U.S. Supreme Court
County of Ray v. Vansycle, 96 U.S. 675 (1877)
County of Ray v. Vansycle
96 U.S. 675
Pursuant to a power conferred in the charter of A., a railroad company, a county court of Missouri subscribed, in the year 1860, for stock, and agreed to issue county bonds in payment therefor. Under the authority of an act of the general assembly of that state, passed in the year 1864, A., by a vote of a majority in interest of its stockholders, said county court voting with said majority, transferred all the assets, rights, and privileges of its charter and all the work done thereunder to a company, B. C. was, under the general railroad law, organized as a corporation for constructing a railroad which passed through the county, and an agreement was made in 1868 between B., C., and the county court by which the subscription was released, and, in consideration of such release, that court subscribed for the same amount of stock in C., and issued county bonds in payment therefor. The county, by this arrangement, secured, with increased railroad facilities, a road in all material respects the same as that desired and originally contemplated, and it received and still retains the requisite certificates of stock. The county court levied and collected the tax to pay the interest due on the bonds for the years 1869, 1870, 1871, 1872, and 1873, but, in August of the last-mentioned year, directed that the payment of the interest thereunder should be withheld. Suit was brought against the county by a bona fide holder of the coupons, who purchased the same for value before their maturity.
1. That B. acquired a vested right to demand and receive the bonds of the county, in payment of the original subscription to A., and that such right was not defeated or impaired by the Constitution of Missouri of 1865.
2. That the agreement made in 1868 is not, as against such holder, subject to the objection that a majority of the qualified voters of the county had not, at a general or special election, expressed their assent to the subscription of stock in C.
3. That the taxpayers are concluded by the act of the county court, and by their own failure to assert, by appropriate proceedings, their legal rights, if any they ever had, to prevent the transfer of the original subscription from one company to the other. chanroblesvirtualawlibrary
This was an action by Vansycle to recover the amount due on interest coupons attached to bonds which were issued in 1869 in the name of the County of Ray, Missouri, by each of which it acknowledged itself indebted to the St. Louis & St. Joseph Railroad Company in the sum of $1,000, which it promised to pay to that company or bearer, at the American Exchange National Bank in New York, on the first day of January, 1879, with eight percent interest, payable annually, upon the presentation and delivery of the coupons.
Each bond contained these recitals:
"This bond being issued under and pursuant to an order of the County Court of Ray County, made under the authority of the Constitution of the State of Missouri and the laws of the General Assembly of the state of Missouri, and authorized by a vote of the people of said county, at a special election held for that purpose."
"In testimony whereof the said County of Ray has executed this bond, by the presiding justice of the county court of said county, under the order of said court, signing his name thereto, and by the clerk of said court, under order thereof, attesting the same, and affixing thereto the seal of said court. This done at the Town of Richmond, County of Ray, aforesaid, this second day of _____, 1869."
"C. W. LARRAMORE"
"Presiding Justice of the County Court of Ray County, Missouri"
"GEO. N. MCGEE"
"Clerk of the County Court of Ray County, Missouri"
The coupons were in the form following:
"RICHARD, RAY COUNTY, MISSOURI, A.D. 1869"
"The County of Ray acknowledges to owe the sum of eighty dollars, payable to bearer on the first day of January, A.D. 1874, at the American Exchange National Bank in New York, for one year's interest on bond No. ___."
"GEO. N. MCGEE,"
"Clerk of County Court of Ray County, Mo."
Vansycle was a lawful holder for value of the bonds, and received them without actual notice or knowledge of any defects or irregularities in their issue.
The main facts connected with the issue of the bonds cover chanroblesvirtualawlibrary
a period of more than ten years, commencing with the year 1859.
An Act of the General Assembly of the state of Missouri approved Dec. 5, 1859, and amended Jan. 5, 1860, incorporated the Missouri River Valley Railroad Company, with power to construct a railroad from any point on the North Missouri Railroad in Randolph County, by way of Brunswick, in Chariton County; thence, through Carroll, Ray, Platte, and Clay Counties, to Weston, in Platte County; and authorized the county court of any county in which any part of such railroad might be, to subscribe to the stock of the company, invest its funds in such stock, and raise the funds by tax to be voted by the legal voters of the county, in such manner as the county court might prescribe for the purpose of paying such stock. It declared that the provisions of the general railroad law of Missouri, not inconsistent therewith, should be extended to that company.
The general railroad law of Missouri then in force made it lawful for the county court of any county to subscribe to the capital stock of any railroad company duly organized in Missouri, and, for information, to cause an election to be held to ascertain the sense of the taxpayers of such county as to such subscription, and as to whether the same should be paid by issuing county bonds or by taxation. A county, upon its making such subscription, became, like other subscribers to stock, entitled to the privileges granted, and subject to the liabilities imposed, by that law, or by the charter of the company to which such subscription was made. In order to raise funds to pay the installments which might be called for from time to time by the board of directors of such company, it was made the duty of the county court to issue the bonds of the county, or levy a special tax upon all property taxable by law for state and county purposes &c.
By an Act approved March 30, 1860, amendatory to that of Dec. 5, 1859, and for other purposes, the county courts of Ray and other counties specifically named were authorized to issue and deliver the bonds of their respective counties in payment of any subscription to or purchase of the capital stock of the Missouri River Valley Railroad Company which such counties might respectively make; the bonds to be in the sum of not chanroblesvirtualawlibrary
exceeding $1,000 each bond, having not exceeding ten years to run before maturity, bearing interest at the rate of eight percent per annum, payable annually at the county seat of the county issuing them, or in the City of St. Louis, as the county court might prefer.
On the 2d of July, 1860, the Ray County Court, by an order