The comet. [volume] (Jackson, Miss.) 1877-1882, 1880-05-22

$500. The Board adjudged that two
thirds of the legal votes were east for the
subscription, and therefore made sub
scripton to the capital stock Of the Com
pany of $25O,0O0.
Bonds to that amount were also directed
to be prepared and executed and placed
into the hands of trustee to be by him
delivered to the Company in installments,
when certain conditions relating to the
progress of the work on the road were
complied with by the Company.
A. M. Paxton, the appellee, was Presi-
dent of said Railroad Company, from its
organization until after his purchase of the
bonds in controversy in this suit.
September II, 1873, an installment OF
So, 900 of the bonds was called for by the
Company, and its vice-President and
; the contractors for building the road
were in the town Of Canton for the
purpose of receiving them. A bill to
enioin the issuance of said bonds, and the
fiat of n Judge granting the injunction had
been prepared by a tax payer of the colln-
ty, and an injunctlan was about to beissued
by the clerk of the Chancery Court. This
Injunction was ''predicated on the charge
that two-thirds of the legal voters OF Mad
ison county had not voted for the subscrip-
ton of stock and issuance of the bonds.
A compromise was made between the
Vice-Presdent and contractors on the one
hand, and the complainant in the injunc-
ton bill on the other, whereby the Dill
was not filed nor the injunction sued out,
and the bonds were delivered to the Vice
President by the trustee. Afterwards,
to-wit: on January 81, and September "a,
1874, two other installments of the bonds,
of S25. 900 each, were delivered to the
Company, which were received by the ap-
pellee, Paxton, as President of said Com
pany, acting on its behalf. OF the last in
stallment, the three bonds in controversy
in this suit, were Il part. Paxton paid said
three bonds to a creditor of the Company,
and received them back in payment of
debt due by such creditor to him. The
Board of Supervisors for several years
afterwards, paid the interest ON the bonds
so issued.
January Sd, 1879, this bill was filed by
the Board OF Supervisors against Paxton,
charging the illegal issuance of the bonds
for the want of the two-thirds vote neces-
sary to authorize the issuance thereof, and
alleging his connection with the Company
as President and charging him also with
notice of that illegality, and especially
with notice of the controversy initiated by
the injunction suit and settlement above
mentioned. The object of the bill is to en-
join Paxton from negotiating the bonds
and to have them delivered up and can
celled.
f. b. Pratt, for appellants.
Cowan & McCabe for appellee.
GEORGE, G. j.
.Held-
1. Paxton denies the knowledg charged,
but it is insisted that his denial is by way
of negative pregnant, and the allegation
of the bill on that point should, on that ac-
count, be taken as admitted We think
the answer is liable to the objection, but
we do not consider that it is such fault as
entities the complainant to take the allega-
ton of the bill as admitted. 1t is denial
of the charge as made in the bill, basing |
the denial upon all the circumstances of
time and place mentioned in the bill, and,
therefore bad pleading. But we think |
that the complainant should have excepted |
and required further answer.
2.Thcre is no attempt to shelter PaXton's
purchase under the rights which the pur-
chaser from the Company may have had i'll
case his purchase was bona file. Paxton
does not claim that this purchaser. had
no notice. His defense rests solely on the
ground that he himself is bona fde pur-
chaser for value. The fact, therefore, that
there was a sale by Paxton, as President
of the Company, to another who resOld to
Paxton, as an individual, may be eliminated
from the case, as it is not of the slightest
value in determining the rights of the par
ties, and the case may be considered as if
Paxton, as President of the Company, and
by its authority, had made the sale to him.
self on such terms as were satisfactory to
the Company.
3. The power of the Board of Supervi-
visors to issue these bonds was special and
limited. 1t was no part of their ordinary
jurisdiction. They were not the county of
Madison whose rights were to be affected
by their action. They were not even the
legal representatives of the county, except
in so far as they pursued strictly the au-
thOrity conferred on them by the charter
of the railroad bOmpany passed in pursu-
ance of the Constitution. Whatever au-
thority they had was given on con-
ditiOn precedent which must have been
performed before the power vested. 1t .
was the assent of two-thirds of the legal
voters presumed to be taxpayers, ON whom
the burden of payment of the debt to be
created must fall. All that the Board did
without this assent was mere usurpation,
in violation of the Constitution of the
State, and therefore was binding on no
one.
4. Whoever deals with special agent,
or an agent whose powers depend upon
conditions, must enquire into the extent of
the authority and see that the conditions y
exist, on which the authority rests. This S
is the rule when the agent is private, and o
it applies with equal force to dealings with 4
public agents whose powers are defined in {
the Constitution and laws.
b. Mr.. Paxton was the President of the
Company, and, as such, was specially au-
thoriZed by the 9Th section of the charter
to receive these bonds. He was then by
law made the representative of the Com
pany as to its reception of them. He did
in fact receive two-thirds of all that were
ever issued, including the bonds in cOntrO-
versy. He was, therefore, in legal effect,
as tO-the reception of the bonds and all the
1uties connected Herewith, the Company
tself. His mind and voice were the mind I
md voice of the Company to make the in v
Jury as TO the legality of the issue of the
bonds, and his hand was the hand of the
company to receive them. He was, there
ore, under all the obligations that rested on
he Company to make inquiry as to the '
power Of the Board of Supervisors to issue
he bonds.
9. He cannot, under the circumstances,
'e allowed to aver Ignorance of the inval-
dity of these bonds which, as President of
he Railroad Company he Illegally 7
eceived from the Board of Supervi-
ors, and then, in effect, bought indi-
from the Company. 1t can
ot be allowed that a man who, as Presi-
lent of corporation organized under the
avs of this State, received bonds of a
ounty issued in violation of the Constitu- i
ion and the charter of the Company should
ave greater right to the bonds than the
company he represented, based on an as
erted ignorance of fact which, as Pres
lent of the Company, he was bound to
now.
Z. There is nothing in the estoppel set p
p as arising from the acts of the Board of "
supervisors in assuming control of the
jock, and levying taxes and paving
lterest on the bonds. The fact that an