Carroll County v. Smith

111 U.S. 556, 4 S. Ct. 539, 28 L. Ed. 517, 1884 U.S. LEXIS 1815
Supreme Court of the United States·Decided May 5, 1884·No. 333·Published·Cited by 134 cases

Opinion

Mr. Justice Matthews

delivered the opinion of the court. He stated the facts in the foregoing language, and continued:

The provision in. the charter of the railroad company *561 authorizing the issue of bonds in payment of subscriptions by municipal bodies to its capital stock, is based upon article 12, section 14, of the Constitution of the State, which declares that—

“ The legislature shall not authorize any county, city or town to become a stockholder in, or to lend its credit to, any company, association or corporation, unless two:thirds of the qualified voters of such county, city or town, at a special election or regular election to be held therein, shall assent thereto.”

It is claimed, on behalf of the plaintiff in error, that the qualified voters referred to in the Constitution of Mississippi and the charter, of the railroad company, are those who have been determined by the registrars to have the requisite qualifications of electors, ,and who have been enrolled by them as such, and that it requires a voté of two-thirds of the whole number enrolled as qualified to vote, and not merely two-thirds of such actually voting at an election for that purpose, to authorize the issue of such bonds as those in suit.

That presents the single question for our decision, for the averment in the last plea, that “ the board of supervisors fraudulently and illegally issued and delivered the bonds and coupons,” has reference merely to their being issued without the alleged requisite assent of two-thirds of the registered voters, and there is nothing alleged in the plea from which it can be inferred that the injunction bill, pending which the bonds, it is charged, were issued and delivered, was based on any other infirmity.

We do not think the plaintiff in error is precluded from raising this question by any recitals in the bonds. They contain no statement of any election called or held, or of the vote by which the issue of the bonds was authorized. They do mot embody even a general statement that the bonds were issued in pursuance of the statutes referred to. The utmost effect that can be given to them is, that ©f a statement, that a subscription to the capital stock of the railroad 'aompafly was authorized by the statutes mentioned, and that the sum mentioned in the bonds was part of it. They serve simply to-point out the particular laws under which the transaction may law *562 fully have taken place. They say nothing whatever as to any compliance with the requirements of the statute in respect' to which the board of supervisors were authorized and appointed to determine and certify. ‘ They do not, therefore, within the rule of decision acted .on by this court, constitute an estoppel, which prevents inquiry into the alleged invalidity of the bonds. Northern Bank of Toledo, v. Porter Township, 110 U. S. 608; Dixon County v. Field, ante, 83; School District v. Stone, 106 U. S. 183.

On the other hand, we do not agree with the counsel for the plaintiff in error, that the pendency of the injunction bill, re- ■ ferred to in the last plea, affects the title of the defendant in error, as a bona fide holder of the bonds for value; or that this court is bound to follow and apply the judgment of the Supreme Court of Mississippi, in that case, reported as Hawkins v. Carroll County, 50 Miss. 735, perpetuating the injunc- . tion, on the ground that the Constitution and laws of the State required a majority of two-thirds of those qualified to vote to be cast at the election, to support the validity of the bonds.

The defendant in error was no party to that suit, and the récord of the judgment is therefore no estoppel. The bonds were negotiable, and there was, therefore, no constructive notice of any fraud or illegality, by virtue of the doctrine of lis-pendens. County of Warren v. Marcy, 97 U. S. 96. It is not alleged in the plea that the defendant in error had actual notice of the litigation, or of the grounds on which it proceeded, or that any injunction was served upon the board of supervisors ; and, if he had, that notice would have been merely of the question of law, of which, as we have seen, he is bound to take notice, at all events, and which is now for adjudication in this case. There is nothing in the case of Williams v. Cammack, 27 Miss. 209, 224, to which we are referred by counsel on this point, inconsistent with these views.

The decision in Hawkins v. Carroll County, above referred to, is not a judgment of the Supreme Court of Mississippi construing the Constitution and laws of the State, which, without regard to our own opinion upon the question involved, we feel bound to adopt and apply in the present case. It is a de *563 cisión upon the very bonds here in suit, pronounced after the-controversy arose, and between other parties. It was not a rule previously established, so as to have become recognized as settled law, and which, of course, all parties to transactions, afterwards entered into would be presumed to know and to conform to. When, therefore, it is presented for application by the courts of the United States, in a litigation growing out of the same facts, of which they have jurisdiction by reason of the citizenship of the parties, the plaintiff has a right, under the Constitution of the United States, to the independent judgment of those courts, to determine for themselves what is the law of the State, by which his rights are fixed and governed. It was to that very end that the Constitution granted to citi-. zens of one State, suing in another, the choice of resorting to a federal tribunal. Burgess v. Seligman, 107 U. S. 20, 33.

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Carroll County v. Smith, 111 U.S. 556, 4 S. Ct. 539, 28 L. Ed. 517, 1884 U.S. LEXIS 1815 (1884).

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