nada with power to make a subscription when assented to by two-thirds of the electors voting, and, in the same act, to invest the county with authority to subscribe upon the assent of a bare majority of the electors voting. And yet the argument imputes such diverse purposes to the legislature of the state, if the act of 1871 be construed as authorizing, in violation of the state constitution, a county subscription upon the assent of a bare majority of the electors voting. The act of 1860 required 20 days' notice of the election, of the amount proposed to be subscribed, and in what number of installments to be paid. These provisions were left untouched by the act of 1871. But the requirement in the latter act of conformity, in all things, to the constitution and laws in force when the election was held, implies that the legislature did not intend to authorize a municipal subscription upon the vote of a bare majority, but only upon the condition prescribed in the constitution; namely, a two-thirds majority of the electors of the county.

It certainly cannot be said that a different construction is required by the obvious import of the words of the statute. But if there were room for two constructions, both equally obvious and reasonable, the court must, in deference to the legislature of the state, assume that it did not overlook the provisions of the constitution, and designed the act of 1871 to take effect. Our duty, therefore, is to adopt that construction which, without doing violence to the fair meaning of the words used, brings the statute into harmony with the provisions of the constitution. Cooley, Const. Law, 184, 185; Newland v. Marsh, 19 Ill. 384; People v. Supervisors, 17 N. Y. 241; Colwell v. May, 4 C. E. Green, 249. And such is the rule recognized by the supreme court of Mississippi in Marshall v. Grimes, 41 Miss. 31, in which it was said: "General words in the act should not be so construed as to give an effect to it beyond the legislative power, and thereby render the act unconstitutional. But, if possible, a construction should be given to it that will render it free from constitutional objection; and the presumption must be that the legislature intended to grant such rights as are legitimately within its power." Again, in Sykes v. Mayor, 55 Miss. 143: "It ought never to be assumed that the law-making department of the government intended to usurp or assume power prohibited to it. And such construction (if the words will ad mit of it) ought to be put on its legislation as will make it consistent with the supreme law."

It is worthy of observation that the board of supervisors of Grenada county understood the act of 1871 as requiring conformity to the constitution, for they were careful to make a record of the fact that the proposed subscriptions had been sustained by "a constitutional majority of two-thirds of the legal and registered voters of said county." It results that, in respect of such of the bonds in suit as, according to the evidence, were issued in payment of the subscription to the stock of the Grenada, Houston & Eastern Railroad Company, that there was valid legislative authority as well for the subscription as for the issue of the bonds; consequently the county is liable upon them. It only remains to determine whether the county is liable upon such of the bonds in suit as were delivered to the Vicksburg & Nashville Railroad Company in discharge of the subscription of $50,000 voted in aid of the construction of the "so-called Vicksburg & Grenada Railroad." We have seen that when that subscription was voted there was no such corporation as the Vicksburg & Grenada Railroad Company, but that the vote had reference to an organization or scheme, the managers of which proposed to construct a railroad connecting the cities of Grenada and Vicksburg; that these managers were shortly thereafter incorporated as the Vicksburg, Yazoo Valley & Grenada Railroad Company, which was subsequently, and before the bonds were issued, merged in the Vicksburg & Nashville Railroad Company. We have also seen that the Vicksburg & Nashville Railroad Company was empowered to construct a railroad from Grenada to Vicksburg, and by the terms of the con

*272

*271

solidation agreement with the Vicksburg, Yazoo City & Grenada Railroad Company obligated itself to do so.

Such were the circumstances attending the passage of the act of 1872, the fourth section of which confirmed and legalized the action of the voters of Grenada county and its board of supervisors in the matter of a county subscription in aid of the construction of a railroad from Grenada to Vicksburg. The evident purpose of that act was to give effect to the will of the voters, as expressed at the election of 1871, by a majority large enough, under any construction of the constitution, as a basis for a valid municipal subscription to the stock of a railroad corporation. The act of 1872 recites that the proposed subscription was approved by the requisite constitutional majority. Had the action of the voters and of the board of supervisors been taken under legislative authority previously conferred, there could be no doubt of the validity of the subscription, or of the power of the board of supervisors to issue bonds; for, it is to be observed, the state constitution of 1869 does not prohibit municipal subscriptions to the stock of railroad companies under all circumstances, but only forbids the legislature from authorizing them except where two-thirds of the qualified voters of the municipality assent thereto. "It is not an open question in this state," said the supreme court of Mississippi, "that the legislature may authorize a county or town to aid a railroad. That power was held to exist under the former constitution, and the present constitution distinctly recognized it." Article 12, § 4. If it were not for the constitutional restriction the legislature could authorize a county, city, or town to aid, in any of these modes, railroads, or other public enterprises, without the assent of the qualified voters." N. O. & R. R. Co. v. McDonald, 53 Miss. 245, 246. Thus the constitution recognized subscriptions to railroad companies as within the scope of the powers which municipal corporations might exercise under legislative sanction. While the legislature could not, after the adoption of the constitution of 1869, have legalized a municipal subscription assented to by a less majority of legal voters than is prescribed in that instrument, its power, by retrospective enactment, to confirm and legalize a municipal subscription to the stock of a railroad corporation to which the constitutional majority of electors had assented at an election of which due notice was given, cannot, we think, be successfully disputed. Since what was done in this case by the constitutional majority of qualified electors, and by the board of supervisors of the county, would have been legal and binding upon the county had it been done under legislative authority previously conferred, it is not perceived why subsequent legislative ratification is not, in the absence of constitutional restrictions upon such legislation, equivalent to original authority.

* *

In Sykes v. Mayor, 55 Miss. 137, it was held that, after the constitution of 1869 took effect, the legislature could not, by retrospective enactment, make valid an issue of municipal bonds executed prior to the adoption of that instrument, without legislative authority; because, said the court, "the measure of its power was the constitution of December, 1869, and it could not ratify an act previously done, if, at the date it professed to do so, it could not confer power to do it in the first instance. It could authorize a municipal loan conditionally. In order to ratify and legalize a loan previously made, it was bound by the constitutional limitation of its power." Further, in the same case: "The idea implied in the ratification of a municipal act performed without previous legislative authority is that the ratifying communicates authority which relates back to and retrospectively vivifies and legalizes the act, as if the power had been previously given. Such statute is of the same import as original authority. If the constitution had altogether denied to the legislature the delegation of such power to counties, cities, and towns, it is manifest that it could not vitalize and legalize a subscription made before its adoption, and without authority of law. If that be

so, it follows that, in dealing with the subject at all, it is bound by the limitation of section 14 of article 12 of the constitution." In Cutter v. Board Sup'rs, 56 Miss. 115, the question was as to the power of the legislature to ratify and legalize certain municipal bonds issued to a railroad corporation by a county board of supervisors in pursuance of a vote of the people, with interest coupons attached, payable semi-annually. The statute under which the board proceeded authorized bonds with interest payable annually. The people, however, voted for bonds with interest payable semiannually. The court sustained the constitutionality of the curative act. It was said: "This is far from being an effort to impose a debt on the county without its consent. The agreement of the people of the county to incur the debt, in the precise shape which it assumed, has been expressed. Their representatives, the county authorities, in execution of that will, have delivered the bonds, and the legislature afterwards affirmed. If there has been any departure from the letter of the original authority, it acquiesces in such deviation, cures the irregularity, and makes valid the bonds. The principles announced in Supervisors v. Schenck, 5 Wall. 776, 789, fully support these views." These doctrines are in accord with the views of this court as indicated in several cases. Ritchie v. Franklin, 22 Wall. 67; Thompson v. Lee Co. 3 Wall. 327; City of Lamson, 9 Wall. 485; St. Joseph v. Rogers, 16 Wall. 663. Campbell v. City of Kenosha, 5 Wall. 194.

Our conclusion is that the act of 1872, requiring bonds of Grenada county to be issued to the Vicksburg & Nashville Railroad Company, in payment of the subscription voted in 1871 by the constitutional majority of its voters for a railroad from Grenada to Vicksburg, is not in conflict with the constitution of Mississippi. Consequently, there is no ground upon which the county can escape liability upon them to the plaintiffs, who are bona fide holders for value. Indeed, there is nothing of substance in the defense made by the county, beyond the question of legislative authority for the subscriptions, in payment of which the bonds in suit were issued, and passed to the plaintiffs for iron used on one of the proposed roads. Other questions of minor importance are discussed in the very able brief of counsel for the county. But they do not, in our opinion, affect the right of plaintiffs to judgment, and need not be noticed. We perceive no error in the record, and the judgment is affirmed.

(112 U. S. 238)

PUGH, Surviving Trustee, etc., v. FAIRMOUNT GOLD & SILVER MINING CO. and others.

(November 10, 1884.)

1. FORECLOSURE OF MORTGAGE-AUTHORITY TO EXECUTE INSTRUMENT - ADMISSION BY DEFENDANT ESTOPPEL.

In a suit to foreclose a mortgage made by a mining company, the defendant haying admitted the execution of the mortgage by the officers of the company, the complainant has the right to rely upon the admission, and is not bound to prove

the fact.

2. SAME-CONDITIONAL SURRENDER OF NOTES-NOTE-HOLDER NOT COMING IN-RIGHTS OF PARTIES.

The board of directors of a mining company having authorized the conversion of certain outstanding certificates of indebtedness into stock of the company, conditionally upon all the holders of such certificates converting them, a creditor who did not offer to convert, cannot legally contend that the conditional offer of the other holders to convert is in effect a conversion, and satisfies their notes, leaving the property of the company unincumbered and liable to seizure, and applicable exclusively to the satisfaction of his claim.

3. SAME-RIGHT TO FORECLOSE, CONDITION NOT BEING FULFILLED.

The conditional surrender of notes secured by a mortgage does not cut off the right to foreclose the mortgage for their satisfaction in a case where the condition is not fulfilled.

⚫239

4. SAME JUDGMENT IN FAVOR OF ONE OF SEVERAL CO-MORTGAGEES-RIGHTS OF OTHER MORTGAGEES.

A sale of mortgaged premises upon a judgment recovered on a part of the notes secured by the mortgage, does not preclude the holder of other notes from proceed. ing to foreclose it.

Appeal from the Circuit Court of the United States for the District of Colorado.

John W. Ross and Mills Dean, for appellant. A. T. Britton, J. H. M. Gowen, and A. B. Browne, for appellees.

WOODS, J. This was a bill filed on November 26, 1875, by Thomas Hau and Jonathan H. Pugh, trustees, to foreclose a mortgage executed to them. on August 22, 1870, by the Fairmount Gold & Silver Mining Company, to secure the bond of the company for $17,000. It appears from the record that at the date of the mortgage the mining company was indebted to va ious persons, who held its promissory notes or certificates of indebtedness, given and bearing date between August 4, 1868, and May 20, 1870, and amounting in the aggregate to $16,387.05, all bearing interest at the rate of 6 per cent. per annum. To secure the payment of this indebtedness to the holders of the notes, the mining company, on August 22, 1870, executed a bond of that date to Hare and Pugh in the penal sum of $34,000, conditioned for the payment to them at the expiration of one year from date of the sum of $17,000, with interest at the rate of 6 per cent. per annum, payable half-yearly in gold This bond was secured by the mortgage which the suit was brought to foreclose, bearing the same date, and conveying to Hare and Pugh certain mines, a mill-site, mill, and machinery in Clear Creek county, Colorado. Contemporaneously with the execution of the bond and mortgage, Hare and Pugh executed a declaration of trust to the effect that they held the bond and mortgage in trust for the benefit of the holders of the notes of the mining company above mentioned, and that if the mining company should pay off the notes, the bond and mortgage should be taken as paid and satisfied, and should be canceled. The bill averred that the bond was due and wholly unpaid, and prayed a foreclosure of the mortgage. John W. Thackara, Gilbert B. Reed, and others, who, it was alleged, claimed some interest in the mortgaged premises as judgment creditors or otherwise, were made defendants to the bill It appeared from the record that the defendant Thackara had been super intendent of the mine and general agent of the mining company in Colorado, and was a stockholder. He held by purchase some of the notes or certificates of indebtedness secured by the mortgage issued to other parties, and held other notes issued subsequent to the mortgage to himself for his salary, etc. Prior to the institution of this suit, to-wit, on the twenty-second day of March, 1873, Thackara began suit against the mining company on his notes and a book-account, caused a writ of attachment to be issued against the mining company, and on the thirteenth day of January, 1875, recovered a judgment for $23,442.12. Upon a sale under execution issued on this judgment all the real and personal property of the mining company, including that covered by the mortgage, was sold to Thackara for the sum of $24,873.01, and he assigned the certificate of purchase to the defendant Reed, to whom a sheriff's deed was executed December 15, 1875. It was conceded that Reed had succeeded to all the rights and interests of Thackara. The bill was dismissed as to Thackara, and Reed substituted as defendant in his place. Reed, by his answer, admitted the execution of the mortgage mentioned in the bill to secure the payment of notes made by the mining company, the sum secured by the mortgage not to exceed $17,000. He set up title to the mortgaged premises, claiming under the sheriff's deed executed to him under the sale made to Thackara. He averred that all the notes which had been secured by the bond and mortgage executed to Hare and Pugh, except two held by Samuel Nelson one for $25 and the other for $150, and one held by W. B. Wharton

for $100, had either been transferred to Thackara, and were included in the amount of his judgment against the mining company, or had been converted into stock of the mining company and surrendered and were thus satisfied. Neither the mining company nor any of the other defendants made any defense to the suit, and decrees pro confesso were taken against them. The answer of Reed was put in issue by replication. Upon final hearing on the pleadings and evidence the circuit court dismissed the bill, and the complainant Pugh, Hare having died pending the suit, appealed.

It is clear that the complainant was entitled to a decree of foreclosure unless the grounds of defense alleged by the respondent Reed were well taken. The first of these was that the directors of the mining company, who executed the bond and mortgage, did so without authority, and the bond and mortgage were therefore null and void. It is a sufficient reply to the defense to say that no issue is taken by the answer upon the averment of the bill that the bond and mortgage were executed and delivered by the proper officers of the mining company. On the contrary, the answer admits that "the said mining company, by its officers, on the date aforesaid, made, executed, and delivered to complainants, as trustees, a certain bond," describing the bond mentioned in the bill, "and that to secure the said sum of seventeen thousand dollars mentioned in said bond, the said Fairmount Gold & Silver Mining Company, by its officers, made the mortgage in said bill mentioned and upon the property in the bill of complaint described to the complainants." These admissions preclude the defense set up for the first time at the hearing, that the officers were not authorized to execute the bond and mortgage. The defendant having admitted the execution of the mortgage by the officers of the company, the complainant had the right to rely on the admission, and was not bound to, prove it.

*The other defense relied on was based on the allegation that the notes which the mortgage was given to secure had been satisfied, except those held by Nelson and Wharton, and these the defendant Reed offered to pay. The facts upon which this defense rests are as follows: On February 8, 1873, the board of directors of the mining company passed the following resolution: "Resolved, that the board of directors authorize the conversion of certain outstanding and unpaid certificates of indebtedness of the Fairmount Gold & Silver Mining Company, being numbered from 1 to 87, both numbers inclusive, and Nos. 89 to 100, both numbers inclusive, into stock of the said company at the par value thereof, upon the surrender of the said certificate of indebtedness by the holders thereof: provided, that the holders of the said certificates of indebtedness convert the same into stock of the said company, at the par value thereof, within ten days from the date of the passage of this resolution, and all the holders convert." The certificates of indebtedness mentioned in this resolution were the notes which the mortgage was given to secure. It is insisted by the defendant Reed that all the notes of the company, except those held by Thackara, Nelson, and Wharton, were converted into stock under the provisions of the foregoing resolution and were thereby satisfied, and that the notes held by Thackara, being merged in the judgment recovered by him, were satisfied by the sale of the company's property under execution, and as he offers to pay the notes held by Nelson and Wharton, there should be no decree of foreclosure.

The record does not sustain the assumption of the defendant. On the contrary, it appears that there never was any conversion of notes secured by the mortgage into the stock of the company. It was a condition of the resolution passed by the directors, under which the conversion is alleged to have taken place, that none of the notes were to be converted unless all were converted. The purposes of the resolution were plain, namely, to relieve the company of its embarrassments by providing for the conversion of its debts into stock. In order that this might be done and no advantage taken by one