Wade v. Travis County, Texas

This was an action brought in the circuit court for the Western district of Texas by the plaintiff, Wade, who is a citizen of the state of Illinois, against the county of Travis, to recover upon certain interest coupous detached from 47 bonds issued by the defendant for the purpose of building an iron bridge across the Colorado river.

The petitioner set forth: That in July, 1888, the defendant, being authorized so to do, entered into a contract with the King Iron Bridge Manufacturing Company of Cleveland, Ohio, for the construction of a bridge for public use over the Colorado river, the company agreeing to complete the same by November 15, 1888, in consideration of which the defendant agreed to pay the sum of $47,000 in 6 per cent. bonds, payable in 20 years after date.

That, prior to the making of such contract, to wit, February 23, 1888, the defendant, acting through its commissioners' court, levied for the year 1888 and subsequent years, until otherwise ordered, an annual ad valorem tax of 20 cents for general purposes, and an annual ad valorem tax of 15 cents for road and bridge purposes, on each $100 worth of taxable property in such county. That on February 13, 1889, the commissioners' court of the county levied for the year 1889 an ad valorem tax of 15 cents on each $100 worth of property for road and bridge purposes, and an ad valorem tax of 5 cents to create a sinking fund for bridge bonds, and to pay the interest on such bonds. That the defendant delivered to the bridge company, upon its contract for erecting the bridge, 5 bonds on December 6, 1888, 10 bonds on December 22, 1888, 10 bonds on February 12, 1889, and the remaining 22 of such bonds on July 3, 1889, such bonds being signed by the county judge, countersigned by the county clerk, and registered by the county treasurer. That the several levies in question had not been appropriated for any other purpose by the county, or, at least, a sufficient portion of them remained unappropriated to pay the interest and sinking fund upon such bonds, and that it was the intention of the commissioners' court to use these levies with a view of providing an annual fund sufficient to pay the interest, and to provide the sinking fund required by law. The petition further averred that plaintiff purchased the coupons for a good and valuable consideration in open market, and that he is the legal owner and holder of the same; that on January 16, 1896, he presented such coupons to the county treasurer, and demanded payment thereof, which was refused.

The county demurred to the petition upon six different grounds, the first and material one of which was that the petition failed to allege that 'at the time the debt was created for which the bonds were issued, upon the coupons of which this suit is brought, any provision was made for the interest, and at least 2 per cent. sinking fund upon such bonds.'

The circuit court was of opinion that, at the date of the execution of the contract for erecting the bridge, the commissioners' court should have made a distinct and specific provision for the interest upon such bonds and for a sinking fund, and thereupon sustained the demurrer, and dismissed the cause. 72 Fed. 985.

The plaintiff appealed to the circuit court of appeals, which affirmed the judgment of the circuit court. 52 U.S. App. 395, 26 C. C. A. 589, and 81 Fed. 742. Upon plaintiff's petition a writ of certiorari was subsequently allowed by this court.

Joseph Paxton Blair and Frank W. Hackett, for petitioner.

Clarence H. Miller, for respondent.

Mr. Justice BROWN, after stating the facts in the foregoing language, delivered the opinion of the court.