Goodman may be in every case a preliminary question | actual custody of the instrument. v. Harvey, 4 A. & E., 870; Goodman v. Simonds, Apply that rule to the question before the court, and it is clear that the ruling of the circuit court was correct, as there is no evidence reported in the transcript which would have warranted the jury in finding the issue for the defendants. Jewell v. Parr, 13 C. B., 916; Toomey v. R. Co., 3 C. B. (N. S.), 150; Wheelton v. Hardisty, 8 El. & Bl., 276; Schuchardt v. Allens, 1 Wall., 369 [68 U. S., XVII., 646]; Grand Chute v. Winegar, 15 Wall., 369 [82 Ú. | S., XXI., 173]. III. Due exception was also taken to the third instruction, which presents a question of commercial law. Standard authorities show that, where a negotiable instrument is originally infected with fraud, invalidity or illegality, the rule is, that the title of the original holder being destroyed, the title of every subsequent holder which reposes on that foundation and no other falls with it. Byles, Bills, p. 118. Where the theory that the plaintiff paid value for the instrument depends solely upon the prima facie presumption arising from the possession of the instrument, the defendant may, if the pleadings admit of such a defense, prove that the instrument originated in illegality or fraud; and the rule is, if he establishes such a defense, that a presumption arises that the subsequent holder gave no value for it, and it is also true that such a presumption will support a plea that the holder is a holder without consideration, unless the presumption is rebutted by proof that the plaintiff paid value for the instrument, in which event the plaintiff is still entitled to recover. Fitch v. Jones, 5 El. & Bl., 238: Smith v. Braine, 16 Q. B., 244; Hall v. Featherstone, 3 H. & N., 287; 2 Pars. Bills & N., 438. But the rule is different when the question is whether the indorsee and holder had notice of the prior equities between the antecedent parties to the instrument. Holders of such instruments, under such circumstances, are not obliged to show that they paid value for the instrument until the other party has clearly proved that the consideration was illegal, or that it was fraudulent in its inception, or that it has been lost or stolen before it came to the possession of the holder. Wheeler v. Guild, 20 Pick., 551; Collins v. Martin, 1 Bos. & P., 648; Miller v. Race, 1 Burr., 452; Peacock v. Rhodes, 2 Doug., 632. Possession, even without explanation, is pri ma facie evidence that the holder is the proper owner or lawful possessor of the instrument; and the settled rule is, that nothing short of fraud, not even gross negligence, is sufficient to overcome the presumption and invalidate the title of the holder, as inferred from his None of these propositions can be controverted; and it follows that where the first indorsee purchases the instrument before due and pays value, without notice of any prior equities, the second indorsee holding under the first takes a good title, even though he had notice of such prior equities, if he purchased the instrument in the regular course of business before it became due, for the reason that he took a new and independent title under another indorser. Bailey v. Bidwell, 13 M. & W., 73. Notice of such prior equities cannot affect the title of the second holder, if he acquired title from a prior holder who had no such knowledge. Byles, Bills, 5th Am. ed., 118; Story, Notes, sec. 196; Story, Bills, sec. 220. Suffice it to say, without pursuing the inquiry, the court is unhesitatingly of the opinion that the exception to the third instruction must also be overruled. IV. Proof was offered by the defendants to show that the charter of the railway company was amended subsequent to the subscription to the stock, so as to include branches four hundred and fifty miles in length, in addition to the original line, without the knowledge or consent of the County Commissioners or of the directors of the railway company resident in the County; but the plaintiff objected to the evidence, and it was excluded by the court; to which ruling the defendants then and there excepted, which presents the same question as that which arises from the exception taken to the fourth instruction given to the jury, as follows: that the amendment of the charter is no defense to the action if the bonds were purchased by the bank before due and for value. Counties, if duly organized under the law of the State, are certainly vested with the power to subscribe for stock in a railway company, and to issue the bonds of the County to pay for such subscription. Suppose that is so; still it is insisted by the defendants that the bonds delivered to the railway company in this case impose no pecuniary obligation upon the County, in consequence of the defects and irregularities in the proceedings of the municipal authorities, and the frauds and misrepresentations of the officers and agents of the railway company. In conducting the defense at the trial, the defendant proceeded upon the ground that the plaintiff had knowledge of the supposed defects, irregularities, frauds and misrepresentations; but the finding of the jury under the instructions of the court negatives every such imputation, and shows that the plaintiff is a bona fide holder of the instruments, having purchased the same in the usual course of business before due and for value. That such is the legal effect of the verdict, cannot be doubted; and it appears by the recital of the bonds that they were issued in payment for two thousand shares of the capital stock of the railway company subscribed by the County, in pursuance of an order of the County Commissioners, made and entered in their minutes. Bonds of the kind executed by a municipal corporation to aid in the construction of a rail road, if issued in pursuance of a power conferred by the Legislature, are valid commercial instruments, and, if purchased for value in the usual course of business before they are due, give the holder a good title, free of prior equities between antecedent parties, to the same extent as in case of bills of exchange and promissory notes. Such a power is frequently conferred, to be exercised in a special manner or subject to certain regulations, conditions or qualifications; but if it appears that the bonds issued show by their recitals that the power was exercised in the manner required by the Legislature, and that the bonds were issued in conformity to the prescribed regulations and pursuant to the required conditions and qualifications, proof that any or all of the recitals are incorrect will not constitute a defense to the corporation in a suit on the bonds or coupons, if it appears that it was the sole province of the municipal officers who executed the bonds to decide whether or not there had been an antecedent compliance with the regulations, conditions or qualifications which it is alleged were not fulfilled. St. Joseph v. Rogers, 16 Wall., 659 [83 U. S., XXI., 336]; Coloma v. Eaves, 92 U. S.. 484 [XXIII., 579], Other cases, too numerous for citation, have been decided by this court to the same effect, but suffice it to say that we are all of the opinion that there is no error in the record. Judgment affirmed. The defendant in error brought suit and recovered judgment in the court below, upon certain bonds; whereupon the defendant sued out this writ of error. Messrs. J. W. English, L. M. Stoddard and John C. Douglass for plaintiff in error. Messrs. Clough & Wheat and Stillings & Fenlon, for defendant in error: Mr. Justice Hunt delivered the opinion of the court: This action is brought upon certain bonds and coupons issued by the County above named in the month of July, 1865. It is found by the judge, who tried the cause without a jury, that the bonds were issued by the County, and that the plaintiff below was the owner and holder, and purchased them without actual notice of the defenses set up, and for value paid. The defenses to the recovery upon the bonds resolve themselves into the following: First. The bonds recite that they are issued under the provisions of the Act of the State of Kansas, approved Feb. 10, 1865, entitled "An Act to Authorize Counties and Cities to Issue Bonds to Railroad Companies. They bear date of July 1, 1865, and are payable on the first day of July, 1875. This Act authorized the counties to make subscription to the capital stock of a railroad company, and to issue bonds in payment there Cited -96 U. S., 277; 107 U. S., 542; 111 U. S., 94; 15; for, payable within thirty years, at a rate of inBlatchf., 152, 159; 2 Flipp., 489; 73 N. Y., 291. THE BOARD OF COUNTY COMMISSIONERS OF THE COUNTY OF LEAVENWORTH, Piff. in Err., อ. ROBERT A. BARNES. (See S. C., 4 Otto, 70-73.) terest not exceeding seven per cent. A previous assent of the qualified electors of the county, at an election, of which twenty day's notice should be given, was required. It is contended that without this Act there was no authority in the County to issue the bonds in suit, and that the Act was never legally passed. The objection is that the yeas and nays were not called and entered on the journal, on the final passage of the bill; and, again, that the enrolled bill was not signed by the presid State decisions-county bonds, when valid-es- ing officer of the Senate. toppel. 1. The decision by the Supreme Court of Kansas, which gives construction to one of its own statutes, will be followed by this court. 2. County bonds are not invalid for the reasons that the only vote taken by the electors of the county was before the passage of the Act authorizing it, where the law authorizes the adoption of such previous vote by the electors. 3. Where a county subscribed for stock of a railroad company and held it for several years and then sold it by authority of the Legislature, the county, when sued on its bonds given for the stock, is estopped to say that there was an irregularity in the organization of the company. [No. 662.] Submitted Jan. 8, 1877. Decided Jan. 22, 1877. IN ERROR to the Cirit of Kansas. N ERROR to the Circuit Court of the United NOTE.-Jurisdiction of U. S. Supreme Court to deciare state law void as in conflict with state constitution; to revise decrees of state courts as to construction of state laws. Power of state courts to construe their own statutes. See note to Jackson v. Lamphire, 28 U. S. (3 Pet.), 280. It is for state courts to construe their own statutes. specially authorized to by statute. See note to Com. Bk. v. Buckingham, 46 U. S. (5 How.), 317. Supreme Court will not review their decisions unless In what instances U. S. Courts do not follow state decisions. See note to U. S. v. Muscatine, 75 U. S., XIX., 490. The recent decision of the Supreme Court of Kansas, in a suit against this same County, and upon this identical statute, relieves us from all embarrassment upon this question. It is a decision by the Supreme Court of that State giv ing effect and construction to one of its own statutes, and, according to well settled rules, will be followed by this court. The question is discussed at much length, many local authorities in support of their conclusion are cited, and the Act is held to have been legally passed, and to be a binding Act. We must hold in ac cordance with this decision. Second. It appears by the record that on the 2d day of January, 1865, the Board of County Commissioners called an election for the 21st day of that month, for the submission to the electors of the question of subscribing to the stock of the Leavenworth and Missouri-Pacific Railroad Company; that an election was held on that day, at which seven hundred and eightyfour votes were cast in favor of the subscrip that on the 18th day of April the chairman of tion, and one hundred and eleven against it; the Board was directed by the Board to make the bonds were issued in payment thereof. the subscription; and that on the first day of July It is now objected that the bonds are invalid for the reason that the only vote taken by the| electors of the County was before the passage of the Act authorizing it. The law in question appears, from the printed volume of the Statutes of Kansas, to have been approved on the 10th day of February, 1865, and to have been published on the 14th day of the same month. [67 U. S.,. XVII., 342]; Zabriskie v. R. R. Co., 23 How., 400 [64 U. S., XVI., 497]; Pendleton v. Amy, 13 Wall., 297 [80 U. S., XX., 579]. There are some other objections made, but none of them are serious in their character. The judgment should be affirmed. Cited-98 U. S., 102; 5 Dill., 336; 80 N. Y., 447: 36 Am. Rep., 647. The Act we are considering authorizes the counties into, from or near which any railroad is or may be located, to subscribe to the capital stock thereof, and to issue its bonds in payment of such subscription. It proceeds to say; "But no such bonds shall be issued until the question shall be first submitted to a vote of the qualified electors of the county at some general election, or some special election, to be called STATE OF WISCONSIN, on the relation of by the Board of County Commissioners by first giving twenty days' notice in some newspaper published and having general circulation in the county * ** If a majority of the votes cast at such election shall be in favor of issuing such bonds, the Board of Commissioners of the county shall issue the same. The road in question was located and built in and through the County of Leavenworth. The 4th section of the Act of February, 1865, contained this provision: * "In case the Board of Commissioners of any such county * * have heretofore submitted to the electors of such county the question of issuing bonds to any railroad company, and at such election such electors voted to issue such honds, such board are hereby authorized to is sue such bonds and subscribe for stocks not exceeding the amount as provided in the 1st and 3d sections of this Act." Stat. Kan., 1865, p. 42. PETER DOYLE, SECRETARY OF STATE OF THE STATE OF WISCONSIN, Plff. in Err., v. The case is fully stated by the court. Messrs. Wm. Allen Butler, Thos. E. Stillman, Thos. W. Hubbard and I. C. Sloan, for plaintiff in error. Mr. Chas. W. Felker for defendant in error. Mr. Chief Justice Waite delivered the opin In the present case, a majority of the electors voting declared themselves in favor of the sub-ion of the court: scription and issue of the bonds. This is all that is required either by the 1st or the 4th section. The same rule is intended to be applied in each case. On the 15th day of August, 1876, the Supreme Court of Wisconsin rendered a judg ment ordering that a peremptory writ of mandamus do forthwith issue out of and under the This is an explicit authority from the Legis- seal of the court, to be directed to the respondlature to the County Board to adopt any previent (plaintiff in error), commanding him, and ous expression of the electors of their willingness to make such subscription. It is concluSive upon the point under consideration. Third. It is objected, again, that the bonds were issued to the Leavenworth and MissouriPacific Railroad Company, whereas it is alleged that no such company was in existence on the 21st day of January, 1865, when the election was heid, or on the 1st day of July, when the bonds were issued. This company was organized in 1860, under the name of the Missouri River Railroad Company, and on the 18th of April, 1865, it consolidated with another company, increased its capital, and changed its name to that of the Leavenworth and Missouri-Pacific Railroad Company. We suppose this to have been authorized by the Statutes of Kansas. Laws, 1862, p. 768. We are certainly of opinion that when the parties interested in the two companies are content; when the newly named company has been in operation for ten years; when the county has received and held its stock until 1869; when the same was sold by the county by authority of the Legislature, it is not competent for such a contracting party to say that there was an irregularity in the organization of the company. Big. Estop., 464; Moran v. Comrs., 2 Black, 722 in his absence the Assistant Secretary of State, forthwith, within twenty-four hours after the service of the writ," to recall the license given by him to the Continental Insurance Company of the City of New York to do business in that State. The writ was issued and served on the same day, and on the next, August 16, its command was obeyed. On the 10th October, 1876, this writ of error was sued out in due form, and bond given to operate as a supersedeas. The plaintiff in error now moves that all the proceedings in execution of the judgment within ten days after its rendition may be vacated and set aside and that all further process be stayed. The claim on the part of the plaintiff in error is, that as a writ of error to operate as a supersedeas might issue from this court to re-examine the judgment of the court below, a writ to carry the judgment into effect could not issue from the State Court until the expiration of ten days after the rendition of the judgment. Whether this is so or not depends upon the effect to be given to that clause in section 1007, Revised Statutes, which reads as follows: "And in such cases, when a writ of error may be a supersedeas, executions shall not issue until the expiration of ten days;" that is to say, until the expiration of ten days after the rendition of | CHARLOTTE the judgment. The writ of error was issued in this case under section 709 of the Revised Statutes, which is a reproduction of section 25 of the Judiciary Act of 1789, 1 Stat. at L. 85, as amended before the revision. The part of section 1007 referred to is the reproduction of a similar provision in section 23 of the same Act. The Revised Statutes are a revision and consolidation of the old statutes, rather than an enactment of new. 16 Stat. at L., 96; 14 Stat. at L., 74, sec. 2. Section 5600 provides that "The ar rangement and classification of the several sections of the revision have been made for the purpose of a more convenient and orderly arrangement of the same and, therefore, no inference or presumption of a legislative construction is to be drawn by reason of the title under which any particular section is placed." This makes it proper that we should look to the original Act to ascertain the legislative intent in cases of doubt. * * THOMAS R. LOVETT, Deceased, Appt., v. UNITED STATES. (See S. C., 4 Otto, 53-69.) Contract, by letters-tenant's duty-payment— modification of lease-use of premises-accidental damages. 1. When a contract is entered into by correspondence, the whole correspondence must be considered in determining what the parties have agreed to. 2. The relation of landlord and tenant implies an obligation that the tenant, while using the property, will exercise reasonable care to prevent damage to the inheritance. 3. Such implied obligation does not make a tenant answerable for accidental damages, or bind him to rebuild, if the buildings are burned down or otherwise destroyed by accident, but makes him liable for voluntary waste. 4. Payment by a debtor, of a part of his debt, is not a satisfaction of the whole, except it be made and accepted upon some new consideration. 5. The acceptance by a landlord, of reduced rent from the expiration of an original lease, without objection, is conclusive evidence of his assent to its modification in this particular. 6. The use of the premises for a small-pox hospital, where all the receipts for the rent expressly state that the property was being so occupied, and no objection to such an occupancy was ever made, furnishes no ground of recovery. [Nos. 152, 153.] Argued Jan. 8, 1877. Decided Jan. 29, 1877. APPEALS from the Court of Claims, Going, then, to the old law, we find that section 22 relates entirely to writs of error for the review of judgments and decrees in the courts of the United States. Then follows section 23, which provides "that a writ of error as aforesaid." clearly referring to the writ provided for in the preceding section, "shall be a supersedeas, and stay execution in cases only where the writ of error is served * within ten days, Sundays exclusive, after rendering the judgment or passing the decree complained of. Until the expiration of the term of ten days, execution shall not issue in any case where a writ of error may be a superse deas." Read in this connection, it is clear that the provision for delay of execution refers only to judgments and decrees in the courts of the United States. Section 25 then provides for writs of error to a state court, and adopts the regulations of section 22, as to the writ and proceedings under it, but omits entirely any direction as to delay of execution upon the judg-v. ment. From this we think it manifest that it was not the intention of Congress, under the Act of 1789, to interfere at all with the practice of the state courts as to executions upon their judg. ments, until a supersedeas was actually perfected, and that the same effect must be given to the corresponding sections of the revision. In Bd. of Comrs. v. Gorman, 19 Wall., 664 [86 U. S., XXII., 227], we held that if an execution was issued upon a judgment in the courts of the United States after the expiration of ten days, a supersedeas afterwards obtained would prevent further proceedings under the execution, but would not interfere with what had already been done. Applying this principle to the case in hand, it follows that, as the writ of mandamus was rightfully issued and served before the supersedeas was obtained, this motion must be denied. Mr. Edwin B. Smith, Asst. Atty-Gen., the United States: for "If a proposition be made with certain conditions or limitations, the acceptance must correspond to it in terms, or otherwise it will be considered a new proposition, requiring the subsequent assent of the other party to render it binding.' 1 Story, Cont., 5th ed., 1874, 455; Slaymaker Irwin, 4 Whart., 369; Honeyman v. Marryatt, 6 H. of L. Cas., 112. There was no liability to rebuild in case of fire. Tayl. Land. & Ten.. 101, sec. 146; Leach v. Thomas,7 Carr. & P., 327; Horsefall v. Mather, Holt, 7; Brown v. Crump, 1 Marsh., 567; Rook v. Warth, 1 Ves. Sr., 462; Wainscott v. Silvers, 13 Ind., 497; Warner v. Hitchins, 5 Barb., 666. The stipulation for rent at $500 was positive only for one year, to be continued for three more if desirable. It was paid for that year, except for July and a fraction of August. To avoid a return of the premises to him at the expiration of the year, the claimant assented to a reduction, commencing before the year closed. Whatever his motive, he is bound by his assent; especially as the Government continued an optional occupancy upon the faith of his acquiescence. U. S. v. Clyde, 13 Wall.,35 (80 U. S., XX.,479.) Messrs. Carlisle & McPherson, for Bostwick: The difference between small-pox and ordinary diseases is recognized in Rex v. Sutton, 4 M. & S., 532; Rex v. Vantandillo, 4 Maule & S., 73; and Rex v. Burnett, 4 Maule & S., 272. It is an indictable offense to set up a smallof pox hospital near the public streets. 3 Chit. Cr. Law, 636. These authorities take this disease out of the | category of ordinary diseases, and exclude from the agreement for reception of sick persons generally, those diseased persons whose distemper necessarily infects the premises rented. Independently of any express agreement, the law imposed upon every tenant, whether for life or years, an obligation to treat the premises in such a manner that no substantial injury may be done to them, and so that they may revert to the lessor at the end of the term, unimpaired by any wilful or negligent conduct on his part. Tayl. Land. & Ten., sec. 1, par. 343: extract from 2 Rob. Pr., 384, 385; White v. Nicholson, 4 Man. & G., 95; 43 E. C. L., 58. Comyn, "to treat the premises demised in such manner that no injury be done to the inheritance, but that the estate may revert to the lessor undeteriorated by the willful or negligent conduct of the lessee." Com. Land. & T., 188. This implied obligation is part of the contract itself, as much so as if incorporated into it by express language. It results from the relation of landlord and tenant between the parties which the contract creates. Holford v. Dunnett, 7 M. & W., 352. It is not a covenant to repair generally, but to so use the property as to avoid the necessity for repairs, as far as possible. Horsefall v. Mather, Holt, 7; Brown v. Crump, 1 Marsh., 569. Payment of a part of a debt is no legal sat- There are in this contract no stipulations to isfaction of the debt, although the creditor re-take the place of or in any manner restrict this ceive a smaller sum in full discharge of the full demand, and give a receipt accordingly." Chit. Cont., 578; and cases cited. Mr. Chief Justice Waite delivered the opinion of the court: In the determination of this cause, it is nec essary at the outset to ascertain definitely the terms of the contract under which the United States occupied the property of the petitioner. On the one hand, it is claimed that the propo sition of Mr. Lovett was accepted by Gen. Mansfield with modifications, and that all the stipulations suggested by him are included in the contract as finally entered into, unless modified or rejected in terms by the note of Gen. Mansfield. On the other hand it is contended by the United States that the note of Gen. Mansfield, instead of being an acceptance of the proposition, was a rejection of it, with an offer of new terms, which, when acceded to by Mr. Lovett, embraced all there was of the contract as made. The latter, we think, is the true construction of the correspondence. We know that, when a contract is entered into by correspondence, the whole correspondence must be considered in determining what the parties have agreed to; but we also know that both parties must assent to a proposed agreement before either is bound by it. Here Gen. Mansfield has nowhere indicated a willingness to accept any of the terms offered him, but, rejecting all, has made a new offer of his own. No reference whatever is made by him to any of the special stipulations suggested by Mr. Lovett. All these are laid aside, and he states the terms upon which the United States will hire the property. The words "as above," where they occur in his note, are used to designate the property, not to extend the offer. In short, Mr. Lovett proposed his terms, and General Mansfield his. Mansfield's were accepted, but Lovett's were not. This being the case, the contract is one by which Mr. Lovett agreed to let and the United States to hire the premises described for the term of one year, with the privilege of three, at a rent of $500 a month, and without restric tion as to the use to which the property might be put. The United States agree to nothing in express terms, except to pay rent and hold for one year. But in every lease there is, unless excluded by the operation of some express covenant or agreement, an implied obligation on the part of the lessee to so use the property as not, un necessarily to injure it, or, as it is stated by Mr. implied obligation on the part of the United States growing out of their relation to the petitioner as his lessees. They had the free and unrestricted right to use the property for any and all purposes, but were bound to so conduct themselves in such use as not to cause unnecessary injury. Whatever damages would necessarily result from a use for the same purpose by a good tenant must fall upon the lessor. All that the relation of landlord and tenant implies in this particular is, that the tenant, while using the property, will exercise reasonable care to prevent damage to the inheritance. His obligation rests upon the maxim, Sic utere tuo ut alienum non lædas. If he fails in this, he violates his contract and must respond accordingly. The United States, when they contract with their citizens, are controlled by the same laws that govern the citizen in that behalf. All obligations which would be implied against citizens under the same circumstances will be implied against them. No lease in form was ever executed in this case; but the contract, followed by the delivery of possession and occupation under it, is equivalent for the purposes of this action to a lease duly executed, containing all the stipulations agreed upon. Such being the agreement of the parties, it remains only to consider the questions arising under it, as they appear in the record: 1. As to the rent. The United States hired for a year absolutely, at the agreed rent of $500 a month, and occupied during the whole of that term. They, therefore by their agreement, were expressly bound to pay rent at that rate for the whole of the year. This they have paid in full to June 30; but after that until the end of the year, Aug. 23, 1862, their payments have been only at the rate of $250 a month. Payment by a debtor, of a part of his debt, is not a satisfaction of the whole, except it be made and accepted upon some new consideration. It is not found that there was any new consideration in this case. All that appears is, that an account was made out for the rent from July 1 to September 30, at the new rate, and that this account was receipted by Mr. Lovett after payment. Upon this finding, therefore, in the ab sence of anything more, showing that the reduction in the rent of the first year was part of the agreement to continue the lease beyond the year upon new terms, the petitioner will be entitled to judgment for rent at the rate of $250 a month, from June 30 to August 23, 1862, that being the balance remaining after deducting payments made. |