Court Opinion

ID: 5184580
Source: CourtListenerOpinion
Date Created: 2022-01-06 04:46:39.622882+00
Date Added: 2024-06-11T08:26:41.741219
License: Public Domain

Hardin, P. J.:
In chapter 316 of the Laws of 1886 authority was given to supervisors of towns, as to the then indebtedness of the town, to pay up and retire, by the issue of new bonds “for like amounts,” such indebtedness. It was provided, however, “ that such new bonds shall be issued only when existing bonds can be retired by the substitution therefor of such new bonds or can be paid up by money realized on the sale of such new bonds, but where the said bonded indebtedness shall become due within two years from the issue of the said new bonds, then such new bonds may be issued or sold to *327provide money in advance, with which to pay up such existing bonds, when they shall become due and payable.”
In the following year the Legislature passed chapter 158 of the Laws of 1887, which contained the following language: “Section 1. The supervisor of the town of Ontario, in the county of Wayne, is hereby authorized and empowered to do all acts necessary in paying up, retiring and cancelling the present bonded indebtedness of said town, and said supervisor is hereby authorized, empowered and designated as the proper officer or person to sign, execute, issue and deliver new bonds of said town for the purposes above set forth, and under and pursuant to the provisions of chapter three hundred and sixteen of the laws of eighteen hundred and eighty-six.”
The respondent Hill, under the authority given by the two chapters above cited, undertook to retire the bonded indebtedness of his town. In doing so apparently he did not adopt the most formal and particular method of keeping an account of the bonds actually retired, or the new bonds and coupons actually issued, and it is difficult to determine from the evidence adduced at the trial precisely what amount of bonds he retired and took up, and the terms and conditions which were applied by him to the negotiations for the surrender of old bonds, and the delivery of new bonds. The three bonds in question were apparently issued while he was retiring the old bonds, and were subsequently taken by him to the Union Bank and pledged for a loan of $500, then and there made to him in good faith. Before the loan was made an officer of the bank sought such information as he could avail himself of, as to the regularity and validity of the bonds proffered to the bank, and the evidence satisfactorily indicates that the bank, in good faith, loaned the $500 and took in pledge therefor the three several bonds amounting to $700, and that, at the time of the commencement of this action, the whole $500 debt remained unpaid, and that the bonds SO' taken by the bank were held by it as collateral security for its loan so made. Its loan was made directly to Hill. Just how or when he acquired title to the bonds pledged to the bank is difficult to determine by the evidence submitted at the trial. The evidence, however, is satisfactory that the Union Bank is a bona fide pledgee of the three several bonds, and the views expressed in the opinion of the trial judge in that regard are satisfactory, but the right of Hill *328to hold and own the bonds as against the town is not made clear by the evidence.
We think the judgment should be modified as to the Union Bank, so that instead of dismissing the plaintiff’s complaint, it should be declared that the Union Bank, upon receiving the amount of its loan and interest and the costs of this action, should surrender the three bonds mentioned in the complaint, and that the judgment as to the Union Bank, as so modified, be affirmed.
We think the judgment as to Ilill, so far as it dismisses the plaintiff’s complaint, should be reversed and a new trial ordered, with costs to the appellant to abide the event.
All concurred.
Judgment as to the Union Bank modified, so that the same shall declare that the bank is entitled to hold the three several bonds as collateral security for the §500 debt and interest, and that upon the payment of that sum, and the costs of this action, the said bank shall deposit said bonds with the county clerk of Wayne county to be disposed of as directed by the final judgment in this action, and, as so modified, judgment affirmed, with costs of the appeal to the respondent Union Bank.
Judgment as to the defendant Hill reversed and a new trial ordered, with costs of the appeal to the appellant to abide the event.