Court Opinion

ID: 8010674
Source: CourtListenerOpinion
Date Created: 2022-09-09 01:57:50.057881+00
Date Added: 2024-06-11T16:35:43.651896
License: Public Domain

Barclay, J.
The action is upon three funding bonds issued by Butler county, dated April 29, 1871, and expressed to be for value received. Each promises to pay the bearer thereof, April 29, 1881, at the Provi*336dent Savings Institution at St. Louis, Missouri, $500, with, interest from date until paid, at the rate of ten per cent, per annum.
The petition states in detail the facts showing the regular issue of these bonds under the “funding act” of 1868. Session Acts, 1868, p. 46. No question of their validity is raised. The defense relates solely to the proper rate of interest payable.
The trial court sustained a general demurrer to the answer, which stated, in substance, that no demand for payment had been made until February, 1880, but admitted that, when the bonds matured,, defendant had no funds at the place named for payment.
Defendant with its answer tendered the principal amount with interest to maturity, etc., but refused to pay the ten per cent, rate from maturity.
The legality of that refusal constitutes the only question for decision.
I. By the statute under which these bonds were issued, express authority was given to the county to pay thereon “interest at not more than ten per centum per annum, payable semi-annually,” and to attach interest coupons to the bonds. It was also enacted that the bonds should be “payable not more than twenty years from the date thereof.”
Excepting the limitations thus indicated, as to the time and rate of interest, the form of these bonds was not prescribed. The county authorities might have fixed (as they in fact did) a shorter term than twenty years, or might have expressed in them a promise to pay less than ten per cent, interest. They had a discretion, within the limits of the law, to give the bonds such form, in those respects, as would enable the county to make the loan to best advantage. They, moreover, saw fit to designate as the place for payment *337the Provident Savings Institntionin St. Lonis, Missouri. On that point the funding act was silent; hut as it plainly authorized the making of the loan, and placed only the limitations above noted upon the terms thereof, the intent of the law-makers to invest the county with discretion, in regard to the other formal and usual parts of such commercial instruments, is very plain. Maddox v. Graham (1859), 2 Metc. (Ky.) 80; Railroad v. City (1860), 15 Ind. 413. The designation of the place for payment of principal and interest is a part of the ordinary phraseology of such bonds when put upon the market, and constitutes one subject of consideration by persons advancing funds upon that kind of securities.
In the absence of such a designation, the office of the county treasury has been held the proper place for payment as respects the running of interest. Friend v. Pittsburgh (1890), 131 Pa. St. 305. But that ruling does not support the deduction sought to be grounded on it here, that the county may not, as part of such instruments, properly name a place of payment outside its territorial borders. Such appointment of a place has often been expressly authorized when the law prescribed the forms of bonds with minuteness (Session Acts, 1872, pp. 278, 473; 1873, pp. 293, 361); and we think the power to make such appointment is impliedly committed by the funding act of 1868 to the sound judgment of the county authorities, along with the discretionary powers given by that act in respect to other matters of larger moment in the make-up of the bonds already noted.
We conclude that the provision in the latter for payment at the Provident Savings Institution is valid and obligatory on the defendant.
II. Defendant, it is admitted, had no funds in or at the savings institution when the bonds matured. *338The failure of the holder, therefore, to demand payment then and there did not stop the interest at that date.
This is settled commercial law in the United States in respect to the obligation of individuals. Mahan v. Waters (1875), 60 Mo. 171; Cox v. Bank (1879), 100 U. S. 714; Hills v. Place (1872), 48 N. Y. 520. Nothing has been suggested towards establishing any distinction, in this regard, in favor of municipal corporations as makers of such paper, and we think such distinction untenable, unless founded on statutory, provisions governing the bonds. No claim of that sort is advanced on this appeal.
It seems unnecessary to comment further upon the case, as it follows, from the application of the above stated principles of mercantile law, that plaintiff was entitled to judgment for interest as claimed, so soon as the proposition discussed in the first- paragraph above was determined in his favor. The learned circuit judge so determined it, and we think correctly. The judgment is affirmed.
Sherwood, C. J., Black and Brace, JJ., concur.