1. Where, upon the undisputed facts of the case, the plaintiff
is entitled to recover, it is not error for the court to instruct
the jury to find for him.
2. Where the testimony is all one way, a party is not entitled
to instructions which assume that it is otherwise.
3. Where, pursuant to the authority vested in him by chapter 907
of the laws of New York, passed May 18, 1869, and the several laws
amendatory thereof, the county judge renders judgment declaring
that the conditions have been performed whereon a town in the
county can lawfully subscribe for shares of the capital stock of a
railroad company in that state, and issue its bonds to pay
therefor,
held that the judgment, until reversed by a
higher court, is conclusive.
Page 99 U. S. 677
4. In May, 1871, certain parties claiming to be a majority of
the taxpayers, and to own the greater part of the taxable property
of a town in New York, petitioned the proper county judge for an
order that its bonds, to the amount of $80,000, should be issued to
enable it to subscribe and pay for that amount of the capital stock
of A., a railroad company. After hearing, he, July 1, 1871, ordered
the bonds to be issued, and, pursuant to the statute, appointed
three commissioners to execute and deliver them. Application was
thereupon made by sundry taxpayers to the supreme court for a writ
of certiorari, which was allowed Sept. 30, 1871, and served upon
him. The proper return was made. June 27, 1872, the supreme court
affirmed the judgment. In July following, the case was taken to the
Court of Appeals, where, solely upon the ground that he had refused
the application of taxpayers to withdraw their signatures from the
petitions, which, had it been granted, would have reduced the
numbers and the taxable property represented below the statutory
requirement, the previous judgment was, in February, 1873,
reversed, with directions to dismiss the proceeding. April 3, 1872,
the commissioners subscribed for eight hundred shares of the stock
of A., and on the next day issued and delivered in payment one
hundred and sixty of the bonds of the town of $500 each, and
thereupon received from A. scrip for the stock, which the town
still holds. On the face of each bond was a certificate that it had
been duly registered in the clerk's office of the county. A., Feb.
26, 1872, and May 31, 1873, entered into contracts with another
railroad company, and at the latter date delivered as collateral
security for the fulfillment of both contracts all the bonds to B.,
with authority to him to sell them and pay over the proceeds to the
latter company. Feb. 4, 1874, the plaintiff purchased some of the
bonds in good faith for a valuable consideration. He subsequently
brought suit against the town to recover the amount due on the
coupons.
Held that the plaintiff is entitled to
recover.
6.
County of Warren v. Marcy, 97 U. S.
96, cited and approved.
The facts are stated in the opinion of the Court.
MR. JUSTICE SWAYNE delivered the opinion of the Court.
This suit was brought upon interest coupons belonging to alleged
bonds of the Town of Orleans, in the State of New York. There are
thirteen assignments of error in the record. Ten of them relate to
the admission or rejection of evidence. All these ten have been
pressed upon our attention, but we think there is nothing in them.
We shall therefore pass them by without giving to either of them
special consideration. The proceedings
Page 99 U. S. 678
of the county judge touching the issuing of the bonds and the
bonds themselves were sought to be excluded. This proceeded upon a
misconception of the law of evidence. The plaintiff had a right to
exhibit his case. These documents, according to his view, were
links in his chain of title to recover. To shut them out would have
been to condemn him unheard and to give judgment against him
without trial. The admissibility of testimony under such
circumstances, and its effect after it is admitted and all the
other evidence is in are very different questions.
The twelfth assignment is that the defendant asked the court to
submit to the jury, as distinct issues to be tried, the
propositions whether the two railroad companies which had held the
bonds and the plaintiff were
bona fide holders, and that
the court refused.
Where the testimony is all one way and is conclusive in its
effect, a party has no right to ask a charge which assumes that it
is otherwise. It would tend to create a doubt where none existed or
ought to exist, and might mislead the jury.
Admitting that there could be doubt as to the companies, a
concession by no means necessary to be made, there could be none,
as the case appears in the record, with respect to the plaintiff.
The inquiry was therefore immaterial as to them, and wrong as to
him. The court properly declined to accede to the request.
The tenth and eleventh assignments charge error in the refusal
of the court to direct the jury to find for the defendant. The
former relates to a general request and refusal; the latter, to a
request upon twelve specified grounds, with the same result.
The last assignment complains that the court directed the jury
to find for the plaintiff.
It is well settled in the jurisprudence of this Court that if
the facts are clearly established and are undisputed, it is
competent for the court to give such a charge.
In one of the cases brought before us, where it had been done,
the practice was commended, and it was remarked that "it gives the
certainty of applied science to the results of judicial
investigation."
Merchants' Bank v. The
state Bank, 10 Wall.
Page 99 U. S. 679
604. In whose favor the charge should have been given will
appear by the result of our examination of the case.
We have already adverted to the good faith of the defendant in
error as a purchaser. When he bought, he gave his negotiable notes,
payable at different times, for the purchase money.
The consideration was sufficient. 1 Daniel, Negotiable
Securities 584. Whether the notes were absolute, presumptive, or
conditional payment or only special collaterals to the amount to be
paid are points upon which there is great conflict in the
authorities. 1 Parsons, Notes and Bills 151, c. 7. We need not
consider the subject in this case.
The plaintiff was not bound to allow his paper to go to protest,
and take the hazards of the litigation which would have followed.
The refusal to pay the note first due upon the ground of the want
of consideration would doubtless have led to the transfer of the
other notes, all under due, and as to them, in that case, there
could have been no defense. But irrespective of this, there could
have been none upon the merits.
In
Otis v. Cullom, 92 U. S. 447, a
city bond issued in Kansas was sold to the plaintiffs in New York.
This Court, on the ground that the legislature had no power to pass
the act under which the bond was issued, adjudged it void. The
plaintiffs subsequently sued to recover back what they had paid for
it. This Court held that in such cases there is only an implied
warranty of title and genuineness, and that if there were no
guaranty, and no fraud or misrepresentation on the part of the
vendor in selling, the plaintiffs could not recover. It was said
that such instruments pass from hand to hand like banknotes, and
that, if invalid, the law would not inflict the hardship of
compelling everyone who had passed them to pay back what he had
received from his transferee. This case followed
Lambert v.
Heath, 15 Mee. & W. 486, in which the same point was ruled
in the same way.
The important question here is whether the bonds were wholly
void -- like a promissory note given for a gaming consideration and
made a nullity by statute -- or whether they were of such a
character that a
bona fide holder could enforce them like
any other commercial security, free from infirmity.
It is not denied that the statutory authority to issue them
Page 99 U. S. 680
under the circumstances designated was ample and valid. In this
respect, our attention has been called to no defect; no question
has been raised upon the subject.
Parties claiming to be a majority of the taxpayers, and to own
the greater part of the taxable property of the town, petitioned
the county judge for an order that the bonds of the town to the
amount of $80,000 should be issued to enable it to subscribe and
pay for that amount of the capital stock of the Clayton and Theresa
Railroad Company. After hearing the petitioners and their opponents
at the appointed time, the judge, on the 1st of July, 1871, ordered
the bonds to be issued, and, pursuant to the statute, appointed
three commissioners to execute and deliver them. An application was
thereupon made by the dissatisfied parties to the supreme court for
a writ of certiorari. The writ was allowed on the 30th of
September, 1871. It was served upon the county judge, and he made
the proper return. On the 27th of June, 1872, the supreme court, at
a general term, affirmed the judgment. In the month of July
following, the case was taken to the Court of Appeals, and in
February, 1873, that court reversed the previous judgments and
ordered the petition to be dismissed.
On the 3d of April, 1872, the commissioners appointed by the
county judge subscribed for eight hundred shares of the stock of
the railroad company, amounting to $80,000, and on the next day
issued and delivered in payment one hundred and sixty of the bonds
of the town of $500 each, and thereupon received from the company
scrip for the stock, which the town still holds. On the face of
each bond was a certificate that it had been duly registered in the
clerk's office of the county. The coupons in suit in this case were
attached to one hundred and forty of these bonds. On the 26th of
February, 1872, and on the 31st of May, 1873, the Clayton and
Theresa Railroad Company entered into a contract with the Utica and
Black River Railroad Company, and at the date of the second
contract delivered all the bonds to Isaac Maynard as collateral
security for the fulfillment of both contracts, and with authority
to him to sell the bonds and pay over the proceeds to the latter
company. On the 4th of February, 1874, Maynard sold to the
plaintiff the bonds here in question under the circumstances before
stated.
Page 99 U. S. 681
The Court of Appeals reversed the judgment of the county judge
solely upon the ground that when the case was before him he had
refused to allow taxpayers who had signed the petition to withdraw
their signatures, although applications for that purpose were made,
and if it had been permitted, the numbers and taxable property
represented would have been below the standard required by the
statute to authorize the judgment that was rendered. It does not
appear that any other objection was made by the contestants.
People ex Rel. v. Sawyer, 52 N.Y. 296. The previous
reported adjudications are said to have been all contrary to this
decision; none of them, however, was by the court of last resort.
Matter of Taxpayers of Town of Greene, 38 How.Pr. (N.Y.)
515; Mem. of Decisions of Sup.Court, fols. 281, 282.
See also
People v. Mitchell, 35 N.Y. 555.
The bonds showed no defect upon their face. They purported to be
issued by virtue of certain specified acts of the legislature, and
set forth that the
"commissioners, under the acts above referred to, for the Town
of Orleans, . . . upon the faith and credit and on behalf of said
town, and confirmed by a majority of the taxpayers, representing a
majority of the taxable property of the same, according to said
acts, for value received, do hereby promise,"
&c.
When the county judge appointed the commissioners to issue the
bonds, it was made their duty to proceed "with all reasonable
dispatch." They were not parties to the proceedings upon the
certiorari, and hence were not directly affected by them. The same
remarks apply to the corporation that received the bonds in payment
for its stock. It is expressly provided by statute that in case of
disagreement of the commissioners touching the issuing of the
bonds, the supreme court may decide and direct what shall be done,
and that
"said court . . . shall have power at any time, by injunction,
to prevent the issue of said bonds or any part thereof on notice
and for good cause shown, and any judge of said court may grant a
temporary injunction until such motion can be heard."
Laws of 1871, vol. ii. p. 2119, c. 935, sec. 5. In this case, a
preliminary injunction might and should have been procured
forbidding the commissioners to issue the bonds, and the
railroad
Page 99 U. S. 682
company, if it received them, from parting with them, until the
case made by the certiorari was finally brought to a close. This
would have involved only an ordinary exercise of equity
jurisdiction.
State of Illinois v. Delafield, 8 Paige
(N.Y.) 527;
s.c. on appeal, 2 Hill (N.Y.) 160. The
omission was gross laches. This negligence is the source of all the
difficulties of the plaintiff in error touching the bonds. The
loss, if any shall ensue, will be due not to the law or its
administration, but to the supineness of the town and the
contestants.
County of Ray v. Van Syckle, 96 U. S.
675.
Where one of two innocent persons must suffer a loss, and one of
them has contributed to produce it, the law throws the burden upon
him, and not upon the other party.
Hern v. Nichols, 1
Salk. 289;
Merchants' Bank v. State
Bank, 10 Wall. 604.
The bonds in question have all the properties of commercial
paper, and in the view of the law they belong to that category.
Murray v.
Lardner, 2 Wall. 110. This Court has uniformly held
when the question has been presented that where a corporation has
lawful power to issue such securities and does so, the
bona
fide holder has a right to presume the power was properly
exercised, and is not bound to look beyond the question of its
existence. Where the bonds on their face recite the circumstances
which bring them within the power, the corporation is estopped to
deny the truth of the recital.
Mercer County v.
Hacket, 1 Wall. 83;
San Antonio v.
Mehaffy, 96 U. S. 312;
County of Moultrie v. Savings Bank, 92 U. S.
631;
Moran v. Commissioners of
Miami County, 2 Black 722;
Knox v.
Aspinwall, 21 How. 539;
The Royal British Bank
v. Turquand, 6 El. & Bl. 325.
A corporation is liable for the acts of its servants while
engaged in the business of their employment, to the same extent
that individuals are liable under like circumstances.
Philadelphia, Wilmington,
& Baltimore Railroad Co. v. Quigley, 21 How.
209;
Greene v. London Omnibus Co., 8 C.B.N.S. 290;
The
Life and Fire Insurance Co. v. Mechanics' Fire Insurance Co. of New
York, 7 Wend. (N.Y.) 31.
The doctrine of
lis pendens has no application to
commercial securities.
Murray v. Lylburn, 2 Johns. (N.Y.)
Ch. 441;
Page 99 U. S. 683
Kieffer v. Ehler, 18 Pa.St. 388;
Stone v.
Elliott, 11 Ohio St. 252;
Mims v. West, 38 Ga. 18;
Leitch v. Wells, 48 N.Y. 585;
County of Warren v.
Marcy, 97 U. S. 96.
See, in the case last named, MR. JUSTICE BRADLEY's full
examination of the subject.
The county judges was the officer charged by law with the duty
to decide whether the bonds could be legally issued, and his
judgment was conclusive until reversed by a higher court.
Lynde v. The
County, 16 Wall. 6;
Township of Rock Creek v.
Strong, 93 U. S. 271. The
plaintiff had no notice, actual or constructive, of the proceedings
in the case subsequent to the first judgment, and is in nowise
affected by them.
The County of Warren v. Marcy, supra, is in effect
decisive of the case in hand. There, the board of supervisors
claimed to be authorized by a popular vote to subscribe for the
stock of a railroad company and to pay in county bonds to be issued
by themselves. A taxpayer filed a bill in the county circuit court
and procured a preliminary injunction prohibiting the issue of the
bonds. Before the final hearing, this injunction was dissolved; at
the final hearing, the bill was dismissed. There had been no
injunction in force after the preliminary injunction was disposed
of.
The complainant appealed to the supreme court of the state.
There, in due time, the decree of the lower court was reversed and
the case was remanded with directions to enter a decree in
conformity to the prayer of the bill. But between the time of the
dissolution of the preliminary injunction and the final hearing in
the court below the supervisors subscribed for the stock and issued
the bonds.
The same question arose as to the bonds there as here.
This Court held that in the hands of a
bona fide holder
they were free from objection and could be enforced.
Our examination of this case with respect to the bonds here in
question constrains us to come to the same conclusion.
There is no difference between the two cases in any material
point.
We think the instruction given by the court below to the jury
was correct.
Judgment affirmed.
MR. JUSTICE BRADLEY did not sit in this case.