and deposited as escrows. On the
22d of May, 1871, the commissioners made an order that they should
be delivered, and they were delivered accordingly. A certificate of
stock was issued and delivered by the company, and is still held by
the county. It has never been surrendered nor offered to be
surrendered. The bonds were signed by the chairman and clerk of the
board of commissioners and attested by the county treasurer. There
was in each one a recital
"That this bond is executed and issued by virtue of and in
accordance with an act of the Legislature of Kansas entitled 'An
Act to authorize counties and cities to issue bonds to railroad
companies,' approved Feb. 25, 1868, and is in pursuance of and in
accordance with the vote of a majority of the qualified electors of
the County of Johnson at a regular election, held on the sixth day
of April, 1869."
Each one bore also the following endorsement:
"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 the bond has been duly
registered in my office in accordance with an act of the
" 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 such
bonds and the repealing of all laws in conflict therewith,"
"approved March 2, 1872. Witness my hand and official seal, this
twenty-first day of March, 1872."
The certificate is authenticated by the official signature and
seal of the auditor.
Page 94 U. S. 205
The road was finished, and has since been in operation. The
county and its inhabitants are in the enjoyment of the benefits
arising from it.
There is no imputation of any taint of fraud upon either
The county authorities paid the interest upon the bonds for a
The county has received what it contracted to receive, and has
paid what it contracted to pay.
The plaintiff in the suit is the bona fide
A case of stronger equity can hardly exist.
Several objections have been taken to the validity of the bonds.
They have been elaborately and ably argued upon both sides. The
view which we take of the controversy renders it necessary to
advert to but one of the objections, and to that one briefly. Our
judgment will be placed upon a different ground.
The act mentioned in the recital in the bond was erroneously
referred to. That act does not affect the case, and may be laid out
of view. The Act of Feb. 25, 1868, was in force when the order for
the election was made. It gave ample authority for making the order
and for all that was subsequently done. It is insisted that this
act was repealed by the Act of Feb. 27, 1869; that the order for
the election fell with the act repealed, and that consequently the
election was held without any legal authority. Such repeal, so far
as regards the authority to make the order and the continuing
efficacy of the order, is strenuously controverted upon the other
Whatever may be the fact, we are satisfied that after the
passage of the act of 1869, all the proceedings were in substantial
conformity to its requirements. It was in force before the election
was held and until after the bonds were issued and delivered.
This act, like the act of 1868, authorized the commissioners to
issue the bonds when the requirements of the law had been complied
with. They were thus constituted a tribunal for the adjustment of
all questions touching the subject. They were clothed with the
power and charged with the duty to decide them. No appeal or review
was provided for. Their issuing the bonds was the reflex and
embodiment of their judgment
Page 94 U. S. 206
that it was proper to do so. It implies a prior determination to
that effect. The fact carries with it this presumption. The bonds
recite that they were issued in conformity to law and in pursuance
of the election held on the 6th of April, 1869. It is true they
refer to the wrong statute, but falsa demonstratio non
The bad here does not hurt the good. The act of the
commissioners was the act of the county, and the county is
conclusively bound by what they have done. As between the county
and a bona fide
holder, no question involving the
infirmity of the securities can be raised.
The principle of estoppel applies, and it precludes the obligor
from interposing such a defense.
Whether the certificate of the auditor of state, endorsed on the
bonds, has or has not the same effect is a point not necessary in
this case to be considered. Taking and holding the certificate of
stock, issuing and delivering the bonds, and paying the interest
for a time, cured the defect as to the order for an election, if
any such existed. Under the circumstances, a bona fide
taker had a right to presume that everything had been properly done
which was necessary to the validity of the bonds. When this suit
was instituted, the objections which have been made were too
The views we have expressed have been repeatedly sustained by
the adjudications of this Court. Supervisors v.
5 Wall. 772; Olcott
16 Wall. 698; City
of Lexington v. Butler,
14 Wall. 283;
Pendleton County v.
13 Wall. 298; Myers
1 Wall. 385; Knox
21 How. 544; Lind v. The
16 Wall. 6; St.
Joseph's Township v. Rogers,
16 Wall. 644;
Pine Grove v.
19 Wall. 666.
We refer especially to the closing part of the opinion in the
case last mentioned.