NATIONAL BANK OF COMMERCE fl. TOWN OF GRENADA.
89
right of way through said city limits free of all expense to said Doak, so that in digging or constructing said ditch through said city said Doak, " etc., "shall be at no expense, either for right of way, damages, bridges, or any otht'r expense, except excavation. Said city hereby agrees to pay all expense, damages, or other demands made on said Doak, " etc., "in the digging or construction of said ditch through said city, except engineering and excavating. Said city shall also furnish with good and sufficient title to said Doak, his heirs or assigns, suitable lands, on or adjacent to the ditch, for the uses and purpose of a reservoir. Said Doak," etc., "shall locate said ditch in and through said city wherever he may choose, except said ditch shall be on or along some street, streets. alley,. or alleys. Said city shall at once proceed to refund said issued scrip into refunding bonds, bearing interest at eight per cent., payable semi-annually, and deliver same to said Doak, his heirs or assigns. Said Doak, his heil"s or assigns, to" begin work as required by law, and complete the same as soon as it is practicable so to do." . On the 7th day of November, 1887, a petition containing the same names as the former petition was presented to the board, petitioning it to submit to ·a vote a propositiOJl to fund $36,000 of the city indebtedness with 8 per cent. funding bonds. On the 10th day of November, 1887,Doak presented, at a meeting of the board, the $36,000 of warrants, and offering to accept in lieu thereof the funding bonds of the town, which was accepted. On the 11th of November, 1887, the board adopted the following ordinance: Section 1 directs the submission to the. qualified electors of the town to vote on the quesissue bonds thereof under the protion whether the Loard of said town visions of an act of the legislature of the state of Colorado entitled "An act to enable the several cities and. towns of the state to fund their floating in. debtedness," in exchange at par for warrants of said town issued prior to date of the fil"st publication of the notice heretofore published in this behalf, in accordance with the petition heretofore presented to s!ild board, etc.;· such question to be submittecl at the special election,at the usual place of holding elections, on t.he 12th da,J of December, 1887. Section 3 prOVided that if, upon the return of the canvass of the vote of said election, according to law, it should be found that a majority onhe electors who shall have pai\ltaxes upon propltyassessed to them insaid·town the preceding vear shall have voted in fathen the vor of said proposition, and the result of said election be so maYO!; and. clerk of said town were authorized and directed to exchange bonds of said to",n to the amount $36,000. and no more, at par, for and on account of certain warrants to the amount heretofore issued to one Thomas Doak, in payment for. the construction and operation of water-works within said town, as per the ordinance heretofore passed in that behalf. Section 4 directed that notice of said election be published according to law. This ordinance was not recorded in the ol"dinance book, nor signed by the mayor and clerk, nor published in any paper. It is admitted that no poll-tax was ever paid by the citizens of said town after its incOl.:poration, and that the total value of the real and personal property, as shown by tile legal assessment in said town, was $119,000. Notice was duly given of the special election ordered In said ordinance, which recited that the election was" for the purpose of voting upon the proposition to i.8sue $36,000 in bonds for water-works for the town of Grenada. Those voting for said bonds shall have written or printed upon their ballot, · For water-works bonds. Yes.' Those voting against the bonds will have written or printed upon their ballots, · For water-works bonds. No.''' At a meeting of the board of trustees held December 17, 1887, as a canvassing board, it was found that a majority of the electors of said town voted in favor of funding the town deht; Whole number of votes cast, 24; all in favor thereof, none against. At tniJ same meeting it was ordered that the mayor and clerk of the town btl au-
":lhDERAL 'RE1"ORT:ER,
vol. 41.
thorized Issued and
boril!sjlnJthe'sum of $36,000; which bonds were thereafter· in exchange for his said No nual passedb.Y the town boaooi.n 1887, and no ordinance-was eV'er:passedproviding for a tax t.o pay principal or interest upon said bonds or coUp'ollli. Tbe water-works in question were never structed; nor any part thereof. . It is admitted that of sliid bonds, with coupons attached, numbered 9 to 72, inclusive,were soldoI' nejtot.iated to plaintiff, w purcbased them. before ma110 turity, in good faith,andwithout notice of the proceedings .of the said town bOard; that tbey were 80 bdught In open market, for a valuable consideration ; and that. the plainWHs sbanking corporation, resident of Kansas City, M<l.
The agreed statement contains other specifications, not deemed important to recite. If the joining issue herein were Doak, -the contractor, on one side,and the'defendant town on the other, I should not hesitate to hold that theconsigerationof:tlIe bOnds failed, and no could be_ had. That Doak an,d the town officials, ,or some of them, entered into a conspiracy to plunder the tax-payers of this town, does not admit of debate. It was as bold in conception aeit was graceless and impUdent in execution. ,Thatan h,onest constituency, with the instinct of selfpreservation"could sit by aOd-permit such a larcenous scheme to clUminate before their .eyes,is-almost incredible. It is transparent, from the face of the and especially onthpJace'of the t-ract made by Doakwi'th the town,' that he never intended to construct the water-works... No place or approximate to the town is fixed for planting the reservoir, the title to the land for the reservoir, and the light of .way for the dHdh, Were to vest in DoRk:. The'cityobligated itself to issue to qim at, once, before any work was done, warrants for $36,000, and to proceed at once to refund the warrants in funding bonds, and deliver them to 'Doak, without any security being asked from or given by him for the of the work. The only promise made py him was to begin the work as required. bylaw, and complete the ljlQ.me as soon as practicable·. It has 'not yet appeared when the law requires such .work to begin, .Jlnd it bas ,not yet proven to be practicable for him to begin or complete it, and presumably it never will be. c But the question to be decided here is between the' plaintiff, a chaser of these bonds for valuable consideration, before maturity, and in good faith, and the defendant whose and agents perni,itted the bonds to be upon the market as cotl1ri.1ercial The bonds as offered for sale were in due fbrm" and properly They had been registered with the state auditor, an,d, recorded by the 'Wwn:treasurer, as certified on their face. It was reoited in the bonds had been' issued under the sanction' of an' ordinanee providing forfundingand;paying the existing debts of the city of Grenada. " Itis to be conceded thatthe plaintiff was putuppn inquiry before making the purchase to whether Or not the law of .Colorado conferred upon the town of :Grenada..power thus to issue such bonds, and possibly whether or notisuchordinance ,was in fact passed. By section 3419 et 8e1]., Gen. Sf. 'Colo'. ,power was conferred upon the board of trus-
NATIONAI, BANit'
OF
COMMERCE' V. TOWN, Oll' GRENADA.
91
tees of ihcorporated towIistoissuehondaof this character, to fund the floating indebtedness of the :town. ' The bon,d recites that the modA a.dopted by the town for the aUthori'zation of the issue of the 'bonds was ",under ordinance of the city council of the city of Grenada adopted," etc. It is urged by counsel for defendant that no such ordinance was legally adopted. Its infirmity is predicated on two facts: First, that the ordinance, after being voted on (lnd receiving the requisite number of v()tes, was' not duly recorded in a book 'kept therefor, 110r was it authenticated by the signature of the mayor and the attestation of the clerk; and, second, that it would not become operative as an ordinance until it was duly publillhed in a newspaper, whioh was not done. In respect to the authentication of the ordinance by the signature of the mayor, etc., unless some positive statute applicable to such case raqtiires such signature as essential to the validity of the ordinance, this objection cannot be sustained. The doctrine of the old 'English courts as to corporations in that country, holding that the mayor was an integral part 'of the corporation, whose presence and co-operation were necessary to a valid corporate meeting and acts, does not obtain.in this country. In this country the powers and duties of mayors depend largely, if not entirely, upon the provisions of the organic act or charter of the municipal body, or the by-laws authorized thereby. Primarily his powers and and ministerial. and not judicial or legislative. So duties the general rule is that the essentiality of his signature to the validity of an ordinance depends upon the charter or the organic act of the corporation, and, unless so made essential, it is merely directory. 1 Dill. Mun. Corp. (3d Ed.) §§ 208. 260. 271. The statute of Colorado concerning town ordinances (section 25) provides that "all ordinances shall, as soon as may be after their passage, be recorded in a book kept for that purpose, and be authenticated by the signature of the presiding offioer of the councilor board of trustees and the clerk." It will be observed that this statute does not require the signature of the mayor, or the attestation of the clerk, to give e.lfect to the ordinanoe. But the act only requires that the ordinance, as soon as may be after its passage, shall be recorded in a book, etc., and be authenticated by the signature of the presiding officer, etc.; thus clearly implying tliat the signature is not essential to the passing of the ordinance, but is merely for the purpose of e\TJ.dencing its authentication, because apparAntly the signing is after the recording, and the recording is only to occur as soon as may be after the passage. So far as this plaintiff, a stranger, taking the bonds issued under such ordinance, is concerned, it becomes a binding act upon the city, provable by any other competent evidence. Bank v. Dandridge, 12 Wheat. 74. This view is strongly maintained, both on reason and authority, in Martindale v. PalrMl', 52 Ind. 411, and loco cit. As to the publication oftha- ordinance, there can be no question that where, by express statute, such ordinanoes do not become operative until published in a prescribed manner, they have no force and e.lfectuntil so pUblished. The further provision of said section 25 is as follqws:
·92
1'EDERA.L REPORTER,
..And all by-Iawsof'& general or permanent nature, and those imposing any fine, penalty, or forfeiture, Shall be published In some newspaper published within the limits oftpeC9rporation, or, if there be none such, then in Bome newspaper of general circulation in the municipal corporation; and it shall be deemed a sufficient defense to any suit or prosecution, for such fine, penalty, 01' forft'iture, to show that no such publication was made: provided, however, that if there is no newspaper pUblished within. 01' which has a generalcirculation within, the lImitsoUhe corporation. then and in that case, upon a resolution being passed by B.uch councH or board of trustel's to that effect, such by-laws and ordinances may be published by posting copies thereof in three public places, to be designated by the board of trustees, within the limits of the corporation; and SUch by-laws and ordinances shall not take effect and be in force until the expiration of five days after they have been so published or posted. But the book of ordinances herein prOVided for shall be taken and considered in all courts in .this state as prima facie evidence that such ordinances have been pUblished as pl'Ovided by law." It is apparent from this provision that the rigbt to defend on the ground of the omission to publish is limited to by-laws of a penal character, and to suits or prosecutions for fines, penalties, and forfeitures arising out of a violation of such by-laws; and on the maxim, expreBBio 'Unius, exclusio alterius, the idea of any other character of ordinance being in the mind of the law-maker is not tenable. It is also manifest, from the subject-matter and context, that the provision that "by-laws and ordinance13 shall not take effect," etc., "until the expiration of five days after they have been so published or posted," being qualified by the word "such," evidently has reference back to the penal enactments of the governing board; for it is not to be conceived that the law-maker would make a provision of a substantive character, limiting the operation of'all ordinances from the. period of their publication, by covertly and obscurely mingling the provision with one providing for an alternative mode of publication by posting copies in certain public places. Neither ltm T of\the opinion that this section applies to an ordinance like the one in question, which is special in its character, not for the government and guidance of the people, but designed only to authorize a change in the form of the municipal indebtedness. Amey v. Mayor; etc., 24 How. 365; Blanchard v. Bissell, 11 Ohio St. 103. Furthermore, if there were mere irregularities and <lefects in the passage of the ordinance, is the defendant in a position to st1ccessfullymake such objection, after its agents have recited in the bonds that the ordinance was adopted, and the bond has been bought in the market? Van H08trup v. Madison Oity.1 Wall. 291. . It is insisted, with vigorous repetition, that in fact the debt funded was 110 existing indebtedness of the town; that it had its origin in fmud; that the town never received any consideration for the bonds, and none in fact was contemplated by the conspirators to the fraud. All this I firmly believe, from the evidence before me. But the insurmountable obstacle in the way of this deferise is that by the recital on the face of the bond, that it was issued ordinance "for the purpose of funding and paying the existing debt of theaity of Grenada," the defendant ispraeluded, as against this ,plaintiff, from now the non-existence of the antecedent debt. Hackett v. Ottawa, 99 U. S. 86. In Ottawa v
RATIONAL BANK of COMMERCE
tl.
TOWN
GRENADA.
93
Bank, 105 U. S. 343, Mr. Justice HARLAN, reaffirming the holding in Hackett v. Ottawa, supra, said: "The city council had power, the voters consenting, to issue negotiable securities for certain municipal pUl'poses. If the purchaser, under some eircumstances. would have been bound to take notice,of .the provisions of the ordinances whose titles were recited in the bonds, he was relieved from any responsibility or duty in that regard by reason of the representation, upon the face of. thl' bonds, that the ordinances provided for a loan for municipal purpasps. Such a representation, by the constituted authorities of the city, would naturally avert suspicion of bad faith upon their part, and induce purchasers to omit an examination of the ordinances themselves; and, consequently, the city was estopped. as ag-ainst a bonafide holder for value, to say that the bonds were not issued legitimate or proper municipal or corporate purposes. " The other objection to the issue of these funding bonds may be summarized as follows: That the statute prescribes, as preliminary to the act of funding, that notice to holders of warrants must be published in a given manner, which was not observed in this instance; that the statute prescribes that 50 tax-payers must first petition the town board of trustees to fund the debt, which was not observed, as the petitioners had not in fact paid any tax to the town to qualify themselves; and, finally, the law requires that the adoption of the ordinance in question should be preceded by a vote of a majority of tax-paying voters, whereas the vote submitted in this case was for or againE't issuing "water-works bonds," instead of for or against "funding town debt," as prescribed by statute. The fact that notice to the warrant holders was not published is not, in my opinion, of substance. The principal object of this obviously is to secure the presentation of the warrants for the purpose of funding such debt. The end of the law, in this respect, was substantially obtained by the act of presentation of the outstanding warrants, and the offer of the holder to accept therefor funding bonds. As to the objection that the requisite petition was not presented by qualified tax-payers for the electiot1, it is answered that, as a matter of fact, the records of the corporation show when the plaintiff bought the bonds that the required number of qualified citizens had petitioned, for ,the election; and thereupon the board of trustees passed a formal ordinance, reciting the fact of the presentation of the petition by the ified electors, and ordering the election. So that, had the plaintiff gone to the town records before purchasing, it would have been advised that the necessary preliminary steps to a legal election had been taken; and, if the petitioners and electors were not tax-payers of the town, that was a fact'rei\ting in pais, to be ascertained quasi judicially by the municipal board; and the law presumes, in favor of the bonafide purchaser, that such conclusion of the town board was absolutely correct. Commi.$Bioners v.AspinwaU, 21 How. 539; Bissell v. Jeffersonville, 24 How. 288; ,Town of Coloma v. Eaves, 92 U. S. 484. Superadded to which, I do not :think thatl'the provisions of the statute of Colorado, respecting the qualification of such petitioners and electors having paid taxes to the town,
.,;FEDERA.l,. REP.QWJ.1EB j
vol. 41.· "
to the .caSE! ofaitown organizeq'after taxing period for the current year had passed. In fact, othet:provisipns! of the statute.cll;larly make I,m exceptioniI;l.favor of such palities. ' ,,' , " .· As. tQ the remaining objection, that,the. form of the vote submitted by ,the. orainnnce to the, elect,ors waS it must be conceded that was'Cl!1culatedto' deceive, as' a tax-payer might to'vota bond,sto secure water facilities, yet to issuing bonds to fund, thegeJ;leral floating indebtedness of the town. And although the debt in.question was incurred in an effort to provide the town with water, yet if the form of submission be important, and a vote in :faYor oflunding was essential to the exercise of the power by the town board to issue funding bonds, this defect would be embarrassing 10' the' :right of recovery herein, unless the infirmity be cured by some 'reCitation in the bond or other affirmation of record. We find from the agreed l'3tatement offacts the following admissions: That on November 11, 1887, an ordinance was adopted providing for this election. The ordinance, cODtt-ary to the assumptions in the objections,showed on,its face that the proposition to be submitted to the electors was whether or not they would vote for funding the £loating indebtedness of the town, (electi()n: to be held December 12, 1887,) The notice of election, however,llS pUblished, stated that the proposition to be voted on was: "For water"works bonds. Yesj""For water.works bonds.' The record then shows that at the meeting of the town board held December 12, 1887, as a canvassing board, they found and declared "that a majority of the electors of said town voted in favor of funding the town debtj" and it was at this meeting that the bonds in question were ordered to be issued. What is the effect ofsuch a record made· by the municipal legislative body upon a purchaser of these bonds? Had the plaintiff examined the record before purchasing, it would have found the requisite formal ordinance directing the election. It would have found, further, that the canvassing board had declared that an actual majority of the voters of the town had, conformably.to the ordinan<:le, voted for funding the debt of the town. There was absolutely nothing of record to indi. cate that' the notice was defective. The forged entry of record, made by the clerk of the board, showed that the proper notice was given, and the fact of an improper notice rested alone in paisj which, under all the facts appearjng affirmatively of record and on the face of the bonds, the purchasel' is not bound to look up, and therefore cannot be bound thereby. "In a suit against amulilicipal corporation by a bona fide holder of its bonds; whose title accrued· before maturity, the corporation cannot show by way of defense, if the legal authority of the corporation to issue the bonds:is8uffi vient andoomprehensive.,a want of compliance on its part with formalities required:' by the statute authorizing the issue of the bonds. or 'show frauds in, the their own, agents in issuing them.". (kand Ohu#k,';.Winegar, 15 Wall. 356. The case at bar in thisrespeot is unlike that of McOlurev. OXford, 94 U. S. 429. There the bond refeued ,to the aot of the legislature authorizing its issue, and a purchaser, of
of
mE". CHICAGO & A. B. 00.
96
course, with notice of the requirements olthe law. As the act under wblch: the bonds purported to have been issued took .effect only from its publication, it was manifest, from the date of the bond itself, that the required publication of the act could not have been made prior to the issue of the bonds, and it could not, therefore, have been authorized by the law as claimed on its face. It is finally insisted by the learned counsel for defendant that section 1, of the state' constifution, prohibits, in strong terms, such municipal corporations from lending their credit in any form in aid of any individual, association, or corporation whatsoever. But by section 8 of said article special exception is made in favor of the power by such corporationsto create debts for supplying themselves with water. for irrigation, for suppressing fires, and for domestic use. There seems to be no limit totheextent;ofthedebts which maybe incurred for such purposes. The facts in this case aptly illustrate the great danger to the ing constituency in intrusting such large powerto the average trustees of local cOmmunities, and the bitter experience of its oppressiveness may teach the people of Colorado the same lesson learned by some of the older states, that the only complete safeguard of the people against such .exposure lies in unconditional abrogation and denial of the power itself. Here is II community of only about 400 souls, with an assessed valuation of prdpertyof only $119,000, with a bonded indebtedness, in the first four months of its corporate existence, of $36,000, without one dollar of benefit in return having been received by the inhabitants. How such a burden is; to be met, and how the court is to enforce its payment, is not apparent to my mind. But the question before me is one oflaw only, and to that only do I now respond. My conclusion is that the plaintiff is entitled to judgment for the principal and interest of the ooupona sued on herein, and it is accordingly so ordered.
PIKE
tI. CHIOAGO &;
(OITCUUCov,?t. E. D. Mf880'U7i, E. D. January:US, 1890.)
Ii BA.8TBB
., A watchman on a and the engineer and .conductor of a train on the road, being engaged in different departments ot the company's service, and .. working. under the immediate direction of difEerentforemen, are not fellow-servantAl, so as to exempt the company trom liability to the former for the trainmen'. negligence. . . In an action by watchman ofa railroad bridge fOr injuries received by a passing train, the only theory on which a verdict could be sustained was that plaintiff was caught on the trestle. The onlr evidence in support; of this theory was the testi1I10ny of three w;ltness68 whp the scene of the acpidllnt 8 or 10 boursafter t, happened, and who stated that theY found a spot of blood .at the foot of theea.s' abutment,'from SO to·l5O feetcin' a direct line from the tOll ot the trestle. Theplain. tiff was weeks by )1{\1 wOllncl, which was on the head, and after he regamed consoJ<llisness had no recolllsCtion of the details. 'The teatiiilony aJicLtwo passengera tended to Bhow that he Wl\ll struck.
AND ·SERVANT-FBLLOW-SnVANTB-R.ULROAD EHPLOYBs·
"NEW 'l'RIAL-WEIGRT OJ' EVIDENOE.