County Commissioners v. Chandler

ERROR to the Circuit Court of the United States for the Northern District of Nebraska.

This was an action brought by George B. Chandler to recover the amount of certain coupons attached to certain bonds issued by the board of county commissioners of the county of Dodge, in the State of Nebraska, on behalf of the precinct of Fremont in said county. Chandler purchased the coupons used on before maturity, and for a valuable consideration. The controversy in the case relates to the validity of the bonds and his title to the coupons.

By a law of the State of Nebraska, passed Feb. 15, 1869, it was enacted that any county or city in the State should be authorized to issue bonds to aid in the construction of any railroad or other work of internal improvement, the amount to be determined by the county commissioners of such county or the city council of such city, not exceeding ten per cent of the assessed valuation of all taxable property in said county or city: Provided, the county commissioners or city council should first submit the question of issuing such bonds to a vote of the legal voters of said county or city in the manner provided by chap. 9 of the Revised Statutes of Nebraska for submitting to the people of a county the question of borrowing money. By a subsequent section, it was enacted that any precinct in any organized county of the State should have the privilege of voting to aid works of internal improvement, and be entitled to all the privileges conferred upon counties and cities; and that in such cases the precinct election should be governed in the same manner, so far as applicable, and the county commissioners should issue special bonds for the precinct.

It thus appears that the board of county commissioners had sufficient power to issue bonds for the precinct, if authorized and required so to do by the latter, for the purpose of aiding works of internal improvement.

In the present case, the bonds purport on their face to have been thus issued. The following is a copy of one of them:--

'UNITED STATES OF AMERICA,

'STATE OF NEBRASKA.

'It is hereby certified that Fremont Precinct, in the county of Dodge, in the State of Nebraska, is indebted unto the bearer in the sum of $1,000, payable on or before twenty years after date, with interest at the rate of ten per cent per annum from date. Interest payable annually on the presentation of the proper coupons hereto annexed. Principal payable at the office of the county treasurer, in Fremont, Dodge County, Nebraska. Interest payable at the Ocean National Bank, in the city of New York.

'This bond is one of a series issued in pursuance of and in accordance with a vote of the electors of said Fremont Precinct, at a special election held on the eleventh day of November, A.D. 1870, at which time the following proposition was submitted:--

"Shall the county commissioners of Dodge County, Nebraska, issue their special bonds on Fremont Precinct, in said county, to the amount not to exceed $50,000, to be expended and appropriated by the county commissioners, or as much thereof as is necessary, in building a wagon-bridge across the Platte River, in said precinct; said bonds to be made payable on or before twenty years after date, bearing interest at the rate of ten per cent per annum, payable annually; which proposition was duly elected, adopted, and accepted by a majority of the electors of said precinct voting in favor of the proposition.'

'And whereas the Smith Bridge Company of Toledo, Ohio, have entered into a contract with said county commissioners to furnish the necessary materials and to build and construct said bridge referred to in the foregoing proposition; therefore, this bond with others is issued in pursuance thereof, as well as under provisions of an act of the legislature of the State of Nebraska, approved Feb. 15, A.D. 1869, entitled 'An Act to enable counties, cities, and precincts to borrow moneys on their bonds, or to issue bonds to aid in the construction or completion of works of internal improvements in this State, and to legalize bonds already issued for such purposes."In witness whereof, we, the said county commissioners of said Dodge County, have hereunto set our hands, this first day of September, A.D. 1871.'

[Signed and sealed by the county commissioners.]

It is conceded that the precinct regularly voted for an issue of bonds to the amount named therein, to be appropriated for building a bridge across the Platte River; but the defendant, in its answer, set forth the notice of the election, by which it appears that the proposition submitted to the people was to build a toll-bridge and not a free bridge; and that the bridge was accordingly built and operated as a toll-bridge. The notice of election further declared that the tolls were to be used for the purpose of raising a sinking fund to pay the principal, interest, repairs, and expenses of the bridge, and were to be regulated from time to time by the county commissioners.

The plaintiff demurred to this answer. The demurrer was sustained, and judgment rendered in his favor. In the argument below, three questions were raised, on which the judges were divided in opinion; and it is on this division of opinion that the case comes here. The questions were as follows:--

1. Whether the said answer sets up a sufficient defence in law to the causes of action stated in the petition.

2. Whether the recital in the bond charged the holder thereof with notice of the proposition, which was in fact the one submitted to a vote of the people, as contained in and shown by the records of the county.

3. Whether the fact that the bonds were issued for a toll-bridge of the character of the one set forth in the proposition submitted to the votes of said Fremont Precinct, as shown in the answer, makes them invalid in the hands of the holder thereof for value before due, without other notice than that imparted on the face of the bonds.

Mr. W. A. Marlow for the plaintiffs in error.

Mr. W. H. Munger, contra.

MR. JUSTICE BRADLEY, after stating the case, delivered the opinion of the court.