66 F. 127 | U.S. Circuit Court for the District of Western Missouri | 1895
The statute under which the bonds in question were issued does not provide in terms for the redemption at the end of five years, nor prescribe any method therefor; though it does prescribe that no bond under the-act shall be issued to run for a longer period than twenty years, nor less than five years. It was, however, competent for the county, in issuing the bonds, to reserve the right to make them payable at the end of five years after their issue, at its option. This it did, and this fact is expressed on the face of the bond, and the purchaser took subject thereto. After such recitation as to the statute under which, and the purpose for which, the bond was issued, it concludes with this provision: “But this bond is payable at any time after the 1st day of July, 1887, at the option of said county.” The preceding part of the bond recites that the county “promises to pay bearer, at the National Bank of Commerce in the city of New York and state of New York, on the 1st day of July, 3902, with interest at the rate of six per centum per annum, payable at said bank, upon presentation and delivery of the coupons for said interest hereto attached on the 1st day of July of each year.” Then follows immediately the provision above quoted, respecting the option to pay at any time after July 1, 1887. Clearly enough, then, it appears that, the place of payment under either provision is the National Bank of Commerce in the city of New York. This admits not of debate. Unquestionably, upon the maturity of any coupons, or the bonds under the first part of the obligation, should the county have on deposit at said bank the money to pay the same, it would have been the duty of the holder of the bond to present it there for
The remaining question is, did the county perform its obligation to the holder of any such bond by declaring its option to pay on The 1st day of September, 1887, and publishing notice thereof in the manner in which it did, and having the money in readiness at said bank to meet the payment of any bond and interest that might be presented for payment at said place? or does the contract contemplate that in addition the county should hare given personal notice of its election to the holder of said bonds and coupons? It is true, as suggested by plaintiff, the county could have provided in the bond for notice, and how it should be given. On the other hand, it seems to me, the defendant might with equal, if not greater, force reply that the plaintiff took the bond with full knowledge of the fact (hat the right was reserved to the defendant-county, at any time after July 1,1887, to elect, to pay; and, inasmuch as he took the bond when issued without, exacting any specification respecting notice, it does not conn» with grace for him after-wards to demand, without any notice to the county, that he would expect it to notify him, or, without keeping it advised that he was the holder of any such bonds, to claim that he should have his interest until such time as he had actual notice of the election made by the county. In construing a contract regard must be had always to the circumstances under which it was made, to the subject-matter, as well as the reasonable and customary method of its performance. The plaintiff knew when he took the bonds that they were subject to the provision respecting the option. He knew that such bonds possessed all the qualities of commercial paper on their face payable to bearer, and as such passed freely from hand to hand by mere delivery, and entered into all the channels of trade and commerce, like inland bills of exchange. How, then, was it possible for the defendant to know, when it made its election to pay, who held this or that particular bond and the coupons? Personal notice in such case would be practically impossible. The county might possibly have; ascertained from the hank, where the payment of coupons was usually made, who presented the same at the last payment. But that would furnish no evidence as to who held the bond, as the coupons might be severed therefrom, or who held the remaining coupons. He who held the bond at the time of the payment of interest might not hold it to-morrow. So that, if notice were served on the holder of the coupon last paid, he could answer that he had parted with the bond and any other coupon held by him; and it would be practically impossible for the county to get at the real facts or the real holder. Under such construction of the contract, the county would absolutely be at the mercy of the commercial winds. Sucli a construction would be so unreasonable and impractical that the court should hesitate to adopt it, if there is any other more reasonable, natural, and equitable construction to both parties. County courts, under the state statute, are courts of record,
“It is the general usage in such cases for the bolda’s of the instrument to lodge it with the hank for collection, and the party bound for its payment can call there and take it up. If the instrument be not there lodged, and the obligor is there at its maturity with the necessary funds to pay it, he so far satisfies the contract that he cannot be made responsible for any future damages, either as costs of suit or interest for delay.”
In the absence of any express provision in the bond for giving notice, the county took the only practicable course open to it, which a spirit of fairness and justice to the bondholders would dictate. It made publication of the order of the court in its home newspaper, of large circulation; in the St. Louis Republic, published at the commercial metropolis of the state, having a wide circulation; and in the New York World, published at the city of New York, where the bonds were payable, and the commercial center of the United States. As proof of its effectiveness, the evidence in this case shows that all of the bonds, amounting to $419,000, with the single exception of the $2,500 held by the plaintiff, were presented and paid at the places designated in the notice, over $70,000 of which were paid at
The plaintiff, in his testimony and instructions, pro so, makes question as to whether there was a sufficient tender made by the county at the New York bank, September 1, 1887. I find this issue of fact for the defendant. The evidence shows that Mr. Little, bond broker of St. Louis, contracted with the defendant county to take up said outstanding bonds in consideration of the county issuing to him bonds at a lower rate of interest, which the county did. Little arranged on behalf of the county, through ’the La Clede Bank of St. Louis, to have the National Bank of Commerce of New York pay off such bonds of the county under the call as should be there presented. To this the New York bank consented, and accordingly it paid off all such bonds so presented, including principal and interest up to the 1st day of September, 1887, and was ready and willing to pay all that might be presented. Its cashier testifies that the bank would have paid the principal and interest of the plaintiff’s bonds up to that date had they been presented. The evidence further shows that the bank was ready and willing to pay the plaintiff the principal and interest of his bonds as late as October, 1888, up to September 1, 1887, had he been willing to accept the same. And the evidence further shows that Mr. Little, on meeting the plaintiff in St. Louis in the summer of 1888, on his return east from the state of California, offered likewise, under his contract with the county, to pay the interest and principal of his bonds up to. September 1, 1887. The plaintiff declined to do: so, unless he received interest up to July 1, 1888. He made no question of the bank or
Outside of the issues made in the pleadings, his final contention is that when he went to the bank- in New York in October, 1888, he expressed a willingness to its cashier, or other officer, to accept from the bank the principal of his bonds, and „to withhold the coupons of interest unless the bank would pay thereon up to July, 1888; thereupon he had the bonds protested. As shown by the deposition of the bank officer, and as the plaintiff unquestionably understood it, this refusal of the bank to pay the bonds without the coupons was based solely upon the ground that it had no power of attorney from the county to pay one without the other. In other words, it was not authorized to halve or subdivide its agency by taking up one and leaving the other outstanding. Of course, if it could be regarded as- a demand on the defendant, the case in- this particular would stand differently had the coupons represented other bonds than those held by the plaintiff. But the coupons belonged to the bonds owned by the plaintiff. It would be the merest jugglery to say that, by severing the coupons from the bonds held by the plaintiff, he acquired any greater right than if they had remained physically attached to the bond. The coupons, though detached from the bond, represented the interest thereon, and, as such, were an integral part of the bond, as much so in the plaintiff’s hands as if written in the face of the bond. Howard v. Bates Co., 43 Fed. 276. A reference to some well-settled principles of law and pleading will demonstrate that the plaintiff’s contention in this connection is most lame. Where a note is made payable at a designated place, it is the duty of the payor to be in readiness at the designated time and place to meet the debt, and it is the duty of the payee to have his note at the designated place so it may be paid. If the payor be so ready with the money, and the payee fail to present his note, the payor may plead the fact as he would a tender; and when sued he may bring the money into court, not to defeat the action, but in bar of interest and costs. Then, to avoid such plea, the plaintiff may reply and prove a subsequent demand and refusal. But the demand, to be available to the plaintiff, must be of the precise sum tendered. The plaintiff in this case did not demand the precise sum in effect tendered on the 1st day of September, 1887, but demanded more. But his replication in this case is wholly insufficient to let in the proof, if any there had been, in avoidance of the plea of tender. His replication is simply a general denial, — a tender of the general issue, — which puts in issue only the fact of the defendant being in readiness to pay the money at the designated bank, September 1, 1887; whereas the rule of pleading is that he should plead the facts constituting the avoidance. Berthold v. Reyburn, 37 Mo. 586; Mahan v. Waters, 60 Mo. 167. Again, the demand, when made, must be of the debtor. “A tender may be