The Manitowoc pilot. [volume] (Manitowoc, Wis.) 1859-1932, 1884-05-01


law that irregularities and defects in the exercise
of the power TO issue municipal bonds. against
holder for value, without notice of such lrreeu
laritleS. constitute defense, when the bond.
contain recitals of due compliance with the law
and Of the fulfllment of conditions precedent
such as are found in the bonds of this county.
humboldt Township vs. Long. 81 u s. 6i2
Elmwood vs.. Marcy 90 U. s., 2S9
st. Joseph Township VS.. Rogers, Is Wallace
6li 65I.
Clark ct al. VS.. GAINESVILLE. 10 Wis. 11e.
And such recitals relieve. the purchaser from
obligation to consult the records Of the munich.
pallty, and from being charged with constructive
notice of their contents.
Marcy vs.. Township of Oswego. 81 Z S. 6S7
Coloma VS.. Eaves, 90 Y. 5. 4s4.
1t IL suggested to counsel IN this case that the
voters were induced by delusive promises, and
other like MEANS to cast their ballots IN favor oi
granting aid to the railroad companies. lit il
urged that voters were assured that the construc-
ton of the roads would increase the value of
farming lands IN this county from ten to thirty
times their former value; that the railway com
panles themselves would have TO pay, as taxes on
the value of their own property II the county.
about one-fifth of the sum that would be required
to discharge the bonded indebtedness abont 10 be
incurred: that the railroad stock which the coGI-
ty would receive IN exchange for Its bonds would
be worth from fifty to one hundred per cent. of
Its par value, and that the same could be sold by
the county, Immediately after its Issue, for at
least enough TO pay one-half the amount of the
bonds: that by the time the principal of the bonds
would become DUE the city of Manitowoc would
have so increased IN wealth and population that
II NOuiu least tnTet-IUuFtiiS OF tie bonded
debt, and the rest of the county would be called
on to pay not more than one-fourth thereof: that
the county supervisors would not be asked to part
with the bonds until the roads should be builr
and other arguments and representations OF like
import, none of which have proved correct and
but for which the debt would not have been in
CURED While these considerations might pos
sibly afford ground for resisting payment if the
bonds were not negotiable and could not be trans
ferred by the original payees, they constitute no
defense against bono dde holders for value And
N he ia mt b,o
bonds, TO the effect that they were duly issued
pursuant to law, and that the questions were fair
ly submitted to the popular vote.
Pendeton County rs. Amy. Is Wallace. 2Q7.
Commissioners VS.. Bodies, 81 u. S. 104.
Knox VS.. Aspinwall u Howard $50.
These bonds were voted and issued to two diff
ferent and distinct railway corporations which
were thereafter consolidated, and thereby formed
the present company. 1t has been decided that
II AID be voted TO one railroad company, which
afterward consolldates with another company,
before subscription contract for subscription to
the stock has been made, and the subscription is
made TO the consolidated company, without any
new election the bonds which are issued to the
new company, and which recite those Gacts. are
void, even in the hands of bona fde holder. The
which I'D is voted, and terminates the authority
to make the subscription regarding which the
popular vote was had. (HarshmaD VS.. Bates
County, 81 u. ). 5o9.) But ii has also been de-
cided that when the vote and the subscription
both preeeG9 the consolidation the right to the aid
is vested, and may be transferred to the CONSOLE
dated company, there be legal authority for the
consolidation. And when there is In force. at the
time of the subscription, statute authorizing the
oonsol idation TO be made, II may be made after
the subscription (Nugent VS.. Supervisors of Put
nam County 10 Wallace 241) In the present
case. the records of the county state that the SUBJ
scriptions We're made to the stock of the two COM
panIes to which the aid was voted, and the bonds
We're issued to those companies, and not to the
company now existing. The present company
was formed after the contract of subscription had
been made, and after the bonds had been issued
wi on
were made, the charter of the Appleton and New
London Railroad Company, as amended provided
that said company shall have the right to sell OF
dispose of any part of its road, - TO any
other railroad company, or 1t may consolidate
railroad company. crossing, touching or con-
meeting with the main road of said
company" Up. and l.. laws of 1867, chap. So
sec. A. The consolidation would not, In my
opinion be held by the federal courts TO have in
validated the bonds in the hands of bona 1de hold
ers.
The charter of the Milwaukee, Manitowoc 4
Green Bay Railroad authorized it to construct
road from Milwaukee TO Sheboygan, ManitowoC
and Green Bay 1t has constructed no road tc
Green Bay and by acquiring the Appleton road
material change of route took place. And inquiry
is made whether such change does not affect the
bonds issued to the hrst named company. HaC
the county withheld the issue of its bonds tt
that company, until the change of route was
made, and then refused to issue them; or if after
their execution, they had been retained in tho
custody and under the control of the officers OF
the county. until such change had been made ,anC
If the county had then refused to deliver then
and to receive the stock of the road in exchange
neither issue nor delivery of the bonds to the NJ
NJ. d q. b. h. r. co. could have been enforced
under the rule laid down In the case of NoeseI
and others vs. Town of Port Washington anC
others, 81 Wis, 1853 and Perkins VS.. Same 81 Wis
III. In the cases last cited, it appears that the
town of Port Washington had voted to issue
bonds to the amount of $4,000 to aid the NJ NJ. {
G. b. Il. X. Co., in constructing its road, anC
afterward refused to deliver the bonds to tn,
Bay, and the route had been materially changed
and the Supreme Court of state held that the
change of route released the town from its obi
cation. But no such action was taken by this
county, and the bonds were issued, delivered anC
negotiated, and contain recitas to the effect that
the law authorizing their issue has been complied
with and the stock having been accepted and
held by the county, and interest having been paiC
on the bonds for series of years, l consider il
too late to raise any Oh ections this ground
This dlsposeS of every question which Is to my
mind material in this case, excepting one, anC
that is perhaps the most important question In
volved in the matter, namely: Ioes the fact
that the county board of supervisors which sub
mltted to the people the propositions of the rail
road companies, for approval by the voters, ano
which orC,ered the elections at which those pro
positions were voted upon, was an unconstitution
al body, render void the bonds issued by the
county pursuant to the elections To answer
tins question, it Is necessary ascertain whether
this objection the bonds is of the nature of an
irregular exercise of power vested in the county
or shows a total rant of power to DO the thing
that was attempted to be done.
Bonds payable to bearer, issued by munich
pal corporation, if issued in pursuance
of power conferred by the legislature are valid
Commercial Instruments; but if issued by such
"a corporation which possessed no power from
the legislature they are invalid even in the
hands of innocent holders" (St. Joseph Town
ship VS.. Rogers, Is Wallace ga, 659)
When Legislative authority has been given to a
municipality, or TO its officers to subscribe fol-
the stock of railroad company, and to issue
municipal bonds in payment, but only on some
| ''nTpcadpnt condition q or +e
'favoring the subscription, and when 1t may be
gathered from the Legislative enactment that the
Officers of the municipality were invested with
power to decide whether the condition prece-
dent has been complied with. their recital that
1T has been, made in the bonds issued by them and
held by bona fde purchaser is conclusive of
the fact, and binding upon the municipality for
THE recital is itself decision of the fact by the
appointed tribunal" (Town of Coloma vs.
Eayes. so U. S. 49, In another case. the bonds
recited that they were executed and issued in ac-
cordance with and by virtue of the act of the
legislature, and IN pursuance of and in accOr-
dance with the vote of qualified majority of the
electors of the county. The bonds issued by
Manltowoc county contain recltals substantially
the same. In that case the court said They
1.-THE recitals) are untrue if the board had not
followed the directions OF the law, and If there
mad not been popular vote at an election, ap-
proving the issue of those bonds. The truth or
tdSeh90d Of the assertion can not be inquired after
here for we have said the recitals are practc-
ally the Judgment of the board that
AL the steps required by the law had been taken
= Behind such a recital bona fide
holder for value Is bound to look for nothing ex
sept legislative authority for the issue of munich
pal bonds to railroad companies. He Is not re-
"quired TO examine whether the conditions upon
''Whicb such authority may be exercised have been
fulfilled. He may rely on the decisions made BY
'the tribunal selected by the legislature" Com
missioners, &c, VS.. Bodies, "a U. S. 10l.)
I'm all the cases in the supreme court of the
United States. that tribunal has held that the
municipal or local officers were constituted the
Judges to decide whether antecedent prelimi-
nary steps or conditions hadbeen complied with
land that their decision. stated implied in the
recital, conclusive against the corporate
maker. when the bonds have found their way
Into the hands of innocent holders. The view
(which holds the local officers tribunal to make
80 important decision rests not upon any ex-
press declaration of the legislature to that effect
but is gathered by construction from the sup
posed intent and purpose of the legislature
MANY of the state courts but not all of them.
have taken a somewhat different view.n oil
Ion on Municipal Bonds, page So
The principles applicable to the question of
p0csr, which the decisions of the federal supreme
court appear to establish, are that If there be a
valid act of the state Legislature authorizing the
issue of the bonds, the poUer TO issue Is thereby
vested IN the municipality, to be exercised upon
the conditions prescribed by the act. If the mu-
In the exercise of that power there
after by its proper officers issues the bonds and
u - 4. =