5 Iowa 15 | Iowa | 1857
Lead Opinion
The questions which, arise in this cause, are numerous, interesting and important, but it will be necessary to express the opinion of the. Court upon them, as briefly as possible. The first question is presented under the demurrer of the defendant to the plaintiffs petition and is whether the District Corn! has original jurisdiction of the cause. This point was decided in the case of Campbell v. County of Polk, 3 Iowa, 167, as well as in Steele v. Davis County, 2 G. Greene, 169. In the first named of the aboye cases, this corn! sustained an action brought upon a warrant issued by the county Judge upon the county Treasurer. The statute means that unsettled, unliquidated demands for money against the county, shall first be presented to the proper auditing officer. But where a matter has already been presented and liquidated or 'allowed, and the county warrant, note, or bond, has been issued therefor, there can be no object in again presenting it, when only a new promise can result from itand there is, perhaps, yet more force in the consideration, when the contract is by its terms made payable in a place distant from the county, as in the present instance.
The next question in the natural order of the causé, arises on the same demurrer to the petition. It is upon the authority of the county Judge to issue such a bond. It is the question whether a county can issue its bonds for a subscription to the stock of a rail-way company, whose road is to run through the county. This subject cannot haye es
Upon the first step in the inquiry- — that is, upon the inherent authority of a State to enter into these and similar internal improvements, no one has ventured to make a question. The second step would be, whether a legislature possesses the power to confer this authority upon a county. Few have doubted the existence of this power; tlie question having generally been, whether the power had been exercised, or whether a county possessed the desired authority, without a special grant. The mass of American cases, have sustained the power in the legislature ; and it is probably necessary for us to say only, that whatever doubts we may tacitly entertain, or might suggest, were the question a new one, even here in this State, we shall let it rest upon those past decisions, and upon the considerations presented in .the next stage of the inquiry.
That next stage is this — do the counties of this State possess this authority, whether inherently, or by express provision. If we were called upon to decide this question now for the first time, for this State, we should entertain heavy doubts of the existence of the power, upon any ground-; and if the attempt were made to place it upon section 114 of the Code, under the power to aid in constructing roads, we should think very lightly of the argu
Let us look at our judicial and legislative history on this subject. It is short, but yet 'effective. The case of the Dubuque and Pacific Railroad was brought to this Court, expressly to test this question. Judgment was rendered, affirming the power in the county. But it is objected, that no opinion in this cause is on record, or to be found. This is true, and consequently, we cannot know the reasoning of the Court, except as gathered from the dissenting opinion. But we cannot ignore the fact of such a decision, whatever the mischance by which the opinion failed to be placed on record. In the first place, a judgment is rendered, implying such a determination. In the second place, Justice IGinney wrote a dissenting opinion, which is recorded, and whose basis is the existence of such an opinion on the part of the majority of the Court. Then there is the common understanding of the bar,
The foregoing matters arise under the defendant’s demurrer, to the the plaintiff’s petition. The next questions arise under the plaintiff’s demurrer to the defendant’s answer. The Court sustained the demurrer, and the
The Court may well have decided that the thirty days publication, was not necessary, in this case. This is manifest from. Code, section 119.
It may also have decided, well, that the sixth cause under the fourth allegation of the defendant, to-wit: that no, requisite of chapter 15 of Code was observed, was not sufficient, being too general.'
As. to the first four grounds under the defendant’s fourth allegation, the Court below had a right to loolc into the whole record; and upon so doing, it found that the first, third and fourth grounds, were negatived in point of fact, by the defendant’s allegations, of what the county records contained. In truth, this part of the cause is absorbed in that arising under the sixth and eighth allegations of the defendant.
The second ground under the defendant’s fourth allegation, will be noticed hereafter in its bearing upon the plaintiff, as the endorsee, assignee, or holder of the bond and coupons. The next point is, that the recitals in the bond executed by the County Judge, are not conclusive on the county. This point appears to be abandoned by the counsel; and if not so, it cannot be maintained.
We come now, to matters presenting somewhat more of difficulty. The defendant pleads fraud and misrepresentation, and failure of consideration. The validity of these pleas, or of this part of the answer, depends upon the question of the negotiability of the bond and coupons. Whether the coupons have an existence independent of the bond, and could be assigned and sued upon separately, is not here made a question, but the bond is set forth and shown, and the relation of the interest warrants to it, is made manifest. The case will be considered, then, as if the warrants were entirely dependent upon their conuec
To sustain the position that the bond in the present cause, (and, consequently, the coupons as dependent upon it,) is not negotiable nor assignable, in any sense or manner, so as to entitle the holder to assume the position, or the maker the defences, which pertain to the tona fide holder of negotiable' paper, we are referred to the case of Clark et al. v. the City of Janesville, before the U. S. District Court for Wisconsin, now first reported in 4 AmericanLaw Reg. 591. In certain features, that ease is singularly like the present one. It related to bonds of the town of Janesville, issued for subscription to the stock of a rail-way company. They were issued in 1853 — payable in twenty years, — with semiannual interest, payable in New York, — and the action was brought on certain coupons attached to the bond, for the semi-annual interest. The report does not state the pleadings, further than to say, that the declaration was in assumpsit on the common counts. The bonds, with the coupons attached, were offered in evidence. They were payable to the R. R. Company, or assigns, and purported to
Reference is further made to Overton v. Tyler, 3 Barr, 346. This was a case of a promissory note, payable to A. or bearer, with which, in the body of the same writing, was a warrant of attorney to confess judgment. Gtbson, C. J. for the court, held it not to be a negotiable promissory note. Alluding to the brevity and pertinency of the terms of a note or bill, as usually drawn, he says: “A negotiable note or bill, is a courier, without luggage.” Let us see what the learned Chief Justice regarded as luggage, embarrassing the transfer of the instrument. It was not only a promissory note, but also a power of attorney to enter judgment — even before due — releasing errors — waiving a stay of execution, and the appraisement of property. Upon this, he held that its negotiability was instantly liable to be merged in a judgment, as it was in fact merged when it had • three months to run; that its separate existence was liable to be merged, and its circulation arrested, by being attached asan incumbrance to the maker’s land; that the warrant of attorney would not pass by the indorsement; and that, altogether, the j)arties did not intend it as a negotiable instrument. Against the above case, stands that of Osborne v. Hawly, 19 Ohio, 130, in which it was held, that a power of attorney attached to a note, did not inter
Let ns nest inquire, what there is" in or about the present obligation, (we look at the bond itself,) which serves to embarrass it — to render it a courier, with, luggage. It pos. sesses the principal qualities of a promissory note. It is simply a promise to pay — to pay money — to a certain person — absolutely—at a certain time, and it is payable to the payee or assigns. The coupons are payable to the holder. But it is true that these things do not constitute the sole criterion of negotiability, as is shown by the cases above cited. The present instrument, .then, contains a simple and absolute promise to pay money, with all the certainty and definiteness of a promissory note. But there is more, it is said. "What there is more, however, is mere verbiage, in effect, so far as it bears upon the present question. Besides the promise, it shows, the authority by which it was issued, and the purpose for which it was designed. The only effect of this, it is apprehended, is to put the purchaser upon inquiry as to that authority. Then there is a stipulation to pay the obligation in the stock of the company, if the holder should so elect. If this latter were at the option of the county, it might change the ease; but, as the whole stands, it is a promise to pay money, with an election in the holder to take stock. There does not appear to be anything in this instrument, embarrassing its negotiability, unless it be the reference to the authority, and this is only a caution to the purchaser. There is nothing by which its separate existence can be merged, or its circula, tion arrested. No particular form of words is necessary to make a negotiable promise — not even a promise in express words, — but there must be an undertaking to pay, and an intent of negotiability. For different forms, and as to what has been held to be a negotiable note, see 1 Am. L. Ca., 312, et seq. Nor is the seal an objection to its negotiability, as in past times it would have been, and may yet be in some States, for, with us, sealed instruments have ever been negotiable. That is, the seal is not an obstacle, since sealed promissory notes, payable to order or bearer, have,
In the support of these views, we desire to call attention to the case of The Morris Canal and Bank Co. v. Fisher, 1 Stockton, 667. The length of this opinion forbids some quotations which would be pertinent, but itmay be remarked, that that case is even stronger than the present one, and folly considers the question of negotiability and of defenses against, a Iona fide holder. See also Delafield v.
The fourth allegation and defense of the defendant, is that the bond was not issued under authority of law, by reason of the non-compliance with the law in several particulars, as set forth in the pleading, numbered four in the statement. The demurrer of the' plaintiff extends to this, and were this the only pleading relating to those matters, it would be fatal to that demurrer, for although the obligation is a negotiable instrument, yet, if it were issued without authority of law, the plaintiff could not recover. This point differs from the matter of the inducement, representations or considerations leading to the issuing of the obligation. It is a paper executed by a public officer, in behalf of the public, (of a county,) and there must be authority for it to stand upon. But under a demurrer, the Court looks to all the pleadings, and we find that the defendant sets forth, at large, the record of the county upon the issuing of these bonds and coupons. If this record shows enough upon the matter of authority, to justify the purchaser in taking the bond, he cannot be held to go behind it, and show that the record is true. The case of The State ex rel. Leach v. Bissell, 4 G. Greene, 328, was brought to this Coiut for the particular purpose of testing the regularity and legality of the proceedings which led to the issuing of those bonds. It was instituted by the tax payers of that county, who were not in favor of the county taking stock in the proposed railway company. The points made in the case, relating solely to the proceedings, and to test these being the object of the 'action, the judgment settled those questions. The opinion takes special notice of the objections made on the form and manner of the vote, and on the supposed ground that the road must be constructed before the bonds could issue. It is not a matter of much consequence, whether that decision can, strictly, be pleaded in the present cause. It is sufficient, that it naturally
The record of the proceedings in relation to this subscription, is very awkwardly drafted and ungrammatically composed; but it contains the substantial matter: the proposition to subscribe to the stock of the company — the issuing of bonds — the tax to meet the payments — the form or manner of the vote — and the order that it be voted upon at the then next regular election, in April. This was ordered and entered, on or about the first of March, 1853. Afterward, on the second of May, there is an entry refering sufficiently clearly to this proposition, and declaring that a majority of the votes were in favor of adopting the proposition, and then follows the requisite order, to declare the result and to carry it into effect.
The objections made to this record are the following: 1. That it does not appear that the requisite notice was given prior to the election. We are looking at it from the position of the purchaser of the negotiable paper of the county. lie finds a regular proposition ordered to be submitted to the people. It is no objection, of weight, that the record of the submission of the proposition, was made before the election, and that of the result, after it. After the election, he finds a record that a vote was taken, and that it was in favor of the subscription. Standing as he does, he has a right to presume the notice from this record. The record and the proceedings of the County Judge imply it. 2. Again: the proposition submitted contained the clause — “said amount to be expended only in the event of said railroad being constructed, and running centrally through the said county.” The defendant now claims, that the final construction of the road, was to be a condition precedent to the issuance of the bond. But, in the first place, the expression is ambiguous, and admits of a strong doubt whether the word “constructed,” does not belong to the word “centrally,” as the word “running”
In connection with this part of tbe case, a good deal lias been said about tbe County Judge being an agent — the agent of tbe county. And on one side, he is called a special agent, and much argument bas been drawn from tbis relation. Tbe analogy between tbis officer and an agent, will bold good but a little way. It does not bold good in any valuable sense. It is true that tbe statute, in creating him, styles him tbe general agent of tbe county. But tbis is not to institute tbis relation properly. It was to declare him to be tbe general, rather than tbe special, agent. At tbe best, be is but a quasi agent. Properly speaking, be bas no principal, and so far as be bas, tbis principal only appoints him, and bas no farther power over him. He does not derive bis powers from tbe county, but from tbe law, and tbe county cannot revoke them. It cannot act itself, in any case. He is tbe bead, and hand, of the county. In short, be is an officer of tbe law, deriving bis powers from tbe law, and governed by it. He keeps a record, and these proceedings are to be recorded; and this record, at least in such a transaction, and as to
The fifth ground of defense.is, that the said company never had possession of the bond, nor was it ever delivered to said company, but on- the contrary thereof, certain persons,' to-wit: Adams, Haun, and McCoy, and others unknown, pretending to represent said company, conspired together, and by fraud, misrepresentation and deceit, unlawfully got possession of said bond, and afterward fraudulently, and without authority of law, or of the company, pretended to assign the same to the said Adams. The demurrant says, that this part of the answer is bad, in law, for ■ not setting forth and showing the fraud and the misrepresentations. There is so much of legal duplicity, or else of ambiguity, in this plea, that it is difficult to determine on a satisfactory view to take of it. Whether its burden lies in the fraud, or in those persons not representing the company, in fact, or whether it is in the pretence of an assignment, or in the manner of getting possession, is uncertain. There are several facts embraced in it, but
The sixth defense is, that the bond and coupons were obtained from the county by fraud and misrepresentation, and without consideration. This pleading is guilty of the same kind of ambiguity with the preceding, and it is, in fact, doubtful whether its gist lies in the assumption of an authority by the agents, which they did not possess, or in the representation of an intention in’ the company, which did not, in fact, exist. But the prominent thought is probably sufficiently apparent. As the defense just noticed, related to the obtaining possession of the bond, so the present one aims at the representations made, and the induce-
The defendant claims, that if he sustains the averments in his pleading, by proof, it will, at least throw upon the plaintiff, the burden of showing that he obtained the bond dona fide, or gave value for it. ITe cites, and relies upon the remarks made in Liv. Law Hag., January, 1856, 96, and the English cases there cited, of Bailey v. Bidwell, 13 M. & W., 73, and Fitch v. Jones, 32 Eng. Law and Eq. 134. That such a rule of law has been recognized, both in England and in this country, cannot be doubted. See the above eases, and other cases cited by counsel; Story on Bills, sections 185 to 144; Uther v. Rich, 10 Adol & Ellis, 784, S. C. 37 E. C. L. R. 235; Holmes v. Karsper, 5 Binn. 469; Vallett v. Parker, 6 Wend. 6, 15; Munroe v. Cooper, 5, Pick. 412; Knight v. Pugh, 4 Watts & S. 445; Woodhall v. Holmes, 10 Johns. 231; Rodgers v. Morton, 12 Wend. 484. .But, in order to throw this burden upon the plaintiff, it is equally clear, that the defendant must both allege and show, either that the plaintiff took the paper after due, or that he had notice, or that he gave no value. It is true that in Fitch v. Jones, ut supra, Lord Campbell said that though the defendant was to prove one of these things, yet he held that he did prove it prima facie, by showing the illegality; and in Bailey v. Bidwell, 13 M. & W. 73, it was held, that if it were proved
Now, in the defendant’s fifth and sixth grounds of defense, he makes no such averment against Clapp, the holder and plaintiff, but he singularly stops short with Adams, in all this class of allegations. The defendant in a part of his answer, separately and distinctly from those allegations, concerning the obtaining the possession, and the issuing of the bond by fraud and misrepresentations, makes an independent averment, that the plaintiff is not a bona fide holder, but does not state why or how. That this is not sufficient, see the three cases last above named. That a mere want or failure of consideration, is not sufficient to raise the presumption, and throw the burden, above spoken of, upon the plaintiff, see the same cases.
The seventh plea or defense contained in the amended answer of defendant, is in substance but a repetition of a portion of his first answer, and is but a denial of the assignment of the bond, and of the authority of Haun and McCoy, to make such assignment. • It presents some of the few facts which were ultimately submitted and tried, and on which a verdict was rendered.
Erom the views above expressed, it will be perceived, that the court below did not necessarily decide several points of law in the manner supposed by the defendant, in his assignment of errors, when it overruled the one and sustained the other demurrer. And it will be farther perceived, that the subsequent event of the rail-way company becoming insolvent, and being dissolved, has no bearing on the plaintiff as a purchaser, and holder of the county bond and coupons.
, We believe that all the questions raised for adjudication have been touched upon. Some of them would well admit of a wider range of discussion, but they are so numerous, that they have extended this case to a degree which compels us to content ourselves with a brief consideration of some, and even with a summary' disposition of a portion of them.
The judgment of the District Court is affirmed.
Weight, C J., dissenting.
Dissenting Opinion
Dissentmg. — I do not wish to be understood as concurring in one point determined in the foregoing opinion. I allude to the power of the county to issue these bonds. While we unite in entertaining very great doubts, whether the power exists, yet in view of the peculiar and vital character of the question involved— the possible, not to say probable, various consequences to the credit of the State, to result from a change — and the fact that the holders of these bonds, within and without the State, have in good faith relied upon the decisions
