Frick v. County of Mercer

21 A. 6, 138 Pa. 523, 1891 Pa. LEXIS 1130

• Court: Supreme Court of Pennsylvania
• Decided: January 5, 1891
• Docket: No. 202
• Status: Published

Opinion

OuiNioN,

Mu. Justice Stbrrbtt:

This action of assumpsit was brought March 2, 1888, on three bonds of the county defendant, dated September 5, 1853, for $100 each, payable to the Pittsburgh & Erie Railroad Company or bearer, at the office of the Ohio Life Insurance & Trust Company in New York, twenty years after date, with interest semi-annually, etc. The bonds purport to have been issued under authority of the act of May 4, 1852, entitled “ A supplement to an act incorporating the Pittsburgh & Erie Railroad Company, approved April 21, 1846,” and are part of the same issue of bonds which was the subject of contention in Mercer Co. v. Railroad Co., 27 Pa. 389. As stated in the affidavit filed on behalf of the county, the defence set up by it was “that the issuance of the bonds upon which said claim is founded was without authority of law and therefore void, and created no legal liability on the county to pay the same, or any part thereof.” The pleas were non-assumpsit and statute of limitations.

To maintain the issue on his part, the plaintiff gave in evidence said act of April 21, 1846, and the supplement thereto of May 4, 1852, authorizing the county defendant, under certain restrictions, limitations and conditions, to subscribe for the capital stock of the Pittsburgh & Erie Railroad Company, etc.; also the record of the Court of Quarter Sessions of the county showing the. action of the grand jury in relation to the subscription, the minutes of the county commissioners showing the appointment of managers or directors of the railroad company, etc., the making of bonds including those in suit, and the delivery of same to the company. He then put in evidence the bonds in suit, with coupons attached, and rested. No evidence was introduced by the defendant.

The learned judge, after instructing the jury that the bonds were collectible in the hands of innocent purchasers for value before maturity, directed them to find in favor of the plaintiff for the amount of the bonds and coupons, with interest, etc., and reserved for future consideration the question “ whether the plaintiff must show that he is an innocent purchaser for value, without notice of the illegality of the bonds.” The jury accordingly rendered a verdict for $1,333.76 in favor of plaintiff. The court afterwards entered judgment in favor of defendant on the question of law reserved, non obstante veredicto. That action of the court is the only subject of complaint in the several specifications of error.

The record evidence introduced by the plaintiff in this ease presented precisely the same facts that were before this court in Mercer Co. v. Railroad Co., supra, and upon which it was then adjudged that the bonds were issued without authority of law, and were therefore void. The legal effect of the evidence showing the illegality of the bonds is of course the same as if it had been introduced by the defendant. In other words, the position of the plaintiff is the same as if he had made out a prima facie case entitling him to a verdict, and the defendant had then proved the facts upon which this court in the case above cited, held that the county commissioners had no authority to issue the bonds. The plaintiff having thus, by his own evidence, established the fact that he is the holder of bonds issued without authority of law, it necessarily followed that he was not entitled to recover without first showing that he was an innocent purchaser of the bonds in suit for value and without notice of their illegality. No attempt was made to do that, and for that reason the learned president of the Common Pleas entered judgment in favor of the defendant, non obstante vere-dicto. In doing so we think he was clearly right. There is no escape from that conclusion, unless we are prepared to overrule the ease referred to, and now hold that the bonds in question were regularly and legally issued. We are not disposed to take such a radical departure as that would be, because, in the first place, some respect is due to the maxim stare decisis ; and, secondly, because it is far from being clear that the adjudication referred to was erroneous.

The supplement of May 4, 1852, declares that subscriptions to the capital stock of the railroad company shall be made subject to the following restrictions, limitations and conditions, and in no other manner or way whatsoever, viz.: All such subscriptions shall be made by the county commissioners after, and not before, the amount of such subscriptions shall have been designated, advised, and recommended by the grand jury; and the amount of such subscription, ordered and designated as aforesaid, may be made payable either in money or in the bonds of the county so subscribing. The grand jury signed a paper saying they would recommend the commissioners to subscribe to the capital stock of the company to such amount, and under such restrictions, as may be required by the act, to an amount not exceeding $150,000. Without any other authority than that, the commissioners subscribed for $150,000 of the capital stock, issued bonds of the county to that amount, and delivered the same to the railroad company in payment of the subscription.

Speaking for the court in the case referred to, Chief Justice Lewis said: “ It is impossible to read the act of May 4, 1852, without perceiving that all discretionary power touching the subscription to the stock was given exclusively to the grand jury. They were directed to designate the amount of the subscription to be made; and, when they did so designate the amount, and advise and recommend the subscription, it was imperative on the commissioners to obey. The language of the act is that the subscription ‘ shall be made ’ by the county commissioners. The mandate is repeated in the clause declaring that the subscription shall be made after the grand jury have designated, advised, and recommended the amount. It is indicated in the express prohibition of any subscription before the amount is so designated by the grand jury.That the action of the grand jury was intended to be mandatory — a command and not merely an authority — is manifest from what has already been said. The advice and recommendation of the grand jury was to be regarded as an order which the commissioners were not at liberty to disobey,” etc. The conclusion was thus reached that all discretionary power touching the subscription was given exclusively to the grand jury, and they could not transfer any part of it to the county commissioners or any other persons; that a mere recommendation by the grand jury to subscribe to such stock to an amount not exceeding a specific sum named, was not a compliance with the provisions of the act and conferred no authority upon the commissioners to make any subscription whatever; and that such a subscription, made without any designation by the grand jury of the amount to be subscribed, was without any' competent authority, and therefore void. This appears to be a correct construction of the act, and the only one of which it is fairly susceptible ; but, whether right or wrong, it was given in a case involving the validity of the issue of bonds, including those now in controversy, and it is plainly our duty to accept the construction then put upon the act as final and conclusive. The specifications of error are not sustained.

Judgment affirmed.