use or enjoyment of said rights, privileges, | matters very critically. The charter itself The decree of the court finds "that the defendant Corporation, the Willamette Woolen Manufacturing Company, did have full authority and power to make and execute the mortgage now here sought to be foreclosed, and that it conferred upon the plaintiff Corporation, by said mortgage, a lien upon all its right and power, under said territorial Act, to take water from the Santiam River in upon its franchise touching the taking, carrying, and using of said water, and all the rights, privileges, and uses incident thereto," and orders a sale of the property as mortgaged, unless the defendant Company pay the sum of $15,606.51 within thirty days from the date of the decree. O The right of the Corporation to make a mortgage which should cover everything described in this mortgage under ordinary Acts of incorporation, or the provisions usually found in such Acts, might be an interesting question. It also admits of doubt whether the mortagor Corporation in this case intended, by the use of the general language found in this instru[197] ment describing what was conveyed, to transfer all of the powers, the privileges, and the franchises conferred upon it by its charter. It was undoubtedly desirable, in making this mortgage, that if it became necessary to sell under it, the purchaser, in getting the realty, the houses, the mills, the manufacturing machinery, the conduits through which the water power came to operate upon that machinery, and all the tangible property necessary to the use of that water power, should also get the privilege of using it; and so far as the privilege of using that particular water appropriated to these mills was a franchise or special grant to the Corporation, it was intended to be conveyed in the mortgage. For all the powers which it was necessary to exercise in the use of this water as a manufacturing motive power, the Woolen Company intended to create a lien upon the property it mortgaged. But there were franchises created by the Act of incorporation which would be of no value to the purchaser, which, in the nature of things, could not be transferred to it, and which were not intended to be transferred to it. Obviously among these was the right to exist as a Corporation. The sale under the decree of foreclosure did not annihilate the Willamette Woolen Manufacturing Company so that it no longer had any existence. Nor was its power to make contracts, to sue and be sued, to have a common seal, to buy other lands and sell them, to make by-laws, and to do many other things which an incorporated body can do, and which are described in the second section of its charter, ended with such sale. Nor is it at all clear that, if it had sold outright the property which it mortgaged to this Company, it would not have still had the right to take other water from the Santiam River and conduct it to other mills and other places for the purposes of manufacture, provided it did not interfere with or limit the water and the use of the water which it had sold. It is, however, unnecessary to examine these There seems to be here no limitation upon the power of the Corporation to dispose of whatever it acquired under the statute which called it into being. Describing in the same sentence that it shall have "the exclusive right to the hydraulic powers and privileges created by the water which it takes from the Santiam River," it declares that it "may use, rent, or sell the same," which means all of it; and to show that it does mean all of it, there is added after the words "sell the same," the further clause, "or any portion thereof, as it may deem expedient.' It is hardly necessary to say that this right to sell in these general and strong terms, or to rent or to use it, must include the power to mortgage it. A mortgage is in effect a sale with a power of defeasance, which may ultimately end in an absolute transfer of the title. This language is in its nature inconsistent with a limitation upon the power of the Company to transfer its rights and privileges. If there is anything peculiar in the word franchise it must include, in any definition that can be given it, this word "privileges;" especially when the statute speaks of "the exclusive right to the hydraulic powers and privileges." As we have already said, it would be unprof- The decree is therefore affirmed. James H. McKenney, Clerk, Sup. Court, U. 8. [215] 216] MOSES R. CROW, Piff. in Err., v. TOWNSHIP OF OXFORD. (See 8. C. Reporter's ed. 215-228.) In an action on bonds issued by the Township of 1. That the plaintiff, being referred by the re- right to refer to the Act of March 2, 1872, as the source of authority, he was bound to take notice of 2. That though the plaintiff was a bona fide that Act. under the Act of March 2. Submitted Oct. 25, 1886. Decided Nov. 29, 1886. IN ERROR to the Circuit Court of the United Mr. S. E. Brown, for plaintiff in error. in error. Mr. Justice Blatchford delivered the ion of the court: $100 each, of the stock of the Oxford Bridge "MARCH 8TH, 1872. Township board met. Act authorizing a majority of the township GEORGE T. WALTON, Trustee. MARCH 24TH, 1872. This suit was brought in the Circuit Court of the United States for the District of Kansas, by Moses R. Crow against the Township of Oxford, in the County of Sumner, and State of Kansas, to recover the amount of ten bonds, of $500 each, issued by that Township, and one hundred forty coupons, of $25 each, cut from those bonds, being in all $8,500. It was tried before the court, without a jury; a special finding of facts was made, and a judgment was rendered for the defendant. The plaintiff has sued out a writ of error. The defendant, on the 15th of April, 1872, made twenty bonds for $500 each. Coupons cut from some of those bonds were the subject of the suit of McClure v. Oxford, 94 U. 8. 429 [Bk. 24, L. ed. 129]. The bonds and coupons involved in the present suit are all of the forms of the bond and coupon set out in the report of the McClure case, and each bond has indorsed on it, of the date of April 25, 1872, a certificate duly signed by, and attested by the seal of office of, the Auditor of the State of Kansas, the certificate being in the form of that contained in the report of the McClure case. The bonds were made for the purpose of aiding in the construction of a bridge across the Arkansas River, at the town of Oxford, in the Township of Oxford; and were issued and delivered in payment for eighty-five shares, of GEORGE T. WALTON, Trustee. April 8th, 1872. GEORGE T. WALTON, Trustee. April 10th, 1872. At a meeting of the trustee and clerk of Oxford Township, to take into consideration the subscribing of stock in the Oxford Bridge Com [217] pany-present, George T. Walton, trustee, and | ized the trustee, treasurer and clerk of Oxford John H. Folks, clerk-it was ordered that the Township, or any two of them, to issue the [218] said George T. Walton, trustee, and John H. bonds of the Township, to the amount of Folks, clerk, do subscribe to the capital stock $10,000, for the purpose of aiding in building of the Oxford Bridge Company for such amount such bridge. It required that the bonds should of capital stock as the ten-thousand-dollar bonds be in sums not less than $500, payable in teu may purchase, not to be less than eighty-three years from the date of issuing, with interest at shares of said stock; and the said George T. the rate of 10 per cent per annum, payable semiWalton and John H. Folks are further author- annually, in the City of New York; that interized to vote the number of votes said Township est coupons should be attached, signed by the shall be entitled to, at any meeting of stock- trustee and attested by the clerk; that the bonds holders of said bridge company, during their should contain a statement of the purpose for continuance in office, in pursuance of law. Also which they were issued, and the result of the ordered, that a copy of said law be sealed in vote of the inhabitants of the Township on the this book. GEORGE T. WALTON, Trustee. question of issuing the bonds; that before any JOHN H. FOLKs, Clerk. of the bonds should be issued, the question of April 12th, 1872. issuing them should be submitted to the legal voters of the Township, at an election for that purpose; that the time and place of holding the election should be designated by the trustee, treasurer, and clerk, or any two of them, "by [219] written or printed notices thereof in three of the At a meeting of the Board of Oxford Town- GEORGE T. WALTON, Trustee. No other proceedings were had or taken by or before the township board in respect to issuing the bonds, except that, on April 8, 1872, an election was held in the Township on the question, with the result set forth on the face of the bonds. The bridge was erected by the corporation, and was maintained as a toll bridge until it was destroyed by water on June 9, 1876. The plaintiff owns and holds the bonds and A special Act of the Legislature of Kansas, " The Act passed March 2, 1872, chapter 68, referred to in the petition as the Act in enoformity with which the election was held in pursuance of which the bonds were issued, was an Act approved March 2, 1872, section 24 of which provided that it should "take effect and be in force from and after its publication in the Kansas Weekly_Commonwealth.' It was pub lished in the Kansas Weekly Commonwealth, March 7, 1872. It bore the title set forth in the auditor's certificate indorsed on the bonds, and was the Act therein referred to. It was a general law applicable to all counties, cities and townships. It embraced bridges, railroads and water power. It authorized the issuing of bonds to build bridges, and also as donations, and to pay for stock, in aid of railroads and bridges. It graded the amount of bonded debt by taxable property. It allowed bonds of not less than $100, required them to be payable in the City of New York, in not less than five nor more than thirty years from their date, with interest not to exceed 10 per cent per annum, payable semi-annually, on coupons, the bonds, if issued by a township, to be signed by the township trustee and attested by the township clerk. The bonds could not be issued unless ordered by a vote of the qualified electors of the township. To procure such vote, a petition was required, signed by at least one fifth of the voters of the township, to be presented to the trustee, clerk and treasurer, asking for a vote; and they were to call an election to be held within 30 days thereafter, and to give notice of it by publication, for at least three consecutive weeks, in each newspaper published in the township, and, if none were published, by posting up written or printed notices in at least 5 public places in each voting precinct in the township, for at least 20 days preceding the election, the notice to set forth the time and place of holding the election, the bridge pro [220] [221] posed to be built, and whether the aid was to be by donation or taking stock. The question of the validity of the bonds involved in the McClure case was there passed upon by this court. No question was there presented as to their validity under the Act of March 2, 1872, or as to their having been issued under that Act, and not under the Act of March 1, 1872. It was there held that as the Act of March 1, 1872, did not go into effect till it was published, and it was not published till March 21, 1872, and required 30 days' notice of the election, and as the bonds were dated April 15, 1872, and stated that the election was held April 8, 1872, and gave the title of the Act, and the date of its approval, their invalidity appeared on their face, in connection with the terms of the Act, because 30 days had not elapsed be-election to allow the required notice to be given; tween the time the law took effect and the day of the election. It is contended for the plaintiff in the present case, that, as the Act of March 2, 1872, took effect on March 7, 1872, the day before the commencement of the proceedings for an election, and there was an interval of full 30 days between March 8, 1872, and April 8, 1872, the day of the election, there was legislative authority under the Act of March 2, 1872, for all that was done. It is urged that in the McClure case no reference was made, in the record or in the arguments of counsel, to the latter Act, and that the question, as to the validity of the bonds under that Act is not controlled by the decision in the McClure case. The whole point of the contention in favor of the validity of the bonds is based on the proposition that the bonds were in fact issued under the authority of, and in compliance with, the provisions of the Act of March 2, 1872, instead of the Act of March 1, 1872. The plaintiff, being referred by the bonds to the Act of March 1, 1872, as the statute under which they were issued, was bound, as was said in the McClure case, to take notice of the statute and of all its requirements. If, finding the bonds invalid under that statute, as he is held by law to have done, he claims the right to refer to the Act of March 2, 1872, as the source of authority, because that Act was in force from March 7, 1872, he was bound to take notice of the requirements of that Act. Looking at them, he was met by the fact that that Act required that the proceedings should be initiated by a petition of voters to the trustee, clerk, and treasurer of the township, and be [2221 followed by the publication of the notice of election for three consecutive weeks in each newspaper, if any, published in the township; and if none were published, then by the posting of written or printed notices in at least five public places in each voting precinct in the township, for at least twenty days preceding the election. These proceedings were all variant from those to be had under the Act of March 1, 1872, which did not require any prior petition of voters, nor any newspaper publication of the notice, but only a posting of notices, and those only in three public places in the township, and not in five public places in each voting precinct in the township. Looking at the public records of the Township, he was met by the following facts: The proceedings made no reference to the Act of March 2, 1872, or to any petition of voters, but stated that they were taken under the Act of March 1, 1872, and that the officers gave thirty days' notice of election by posting written notices in only three public places in the Township. Even though the plaintiff purchased the bonds and coupons, as the finding of facts says, "before their maturity, for value, without actual notice of any defeuse to them, or of any defect or infirmity in the proceedings for issuing them," he was, in the absence of such recitals in the bonds as would protect him, bound by the information open to him in the official records of the officers whose names were signed to the bonds. The recitals in the bonds could not avail him, because as to the only Act recited, that of March 1, 1872, that Act was not in force long enough before the and, as to the Act of March 2, 1872, the records, which showed proceedings not in conformity with it, and the bonds, by the absence of all reference to it, and by their recitals as to the Act of March 1, 1872, excluded the possibility that the town officers issued the bonds, or intended to issue them, under the authority of, or in pursuance of, the Act of March 2, 1872. The statement in the bonds that they were issued "in pursuance of a vote of the qualified electors of said township, had at an election held therein on the eighth day of April, A. D. 1872, which said election resulted in a majority of 112 in favor of issuing said bonds in a total vote of 140," can refer only to an election held under the Act of March 1, 1872, before recited in the bond by its title and date, which was an illegal election for want of due notice; and the records showed that the election was held under that Act. The case of Anderson Co. v. Beal, 113 U. S. 227 [Bk. 28, L. ed. 966], is relied on by the plaintiff, but does not aid him. In that case, although the bonds recited the wrong Act, the records of the county officers who issued the bonds did not show any want of compliance with the later Act, but showed a substantial compliance with it, and in fact the proceedings were had and were intended to be had under it. The reference in the bonds to the earlier Act as the source of authority was thus a mere clerical error. In the case at bar, the reference in the bonds to the Act of March 1, 1872, was not a clerical error, and the proceedings were intended to be had under that Act, and the records show a failure to comply with the Act of March 2, 1872, and an attempt to comply only with the Act of March 1, 1872. In the Anderson County case, legislative authority having been given for the issue of bonds by a statute under which the authorities in fact acted, the recital in the bonds, that the bonds were issued in pursuance of the vote of the electors, was effective to cover any irregularity as to notice, which did not appear of record, but was sought to be proved aliunde. In the present case, no such doctrine is applicable. In Commissioners v. January, 94 U. S. 202 [Bk. 24, L. ed. 110], an Act was recited in the bonds which had been repealed by a later Act. The order for the election was made while the earlier Act was in force. The election was held after its repeal, and after the new Act went into force, but there was no new order of election. Otherwise, all the proceedings after the new [223 Act went into force were in conformity with it. | cording to law. A defense was set up against It was held that a recital in the bonds that they were issued "in pursuance of, and in accordance with, the vote of a majority of the qualified electors of the county" "at a regular election, held on" a day named, estopped the county from raising the objection of the want of an order under the new Act, although the old Act, and not the new Act, was recited in the [224] bonds, as the statute authority. We think that case is distinguished from the present one by the fact that in it all the proceedings after the new law took effect were in conformity with it, while in the case at bar, none of the proceedings were in conformity with the Act of March 2, 1872. Another question is presented in the case be- a bona fide holder of the bonds, that they had But now it is contended that the provision [225] for registration in the Act of March, 2, 1872, settles the question, that the bonds were bonds issued under that Act, and were "regularly and legally issued," according to the provisions of that Act. The case of Lewis v. Commissioners, 105 U. S. 739 [Bk. 26, L. ed. 993], is cited as sustaining that view. But we do not so regard it. In that case, section 14 of the Kansas Act of March 2, 1872, was under consideration in regard to the bonds of a county in Kansas, issued, in fact, under that Act, each of which had indorsed on it a certificate by the state auditor, that it had been "regularly and legally issued," and that it had been registered in his office ac actual facts, and that thereby the bonds were As the recitals in the bonds here are of no Judgment affirmed. James H. McKenney, Clerk, Sup. Court, U. 8. [226] |