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sue of debentures at the time when defendant signified its intention not to take it. What was the situation at this time? The defendant, relying upon the conduct of the board, had gone to substantial expense to prepare the debentures; had employed its energies towards finding a market therefor; had incurred substantial preliminary expenses, which were justified by its allowable confidence that the plaintiff would meet its obligations; had retained counsel to pass upon plaintiff's obligations. All of these outlays and inconveniences were factors of substantial damages it would sustain, should plaintiff finally refuse it the securities, and they were likewise substantial incidents binding upon plaintiff by way of executing a contract of which they were implications. On the other hand, the board had incurred expense in advertising for tenders, which was uselessly made, if it could not hold defendant to its proposition, for undoubtedly other tenders made in competition with defendant's were not available for the board's reconsideration. The latter, also, by way of executing the agreement, had met every demand made upon it by the defendant, even, in response to exigencies urged by defendant, going to the trouble of sending its officer to another province to get the minister's counter signature, and thus to anticipate, for defendant's benefit, the date of delivery of the first $100,000. Finally, it had executed, ready to deliver, securities which met the defendant's approval, and which were valid and indefeasible obligations of the district.

Pending the taking of these steps it had taken advantage of a law, knowledge of which concluded the defendant, and had entered into obligations requiring the expenditure of the money which these securities were to bring into its treasury. Failure to negotiate the debentures involved it in serious embarrassment, which only the default of the defendant brought about. These matters involved defendant in responsibility to plaintiff. If the contract of April 16 had avoided every technical criticism urged against it, i. e., if it had been sealed and had contained no terms and conditions which were beyond the corporate powers of the plaintiff, everything done between its date and the date of defendant's repudiation, by either defendant or plaintiff, was consistent therewith, and was an act pertinent to the execution thereof, wherefore the implied contract was precisely on valid lines. On the principle of the decisions in Township of King v. Beamish, 36 Q. L. R. 325, Marshall v. Queensborough, 1 Simons & Stuart, 523, Paterson v. Railway Co., 17 Grant, 521, and others of the same class, it is very difficult to see why mutuality has not here obtained, justifying relief at law, as in controversies of the character cited specific performance was enforced because of the inadequacy of the law.

We very much doubt, and are prepared to decide adversely, if necessary, to a decision in this case, whether defendant is competent to urge these alleged ultra vires conditions at this time. The analogy is compelling between this situation and that in State ex rel. v. Mastin, 103 Mo. 508, 15 S. W. 529, where it is held that a property owner, who assisted in instituting proceedings for the issue of local public obligations, and whose lands are being levied upon to secure their ratable proportion of the debt thereby created, may not plead that the adventure in which he had a part was ultra vires.

[11] Only because of the able and elaborate arguments in this case have we extended this opinion to all the foregoing matters. We think that all defendant's misgivings concerning the validity of the issue were groundless, in view of the terms of sections 127 and 129. These fears must dissipate against the countersigning of the minister. When that is done, the obligations become "sufficient to bind the district and create a charge or lien against all school property or rates,” for such counter signature "shall be conclusive evidence that the district has been legally constituted and that all the formalities in respect to such loan and the issue of such debentures shall be thereby conclusively established, and its validity shall not be questionable by any court in Saskatchewan, but the same shall, to the extent of the revenues of the district issuing the same, be of good and indefeasible security in the hands of any bona fide holder thereof." While ordinarily a bona fide holder is one who purchases in good faith without notice of alleged infirmities, that is not necessarily the only definition. The qualification of bona fides may be used only in the sense that fraud is not present in the transaction under consideration.

In O'Connor v. Gertgens, 85 Minn. 481, 485, 89 N. W. 871, it is said, in a syllabus prepared by the court, amplified in the opinion by consideration of the authorities, that:

"The expression “bona fide purchaser is oftentimes used ambiguously, and is construed in various ways. The context must be examined, and the expression considered with reference to its use and the connection in which it is found. It may mean without fraud or deception. It may mean without notice of others' rights. It sometimes signifies honesty of purpose, as distinguished from bad faith. To be a bona fide purchaser may, under some circumstances, require the payment of the consideration or purchase price, but not always. In the statute in question the term 'bona fide' was used as the opposite of 'mala fide.'”

Either the qualification "bona fide" in section 129 has that restricted sense, or we must think the provision in question to be a piece of superfluous legislation, for in Canada, as in the United States, the principle has long held that one is protected who purchases in good faith, without notice, from one who is aware of infirmities preceding execution, public securities which are regular and lawful on their face. Webb v. Commissioners of Herne Bay, L. R. 5 Q. B. 642. Before the act was passed, it was for the first purchaser of debentures to ascertain all facts pertinent to their validity. The legislation, however, seems intended to change the law by making the countersigning close the door to investigation of the antecedent situation and to establish the force of the issue as a lien. This statutory provision, to justify its enactment at all, appears to necessitate the construction of the term “bona fide holder” to mean one who then deals in good faith with the issuing body; i. e., a first purchaser who is free from actual fraud and who pays value. More than 40 years ago, one of the ablest courts of one of the middle western states (Griffith v. Burden, 35 Iowa, 138, 143) noted the steady tendency to strip from municipal securities the impedimenta of the law merchant, that the public inter

est might be better served in their marketing. The legislation before us is capable of construction in line of that beneficent tendency of the law; otherwise, it has little function. We are constrained to give it a construction, if reasonably possible, which will magnify its usefulness.

If there is any difference in principle respecting the accrual of mutuality between the case of an accepted tender for the purchase of public securities and that of a common subscription, the favor, we think, would be with the former. In the case of a subscription, it is settled that substantial effort or expenditure in reliance thereon to further the object thereof will convert the gratuitous promise into a binding contract. 37 Cyc. 486; Sargent v. Nicholson, 25 Manitoba, 638. It can hardly be said that a formal tender in response to a public call offering public securities is ever a gratuitous promise; but, even so, the authorities just cited would bring defendant to court under circum. stances as here.

This construction, we think, is consistent with that of analogous Saskatchewan statutes, 207 and 208 of the City Act, by Chief Justice Haultain in the trial of Canadian Agency, Limited, v. Tanner, 6 Saskatchewan Reports, 152, 161, in which the defendant was held to pay for city stock for which he had subscribed, and which had been approved by the minister of municipal affairs. Tanner's defense that there were infirmities antecedent to the minister's indorsement was held unavailable. Other cases cited (Harper v. Township of East Flamboro, 32 0. L. R. 490; Village of Georgetown v. Stinson, 23 Ontario Reports, 33) indicate general Canadian approval of legislation of this character.

We hold, therefore, that defendant was not justified, for anything shown upon this record, in its refusal to take the balance of this issue, and that there accrued to plaintiff, through its refusal, a right of actior in damages.

[12] What should be the measure of damages? It is argued for defendant that, at the worst, damages would be nominal, on the theory that there is here but a breach of an agreement to loan money, and we are referred to Western Wagon Co. v. Welch, L. R. Chancery, 1892, 271, and Larios v. Bonany y Gurety, Privy Council Appeals, 5 L. R. 346. Our reading of these decisions fails to suggest much weight to the point as it is sought to apply it here. The latter case, particularly, is authority to the proposition that, even where the contract is merely to extend credit or to loan money, substantial damages may be recoverable, if substantial loss accrues to the obligor through reasonable reliance upon it. But, it seems to this court, an accepted offer to buy public securities, made in response to a public advertisement for tenders, is something more than an agreement to loan money; that it becomes a sale of negotiable paper, which differs from ordinary paper, in that it has many of the characteristics of chattels. Griffith v. Burden, supra.

We think it would be mischievous to hold that, until substantial progress was made by way of execution, such a contract was merely a naked pact. Public policy suggests insuperable defects in such a

doctrine. So far as we know, the exaction of a deposit guaranty by bidders has never been questioned, and in no case, so far as we know, involving a deposit of that character, has there been an attempt to so belittle the fundamental agreement. The right to exact a deposit has been upheld, because the right to actual damages is recognized. The dearth of authorities suggests that the point made by defendant's counsel is unusual. We are aware of but one. City of Junction City v. Bank, 96 Kan. 407, 153 Pac. 28. The syllabus is by the court, paragraph 5 reading :

“Where a city offers its paving bonds for sale and the successful and aecepted bidder repudiates its contract of purchase, the city may recover from such bidder compensatory damages, even if these exceed the sum which the bidder puts up as a pledge of good faith accompanying the bid.”

This case is not very fully reported, and the same justice writing the majority opinion indulges in a written dissent; but upon the precise question in the paragraph above quoted the court is unanimous. In the body of the majority opinion the court says of the deposit:

"The purpose of a certified check to accompany a bid is well known. It was a pledge of good faith, and to guarantee a recoupment or partial recoupment for any contingent loss to the vendor if the contract was broken by the vendee."

Recovery in this Kansas case was ordered, allowing the city damages for the difference between the bid and the price obtained on a resale, with a recovery of the excess of damages beyond the amount of the check.

Whatever view may be taken of the April agreement, i. e., whether it is a mere subscription, or a promise to loan money, or a contract void because ultra vires, the measure of recovery, under the circumstances here, should be the difference between the bid price of $400,000 of the securities and the price obtained on resale, as it would be if the agreement is held to be a binding contract. If we must assume that the actionable contract between the parties is to be implied, one of the terms necessarily found is the agreement to pay 95 per cent. of par and accrued interest, because it is inevitable that all the dealings between the parties from April 12 to August 15 were on that basis.

We come now to consider the effect on the damages of defendant's subsequent offer of 92 per cent. of par. In this connection it is to be recalled that in its letter of August 15 defendant specifically extended the privilege to plaintiff to seek another market for the balance of the issue, and there is no evidence here tending to show that diligence and good faith were not exercised in the sale at 90, nor that the price was inadequate. This sale, then, would fix plaintiff's damages at the difference between 90 and 95 on $400,000, or $20,000, with interest, and we do not think that defendant's bid to pay 92, made pending the sale to a third party at 90, affects the situation. For the plaintiff to have accepted that bid meant an abandonment of its right of action against the defendant because of the latter's failure to take the issue at 95, for defendant extended a new bid on the theory that it was absolved from its obligations under the old tender. Besides, at the time defendant's new bid came in, plaintiff had undoubtedly

entered into obligations with the final purchaser, which were capable of giving it much embarrassment.

We find, therefore, for the plaintiff, with damages and interest as prayed for.

BANNING v. PENROSE.

(District Court, N. D. Georgia, N. D. January 13, 1919.) 1. ALIEXS 68—NATURALIZATION-COMPLIANCE WITH STATUTE.

Where a native of Germany, as shown by the record of his naturalization, renounced allegiance to every foreign potentate, state, or sovereignty, and particularly to the Emperor of Germany, that was a substantial compliance with Rev. St. § 2165, though the Emperor's name was not

given. 2. CITIZENS 13–EXPATRIATION,

A naturalized citizen who returns to the country of his origin does not lose his citizenship, though he remains there indefinitely, if his purpose be

to return to the land of his adoption; the test being one of intention. 3. CITIZENS 13EXPATRIATION.

Where a native of Germany, after becoming naturalized, returned to the land of his nativity, held, that his indefinite stay did not work an expatriation so as to deprive him of his rights as an American citizen on

his return. 4. HABEAS CORPUS C 25(1)—ALIEN ENEMIES--INTERNMENT.

A duly naturalized citizen who has not lost his rights, if arrested as an enemy alien on Presidential warrant issued under Rev. St. $ 4067, as amended by Act April 16, 1918 (Comp. St. 1918, 8 7615), is entitled to be discharged on habeas corpus. At Law. Petition by C. F. Banning for writ of habeas corpus against C. W. Penrose, Commandant of Ft. Oglethorpe, Ga. Writ issued, and petitioner ordered discharged.

Richard W. Martin, of Pittsburgh, Pa., and J. A. Branch and William Schley Howard, both of Atlanta, Ga., for petitioner.

Hooper Alexander, U. S. Atty., of Atlanta, Ga., for respondent.

NEWMAN, District Judge. This is a proceeding by C. F. Banning against C. W. Penrose, who is commandant of Ft. Oglethorpe, Ga., a military encampment. Mr. Banning asks that, on a writ of habeas corpus, he be discharged from his detention and confinement at Ft. Oglethorpe, where he was interned, as I understand it, by an order of the Attorney General, acting for the President, under section 4007, Rev. St., as amended by the Act of Congress approved April 16, 1918, 40 Stat. L. 531, c. 55 (Comp. St. 1918, § 7615), and the President's proclamation issued thereunder.

There has been a hearing on the petition, considerable evidence taken, and a lengthy argument. It is conceded at the outset that the acts above referred to are constitutional acts, and that the proclamation of the President was properly issued in pursuance thereof. No question is made as to the right to do this, if it was directed toward an alien enemy.

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