Nashville union and American. [volume] (Nashville, Tenn.) 1868-1875, 1874-02-13
"EXCEPT THESE BONDS"
Interesting Railroad Case in IL
linOiS.
Does n Suit Pending Give Legal
warning 10 Purchasers of CONNER
cial Paper?

Does Suit Pending Give Legal
warning 10 Purchasers Of CONNER
cial Paper?
CHICAGO, Feb. 12.--In the United States
Circuit Court Judge Drummond has over
ruled the demurrer to the replicatiOns in
the Warren county bond cases. The suits
are Of public interest, not only on account
OF the amount involved, but as presenting
a new phase of liability of towns and
counties on their bonds issued in aid of the
building of railways. The arguments
were veryIelaborate. Ex- Chief Justice Law
renee and Mr.. Harding appeared for the
county of Warren, and Judge J. Il. Wilson
and Z. B. Mccoy, Esq. for the bOnd-hold-
ers. The cases involved the legality of
100000 bonds of the county of Warren,
in aid of the Rockford, Rock Island and st.
Louis Railroad Company. Before the
bonds were issued, certain taxpayers fled
a bill in cbancery in the Circuit Court of
that county to enjOin the Board of Super
visOrs from issuing the bonds and alleged
that no sufficient notice of the election, at
which the bonds were voted had been given,
and that county officers had acted cOllu-
sively with the railway company in issuing
bonds. Upon hearing theinjunction was
dissolved by the Circuit Court on the
sd of January, 1871.
Two days after the bonds were issued
and registered in the State Auditors office,
and were subsequently put on the market
and sold. After the dissolution of the in
junction and the issue of the bonds, the
complainants appealed to the Supreme
Court of the State, where the decree of the
Circuit Court was reversed and the bonds
declared to be unauthorized and void.
ThereupOn. the taxpayers filed a second
bill, making as new parties defendant the
unknown owners of the bonds, and asking
for a like decree as in the first chancery
suit, which second is still pending.
The Portsmouth Savings Bank and Au-
gustus Post, of New York, having pur-
chased the bonds in question in open mar
ket, without any actual notice of the pen
dency of the chancery proceedings in the
State courts, commenced the present suit
for the recovery Of the unpaid interest cou-
pOns in July last. The county pleads the
adjudication of the State Supreme Court
declaring the bonds involved in bar, and
insists that the pendency of the chancery
proceedings was notice TO the purchasers of
the bonds. To these pleas the plaintiffs
fled replications, setting forth that they are
bona fide purchasers for value, and that
IDtN Udu 10 dClual nOLlCc Oh Tie ptuOCliCs
of the ehancery suits, nor any notice that
the bonds were invalid. The county de-
INJURED to the replication, claiming that
the pendency of the suit was notice. 1t is
the demurrer which Judge DrummOnd
Oyeuuled, holding that the doctrine of us
pendeRS does not apply to commercial
paper, and also in effect reafiirming the
principle that whenever there is a statute
authorizing municipality to issue bonds,
and it does issue them, they are not liable
to be impeached in the hands Of a bona
fide purchaser.
The above ruling was in pursuance of
Elliott vs.. the Supervisors of Fond du Lac
county, in II Wallace. In that case the
question Of us peRdeRs was involved, but
the Supreme Court OF United States on af-
frming the validity Of the bonds did not
refer TO this question in any manner. Judge
DTummOnd on this point is understood to
have differed from the ruling in the case
above referred to, but telt bound to follow
its decision. The present case will shortly
be tried on the facts, and the defendants
will be allowed to bring up their disputed
point on the motion for a new trial.