23 Ind. 353 | Ind. | 1864
This was an action brought by Smith against the New Albany, Lanesville, and Gorydon Flank-road Company, upon certain bonds issued by her, payable to William S. Gulberton, trustee, or bearer, at the office of said company in New Albany, and secured by mortgage. The company answered by general denial, and by special pleas. To the third, fourth, and fifth pleas demurrers were filed and sustained, to which rulings the defendant excepted, and assigns the same, in this court as error. The third and fourth paragraphs answer, as to one-half of the amount of each bond, that, as to so much, the same was given in consideration of the surrender by the stockholder, to whom it was originally issued, of the stock of said company, and therefore to that extent the bonds were illegal. The fifth paragraph is a plea of want of consideration. It is not averred in either of the paragraphs of the answer that the plaintiff had notice of any illegality or want of consideration in the original sale of the bonds by the company. They were issued under section 22 of the plank-road act, (1 Gf. & H. 479.) This section
The rule is controverted, however, by the Supreme Court of Pennsylvania, in the case of Diamond v. Lawrence County, 37 Penn. St. Rep. 353; and this language occurs in the opinion: “We will not treat these bonds as negotiable securities. On this ground we stand alone. All the courts, American and English, are against us. Be it so. We are not insensible to the importance of this fact, nor are we wanting in deference to the learning and wisdom of the judges who differ from us. But we are a Pennsylvania tribunal, setting in judgment on an occasional and extraordinary security for money created under Pennsylvania statutes. We know the history of these municipal and county bonds; how the legislature, yielding to popular excitement about railroads, authorized their issue; how grand jurors and county commissioners and city officers were molded to the purposes of speculators;, how recklessly railroad officers abused the overwrought confidence of the public, and what burdens of debt and taxation have resulted to the people. A moneyed security was thrown upon the market by the paroxysm of' the public mind, and the question is now, How shall the judicial mind regard it?”
The court seem to have regarded the circulation of corporation bonds, payable to bearer, as a mere temporary matter, to be dealt with as such, and that, when all other-branches of the state government had yielded to the popular impulse, it was the duty of the court to adopt a construction peculiar to the wants of that state. It is a Pennsylvania decision, made, as-it implies, for the-peculiar-
The demurrers were correctly sustained, and the judgment is affirmed, with five per cent, damages.