Parsons v. Jackson

delivered the opinion of the court.

This case arises out of the supplementary proceedings which took place in the case of Jackson et als. v. The Vicksburg, Shreveport, & Texas Railroad Co. and Others (reported under the name of Jackson v. Ludeling, in 21 Wall. 616 ), after our decision therein. In pursuance of the mandate issued in that case, the court below made a further decree on the twenty-second day of March, 1875, directing, amongst other things, as follows, that is to say: —

“ He will give notice to the holders of bonds bona fide issued for twenty days by publication in one of the city papers that he is ready to receive proofs of the debt aforesaid, and that he shall hold sessions for thirty days each day, Sunday excepted, from the date of his first publication in the paper for that purpose.”

In pursuance of this decree the master gave the required notice, and received proofs adduced by those claiming to hold bonds entitled to the benefit of the decree rendered by this court. By his report, filed the seventeenth day of January, 1876, it appears that there were then outstanding seven hundred and sixty-one bonds bona fide issued by the said railroad company, of which schedules were annexed to his report. He further reported a schedule of certain other bonds executed by the company, and presented to him as issued under the mortgage mentioned in the decree ; but which the testimony taken by him proved were never issued by the said company, its officers or agents, but were carried off by persons belonging to, or taking advantage of, a raid upon the town of Monroe, La., during the late war, in the month of April, 1864. As to these bonds, the master further reports as follows: —

“ None of the parties presenting these bonds, or the coupons on them, have proved at what time, for what consideration, or under what circumstances they acquired them, except Francis T. Willis, Charles Parsons, E. G. Pearl, Edwin Parsons, George Parsons, and Sc<t., Zérega, & Co. in liquidation. In reference to this class, if the bonds were complete in all their parts and no circumstances of suspicion appeared on their face, the proof that they had not been issued bona fide under the authority of the corporation, and other facts relative to the issue, would have required the parties to prove that they were bona fide holders for a valuable consideration.

“ In reference to the claims of Francis T. Willis, Charles Parsons, E.

.“I therefore report that the said bonds mentioned in the schedule BB were not issued bona fide by the said railroad company, and ought not to be allowed as a charge on the mortgage.”

The parties above named excepted to this report; but after hearing thereon, the court confirmed the same, and made a decree disallowing the said last-mentioned bonds, and from that ■ decree the present appeal was taken.

From the evidence taken by the master it appears that the .appellants purchased the bonds held by them, in the city of New York, in November and December, 1865, at from ten to fifteen cents on the dollar, without any actual knowledge that they were not issued by the company. But it further appeared that none, or very few, of the coupons had been cut off from the bonds, and that the latter were imperfect in form.

Each bond, on its face, certifies “ that the Vicksburg, Shreveport, and Texas Railroad Company is indebted to John Ray, or bearer, for value received, in the sum of either £225 sterling or $1,000 lawful money of the United States of America; to wit, £225 sterling if the principal and interest are payable in London, and $1,000 lawful money of the United States of

The uncertainty of the amount payable, in the absence of the required indorsement, is of itself a defect which deprives these instruments of the character of negotiability.- As they

Now it is shown by the master’s report, and if it were necessary to go behind the report, the evidence shows, that these bonds were never issued by the railroad company at all, but were seized and carried off by a raid of soldiers during the war. They afterwards turned up in New York, and were purchased' by the appellants; and the question is, whether the fact that the past-due coupons were still attached, and that no place, of payment was indorsed on the bonds, as required to be done by the bonds themselves, was sufficient to put the appellants upon inquiry as to their validity, and as to the bona ftdes of their issue; — these marks of suspicion being supplemented by the further fact, that the bonds were offered for a very small consideration.

Our opinion is, that the appellants had abundant cause to question the integrity of these bonds, that they were affected with notice of their invalidity, and cannot be allowed to sustain the position of bona fide holders without notice. The presence of the past-due and unpaid coupons was itself an evidence of dishonor, sufficient to put the purchasers on inquiry. The imperfection as to the place of payment is another strong evidence of want of genuineness. Of course, it is not necessary to the validity of a bond that it should name a place of payment; but these bonds expressly declare that they are to be payable at the place which should be ■ determined by the president’s indorsement, and that the sum payable should depend on that indorsement; and.yet no indorsement appears thereon. We do not say that this defect would have invalidated the bonds if they had in fact been issued by the company, and the amount had been certain ; but it was a pregnant warning to the pur

Decree affirmed.