County of Moultrie v. Fairfield, 105 U.S. 370 (1882)

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Filed: 1882-03-18Precedential Status: PrecedentialCitations: 105 U.S. 370

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105 U.S. 370
105 U.S. 370
26 L.Ed. 945

COUNTY OF MOULTRIE
v.
FAIRFIELD.
October Term, 1881

ERROR to the Circuit Court of the United States for the Southern District
of Illinois.
This action was brought by Fairfield against the county of Moultrie, upon
the common counts, for money lent, money had and received, and money
due on account stated, with notice that he would give in evidence coupons
detached from certain bonds of the county issued in satisfaction of its
respective donations in aid of the Bloomington and Ohio River Railroad
Company, and the Decatur, Sullivan, and Mattoon Railroad Company.
Plea, non assumpsit, under which, by agreement, the county was allowed
to offer any evidence and make any defence that would be competent
under any special plea well pleaded. The parties submitted the issues of
fact as well as of law to the court; and a special finding of facts was made,
upon which judgment in his favor was rendered, to reverse which the
county brought this writ of error. The material facts are set forth in the
opinion of this court.
Mr. John R. Eden for the plaintiff in error.
Mr. Shelby M. Cullom and Mr. E. S. Bailey for the defendant in error.
MR. JUSTICE WOODS delivered the opinion of the court.

1

We shall first consider the objections raised by the plaintiff in error to the
recovery upon the bonds of the county of Moultrie issued to the Decatur,
Sullivan, and Mattoon Railroad Company. The charter of this company took
effect March 26, 1869. The ninth section provides as follows: 'The several
incorporated towns, cities, counties, and towns organized under the township
organization law, along or near the route of said road, or that are in any way
interested therein, may, in their corporate capacities, subscribe to the stock of
said company or make donations thereto to aid in constructing or equipping
said railroad.' Then follows a proviso making subscriptions to the stock and
donations conditional upon a vote of the people and prescribing the mode of
holding elections, &c.

2

Section 10 declares: 'The board of supervisors of Moultrie County are hereby
authorized to subscribe to the capital stock of said company to an amount not
exceeding eighty thousand dollars, and to issue the bonds of the county
therefor, bearing interest at a rate not exceeding ten per cent per annum, said
bonds to be issued in such denominations and to mature at such time as said
board of supervisors may determine: Provided, that the same shall not be issued
until said road shall be opened for traffic between the city of Decatur and the
town of Sullivan aforesaid.'

3

It appears from the records of the board of supervisors, as stated in the findings
of the court, that on Nov. 2, 1869, an election was held according to law in the
county, at which a majority of the votes cast was in favor of a proposition to
donate to the company the sum of $75,000, to be paid in the bonds of the
county when the road should be completed and in running order through it; and
that, in pursuance of the vote, the board, Dec. 19, 1869, passed an order that
there be donated by the county to the company the sum of $75,000 and that
when the road should be completed through the county there be issued and
delivered to the company the bonds to that amount payable in ten years, in
satisfaction of such donation; and that on Nov. 1, 1871, the chairman of the
board of supervisors and the clerk of the county issued and delivered to the
company seventy-five bonds of $1,000 each in satisfaction of the donation.
These bonds recite on their face that they are 'issued by said county of Moultrie
by virtue of a vote of a majority of the legal voters of said county voting at an
election held in said county of Moultrie on the second day of November, 1869,
which election was authorized by, and conditioned according to the provisions
of, an act of the General Assembly of the State of Illinois, approved March 26,
1869, entitled an act to incorporate the Decatur, Sullivan, and Mattoon Railroad
Company.'

4

The court further found that Fairfield was a bona fide purchaser for value
before maturity of the bonds issued to the company, from which the coupons
offered in evidence were detached.

5

The facts above stated as found by the court, and the authority conferred by the
charter of the company to issue the bonds, establish prima facie their validity
and the right of Fairfield to recover.

6

The county insists, however, that there are other facts set forth in the findings
which show the invalidity of the bonds. These are that, at the December special
term, 1869, of the board of supervisors of Moultrie County, an order was
passed that the county subscribe to the capital stock of the company, by
authority of sect. 10 of its charter, above recited, the sum of $80,000; that said
subscription was then and there made; and that on Dec. 31, 1872, the road
being then open for traffic between Decatur and Sullivan, the bonds of the
county were issued and delivered to the company in payment of its subscription
of stock.

7

The contention of counsel for the county is that the board of supervisors
having, in December, 1869, subscribed to the capital stock of the company the
sum of $80,000, by authority of sect. 10 of the charter of the company, it had
given all the aid to the railroad company which the law authorized. In other
words, it is insisted that the county could not subscribe the full amount of stock
authorized by sect. 10, and also make a donation under sect. 9; that it could
only do one of these two things. The inference which is drawn from this
position is that the bonds issued in satisfaction of the donation, voted for by the
people of the county and subscribed by the board of supervisors, were issued
without authority, and are, therefore, void.

8

We cannot, for several reasons, concur in his views. First, it is conceded that
the board could either subscribe any sum not exceeding $80,000 to the stock of
the company, under sect. 10 of its charter, and issue the bonds of the county in
payment thereof, or it could make a donation, under sect. 9 of the charter, of
any amount which had been voted for by the voters of the county, and issue the
bonds of the county in satisfaction thereof. As the county sets up as matter of
defence against the donation bonds issued to the company, the fact that a
subscription of stock had also been made, in payment of which the county had
issued its bonds, it stands it in hand to show that the obligation of the county to
issue bonds in payment of its subscription antedated its obligation to issue
bonds to satisfy its donation. This the findings fail to show. They do not show
which was first voted by the board, the donation or the subscription. They do
show, however, that before any action was taken by the board in reference to
either, to wit, on Nov. 2, 1869, the electors of the county had voted in favor of
the donation. They further show that the county agreed to issue its bonds in
satisfaction of its donation when the company had completed its road through
the county, and to issue its bonds in payment of its stock when the railroad
should be open for traffic between the city of Decatur and the town of Sullivan;
that the road was completed through the county as early as Oct. 20, 1871, and
that the donation bonds were issued and bore date Nov. 1, 1871; that the road
was not open for traffic between Decatur and Sullivan until Dec. 31, 1872; and
that on that day, fourteen months after the issue of the donation bonds, the
subscription bonds were executed and issued. If either class of bonds, therefore,
has any advantage over the other on the question of authority for their issue, it
would seem to be the donation bonds. Secondly, as there was authority for the
issue of the donation bonds, which is recited on their face by reference to the
law from which it was derived, the purchaser before maturity was not bound to
look further. The county having authority to issue bonds like those purchased
by him, he was under no obligation to inquire whether the county had issued
more bonds than the law authorized. Lynde v. The County, 16 Wall. 6; City of
Lexington v. Bulter, 14 id. 282; Marcy v. Township of Oswego, 92 U. S. 637;
Humboldt Township v. Long, id. 642. Thirdly, we are clearly of opinion that
under sect. 10 of the charter of the company the county might subscribe for
stock to an amount not exceeding $80,000 and issue, its bonds in payment
thereof, and under sect. 9 of the same charter make a donation to the same
company, and issue its bonds in satisfaction thereof.

9

It is clear, and it is conceded in the brief of plaintiff in error, that the county is
included within the terms of sect. 9, which applies to counties along or near the
route of the road, or that are in any way interested therein. It is also clear that,
independently of the provisions of sect. 10, the county might, upon a vote of
the people authorizing it, make a donation of any amount of the company.

10

Section 10, which authorizes a subscription to the stock within certain limits,
and without any vote of the people, does not preclude a donation under sect. 9.
The obvious construction of the two sections, taken together, is that any county
along the line of the railroad, upon a vote of the people, may, without limit,
either subscribe to the stock of the company or make it a donation to be paid for
in bonds, and that the county of Moultrie may subscribe to the stock of the
company, without a consenting vote of the people, any sum not exceeding
$80,000. We must give this construction to the two sections if we allow both to
have their full effect; and, if possible, they should be so construed as to give full
effect to both, without any limitation or condition not incorporated in them by
the legislature. The authority granted to Moultrie and other counties by sect. 9
to make donations is not restrained or repealed because authority is granted to
Moultrie County, by another section and upon different conditions, to subscribe
stock. One section is not inconsistent with the other, and therefore does not
repeal it.

11

The next reason upon which the invalidity of the bonds and coupons under
consideration is based, is the section of the Constitution of Illinois of 1870,
which declares: 'No county, city, town, or township, or other municipality, shall
ever become subscriber to the capital stock of any railroad or private
corporation, or make donation to or loan its credit in aid of such corporation:
Provided, however, that the adoption of this article shall not be contrued as
affecting the right of any such municipality to make such subscriptions, when
the same have been authorized under existing laws, by a vote of the people of
such municipalities under existing laws.' First additional section.

12

The proviso of this section has been construed by the Supreme Court of Illinois
—and this court has followed that construction—to extend to donations as well
as subscriptions of stock. Chicago & Iowa Railroad Co. v. Pinckney, 74 Ill.
277; Middleport v. AEtna Life Insurance Co., 82 id. 562; Lippincott v. Town of
Pana, 92 id. 24; Fairfield v. County of Gallatin, 100 U. S. 47.

13

According to the findings of the court lbelow, the records of the board of
supervisors of the county of Moultrie show that before the adoption of the
Constitution of 1870 an election was held whereby the donation was
authorized, which the bonds in suit were issued to satisfy, and we have already
seen that such election was authorized by sect. 9 of the charter of the railroad
company. The prohibition of the Constitution does not, therefore, extend to the
donation made in this case, or the bonds issued in satisfaction thereof.

14

An attempt is, however, made by the plaintiff in error to show that no election
by which said donation was authorized was ever held; because in the petition
for the election, and in the notice of the election, the railroad company to which
the donation was to be made was designated as the Mattoon, Sullivan, and
Decatur Railroad Company and not be its true name, to wit, the Decatur,
Sullivan, and Mattoon Railroad Company. And the contention is that as there
was no vote of the people which authorized the donation in question to the
Decatur, Sullivan, and Matton Railroad Company, the power of the county to
make the donation was cut off by the Constitution of 1870.

15

There can be no doubt to what company the people intended to make their
donation. The statute-books of the State of Illinois will be searched in vain to
find an act incorporating a railroad company by the name of the Mattoon,
Sullivan, and Decatur Railroad Company. There can be no question that in the
petition for, and the notice of, the election, the company intended was that
known and chartered as the Decatur, Sullivan, and Mattoon Roilroad Company;
for the petition and notice designated the route upon which the road was to be
built, and afterwards was built, and they refer to the provision of the charter of
that company, which authorized the donation upon the making of which the
voters were to express their will.

16

But a conclusive circumstance against the county to show to what company the
donation was voted, is found in the records of the board of supervisors, set out
in the findings of the court, in which it is distinctly stated that the petition for
the election requested that an election be held in pursuance of an act entitled an
act to incorporate the 'Decatur, Sullivan, and Mattoon Railroad Company,' to
decide whether a donation of $75,000 should be made to that company, and
that such election was held on Nov. 2, 1869, and resulted in favor of donating
the sum of $75,000 to that company. It was therefore ordered that said sum be
donated to the Decatur, Sullivan, and Mattoon Railroad Company, and when
said company should have completed its road through the county, that the
bonds of the county should be delivered to it in satisfaction of such donation.

17

These records show what the understanding of the representative body of the
county was in respect to the company to which the donation was voted. There
can, therefore, be no doubt about the identify of the company which the voters
of the county had in view when the election was held. It is certain that on Nov.
2, 1869, an election was held by the voters, and a donation of $75,000 voted to
some railroad company. The circumstances to which we have adverted do not
leave the least doubt that it was the Decatur, Sullivan, and Mattoon Railroad
Company. Upon such a state of facts the law is well settled.

18

Even a contract is not avoided by misnaming the corporation with which it is
made. Hoboken Building Association v. Martin, 2 Beas. (N. J.) 427. And if a
corporation is misnamed in a statute, the statute is not thereby rendered
inoperative if there is enough from which to ascertain what corporation is
meant. Chancellor of Oxford's Case, 10 Rep. 53.

19

'Although the names of corporations are not merely arbitrary sounds, yet if
there be enough to show that there is such an artificial being, and to distinguish
it from all others, the body politick is well named, though the words and
syllables are varied from.' Bacon's Abr., tit. Corporation, C. 2. And it has been
held by the Supreme Court of Illinois that the transposition of words
comprising the name of a corporation is unimportant, if it be evidence what
corporation is intended. Chadsey v. McCreery, 27 Ill. 253.

20

We are, therefore, of opinion that in the petition for and notice of the election
the transposition of two of the words of which the name of the corporation to
which the aid was to be voted was in part composed, cannot render the
electlion invalid and void.

21

It is, therefore, clear that the donation voted for at that election is taken out of
the operation of that clause of the Constitution of the State which declares that
no municipality shall make donations to, or loan its credit in aid of, any railroad
or private corporation. In our opinion none of the objections which we have
noticed, to the validity of the bonds under consideration, are well taken.

22

The remaining objection to their validity is also urged against a recovery on
those issued to the Bloomington and Ohio River Railroad Company, and is the
only ground of defence against the last-named bonds. This objection we shall
now consider. It is based on sect. 8 of art. 9 of the Constitution of Illinois,
which declares: 'County authorities shall never assess taxes, the aggregates of
which shall exceed seventy-five cents per one hundred dollars valuation, except
for the payment of indebtedness existing at the adoption of this Constitution,
unless authorized by a vote of the people of the county.'

23

To show the applicability of this provision to the question in hand, the plaintiff
in error offered evidence in the court below, on which the court made the
following findings:——

24

'That at the time of the issuing of said bonds the indebtedness of said county,
including said bonds, was two hundred and seventy-five thousand dollars, and
the valuation of the taxable property of said county was two million two
hundred and seventy-nine thousand and eighty-four dollars, and that the sum of
ten thousand dollars per annum was required to defray the necessary ordinary
expenses of said county; and that at the time of the rendition of the judgment in
this cause the indebtedness of the county, including accrued interest, was three
hundred and seventy-five thousand dollars, and the valuation of the taxable
property therein was three million five hundred and eighty-nine thousand two
hundred and fifty-one dollars, and that it required twelve thousand dollars per
annum to defray the necessary ordinary expenses of said county.

25

'That to enable said county to pay the indebtedness created by said donations to
said Bloomington and Ohio River Railroad Company, and to said Decatur,
Sullivan, and Mattoon Railroad Company, evidenced by said bonds still
outstanding, the interest coupons upon which were sued on and offered in
evidence in this case, will require the annual assessment of taxes, which will
exceed 75 cts. per $100 valuation of the taxable property in said county of
Moultrie.'

26

The argument of the plaintiff in error is that the indebtedness evidenced by the
bonds issued by the county of Moultrie, in aid of the two railroads mentioned,
does not fall within the exception found in sect. 8 of art. 9 of the Constitution,
and that the above-recited findings of the court below show that the authorized
tax of seventy-five cents on the one hundred dollars would not be sufficient to
pay the expenses of the county and the principal and interest on the bonds. And
it is, therefore, contended that the bonds are void.

27

The authority cited to sustain this position (Loan Association v. Topeka, 20
Wall. 655) merely decides that the bonds are void where there is no power in
the legislature to authorize a tax in aid of the purpose for which they were
issued.

28

But here it is conceded that there is power, within certain limits, to levy a tax to
pay these bonds. They cannot, therefore, be void. Marcy v. Township of
Oswego, supra.

29

Moreover, it appears from the findings of the court that at the time the bonds in
question were issued a levy of seventy-five cents on every hundred dollars
valuation of the taxable property of the county would produce a sum sufficient
to pay the ordinary expenses of the county, and leave a surplus of over $7,000
to be applied to the payment of the bonds, and that at the commencement of this
suit such annual surplus, by reason of the increase in the taxable property of the
county, would amount to nearly $15,000,—a sum almost sufficient to pay the
judgment rendered in this case. So that the defence now under consideration is
reduced to this, that because the whole judgment cannot be at once collected,
there should be no judgment at all.

30

But it nowhere appears in the record that the county has not ample means out of
which the judgment could be collected besides its revenues derived from
taxation. We know from the record that the county at one time owned $80,000
of the stock of the Decatur, Sullivan, and Matton Railroad Company, and it
does not appear that it is not still the owner of this stock, and that it may not
now be subjected to the payment of the judgment recovered in this case, or that
the county may not have other similar assets sufficient to pay all its debts.

31

Therefore, even if the county, by reason of the limit on its taxing power, could
not levy a tax to pay these bonds, nevertheless, they having been authorized,
the holder is entitled to judgment on them, and to collect it out of any property
of the county which could be subjected to the payment of its debts.

32

Whether the indebtedness evidenced by the bonds which are the basis of this
suit falls within the exception of sect. 8, art. 9, of the Constitution of Illinois, so
that taxation for their payment is without limit, is a question which does not
necessarily arise upon this record, and which we are not now required to
decide.

33

We are of opinion that there is no valid defence against a recovery on the
coupons sued on. The people of the county almost unanimously voted for the
issue of the bonds. The conditions upon which the donations were made were
fully performed. The railroads which they were lintended to aid were
completed and in use before they were executed, and they were regularly and
honestly issued by the public officers charged with that duty. They are in the
hands of bona fide holders for value. Common honesty demands that the
county should apply its available means to their payment, and there is no
obstacle to a recovery upon the coupons.

34

Judgment affirmed.

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