The Manitowoc pilot. [volume] (Manitowoc, Wis.) 1859-1932, 1884-05-01
JUDGE KRwAN's OPINION

JUDGE hlRWAN s OPINION.
To THE HONORABLE BOARD OF SUPERVISORS OF
THE COUNTY OF MANITowoo, WIs.-Gentlemcn:-
Some time ago, committee of your board, con-
| employed other counsel and myself to as
| certain and report whether the railroad stock
now held by Manitowoc County has any value, and
whether payment of the bonds issued by the coun-
| ty to railway companies can be enforced.
| i have given considerable time to the examin-
alton of the questions submitted to me, and here
| with present my views of the law applicable to
| their determination.
As to the stock of the roads which was received
IN exchange for the bonds, the examination of the
facts pertaining TO that subject has been made by
| Mr.. Cotzhausen solely, and his conclusions there
| on are set forth In the written opinion which he
| has prepared. / have sought TO ascertain to some
extent whether the subscriptions and bonds of
municipalities affected by the worthlessness
| of stock received in exchange for aid granted to
| railroad corporations. And it has recently been
decided N this state that it is no defense to an
action to recover upon q subscription to capital
stock of such corporation for the municipality
10 show that the stock Is of no value, unless it
can also be shown that there was fraud or mis-
4 representation on the part of the railroad COM
pany or its agents, in regard to such value where
| by the subscription was induced.
Lynch VS.. Ry. Co.. 81 Wis. 1861
! As to the bonds numerous defects and irregu-
lsritles IN the proceedings which led 70 their
my opinion sufficient to defeat the obligations
incurred by such issue.
In coming to the conclusion here stated,
assume that the bonds are held by parties who
purchased from the original holders, and who,
when the purchase was made had no actual notice
of anything which would inyalidate those securi-
ties. The assumption may not be wholly war
ranted by the facts, as the facts are to-day, but
that is the aspect of the case which will be pre-
eented In the courts, and which the county must
expect 10 meet If the issue be Irrigated.
1t may also be taken for granted, that if pay
ment be refused by the county, all or nearly all
the suits which viii be instituted because of such
refusal will be brought in the federal courts.
rather than in those of our own state; and the
issue must eventually be settled by the Supreme
Court OF the United States.
OF that court g learned law writer says: The
supreme Court of the United States has upheld
the rights Of the holders OF municipal securities
with strong hand and has SET face of flint
against reputation. even when made ON legal
grounds deemed solid by the State courts. by
''rlunicipalIties which had been deceived and
defraGded." Dillon on Municipal Bonds page
~ And in the case of BATh0p u.s. Hllt1aHkee. u
Wis. 257 referring TO certain bonds issued by the
city to 8 railroad company. the court said THE
questions which have arisen to similar instru-
'ments and which mary arise as 70 the validity of
these bonds, have been decided differently by
''the United States Courts from the decision Of
this and other State courts that do not think
I'VE could Ttd1nu protect the city by any decision
of ours, unless the holders of the bonds should be
within our jurisdiction, that could by act
ing on their persons, require them TO surrender
''and cancel the bonds
And in the case OF IGuS0s Us. SchHelles and
others 33 Wis 2Ss which WAS brought 10 restrain
the officers of the town of Menashs from Issuing
bonds Of the town TO the Wisconsin Central Rail-
road Company, Chief Justice Dixon in delivering
the Oplllou VI Tic NbuIt Vi W lsCOnslQ.
and by way of comment Hpon the decision of the
Supreme Court of the United States in constituting
a statute of Wisconsin, under which subscription
had been made by a town TO the capital stock of
q plank road company, says: 1T seems almost
needless to remark that the federal court came
Ito conclusions the very opposite of those reached
''by this court, in that and other similar cases.
especially upon the questions relating to the
meaning and proper construction of the acts
''of the legislature of the state, and of our own
state constitution. Such has been the uniform
course of federal decision whenever and wher- |
ever case of this particular kind has arisen in
those courts. If the tax payers and |
real parties in interest have not the remedy By
injunction to prevent the issue of such bonds l. /
then there exists none whatever for the wrong !
1t becomes an evil wholly without means of pre-
''yention OF redress by any process known to the |
Law.