114] [115] stock shall be so consolidated, upon such | subscribe to stock and to issue bonds. In that " It is not contended that the provisions of this statute were not complied with in making the consolidation in question. The consolidated company was, by the statute, to be entitled to the same privileges under the laws of the State of Missouri as if the consolidation had not taken place. This can only mean that it was to be entitled to the same privileges under the laws of Missouri that the Missouri corporation was entitled to under the laws of that State at the time the consolidation took place. One of those privileges was the privilege of a subscription to stock by the Township of Chillicothe. (2) As to the authority to subscribe to stock in, and issue bonds to, the St. Louis, Council Bluffs & Omaha Railroad Company, under the vote of the people of the township to subscribe to stock in, and issue bonds to, the Chillicothe & Omaha Railroad Company. The case of Harshman v. Bates County, 92 U. S. 569 [23: 747], decided by this court at October Term, 1875, is relied upon by the plaintiff in error as a decision against the validity of the bonds in that respect. It arose under the same statute of Missouri, of March 23, 1868. The bonds were issued by the County of Bates, in behalf of Mount Pleasant Township, in that county, to the Lexington, Lake & Gulf Railroad Company, in January, 1871. The taxpayers of the township had, in May, 1870, at an election, voted in favor of a subscription to the stock of, and the issue of bonds to, the Lexington, Chillicothe & Gulf Railroad Company. In October, 1870, that corporation was consolidated with another corporation, under the name of the Lexington, Lake & Gulf Railroad Company. Thereafter, in January, 1871, the county court, in pursuance only of the authority conferred by such vote, subscribed the specified amount, in behalf of the township, to the consolidated company, and issued the bonds to it in pay ment of the subscription. The objection was taken, that the question of subscribing to stock in, and issuing bonds to, the consolidated company was never submitted to a vote of the people of the township. This court held that as at the time of the consolidation, no subscription to stock had been made, and thus no vested right had accrued to the company named in the vote, the extinction of that company worked a revocation in law of the authority to In County of Scotland v. Thomas, 94 U. S. 6S2 [24: 219], at October Term, 1876, the suit was brought on coupons attached to bonds issued by the County of Scotland, in the State of Missouri, on its own behalf, to the Missouri, Iowa & Nebraska Railway Company, for a subscription on behalf of the county to the stock of that corporation, which was a corporation formed by the consolidation, in March, 1870 (under the above mentioned Act of March, 2, 1869), of the Alexandria & Nebraska City Railroad Company, of Missouri (formerly the Alexandria & Bloomfield Railroad Company), with the Iowa Southern Railway Company, of Iowa. It was claimed that the power to subscribe to the stock had been given by the charter granted in 1857 by Missouri to the Alexandria & Bloomfield Railroad Company, before the adoption of the State Constitution of 1865, which required that the question of subscribing to stock should be submitted to a vote of the qualified votes of the county. No vote had been taken in the case. It was contended on behalf of the plaintiff that the consolidated corporation acquired, by the consolidation, all the privileges of the Alexandria & Nebraska City Railroad Company, and, among others, the privilege of receiving county subscriptions to its capital stock. This court held that the prohibition of the Constitution of 1865 only extended to restraining the Legislature from authorizing in the future municipal subscriptions, or aid to private corporations, without a vote of the people of the municipality, but did not take away any authority previously granted to subscribe to stock without a vote of the people. It also held that the simple consolidation with another company did not extinguish the power of the county to subscribe, or the priv ilege of the company to receive a subscription. As authority for this view it cited the case of State v. Green County, 54 Mo. 540. In the case of County of Scotland v. Thomas the power to consolidate was given in 1869, after the original Charter of 1857 was granted, and after the Constitution of 1865 went into effect; but it was held that that fact did not affect the power. In its opinion, the court said, p. 691 [220], that the railroad authorized by the Charter of 1857 "was 'a railroad from the City of Alexandria, in the County of Clark, in the direction of Bloomfield, in the State of Iowa, to such point on the northern boundary line of the State of Missouri as shall be agreed upon by said company, and a company authorized on the part of the State of Iowa, to construct a railroad to intersect the road authorized to be constructed by the provisions of this Act, at the most practicable point on said state line." Bloomfield was a small town in Iowa, evident [116] [117] [118] spective right to take tolls. Why it should not The conclusion of the court was that the ly not intended as the final objective point of The court distinguished the case from that of Harshman v. Bates County, 92 U. S. 569 [23:747], on the ground that in that case the subscription to stock was made by the county court in behalf of a township, and that the county court was regarded as being the mere agent of the township, and as having no discretion to go beyond the precise terms of the power given to it, to subscribe to the stock of the company named in the vote; while in the case of Scotland County the county court acted as the representative authority of the county itself, and was officially invested with all the discretion necessary to be exercised under the change of circumstances brought about by the consolidation. being a right and privilege of the Alexandria & In County of Bates v. Winters, 97 U. S. 83 [24:933], at October Term, 1877, the suit was brought to recover the amount of bonds and coupons issued by the County of Bates, in the State of Missouri, in behalf of Mount Pleasant [119] Township, in that county. The bonds were The court further proceeded to say, in the issued in January, 1871, to the Lexington, Lake Scotland County Case, p. 693 [221]: "If we & Gulf Railroad Company, a corporation look at the subject in a broad and general view, formed by the consolidation of the Lexington, it will be still more manifest that the power in Chillicothe & Gulf Railroad Company with question was intended to exist, notwithstand- another corporation. The township had voted, ing the consolidation. The project of the rail-in April, 1870, in favor of a subscription to the road promised a great public improvement, stock of, and the issue of bonds to, the Lexingconducive to the interests of Alexandria and the ton, Chillicothe & Gulf Railroad Company. counties through which it would pass. Its No subscription to the stock of t at company construction, however, would greatly depend was shown to have been made, but the subupon the local aid and encouragement it might scription was made on the books of the new receive. The interests of its projectors and of company formed by the consolidation. This the country it was to traverse were regarded as court held that as, in fact, no subscription had mutual. The power of the adjacent counties been made to the stock of the Lexington, Chiland towns to subscribe to its stock, as a means licothe & Gulf Railroad Company, the bonds of securing its construction, was desired not were void, under the ruling in Harshman v. only by the company, but by the inhabitants. Bates County, because the popular vote gave Whether the policy was a wise one or not is not authority to subscribe to the stock of one comnow the question. It was in accordance with pany, while the subscription was made, and the the public sentiment of that period. The bonds were issued, to a different company; and power was sought at the bands of the Legisla-that the recitals in the bonds were such that ture, and was given. It was relied on by those there could be no bona fide holders of them. who subscribed their private funds to the en- The bonds recited, on their face, that the vote terprise. It was involved in the general scheme had been on the proposition to subscribe to the as an integral part of it, and as much contrib-capital stock of the Lexington, Chillicothe & utory and necessary to its success as the pro- Gulf Railroad Company, and that that com [120] [121] pany and another company had been consolidated into one company, under the name of the Lexington, Lake & Gulf Railroad Company, to which latter company the bonds were, on their face, issued. This court reversed the judgment below, which had been in favor of the plaintiff, and remanded the case for a new trial. In Wilson v. Salamanca, 99 U. S. 499 [25:330], at October Term, 1878, the suit was against the Township of Salamanca, in Cherokee County, Kansas, to recover the amount of coupons detached from bonds issued by that township to the Memphis, Carthage & Northwestern Railroad Company. The bonds were issued in September, 1872, in pursuance of an election held in November, 1871, at which it was voted to subscribe to stock in, and issue bonds to, the State Line, Oswego & Southern Kansas Railroad Company. After the vote was had, the latter company was consolidated with another railroad company, into a new corporation, to which the bonds were issued. The subscription was made to the stock of the new corporation, and no other vote was had than the one above mentioned. The case came up on questions certified, one of which was as follows: Whether or not it is a defense to this action by a bona fide holder for value of the interest coupons sued on, without actual notice, that after the order of the board of county commissioners for an election, and after a favorable vote by a three fifths majority of the qualified electors of Salamanca Township, according to law, to subscribe stock in the State Line, Oswego & Southern Kansas Railroad Company, payable in negotiable bonds, to aid in the construction of its railroad, the subscription of stock and the issue of bonds without any further election were made to the Memphis, Carthage & Northwestern Railroad Company, with which said prior company, in whose favor the vote was had, had become merged and consolidated under a law existing at the time of said election, to form a continuous line." The judgment of the circuit court was in favor of the township; but this court reversed the judgment, and answered the above question in the negative, ou the authority of the case of County of Scotland v. Thomas, 94 U. S. 682 [24:219]. The court said: "The power of the State Line, Oswego & Southern Kansas Railroad Company to consolidate with other companies existed when the vote for subscription was taken in the township. When the consolidation took place, there was a perfected power in the township to subscribe to the stock of that company, and there was also an existing privilege in the company to receive the subscription. That privilege, as we held in the Scotland County Case, passed by the consolidation to the consolidated company" The court distinguished the case from that of Harshman v. Rates County, 92 U. S. 569 [23:747], on the ground that the township trustee and the township clerk, who made the subscription and issued the bonds in the Salamanca Township Case, acted in their official capacity as the constituted authorities of the township, and its legal representatives, and not as mere agents, and occupied the position of the county court in the Scotland County Case. In Menasha v. Hazard, 102 U. S. 81 [26:83], at October Term, 1880, the suit was against the Town of Menasha, in the County of Winnebago and State of Wisconsin, to recover the amount of coupons detached from bonds issued by that town to the Wisconsin Central Railroad Company, in October, 1871. It had been voted by the town, in June, 1870, to issue bonds to the Portage, Winnebago & Superior Railroad Company. After the vote was had, and in November, 1870, the Portage, Winnebago & Superior Railroad Company was consolidated with another company, and its name was changed, in February, 1871, to that of the Wisconsin Central Railroad Company, and a further consolidation took place with a company in which the bonds were afterwards issued. It appeared that, before the subscription and bonds were voted, the Portage, Winnebago & Superior Railroad Company was authorized by statute to consolidate with other companies constructing connecting lines, and that the consolidation was effected in pursuance of the statute. This court held that, under these circumstances, the issuing of the bonds to the consolidated company was lawful. In Harter v. Kernochan, 103 U. S. 562 [26: 411], at October Term, 1880, bonds had been voted by the Township of Harter, in Clay County, Illinois, as a donation to the Illinois Southeastern Railway Company, and were is sued to the Springfield & Illinois Southeastern Railway Company, the latter company having been formed subsequently to the vote, by a consolidation between the former company and another company. This court held that the statutes of Illinois existing when the vote was taken authorized the consolidation, and that upon such consolidation, the new company succeeded to all the rights, franchises, and powers of the constituent companies. The court said, p. 574: "The power in the township to make a donation to aid in the construction of the Illinois Southeastern Railway was also a privilege of the latter corporation, and that privilege, upon the consolidation, passed to the new company. The donation was voted before the consolidation took effect, and since the consolidated or new company did not propose to apply such donation to purposes materially different from those for which the people voted it in 1868, its right to receive the dona- [122] tion, at least when the township assented, cannot be doubted." The validity of the bonds was upheld. In New Buffalo v. Iron Company, 105 U. S. 73 [26: 1024], at October Term, 1881, the suit was brought on bonds and coupons issued by the Township of New Buffalo, in the County of Berrien and State of Michigan. The bonds had been voted by the township in May, 1869, as a donation in favor of the Chicago & Mich. igan Lake Shore Railroad Company. When the bonds were voted, there was in force a general statute under which any railroad company of the State, forming a continuous or connected line with any other railroad company in or out of the State, could consolidate with the latter. The statute provided that the new corporation should possess all the powers, rights and franchises conferred upon its constituent corporations, and that they should be deemed to be transferred to and vested in it. After the vote was had, the company to which the bonds were voted was consolidated with another company, into a new corporation, hav [123] ing the name of the Chicago & Michigan Lake | present case, although it is a case of bonds is- the General Statutes of Missouri of 1865, pos- We do not think that the rigid rule laid down in the case of Harshman v. Bates County, 92 U. S. 569 [23: 747], ought to be applied to the [124] [125] with a view to continuing the road from such that not less than two thirds of the qualified boundary line to Omaha, in Nebraska. This voters voting at the election were in favor of the object was attained by means of the consolida- subscription to the stock of the railroad comtion. The road was constructed by the consol-pany, it should be the duty of the county court idated company from Chillicothe to the bound- to make the subscription in behalf of the townary line between Missouri and Iowa, through ship, according to the terms and conditions the counties of Missouri named in the articles thereof, and that if those conditions provided of association of the Missouri company, and for the issuing of bonds in payment of such was continued thence to Omaha, in Nebraska, subscription, the county court should issue such and has ever since been operated upon that bonds in the name of the county and deliver line. The object expressed in the articles of them to the railroad company. This imposed association of the Missouri company, of having a plain duty in the present case upon the county a continuous road from Chillicothe to Omaha, court, because the statute and the vote, taken was not only effectually accomplished by the together, authorized the subscription and the consolidation, but could not have been accom- issue of the bonds, and no formal order by the plished without it. The Missouri corporation county court to do those acts was necessary. could not have built the road in Iowa, from The acts were ministerial. The statute left no the state line to Council Bluffs, and a railroad discretion in the county court, but made it the extending only from Chillicothe to the state line duty of the court to make the subscription and would not have answered the purpose con- issue the bonds. The sole duty of the court templated. To say, therefore, that there has was to ascertain that the proper vote had been been any substantial diversion in the use of the had. The bonds state on their face that they bonds from the purpose contemplated by the are "issued under and pursuant to an order of vote of the people of the township, because of the County Court of Livingston County, authe consolidation and of the issuing of the thorized by a two thirds vote of the people of bonds to the consolidated company, which has Chillicothe municipal Township," and each made the very road intended, because the au- bond also states that the county has executed it thority conferred by the vote was nominally by the Presiding Justice of the County Court one only to issue the bonds to the Missouri cor- of the County, under an order of the court, poration, is not a sound proposition, in view signing his name to the bond, and by the clerk of the fact that the statute of Missouri express- of the court, under the order thereof, attesting ly authorized the consolidation which took the same and affixing thereto the seal of the place. Under the facts of the case, the pro- court, and it is so signed and attested and the vision for consolidation became a part of the seal is affixed. contract between the township and the railroad company, and the vote to issue the bonds to [126] the company was an assent to the exercise by it of all the corporate powers, including that of consolidation; with which it was invested at the time of the vote. So true is this that if the Missouri company had never been consolidated with the Iowa company, and the road had only been built to the state line, and no extension of it through Iowa to Council Bluffs and Omaha had been made, it might well have been urged that the citizens of the township had been defrauded, and that the purpose in issuing the bonds had not been carried out. We think that, in the present case, the rule applied in the cases before cited, of County of Scotland v. Thomas, 94 U. S. 682 [24:219]; East Lincoln v. Davenport, 94 U. S. 801 [24:322]; Wilson v. Salamanca, 99 U. S. 499 [25:330]; Menasha v. Hazard, 102 U. S. 81 [26:83]; Har ter v. Kernochan, 103 U. S. 562 [26:411]; New Buffalo v. Iron Company, 105 U. S. 73 [26: 1024]; and Bates County v. Winters, 112 U. S. 825 [28:744], is the more proper and salutary one, and that the doctrine laid down in Harsh man v. Bates County, 92 U. S. 569 [23:747], and in Bates County v. Winters, 97 U. S. 83 [24:933], that a county court in Missouri could not, on a vote by a township to issue bonds to a corporation named, issue the bonds to a company formed by the consolidation of that corporation with another corporation, would not be, if applied here, a sound doctrine. (3) As to the objection that it does not appear by the finding of the circuit court that there was any formal order made by the county court for the issue of the bonds. By section 51 of the statute before cited, it was provided that if it should appear from the returns of the election Moreover, the finding of the circuit court is that the records of the county court show that that court made an order, on the 21st of February, 1877, stating that, under and by virtue of the statute of the State, approved March 23, 1868, the County of Livingston, for the use and in behalf of the municipal Township of Chillicothe, had issued and delivered the bonds in question to the St. Louis, Council Bluffs & Omaha Railroad Company. It is also found as a fact by the circuit court that the County of Livingston had made eleven semi-annual payments of interest on the bonds, from the proceeds of taxes levied in each year on the taxable property of the township. The county court having been designated by the statute as the proper authority to determine that the conditions existed which authorized the making of the subscription, to be followed by the issuing of the bonds, the fact of the issue of the bonds by the county court, under its seal, with the recitals contained in the bonds, and the other facts above stated, estop the County from urging, as against a bona fide holder of the bonds and coupons, the existence of any mere irregularity in the making of the subscription or the issuing of the bonds. On the foregoing facts, it must be presumed that the subscription to the stock was made by the county court in behalf of the township, and the County is estopped from asserting the contrary. We are referred by the counsel for the plaintiff in error to the cases of State v. Garroutte, 67 Mo. 445; and Weil v. Greene County, 69 Mo. 281, as holding to the contrary of the views we have here announced. Independently of the fact that these decisions were made in 1878, many years after the bonds in the present case were issued, no such facts existed in those cases [127] [128] |