Andes v. Ely

This was an action by Dudley P. Ely against the town of Andes to recover the amount of certain coupons cut from bonds issued by the town. Judgment was rendered in the circuit court for the plaintiff. Defendant brings error. Affirmed.

On September 1, 1871, the town of Andes, in the county of Delaware, state of New York, issued $98,000 of its bonds in payment of a subscription to the capital stock of the Delhi & Middletown Railroad Company, and received in exchange therefor stock of said company to an equal amount. The recitals in the bonds were as follows:

'Issued by virtue of an act of the legislature of the state of New York entitled 'An act to authorize the formation of railroad corporations and to regulate the same,' passed April 2, 1850, and an act to amend an act entitled 'An act to authorize the formation of railroad corporations and to regulate the same,' passed April 2, 1850, so as to permit municipal corporations to aid in the construction of railroads, passed May 18 (1869), 'sixty-nine, three-fifths being present.

'These acts authorize any city or town, except in the counties of New York, Kings, Erie, Greene, Albany, Westchester, Ontario, Seneca, Yates, Onondaa, and Niagara, to subscribe to the stock of any railroad corporation formed in pursuance of said acts, and these acts authorize the town of Andes to subscribe to the stock of the Delhi and Middletown Railroad Company, and to issue town bonds in payment thereof, all necessary and legal proceedings having been taken and had under said acts.'

The act of 1869, referred to in these recitals (Laws N. Y. 92d Sess. 1869, p. 2303), contains these provisions:

'Section 1. Whenever a majority of the taxpayers of any municipal corporation in this state, whose names appear upon the last preceding tax list or assessment roll of said corporation as owning or representing a majority of the taxable property in the corporate limits of such corporation, shall make application to the county judge of the county in which such corporation is situated, by petition verified by one of the petitioners setting forth that they are such a majority of taxpayers and represent such a majority of taxable property, and that they desire that such municipal corporation shall create and issue its bonds to an amount named in such petition (but not to exceed twenty per centum of the whole amount of taxable property as shown by said tax list and assessment roll), and invest the same or the proceeds thereof in the stock or bonds (as said petition may direct) of such railroad company in this state as may be named in said petition, it shall be the duty of said county judge to order that a notice shall be forthwith published in some newspaper in such county, or if there be no newspaper published in said county, then in some newspaper printed in an adjoining county, directed to whom it may concern, setting forth that, on a day therein named, which shall not be less than ten days nor more than thirty days from the date of such publication, he will proceed to take proof of the facts set forth in said petition as to the number of taxpayers joining in such petition, and as to the amount of taxable property represented by them.'

'Sec. 2. It shall be the duty of the said judge at the time and place named in the said notice to proceed to take proof as to the said allegations in said petition; and if it shall appear satisfactorily to him that the said petitioners, or the said petitioners and such other taxpayers of said town as may then and there appear before him and express a desire to join as petitioners in said petition, do represent a majority of the taxpayers of said municipal corporation as shown by the last preceding tax list or assessment roll, and do represent a majority of the taxable property upon said list or roll, he shall so adjudge and determine and cause the same to be entered of record. And such judgment and the record thereof shall have the same force and effect as other judgments and records in courts of record in this state.'

The bonds were issued by virtue of the following proceedings: On May 6, 1871, a petition of certain taxpayers of the town of Andes was presented to the county judge of Delaware county, upon which an order was entered and notice given, as required by the statute, which order and notice were in these words:

'To Whom It may Concern:

'Notice is hereby given that a petition purporting to be signed by a majority of the taxpayers of the town of Andes, in the county of Delaware, representing a majority of the taxable property in the limits of said town, duly verified by one of the petitioners, has been filed in my office, and that I shall proceed on the 22d day of May next, at 1 o'clock p. m., to take proof of the facts set forth in said petition as to the number of taxpayers joining in such petition, and as to the amount of taxable property represented by them.

'Given under my hand, at Delhi, in said county, on the 6th day of May, 1871.

'Edwin D. Wagner,

'County Judge of Delaware County.

'On reading and filing the annexed petition of a majority of the taxpayers of the town of Andes, Delaware county, representing a majority of the taxable property in the limits of said town, verified by James H. Davis, one of said petitioners, setting forth that they are such a majority of taxpayers, and represent such a majority of the taxable property, and that they desire said town of Andes shall create and issue its bonds to the amount of ninety-eight thousand dollars, and invest the same, or the proceeds thereof, in the stock of the Delhi & Middletown Railroad Company, an association formed in said county and state:

'Now, on motion of White and Jacobs, attorneys for said petitioners, that a notice be forthwith published in the Andes Recorder, a newspaper published in said county, directed to whom it may concern, that on the 22d day of May, 1871, I shall proceed to take proof of the facts set forth in said petition as to the number of taxpayers joining in such petition, and as to the amount of the taxable property represented by them.

'Delhi, May 6th, 1871.

'Edwin D. Wagner,

'County Judge of Delaware County.' Due publication thereof was made. The petition referred to was upon 19 separate sheets of paper, each of them containing the petition in full, and each signed by different taxpayers. Sixteen of them were unconditional; to two of them was attached a condition, 'that said road is located by Fish Lake and Shavertown'; and one of them had this proviso: 'Above conditions [consent] shall be null and void unless said road shall be located by Shavertown and Lumberville.' On the day named in the notice, to wit, May 22, 1871, two orders were entered. The first, after stating the presentation of the petition, the order for notice, proof of publication of notice and of the allegations in the petition, ended with this adjudication:

'I do hereby adjudge and determine that said petitioners do represent a majority of the taxpayers of said town of Andes, Delaware county, as shown by the last preceding tax list or assessment roll, and do represent a majority of the taxable property upon said list or roll, and do hereby adjudge and determine that the same be entered of record.

'Given under my hand, at Delhi, in said county, on the 22d day of May, 1871.

'Edwin D. Wagner,

'County Judge of the County of Delaware.'

The second appointed the three commissioners required by the act to carry out its provisions. Subsequently, one of the commissioners having resigned, another was appointed in his place, and the three thus appointed acted on behalf of the town, in issuing the bonds.

From the time of their issue, down to and including September 1, 1881, the town regularly paid the interest as it fell due upon the bonds, and also paid and retired $3,000 of the principal thereof. Thereafter, some question having arisen as to the validity of the bonds, the town defaulted in payment of further interest, and on December 30, 1889, the defendant in error brought his action in the circuit court of the United States for the Northern district of New York on coupons cut from such bonds. Answer having been filed, the case was tried December 31, 1890, and the jury, by direction of the court, rendered a verdict in favor of the plaintiff for the sum of $32,324.80. To reverse this judgment the defendant sued out this writ of error.

Wm. H. Johnson and C. L. Andrus, for plaintiff in error.

J. B. Gleason, for defendant in error.

Mr. Justice BREWER, after stating the facts in the foregoing language, delivered the opinion of the court.