Source: http://supreme.nolo.com/us/119/680/case.html
Timestamp: 2019-04-24 01:52:23+00:00

Document:
In Illinois, an incorporated "town" and an incorporated "village" are one and the same thing. We1ch v. Post, 99 Ill. 471, overruled, and Martin v. People, 87 Ill. 524, followed.
The provision in the Act of February 24, 1869, of the Legislature of Illinois, giving authority to "any village, city, county, or township organized under the township organization law or any other law of the state along or near the route of the railway" therein mentioned, "to subscribe to the stock of the railroad company or make donations to it" applies to a town along or near the route.
The proviso in the clause of the Constitution of Illinois regarding municipal subscriptions to the stock of, or donations or loan of credit to, railroads or private corporations, applies to donations as well as to subscriptions to stock.
When a question in a certificate of division is stated in broad and indefinite terms which admit of one answer under one set of circumstances and of a different answer under another set of circumstances, this Court must regard it as immaterial to the decision of the case.
The pendency of a suit relating to the validity of negotiable paper not yet due is not constructive notice to subsequent holders thereof before maturity, and this general rule cannot he changed by state laws or decisions so as to affect the rights of persons not residing and not being within the state.
In Illinois, the making the place of payment of a municipal bond at a place which is not the office of the treasurer of the municipality does not affect the validity of the bond, or charge the holder of such a bond, being negotiable and not yet matured, with notice of judicial proceedings between a previous holder and the municipality so as to work an estoppel.
This was an action at law to recover the amount of coupons cut from bonds not yet matured, issued by the plaintiff in error, a town in Illinois, and held by the defendant in error. Judgment for plaintiff. Defendant sued out this writ of error. The case is stated in the opinion of the Court.
This is a suit brought by C. N. Jordan against the Town of Enfield to recover the amount of twenty-two interest coupons, for fifty dollars each, made by the town on the 1st of January, 1871, and payable in January and July, 1881, 1882, and 1883. The defendant pleaded nonassumpsit, and on the trial a jury was waived, and the cause was tried by the court, consisting of the circuit and district judges. A finding of the facts was made, and, the judges being divided in opinion as to certain questions of law arising thereon, judgment was rendered in favor of the plaintiff in accordance with the opinion of the presiding judge. The principal question of law was whether an "incorporated town," as Enfield was, had power to make a donation of its bonds to the railroad company. Questions of estoppel were also raised, as hereafter noticed.
1. That the Town of Enfield was incorporated under an Act of the General Assembly of the State of Illinois approved March 15, 1869. This act is set out in full, and is entitled "An act to extend the corporate powers of the Town of Enfield." It is an ordinary town charter, making the town a corporation by the name and style of "The Town of Enfield." Its territorial limits were then prescribed, being one mile square, and the usual corporate powers were conferred. A town council, consisting of five trustees, together with a police magistrate, a treasurer, and a town constable, were directed to be elected annually on the first Monday of May. The powers given to the town council were similar to those usually conferred upon municipal bodies, as the power to levy and collect taxes, to appoint a clerk, supervisor of streets, and other officers, to appropriate moneys to pay the debts and expenses of the town, to make regulations for securing the general health; to provide a supply of water; to make sidewalks, and to open, grade, pave, and repair streets, to establish markets, to regulate the public grounds, to organize a fire department, to regulate the police, etc.
The findings next set forth at large an act of assembly of Illinois incorporating the Illinois Southeastern Railway Company, approved February 25, 1867. This act authorized the company to construct a railroad from a point on the Illinois Central Railroad, by way of Fairfield, in Wayne County, to the Ohio River. The route designated would naturally pass in the neighborhood of Enfield, and the railroad, when built, did pass through the town. The seventh section authorized counties through which the road might pass to donate to the company any sum not exceeding $100,000, and to give its bonds therefor. The ninth section authorized any town in any county under township organization to donate not to exceed $30,000, but such donation was payable only by taxation, no authority being given to issue bonds. This section related not to incorporated towns, but to townships forming the territorial subdivisions of counties. The eleventh section authorized "any incorporated city or town" through or by which the railroad might run to make donations not exceeding $10,000, on the same terms, propositions, conditions, and under the same restrictions, as provided for townships.
"any village, city, county, or township organized under the township organization law, or any other law of the state, along or near the route of the railway . . . or anywise interested therein"
to subscribe to the stock of the railroad company or make donations to it to aid in the construction and equipment of its road, provided such subscription or donation was sanctioned by an election of the people. This section gave power to issue bonds for such subscriptions or donations, but towns are not included therein by name.
issued by said town by virtue of the power (if any) contained in the acts aforesaid, approved February 25, 1867, and February 24, 1869, and that afterwards said bonds and coupons came to the plaintiff through mesne transfers from said Springfield and Illinois Railway Company, and that the bonds were registered in the state auditor's office.
The findings further set forth copies of the order of the Town Council of Enfield, made June 10, 1870, appointing judges of election to be held in the town on the 11th of the same month, and a copy of the returns of the vote at said election, for the purpose of determining whether the town would donate the sum of $7,000 to the Springfield and Illinois Southeastern Railway Company, the result of which was: for donation, 64 votes; against it, 1 vote, and that this was the only election held in relation to said donation.
The court further found that at the June term, 1880, of that court, judgment for the plaintiff against the defendant was rendered upon coupons then due, detached from the same bonds from which the coupons now sued on were taken. It was also admitted by the plaintiff that the Enfield town bond represented by Post in the case of Welch v. Post, 99 Ill. 471, was one of the series of seven bonds in controversy in this suit, but as to which bond it was the plaintiff disclaimed any knowledge.
1st. Whether the incorporated Town of Enfield had power to vote and issue the bonds and coupons in controversy under any of the provisions of the acts above specified.
2d. More particularly, whether said town had said power under the 10th section of the amendment of the railway company's charter, approved February 24, 1869.
3d. Whether said town was not estopped from further defense by the litigation theretofore had between it and plaintiff.
bonds, and the coupons thereto belonging, were void in the hands of plaintiff in this suit by reason of one Post having litigated it in the state courts of Illinois.
"That any village, city, county, or township . . . along or near the route of said railway or its branches, or that are in any wise interested therein, may in their corporate capacity subscribe to the stock of said company, or make donations to said company, to aid in constructing and equipping said railway,"
with a proviso for holding an election on the subject, and authorizing the issue of bonds in payment," said bonds to be signed, in case of a village, by the chairman of the board of trustees thereof; in case of a city, by the mayor thereof," etc. The Town of Enfield is not a township nor a county nor a city. If it is within the purview of the act, it must be because it is a village. The question then arises is the incorporated Town of Enfield a village within the meaning of the act?
a regular market, and which is not a city (Johnson, Webster, Ogilvie). The same authorities define a village as a small collection of houses in the country less than a town. According to this distinction, the law, in giving power to "any village, city, county, or township" to make donations and issue bonds to the railroad company, confers the power upon bodies of higher and lower degrees of municipal organization than towns, and leaves them out. This is an incongruity which we can hardly suppose was intended. The Supreme Court of Illinois, in a recent decision against the power to which we shall presently refer, is obliged to say, "Why incorporated towns were omitted in that act cannot now be known."
of any town heretofore or hereafter established, may cause to be made a survey and plan of the town showing each lot, public street, etc., to lay out, alter, improve, and light the streets, and to adopt various municipal regulations relating to public grounds, markets, health, nuisances, supply of water, fire departments, etc. Most of these towns were nothing but villages. The close connection between Virginia and Kentucky and the early settlement of Illinois renders this use of the word "town" in the mother state apposite to the question under consideration. In New Jersey, Pennsylvania, Ohio, Indiana, Michigan, and Illinois, the subdivisions of a county, answering to the towns of New England and New York, are called townships, though the word "town" is also applied to them in Illinois. In these states, the words "town" and "village" are indiscriminately applied to large collections of houses less than a city.
These results are gathered from an examination of the laws and constitutions of the states named, and we should have no hesitation in saying that in Illinois an incorporated town and an incorporated village were one and the same thing were it not for the decision of the Supreme Court of that state to the contrary in the case of Welch v. Post, 99 Ill. 471, already alluded to, which decision was made in relation to the identical bonds in question in this suit.
"Keeping in mind, as must be done, there is no implied authority in municipal corporations to make donations to railway companies and to issue interest-bearing bonds in payment, it must appear there is express enabling legislation to that effect before municipal corporations can properly assume to exercise such extraordinary powers. No such authority is to be found anywhere, in any public or private law of this state, applicable to the Town of Enfield at the time that corporation undertook to and did issue the bond held and owned by the respondent, and, having been issued without authority of law, such bond constitutes no valid obligation that can be enforced against the municipality."
concerned, it is merely an incorporated town, or, in other words, 'an incorporated village.' Before that charter was enacted, the Town of Lake was merely a municipal corporation under the laws relating to township organization. By this charter, the inhabitants of that town took another form of corporate existence, and became also, in contemplation of law, what, in the Revised Statutes of 1874, is known as a village."
"All the powers are of the kind usually conferred upon cities or villages, and of the character conferred upon cities or villages by the general law of 1872, of which this article 9 is a part. Before the adoption of our present constitution, many special charters conferring like powers were granted by the General Assembly, and in most cases such corporations are called towns, but in some cases they are called villages; but the character and nature of these corporations, whether called in their charters towns or villages, were in all cases substantially the same."
"We therefore hold that the Town of Lake was and is a village in the sense in which that word is used in § 168 of the general act of 1872 relating to cities and villages; that it therefore is one of the municipal incorporations which, by that section, are authorized to avail themselves of the provisions of article 9 of that act as an amendment to their charters."
We have quoted more fully from the judgment in this case because it is not only directly in point, but it shows historically the use of the terms "town" and "village" in the legislation of Illinois. Its bearing on the present case is enhanced by the fact that the Towns of Lake and Enfield were incorporated at the same session of the legislature, and invested with like powers and form of organization.
"It shall be lawful for the incorporate authorities of any incorporate city or village through which said railway shall be located, to donate or lease to said railway company, as a right of way, the right to lay a single or double track through said city or incorporated village or any portion of the same or any street or highway that the said railway company shall elect for that purpose, except at the option of the said railway company and corporate authorities of such towns or cities."
"No county, city, town, township, or other municipality shall ever become subscriber to the capital stock of any railroad or private corporation, or make donation to or loan its credit in aid of such corporation, provided, however, that the adoption of this article shall not be construed as affecting the right of such municipality to make such subscriptions where the same have been authorized under existing laws by a vote of the people of such municipalities prior to such adoption."
subscriptions to the capital stock of private corporations, it does not save the power to make donations to them. We did so decide in the case of Town of Concord v. Portsmouth Savings Bank, 92 U. S. 625, but in the subsequent case of Fairfield v. County of Gallatin, 100 U. S. 47, that decision was overruled in deference to several decisions of the Supreme Court of Illinois to the effect that donations as well as subscriptions were within the meaning of the proviso. The authorities are collected in the latter case, and need not be repeated here. We held, as we had often held before, that this Court will follow the construction which has been uniformly given by the highest court of a state to its constitution and laws.
In the first and second questions, therefore, our answer is that the Town of Enfield had power, under the 10th section of the amending act approved February 24, 1869, to vote and issue the bonds and coupons in controversy.
"That at the June term, 1880, A.D. of this Court, judgment for the plaintiff against the defendant herein was rendered upon coupons then due, detached from the same bonds from which the coupons in evidence in this suit were taken."
proper answer can be given to a question stated in such broad and indefinite terms, which admits of one answer under one set of circumstances and of a different answer under another, we must necessarily pass it by as immaterial to the decision of the case in this Court.
"It is admitted by the plaintiff in this suit that the Enfield town bond represented by Post in the case of Welch v. Post 99 Ill. 471, was one of the series of seven bonds now in controversy in this suit, but in making said admission, plaintiff disclaims any knowledge of which one it was, or any connection with said suit."
to the validity of negotiable paper not yet due is not constructive notice to subsequent holders thereof before maturity. This general rule cannot be changed by state laws or decisions so as to effect the rights of persons not residing and not being within the state, any more than publication of suit can be made constructive service of process upon such persons. Rights to real property and personal chattels within the jurisdiction of the court, and subject to its power, may be affected by lis pendens, but not those acquired by the transfer of negotiable securities or by the sale of articles in market overt in the usual course of trade. See Brooklyn v. Insurance Co., 99 U. S. 362; Empire v. Darlington, 101 U. S. 87; Pana v. Bowler, 107 U. S. 545.
"The objection that the bonds are illegally made payable at a bank in Chicago does not invalidate them, as was held in Johnson v. Stark County, 24 Ill. 75. The agreement to pay at that place is void, but the balance of the coupons and bonds are not rendered invalid for that reason. In paying the interest, the treasurer should not obey that agreement in the bond, but pay it at the village treasury. If he were to deposit the money in the bank for the purpose, and it were to break or the money should otherwise be lost, he and his sureties would no doubt be liable for the loss growing out of his illegal act in placing the money in a place unauthorized by law."
The court did not regard this as a ground for enjoining the collection of taxes, but enjoined their collection upon other grounds.
different from that of similar bodies in other states. When the bonds of an Illinois municipality are offered for sale in the market, and on their face are made payable at a different place from the treasury of such municipality, even though it be conceded that a purchaser is bound to know that, by the jurisprudence of Illinois, the bond is legally payable at such Treasury, that is all he is bound to know. The same jurisprudence informs him that the naming of a different place for payment does not affect their validity, nor the obligation of the municipality to pay them. At all events, we are of opinion that the place of payment named in the bond which was formerly in the hands of Post did not affect the present holder with notice of the proceedings in which Post was a party. Those proceedings are an estoppel against Post even though, in our judgment, the decision was based on an erroneous view of the law, and they would be an estoppel against Jordan if he had notice of them when he took the bond. But there is no evidence that he had any such notice, and we think that the fact of the bond's being payable at a place where the Town of Enfield had no authority to make it payable -- a fact which it is admitted does not affect its validity -- was not sufficient to put Jordan on inquiry. Though made payable in Shawneetown, it is legally payable at Enfield, and is as valid and binding on the town as if it were in terms made payable there.
The answer to the fourth question therefore is that one of the bonds, and the coupons thereto belonging, are not void in the hands of the plaintiff by reason of Post's having litigated the bond in the state courts of Illinois.

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