Town of Pontotoc v. Fulton

Mississippi Supreme Court October 15, 1901

Town of Pontotoc v. Fulton, 79 Miss. 511 (Miss. 1901)

Calhoun

Opinion of the Court

CalhouN, J.,

delivered the opinion of the court.

The town of Pontotoc issued $3,500 of bonds to build a schoolhouse, and got the money. These bonds are in the hands of *516bona fide holders without notice, unless, on the objections made, the statute gives to every one dealing in them notice of their invalidity. They were issued, and, we hold, pursuant to the power conferred by code, § 3017. That section is as follows: “The mayor and board of aldermen, if it elect, may issue bonds, making a part of them mature annually, and running through a series of not more than twenty years from their issuance. All the interest in such case, and a part of the principal, to be fixed by the board at the time the bonds are issued, shall be payable annually, and the bonds shall be issued accordingly; in which case a part of the principal shall not be called in and paid by the board until maturity of the bonds.” The only question, we think, we need refer to arises out of the concluding sentence, viz.: “In which case a part of the principal shall not be called in and paid by the board until maturity of the bonds.” Now, the bonds issued in the case before us have this provision, viz.: “The said town of Pontotoc reserves the right, after ten years from the issuance thereof, to pay off and cancel any of said bonds.” It is contended that the bonds are void, because, while all matured in fifteen year's, the board reserves the right to pay them after ten years. This reservation was, of course, void, and the board could never be compelled to exercise the option. Non constat that it ever would. If it ever attempts to exercise it, then will be the time for taxpayers to complain. It was expressly decided by the supreme court of the United States in Howell v. Railroad Co., 94 U. S., 463; 24 L. Ed., 254, opinion by Ililler, J. — a case practically identical with this in principle — • that, though such a provision is void, the bonds are valid. We follow that decision. We do not concur with learned counsel for appellant that there is anything in the other points made.

Affirmed.

Reference

Full Case Name: Town of Pontotoc v. Francis R. Fulton
Status: Published
Syllabus: 1. Municipal Bonds. Void recital. A -void recital in municipal bonds does not render the bonds invalid. 2. Same. Code 1893, ? 3017. Municipal bonds issued under code 1892, g 3017, providing that municipalities may in issuing them make a part mature annually, and prohibiting in such case the calling in of the bonds until maturity, are not void because of a recital to the effect that the municipality reserves the right, after a certain date, to pay off and cancel any of the bonds. 3. Same. Schoolhouse. Consent of taxpayers. Bxeessime levy. Bona fide holder. Code 1893, \\ 4014. It is not a defense to an action on municipal bonds, by a ftona fide holder, that the municipality was at the time of their issuance a separate school district, that the bonds were issued to raise funds with which to build a schoolhouse, that the debt incurred by their issuance exceeded a three-mill levy of taxes on the taxable property of the municipality, and that the consent of a majority of the taxpayers was not given to authorize the levy of a tax exceeding three mills on the dollar for the erection of the schoolhouse or the issuance of the bonds.