I concur in the result of the foregoing opinion and in the main in the views therein advanced.
The leading elements in the case are that the bonds are negotiable, were issued by the proper officers, and the plaintiff is a bona fide holder for value without any notice of the facts now ruled on as a defense, except so far as he is bound in law to take notice thereof.
The vote was duly had in favor of the Pleasant Hill Division, a distinct corporation, and whose articles in express terms provided for a consolidation with the very company with which it afterwards consolidated. The subscription was made to the stock of the company voted for; but afterwards and before the bonds in suit were issued, the contemplated consolidation was effected by the concurrent action of the stockholders of the two constituent companies, and a new company formed. All the steps required by law to effect .this consolidation were taken, and the bonds were issued, as by the statute they were required to be, to the new company. See, also, Nugent v. Supervisors, 19 Wall. [86 U. S.] 241.
But it is said that this consolidation is void, and hence the bonds were illegally issued. It is to be remarked, however, that the validity of the organization of the new company has never been questioned by any stockholder, nor by the state. I do not consider it to be necessary in this case to determine whether on the facts agreed a stockholder or the state could successfully question the validity of the consolidation on the ground that one of the companies, although possessing capital stock paid in and subscribed, had in point of fact no part of its road actually constructed.
It is not claimed that the plaintiff had actual notice of this fact when he purchased the bonds; and the bonds in express terms recite that the consolidation was made as required by law. Upon this recital as respects facts in pais, the purchaser of the bonds had a right to rely; and in the face of this recital, the plaintiff was not bound to inquire whether each of the two constituent companies had all or some part of its road actually completed, nor whether the roads when completed would form a continuous line, even if each of these facts was an essential condition of a consolidation de jure.
This case is substantially within the doctrine of Nugent v. Supervisors, above cited, and differs from Harshman v. Bates County [Case No. 6,148], where the subscription was made after the consolidation, and where there was no authority in the charter of the company voted for to consolidate with another company. Judgment for plaintiff.
Other cases against Cass county: Kennard v. Cass County [Id. 7,697]; Jordan v. Cass County, [Id. 7,517],