tions of its validity must be deemed to have put that question at rest. Houston v. Robertson, 2 Tex. 23; Hancock v. McKinney, 7 Tex. 384, 441, 442.”

In view of the grounds upon which the court rests its decision, it is unnecessary for us to discuss the extent of relief to which Preston is entitled.

For the reasons stated we cannot assent to the opinion and judgment in this case.

(109 U. S. 341)

INHABITANTS OF THE TOWNSHIP OF BERNARDS, in the County of Somerset and State of New Jersey, v. STEBBINS, Ex'r, etc.

SAME v. MORRISON and another.

(November 26, 1883.)

MUNICIPAL BONDS-DEFECTIVE EXECUTION-OMISSION OF SEAL-ACTION BY CITIZENS OF ANOTHER STATE-TRANSFER TO GIVE JURISDICTION.

If commissioners, authorized by statute to subscribe in the corporate name of town for stock in a railroad company, and, upon obtaining the consent of a cer. tain majority of tax-payers, to issue bonds of the town under the hands anc seals of the commissioners, and to sell the bonds and invest the proceeds of the sale in stock of the railroad company, which shall be held by the town with all the rights of other stockholders, issue, without obtaining the requisite consent of tax-payers, to the railroad company, in exchange for stock, such bonds signed by the commissioners, but on which the seals are omitted by oversight and mistake; and the town sets up the want of seals in defense of an action at law afterwards brought against it by one who has purchased such bonds for value, in good faith, and without observing the omission, to recover interest on the bonds, a court of equity, at his suit, will decree that the bonds be held as valid as if actually sealed before being issued, and will restrain the setting up of the want of seals in the action at law.

A bill in equity in the circuit court of the United States against a town in one state by a citizen of another, for relief against the accidental omission of seals from bonds of the defendant, payable to bearer, and held by the plaintiff, some of which are owned by him, and others of which are owned in different amounts, part by citizens of the state in which the town is, and part by citizens of other states, and have been transferred to him by the real owners for the mere purpose of being sued, should be dismissed, under the act of March 3, 1875, c. 137, 5, so far as regards all bonds held by citizens of the same state as the defendant, and bonds held by a citizen of another state to a less amount than $500.

Appeal from the Circuit Court of the United States for the District of New Jersey.

Alvah A. Clark and Thos. N. McCarter, for Inhabitants of Township of Bernards.

H. C. Pitney, for Stebbins, Ex'r, etc.

Cortlandt Parker, for Morrison and Hutchinson.

GRAY, J. These are appeals by a township in New Jersey from decrees of the circuit court of the United States for the district of New Jersey, upon bills in equity by the appellees for relief against the ac

cidental omission of seals on its bonds. The facts appearing by the record, are as follows:

By the General Laws of New Jersey, the inhabitants of each township in the state are a body politic and corporate, by the name of "The Inhabitants of the township of -, in the county of Rev. St. N. J. 1877, p. 1191. On the ninth of April, 1868, the legislature of New Jersey passed a statute entitled "An act to authorize certain towns in the counties of Somerset, Morris, Essex, and Union to issue bonds and take stock in the Passaic Valley & Peapack Railroad Company," the first section of which directed the circuit court of either of those counties, on the application of 12 or more freeholders and residents of any township therein, situated along the route of the railroad, to appoint three "commissioners for such township to carry into effect the purposes and provisions of this act." The next two

sections are as follows:

"Sec. 2. It shall be lawful for said commissioners to borrow, on the faith and credit of their respective townships, such sum of money, not exceeding ten per centum of the valuation of the real estate and landed property of such township, to be ascertained by the assessment rolls thereof respectively for the year eighteen hundred and sixty-seven, for a term not exceeding twentyfive years, at a rate of interest not exceeding seven per centum per annum, payable semi-annually, and to execute bonds therefor, under their hands and seals respectively. The bonds so to be executed may be in such sums, and payable at such times and places as the said commissioners and their successors may deem expedient; but no such debt shall be contracted or bonds issued by said commissioners of or for either of said townships until the written consent shall have been obtained of the majority of the tax-payers of such township, or their legal representatives, appearing upon the last assessment roll, as shall represent a majority of the landed property of such township (including lands owned by non-residents) appearing upon the last assessment roll of such township. Such consent shall state the amount of money authorized to be raised in such township, and that the same is to be invested in the stock of the said railroad company, and the signatures shall be proved by one or more of the commissioners. The fact that the persons signing such consent are a majority of the tax-payers of such township, and represent a majority of the real property of such township, shall be proved by the affidavit of the assessor of such township, indorsed upon or annexed to such written consent, and the assessor of such township is hereby required to perform such service. Such consent and affidavit shall be filed in the office of the clerk of the county in which such township is situated, and a certified copy thereof in the town clerk's office of such township, and the same, or a certified copy thereof, shall be evidence of the facts therein contained, and received as evidence in any court in this state, and before any judge or justice thereof.

66

'Sec. 3. The said commissioners authorized by this act may, in their discretion, dispose of such bonds, or any part thereof, to such persons or corporations and upon such terms as they shall deem most advantageous for their said township, but not for less than par; and the money that shall be raised by any loan or sale of bonds shall be invested in the stock of said railroad company for the purpose of building the aforesaid railroad, and said money shall be applied and used in the construction of said railroad, its buildings, equipment, and necessary appurtenances, and for no other purpose. The commissioners respectively, in the corporate name of each of their said townships, shall subscribe for and purchase stock in said railroad company to the amount

they may have severally borrowed as aforesaid; and by virtue of such subscription or purchase of stock, upon receiving certificates for the amount of said stock so subscribed for or purchased by them, the said townships shall acquire all the rights and privileges respectively of other stockholders of said company, and it shall be lawful for the commissioners provided for in this act, or either of them with the consent of the others, or a majority of the said commissioners, to participate in and to act in all the regular and legally authorized meetings of the stockholders, and either of them may act as director of said company, if he shall be duly elected as such."

By section 4, the commissioners were directed to report annually to the township committee the amount required for the next year to pay the interest or principal of the bonds, and to apply in payment thereof the dividends on the stock subscribed or purchased for the township; and any deficiency was to be assessed and levied upon the landed property of the township, like other taxes. By section 5, the railroad company might agree with the commissioners, "in behalf of their respective townships," to pay the interest accruing "on the bonds issued by such townships," for three years, or until the railroad should be completed and earning sufficient to pay dividends equal to the interest. By section 6, the commissioners might, after acquiring stock, exchange it for bonds issued, and cancel the bonds so received; or they might, with such consent as mentioned in section. 2, sell the stock for cash at public sale, and apply the proceeds to the purchase or redemption of the bonds. And by section 7, at the end of 25 years, the sum due for principal and interest on the bonds, as reported by the commissioners, was to be assessed and levied on the landed property. By section 9, the commissioners were required, before entering upon the discharge of their duties, to give bond to the township, with sureties approved by the township committee or by the judge of the county court. By section 11, their pay and disbursements were to be "audited and paid by the township committee, the same as other township expenses." By section 12, the commissioners in each township were to "constitute a board to act for their said townships respectively." And by section 14, all bonds issued were required to be registered in the office of the county clerk, and the words "registered in the county clerk's office" be printed or written across the face of each bond, attested by the signature of the county clerk, "and no bond shall be valid unless so registered."

Commissioners for the township of Bernards, in the county of Somerset, were appointed, and gave bond to the township according to sections 1 and 9. On the seventeenth of December, 1868, they filed in the county clerk's office the written consent of a number of taxpayers, not being a majority of all the tax-payers in the township, but being a majority in number and value of the owners of real estate therein; with an affidavit of one of the commissioners to the signatures; and an affidavit of the assessor that the signers were a majority of the tax-payers of the township and represented a majority of the real property of the township, and also that they were a ma

jority of the tax-payers of the township appearing upon its assessment roll for 1867, or their legal representatives, and represented a majority of the landed property of the township appearing upon that assessment roll.

In the same month of December, 1868, the commissioners subscribed in behalf of the township for stock in the railroad company, of the value of $127,000, which did not exceed 10 per cent. of the assessed valuation of the landed property of the township in 1867; and caused bonds of the township to an equal amount to be printed in the form hereinafter set forth; and made an arrangement with the railroad company to exchange the bonds of the township for stock in the company, and to deliver the bonds of the company in installments, as calls for payments on subscriptions were made, and as the work on the railroad progressed. The railroad was afterwards built and put in operation through the town; and the commissioners issued to the railroad company, in exchange for stock, instruments to the amount aforesaid, in the form of bonds, of the denominations of $1,000, $500, and $100, respectively, signed by the commissioners, but not sealed, with interest coupons annexed. The form of the bonds and of the coupons was as follows:

"No.

United States of America.

$500.

"TOWNSHIP OF BERNARDS, SOMERSET COUNTY, STATE OF NEW JERSEY. "The inhabitants of the township of Bernards, in the county of Somerset, acknowledge themselves to owe to bearer five hundred dollars, which sum they promise to pay the holder hereof, at the American Exchange National Bank, in the city of New York, twenty-three years after the date hereof, and interest thereon at the rate of seven per cent. per annum, payable semi-an nually on the first days of July and January in each year, until the said prin cipal sum shall be paid, on the presentation of the annexed interest coupons at the said bank.

"This bond is one of a series of like tenor, amounting in the whole to the sum of one hundred and twenty-seven thousand dollars, issued on the faith and credit of said township in pursuance of an act entitled 'An act to authorize certain towns in the counties of Somerset, Morris, Essex, and Union to issue bonds and take stock in the Passaic Valley & Peapack Railroad Company,' approved April 9, 1868.

"In testimony whereof the undersigned, commissioners of the said township of Bernards, in the county of Somerset, to carry into effect the purposes and provisions of the said act, duly appointed, commissioned, and sworn, have hereunto set our hands and seals the first day of January, in the year of our Lord one thousand eight hundred and sixty-nine.

"Registered in the county clerk's office.

"JOHN H. ANDERSON,
"JOHN GUERIN,

"OLIVER R. STEELE,
"Commissioners."

"WILLIAM Ross, Jr., County Clerk."

"$17.50. The inhabitants of the township of Bernards, in the county of Somerset, will pay the bearer, at the American Exchange National Bank, in

the city of New York, seventeen 50-100 dollars, on the first day of January 1889, for six months' interest on bond No.

"JOHN H. ANDERSON,

"JOHN GUERIN,
"OLIVER R. STEELE,
"Commissioners."

One-fifth of the whole amount of bonds was signed by the commissioners and delivered to the railroad company on the sixteenth of January, 1869, was registered on the eighteenth of the same month, and was afterwards put in circulation by the company. Upon a bill filed by certain tax-payers of an adjoining township in the spring of 1869, the court of chancery of New Jersey restrained the issue of like bonds, for want of the consent of a majority of all the tax-payers of the township. Lane v. Schomp, 5 C. E. Green, 82. The commis

sioners thereupon obtained, and filed in the county clerk's office on the first of September, 1869, the written consent of other tax-payers, which, with those whose consent had been previously filed, constituted a majority of all the tax-payers in the township, with similar affidavits of commissioner and assessor; and the remaining four-fifths of the bonds were afterwards issued and registered, and put in circulation. Of the bonds in controversy, some were issued before, and some after, the first of September, 1869.

The commissioners intended to issue, and supposed that they had issued, perfect bonds, and their failure to affix their seals to the bonds was by oversight and mistake. The bonds were purchased by the present owners in good faith, in open market, for the then market price of from 85 to 100 cents on a dollar, and without observing that they had no seals.

Cyrus Curtis, a citizen of New York, (of whom the appellee in the first case is the executor,) held and owned such bonds to the amount of $2,000, and held like bonds to the amount of $3,000, owned by other citizens of New York, in amounts varying from $1,300 to $500 each, except that one owned only $200, and delivered by them to him solely for the purpose of bringing suit on the coupons; and also held coupons, past due and unpaid, upon like bonds to the amount of $18,600, owned by citizens of New Jersey, who had assigned those coupons to him for the sole purpose of collecting the amount thereof. Thomas H. Morrison and Gardner S. Hutchinson, citizens of New York, (the appellees in the second case,) held and owned such bonds to the amount of $10,000, and also held like bonds to the amount of $12,000, owned by other persons, citizens of New York or Pennsylvania, in amounts varying from $6,000 to $500 each, as well as bonds to the amount of $5,100, owned by citizens of New Jersey, all which bonds had been transferred to them by the owners for the mere purpose of collecting the unpaid coupons thereon. In April, 1874, actions of debt were brought by Curtis, and by Morrison and Hutchinson against the township, in the circuit court of the United