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Opinion of the court.

bill, with directors of the bank, and that transfers were made by the complainants in many instances, as will be seen, of portions of this judgment, on the faith of which your receiver gave up the assets thus settled and arranged, believing that in law and equity he was bound to do so. In other cases the debtors of the bank, and among them some of the directors, made compromises with the complainants; and in such cases your receiver delivered to the complainants the evidences of the indebtedness of such debtors, on obtaining a credit for the full amount of such assets on the judgment.

He closes the report by returning all the assets in his hands undisposed of, and which were described in the statements and exhibits thereinafter referred to; also, the circulation of the bank which he had taken up, and which, if not all, is nearly all of the circulation that was issued by the bank, and that the only other indebtedness of said bank, of any magnitude, is the debt due the complainants.

Exceptions were afterwards taken to this report by the bank, and allowed. It is not material specially to refer to them. And in November, 1859, it was adjudged and decreed that the receiver pay forthwith into court the sum of $125,243.85, the amount of money in his hands, as receiver, unaccounted for; and also the further sum of $227,044.29, being the amount of bonds, bills, assets, &c., which came into his hands as receiver, and unaccounted for-amounting in all to the sum of $349,259.14; and the receiver having failed to pay into court this sum as ordered, a decree was entered, directing a writ of scire facias against his sureties, among whom were the complainants, Brown Brothers & Co. The sum adjudged against the receiver and his sureties included the assets surrendered on compromises and settlements, and which had been applied upon the judgment, and, of course, embracing the indebtedness of C. R. Bass to the bank, the settlement in respect to which is the subject of controversy in this suit.

The question upon this state and posture of the case is

Opinion of the court.

whether or not the bank is entitled to a remedy against the receiver and his sureties for this old indebtedness of C. R. Bass, deceased, thus compromised and satisfied by the new and substituted securities, and also against the estate or legal representatives of the deceased, founded upon the original securities, which it is claimed were surrendered without authority?

In our judgment it is not. Even assuming that the compromise and surrender of these old securities and the substitution of the new were not authorized, and might have been set aside and annulled, the bank having elected to charge the receiver with this indebtedness, has thereby affirmed the transaction, and left the parties to the arrangement as they stood when it was entered into.

This result, we think, is clearly deducible from the proceedings on the part of the bank and the decrees of the court. From the report of the receiver, it appears that as it respects this debt, and others in the like condition, it was not in his power to produce before the court either the original or substituted securities. The original were in the hands of the debtors of the bank, to whom they had been surrendered, and the new securities in the hands of third persons to whom they had been delivered. The bank, on the supposition that the acts of the receiver were void, could have pursued its remedy against the original debtors, and perhaps against the persons holding the new securities, if not negotiable and in the hands of bonâ fide holders for value, or it could have proceeded by attachment against the receiver and dealt with him until he had exhausted all the means in his power to repossess himself of these securities. But no steps in this direction have been taken. No intimation has been given by any proceeding under the decree dismissing the bill, or otherwise, of an intent to disturb the debtors of the bank or the adjustments by the receiver. It has accepted the proposition of this officer in his report to look to his bond for indemnity against any wrongs or losses sustained in the discharge of the duties of his office. Indeed, it is manifest that a resort to the original debtors or

Opinion of the court.

to the substituted securities for the purpose of collecting or realizing the assets would have been ruinous, not only to the bank but to the debtors. The receiver had been diligently engaged for some thirteen years in the service and had exhausted the resources of the debtors. A second call on them would have been hopeless.

The bank was insolvent, and proceedings were pending to take away its charter. Its organization had been given up as early as 1844, and the business abandoned. In this condition the receiver, under the order of the court, was the only person to deal with its assets, and to administer upon them in a way most beneficial to all concerned.

No doubt this obvious view of the affairs of the institution, together with the complications and inextricable confusion into which the assets had become involved by the dismissal of the chancery suit, led to the election of a remedy against the receiver in preference to a resort against the original debtors.

Another reason for considering the bank concluded by the election is, that no notice has been given to the debtors of an intention to look to them for payment, and at the same time forbidding payment to the holders of the new securities. This notice it was a duty to give, in all fairness, to prevent loss to the debtors. Seven years have elapsed since the decree against the receiver. Doubtless a large portion of these new securities have, in the meantime, been paid. The present appellee, Mrs. Bass, has already paid more than half of her indebtedness upon the new securities.

This absence of any claim against the debtors, as well as against the holders of the substituted securities, shows that great injustice would necessarily result from permitting the defence relied on in the present case. Full value has been received for the notes and mortgage in controversy by Mrs. Bass and by the bank. The old securities were surrendered to her and an equal amount of the indebtedness of the bank extinguished. She has enjoyed the consideration thus paid for some fourteen years without any adverse claim or attempted disturbance of the arrangement. There has been

Syllabus.

no eviction or disturbance of possession by an attempt to foreclose the old mortgage against the lands covered by it. She has been in the undisturbed enjoyment of the rents and profits for aught that appears down to the present time. Even as respects Mrs. Bass, and independently of the foregoing considerations, in analogy to the rule applicable to the sale of real estate, or any interest therein, which obliges the purchaser to pay the purchase-money according to his contract, notwithstanding the failure of title, unless evicted or the possession disturbed by paramount title, the payment of the demand in the present case, we think, should be enforced. The principle is as applicable to the sale of personal chattels as to that of real property.

Upon the whole, without pursuing the case further, our conclusion is, that the defendant below has failed to establish the want of title in the complainant to the mortgage which he is seeking to foreclose and the notes accompanying the same, or a title in the Bank of Mississippi, by force of which she may be subjected to a second payment of the same indebtedness. She does not deny but that she owes the debt, nor does she seek to avoid the payment. The question which is important to her and which she desires to have determined is as to the proper party to receive the payment. We think the complainant is that party.

The decree of the court below reversed and the cause remitted, with directions to that court to enter a decree for the complainant in conformity with this opinion.

DECREE ACCORDINGLY.

MITCHELL V. BURLINGTON.

1. A provision in the charter of a city corporation authorizing it to borrow money for any public purpose, whenever, in the opinion of the City Council, it shall be expedient to exercise it, is a valid power. Rogers v. Burlington (3 Wallace, 654) affirmed.

2. Money borrowed by such a corporation to construct a plank-road, if the

Opinion of the court.

road leads from, extends to, or passes through the limits of the corporation, is borrowed for a public purpose within the meaning of the provision.

3. Havemeyer v. Iowa County (3 Wallace, 294), and Gelpcke v. City of Dubuque (1 Wallace, 175), affirmed, and the doctrine reasserted, that if municipal bonds, when made, were valid by the constitution and laws of a state as then expounded, by the highest judicial authority whose duty it was to interpret them, no subsequent judicial exposition of an opposite kind, will make them invalid.

ERROR to the Circuit Court of the United States for the District of Iowa.

Mr. Grant, for the plaintiff in error; Mr. Ewing, contra.

Mr. Justice CLIFFORD delivered the opinion of the

court.

Plaintiffs sued the corporation defendants, in a plea of debt, declaring on five bonds of one thousand dollars each, issued by the city on the 23d day of March, 1850, and made payable ten years after date, to E. W. Clark, Brother & Co., or bearer, with interest on the same at ten per cent. per annum. The bonds were signed by the mayor and recorder of the city, and purport to have been issued in pursuance of an ordinance of the city, "to provide for procuring and investing the loan of ten thousand dollars to the city, to be invested in the stock of the Burlington and Mount Pleasant Plank-road Company, and for other purposes." Declaration alleged that the plaintiffs became the lawful owners and holders of the bonds before they were due, and that the defendants were liable to pay to them the amount of the bonds.

Defendants appeared and pleaded, among other defences, as set up in the answer, that the plank-road company mentioned in the declaration was a private corporation; that the bonds were executed for the purpose of procuring money to invest in the stock of that company, and that the obligees of the bonds purchased the same, and loaned the money, well knowing that the proceeds of the bonds were to be. used for that purpose. They also set up the defence that

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