Statement of the Case.

thereon at the rate of six per cent per annum from date, payable on the first days of February and August in each year in like gold coin at the said First National Bank on the presentation and delivery thereto of the coupons hereto annexed as they severally become due.

"This bond is issued by said city in accordance with a resolution passed by the common council thereof on the 5th day of September, A.D. 1893, and also in accordance with the provisions of section 9 of chapter 9 of Act No. 255 of the Local Acts of 1893, of the Legislature of the State of Michigan, providing for the bonding of said city for paying the floating indebtedness and making public improvements, and authorized by a vote of a majority of the qualified electors of said city, voting at an election held for that purpose on the 3d day of April, 1893, under and in accordance with the provisions of the charter of said city providing for the issue of bonds, and all of which said provisions have been fully complied with in the issuance thereof.

"In witness whereof the said city of Ironwood has executed this bond by causing its mayor and city clerk to sign their names hereto under the resolution aforesaid and by causing the city comptroller to countersign the same and to affix the seal of said city thereto. Done at the city of Ironwood, in the State of Michigan, this first day of August, A.D. 1893. "City of Ironwood,

WM. TREBILCOCK,

Mayor.

JOHN EVANS,

City Clerk.

The reference in the bonds to Act No. 255 of the Local Acts of Michigan of 1893 was a clerical error. It should have read Act No. 235 of the Local Acts of Michigan of 1893, a mistake which could have easily been seen by any one consulting the volume of local acts of that year.

Statement of the Case.

It appeared from the evidence that these bonds were part of an issue of one hundred and fifty $1,000 bonds sold by the city of Ironwood to the broking and banking firm of Coffin & Stanton, of New York, under a contract which was entered into by the mayor and common council of the city of Ironwood by their acceptance of the following proposition:

"To the Mayor and Common Council of the City of Ironwood, Michigan:

"GENTLEMEN: We will purchase $150,000 of city of Ironwood six per cent public improvement bonds, dated August 1, 1893, paying for the same $145,275, the said $145,275 to be deposited with us to the credit of the city, and to be paid out as follows: $25,000 on the delivery of the $150,000 bond issue; $25,000 thirty days after date of first payment; $15,000 sixty days after date of first payment; $15,000 three months after date of first payment; $20,000 four months after date of first payment; $20,000 April 15th, 1894; $25,275 May 15th, 1894, bonds to be accompanied by satisfactory papers as to due issuance, statement of debt, population and assessed valuation.

"COFFIN & STANTON, New York."

After Coffin & Stanton had paid the first $25,000 due on this contract and received the bonds, they hypothecated them with the plaintiff, the President and Directors of the Manhattan Company, which is a banking corporation of the State of New York, to secure a loan of $50,000 then made, and to secure to the bank any sums which might be then due or should thereafter become due on other loans by Coffin & Stanton. Before the city of Ironwood could secure a second payment from Coffin & Stanton, they became insolvent and made an assignment for the benefit of creditors. No interest has been paid by the city on the bonds. The court below directed a verdict for the defendant on the ground that the popular election from which the common council and the various city officers assumed to derive authority to issue the bonds, held, as recited in the bonds, on the 3d day of April, 1893, was an

Statement of the Case.

election at which it was not within the corporate power of the electors of the city of Ironwood to confer by their votes authority for this purpose. This writ of error is brought to review the judgment entered upon the verdict thus directed. Section 9 of chapter 9 was the particular section of the local act of Michigan of 1893, No. 235, pp. 36, 69, which was claimed to authorize this issue. That part of it material here was as follows:

"First, The council may provide for the payment of all bonds that have been heretofore issued as they shall mature; "Second, The common council may provide, by bonding the city, for the payment of the present floating indebtedness of said city, as hereinafter in this section provided;

"Third, The common council may purchase of the Ironwood Waterworks Company, and the Hurley Water Company, a corporation, all the water-pipe owned by said companies and now laid in the streets and alleys, and other public places of said city; also purchase the stock, rights, privileges and franchises of said Ironwood Waterworks Company and said Hurley Water Company, and the said common council may provide for the payment of such pipes, stock, privileges and franchises by bonding said city except as hereinafter provided;

"Fourth, To enable the common council to fully and effectually carry out and perform the powers conferred upon them by this section, and to make additional public improvements, they may borrow money at a rate of interest not to exceed six per cent per annum and issue the bonds of the city therefor, signed by the mayor and city clerk and countersigned by the comptroller; but no money shall be borrowed for a longer period than thirty years, and the question of making any loan shall be submitted to the qualified voters of said city at some annual or special election called for that purpose in the same manner as other special elections are called under this act; but before any loan of money shall be authorized by a vote of such electors of said city, written or printed notice shall be posted by the clerk in at least three public places in each ward, specifying the object or objects for which money is proposed to be borrowed. The common council may provide by ordinance,

Opinion of the Court.

the manner of voting upon any question of borrowing money, but the votes shall be canvassed in the same manner as the result of other votes are canvassed by the provisions of this act."

The act was passed on February 24, 1893, and was by its terms to take immediate effect. The city of Ironwood had been organized out of the village of Ironwood by a local act or charter passed on April 8, 1889 (Local Acts of Michigan of 1889, No. 362, p. 455), and this charter was amended in some respects by a local act on May 18, 1891 (Local Acts of Michigan of 1891, No. 225, p. 109). Both the acts of 1889 and of 1891 were repealed by the act of 1893. The title of the act of 1893 was "An act to reincorporate the city of Ironwood, in the county of Gogebic, and add territory thereto and to repeal all acts and parts of acts inconsistent herewith."

Mr. Charles E. Rushmore (Mr. Julian G. Dickinson and Messrs. Stern & Rushmore were with him on the briefs) for plaintiff in error.

Mr. James C. Flanders and Mr. Charles E. Miller (Messr8. Winkler, Flanders, Smith, Bottum & Vilas were on the briefs) for defendant in error.

TAFT, Circuit Judge, after stating the case as above, delivered the opinion of the court.

The case turns on the construction of the charter of the city of Ironwood passed in 1893. We may assume, without deciding, that the officers of the city who signed these bonds had implied power, by virtue of the charter's provisions, to recite in the face of the bonds that the requirements of the act in the issuance of the bonds had been complied with, and thus to estop the city from denying the performance of the conditions precedent to the valid issue of the bonds as against a bona fide purchaser of them without notice. The contention on behalf of counsel for the city is that the bonds recite on their

Opinion of the Court.

face a fact which must invalidate them. They recite that the bonds were issued in accordance with the provisions of section 9 of chapter 9 of Act No. 235 of the Local Acts of 1893 and were authorized by a vote of a majority of the qualified electors of the said city, voting at an election held for that purpose, on the 3d day of April, 1893, under and in accordance with the provisions of the charter of said city providing for the issuance of the bonds, and that all of said provisions have been fully complied with. If reference to this act shows that the common council of the city of Ironwood could not have been authorized to issue the bonds by a popular election held upon the 3d day of April, 1893, then it must follow that the bonds are void in the hands even of the bona fide purchaser. This is clearly established by the case of McClure v. Township of Oxford, 94 U. S. 429, 433.

The bonds in that case were issued by the township of Oxford, Kansas, bearing date of April 15, 1872, and recited that they were issued under an act of the legislature of Kansas, approved on March 1, 1872, authorizing the township to subscribe for stock in the Oxford Bridge Company (Laws of Kansas of 1872, c. 158, p. 320), and in pursuance of a vote of the qualified electors of said township at an election held therein on April 8, 1872. They were adjudged by the Supreme Court to be void, because the act referred to took effect, by its terms, only from its publication in the Kansas Weekly Commonwealth, which did not take place until March 21, and it thus appeared that the election could not have been held pursuant to a notice of thirty days, as required by the act. Said Mr. Chief Justice Waite, speaking for the court: "No valid notice of an election could be given until the act went into effect, because until then no officer of the township had authority to designate the time or place of holding it. These bonds, therefore, carried upon their face unmistakable evidence that the forms of the law under which they purported to have been issued had not been complied with, because thirty days had not elapsed between the time the law took effect and the date of the election. If a purchaser may be, as he sometimes is, protected by false recitals