KIMBALL ". TOWN 01' LAKELAND.
enforcing the decree by actual control.over the person of the defendant, then the suit and decree directly affect the land, and are in the nature of a proceeding in rem. This being. so, then substitutive service is effectual against non-residents. If the judgment to be pronounced by this court was to be final in this eause, I should feel embarrassed by the made in this circuit. several of which were rendered by the circuit judge, and which, upon the authority of Hart v. SansQm, hold a proceeding to quiet title to be in personam, and therefore ineffectuaL when based upon service by publication. It being understood, however, that it is the settled purpose of counsel to take this case to the'supreme court in order to obtain a final and authoritative decision of the question, it follows that the ruling now made will have little effect other tha.n to determine wbiyh of the parties shall become the plaintiff ill er:rbr. Under these circumstances, I ,pave felt at liberty to considetthe question as one still open for examination, and have, as already indicated, reached the conclusion that the decree rendered in Lord: v. He:nryean be sustained, so far as.it deals with thEl title to the land. This being so, then, under the stipulation of the parties, the judgment must be in favor of the defendant, and it is so ordered.
TOWN OF LAKEJ,AND.
(Oircuit Oourt, D. MinnlJ8ota.February 19, 1890.)
RAILROAD COMPANIES-MuNICIPAL AID-BoNDS-EsTOPPEL.
Gen. St. Minn. 1878, c. 84, authorizes munillipal corporations to issue railroad aid bouds, provided an· agree)llent is reached between the railroad company and the municipality in either one of two modes. In 1879 this act was amended so as to allow but one mode. of making such agreement. In 1880, town bonds,. were issued! in pursuance of said act, upon an agreement entered into in the mode which haa been repealed. Thebonds recited that they were issued unde!' said act, and that all the conditions of .he a!1t had been complied with. that the town was estopped from denying the validity of the bonds as against a bona fide holder for value.
At Law. Action by John Kimball against the town of Lakeland, to recover terest on certain bonds. Warner & Lawrence, for plaintiff. L. L. Manwaring, and Olapp & Macartney, for defendant. SHIRAS, J. On theIst day of JQly, 1880, the town of Lakeland,a municipal corporation of Washington county, Minn., issued bonds, in the sum of $5,000, in aid of the construction of the Hastings & Stillwater Railroad, payable on the 1st day of July, 1900, with interest at the rate of 7 per cent. per annum, payable semi-annually, according to the terms of interest coupons attachad to said bonds. Having defaulted in the payment of interest, the present action was commenced, in 1886, to recover $1;925,.the interest then due and unpaid; the plaintiff having become the owner oUhe bon<;ls by purchase from the prior holders thereof. v,41F.no.5-19
Thedefe'nSe is that the bonds areinvalid and void. By written stipulation,duly I!igned on behalf of the parties, it is admitted ,that"Theicoupon bonds referred to in the pleadings were made and issued undeD'theprovision of Gen.8.t..I878, c. 34.: § 98, which. is the Same as section 7, c. lO6,Gen. Laws IB77,and upon and after proceedings full compliance, with. and according t,o, said provision, and not otherwise. The plaintiff pllr¢hased said coupon bonds, in the usual course of business, at Concord. It. R., of wbichstate the plaintiff. then was, and ever since has been, a citizen,after thf'Y were so made and issued, and paid therefor full value, in good faith.llaving no notice ot any defect in said sfatutory provisions. and ever been, and,is.,the owner and bolder of sai<} coupon bonds. Said purchase was ,made pri(?r to the year A,. D, 1883. Said proceedings for issuapceqf sllid bonds were so ,had dur,ng the year A. 1). 1880. and prior to Jul,r' 1,,1,880; and said bonds were actuallY,deliveredto. and became the propetty ot; tbe payee therein named. 'on the 17th day of September, A. D. 1880. without saId payee having any knowledge or notice of any defect in said statutory proVisions" after which the same passed through divers trdnsfers to said before : . The bonds are'uegotiable in form, are payable to the Stillwater &, Hastings Railroad Conlpanyor bearer, and' contain the following recital: "This bond is Issued under an act of the legislature of the state of Minnesota. approved March 5. U!77. entitled "An act to authorize municipal corporations to aid in the construction of raIlroads," and in strict and literal compliance with the conditions and provisions of said act. which said conditions and prOVisions, all and ,beqn, observed apd followed, so as to make this bond the 'legal and binding obligation of said town of Lakeland. In testimony whereof,:tbslJ8,id town of Lakelan,dhascaused these presents to be signed by the cbairman of the board of supervisors, and countersigned by its this first day of JUly. 1880. :"" ", "L. H. , "JOHN BIRCH. (Jhliirman of Board of Sup'vrs." The actofJ877 authorized, any town, county, incorporated city, or village inthe,state to aid in the construction of railways by issuing bonds linli4l;tionsin the act provided an agreement to that end is reached between the railroad company and the municipality iIi either one of two modes pointed out in the statute. The first mode de,igbated is through an to be held, the prerequisites for the holding of which are the submission on behalf of the company of a proposition for such aid, to be filed with the town-clerk, and the filing in the ofIj.ce 'of such clerk a statement in writing, in favor of. such election, signed by the supervisors, town-clerk, and justice of the peace or any two ofIthem, ,together with at'least twelve other freeholders of the town. If the majority of the Yotes cast at such election are in favor of the acceptance :ofthe proposition submitted,then the mutual agreement authorizing the :issuance of the bonds is deemed to have been reached, and the proper officerssre authorized to issue the bonds according to the terms of the proposition. The second mode of reaching the agreement for the issuallce ofthebonds is by procuring and filing with the clerk a petition, sighed by' s;majorityof the tax-payers in the town, asking the town authorities to agree to such proposition. "By an act passed
in:. 1879, the legislauure:6fMfnMsotil repealed the section providing "for, tile, mode of Teadliipg an agreement for of bonds, and therefore, in 18$0, bo,llds question were issued, th.erewas but one mode .by. whicp., ,under the ,act of 1877, the agreement for the issuance of bands in aid of railways could be reached, and that was by submitting the proposition'to the tax-payers at an election called for that purpose. It seems that, by oversight, the officials and the town werELequally ignorant of the eXistence, of the repealing statute of 1879, when the proposition for aiding the railway by the issuance of. bonds waS submitted, in 1880, and therefore the proposition was acted upon uuder the provisions of section 7 of the act of 1877, when that section was no longer in force. It is clear, therefore, that if it is open to the defendant to make the defense of a want of authority in fact to issue the bonds, grouud\therefor exists, as the stipulated facts show that no election wll.scalled or held for the purpose of voting upon' the acceptance or rejection of the proposition filed by the railway company. The query is whether the town is estopped from making such defense by renson of the recitals in the bond operating in favor of an innocent holder for value. When the bonds were issued, in 1880, the act of 1877, as anlendedbythe repeal ofthe seventh section thereof, fully authorized the issuance of bonds in aid of railways, in case the majority of the tax-payers ,13hould so vote at an election to be held under the provisions of the statute. By the stipulation of facts it is admitted, 'in that:when the plaintiff bought the bonds he paid full value therefor, in good faith, without any actual notIce of any defect therein. He was bound to take notice of the public statutes of the state, and is therefore conclUSively presumed to have had knowledge of the passage of the act of 1879, repealing the seventh' section ()f the act of 1877. If the bonds on their face had shown that they· were in fact issued under the provisions of the seventh section, then the plaintiff would have been chargeable with knowledge of the fact that the bonds were invalid, and he could not be heard to'sssert that he was an innocent purchaser. Such fact, however, does not appear on the face of the bond, the recital being that they were issued under the act of 1877, and it must be held to mean that they were issued under that act as it then, i. e., in 1880, was in force; or, in other words, as in 1880 the act ,of1877 was in force, save the seventh section, which had been repealed; then, when the town authorities recited that the bonds were issued under the provisions of the act of 1877, the clear meaning is that the bonds were issued under the provisions of the act that were in force at the dMe of the issuance of the bonds. The recitali has reference to the statute as it stood when the bonds were issued, and not to· it at some previous date. The position taken by the counsel for the defendant is as follows: "It Is true that there still remained in the act of 1871. the title of which is recited in the bonds, a provision by which an agreement might be arrived at between the town and the raih'oad compally, and bonds issued in thereof, but this recital does not say that the bonds were issued after proceed;i
I'EDJllBAL REPORTER,VOl. 41.
Ings accordance,With that section of ,the act, nor do they say that the bQnds,)yere issued in put:8uance of the provisions of that act as amended by the law of 1879, so that it seems to us that when this plaintiff purchased these bonds containirtg this recital he was bound 'tQ examine the law referred to, aM havIng done so, and finding therein two different provisions or methods by which the agreement which is provided for in that act should be arrived at between the town and the railroad company, be was bound to presume that the bolldsmight ,havllbeen issued under either one of thr me,thods prOVided by the Bct. Being ,bound by such presumption. he was also bound to know that se,ction 7 of the act under which these bonds were issued was no longer in force, and it was his duty to ascertain whether these bonds had been issued under the provisions of section 7 or of the section which pr'ovides for a vote of the people." ,,
When about to purchase these bonds, it was the duty of the plaintiff to inquire what authority the town had to issue the bonds in July, 1880, under the act of 1877. An examination of the statutes would have shown that at ,tl;lat time full authority existed under the provisions of the act of 1877, as then in force, for the issuance of bonds in aid of railways, provided the issuance thereof had been authorized by a vote of the taxpayers. True, .guch examination would have revealed the fact that one modeofauthorizing the issuance of bondEl provided for in the act of 1877 had been abrogated by the' repeal of the seventh section thereof, in 1879; but IfaHto see why the pllj.intiffwas bound to presume, according to the contenti9llof counsel for'de.(endant, that the town authorities might have the provisiQDsof the Eleventh section, which had been repealed :theprevious year. On the contrary, the presumption would be that. the town authorities knew QUhe repeal of this section, and, further, that they intended to act within the. power actually conferred upon them. The. 'plaintiff, therefore, when he purchased the bonds, had a right to the bonda issued under and in strict compliance with thep..rovisio.Qsof the act of 1877, as the same remained in force on the 1st 1880. That statute, as then in force, conferred authority uponthe,t.owntoaid in the construction of railways by the issuance of ,further. provided the steps to be taken in submitting any bonds, givenpl10position to the vote of the tax-payers. The determination of the.qeeEltion.Of ,fa:ctnecessary to be ascertained before the bonds could be Iegally..issued, such as the filing .of a proposition'in writing on behalf of the railway company, the filing of a demand for an election, the holding: the election,and the canvassing the yote, and the declaration of the result,is by tIle statute intrusted to the town officialsb.y whom the bonds afe issuedjand the the bonds to the eflect tbatall the provisions of tbe:statute had been complied with is tantamouuttoa recital that all the p;rerequisite.steps required by the statute had been observed. It is not necessary to cite the many decisions of the supreme court of the United States upon the binding force of such recitals infa¥or of innocent for value, Thesupreme court of Minnesota, inthe case of Fultmi'v:Towno! Riperton, 44N. W. in a decision' upon the for drainage pqrposes under the /lct approved February 27 l88S. qolds that-
COLORADO E. BY. CO. fl. UNION PAO;RY. CO.
"Where, by legislative enactment, authority has been given to a munici. pality, or to its officers, to issue bonds for a proPElr purpose, but only on some condition precedent, such as the presentation of a petition bearing the signatures of two-thirds of the legal voters of said municipality, and where it is obvious from the enactment that the officers of the municipality have been investeq with the power to decide whether that condition has Leen complied with, their recital and certificate in the bonds issued by them, and hdd by St bortajide purchaser, is conclusive of the fact, and binding upon the municipality." Under the settled doctrine of the decided cases, it seems clear that the plaintIff, when he purchased the bonds in question, with the therein found, had a right to assume that the same were issued under the provision of the act of 1877, as the same were in force at the of the issuance of the bonds, and that all the precedent Rteps required to be taken by the statute, as then in force, to authorize the actual issuance and delivery of the bonds, had been fully complied with; and that the plaintiff, having purchased. the bonds for full value, in good faith, relying .upon the assumptions which the law authorized him to deduce from the recitals made on behalf of the municipality by its proper cials, is entitled to estop the defendant from pleading as a defense thaf such recitals are not true as a matter of fact. It follows that plaintiff is entitled to judgment for the amount due on the coupons declfj,red on, with interest and costs.
(Circuit Court, D. Colorado. Februarv 17.1890.)
RAILROAD COMPANIES-FRANCHISES-EMINENT DOMAIN.
A .railroa!i company incorporated undeI"'a statnte making it a common carrier is not rendered a'private enterprise, so'as to deprive it of tbe l'ight of eminent domain, by tbe fact tbat it is poorly constructed, and terminates at a coal-milie belonging to the corporatIon, when it appears that it :larries tbe mails, passengers, .Rnd freight, runs regular trains, and has expended about $280,000 in building 'its road, and aoquiring its right of way. : Where land, sought to be condemned by a railroad company lies on the dire<,'t line between the end of its road, as built, and the at which it aims, fact that it could reach such terminus, by a circuitous route, without crossing such land, does not show that the land is not necessary for the construction of the road, Land which is owned by a railroad company, and which it expects at some future time to use for railroad purposes, but which it has held for five years without using it in any way, is subject,to condemnation for the right of way of another company. " A railroad company whose charter gives it the right to build its road "from" a eel', tain city is not barred from making tbe Union depot in such city its terminus by the fact tbat it began to construct its road from a point in the outskirts of the city, and for some ,time ran trains from such point, when it appears the companv never made any permanent improvements at such point, and that from the first'It made efforts to ,extend its 'line to the Union depot. ...