Source: https://supreme.justia.com/cases/federal/us/71/270/
Timestamp: 2019-04-25 13:48:10+00:00

Document:
l. A provision in the charter of a city corporation authorizing it to borrow money for any public purpose whenever, in the opinion of the City Council, it shall be expedient to exercise it, is a valid power. Rogers v. Burlington, 3 Wall. 654, affirmed.
road leads from, extends to, or passes through the limits of the corporation, is borrowed for a public purpose within the meaning of the provision.
3. Havemeyer v. Iowa County, 3 Wall. 234, and Gelpcke v. City of Dubuque, 1 Wall. 175, affirmed and the doctrine reasserted that if municipal bonds, when made, were valid by the constitution and laws of a state as then expounded by the highest judicial authority whose duty it was to interpret them, no subsequent judicial exposition of an opposite kind will make them invalid.
"to provide for procuring and investing the loan of ten thousand dollars to the city, to be invested in the stock of the Burlington & Mount Pleasant Plank road Company and for other purposes."
Declaration alleged that the plaintiffs became the lawful owners and holders of the bonds before they were due, and that the defendants were liable to pay to them the amount of the bonds.
the officers of the city had no authority to issue the bonds and that the bonds, as against the defendants, were void.
1. That the answer did not allege that the plaintiffs knew for what purpose the bonds were to be issued or to what use the proceeds of the same were to be applied.
2. That the answer is defective because the allegation that the plank road company was a private corporation contradicts the law of the state, of which the court will take judicial notice.
3. That the answer is insufficient because the defendants, in their corporate capacity, had a right to borrow money, upon a proper vote of their citizens, for any public purpose, and that the construction of the plank road mentioned in the pleadings was a public purpose within the meaning of their charter, and that inasmuch as the money was not borrowed for any illegal purpose, the defense set up was no bar to the action.
Such being substantially the state of the pleadings, the court overruled the demurrer of the plaintiffs and decided that the answer of the defendants disclosed a good defense to the action, and the plaintiffs electing to stand on that demurrer, judgment was rendered for the defendants, and the plaintiffs sued out this writ of error.
1. The pleadings raise the question as to the validity of the bonds mentioned in the declaration, and the effect of the decision in the court below was that they were issued without authority. Whether valid or invalid, it is certain that they were issued under the provision in the charter of the city which authorized the corporation defendants to borrow money for any public purpose whenever in the opinion of the city council it should be deemed expedient to exercise that power. Certain important conditions, however, are annexed to the exercise of the power, as appears by the provision itself, but it is unnecessary to examine those conditions, as it is conceded by the defendants that there is no formal objection to the exercise of the authority. All the conditions annexed to the exercise of the power, as expressed in the provision, having been fulfilled, the only questions which under any circumstances could arise in the case are whether the provision is a valid one, and if so whether the power conferred was exercised for a purpose within the meaning of the provision? Questions of a similar character have been repeatedly before the court, and they have uniformly been decided in the same way. Present defendants presented the same questions to this Court at the last term, and the court held that the power to borrow money for any public purpose within the meaning of the provision was conferred by the charter in express terms, and that there was nothing in the constitution of the state which limited the authority so conferred or rendered it invalid. Satisfied with that conclusion, it is not deemed necessary to assign new reasons in its support or to repeat those adduced in our former opinion.
Court follows the decisions of the state courts in the settled construction of their constitutions and statutes.
For these reasons, we are of the opinion that the circuit court should have sustained the demurrer of the plaintiffs to the answer of the defendants.
The judgment of the circuit court is therefore reversed with costs, and the case is remanded for further proceedings in conformity to the opinion of this Court.
Revised Code of Iowa 520, 527.
Rogers v. Burlington, 3 Wall. 654.
Thomson v. Lee County, 3 Wall. 330.
Gelpcke v. Dubuque, 1 Wall. 202; Havemeyer v. Iowa Co., 3 Wall. 294.

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