Empire v. Darlington

ERROR to the Circuit Court of the United States for the Southern District of Illinois.

Under the provisions of an act of the legislature of Illinois, approved Feb. 28, 1867, and in conformity to the result of a popular election duly called, and held on the 3d of June, 1867, the township of Empire in McLean County, in that State, made a subscription of $50,000 to the capital stock of the Danville, Urbana, Bloomington, and Pekin Railroad Company, a corporation created under the laws of Illinois. That company had by its charter power to locate, construct, and complete a railroad from Pekin, through, or as near as practicable to, certain designated towns, to the eastern boundary of the State.

In payment of the subscription, bonds of the township, of like amount, were issued and delivered to the company.

On the twentieth day of August, 1869, that company consolidated with the Indianapolis, Crawfordsville, and Danville Railroad Company, an Indiana corporation, the consolidated company assuming the name of the Indianapolis, Bloomington, and Western Railway Company. The consolidated railroad formed a continuous line of road from Indianapolis, Ind., to Pekin, Ill.

On the 12th of October, 1869, an election was held in the township of Empire for the purpose of ascertaining the sense of its people upon the proposition to subscribe, upon certain conditions, the sum of $25,000, as additional stock in aid of the construction and completion of the Indianapolis, Bloomington, and Western Railroad. The election resulted in favor of the subscription, which being made, bonds to that amount were issued in the name of the township and delivered to the company.

The bonds were in the customary form, dated March 20, 1870, and signed by the township supervisor and clerk. Each one contained a recital that it was issued 'under and by virtue of a law of the State of Illinois, entitled 'An Act to amend the articles of association of the Danville, Urbana, Bloomington, and Pekin Railroad Company, and to extend the powers of and confer a charter upon the same,' approved Feb. 28, 1867, and in accordance with the vote of the electors of said township, at the special election held Oct. 12, 1869, in accordance with said act. And the faith of the township of Empire is hereby pledged for the payment of the said principal sum and interest as aforesaid.'

Darlington, who is the holder of some of the bonds and coupons issued March 20, 1870, brought this action against the township to recover thereon. It was admitted in the court below that on April 29, 1878, the Circuit Court of McLean County, Illinois, upon the application of certain tax-payers of the said township, enjoined the further payment of the principal or interest, or any part of the bonds or coupons issued in payment of the said subscription of $25,000; that the bondholders were made parties to that suit by the name of unknown owners and holders; that they were notified of its pendency by publication only; and that subsequently a decree was rendered declaring said bonds and coupons void, and perpetually enjoining the assessment and collection of taxes for the purpose of paying them.

The defences set up by the township are stated in the opinion of the court.

A jury having been waived, the court below rendered a judgment in favor of the plaintiff for $8,178.05 and costs, whereupon the township sued out this writ of error.

Mr. Lawrence Weldon for the plaintiff in error.

Mr. Shelby M. Cullom, contra.

MR. JUSTICE HARLAN, after stating the facts, delivered the opinion of the court.