Page:Harvard Law Review Volume 5.djvu/181

165 DECISION UPON MUNICIPAL BONDS. 1 65 understanding in such cases should be set aside, and the official action of a board of trustees, which had been taken in good faith and at the request of citizen-owners of five-eighths of the taxable property of the town, should be denied to be, what it is likely everybody supposed it was at the time — a borrowing of money, or the contracting of a loan. But we may look further on for the reasons on which this posi- tion is bottomed. The opinion continues: — " It is admitted that the power to borrow money, or to incur indebt- edness, carries with it the power to issue the usual evidences of indebtedness, by the corporation, to the lender or other creditor. Such evidences may be in the form of promissory notes, warrants, and, perhaps most generally, in that of a bond. But there is a marked legal difference between the power to give a note to a lender for the amount of money borrowed, or to a creditor for the amount due, and the power to issue for sale, in open market, a bond, as a commercial security, with immunity, in the hands of a bona fide holder for value, from equitable defences. The plaintiff in error contends that there is no legal or substantial difference between the two ; that the issuing and disposal of bonds in market, though in common parlance, and sometimes in legislative enactment, called a sale, is not so in fact ; and that the so-called purchaser who takes the bond and advances his money for it is actually a lender, as much so as a person who takes a bond payable to him in his own name. We think the case of Police Jury v. Britton, 15 Wall. 566, is directly and absolutely conclusive against the position of the plaintiff in error, on this point." 1 Is there a marked legal difference between the power to give a note to a lender, and the power to issue a bond and sell it in open market? We are inquiring now of the power to do these acts, not as to any legal difference that may exist in the respective rights of one who becomes a creditor because he has sold goods to the town, or advanced it money as a loan, — taking a note therefor, — and one who is a creditor because he has bought a bond of the town. We know nothing of the history of this litigation save as it appears from the record, but upon the first reading of the opinion there was left upon our mind a dissatisfaction, which has only deepened, now that we have come to bestow upon it a closer study. The great ability and the perfect judicial fairness of the 1 Page 687.