Court Opinion

ID: 8630190
Source: CourtListenerOpinion
Date Created: 2022-11-24 19:36:24.001454+00
Date Added: 2024-06-11T16:55:44.526563
License: Public Domain

DILLON, Circuit Judge.
By the agreed , statement of facts herein, it appears that this is an action by a bona fide holder of bonds issued by the defendant to the La Clede and Fort Scott Railroad Company or bearer.
The bonds recite as follows: “This bond is issued pursuant to the order of the county court of the county.of La Clede, made on the 17th day of August, 1869, by authority granted in the charter of the La Clede and Fort Scott Railroad Company by an act of the general assembly of the state of Missouri, entitled ‘An act to incorporate the La Clede and Fort Scott Railroad Company,’ approved January 11, 1S60.” This act has the following provision: “Sec. 14. It shall be lawful for the county court of any county in the state to subscribe to the stock of said company, or invest its three per cent fund, or any other internal improvement fund belonging to the county, as stock in said road, and for the stock subscribed in behalf of the county may issue the bonds of the county to raise the funds to pay for the same, and, to take proper steps to protect the interests of the county, may appoint an agent to represent the county, vote for it, and receive its dividends.” The twenty-second section exempts this charter from the general statutes of the state with certain specified exceptions.
In this case no popular vote was taken. The defendant’s first position is that the true construction of this charter, in connection with the then existing general law, required a vote of the people of the county to authorize the subscription to the stock and the issue of bonds. If the charter stands alone, there was no need of any vote; but if the general law is to be construed with the charter, then there is room for the defendant’s argument. Under the well established doctrine of the United States supreme court it might be conceded, for the purpose of this cqse, that a vote was necessary, and yet the defendant would be estopped by ‘the recitals of the bonds. The holder for value is authorized to suppose that a vote, if required, was had. Such is the ruling in the cases of Humboldt Tp. v. Long and Marcy v. Oswego Tp. and Coloma v. Eaves, reported in [92 U. S.] 484, 637, 642.
In 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 or preliminary steps or conditions have been complied with, and that their decision, stated or implied in the recital, was conclusive against the corporate maker when the bonds have found their way into the hands of innocent holders. The supreme court so decided long ago, in the case of Knox Co. v. Aspinwall [21 How. (62 U. S.) 539], and the principle has been affirmed time and again.
The defendant’s second objection is that the railroad company was not a corporation de jure. The county issued its bonds payable to said railroad company, which was an admission that it was a corporation. Under the agreed statement of facts there can be no question but that it was a corporation de fac-to. The company issued to the county its stock, and did work upon the projected ray-road. On the other hand, the county issued its bonds to the company. Against these securities, in the hands of a bona fide holder, the county defends on the ground that the railroad company was not duly and legally organized. The defendant is .estopped to make this defence. This point has been decided the same way by the supreme court of Missouri.
Upon the agreed statement of facts, we hold that the plaintiff is entitled to judgment upon his coupons. Judgment for plaintiff.