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Hopper v. Town of Covington, 118 U. S., 148.

12 conceal such fraudulent doings, and that he has refused to pay

over to the president and directors of the bank large sums of money, to wit, $100,000 and over, refusing to account for the same, to the damage of the bank, $100,000.

These allegations of breaches of the bond on the part of Bartow were a sufficient compliance with the statute. If they were not, no reason was thereby furnished for dismissing the complaint. The defendant could have applied to the court, by

motion, to have them made more specific and definite, or for a 13 bill of particulars.

[The residue of the opinion does not involve any question of pleading.]

All the judges concurred.
Judgment affirmed.


United States Supreme Court, 1886.

[Reported in 118 U. S., 148.] 1. In an action on negotiable bonds issued by a town which had been

authorized to make such bonds for specified purposes only, it is not enough for the plaintiff to aver in general terms that the town was authorized to issue the bonds in suit; but he must state the facts

which bring the case within the special authority. 2. A complaint in such a case is demurrable if, as to this point, it only

alleges that defendant was a municipal corporation, existing under the laws of the state, with full power and authority pursuant to those laws, to execute negotiable commercial paper, and that pursuant to those laws it executed the bond sued upon, and does not show the pur

pose for which the bond was made. 3. A demurrer admits only facts well pleaded. 4. An allegation cannot avail which is inconsistent with a fact of which

the court can take judicial notice.


Action in the United States Circuit Court for the District of Indiana, upon municipal bonds issued by the defendant, the town of Covington.

The Original Complaint, after describing the parties, merely alleged that the defendant had executed her certain bond No. 14 and attached thereto a coupon No. 7, a copy of which said coupon

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is filed herewith and made part hereof, marked Exhibit A, by 2
the terms of which said coupon defendant promised to pay to the
bearer thereof, etc., etc., etc., stating terms, default, and that
plaintiff is holder, etc. A copy of the coupon was then set forth.

A second paragraph alleged another coupon in the same way.
A third paragraph enumerated sixty other coupons, and a stipu-

lation of the attorneys was annexed that to avoid unnecessary
repetition the complaint should be treated as if each coupon had
been pleaded in a separate paragraph with a copy attached.
Defendant demurred.

3 Plaintiff then served an Amended Complaint in which, after describing the parties, he alleged “that heretofore, to wit, on Oct. 1, 1870, the defendant, by its board of trustees, upon a petition to said board of trustees of the citizen owners of fiveeighths of the taxable property of the said town,” as evidenced by the assessment roll [etc., etc., detailing the proceedings], executed its bonds, numbered respectively, 14, 15, [etc., etc., describing them and the coupons annexed, and enumerating those purchased by plaintiff, and annexing a copy of one as typical of the


4 form of all, and claiming judgment upon all.]

A similar stipulation was annexed.

An Amended and Supplemental Complaint was afterwards filed by plaintiff, in which, after describing the parties as before, he alleged, “ That said defendant is a municipal corporation, organized and existing under and by virtue of the laws of the state of Indiana, with full power and authority, pursuant to the laws of said state, to execute negotiable commercial paper; that pur

; suant to the laws of said state regulating the execution of such

5 negotiable commercial obligations said defendant, on the first day of October, 1870, by its proper officers and agents, executed its negotiable commercial bond payable to bearer ten years after date, at the Farmers' Bank in Covington, Indiana, which bank was then a bank of deposit and discount at said town of Covington, Indiana ; that thereafter and before the maturity of said bond plaintiff purchased the same for a valuable consideration, and is still the owner thereof; a copy of said bond is filed herewith and hereby made part of this complaint, marked Exhibit A.”

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Hopper v. Town of Covington, 118 U. S., 148.

6 This complaint then alleged that the plaintiff was the owner

of a specified number of other bonds of precisely like tenor and effect; except that they were differently numbered, and that twenty of them were for one hundred dollars each [stating the numbers and amounts of each], “ that he purchased each and all of said bonds before maturity, for a valuable consideration. Plaintiff says that said bond, Exhibit ' A,' and each of said other bonds, is past due wholly unpaid; WHEREFORE plaintiff prays judgment for twenty thousand dollars against said defend

ant, and for all proper relief.” 7

This complaint also contained a count, with similar allegations, upon coupons for interest, attached to such bonds at the time of their execution, annexing the form as Exhibit B. A stipulation similar to those before made was annexed.

The defendant demurred to this complaint because among other things (1) it was insufficient in law; (2) it “does not allege under what law or for what purpose the bonds and coupons sued on were issued ;" (3) it “ contains no allegation showing

authority in defendant to make the bonds and coupons sued 8 upon; ” and (4) “the allegation of power and authority in the

defendant to make the bonds and coupons in suit is a legal conclusion. Lastly, insufficiency of facts to constitute a cause of action.

The Circuit Court sustained the demurrer and gave judgment for defendant.

Plaintiff brought error.


The Supreme Court affirmed the judgment.

GRAY, J. The town of Covington had no general power to issue negotiable bonds. If the general statute of Indiana of June 11, 1852, under which it was incorporated, conferred any power upon towns to issue bonds, it was only for certain municipal purposes therein specified; and the general statute of May 15, 1869, authorized towns to issue bonds for the purchase and erection of lands and buildings for school purposes only. 1 Gavin & Hord's Stat., 623–626; Davis' Supplt., 116.

The bonds in suit containing no statement of the purpose for which they were issued, and no recital which can bind the town

Hopper v. Town of Covington, 118 U. S., 148.


by way of estoppel, anyone suing upon the bonds is bound to 10 allege and prove the authority of the town to issue them.*

The plaintiff relies on the statement of Mr. Justice Swayne in Gelpcke v. Dubuque, 1 Wall., 175, 203, repeated by him and by Mr. Justice CLIFFORD in later cases, that “when a corporation has power, under any circumstances, to issue negotiable securities, the bona fide holder has a right to presume they were issued under the circumstances which give the requisite authority, and they are no more liable to be impeached for any infirmity in the hands of such a holder than any other commercial paper,''

" Supervisors v. Schenck, 5 Wall., 772, 784 ; Lexington v. Butler,

11 14 Wall., 282, 296 ; San Antonio v. Mehaffy, 96 U. S., 312, 314; Macon County v. Shores, 97 U. S., 272, 279.

But the circumstances thus spoken of were the preliminary facts requisite to the exercise of the power, not the limits, fixed by law, of the objects and purposes for which the power could be exercised at all. In each of the cases cited, the defects suggested were in the requisite preliminary proceedings, and the bonds sued on appeared by recitals on their face to have been issued according to law. When the law confers no authority 12 to issue the bonds in question, the mere fact of their issue cannot bind the town to pay them, even to a purchaser before maturity and for 'value. Marsh v. Fulton County, 10 Wall., 676 ; East Oakland v. Skinner, 94 U. S., 255; Buchanan v. Litchfield, 102 U.S., 278; Dixon County v. Field, 111 U. S., 83; Hayes v. Holly Springs, 114 U. S., 120; Daviess County v. Dickenson, 117 U. S., 657.

A demurrer admits only facts, and facts well pleaded. The town having but a limited authority to issue bonds for certain purposes, it is not enough for the plaintiff to aver in general

13 terms that the town was authorized to issue the bonds in suit; but he must state the facts which bring the case within the special authority. There is nothing in this declaration, or in the copies of instruments annexed to and made a part of it, which shows, or has any tendency to show, for what purpose the bonds were made. The averment, that the defendant is a


* By later decisions, recitals in the bond are not enough to raise an esstoppel. Sutliff v. Lake Co. Comrs., 147 U. S., 230 and cas. cit.

Milliken v. W. U. Tel. Co., 110 N. Y., 403.

14 municipal corporation under the laws of Indiana, “ with full

power and authority, pursuant to the laws of said state, to execute negotiable commercial paper," if understood as alleging a general power to execute negotiable commercial paper is inconsistent with the public laws of the state, of which the courts of the United States take judicial notice. The averment, that the bonds held by the plaintiff were executed pursuant to the laws of the state, is but a statement of a conclusion of law, which is not admitted by demurrer. The declaration is fatally defective

for not stating the facts necessary to enable the court to judge 15

for itself whether that conclusion of law has any foundation in fact. Pumpelly v. Green Bay Co., 13 Wall., 166, 175 ; Cragin v. Lovell, 109 U. S., 194; Kennard v. Cass County, 3 Dillon, 147; Broome v. Taylor, 76 N. Y., 564; Cotton v. New Providence, 18 V room, 401.

Judgment affirmed.


New York Court of Appeals, 1888. [Reported in 110 N. Y., 403; rev'g 53 Super. Ct. (J. & S.) 111.] 1. A complaint is not demurrable merely because the facts demurred to

are imperfectly or informally or argumentatively stated. 2. Upon demurrer the question is upon the sufficiency of the facts which

may fairly be collected from the pleading demurred to, considered to

gether with whatever inferences may fairly be drawn from them. 3. A complaint against an ocean telegraph company, after alleging that

plaintiff had sent by it a message to his agent in France, alleged that plaintiff, when expecting an answer by cable to the message he had previously sent, inquired at defendant's office and was told that no answer had been received, although it had been received; and that defendant, according to its usual custom, registered his address and promised to forward an answer if or when received, and defendant declined to receive payment therefor in advance, though offered by plaintiff; and failed to forward an answer which was actually received.- Held, that it stated a good cause of action, either upon the contract made by defendant with plaintiff's agent in France, or upon

its contract with plaintiff in New York. 4. The rule that a principal may maintain an action upon a parol contract

made by his agent with a third person, although the agency is not

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