97 F. 270 | 8th Cir. | 1899
This is an action brought by James R. Sutliff, the defendant in error, against the board of county commissioners of the county of Lake, in the state of Colorado, to recover the amount due upon coupons numbered 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, and 20, which were cut from ten road bonds .that were issued by the plaintiff in error on July 1, 1881, after a favorable vote of the electors of the county, in accordance with the provisions of the act of the legislature of the state of Colorado approved March 24;, 1877, entitled “An act concerning counties, county officers and county government and repealing laws on these subjects.” Gen. Laws Colo. 1877, p. 218. The defenses to the coupons were that the question of their validity was rendered res adjudicata by a judgment in favor of the county which was rendered in the court below and was affirmed by the supreme court in an action which was brought by John Sutliff, the father of the defendant in error, -on September 26, 1889, upon coupons numbered 1, 2, 3, 4, 5, 6, 7, and 8, cut from the same road bonds (Sutliff v. Commissioners, 147 U. S. 230, 13 Sup. Ct. 318), and that the bonds and coupons were void because they were issued when the debt of the county exceeded the constitutional limitation upon it. The case was tried to a jury. John Sutliff originally purchased the bonds and coupons without notice of any defect in, or defense to, them, and paid for them more than their par value. After some of the coupons in suit had become due, and after the defense that they were issued in violation of the constitutional limitation had been made to some of them, he gave the bonds and the coupons now in question to the defendant in error, who is his son, as an advance of a part of his share of his estate. The bonds contained this recital:
“This bond is one of a series of five thousand dollars which the board of county commissioners of said county have issued for the purpose of constructing roads and bridges, by virtue of, and in compliance with, a vote of a majority of the qualified voters of said county, at an election duly held on the 7th day of October, A. D. 1879, and under and by virtue of, and in compliance with, an act of the general assembly of the state of Colorado entitled ‘An act concerning counties, county officers and county government and repealing laws on these subjects,’ approved March 21th, A. D. 1877; and it is hereby certified that all the provisions of said act have been fully complied with by the proper officers in the issuing of this bond.”
At tbe close of the trial, the court below held that the question of the validity of coupons numbered 8 was res adjudicata, because
It is assigned as error that the trial court held that the defendant in error was a bona fide purchaser of the bonds, who could rely upon the estoppel of the recitals therein. It is said that he paid nothing for them; that he received them as a gift; that some of the coupons were past due when he obtained them; and that he knew at that time that the county was defending an action upon other coupons upon the grounds relied upon in this action. Let all this be conceded. Still, the father of the defendant in error, John Hutliff, was a bona fide purchaser of these bonds and coupons, without notice of any defects in, or defenses to, them, and "a bona fide holder of commercial paper is entitled to transfer to a third party all the rights with which he is vested, and the title so acquired by his indorsee cannot be affected by proof that the.indorsee was acquainted with the defenses existing against the paper.” E. H. Rollins & Sons v. Board of Com’rs of Gunnison Co., 49 U. S. App. 399, 413, 26 C. C. A. 91, 99, and 80 Fed. 692, 700. The indorsee wrlio takes from a bona fide purchaser of negotiable paper stands in the shoes of his indorser, and may invoke every presumption and estoppel which buttressed the claim of the latter, notwithstanding the fact that he received the paper as a gift, after its maturity, and with notice of alleged defenses to its collection. Commissioners v. Bolles, 94 U. S. 104, 109; Commissioners v. Clark, 94 U. S. 278, 286; Board of Com’rs of Gunnison Co. v. E. H. Rollins & Sons, 173 U. S. 255, 275, 19 Sup. Ct. 390; Rathbone v. Commissioners, 49 U. S. App. 577, 588, 27 C. C. A. 477, 482, and 83 Fed. 125, 130; Hill v. Scotland Co. (C. C.) 34 Fed. 208; Daniels, Meg. Inst. (4th lid.) § 803. There was no error in the ruling of the court that the defendant in error could invoke the estoppel of the recitals in the bonds to the same extent as a bona fide purchaser, in support of the validity of his coupons.
The next contention of the counsel for the plaintiff in error is that the ruling of the circuit court upon the question of res ad judicata, was erroneous. In the discussion of this position it will be conceded that James S. Butliff, the defendant in error, is a privy of John Hutliff, the plaintiff in the former suit, and that the question here is the same that would have arisen if this action had been between the parties to the former judgment. There are two grounds on which an earlier judgment in an action between the same parties may constitute a conclusive estoppel respecting the issues in a subsequent suit. The first ground is that the later
We turn to the consideration of the defense that the indebtedness of the county exceeded the constitutional limitation when these bonds were issued. The county of Lake was organized in 1879, and the assessed valuation of its taxable property was never less than $1,000,000. The constitutional limitation of its indebtedness on July 1,1881, after the vote of the electors in favor of the issue of these bonds, was therefore 6 per cent, of the assessed vaina
"Tings which are equal to the same thing are equal to each other. Hence the certificate in these bonds that they were issued “under and by virtue of, and in compliance with,” the act of March 24, 1877. and “that all the provisions of said act have been fully compiled with by the proper officers in the issuing of these bonds,” was necessarily a certificate that they had been issued in compliance with, and not in violation of, the constitutional as well as . the statutory limitation. Dudley v. Board, 49 U. S. App. 336, 344, 345, 26 C. C. A. 82, 86, 87, and 80 Fed. 672, 676, 677. A certificate or recital, by officers axithorized to determine the question and to make the recital, that a constitutional limitation has not been exceeded, or that a constitutional condition has been fulfilled, raises an estoppel in favor of a bona fide purchaser as conclusive as a recital or certificate of like effect relative to a statutory limita- tion or requirement. This rule was announced by this court, in 1894, in National Life Ins. Co. of Montpelier v. Board of Education of City of Huron, 27 U. S. App. 244, 265, 10 C. C. A. 637, 651, and 62 Fed. 778, 791; and it was affirmed by the supreme coxirt, upon a review of the authorities, in 1898, in Board of Com’rs of Gunnison Co. v. E. H. Rollins & Sons, 173 U. S. 255, 273, 274, 19 Sup. Ct. 390. To the same effect are Buchanan v. City of Litchfield, 102 U. S. 278, 290; Pana v. Bowler, 107 U. S. 529, 539, 2 Sup. Ct. 704; Oregon v. Jennings, 119 U. S. 74, 92, 7 Sup. Ct. 124; Chaffee Co. v. Potter, 142 U. S. 355, 364, 12 Sup. Ct. 216.
Aside from the provisions of section 30 of the act of March 24, 1877, whose effect will be shortly considered, that act vested the power, and imposed the duty, of determining and certifying whether or not this limitation had been exceeded, upon the board of county commissioners which issued the bonds. After providing in section 21 that the board should not issue any bonds unless the aggregate amount of the indebtedness of the county was within the limitation contained in the statute and in the constitution, nor unless the electors of the county had approved the issue by their votes, it declared in section 22 that “the county commissioners when authorized As provided in section twenty-one of this act, shall make and issue coupon bonds of the county, not exceeding the amounts specified in the preceding section, in counties which have an assessed property valuation exceeding one million of dollars, payable at the pleasure of
But section 30 of the act under which these bonds were issued required the county commissioners to make out semiannual statements at their regular sessions in January and July in each year, which would show the amount of the debt owing by their county; in what it consisted; what payments had been made upon the same; the rate of interest its debts were drawing; and a detailed account of the receipts and expenditures of the county for the preceding months, in which it should appear from what officer and on what fund any money had been received, and the amounts and to wliat individuals and from what account any money had been paid, and the amounts and the balance, showing the amount oí déficit, if any, and the balance in the treasury, if any; and it required the commissioners to publish these statements, and to cause their clerk to record them in a book kept by him for that purpose only, which should be open to the inspection of the public at all times. Gen. Laws Colo. 1877,
It is a poor rule that will not work both ways, and the converse of this proposition is equally true, and has been repeatedly affirmed by this court. It is that, when the constitution or the act under which the bonds are issued prescribes the public record which furnishes the test of compliance with the limitation, the purchaser is not required to look beyond' it; but, if that record fails to show a violation of the limitation, he may rely upon the presumption that the officers faithfully discharged their duty when they issued the bonds, and upon the recitals which they contain, and the corporation will be estopped from proving other records or facts to overthrow them. E. H. Rollins & Sons v. Board of Com’rs of Gunnison Co., 49 U. S. App. 399, 403, 26 C. C. A. 92, 96, and 80 Fed. 692, 697; Dudley v. Board, 80 Fed. 672, 677, 26 C. C. A. 82, 86, and 49 U. S. App. 336, 344. This rule disposes of the complaint of counsel for the plaintiff in error that the court below refused to receive in evidence the register of the county bonds, the register of the county warrants, and the minutes of the proceedings of the board of county commissioners, in which some reference to the indebtedness of the county appears. A buyer of municipal bonds is not required to search the proceedings of the county commissioners, and through all the books of the clerk of their board, to ascertain the indebtedness of the county, when the statute points him to a specific record for his guidance, and the officers of the county have failed to make that record, and have certified upon the face of their bonds that the limitation has not been violated. The minutes of the meetings of the commissioners and the registers of the bonds and warrants of the county constituted no notice of the county indebtedness to a bona fide purchaser of these bonds.
“Bake County in Account with County Treasurer, Expenditures Acct. Koad Fund.
3880.
Jany 1. Total expenditure on county roads in repairing, making, a.nd bridging ........................................ 4,103 84
Interest paid on warrants.............................. (i!) 28
4.171 12
1880.
Jany 1. By amt. of road warrants can.......................... 2,220 50
By outstanding indebtedness o£ Bake county in road warrants, January 1, A. D. 1880. To balance............. 1,850 52
4.171 12"
These accounts constitute the nearest approach to the records of the semiannual statements of the indebtedness of the county, required by the act of 1877, which were found among the books of the county commissioners and tlieir clerk. They never kept any book for the sole purpose of recording such statements. After this evi
“But in this case it is clearly shown that there never were any such semiannual statements, or record thereof, covering any of the time which could affect the legality of these bonds. As there was no such record in existence*281 as the act required and contemplated, there was no record which the purchaser of these lionets was bound to examine, or which would he constructive notice to him of the aggregate indebtedness of the county when the bonds were issued. Such purchaser was entitled to rely on the recitals in the bonds.” Dudley v. Board, 49 U. S. App. 345, 26 C. C. A. 87, and 80 Fed. 677.
Another complaint of the plaintiff in error is that the court refused to receive in evidence the assessed valuations of the taxable property of the county in the years 1879 and 1880. The assessed valuation in 1879 was properly rejected, because, although the vote for the bonds was cast in the fall of that year, they were not issued until July, 1881, long after the assessment of 1880 had been made; and it was the assessed valuation when the bonds were issued, and not when the vote for them was cast, that measured the permissible debt. Dudley v. Board, 49 U. S. App. 336, 346, 26 C. C. A. 88, and 80 Fed. 672, 677. If the assessed valuation of 1880 had been presented at the opening of the defense, it would have been material and competent evidence, because it was by a comparison of this valuation wit'll the public record, required by section 30 of the act of 1877, which the court might then have expected would be subsequently proved, that the test of the violation of the limitation of the county debt was required to be made by a purchaser of the bonds. But it was not offered until all the evidence to show a compliance with this section had been tendered and rejected, and it had become clear that the record required by that section had never been made. At that stage of the trial the valuation of 1880 was not material, because the fact was established that there was no record of the county debt with which a purchaser was required to compare this valuation to test a compliance with the limitation. The trial had progressed so far that the conclusion was inevitable that the county was estopped by the recitals in the bonds to show a violation of the limitation, and the valuation of 1880 was properly rejected.
In the trial of the old action of Sutliff v. Board, the attorneys for the respective parties made a written stipulation of the amount of the debts of Lake county on July 1, 1881, and of the assessed vaina ¡ion of the county in the years 1879, 1880, and 1881, the first clause of which, read: “It is hereby stipulated and agreed that in the trial of this case a jury is waived, and the same shall be submitted to the court upon the following agreed statement of facts.” The commissioners offered this stipulation in evidence, and it is insisted that it was erroneously rejected. It is said that the stipulation was not limited to the case in which it was entitled, or to the trial to which it: referred, and that it was made between the assignor of the defendant in error and the county, and that it is therefore binding upon the defendant in error in this case. The argument is unsound, because the major premise is not founded upon fact, and because the conclusion is not the logical result of the premises. The stipulation was expressly limited by its very terms to the case in which it was fded. It reads: “It is hereby stipulated and agreed that in the trial of this case a jury is waived,” etc. But, if it was not so limited, it could not have the effect claimed for it by the plaintiff
All the objections to the course of the trial of this action which have been presented to this court by brief or argument have now been considered, and our conclusion is that the judgment below must be sustained. Upon the record before us, this is a just and righteous result. It is a salutary principle of law and of equity that one who, by his acts or representations, or by his silence when he ought to speak, either intentionally, or through culpable negligence, induces another to believe certain facts to exist, and the latter rightfully acts on such belief, so that he will be prejudiced if the former is permitted to deny their existence, is conclusively estopped to interpose such a denial. The father of this defendant ir. error bought these bonds, and paid more than their par value for them, in reliance upon the recitals made in them by the officers whom the law and the people of the county had selected and empowered to determine and certify the existence of the facts disclosed in the recitals and to issue the bonds. -It is not impossible that the county received their proceeds, and that its people are now traveling upon the roads which they built. In such a case, justice and equity alike demand that the county pay the bonds and coupons, unless there is some insuperable legal objection to their enforcement. We find no such objection in this case, and the judgment below is affirmed.