1. An act of the Legislature of Mississippi, approved Feb. 10,
1860, authorized the County of Calhoun, among others, to subscribe
to the capital stock of a railroad company, provided that at an
election in the county, of which and of the amount to be
subscribed, and in what number of installments, twenty days' notice
should be given, a majority of the qualified electors voting should
be in favor of the subscription. The proposition, when first
submitted, was rejected, but at a second election, the vote was in
favor of the subscription. An act passed March 25, 1871, declared
that the bonds issued in payment of previous subscriptions should
be made payable to the president and directors of the company and
their successors and assigns. The bonds were issued Sept. 1, 1871,
payable to the railroad company, or bearer, ten years thereafter,
at the agency of the company in the City of New York. They recite
that they are issued in payment of the county subscription to the
capital stock of the company, in pursuance of the said acts, and in
obedience to a vote of the people of the county, at an election
held in accordance therewith. In a suit on the bonds,
Held:
1. That the requirement that they should be made payable to the
president and directors of the company and their successors and
assigns is only directory, and that the recital therein estops the
county from taking any advantage of the irregularity committed by
its servants.
2. That no place of payment having been designated by the act,
it was competent to make the bonds payable in New York.
3. That as in that State they could, after being assigned in
blank, pass by delivery from hand to hand, and have all the
properties of commercial paper, the result is the same as if they
had been drawn in literal conformity with the statute.
4. That, in the absence of any prohibition in the act against
more than one submission to the electors of the question of making
the subscription, the second vote was not unlawful.
Page 99 U. S. 215
2. The fourteenth section of the Constitution of Mississippi,
ratified Dec. 1, 1889, which declares that
"The legislature shall not authorize any county, city, or town
to become a stockholder in, or to lend its credit to, any company,
association, or corporation, unless two-thirds of the qualified
voters of such county, city, or town, at a special election, or a
regular election, to be held therein, shall assent thereto"
is wholly prospective. It does not abrogate previous acts of the
legislature conferring authority to subscribe for stock.
This was an action brought by William B. Galbraith, a citizen of
Tennessee, against the Board of Supervisors of Calhoun County,
Mississippi, on certain bonds and coupons thereto attached. The
bonds are in the words and figures following, except as to the
numbers and amounts, and a copy of one of the coupons is hereto
annexed. They differ only as to the time of payment and the
reference to the bond to which they are attached.
"
Bond No. ___"
"
COUNTY OF CALHOUN, STATE OF MISSISSIPPI"
"
500] [500"
"Be it known that the County of Calhoun, State of Mississippi,
is indebted unto and promises to pay the Grenada, Houston, and
Eastern Railroad Company, or bearer, at the agency of said company
in the City of New York, two years from the date hereof, five
hundred dollars, lawful money of the United States of America, with
interest at the rate of eight percent per annum, payable
semiannually on the first day of March and September of each year,
on the presentation and surrender of the proper coupon hereto
annexed."
"This bond is one of a series of bonds issued and delivered to
the Grenada, Houston, and Eastern Railroad Company by Calhoun
County, to meet and pay off the amount subscribed by said county to
the capital stock of the railroad company aforesaid, in pursuance
of an act of the Legislature of the State of Mississippi, entitled
'An Act to aid in the construction of the Grenada, Houston, and
Eastern Railroad,' approved Feb. 10, 1860, and of an act amendatory
thereof, passed March 25, 1871, and in obedience to a vote of the
people of said county at an election held in accordance with the
provisions of said acts."
"In witness whereof, the board of supervisors of said county
have caused the signature of the president of said board to be
hereto
Page 99 U. S. 216
affixed, countersigned by the clerk, with his official seal
affixed, and who have also signed the coupons hereto attached at
their office in Pittsboro' this first day of September, 1871."
"(Signed) JOEL ABNEY"
"
Pres't B'd of Supervisors"
"J. S. RYAN, Clerk"
"
Coupon"
"UNITED STATES OF AMERICA:"
"
$4.00] [$4.00"
"The County of Calhoun will pay to the Grenada, Houston, and
Eastern Railroad Company, or bearer, four dollars at their agency
in the City of New York, on the first day of March, 18__, being six
months' interest on bond No. ___."
"(Signed) JOEL ABNEY"
"
Pres't B'd Supervisors"
"J. S. RYAN, Clerk"
In addition to the plea of
nil debet, the defendant
filed several special pleas, all of which were demurred to. The
demurrers were sustained, and judgment was rendered against the
defendants. They then sued out this writ. Their assignment of
errors is referred to, and the remaining facts are set forth in the
opinion of the Court.
MR. JUSTICE SWAYNE delivered the opinion of the Court.
The question presented for our determination in the case is as
to the validity of certain bonds issued and delivered by the Board
of Supervisors of Calhoun County, in the State of Mississippi, in
payment for stock of the Grenada, Houston, and Eastern Railroad
Company, for which the supervisors subscribed in behalf of the
county. In the court below, they filed numerous pleas presenting
the points of defense upon which they relied. The pleas were all
demurred to, the demurrers were sustained, and judgment was
rendered for the plaintiff. Here the assignments of error are not
numerous. We shall respond as far as we deem necessary without
formally restating them.
The Act of Feb. 10, 1860, authorized the subscription,
provided
Page 99 U. S. 217
a majority of the voters of the county signified their approval.
That sanction was given, and the stock was subscribed. The
Amendatory Act of March 25, 1871, declared that when bonds were
issued in payment for such stock they should be
"signed by the president of the board of supervisors issuing the
same, and be made payable to the president and directors of the
Grenada, Houston, and Eastern Railroad Company, and their
successors and assigns, and may be assigned, sold, and conveyed
with or without guarantee of payment by said president and
directors, or may be mortgaged in like manner, at their discretion,
as they may deem best for the company."
The bonds here in question bore date Sept. 1, 1871, and were
payable to "the Grenada, Houston, and Eastern Railroad Company, or
bearer, at the agency of said company in the City of New York, two
years from date." Each bond was for $500, with interest coupons
attached, which matured half-yearly. On their face is this
recital:
"This bond is one of a series of bonds issued and delivered to
the Grenada, Houston, and Eastern Railroad Company by Calhoun
County, to meet and pay off the amount subscribed by said county to
the capital stock of the railroad company aforesaid in pursuance of
an act of the legislature of the State of Mississippi, entitled 'An
Act to aid in the construction of the Grenada, Houston, and Eastern
railroad,' approved Feb. 10, 1860, and of an act amendatory
thereof, passed March 25, 1871, and in obedience to a vote of the
people of said county at an election held in accordance with the
provisions of said acts."
An objection is made to the form of the bonds. It is said they
should have been made payable to the railroad company and "their
successors and assigns," and not to the company "or bearer," and it
is insisted that this divergence from the prescribed formula is a
fatal defect.
To this there are several answers. The statutory requirement in
this particular is only directory.
Indianapolis Railroad Co. v.
Hurst, 93 U. S. 291;
Township of Rock Creek v. Strong, 96 U. S.
271. The defect is one of form and not of substance. The
irregularity was committed by the servants of the county, and the
county is estopped to take advantage of it.
Bargate v.
Shortridge, 5 Clark H.L. 297. The recital in the
Page 99 U. S. 218
bonds of conformity to the statutes is also conclusive. A buyer
was not bound to look further. Bigelow, Estoppel 266;
Commissioners of Knox County
v. Aspinwall, 21 How. 539;
Moran v.
The Commissioners, 2 Black 722. No place of payment
of the bonds being designated by the statute, it was competent for
the supervisors to make them payable in New York.
Meyer v.
Muscatine, 1 Wall. 384. The law of the place of
performance governed the construction and effect of the contract.
Brabston v.
Gibson, 9 How. 263;
Cook v.
Moffat, 5 id. 295. By the law of New York, such
bonds may be assigned in blank, and any holder can fill the blank
with his own name or otherwise. In the meantime, after such
assignment in blank, they pass by delivery from hand to hand, and
have all the properties of commercial paper.
Hubbard v. The New
York & Harlem Railroad Co., 36 Barb. (N.Y.) 286. The
result is therefore the same that it would have been if they had
been drawn in literal conformity to the statute.
The requirement of the statute in this particular is evidently
the result of inadvertence. It applies to the securities spoken of
the language necessary in a deed intended to vest in a corporation
a fee simple title to real estate. They were obviously intended to
be made negotiable instruments.
Mayor of Vicksburg v.
Lombard, 51 Miss. 111.
It appears by the record that the proposition for subscription
was twice submitted to the voters. The first time it was rejected;
the second it was approved by a majority. It is contended that the
first submission exhausted the power to submit, and that the second
was a nullity. We cannot concur in this view.
The first section of the act of 1860 gave ample power to the
proper officers (then the board of police, afterwards the board of
supervisors) to subscribe, upon conditions thus expressed:
"
Provided, however, that an election shall be held in
the county for and on account of which stock is proposed to be
subscribed by the qualified electors thereof, at the regular
precincts of said county, twenty days' notice of the time of
holding such election, and of the amount proposed to be subscribed,
and in what number of installments, being first given by the board
of police; and if, at said election, a majority of the qualified
electors voting shall be in favor of
Page 99 U. S. 219
such subscription, then said board shall make such subscription
for and in behalf of the county, for the amount specified, by the
president of said board of police, subscribing the amount so
specified, to the capital stock of said company, but if a majority
of those voting shall be opposed to such subscription, the same
shall not be made."
The remaining sections provide for the collection of the amount
subscribed, by taxation, the mode of collection, &c., if the
subscription should be made.
There is no limitation as to the time when or the number of
times the voters might be called upon to decide the question of
subscription. We cannot recognize any restriction as to the latter
in this respect without adding to the statute what it does not
contain. Our duty is to execute the law, not to make it. Such an
interpolation would involve the "judge-made law" which Bentham so
earnestly denounces. If authority be needed in support of our
construction of the clause, it will be found in
The Society v.
New London, 29 Conn. 174.
The present Constitution of the State of Mississippi, ratified
Dec. 1, 1869, declares:
"SEC. 14. The legislature shall not authorize any county, city,
or town to become a stockholder in or to lend its credit to any
company, association, or corporation unless two-thirds of the
qualified voters of such county, city, or town, at a special
election or regular election to be held therein shall assent
thereto."
The learned counsel for the plaintiff in error insists that this
section abrogated the act of 1860 and avoids the bonds.
It will be observed that the language of the section is wholly
prospective. It is, in effect, that the legislature shall not in
the future authorize any county, city, or town (without the consent
of two-thirds of the legal voters) to do either of two things: 1.
become a stockholder in any company, association, or corporation;
2. lend its credit to any company, association, or corporation.
The restraint is upon the legislature. It is forbidden to do
thereafter either of the two prohibited things.
The act which authorized the subscription here in question and
under which it was made was passed more than nine years
Page 99 U. S. 220
before the constitution took effect. As to this act, there is no
room for any doubt or question. It provided for the payment of the
subscription by a tax equal to the amount subscribed.
The amendatory act of 1871, as regards the point under
consideration, only changed the mode of payment for the stock.
Instead of payment by a tax imposed for that purpose, it provides
"that it shall and may be lawful" for the supervisors to issue
bonds for such sums as "may be deemed necessary to meet, pay off,
and discharge the subscriptions" made theretofore or thereafter
under the prior act of 1860.
The eighth section requires the levy and collection of
sufficient taxes to pay in due time the amount due upon such
subscriptions, or upon the bonds given for their payment.
In neither case was there to be a loan of any kind to the
railroad company, and certainly none of "the credit of the county."
The constitutional prohibitions do not, therefore, apply in any
wise to this case.
The act of 1871 recognizes the distinction between subscriptions
made under it and those made under the act of 1860. The former
permitted subscriptions by towns, which were not authorized by the
latter. In relation to such subscriptions, the constitutional
majority of two-thirds of the voters was required.
Our construction of the clause here in question has been given
to like language in constitutions elsewhere under similar
circumstances. There are several adjudications of this court
exactly in point touching the Constitution of Missouri.
County
of Henry v. Nicolay, 95 U. S. 619;
County of Callaway v. Foster, 93 U. S.
567;
County of Scotland v. Thomas, 94 U. S.
682;
County of Macon v. Shores, 97 U. S.
272.
See also The State ex Rel. Mo. & Miss.
Railroad Co. v. Macon County Court, 41 Mo. 453;
State v.
Greene County, 54
id. 540;
Cass v. Dillon, 2
Ohio St. 607.
We find no error in the record.
Judgment affirmed.
MR. JUSTICE MILLER, MR. JUSTICE BRADLEY, and MR. JUSTICE HARLAN
dissented.
