Commissioners of Johnson County v. January

ERROR to the Circuit Court of the United States for the District of Kansas.

The case is stated in the opinion of the court.

Mr. Nelson Cobb for the plaintiffs in error.

The bonds in question derive no validity from the act of Feb. 25, 1868, as it was expressly repealed by the fourth section of the act of Feb. 27, 1869, without any saving clause as to pending proceedings. The election, ordered when the former law was in force, not having been held until after the last law took effect, was, with all the subsequent action to which it gave rise, unauthorized and void. Aspinwall v. Commissioners of Daveiss County, 22 How. 364; ''Covington, &c. Railroad Co. v. Kenton'', 12 B. Mon. (Ky.) 144. Their issue was not authorized by the act of 1869, as after its passage no election was ordered, and the county is not estopped from contesting their validity, especially when their recitals show an absence of legal authority for the doings of the board in the premises. Marsh v. Fulton County, 10 Wall. 676.

The plaintiff below was not therefore a bona fide holder of the bonds in question. This court has repeatedly held that paper otherwise negotiable, which on its face shows that which should arouse suspicion and put the taker upon inquiry, cannot be so transferred as to cut off defences which would have been available against the original holder. Fowler v. Brantly, 14 Pet. 318; Goodman v. Simonds, 20 How. 343; Angle v. North-western Mutual Life Insurance Co., 92 U.S. 330; Harshman v. Bates County, id. 569.

The subsequent acts of the county do not estop it from setting up the defences upon which it relies in this suit. Bigelow on Estoppel, p. 80; Clark v. Session, 22 N. Y. 312; Langdon v. Dowd, 10 Allen, 423; Freeman v. Cooke, 2 Exch. Rep. 644; Howard v. Hudson, 2 El. & Bl. 1; Anderson v. Lyon, 11 Allen, 349; Wells v. Truesdell, 6 Pick. 455. The only interest paid on the bonds was that paid to the plaintiff below. The delivery of the certificates of stock was necessary to complete the subscription, and was, like it, void. The registration by the State auditor on the application of the holder of the bonds was without notice or knowledge of the county or its officers. Upon neither of these facts, therefore, can the doctrine of estoppel have any application.

Mr. James Grant, contra.

MR. JUSTICE SWAYNE delivered the opinion of the court.