APPEAL FROM THE SUPREME COURT OF THE TERRITORY OF ARIZONA
Fuller, Harlan, Gray, Brewer, Brown, Shiras, Jr., White, Peckham, McKenna
MR. JUSTICE PECKHAM, after stating the above facts, delivered the opinion of the court.
It is claimed on the part of the defendants below that the railroad bonds for which the territorial bonds were given were invalid when issued, and it is only by reason of the passage of the act of June 6, 1896, 29 Stat. 262, that any action could be sustained to enforce their payment. That act has been held to be within the power of Congress to pass, and that by it the bonds therein described were made valid. Utter v. Franklin, 172 U.S. 416.
Three grounds are now urged why the judgments of the lower courts should be reversed. They are:
(1) That the railroad bonds were illegally funded, without any demand having been made by the board of supervisors of Yavapai County upon the territorial loan commission for such funding.
(2) That said bonds were funded after January 1, 1897, and at a time when the board of loan commissioners were by the terms of the statute without power to fund them.
(3) That the bonds were improperly and illegally funded at a meeting of the board of loan commissioners of the Territory of Arizona, at which only two members of the said board were present, the third member being absent from the Territory and not in any manner consulted with reference to such funding.
(1) In regard to the first ground, the Supreme Court of the Territory has held that it was not necessary that a demand should be made by the municipal authorities, but that the
holders of the bonds could themselves make it by virtue of section 7 of the territorial funding act of Arizona, approved March 19, 1891. Act No. 79, p. 120. The seventh section of that act reads as follows:
"SEC. 7. Any person holding bonds, warrants or other evidence of indebtedness of the Territory, or any county, municipality or school district within the Territory, existing and outstanding on the 31st day of December, 1890, may exchange the same for the bonds issued under the provisions of this act at not less than their face or par value, and the accrued interest at the time of exchange; but no indebtedness shall be redeemed at more than its face value and any interest that may be due thereon."
Where a holder of bonds had made the demand it was held sufficient under that section. Bravin v. Mayor, 56 Pac. Rep. 719; Yavapai ...