Page:Federal Reporter, 1st Series, Volume 7.djvu/905

 PIE8T NAT. BANK OF OSWKGO V. TOWN OF WALCOTT. 8O3 �on their face that they were issued "in pursuance" of an act oi tHe legislatiaf e of New Jersey, a honafide purchaser had a right to presume the power of the agents was properly exer- cised, and was not bound to look beyond the question of its existence. In that case, as in the present, the recital was of a legal conclusion ; but in that case it was a legal conclusion which was not warranted unless there had been a oompliance with the statuts, while here it might be correct, although there had not been a compliance. A recital that bonds have been issued by virtue of a certain statute may mean only that the authority to issue them was derived from ■ the stat- ute, being used as the equivalent of legal ef&cacy or power. Assuming, however, that the recital is not a sufficient pro- tection to the plaintiff as a honafide purchaser of the coupons, it must be held, upon the controlling authority of Irwin v. The Town of Ontario, 3 Ped. Ebp. 49, that the defendant bas ratified the act of the commissioner in issurug the bonds by paying interest for six or seven years upon the bonds, and retaining the stock of the railroad company received in ex- change for the bonds. It is urged that the, town was com- pelled to pay interest, and that the payments were not the voluntary act of the defendant. Assuming that to be so, it is shown that, upon the delivery of the bonds, the town received a certiiicate of stock in the railroad company for 1,280 shares in 1871, and has retained that stock, with the right to participate as a stoekholder, from that time to this. It was certainly competent for the town, when its agents issued its obligations under circumstances which did not jus- tify them in doing so, to repudiate the act, and upon return- ing or offering to return the benefits derived, to demand a rescission of "the transaction as between itself and the other original parties to the transaction. Instead of doing this, it has lain by all these years ; and, in the meantime, its obliga- tions have been transf erred from dealer to dealer in the mar- ket, in part, doubtless, in relianoe that by the regular pay- ment of interest the defendant recognized its obligations, and by its long acquiescence in what had taken place did not intend to question its liability. Practically, such considera- ��� �