37 F. 75 | U.S. Circuit Court for the District of Eastern Missouri | 1888
The motion for a new trial is based on three grounds: (1) That the jury was misdirected; (2) that illegal testimony was admitted ; (3) that the verdict was against the weight of testimony. The last proposition requires no extended notice. If the testimony on which the verdict rests was admissible, the court is satisfied with the findings of the jury. Whether illegal testimony was admitted depends, in my .judgment, upon the effect that ought to be given to the recital contained
Recurring, then, to the question above stated, as to the effect of the recital in the bonds, it will suffice to say that, after an attentive consideration of the subject, I adhere to the opinion expressed at the trial, that the recital is not conclusive, and does not create an estoppel, at least against the plaintiff. M3r conclusion is based mainly on the following grounds:
First. The case may be distinguished from that class of cases in which it has been held that recitals in municipal bonds are conclusive against the municipality, in suits by innocent purchasers, if they recite the existence.of facts on which the power to issue bonds depends, and the recitals are made by officers of the municipality who are authorized to detérmine and certify as to the existence of such facts. Town of Coloma v. Eaves, 92 U. S. 484; Dixon Co. v. Field, 111 U. S. 83, 4 Sup. Ct. Rep. 315; Marcy v. Oswego, 92 U. S. 638; St. Joseph Tp. v. Rogers, 16 Wall. 644; Commissioners v. Bolles, 94 U. S. 104; Commissioners v. Clark, Id. 287; County of Warren v. Marcy, 97 U. S. 104; Pana v. Bowler, 107 U. S. 539; 2 Sup. Ct. Rep. 704. The rule announced in these cases has for its object the protection of innocent purchasers of municipal bonds, who have bought on the faith of representations contained therein that certain antecedent steps, necessary to render the securities valid, have been taken. These cases enforce the doctrine that a person who has made representations as to material facts will not he allowed to dispute the facts represented, in a suit by a party who has acted on the representation. But in the case under consideration the recital related nierely to the law under which the bonds sued upon had been issued; there being two laws, (one special and one general,) from either of which the requisite power might be derived. While, the recital fairly implied that the county court had acted under the special law, yet there was no specific statement to that
Second. The recital in question was not made as an introduction to, ox as the basis of, a contract about to be 'entered into. It was a general recital in the body of the bond, and was not intended as a definite statement of matters of fact, with reference to and on the faith of which the parties had contracted. The recital, therefore, cannot be looked upon as in effect an agreement between the county and 'the bondholder to admit the facts recited, and as being for that reason conclusive. This, I think, is apparent from the form of the recital, and the relation it bears to the bond. Bigelow, Estop. (4th Ed.) pp. 858, 365-369, and cases cited; Bowman v. Taylor, 2 Adol. & E. 278.
Third. Furthermore, several decisions of the supreme court of the United States warrant the conclusion that a recital in a municipal bond, merely as to the act under which it was issued, is not conclusive against the bondholder. In the cases of Commissioners v. January, 94. U. S. 202, and Anderson Co. v. Beal, 113 U. S. 239, 5 Sup. Ct. Rep. 433, the bonds in each case contained a recital that they were issued under laws which in point of fact had been repealed before the bonds were issued. Nevertheless the bonds were supported, and a recovery thereon was allowed, because it appeared that they had been issued in substantial conformity with other laws that were in force when the securities were put in circulation. In the cases of Crow v. Oxford, 119 U. S. 215, 7 Sup. Ct. Rep. 180, and Gilson v. Dayton, 123 U. S. 59, 8 Sup. Ct. Rep. 66, the bondsinvolved contained recitals to the effect that they were issued under laws which, as it transpired, were not in force when the bonds were executed. An attempt was made by the bondholders to sustain the issue under laws that were in force, but the attempt failed;—the court holding that, inasmuch as the plaintiffs relied on laws not referred to in the bonds themselves, they were not aided by the recitals, and that it was incumbent on them to show substantial compliance with the provisions of the laws so invoked, which they had failed to do. In none of these cases was it intimated that a recital contained in a bond as to the act under which it was issued operates as an estoppel against the bondholder, and precludes him from contradicting the fact recited. On the contrary, the decisions in each instance proceed on the assumption that recitals of that nature are open to explanation, and that the truth may he shown by any com
The last and most important question for consideration is whether the jury was misdirected. The special issues framed and submitted required the jury to determine whether the county court, in subscribing for stqek in the Missouri & Mississippi Railroad Company, and in issuing bonds therefor, intended to exercise a power conferred on the court by the charter of the railroad company,- and that power only, or to exercise the power conferred by a popular vote at an election held under the general railroad law. The county court had an undoubted right to act either under the special law, without a popular vote, or to act under the general law, by the terms of which an 'election was necessaiy. In point of fact an election had been held, by order of the county court, prior to the subscription, and the requisite majority had voted in' favor of the subscription, as the records of the court showed. It will be seen, therefore, that' the jury had to determine which of the two powers the county court intended to exercise at the time the subscription was made. The question at issue was one of intention. Now, it is undeniable that there was some oral testimony in the case tending to show that after the special election was held, and prior to the subscription, a discussion took place in the presence of the county judges as to the legality of the special election, and that doubts were excited, in the minds of some persons at least, as to the validity of a subscription made in obedience to the vote cast at such election. In view of this testimony and other facts in the case, it was possible, if not probable; that the jury might conclude that the county court was influenced in its action by both the general and the special law; that in point of fact it eventually acted on the theory that it would obey the public will expressed at the election; and that if for any reason the election should.be held to be invalid, the subscription could at least be supported under the special law. It seemed to be necessary, therefore, in view of this phase of the testimony, to give the jury some directions applicable thereto to enable them to answer the special issues. The court accordingly directed the jury to find that the bonds were issued under the general law if it appeared that the county court relied on both the general and special law to support the subscription, and had been influenced in its action by the provisions of both laws. This direction was supplemented by the general statement that “it was competent for the county court to rely and act upon both laws,” and that “it might well invoke the aid of any law that -was supposed to confer power on the court to make the subscription.” Under the circumstances, however, the-latter statements could only have been understood as meaning that it' was possible that the county court had been influenced in its action by both laws, and that the county judges might rightfully have been influenced by the consideration that power to make the subscription without a popular vote was conferred by the special law, and would support the subscription, even if the election held under the general law proved to be invalid. So far as I can see; there was nothing in the charge calculated to produce the impression on the mind of the jury that it was
In conclusion I will add that the view which the court took, and expressed in its charge, of the validity of the order of the county court under which the election to authorize the subscription was held, is supported by the following decisions: Commissioners v. Thayer, 94 U. S. 631; Block v. Commissioners, 99 U. S. 698. In each case it was held, under a law very similar to the law which prevailed in this state when the election in question was called, that an order submitting to the voters of a county a proposition to subscribe stock in aid of a railroad, need not specify the name of the corporation if the proposition describes the proposed route of the road with the requisite certainty. As this case was submitted to the jury with directions as to the questions of law involved that in my judgment were substantially correct, I shall overrule the motion for a new trial. It is so ordered,