Aurora City v. West

ERROR to the Circuit Court for Indiana; the case being this:

The charter of the city of Aurora authorized its council, whenever a majority of its qualified voters required it, to take stock in any chartered company for making 'roads' to that city, and to make and sell their bonds to pay for it. With this power the city, in 1852, issued $50,000 of bonds to the Ohio and Mississippi Railroad Company; a company whose charter authorized it to survey, locate, and construct a railroad 'on the most direct and practicable route' between Lawrenceburg on the Ohio and Vincennes on the Wabash. The bonds recited that they were issued in payment of a subscription to stock in the Ohio and Mississippi Railroad Company, made by the city by order of the common council, in pursuance of its charter.

The bonds all passed from the company to West & Torrence, and the interest, due January 1st, 1856, not being paid, these persons brought suit on them at May Term, 1856, in the Dearborn County Court of Indiana, for payment. The declaration alleged that the city, under the authority of its charter, subscribed for $50,000 of the stock of the company; that the company was chartered to construct, and was then constructing, a railroad to the said city; that a majority of the qualified voters had assented to the subscription; that the city issued and sold the bonds to raise the funds to pay for the stock, and that the plaintiffs purchased them.

The city pleaded: 1. That the location of the railroad was not established through the city till after the subscription. 2. That the company was not chartered to construct, and was not, at the date of the subscription, constructing a railroad to the city.

To the first plea the plaintiffs demurred, and the demurrer was sustained; and to the second they replied, that the company located their railroad through the city before the bonds were delivered.

The defendants demurred to the replication, but the court overruled the demurrer.

The concluding statement of the record was that 'the said city, not desiring to controvert the facts stated in said reply, but admitting the same,' judgment was rendered for the plaintiffs.

Other sets of coupons subsequently falling due, West & Torrence, at May Term, 1861, brought suit on them in the same Dearborn Court, on pleadings much the same as the other, and obtained judgment against the city. This judgment was reversed for error, in the Supreme Court of Indiana, and the cause remanded.