The Abbeville press and banner. [volume] (Abbeville, S.C.) 1869-1924, 1879-01-08

city to prove that three f9urths had not so
petitioned; they refused to.admit the evidence
Of the fact, and held that the proper authority
The judges of the fact and their Judgment
To the same effect is the ease OF Moran vs..
Miami County, 2 Black, T4.
BONA r1DE HOLDER MUST NOT SUFFER.
In Mercer Co. vs.. Hacket, l Wall, SO, evil
dence was offered TO show that the bonds had
been illegally Issued. that the condition pre-
cedent had not been complied with, and that
"the bonds were procured from the county
by fraud n misrepresentafon," but the evil
dence was ru .lgho out Eva, IN up npPI eaa tne t Supre eace
TINT the faith, credit and property OF the
county Is pledged under the authority OF Ger.
tain acts of the General Assembly, and that
In pursuance Of said acts inc PONDS were
They are on their face complete and perfect,
exhibiting no defect In form or substance, and
the evidence offered Is to show that the reel
tails OH the bonds are not true; not that no
the bonds were not issued In pursuance OF the
acts of Assembly authorizing them"
Although we doubt not the mcts suited rs to
the atrocious frauds which have been prac-
ticcd In some counties In obtaining and issu-
ing these bonds, we cannot agree to override
our decisions and TO change the law to suit
hard cases. Such considerations Knight have
issue or negotiation of these bonds, but G,nnot
prevail to authorize their reputation after
they have been issued and have come into
the hands of bona tde holders" Page 8.
The same rule Of law Is laid down In Meyers
VS.. The City Of Muscatinc, Wall, S93; Gelkhe
w. The City OF Dubuque. l Wall, aB; Super
visors VS.. Schenck, 5 Wall, 1874; Lynde VS.. The
County, 10 Wall. IL; Commissioner VS.. Janua'
ry, 81 u. g.. 2M5.
In the County OF Dallas VS.. Mckenzie the
general doctrine Is thus tersely stated "A
holder OF value Is not affected BY any irrcg.
u~lnrities or frauds or unfounded assumptions
Of authority on the part OF the agents OF the
By an unbroken series OF decisions this doc
trinc has become the settled Inv OF ncgotia-
Bile bonds put in circulation by towns, cities.
counties and States. II Is a rule Of law
founded in the wisest views Of public policy
and OF fairness and Justice. With any other
rule prevailing, these negotiable instruments
would be valuelcss In the market, and munic-
Ipal corporations would be unuble to realize
money on them. Through the whole series
OF authorities on this point, from the earliest
to the latest. the doctrine, Is clearly and uni
forlnly sustained that, when the authority to
issue the bonds exists. and the holder Is o
bona adc holder for value, the bond is valid;
and that this rule Of law Is rs applicable to
bonds Of states Us to those OF inferior mt
The case Of the State of California vs..
Wells, Fargo & Co., ID Cal. Rep, gab, bears
with peculiar force upon the issues here in
yolved, and we propose TO close the list OF
re.terenceso on this branch OF the cases In hand
by Tree extracts from It,.
In 1855 certain warmnts were drawn by the
comptr oller OF tho State, of which n schedule
was kept, payable 70 the payces or order, and
by them endorsed In blanks, and afterwards
prior to March Is, 1855, were all presented by
The several holdcrs thereof to the State treas
nrer. and by him paid and discharged, and on
payment were delivered up to the treasurer.
Afterwards, before January !, 1858. the war
rants we're stolen from the office Of the treas
urer. On January y, 1853. the warrants were
presented to the then treasurer as claims
against the State, ana entitled 10 be lunded
under the act OF the Le.'ialature or April 10,
certain equitable claims against the State"
&c. The treasurer. ignorat.t that they had
been paid and stolen, on the 18Th March, lSas
issued bonds to the defendants IN eSchange
for the warrants In the form prescribed by
the funding act, the defendants giving re
ceipts for the bonds and ~surrendcrinS the
Warrants. In October, 1853, the treasurer rs
eer of the bonds, and ON refusal, b%roughtsult,
There was no avcrment or proof that the de
PENDANTS knee the facts showing the fraud.
The Court held that the warrants were ne
gotiublc instruments and In the hands Of IN
innocent holder for value, could not be as'
sailed because Of the larceny, and that upon
n proper case made the plaintiff might have
filed his bill to cnjoin the negotiation OF these
bonds, &C., against the fraudulent holde OF
| other party having no Just claim to them,'
(as was lone by the State OF Illinois vs.. Della
field.1 The Court says;"We do not see how
this can be maintained. The defendants
GERS of the State. From anything that ap.
pears, they bud what purported OH its face 10
be q Just and legal claim upon the State
Reciting the net, the Court proceeds There
OF any objection to these warrants, but the
very proofs which the State itself prescribed
us the proper assurance OF their validity ant
authenticity, assured the holders that they
were what they imported on their face, and
that the Act Of 1858 provided for the funding
OF Indebtedness OF this character. = " I. II
Is said thai the defendants were bouud tc
know the facts: We do not perceive the force
held to any greater knowledge than the rcgu
lar agents OF the State, whose Office and duty
It was to ascertain the facts and protect the
public interest. But 1t cannot be held thai
every man who deals III State securities Il
bound to search the books and records OF thu
State offices before proceeding to take an as
signment OF the claims against the State. w
do not know that these books or papers are
subject to public inspection, and If 1t were SO
1t might lead to very. embarrassing results
In this case 1t seems that the law had already
prescribed q method of procedure deemed by
itself Il sufficient protection M notification o
the government to follow the law ought no!
to be turned to the injury Of the citizen. anC
mace the occasion OF running him for being
no wiser than those officers to whom thii
principle applies In such cases that the losi
should fall ON him by whose fault or conf
dcnce 1t anne. The condition OF the person
In possession would be better under such 6
state OF facts" 49,.
After stating what would be the law in the
case Of private individuals, the Court con-
cIudcs: I'VE see no difference between &
State and mdiv iduals, In the application o
| At, .~.I,iIo A Stnta pt,D,,I Eo l,.lJ 70 n
much Justice and to a~sIstrict responsibility al
one Of her own citizens In these matters o
dealing and contracts. And 1t Is better tina
she should be held responsible for the acts o
her agents than that s!ie should reap the ben
eiits Of fraud committed upon innocent. per
SONS BY those agents under cover and color o
authority"
Such is the sound reasoning OF the Court
for these bonds In the hands OF a bona 1d.
holder for value, though issued for warrants
which had been stolen from the treasury.
Stolen negotiable paper In the hands OF nr
without notice Isl valid claim against the
maker. This doctrine Is q necessary Incident
10 commercial paper, and Is sustained BY
best authority. 2Parsons on Contracts, page
lis: | Daniels Oh Ncgatl0ble Instruments, 81
Against the viewa above expressed thu
counsel for the State contend that the plain
! tiiIs are not entitled to the protection which
the law accOrds to innocent holders OF nego
table paper. because there can be no such
thing as en- innocent holding of a void securt
" which the law will protect, and that thes,
bonds arc rOfd.
While it Is true that q holder OF q roid secu
rity can derive no benefit from the fact thai
he became q purchaser for value before ma
turity, and without notice, We canuot sec
that the doctrine Is applicable to the present
plaintiffs.
THE CANNOT BIZ REsURRCCrEE
1t has notbeen made TO appear that any O
the sur rendered vouchers, In exchange fol
which Consolidation bonds we're issued, were
poid, and, furthermore, Consolidation bonds
were not affected by any infirmities which
may have attached to the securities which
have been surrendered and cancelled: By the
compromise rendered In said act, and accept
cd by the creditors of the state, the old bonds
coupons INT certificates of stock huve beer
delivered up and cancelled. They arc dead
and neither they nor questions appertalniilg
to their validity can be resurrected. Thirdly
the State entered Into q new contract, found
ed In n valuable consideration, and Its obliga
ton. She cannot, therefore, escape by reyiv'
ing issues from which the new contract lsdis'
charged and fee. The State, therefore, In
trIne that the law will not afford protection to
the holders Of said securities. .
Before closing this branch of the case 1t
may not be improper TO notice q question per
these bonds. None of them, 1t seems, gave
full value for them. They were puschascd nj
prices varying with the fluctuations OF the
market. Are they entitled to set up these
bonds against the State for their face value
and interest: We hold that they are, and In
support of this view we reply upon a recent
decision Of the United States Supreme Court
settling this question In language clear, forci:
Bile and %consonant with hard sense and good
aw.
BONDS BOUGHT 1T 4 NOT INyAL-
DYTED.
"a