| Ky. Ct. App. | Jul 1, 1883
delivered the opinion of the court.
The charter of the Cumberland and Ohio Railroad Company authorized counties, towns, and districts to subscribe to its capital stock in pursuance of a popular vote.
The town of Eminence, in exercise of the authority thus conferred, subscribed, in obedience to a majority of the popular vote of its tax-payers, the sum of $25,000 to the capital stock of the company, and the chairman and board of trustees issued negotiable bonds of the town therefor, payable within five years to the bearer, reciting oh the face of the bonds that they were for the Cumberland and Ohio Railroad, and to secure their payment the property and credit of the town of Eminence are pledged.
The bonds were delivered to the railroad company, and thereafter the appellee’s testator became the bona fide owner of four of them, before they became due, for valuable consideration, without notice of any defects or irregularities in the mode of holding the .election or exercising the powers conferred upon the town of Eminence by said charter.
The town of Eminence levied taxes on its tax-payers, and paid $18,000 of the subscription and the interest on the appellee’s bonds up to October 1, 1878, but refusing to make further provision for the payment of the remainder of the appellee’s bonds, this action was brought to enforce the performance of that duty.
The appellant demurred to the petition, and, withoht waiving the demurrer, filed an answer, relying on various irregu
To the answer the appellee demurred; the demurrer was sustained, appellant’s demurrer overruled, and, failing to plead further, judgment was rendered against appellant, whose appeal raises the question whether the recitals of the bonds, and the facts stated above, estop it from pleading the irregularities set forth in the answer.
It is not necessary to carry the doctrine of municipal decision to the extent it was pressed by the supreme court of the United States in Knox County v. Aspinwall, 21 How., 539" court="SCOTUS" date_filed="1859-03-11" href="https://app.midpage.ai/document/board-of-commrs-of-knox-cty-v-aspinwall-87248?utm_source=webapp" opinion_id="87248">21 How., 539, in order to decide this case, which presents very strong equitable features against the appellant’s present position.
Indeed, many of the state courts, and several of the justices of the supreme court, doubt and oppose the doctrine of that case, and we concur in that opposition.
In the present case one of the officers, whose duty it was to superintend the election, signed the bonds, and they present upon their face to the innocent purchaser a statement which, if he believed, would cause him to understand that those in authority as officers of the town of Eminence had decided that the bonds had been issued according to law; for those officers expressly told all who might read and wished to buy the bonds, that they were issued for the railroad company, whose charter clearly - authorized their issuance, and that the property and credit of the town of Eminence were pledged for their payment, which meant, if it meant anything, that the preliminary proceedings, provable in pais, were regularly taken before the bonds were issued.
The sole question here is, whether the mode of performing the conditions precedent was wrong in form or execution, it not being shown that the power did not exist, but that it was irregularly exercised. So the grave objections to the current of authority in the supreme court on this subject do not arise upon this record.
In addition to the recital contained in the bonds, the town of Eminence gave additional representations of their validity by levying and collecting taxes, and paying therewith nearly three fourths of the principal of all the bonds, and several years’ interest on the remainder, thereby inducing innocent
It is not necessary, therefore, to examine into the irregularities relied on, but it is proper and sufficient to say that neither the original nor amended charter required the application to be signed by the president and ten tax-payers where towns should be petitioned to vote on a proposition to subscribe; that the appellant cannot be permitted to deny the official character of its own officers, who acted and claimed to act as such in the performance of the duties necessary to execute the conditions precedent to the issuance of the bonds. They were de facto officers, and their acts are binding so far as innocent third parties are affected; and that’ the alleged change - of route subsequent to the issuance óf the bonds, and failure to build the road according to the original plan or purpose of its projectors, do not furnish any ground of exemption from the payment by the appellant of its bonds purchased and held by innocent persons without notice. (101 U. S., p. 196; 2 Met., p. 60.)
Wherefore the judgment is affirmed.