14 F. 618 | U.S. Circuit Court for the District of Northern New York | 1882
This is a motion for a new trial. The case was tried by the court without a jury, and, on the findings of fact, a judgment was ordered for the defendant. 11 Fed. Rep. 829.
The question on which the case turns is as to the power of the town to issue the bonds. The power, if it existed, arises out of the provisions of section 1-of the act of the legislature of the state of Now York passed April 5, 1871, (Laws New York, 1871, vol. 1, c. 298, p. 586,) which enacts as follows: “The New York & Oswego Midland Railroad Company are hereby authorized and empowered to extend and construct their railroad from the city of Auburn, or from any point on said road easterly or southerly from said city, upon such route and location, and through such counties, as the board of directors of said company shall deem most feasible and favorable for the construction of said railroad, to any point on Lake Brie or the Niagara river.” Then follow provisions for constructing other branches. Then follows this: “And any town, village, or city in any county through or near which said railroad or its branches may be located, except such counties, towns, and cities as are excepted from the provisions of the general bonding law, may aid or facilitate the construction of the said New York & Oswego Midland Railroad, and its branches and extensions, by the issue and sale of its bonds in the manner provided for” in the act of April 5,1866, (Laws of New York, 1866, vol. 1, c. 398, p. 874,) and the acts “amendatory of and supplementary thereto.” The manner so provided for is the appointment, by the county judge of the county in which the town is situated, of not more than three commissioners to carry into effect the purposes of the act. The commissioners are to execute the bonds under their hands and seals, and to issue them. When issued lawfully, they become the obligations of the town, and bonds issued by the town.
The bonds in the present case state on their face that they are obligations of the town, and that they are “issued under the provisions” of the said act of 1866, and “the several, acts amendatory
The commissioners were appointed October 21, 1871, by the county judge of Tompkins county, and took the oath of office on the first of November, 1871. On the sixteenth of November, 1871, the board of directors of the railroad company passed the following resolutions:
“"Whereas, the New Work and Oswego Midland Railroad Company had for its original object the construction of a railway from the city of New York to the city of Oswego; and whereas, since the organization of said railway company it has become desirable to extend their said railroad to Lake Erie, or the Niagara river; and whereas, the legislature of the state of New York did, by chapter 298 of the Laws of 1871, authorize and empower the said New York and Oswego Midland Railroad Company to build and extend their said railroad from the city of Auburn, or from any point easterly or southerly of said city, to any point on Lake Erie or the Niagara river; and whereas, the said railroad company and its board of directors have decided to begin such extension and construction of said railroad westerly at and from the village of Cortland, in the county of Cortland, and westerly to Lake Erie or the Niagara river; therefore, be it
“Resolved, that the board of directors of said railroad company hereby determine that the construction and extension of the said railroad westerly commence at and from the village of Cortland, in the said county of Cortland, and thence to Lake Erie or the Niagara river.”
On the same day the board of directors of said company passed the following resolution:
“ Resolved, that the said New York and Oswego Midland Railroad Company, for the purpose of obtaining- money and materials necessary to extend their said railroad from the village of Cortland to Lake Erie or the Niagara river, hereby authorizes and directs its president and treasurer to borrow money to an amount not exceeding $25,000 per mile in length of the track of the said railroad, so as aforesaid to be extended and constructed, and, to secure the repayment thereof, to issue its iirst-mortgage bonds, to be made payable in gold coin of the United States, and to be of such denomination, and after suoh manner and form, and to such trustees, as the said president may determine upon, and deem best for the interest of the said company.”
It is not shown that the board of directors of the company ever passed any resolutions except the foregoing, or took any action as such board, except what is contained in the foregoing resolutions, in
On the first of January, 1871, the executive committee of the company had purchased a railroad road-bed called the Murdock line, 16 miles long, with its franchises and right of way, which had been graded in 1852, and part of which was ready for ties and ballasting, the grading, however, being grassed over and the culverts decayed. It ran from a place called Osmun’s, in the town of Lansing, northward, to the north line of that town, which is the north line of Tompkins county and the south line of Cayuga county, and then on through the towns of Genoa and Yenice, in Cayuga county, into the town of Scipio, in that county. Daring the fall and summer of 1871 the company made surveys for a line of railroad, to run from Freeville, in the town of Dryden, Tompkins county, (the town next north of Lansing,) northward to Osmun’s, a distance of 10 miles. The grading and making of the railroad from Freeville, north, through the town of Lansing, was begun in December, 1871. On December 13,1871, a map called “Map No. 1,” certified by the directors of the company, was filed in the office of the clerk of Tompkins county, containing this inscription: “Map and profile of a part of the Auburn branch of the New York and Oswego Midland Railroad, as located in and through a part of the county of Tompkins, New York.” This map covered the 10 miles from Freeville to Osmun’s. On the twenty-second of December, 1871, there was filed in the same office a map similarly certified and inscribed, called “Map No. 2,” and covering the Murdock line from Osmun’s to the north line of the town of Lansing. On the twenty-third of December, 1871, there was filed in the office of the clerk of Cayuga county a map similarly certified, called “Map 1,” containing this inscription: “Map and profile of a part of the Auburn branch of the New York and Oswego Midland Railroad, as located in and through a part of the county of Cayuga, New York,” and covering the Murdock line from the north line of the town of Lansing, through the towns of Genoa and Yenice, to the south line of Scipio. On the thirty-first of January, 1872, $15,000 of bonds were issued, and in August, 1872, $60,000 were'issued. No more were ever issued. When the bonds involved in this suit were issued does not appear. In exchange for said bonds the commissioners received a certificate for 750 shares of the capital stock of the railroad company, of S100 each, in the name and on behalf of the town of Lansing. On the thirtieth of May, 1872, there was filed in the office of the clerk
‘Resolved, that the contract made by D. 0. Littlejohn, J. W. Merchant, John R. Clark, Cheney Ames, and, William Poster, as the executive committee, and Charles P. Wood, of Auburn, for the purchase of the franchises, right of way, and road-bed known as the Murdock line, be and the same is hereby approved, ratified, and confirmed. Resolved, that the action of the president in locating and constructing the western extension of this company’s road over and upon the said Murdock line be and the same hereby is approved.’ Unanimously adopted.”
The persons named were all or a majority of the executive committee. On the twenty-ninth of August, 1873, there was filed in the office of the, clerk of Cayuga county a map called “Map 3,” certified by the said directors, containing this inscription: “Map and profile of a part of the western extension of the New York and Oswego Midland Railroad, as located in and through a part of the county of Cayuga,” and covering a line from the said Merrifield road to Mud Lock, a point in Cayuga county 10 miles northwest of Auburn, on the eastern line of Seneca county,'the county next west of Cayuga coujaty, and about 50 miles from Ereeville. The company continued its efforts after the fall of 1872 to extend its railroad westward, until, embarrassed by the financial troubles of 1873, it failed and discontinued operations, and its property passed into the hands of a receiver,
(1) That the statutes prior to the act of 1871 conferred no power to issue the bonds, because the counties through which the branch road to Auburn was to run, as provided by acts passed in 1867 and 1869, were named in the statute, and Tompkins was not one of them, and such branch road was not to pass through or near the town of Lansing; (2) that, under the act of 1871, no power was conferred on any town to issue bonds in aid of the Midland Company until the whole of the western extension provided for in that act should be located by some definite action by the company, and, irrespective of the said maps and profiles, there remained about 140 miles more to be located between Mud Lock and Buffalo or the "Niagara river, which, so far as appeared, was never located at all; (3) that payment of the interest, and receiving and retaining the certificate of stock, might be a ratification of steps in regard to •which merely irregularity was claimed, but could not avail to prevent the town from setting up a total want of power to issue the bonds.
Taking all the provisions of the act of 1871 together, it seems to be very plain, that the legislature, instead of designating any county or town from which the western extension was to start, or any counties or towns through which its route should lie, or any county or town which should be its western terminus, left all those matters open to be determined by the board of directors of the company, and required the board to determine all those matters, and to determine them by certain prescribed principles. It required the board, if it should construct the extension, to first determine what route it should deem most feasible and favorable for the construction of the whole extension, the starting point, the route, and the western terminus being all left to depend on what was most feasible and favorable. A ehoice was given to start from Auburn, or from any point on the existing road easterly or southerly from Auburn, and to end at any point on
But the question arises whether, in view of the recitals in the bonds, which recitals were made by the commissioners as officers of the town, and of the fact that plaintiff is a bona fide holder of the bonds and coupons, and of the payment of the interest, and of the retention of the stock certificate, or of all or any of these circumstances, the town is estopped from asserting that the board of directors of the company never took the action made necessary by the act to fix the route and location of the branch.
It is contended for the plaintiff that the ascertainment of the facts conferring power on the town to issue the bonds was confided by law to the commissioners who issued them; that the bonds are regular on their face, and recite that they are issued “under the provisions” of the act- of 1871; that that is a declaration by the commissioners, in the bonds, that the route and location of the road were fixed by the board of directors in such manner that the town had the right, under some circumstances, to issue the bonds; and that, therefore, they are valid in the hands of a bona fide holder of them. It is also urged, that whenever the company has constructed any railroad which might be a part of a road provided for by the act of 1871, the presumption, in a collateral suit like the present, is, that it has been lawfully built, and that all the proper steps legally necessary for its construction have been taken; that the word “location, ” in the act, is a synonjnn for the word “place;” that, when a road has been built or acquired upon any route or location, the presumption is that such route or location has been deemed most feasible and favorable for its construction; that it is sufficient if the court finds the company constructing, occupying,
The case is sought to be brought within those numerous cases in the Supreme Court of the United States, where, the legal power being sufficiently comprehensive, the bona fide holder has a right to presume, from the recitals in the bonds, and the fact of their issue by the officers charged with the duty of issuing them, that all precedent requirements prescribed by law have been observed. But, in those cases, the municipality was designated by name in the statute, or all the towns in certain designated counties were authorized to issue bonds, or the authority was given to all the towns on or near a route which had been designated by 3ome record, or there was something equivalent to such a designation of the municipality. In the present case, however, on all the facts existing when these bonds were issued, the power to issue bonds in aid of this road, under the act of 1871, might as well have been exercised by any town, village, or city in the state west of Auburn, or west of any point on the road of the company easterly or southerly from Auburn, as by the town of Lansing. Certainly, the legislature did not, in the act of 1871, use language indicating such an intention. It clearly, by the language it used, intended to have the two termini, and the route and location of the road, determined by the board of directors with a view to what was most feasible and favorable for its construction, before the taxpayers of the town could be called upon to act on the question of consent to bonding the town. The determination of this question being confided to the directors, it was not the province of the commissioners or of any one else to determine it. The question in issue in this suit is not as to the regularity of the exercise of
The present case falls within the principles adjuged in Marsh v. Fulton Co. 10 Wall. 676, because the power of the town to contract never existed. In such a case there can be no protection of the holder as an innocent purchaser, and no ratification of a power which never existed, by such alleged acts of ratification as are shown in this case. East Oakland v. Skinner, 94 U. S. 255, 258; South Ottawa v. Perkins, Id. 260, 269; McClure v. Oxford, Id. 429; Ogden v. Daviess Co. 102 U. S. 634, 641; Buchanan v. Litchfield, Id. 278.
The plaintiff can derive no aid from the fact that the decision of the supreme court of New York in the case which the court of appeals decided in 55 N. Y. was contrary to that of the latter court. The decision of the supreme court of New York was an appealable decision, and was appealed and reversed. All persons who relied on the decision by the supreme court of New York took the risk of a decision the other way, on appeal, in the same suit.
It results from the foregoing considerations, that the motion for a new trial must be denied, and the same decision is made in the case of Mellen against the same defendant.