Manhattan Co. v. City of Ironwood

74 F. 535, 20 C.C.A. 642, 1896 U.S. App. LEXIS 1948
Court of Appeals for the Sixth Circuit·Decided May 12, 1896·No. No. 397·Published·Cited by 6 cases

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] Tills 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.

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

74 F. 535 (Manhattan Co. v. City of Ironwood) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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