The Wheeling daily register. [volume] (Wheeling, W. Va.) 1864-1878, 1874-02-13
CHICAGO.


CHICAGO, February l2.-In the U.
s. Circuit Court Judge Drummond has
overruled the demurrer to the replica
ton in the Warren county bond casea
The suits are Of public interest not only
on account Of the amount involved, but
as presenting q new phase Of liability Of
towns and counties on their bonds
Issued in aid OF the builing of railways.
The arguments were very elaborate
Ex.Chief Justice Lawrence and Mr.
Harding appearing for the county OF
Warren, and Judge j.. G. Wilson and
E B. McCegg, Esq, for the bond
holders. The cases involve the legal
ity oil 500, 900 worth OF bonds Of the
county of Warren in aid Of the Rock.
ord, Rock lslaud 4 St. Louis r R. Co.
Before the bonds were issued certain
taxpayers fled a DILL in chancery in
the circuit court OF that county, to en-
join the Board OF Supervisors from
issuing the bonds. alleging that no
sufficient notice OF the election at which
the bonds were voted, had been given,
and that the county officers had acted
colusively with the railway company
in issuing the bends. Upon hearing
the Injunction was dissolved by the
circuit court. 90 the 231 OF January.
1871, two days after, the bonds were is
sued and registered in the State Auditor
office and were subsequently put on the
market and sold. After the dissolution
the Injunction and issue OF the bonds
the complsinants applied to the su-
preme court Of the State where the de-
cree of the circuit court was reversed
and the bonds declared to be unsu-
thorized and void. Thereupon the tax
payere filed bill, making as new psr-
ties deiesdant the holders OF the
bonds and asking for like decree as i6
the first chapcery suit, which second
bill is still pending. The Portsmouth
Savings bank, of New Hampshire,
aud Augustus Post, OF New Nork,
having purchased the bonds in question
in open market and without any actual
notice OF the pendency of the chsncery
proceedings in the State courts, COM
menced The present suits for the re-
covery Of unpaid interest on coupons in
July last. The county pleads the
adjudication OF the State Supreme
Court, declaring the bonds invalid in
law, and insists that the pendeucy Of
the chancery proceedings was a notice
to the purchasers OF the bonds
to those pleas. He (the plain
tiff filed replicstions setting up
that they are bonsfids purchasers fol
value received, and that they had nc
actual notice of the pendency Of chan'
cery suits, nor any notice that the
bonds were invalid. The county de-
INJURED to the replicstions, claiming
that the pending OF the suit was notice
OF it's demurrer, which Judge Drum
mond overruied, holding that the doc
trlne OF lispenders does not apply to
commercial paper, and also in effect re-
affirming the principle that whenever
there is a statute authorizing a munic-
ipality to issue bonds, and it
does issue them, they are
not liable to be impeached in the hands
Of bona fide purchaser. The above
ruling was in pursuance Of the case Of
Aliott versus the Supervisors OF Fon-
DuIac county, lG Wallace. In that
case the question OF lispeDders was To-
volved, but the Supreme Court OF the
Uuited States on affirming the validity
of the bonds. did not refer TO this ques.
ton 10 any manner. Judge Drummond
10 this point is understood to have diff
fered from tue ruling in the case above
referred 10, but felt bound to follow it.
decision. The present case will shortly
be tried on these facts and the defen-
dants will be allowed TO bring up thil
point on the question for new trial.