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payable January 1, 1887, with interest at the rate of 8 per cent. per annum, payable semi-annually, and in the form before set forth, with coupons for the semi-annual interest attached, of the following form:
"CITY OF HOLLY SPRINGS,
"MARSHALL COUNTY, MISSISSIPPI, January 1, 1872. སཐ The city of Holly Springs acknowledges to owe the sum of dollars, payable to bearer on the first day of , 18, at the office of the Holly Springs Savings & Insurance Company, Holly Springs, Mississippi, for six months' interest on bond No. (No. of bond.)
"LEWIS BEEHLER, Treasurer of the City of Holly Springs."
After the issuing and delivery of the bonds to the company, the defendant, for several years, continued to levy and collect taxes for the payment of the interest accruing on the bonds, and took up the coupons as they fell due, and voted the stock so subscribed in the election of directors of the company, and in all stockholders' meetings of the company. On the first of January, 1875, the plaintiff became the bona fide holder for value, in due course of trade, and without any notice or knowledge of any illegality in the bonds or want of power to issue them, of 43 of the bonds, and is the owner of 568 of the coupons, identifying sufficiently the bonds and coupons.
The demurrer sets forth, as causes of demurrer, that the declaration does not show that there was any power to order the election, or to hold it, or to subscribe for the stock, or to issue the bonds and coupons. The court sustained the demurrer, and judgment was given for the defendant. The plaintiff, has brought a writ of error.
It is not claimed there was any statute in existence which authorized at the time the action of the mayor and aldermen of the city in ordering what is called the "special election" to be held, or which authorized at the time the holding of any election, general or special, on the question of a subscription to the stock of the company. Under the provision of the constitution of Mississippi before cited, it is clear that the authority of the legislature is necessary to enable the county, city, or town to become a stockholder in, or lend its credit to, a corporation. The act of March 16, 1872, relied on as the validating act, was passed after the so-called election took place, and after the making of the subscription, but before the issuing of the bonds.
It is contended for the plaintiff in error that the constitution contemplated that the vote might be taken in advance of the granting by the legislature of authority to subscribe. But, however that may be, it is manifest, we think, that the provision of the constitution confers no authority to subscribe for stock. The legislature must authorize the subscription, either by a statute passed in advance, providing for an election, and for obtaining the assent of the required two-thirds of the qualified voters, to be followed by a subscription; or by a proper statute of distinct ratification and authorization, passed after there has been such assent of two-thirds of the qualified voters, at an election, as the constitution requires. The provision is inhibitory on the legislature, and not permissive or enabling to the city. Whether the voting which the declaration says took place was the holding of such an election as the constitution contemplated, (for the assent is to be given at an election to be held, and not otherwise,) is a question not necessary to be decided; because we are of opinion that the act relied on as a validating or ratifying act has no such effect. It provides "that all subscriptions to the capital stock of the" company in question, "made by any county, city, or town in this state, which were not made in violation of the constitution of this state, are hereby legalized, ratified, and confirmed." It is urged that the qualifying words, "which were not made in violation of the constitution of this state, were unneces-• sary, because the legislature could not make valid any act done in violation
of the constitution; and it is sought to have the provision construed as if it read that all subscriptions made after such a voting as took place in this case are legalized, ratified, and confirmed. But this assumes that the legislature regarded such voting as being the holding of such a special election as the constitution requires. If the legislature had distinctly, in words, designated and identified such voting, and adopted it as being such an election, and as evidencing the assent required by the constitution, it might be held that there was an intention manifested to ratify this particular voting and assent and subscription, still leaving it open to be determined whether, on the whole, the constitution had been complied with, and the legislature had, in fact and in law, authorized the subscription. Such a designation and identification of a voting at an election, described as resulting in an approval by the constitutional two-thirds of the qualified voters, followed by an authority to Grenada county, declared to be based on such approval, to subscribe for stock in the Vicksburg & Nashville Railroad Company, is found in the act of the legislature of Mississippi, approved January 27, 1872, (Laws 1872, c. 71, p. 290, § 4,) seven weeks before the act in question was approved. It was the act involved in Grenada Co. v. Broyden, 112 U. S. 261, S. C. ante, 125, where this court held that it was a valid confirmatory act. But no such view can be taken of the act in this case. The intention of the legislature to confirm and ratify the subscription in question cannot be ascertained, with certainty, from the language of the act, which is too vague to form the basis of so important an authority as that sought to be deduced from it. As is said in State v. Stoll, 17 Wall. 425, 436, if the legislature intended to do what is claimed, "it was bound to do it openly, intelligibly, and in language not to be misunderstood," and "as a doubtful or obscure declaration would not be justifiable, so it is not to be imputed." Even a bona fide holder of a municipal bond is bound to show legislative authority in the issuing body to create the bond. Recitals on the face of the bond or acts in pais, operating by way of estoppel, may cure irregularities in the execution of a statutory power, but they cannot create it. If, as in the present case, legislative authority was wanting, the bond has no validity.
The general act of April 19, 1872, is referred to in the declaration. But it does not avail in this case; for, although the bonds were issued after its passage, the subscription took place before, and the act applies only to future elections and subscriptions, and authorizes only bonds bearing interest at 7 per cent. per annum. Judgment affirmed.
(114 U. S. 104)
THOMSON and others v. WOOSTER.
(March 30, 1885.)
1. PRACTICE-JUDGMENT PRO CONFESSO-CONFESSION OF FACTS PROPERLY PLEADED. A confession of facts properly pleaded dispenses with proof of those facts, and is as effective for the purposes of the suit as if the facts were proved, and a decree pro confesso regards the statements of the bill as confessed.
2. SAME-FORCE OF DECREE PRO CONFESSO.
To take a bill pro confesso is to order it to stand as if its statements were confessed to be true; and a decree pro confesso is a decree based upon such statements, assumed to be true. Such a decree is as binding and conclusive as any decree rendered in the most solemn manner.
8. SAME-WHEN DECREE PRO CONFESSO MAY BE HAD.
By the rules of the supreme court, a decree pro confesso may be had if the defendant, on being served with process, fails to appear within the time required; or if, having appeared, he fails to plead, demur, or answer to the bill within the time limited for that purpose; or if he fails to answer after a former plea, demurrer, or answer is overruled or declared insufficient.
4. SAME-DECREE PRO CONFESSO-EFFECT AS TO PROCEEDINGS BY DEFENDANT.
A defendant, after the entry of the decree pro confesso, and while it stands unrevoked is absolutely barred and precluded from alleging anything in derogation of or in opposition to the said decree, and he is equally precluded from questioning
its correctness on appeal unless, on the face of the bill, it appears manifest that it was erroneous and improperly granted.
5. SAME SUPREME COURT-VALIDITY OF ORIGINAL LETTERS PATENT.
After a decree pro confesso the supreme court cannot, on appeal, say, -as to a question raised by the defendant upon the allegation of the bill referring to the reissue of letters patent, and as to the validity of such reissue upon the complainant's own statement of the original patents being confirmed in numerous suits,-as a mere matter of law, what effect such suits had to show that the original letters patent were valid and operative.
6. EXAMINATION OF FACTS upon which affidavits accompanying an application to reopen the proof before the master was based.
Appeal from the Circuit Court of the United States for the Southern District of New York.
J. C. Clayton and A. Q. Keasbey, for appellants. Frederic H. Betts, for appellee.
BRADLEY, J. The appellee in this case, who was complainant below, filed his bill against the appellants, complaining that they infringed certain letters patent for an improved folding-guide for sewing-machines, granted to one Alexander Douglass, of which the complainant was the assignee. The patent was dated October 5, 1858, was extended for seven years in 1872, and was re*issued in December, 1872. The suit was brought on the reissued patent, a♬ copy of which was annexed to the bill, which contained allegations that the invention patented had gone into extensive use, not only on the part of the complainant, but by his licensees; and that many suits had been brought and sustained against infringers. The bill further alleged that the defendants, from the time when the patent was reissued down to the commencement of the suit, wrongfully and without license, made, sold, and used, or caused to be made, sold, and used, one or more folding-guides, each and all containing the said improvement secured to the complainant by the said reissued letters patent; and that the defendants derived great gain and profits from such use, but to what amount the complainant was ignorant, and prayed a disclosure thereof, and an account of profits, and damages, and a perpetual injunction. The bill of complaint was accompanied with affidavits verifying the principal facts and certain decrees or judgments obtained on the patent against other parties, and Douglass' original application for the patent, made in April, 1856, a copy of which was annexed to the affidavits. These affidavits and documents were exhibited for the purpose of obtaining a preliminary injunction, which was granted on notice.
The defendants appeared to the suit by their solicitor, May 3, 1879, but neglected to file any answer, or to make any defense to the bill, and a rule that the bill be taken pro confesso was entered in regular course June 10, 1879. Thereupon, on the second of August, 1879, after due notice and hearing, the court made a decree to the following effect, viz.: (1) That the letters patent sued on were good and valid in law; (2) that Douglass was the first and original inventor of the invention described and claimed therein; (3) that the defendants had infringed the same by making, using, and vending to others to be used, without right or license, certain folding-guides substantially as described in said letters patent; (4) that the complainant recover of the defendants the profits which they had derived by reason of such infringement by any manufacture, use, or sale, and any and all damages which the complainant had sustained thereby; and it was referred to a master to take and☎ state an account of said profits, and to assess said damages, with directions to the defendants to produce their books and papers and submit to an oral examination if required. It was also decreed that a perpetual injunction issue to restrain the defendants from making, using, or vending any folding-guides made as theretofore used by them, containing any of the inventions described and claimed in the patent, and from infringing the patent in any way. Under this decree the parties went before the master, and the examination was com
menced in October, 1879, in the presence of counsel for both parties, and was continued from time to time until November 3, 1880, when arguments were heard upon the matter, and the case was submitted. On November 12th the report was prepared and submitted to the inspection of counsel. On the 18th motion was made by the defendants' counsel, before the master, to open the proofs and for leave to introduce newly-discovered evidence. This motion was supported by affidavits, but was overruled by the master, and his report was filed December 10, 1880, in which it was found and stated that the defendants had used at various times, from January 18, 1877, to the commencement of the suit, 27 folding-guides infringing the complainant's patent, and had folded 1,217,870 yards of goods by their use, and that during that period there was no means known or used, or open to the public to use, for folding such goods in the same or substantially the same manner, other than folding them by hand, and that the saving in cost to the defendants by using the folding-guides was three cents on each piece of six yards, making the amount of profit which the complainant was entitled to recover, $6,089.35; and that during the same period the complainant depended upon license fees for his compensation for the use of the patented device, and that the amount of such fees constituted his loss or damage for the unauthorized use of his invention; and that, according to the established fees, the defendants would have been liable to pay for the use of the folding-guides used by them during the years 1877, 1878, and 1879, (the period covered by the infringement,) the sum of $1,350, which was the amount of the complainant's damages. The evidence taken by the master was filed with his report.
By a supplemental report, filed at the same time, the master stated the fact of the application made to him to open the proofs on the ground of surprise and newly-discovered evidence, (as before stated,) and that after hearing said application upon the affidavits presented, (which were appended to the report,) he was unable to discover any just ground therefor. The defendants did not object to this supplemental report, but on the tenth of January, 1881, they filed exceptions to the principal report, substantially as follows: (1) That, instead of the double guide or folder claimed in the complainant's patent being the only means for folding cloth or strips on each edge during the period of the infringement, (other than that of folding by hand,) the master should have found that such strips could have been folded by means of a single guide or folder, and that the use of such guides was known and open to the public long before 1877, and that such guides were not embraced in the complainant's patent; (2) that the amount of profits found by the master was erroneous, because it appeared that folded strips, such as those used by the defendants, were an article of merchandise, cut and folded by different parties at a charge of 25 cents for 144 yards; (3) that the profits should not have been found greater than the saving made by the use of the double guide as compared with the use of a single guide, or greater than the amount for which the strips could have been cut and folded by persons doing such business; (4) that the damages found were erroneous.
Other exceptions were subsequently filed, but were overruled for being filed out of time.
Before the argument of the exceptions the defendants gave notice of a motion to the court to refer the cause back to the master to take further testimony in reference to the question of profits and damages chargeable against then under the order of reference. In support of this motion further affidavits were presented. *The exceptions to the report and the application to refer the cause back to the master were argued together. The court denied the motion to refer the cause back, overruled the exceptions to the report, and made a decree in favor of the complainant for the profits, but disallowed the damages. That decree is now brought here by appeal.
The appellants have assigned 14 reasons or grounds for reversing the de
cree. The first nine relate to the taking of the account before the master, and his report thereon; the last five relate to the validity of the letters patent on which the suit was brought. It will be convenient to consider the last reasons first. The bill, as we have seen, was taken pro confesso, and a decree pro confesso was regularly entered up, declaring that the letters patent were valid, that Douglass was the original inventor of the invention therein described and claimed, that the defendants were infringing the patent, and that they must account to the complainant for the profits made by them by such infringement and for the damages he had sustained thereby; and it was referred to a master to take and state an account of such profits and to ascertain said damages. The defendants are concluded by that decree, so far at least as it is supported by the allegations of the bill, taking the same to be true. Being carefully based on these allegations, and not extending beyond them, it cannot now be questioned by the defendants unless it is shown to be erroneous by other statements contained in the bill itself. A confession of facts properly pleaded dispenses with proof of those facts, and is as effective for the purposes of the suit as if the facts were proved; and a decree pro confesso regards the statements of the bill as confessed.
By the early practice of the civil law, failure to appear at the day to which the cause was adjourned, was deemed a confession of the action; but in later times this rule was changed, so that the plaintiff, notwithstanding the contumacy of the defendant, only obtained judgment in accordance with the truth of the case as established by an ex parte examination. Keller, Proced. Rom. § 69. The original practice of the English court of chancery was in accordance with the later Roman law. Hawkins v. Crook, 2 P. Wms. 556. But for at least two centuries past, bills have been taken pro confesso for contumacy. Id. Chief Baron GILBERT says: "Where a man appears by his clerk in court, and after lies in prison, and is brought up three times to court by habeas corpus, and has the bill read to him, and refuses to answer, such public refusal in court does amount to the confession of the whole bill. Secondly. When a person appears and departs without answering, and the whole process of the court has been awarded against him after his appearance and departure, to the sequestration; there also the bill is taken pro confesso, because it is presumed to be true when he has appeared, and departs in despite of the court, and withstands all its process without answering." Forum Romanum, 36. Lord HARDWICKE likened a decree pro confesso to a judgment by nil dicit at common law, and to judgment for plaintiff on demurrer to the defendant's plea. Davis v. Davis, 2 Atk. 21. It was said in Hawkins v. Crook, qua supra, and quoted in 2 Eq. Cas. Abr. 179, that "the method in equity of taking a bill pro confesso is consonant to the rule and practice of the courts at law, where, if the defendant makes default by nil dicit, judgment is immediately given in debt, or in all cases where the thing demanded is certain; but where the matter sued for consists in damages, a judgment interlocutory is given; after which a writ of inquiry goes to ascertain the damages, and then the judgment follows." The strict analogy of this proceeding in actions of law to a general decree pro confesso in equity in favor of the complainant, with a reference to a master to take a necessary account, or to assess unliquidated damages, is obvious and striking.
A carefully prepared history of the practice and effect of taking bills pro confesso is given in Williams v. Corwin, Hopk. Ch. 471, by HOFFMAN, masJer, in a report made to Chancellor SANFORD, of New York, in which the conclusion come to, (and adopted by the chancellor,) as to the effect of taking a bill pro confesso, was that "when the allegations of a bill are distinct and positive, and the bill is taken as confessed, such allegations are taken as true, without proofs," and a decree will be made accordingly; but "where the allegations of a bill are indefinite, or the demand of the complainant is in its nature uncertain, the certainty requisite to a proper decree must be afforded