Nabton, Judge,
delivered the opinion of the court.
This suit was brought in August, 1867, on seven coupons, detached from bonds, dated January 1, 1865, due in twenty years, and payable to the Alexandria and Bloomfield Railroad Company or bearer. The bonds are in these -words :
“ $500. United States of America. No. 51. Alexandria and Bloomfield Railroad Company, county of Clark, State of Missouri; bond due in twenty years from date. Know all [62]*62men by these presents, that there is due from the county of Clark to the Alexandria and Bloomfield Railroad Company, or bearer, five hundred dollars, lawful money of tlie United States, with interest at the rate of seven per cent, per annum, payable annually on tlie first day of each year, at tbe treasury of said county of Clark, on the presentation and surrender of the annexed coupons; the principal to be due and payable twenty years after the date hereof; for tbe performance of all which the faith of the said county of Clark is irrev. ocably pledged, as also the property, revenue and resources of the said county of Clark. This bond being issued and pursuant to orders of tbe county court of Clark county, as authorized by an act of tbe legislature of the State of Missouri, entitled “An act to authorize the formation of railroad associations and regulate the same,” approved December 13, 1855. In testimony whereof the said county of Clark has executed this bond by the presiding justice of the county court of Clark county, under the order of said court, signing his name hereto, and by the clerk of said court, under the order thereof, attesting the same and affixing the seal of said court. This doue in the town of Waterloo, county of Clark aforesaid, this, the first day of January, 1865.
Harvey Seymour,
Presiding Justice of County Court of Clark County. Attest: Gf. M. Ochiltree,
Clerk of the County Court of Clark County.” Coupons are as follows:
“State of Missouri. Bond No. 51. $35. The county of Clark will pay thirty-five dollars on this coupon on the first day of January, 1867, at the treasury of said county.
Gh M. Ochiltree,
Clerk of the Clark County Court.”
The petition states, that the coupons due in 1866 were paid, but that the coupons sued on, due in January, 1867, were not paid, although duly presented. There were separate counts on the seven coupons sued on. The answer denies that said bonds were issued in conformity to the law of De[63]*63cember 13, 1855, asserts that no vote of the qualified voters of the count,)' authorized the issue of the bonds for $50,000.
After a trial and a multiplicity of pleadings and a change of venue, the case was finally determined in the circuit court upon an agreed state of facts, which were substantially these:
1. That the A. & B. R. R. Co. was incorporated by the act of February 9, 1857, and subsequently, to-wit, on the 17th of September, 1861, duly and legally organized.
2. It is admitted that sections 8, 9, 10, 11, 11, and 19 of the act incorporating the N. M. R. R. Co. (approved March 13, 1851,) were on the 17th of September, 1861, specially adopted by said A. & B. R. R. Company'.
3. That after the organization of said company', to-wit: On the-day of-1861, the following entry was made on the books of said company: “We, the undersigned judges of Clark county, do subscribe $200,000 to the A. & B. R. R. Co., payable in county bonds, due in twenty' years, at seven per cent, per annum, for said county of Clark, State of Missouri.
“Harvey Seymour, B. P. Hannan, Jacob Tinsman : Number of shares, $20,000 : amount, $200,000.”
That said H. Seymour and B. P. Hannan signed the same at Luray in said county, and Tinsman at his residence during the vacation of the cou.uty court.
1. That afterwards, to-wit: On the-day of-, by an order of said county' court, duly entered of record, the question, as to whether said county should subscribe 200,000 dollars to the capital stock of the A. & B. R. R. Co., was submitted to the resident qualified voters of said county', to be voted upon at the general election for State and county' oificers, held on the first Tuesday of November, 1861, at which said election a majority of the resident voters of said county' voted not to subscribe said sum ; that afterwards, to-wit, on the 6th day' of June, 1865, the said county' court, by its order duly entered of record, having ordered the same, a special election was held for the purpose of voting upon the [64]*64question submitted to the resident voters of said county, as to whether said county would subscribe 100,000 dollars to the capital stock of said company, at which election a majority of the resident voters of said county voted not to subscribe 'said sum. \
5. That afterwards, to-wit: On the 10th day of June, 1865, and at the dates subsequently as the same appear in the transcript from the records of said county court hereto attached marked “A” and made a part hereof, the said county court made the order, as in said transcript set forth; that on the said 10th day of June, and in pursuance of said order of that date, the county court issued and delivered to the A. &B. B. R. Oo. one hundred $500 negotiable bonds with twenty interest coupons thereto attached to each of said bonds, of which exhibit B,” herewith filed, is admitted to be a copy, each coupon for the sum of $35; said bonds payable to said company or bearer, of which the bonds and coupons described in plaintiffs’ petition and the coupons sued on were a part; that said bonds were dated January 1, 1865 ; that afterwards J. H. Crane, the duly authorized agent of said railroad company, before the maturity of said bonds and coupons sued on, for a valuable consideration sold, transferred and delivered the said bonds and coupons to plaintiffs, who were then partners, doing business under the firm name and style of Smith & ITall, who received said bonds and coupons in good faith, without actual notice of any defects in their issue, and upon the representations of said Crane, that said bonds and coupons were issued to said company in payment of subscription of said county of Clark to the capital stock of said company; that the bonds and coupons now belong to plaintiffs, and are due and unpaid.
6. It is admitted, that in pursuance of the order of the county court, authorizing him so to do, as the same appears in the exhibit hereto attached, marked (“A,”), G-. M. Ochiltree was present at an election held by said railroad company for the election of its officers, on the first Monday of May, 1866, and as the agent of said county cast the vote of said [65]*65county, in which he represented and cast 500 votes for and on behalf of said county, which said votes represented $50,-000 stock of said company.
7. It is admitted that the first annual, and a large proportion of the second annual instalment, of coupons on the bonds described in plaintiffs’ petition were paid by the said county on the presentation of said coupons at the county treasury; that the coupons sued on were presented to the county treasury on the 28th of March, 1867, and payment demanded, and payment was refused, as will be shown by reference to indorsements on the back of said coupons. The coupons sued upon were made part of this statement.
Signed by Hagerman, attorney for plaintiffs, and Lipscomb & Anderson, for defendant.
The order of the county court, referred to in the foregoing agreement, is as follows: “ Whereas, heretofore, on the-day of-, 1864, the county court of Clark county entered into a certain obligation to and with the A. & B. B. B. Co. by signing the books of said company and subscribing $200,-000 to said company’s stock, by which obligation the county became liable to a prosecution for the said sum of $200,000; therefore, it is ordered by the court, that the county of Clark issue the sum of $50,000 in seven per cent, bonds, payable twenty years from date, interest payable annually, which is to be received by said A. & B. B. B. Co. in full satisfaction for the adjustment of said former liability, said bonds to., be placed in the hands of the county treasurer, to be by him paid out to said A. & B. B. B. Co., as other subscriptions are by the rules of said company required to be paid.”
Section 14 of the North Missouri Bailroad charter, which is incorporated in that of the A. & B. B. B., as authorized by section 10 of its charter, reads as follows:
“ 14. It shall be lawful for the county court of any county, in which any part of the route of said railroad may be, to subscribe to the stock of said company,” &c.
Section 10 of the A. & B. B. B. charter (Feb. 9,1857,) is as follows:
[66]*66“Said company shall in all things be subject to the same restrictions and entitled to all the privileges, rights and immunities, which were granted to the North Missouri Railroad Company by an act entitled an act to incorporate the North Missouri Railroad Company,’ approved March 3, 1851, so far as the same are applicable to the company hereby created, as fully and completely as if the same were herein re-enacted.”
Various declarations of law were asked, but the plaintiff had a judgment on the facts agreed.
A question is raised here whether the Circuit Court had jurisdiction, on the ground, that each count declared on a coupon for $35, which is a sum below the jurisdiction of the Circuit Court. The aggregate of the coupons sued on is admitted to be within that jurisdiction. In the United States courts the amount of $500 is essential to confer jurisdiction. The aggregate of the coupons sued on has been always impliedly or expressly assumed there as determining the question of jurisdiction. The point was expressly decided by Judge Dillon at the spring term of the Circuit Court in Jefferson City. We know of no decisions in our courts to the contrary.
Another point made is, that the coupons in this case, not being made payable to any particular person, are not negotiable. That point is decided in McCoy vs. Washington county, 1 Wal. Jr., 381.
It, is apparent from the agreed statement in this case, that the main and important question in it is, whether the court had the authority to issue the bonds in question under the act of 1857, which was the charter of the company, or whether the recitals in the bonds, that they were issued under the General Statutes of 1855, were obligatory, and therefore that the failure to call an election, which the recited act requires, vitiates the bonds.
The ground on which the Circuit Court decided the case was, that the charter of the company authorized a subscription without a vote, and we will examine that point first.
The charter of the A. & B. R. R. Co. was passed in 1857. [67]*67It was enacted, that the company should be entitled to all the privileges, rights and immunities, which were granted to the N. M. R. R. Co., as fully and completely as if the same were re-enacted in their charter.
The charter of the N. M. R. R. Co. contained a provision that the county courts of any county, in which any part of the road passed, might subscribe to the stock.
It is objected that the right of subscription granted to the counties on the line of the N. M. R. R. is not a privilege or immunity of the railroad company, but of the counties, and is therefore not transferred to the A. & B. R. R. Co. The section (11) conferring this power, as it appears from the agreed statement of facts, was expressly adopted by the A. & B. R. R. Co. It was undoubtedly the intention of the legislature to give to this last named company the same privileges that had been granted to the former. The county court had no power to subscribe to the stock of railroad corporations without a special authority from the legislature, either express or implied. The power thus conceded to the courts or other municipal bodies may well be termed” a privilege to the corporations, and we see no substantial objection to a transfer of such a privilege by simply, in general terms, embodying the section of the original act, which granted it, into the new law. That such was the intention of the legislature, and of the railroad company, is clear, and if the word “privilege ” admits of the narrow construction claimed, the practical construction it has received in this State, as may be seen by reference to the decisions of our courts, would preclude any inquiry into the subject now. These provisions were the principal means by which this and other roads were built, and without them the charters would have been of no value. (Hannibal and St. Jo. Railroad Co. vs. Marion county, 36 Mo., 294.)
The important question, however, remains : Whether this charter granted to the A. & B. R. R. Co. on February 9, 1857, or rather whether the section of it referred to, allowing subscriptions from county courts of counties along the line [68]*68of Lie road without a previous vote of the people, is not repealed by the subsequent acts of the Legislature passed in 1860 and 1861, and before the subscription made in this case.
The law in the revised code of 1855 concerning railroad corporations did not require any election. The thirtieth section reads: “ It shall be lawful for the county court of any county, and the city council of any city, to subscribe to the capital stock of any railroad company duly organized under this or any other act in this State, and the county court or city council subscribing or proposing to subscribe to such capital stock, may, for information, cause an election to be held to ascertain the sense of the tax-payers of such county or city as to such subscription, and as to whether the same shall be paid by issue of county or city bonds, as the case may be, or by taxation.”
The act of January 11, 1860, amendatory of this law, merely changes the words “may for information” into “ shall for information.”
That of Mafch 23, 1861, which was also an act amendatory of this general statute in the revised code of 1855, requires an election to be held, and positively prohibits a subscription if the result of such an election shows a majority of the votes of the county against it.
It is not of any importance therefore to inquire, whether the act of 1855 would not of itself be regarded as an expression of the intention of the legislature to prohibit the county and city authorities from subscribing to railroad corporations, without ascertaining the wishes of at least a majority of the people within their respective municipalities, because the amendatory act of 1861 undoubtedly so declares; and this act, as well as that of 1860, was passed before the subscription now in question was made.
At the same time the charter of the A. & B. B. B. Co.— and we may add, without going outside of the history of various and repeated State adjudications and State legislation, the charters of a number of other railroad companies — allow[69]*69ed the counties, cities, and towns to subscribe without any vote of the people. The question is, whether these provisions in the general law on the subject of railroad corporations repealed the specific provisions of the special acts chartering particular companies. In 1867 the Macon county case was decided (41 Mo., 453), and the subject was there discussed and decided.
It is true, that the act of 1861, though referred to by counsel, is not particularly noticed in the opinion of the court, but the act of 1865, which passed before the subscription made in that ease, is fully considered as well as the prohibitory clause of the constitution of 1865. The act of 1865 was just as stringent as the act of 1861, so far as the necessity of a vote is concerned, and it was more so in regard to the number of voters essential to authorize the subscription. The subscription in that case was made in 1867, after the adoption of the new constitution, and.after the passage of the act of the Legislature carrying into effect the constitutional provision.
In this case (the Macon county case) the case of Alexander vs. City of St. Louis, 23 Mo., 483, is ¡particularly examined, and the opinion of the court in this last named case is re-affirmed, and the doctrine applied to the case under consideration. It was held, that a general prohibition is not inconsistent with a special indulgence", and that a special indulgence is not repealed by a general prohibition, though the latter is subsequent in time to the former. In the case of Alexander vs. St. Louis, the city was by its charter expressly prohibited from subscribing to the stock of any corporation, and a special act passed before the passage of the charter, allowing it to take a certain amount of stock in the Ohio and Mississippi Railroad Company, was held to be valid, and not affected by the general provision of the charter. In the Macon county case the same doctrine is asserted and the same subject — though not in regard to railroad incorporations — is discussed in Deters vs. Renick, 37 Mo., 597, in State vs. Probate Court, 38 Mo., 529, and in the City of St. Louis vs. Ind. Ins. Co., 47 Mo., 146, and a similar conclusion reached.
[70]*70Moreover the Macon county case was followed by the Nodaway county case decided in 1871 (47 Mo., 349), and the Sullivan county case, decided by this court at the February term, 1873, (51 Mo., 522,) re-affirming the first decision.
So that the provisions of the Bev. Code of 1855, and the amendatory acts of 1860 and 1861, and the constitutional prohibition, and the legislative adoption of that prohibition immediately after its passage, have been held by repeated adjudications, and without any conflicting opinions of the court or any individual judge thereof) so far as the reports show, not to affect the repeal of the privilege contained in special charters.
That this was understood to be the law of this State appears also to have been recognized by the legislative department of the government, for in 1872 the Legislature passed an act entitled “an act to repeal certain sections of law granting to county courts and other corporate bodies the power to subscribe stock to railroad companies.” This act was approved January 30, 1872, and specifically repeals certain designated sections in certain acts particularly specified, and including, among the twenty or thirty charters enumerated, the charter of the A. & B. Co. This was, or would have been, a mere act of supererogation, if it had been understood or supposed, that previous legislation on the subject had ’already effected this object.
Thus it will be seen that, up to January, 1872, the decisions of the Supreme Court had been acquiesced in, and no doubt.acted on, by the railroad corporations and the municipal authorities of various counties, cities and towns, as the judicial history of the State abundantly shows. The necessary result was the investment of vast amounts of money in securities issued by counties, cities and towns, by virtue of the provisions in the charters of railroad companies. After the acts of 1855,1860,1861,1865, the subject was regarded as res adjudicata, and upon this view millions of dollars have been invested.
Whatever, therefore, might be the opinion of this court or [71]*71of any individual judge, had the question come np for examination as an open one, we are all of opinion that it is now too late to disturb the received construction.
But it is objected in this case, that the bonds in controversy on their face purported to have been issued under the act of 1855, and that the holder is estopped from claiming that they. were issued under the special act of 1857, which was the charter of the company.
Whether the recital in these bonds would constitute an estoppel against the makers, it is not important to inquire ; if it were so, it would not follow that the purchaser or holder is hound. If he can show that the power existed, a false recital of it, however obligatory on the county or its agents, would not defeat its efficacy in the hands of a party nowise concerned in the perpetration of the falsehood. Crane vs. Lessee of Morris, (6 Pet., 598.)
Conceding, however, that the law is otherwise in regard to this recital, the question would still remain whether a recovery on such bonds could be defeated by proof on the part of tbe county that no election was beld. This question was presented by instructions in tbe Circuit Court, and decided ; and although it might be passed by in this case, jet as it is an important question, and arises in other cases now before tbe court, it may as well be considered here.
In tbe examination of this question, it is proper to inquire what determination, if any, has been reached by the Supreme Court of the United States on this point. The decisions of that court are not obligatory on this court in questions of this character, but it is certainly very desirable aud of great importance to such of our own citizens as have invested in such securities, that they should not be depreciated below their value in the hands of citizens of other States or foreigners. The Federal courts having long since determined that these securities occupy the footing of commercial paper, do not consider themselves bound by the decisions of tbe courts of tbe State where they are issued, and have, in fact, utterly disregarded them in various instances, as the numerous cases in [72]*72the Supreme Court from Iowa and some from Michigan show. The only effect therefore of contradictory decisions here, if such should occur, would be to compel our citizens, who hold such bonds, to sell them, perhaps at a ruinous discount, to citizens of other States, who can sue in the Federal courts.
I do not propose reviewing the numerous cases in the Supreme Court of the United States on this subject. They run over a considerable period, commencing perhaps with the case of Knox County vs. Aspinwall (21 How., 539,) and terminating, so far as the published decisions go, in the case of Grand Chute vs. Winegar (15 Wall., 355.) There may be more recent cases, but I have not access to them.
In this case of Grand Olíate vs. Winegar, the question came, up in a shape which renders the view of that court on it clear and unmistakable. The point is presented by a plea and demurrer, and is therefore not liable to be misunderstood, or to admit of conflicting constructions, as the generalisms or abstract propositions stated in otlier cases seem to have been considered. The seventh plea was “ that no special election, such as the act prescribed, bad been called or held, previous to the issue of the bonds.” The act under wliich the bonds were issued, § 6, declared, “ no bonds shall be issued by any town in pursuance of this act unless a majority of the votes, cast in said town at the election hereinfter mentioned, shall be in favor of the same.” Section 7 says “ a special election shall be called and held in each of the towns before named, for the purpose of carrying this act into effect, within six months after the passage of the act,” and then proceeds to specify particularly the mode of conducting the election. To this seventh jflea, there was a demurrer, and the demurrer was sustained by the Circuit Court before which the case was tried, and on appeal to the Supreme Court the judgment was affirmed.
Mr. Justice Hunt, who delivered the opinion of the court, refers to Knox County vs. Aspinwall, (21 How., 539,) Mercer County vs. Hackett, (1 Wall. 83,) and Meyer vs. The City of Muscatine, (1 Wall., 384,) and, quoting the language of Judge [73]*73Nelson in tbe first named case, says, that a bona fide bolder for value of a bond, issued under an act of tlie Legislature, lias a right to presume that all precedent requirements of the act conferring the power have been complied with. He says emphatically, that “ the cases cited are in answer to the numerous offers to show want of compliance with the forms of law, or to show fraud in their own agents.”
Now, in this case, “the form of law” not complied with was the total absence of any election at all, which the law required ; and this fact was specially pleaded, and to this plea there was a demurrer, which, of course, admitted the fact. There is, therefore, no room for misconception, as there was in some of the other cases which decided the same thing in general terms. The plea was held bad, and the want of an election held to be no defense. ■
The court, however, go further, (I may say the court for no dissent of any of the judges appears in the report) and quote with approbation the head-note of the. reporter in the Aspinwall case, and apply it to the case then under consideration. In the Aspinwall case there had been an election, but upon an insufficient notice; but the court in this Winegar case, where there was no election at all, apply the principle or doctrine as announced by Judge Nelson, and put at the head of the case by the reporter, “ that where the bonds on their face import a compliance with the law under which they were issued the purchaser is not bound to look further for evidence of a compliance with the conditions of the grant of power.” Notwithstanding some fluctuations of opinion as to the extent to which the doctrine in the Aspinwall case went, we may assert with confidence, that, with the exception of the case Of Marsh vs. Eulton County, all the cases since have conformed to the spirit and meaning of the Aspinwall decision. There were at first some dissenting judges who sought to establish different views, but recently it seems to be conceded, that the court has fully and finally settled on the doctrine of this leading case, and sustained the validity of .municipal bonds in the hands of bona fide holders, wherever an authority to issue [74]*74them is conferred by law, although that authority may have been accompanied with conditions and limitations, which were disregarded by the municipal authorities. At times this presumption of a compliance with the law on the part of the agents designated by the Legislature seems to have been based on estoppels, such as recitals on the face of the bonds, the fact that the county or city had levied taxes to pay interest on them, or had received in exchange for the bonds certificates of stock from the railroad companies. This last was the only estoppel in the case of Pendleton vs. Amy, (13 Wall., 297.) Put the court ultimately take the broad rule heretofore stated, and which is thus announced in the City of Lexington vs. Butler (14 Wall., 283), “that when a corporation has power under any circumstances to issue negotiable securities, the Iona fide holder has a right to presume that they were issued under the circumstances which give the requisite authority, and are no more liable to be impeached in the hands of such a holder than any other commercial paper.”
This being the result of the adjudication of the Supreme Court of the United States, let us see how the question stood here at the time the bonds in question were issued and purchased.
In 1863, the case of Flagg vs. the City of Palmyra was decided, (33 Mo., 440). In that case the return of the city officers set up as a defense, among other matters, that there was no election, though required by the act of the Legislature authorizing the subscription. Issue was taken on this plea, but the evidence on the trial is not reported or noticed in the opinion of the court, for the manifest reason, as it will appear from the opinion, that the court regarded the issue as immaterial ; for the court say: “ In this case, if the bonds have been issued by the city of Palmyra in apparent compliance with the law, and themselves gave no evidence of a want of performance of the pre-requisites to their issuance, and no actual notice of any such defect is traced to the bond-holder, we will not hold the bond-holder to be affected by a failure oí the officers of the City of Palmyra to perform all that was re[75]*75quired by law of them, in anticipation of and preparation for the issuing of these bonds. Being issued in apparent conformity to the law, the public (any of whom might acquire the bonds) is entitled to view them as issued in actual conformity to the law, and to suppose that all the acts required of the people and officers of the City of Palmyra had been duly performed.”
<( To apply these principles to the present case we hold the bond-holder to a knowledge of all that is contained in the act of the general assembly to incorporate the City of Palmyra and the amendatory acts above quoted; but in the absence of actual notice, do not hold them bound to inquire whether an election had been held as to the making of a subscription of stock in the Q. & P. R. R. Co., or as to the regularity of such an election, or the qualifications of the voters thereat, or whether the City of Palmyra had actually subscribed stock in the Q. & P. R. R. Co., or whether such subscription was made by the proper officer or officers of the city of Palmyra. The issuing of the bonds authorizes the receiver or purchaser thereof to suppose that all those things, if required bylaw, have been done in the time, form and substance required by law.”
This language is plain, pointed and unambiguous, and substantially enunciates the doctrine of the Supreme Court of the TJ. S. in the cases to which we have referred.
This was the law of this State in 1863, and continued to be the law until the case of Steines vs. Franklin County, 48 Mo. 167, was decided, which was in 1871, eight years after the decision in Flagg vs. Palmyra. The bonds in controversy in the case now under consideration were issued in 1865, the interest coupons were paid in 1866 and partly in 1867, so that the law as declared by this court in the case of Flagg vs. Palmyra is the law which ought to govern the rights of the parties. (Gelpcke vs. City of Dubuque, 1 Wall., 175 ; Thompson vs. Lee County, 3 Wall., 327; Havemeyer vs. Iowa County, 3 Wall., 294.)
I have been unable to see the force of the distinction,which this court has recently made between the various pre-requisites imposed by law upon the action of municipal bodies, and [76]*76the grounds upon which a prominence is given to a mere election without regard to the substantial defects which may accompany it.
It would seem that an election without notice or upon insufficient notice, or one in which the requisite majority is not obtained, or at which disqualified votes are allowed, would be as worthless as no election at all. Of course mere formal defects occupy a different position, and may well be passed over, but it is conceded in all the cases, that every question as to regularity of the election and its result is closed against the municipal body that issues the bonds, and it is only essential to their vali dity in the hands of a bona fide holder that some sort of an election should be held. It may be that only a majority vote for the subscription when the law requires two-thirds; it may be that from the want of sufficient notice a mere fraction of the voters appear at the polls; it may be that hundreds of minors or other disqualified persons have voted; and in all these cases the pre-requisite of an election is as completely and essentially evaded as if no election had been held. Yet the officers of the municipality are allowed to decide upon these questions and their decision is held conclusive. "Why not hold it equally conclusive when no election at all is pretended? It is said, that the power to subscribe is derived from the people of the county or city, and if this be conceded, a fraudulent or unfair, and illegal election is as fatal to the exercise of the power as a subscription without any election at all.
But the power is derived from the law, without which the unanimous vote of every voter in the county or city could not confer it. The law gives the power*, but restricts, its exercise by requiring an election. The power is not derived from the people of the city, or the county, or township, but from the legislative branch of the State government. These municipal subdivisions are authorized to issue negotiable securities upon certain conditions, and one of the conditions is not complied with. All the conditions and restrictions and limitations are equally binding. The absence of one of the pre[77]*77requisites is as fatal as another. The securities are negotiable, and go into the market as mercantile paper. Is the buyer bound to inquire whether the pre-requisites have been complied with ? Or is he authorized to assume that these municipalities have done their duty as the bonds on their face certify?
As I understand the doctrine of agency, a negotiable instrument cannot be defeated by a plea that the agent who executed it exceeded his powers; provided he was authorized to execute such an instrument upon conditions which he failed to observe.
If a clerk or cashier signs paper as an agent to an amount exceeding that allowed by his principal, the holder can recover from the principal. Farmer’s Bank vs. Butcher’s Bank 16 N. Y., 125.
If a security on a negotiable instrument makes the principal his agent, and instructs him to deliver it only in case some other person signs it, and the agent delivers it without such additional signature, all the cases hold that the security cannot defend on the ground of want of authority. This is decided in a case at the present term.
The result of the decisions of the United States Supreme Court, and of this court at the time of the issuance of the bonds in controversy, is, that the holder had a right to presume that the act of 1855 and the amendments thereto had been complied with, and therefore the' defense of no election was unavailing.
It will, of course be understood, that throughout this opinion all the questions examined are in regard to the rights of bona fide holders of municipal bonds, and are not intended to indicate any opinion upon questions arising on mandamus, or injunction, or other form of proceeding to arrest the action of municipal bodies or their officers. "We have not referred to the decisions of this court on such questions, because very different considerations enter into such adjudications. Moreover the law inflicts heavy penalties upon municipal officers, who exceed or disregard their powers in subscribing to railroad companies, not only pecuniary but personal.
[78]*78Iu conclusion, I venture to copy and adopt the opinion of Judge Greer in Wood vs. Allegheny County (3 Wall. Jr., 267), whose opinion, however bluntly and, perhaps, quaintly expressed, seems to me quite as applicable to the condition of affairs in Missouri as he supposed it to be in Pennsylvania:
“If the right of a municipal corporation to subscribe, even when authorized by the Legislature, to purposes so alien to its general purpose as the construction of works of improvement, which in their largest part are in distant counties and other States, were open to me for consideration as a new point, I cannot say that I should hold such subscription other than simply void. The strongest arguments at law have been made against such subscriptions, and they are worth recurring to as containing true and lawyer-like views of the extent and character ofmunicipal powers. Putthe matter is not open in this court. The Legislature of Pennsylvania has authorized counties to make such subscriptions, and the Supreme Court of the State has decided, though by a bare majority, that the act is constitutional.
“ In spite then of all resistance by the county to paying these bonds, here are the bonds, upon which the county promises to pay. The county said to the railroad companies: ‘W e want to help you; we have not the money, but we will lend yon our credit, our promise to pay.’ That promise is, or ought to be, sacred. Doubtless many improper things have been done. The whole business of making cities and counties to subscribe to railroads was unwise. This will be admitted now ; though the counsels of the able and conservative men,who took ground against it, were not heeded when given. Mercantile and popular clamor demanded ‘subscription traders, politicians and all kinds of interested jobbers urged and drove the matter, while commissioners, grand jurors and legislators have been led in the train. It is to be lamented that such things should be done, but they have been done. If the electors of our cities choose to hand over the great concerns of our public offices to ignorant and unprincipled administrators, they must suffer by it. They must themselves bear the bur[79]*79dens, which they put it in the power of knaves to pile upon them. Whatsoever a man soweth that he shall reap, and when he sows the wind he is apt to reap the whirlwind.
“The objections urged against the plaintiff’s claim would have force, if the question were between the county and the railway companies, bnt it is not. It is between an innocent holder for value of a bond payable to bearer, and the party who sent it out into the market or handed it over to others to do so, where it has been sold in the course of trade. It is useless to bring forward here, as against the business operaatious of this day, abstract dogmas out of Blackstone or the Institutes of Coke. Such instruments as these were never dreamed of in their day. The laws of trade suggest and' govern these matters. As I said in the beginiug, here is the bond; here is the fact. Your promise to pay is put upon the market. You gave it this negotiable and coupon form for the purpose of facilitating sale and preventing all questions of equity about it, and now, when the promise has been put upon the market and sold to an innocent holder, you set up these equities. That won’t do. Why did you issue your bonds if you meant that the holder should look to the railways? Why did you not leave the railways to issue their own ? Eor this reason only, that you knew that capitalists would trust you and would not trust them. I esteem the bold, hardy and industrious people of this county, I feel for them with this load of debt put upon them by the careless and unworthy persons whom they have elected to office. But they have allowed the bonds to be issued and sold, and they must pay for them.”
The judgment of the Circuit Court is affirmed,
with the concurrence of all the Judges, except Judge Sherwood,who is absent.