Nemaha County v. Frank

120 U.S. 41, 7 S. Ct. 395, 30 L. Ed. 584, 1887 U.S. LEXIS 1936
CourtSupreme Court of the United States
DecidedJanuary 17, 1887
Docket1048
StatusPublished
Cited by4 cases

This text of 120 U.S. 41 (Nemaha County v. Frank) is published on Counsel Stack Legal Research, covering Supreme Court of the United States primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Nemaha County v. Frank, 120 U.S. 41, 7 S. Ct. 395, 30 L. Ed. 584, 1887 U.S. LEXIS 1936 (1887).

Opinion

Mr. Justice Matthews

delivered the opinion of the court.

This is an action at law brought by Augustus Frank, a citizen, of the state of New York, for the purpose-of enforcing the payment of the interest Coupons on certain municipal bonds alleged to hate been issued by the county of Nemaha, on behalf of Brownville-precinct in said county,, to aid in the construction of the Brdwnville, Fort Kearney and Pacific Bail-road, in pursuance óf án act of the legislature of the state of Nebraska. The petition - alleges, that, by virtue of an act entitled “ An act to enable counties, cities, and' precincts to borrow money on their bonds, or to issue bonds to aid in the, construction or completion of works of internal improvement in this state, and to legalize bonds already issued for such pur *42 poses,” passed on the loth day of February, 1869, the board of commissioners of the county of Nemaha issued the special bonds or written obligations of said Brownville precinct, on the 20th day of August, 1870,'to aid in the construction of the Brownville, Fort Kearney and Pacific Railroad, and delivered the same to the company authorized to construct said road; that prior to the issue of said bonds the proposition to issue the same was duly submitted to the voters of said Brownville precinct, in strict accordance with the provisions of the said act of the legislature, and that a large majority voted for said proposition; that, during the years 1871 and 1872, the said Brownville precinct and the board of county commissioners duly paid the coupons then falling due by means of a tax levied for that purpose, but for the years 1878 and 1879 they have failed and refused to pay the same or to levy a tax therefor. The petition also alleges, that, on or about the 20th of February, 1871, for a valuable consideration, the bonds and coupons were transferred in good faith to John Fitzgerald, and b3r him to the plaintiff.

An answer was filed by .Nemaha Comfiy, as defendant, containing the following matter:

The total amount of the bonds so issued and sold, being one series, under one proposition, amounted to one hundred thousand dollars. The said bonds and coupons were voted upon, the following contract and conditions and none other: At the time of the vote for said bonds certain persons were attempting to organize a railroad corporation under the name of the Brownville, Fort Kearney and Pacific Railroad Company, the identical same organization named in said bonds, with a capital stock of two million' dollars, but were unable to organize it because unable to obtain a payment on said amount of stock of ten per cent, thereof, as required by law, precedent to the right to do business; they considered and treated said series of one hundred thousand in bonds as one one-huridredthousand-dollar cash subscription all paid up in cash in advance, and, also, they treated and considered bonds of the city of Brownville, situated within the said precinct of Brownville mentioned in the petition, of the nominal sum of sixty thou *43 sand dollars, as sixty thousand dollars cash subscription paid up in cash in advance, all as' capital stock of said railroad company, aggregating one hundred and sixty thousand dollars, so considered and treated as cash capital stock paid in; but, by considering the said bonds of the.nominal sum of $160',000 as one hundred and sixty thousand dollars in money paid in on the capital stock, there was still an insufficient amount paid in to enable the company to do business, there being no cash paid in except on a few private subscriptions,- and' not exceeding ten thousand dollars, so that even by treating said bonds as money there was still a deficiency of thirty thousand dollars of the amount prescribed by law as a condition precedent to the organization of the company for the purpose of transacting any of the business for which it was sought to be organized. Defendant, therefore, denies that said railroad company was ever a corporation with power to transact business or to receive municipal bonds for its aid.

Defendant, therefore, avers that neither said precinct nor said county had any power or authority to aid in the organization of said railroad company by subscribing to its stock or in any other manner. Defendant further avers, that said pretended railroad company. never either filed of recorded its articles of incorporation, if any it ever had, in any county in the state of Nebraska, as by law it was compelled to do prior to its existence as a corporation.

“ In the transactions of issuing said bonds by defendant and of receiving the same by said pretended railroad company, neither the defendant nor the said company had any power to act, and all the acts therein on both sides are and ever have been ultra vires and null and void.

“ The proposition submitted to the voters of said precinct as a basis of the right to issue said bonds was a proposition to subscribe by said precinct one hundred thousand dollars in stock and shares in the capital stock of said pretended railroad company, and pay the same in bonds aforesaid.

u The total assessed valuation of all the property in the said precinct, as shown by the last assessment preceding the issuing of said bonds, was $920,000, and the issue of $100,000 in bonds' was in excess of the amount allowed by law.”

*44 The plaintiff having filed a reply, .afterwards, moved the court to strike out from the answer of the defendant all the foregoing matter as immaterial and irrelevant. This motion was sustained by the court, to which ruling the defendant excepted. Upon the pleadings as thus amended the cause was tried by a jury, who returned a verdict in favor of the plaintiff, oh which judgment was rendered, to reverse which this writ of error has been sued out and prosecuted.

• This ruling of the court in striking out this portion of the answer is alleged as error. For the purposes of the argument avc shall assume what is claimed by the plaintiff in error, that the matter stricken out Avas material and relevant. The defences intended to be raised by it were, that in tivo particulars the bonds in question were void as not' having been issued in conformity with law. The sections of the statute of 1869, in pursuance of which it is alleged they'Avere issued, are as follows:

Section 1. That any county or city in the state of Nebraska L hereby authorized to issue bonds to aid in- the construction of any railroad, or any other work of internal improvement, to an amount to be determined by the county commissioners of such county or the city council of such city, not exceeding ten per centum of the assessed Actuation of all taxable property in said county or city, Provided the county commissioners or city council shall first submit the question of the issuing of such bonds to a vote of the legal voters of said county or city, • in the manner provided by chapter nine of the Revised Statutes of the state of Nebraska, for submitting to the people of a county the question of borrowing money..”

“ Section 1.

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Bluebook (online)
120 U.S. 41, 7 S. Ct. 395, 30 L. Ed. 584, 1887 U.S. LEXIS 1936, Counsel Stack Legal Research, https://law.counselstack.com/opinion/nemaha-county-v-frank-scotus-1887.