ERROR to the Circuit Court of the United States for the Southern District of Illinois. The facts are stated in the opinion of the court. Submitted on printed arguments by Mr. J. M. Palmer for the plaintiff in error, and by Mr. S. M. Cullom for the defendant in error.
The opinion of the court was delivered by: Mr. Justice Hunt delivered the opinion of the court.
The question is as to the legality of certain bonds issued by the town of East Lincoln, bearing date of the second day of April, 1873.
The case shows that the plaintiff below was the bona fide owner of the coupons sued upon. Questions of form merely, or irregularity, or fraud, or misconduct on the part of the agents of the town, cannot, therefore, be considered. Whether the supervisor of the town signed the bonds during the midnight hours, whether he delivered them at about daylight on the morning of April 2, 1873, and whether he immediately left the town to avoid the service of an injunction, are matters not chargeable to the owner of the bonds. The supervisor was not his agent, but the agent of the town, and if there has been misconduct on his part, the town rather than a stranger must bear the consequences. There must be authority in the town to issue the bonds by the statuteso f the State. If this cannot be found, the holder must fail; if it exists, he is entitled to recover.
It is denied that a subscription was made by the town to the stock of the Havana, Mason City, Lincoln, and Eastern Railway Company; and it is found as a fact by the judge who tried the action, that 'no subscription was ever made by the town of East Lincoln on the books of' the railway company.
The bonds recite that they are issued in pursuance of the authority given at an election by the voters of said town, held on the thirty-first day of May, 1870, in pursuance of the authority of two several statutes referred to in said bonds.
The fifth section of the act of March 27, 1869, amendatory of the act of March 9, 1867 (both statutes are referred to in the bonds), prescribes the manner in which the election shall be held, and the record shows that, on the thirty-first day of May, 1870, an election was held under said act, and that a majority of the legal voters attending and voting at said election voted in favor of a subscription of $60,000 to the capital stock of the said company. That section provides 'that if a majority of the legal voters of such town, . . . voting at such election, shall be in favor of such subscription, then it shall be deemed and held that said town . . . has taken stock in said railroad company according to the proposals made in said petition to said clerk.'
We are aware of no legal restriction upon the power of the legislature to declare what shall amount to a subscription to stock in an incorporated company, or what shall be the evidence that the party proposing to take the stock has completed the contract on its part. It may require such evidence to be in writing upon the books of the company, under the authority of the officers of the town, or it may authorize it to be done by an order or resolution of the county court, or it may authorize an engagement to take stock to be made by parol, or, as in the case before us, it may provide that the expressed wish of the voting majority of its inhabitants, at a legally convened townmeeting, shall amount to a subscription, or shall be deemed and held to be a taking of the stock of the company. Nugent v. The Supervisors, 19 Wall. 241.
We think the statute intended to make a majority vote of the legal voters of the town who voted at such an election an equivalent to and substitute for a subscription upon the books of the company.
The subscription thus authorized has been accepted by the successors of the said corporation, and, so far as the record shows, by the original corporation.
In our opinion, the subscription thus made was valid.
If valid as a subscription to the original incorporation, has it lost its force and vitality in consequence of the changes which have taken place in the organizations concerned in this transaction? The corporation known as the Havana, Lincoln, and Champaign Railroad Company was organized under the act of March 9, 1867, creating a company to construct a railroad from Ipava, in Fulton County, to Havana, Lincoln, Clinton, and Champaign, and from the latter place to some point on the Toledo, Wabash, and Western Railway. The corporation was authorized to unite or connect with any other railroad then or thereafter running east and west, and full power was given to lease, purchase, and make all such contracts as would secure the object of such connection. The act of March 27, 1869, amended that act by changing the name of the company to Havana, Mason City, Lincoln, and Eastern Railway Company.
By the acts of Feb. 21, 1861, and Feb. 16, 1865, the Monticello Railroad Company was chartered, with power to build a road from Champaign, by the way of Monticello, to Decatur, all in the State of Illinois. It was authorized to transfer all its stock, property, immunities, and franchises to any other corporation whose line intersected its road, and who would complete the same. On the twenty-eighth day of June, 1872, this company and the other above mentioned entered into articles of consolidai on, merging the two companies into one, whcih was invested with all the powers, franchises, rights, immunities, property, and privileges of either or both of the former companies, and transferring all contracts and obligations, certificates, bonds, &c. The consolidation was made with all the forms and solemnities required by law. The consolidated company assumed the name of one of the companies,–the Havana, Mason City, Lincoln, and Eastern Railway Company.
On the 20th of July, 1869, still another corporation, chartered to construct a railroad from Danville to Pekin, was consolidated with the Indianapolis, Crawfordsville, and Danville Railroad Company, under the name of the Indianapolis, Bloomington, and Western Railway Company.
In its course to the eastern boundary of the State of Illinois, this road passed through Urbana and Champaign City, two places ...