by John Marshall Harlan

“ The contention of the defendant is that Jeter was not the de facto mayor at the time of the signing and delivery of the bonds, nor were the old members of the common council, who continued to act as such after the qualification of their successors, and until after the bonds were delivered to Coffin & Stanton, de facto members of the common council of defendant, after the qualification of their successors. Whether one was or was not a de facto officer at the time when he assumed to perform duties belonging to a public office, is a mixed question of law and of fact. ”

“ Both the city authorities and the qualified electors so regarded the matter. The city's assumption of the bonds imposed as much obligation upon it to pay them as if it had itself directly executed and issued them. It could not acquire complete ownership of the waterworks without paying for them, and it took a deed for the waterworks expressly subject to a valid lien in favor of the water company's first-mortgage bonds, including the above 89 bonds. In every substantial sense, therefore, these bonds were part of the city's outstanding bonded indebtedness. ”

“ The rule that the acts of a de facto officer are valid as to the public and third persons is firmly established, although it is sometimes difficult to determine whether the evidence is such as to warrant a finding that a particular act or acts, the legality of which may be in issue in a given case, were those of a de facto officer. ”

“ We content ourselves with stating the propositions which counsel have urged upon our consideration, and without expressing any settled opinion as to what are corporate purposes within the meaning of the Illinois Constitution, we pass to another point, which, in our judgment, is fatal to the defense. ”

“ If a state constitution, in fixing a limit for indebtedness of that character, should prescribe a definite rule or test for determining whether that limit has already been exceeded or is being exceeded by any particular issue of bonds, all who purchase such bonds would do so subject to that rule or test, whatever might be the hardship in the case of those who purchased them in the open market in good faith. ”

“ When a person is found thus openly in the occupation of a public office, and discharging its duties, third persons having occasion to deal with him in his capacity as such officer are not required to investigate his titled, but may safely act upon the assumption that he is a rightful officer. ”

“ It was also stipulated that Coffin & Stanton should cause to be organized a corporation to be known as the City Water Company of Santa Cruz, to which the above franchise should be assigned. It was further provided that the water company should execute a first mortgage upon all its properties, rights, titles, and franchises then owned or thereafter acquired, for the payment of bonds (not exceeding $400,000 in amount, except as provided in the contract) to be issued to Coffin & Stanton as the work of construction progressed, they to make all necessary cash advances. ”

“ Prior to the passage of the judiciary act of August 13th, 1888, chap. 866, 25 Stat. at L. 433, it was the settled rule that the holder of a negotiable instrument payable to bearer was not an 'assignee' thereof within the meaning of the judiciary act of 1789, chap. 20, or the act of March 3d, 1875, chap. 137, but was the holder in virtue of an original and direct promise moving from the maker to the bearer, and could sue without reference to the citizenship of the original or any intermediate holder. ”

“ They contained recitals to the effect that they were issued by virtue of the charter of the city empowering it to borrow money, issue bonds therefor, and pledge its credit for their payment, and in accordance with certain ordinances of which the titles and dates were given. The bonds stated upon their face that one of those ordinances, passed June 15th, 1869, was entitled 'An Ordinance to Provide for a Loan for Municipal Purposes,' and the other, 'An Ordinance to Carry into Effect the Ordinance of June 15th, 1869, Entitled 'An Ordinance for a Loan for Municipal Purposes. ”

“ It is contended by the defendant that it does not appear that the circuit court had jurisdiction, since the citizenship of the persons who put the bonds in the plaintiff's hands for collection is not set forth. ”

“ Teed, 112 Cal. 319, 328, 329, 44 Pac. 580, 583, the validity of the act of 1883 and that of 1893 amendatory thereof having been questioned by counsel, the supreme court of California said: 'On March 15th, 1883, an act was passed (Stat. 1883, p. 370) authorizing the governing body of every municipal corporation, other than cities of the first class, to fund or refund any indebtedness of the corporation by a vote of four fifths of their number. ”