Presidio County v. Noel-Young Co., 212 U.S. 58 (1909)

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Presidio County v. Noel-Young Bond & Stock Company

No. 41

Argued December 4, 1908
Decided January 18, 1909
212 U.S. 58

CERTIORARI TO THE UNITED STATES CIRCUIT

COURT OF APPEALS FOR THE FIFTH CIRCUIT

Syllabus

Where the officers having statutory authority to issue bonds have also the statutory authority to determine whether conditions precedent have been performed, certify by recitals therein that the bonds are issued in virtue of the statute, such recital import compliance with the statute upon which a bona fide purchaser can rely, and the obligor cannot against such a purchaser assert the contrary. Evansville v. Dennett, 161 U.S. 434.

In the absence of evidence to the contrary the presumption is that a third party producing a genuine negotiable instrument is a bona fide purchaser for value.

The doctrine of lis pendens has no application to commercial securities. Orleans v. Platt, 99 U.S. 676, 682.

In respect to the doctrine of commercial law and general jurisprudence, while courts of the United States, in questions balanced with doubt, will, for the sake of harmony, lean toward an agreement with the state court, as a general rule, they will exercise their independent judgment uncontrolled by decisions based on local statutes and usage, and so, in this instance, as the state court proceeded in part on grounds inconsistent with the decision of this Court in such cases, it decision should not be followed. Ball, Hutchings & Co. v. Presidio County, 88 Tex. 60, not followed.

Although a coupon is for interest to become due on the bond, the promise to pay are s distinct as though expressed in different instruments, and, as the bond and the coupon are capable of separate ownership, a suit on the bond and a suit on the coupon are based on different causes of action.

A bona fide purchaser for value before maturity of bonds is not precluded or affected by an adverse judgment in a suit on the coupons of those bonds to which suit he is not a party, and of which he had no notice.

___ F. ___ affirmed.

The facts, which involve the validity of bonds issued by the petitioner, are stated in the opinion.