Manhattan Co. v. City of Ironwood

74 F. 535, 20 C.C.A. 642, 1896 U.S. App. LEXIS 1948
CourtCourt of Appeals for the Sixth Circuit
DecidedMay 12, 1896
DocketNo. 397
StatusPublished
Cited by6 cases

This text of 74 F. 535 (Manhattan Co. v. City of Ironwood) is published on Counsel Stack Legal Research, covering Court of Appeals for the Sixth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Manhattan Co. v. City of Ironwood, 74 F. 535, 20 C.C.A. 642, 1896 U.S. App. LEXIS 1948 (6th Cir. 1896).

Opinion

TAFT, Circuit Judge,

after stating the facts as ahoye, delivered the opinion of the court.

The case turns on the construction of the charter of the city of Ironwood, passed in 1893. We may assume, without deciding, that the officers of the city who signed these bonds had implied power, by virtue of the charter’s provisions, to recite in the face of the bonds that the requirements of the act in the issuance of the bonds had been complied with, and thus to estop the city from denying the performance of the conditions precedent to the valid issue of the bonds, as against a bona fide purchaser of them without notice. The contention on behalf of counsel for the city is that the bonds recite on their face a fact which must invalidate them. > They recite that the bonds were issued in accordance with the provisions of section 9, c. 9, of Act 235 of the Local Acts of 1893, and were authorized by a vote of a majority of the qualified electors of. the said city voting at an election held for that purpose on the 3d day of April, 1893, under and in accordance with the provisions of the charter of said city providing for the issuance of the bonds, and that all of said provisions have been fully complied with. If reference to this act shows that the common council of the city of Ironwood could not have been authorized to issue the bonds by a popular election held upon the 3d day of April, 1893, then it must follow that the bonds are void in the hands even of the bona fide purchaser. This is cle'arly established by the case of McClure v. Township of Oxford, 94 U. S. 429. The bonds in that case were issued by the township of Oxford, Kan., bearing date April 15, 1872, and recited that they were issued under an act of the legislature of Kansas, approved March 1, 1872, authorizing the township to subscribe for stock in the Oxford Bridge Company, and in pursuance of a vote of the qualified electors of said township at an election held therein April 8, 1872. They were adjudged by the supreme court to be void, because the act referred to took effect, by its terms, only from its publication in the Kansas Weekly Commonwealth, which did not take place until March 21st, and it thus appeared that the election could not have been held pursuant to a notice of 30 days, as required by the act. Said Mr. Chief Justice Waite, speaking for the court:

“No valid notice of an election could be given until tbe act went into effect, because until then no officer of tbe township bad authority to designate time or place of bolding it. These bonds therefore carried upon the face unmistakable evidence that the forms of the law under which they purported to have been issued had not been complied with, because thirty days had not elapsed between the time the law took effect and the date of the election. If a purchaser may be, as he sometimes is, protected by false recitals in municipal bonds, the municipality ought to have the benefit of those that are true. This suit was brought upon coupons detached from the bonds purchased by the plaintiff in error before maturity, but upon their face they refer to the bonds, and purport to be for the semiannual interest accruing thereon. [539]*539Tills puts, tlie purchaser upon Inquiry for the bonds, and charges him with notice of all they contain.”

It is hardly necessary to refer to other cases to establish the principle that all persons dealing with municipal bonds are bound to take notice of the provisions of the statutes under which such bonds purport to have been issued. A few of them are as follows: Northern Bank of Toledo v. Porter Tp. Trustees, 110 U. S. 608, 4 Sup. Ct. 254; McClure v. Oxford, 94 U. S. 429; Anthony v. Jasper Co., 101 U. S. 693; Lake Co. v. Graham, 130 U. S. 674, 9 Sup. Ct. 654; German Sav. Bank v. Franklin Co., 128 U. S. 526, 9 Sup. Ct. 159; Dixon Co. v. Field, 111 U. S. 83, 4 Sup. Ct. 315.

We come now to the question whether, under the 1893 charter of the city of Ironwood, authority could have been derived from a popular election held upon the 3d of April, 1893, to issue bonds under chapter 9, § 9, of that charter. The act was passed February 24, 1893, and, by its terms, took immediate effect. It repealed all former acts in .relation to the city of Ironwood. It was entitled “An act to. re-incorporate the city of Ironwood.” It added to the territory of the old city, and created two additional wards. It provided that the city should “exercise all the powers in this act conferred.” It directed that the first election under the act should be held A.pril 3,1893. It did not in terms continue the officers and common council of the old city in office, but it imposed duties on them in respect to the election of their successors which necessarily implied that they retained official power for some purposes, at least. The argument for the plaintiffs in error is that, as all the powers of the new city were conferred by words of present grant, they were to be exercised by and through the old council and officers as long as they remained in office, as well as by the new council and officers to be selected at the election of April 3, 1893. It is said that the new city, with all its powers, came into being on February 26th; that the power to issue bonds was one of the most important of these; and that section 9, c. 9, conferring this power, was as much in operation February 26, 1893, as upon May 1st of the same year. A careful consideration of the entire act, which embraces 17 chapters, of many sections each, and is much too long to be quoted, convinces us that while the act took immediate effect, and the powers therein conferred were presently conferred upon the new city, most of them which were new and different from those exercised by the prior corporation were only to be exercised through the instrumentality of the new official organization to be provided by the first election to he held under the act. The old city organization was continued during the interval between the passage of the act and the qualification of the new' officers to be elected, for police and other necessary purposes, such as the holding of the first election. The old ordinances were expressly kept in force; until amended or repealed “by (he common council established by this act.” This phrase doubtless refera to the new council established by the act, rather than to the old council, the vitality of which was continued by implication only. It follows that the old common council had no power of repealing or amending the old ordinances. If it had no [540]*540power to repeal or amend ordinances, it is not to be supposed that it. had the po.wér of initiating new municipal legislation. At least, in the absence of express authority, this is not to be implied. All the powers conferred upon the common council by the new act, which involved the enactment of ordinances, could therefore be'exercised only by the new council. The power to submit the question of issuing bonds, under section 9, c. 9, to a popular vote, was one in the exercise of which the common council had to pass an ordinance formulating the question and the mode of its submission. Therefore it could not be exercised by the old council at all.

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Bluebook (online)
74 F. 535, 20 C.C.A. 642, 1896 U.S. App. LEXIS 1948, Counsel Stack Legal Research, https://law.counselstack.com/opinion/manhattan-co-v-city-of-ironwood-ca6-1896.