Page:Federal Reporter, 1st Series, Volume 8.djvu/218

204 , fedsbal befobteb. �MaQufacturing Company, and one of its directors, and that on or about the eleventh of March, 1871, he delivered to said eompany the said entire issue of $60,000 in bonds, and that the said Ottawa Manu- facturing Company, on the eighth of April, sold to Caldwell, Clark & Co. $10,000 of said bonds, and on the sixth of June, 1871, they sold to Lester H. Eames |38,000 of said bonds; that, at the time said bonds came into the hands of the Ottawa Manufacturing Company, the coupons for the first year's interest had been taken up by the city and some short-time bonds given to Cushman in settlement thereof, and that the manufacturing eompany sold the bonds to Eames for their par value, with some slight discount upon the second year's interest, which was then running. Eames subsequently purchased $9,000 of the bonds sold to Caldwell, Clark & Co., making in all $47,000 worth of bonds purchased and paid for by him, and aftex such purehase the city paid two year's interest on said bonds. �At the time the ordinance authorizing the issue of these bonds was adopted by the common council and voted upon by the electors of the city, and at the time the bonds were issued and the contract made with Cushman, Eames was a citizen and resident of Ottawa, engaged in the banking business there, and a subscriber to the corporation newspaper, which contained the proceedings of the common council relating to the issue and disposition of these bonds. �It also appears by the proof that the Ottawa Manufacturing Com- pany applied the proceeds of these bonds to the construction of the dam across both the Fox and Illinois rivers, and the work was so far completed as to develop some water-power for manufacturing pur- poses during the season of 1871. �It also appears that Eames continued to hold these bonds until a short time before the commencement of this suit, when he transferred them to the plaintiff, It is contended that Eames is chargeable with full notice of the fact that these bonds were issued as a bonus to the parties who were engaged in the improvement of the water-power aforesaid, and knew that the city had no authority to aid said enter- prise by such issue of bonds, and the question is, it being clear from the proof that Eames was a purchaser for value, is the fact that he did know, or may be presumed to have known, that the only purposes for which the city issued these bonds was to aid in this contemplated water-power improvement, any defence to bis right to maintain the action thereon ? �This question was so fully discussed in HacJcett v. Ottawa, and the Illinois authorities as to what is a corporate purpose so caref ully con- ��� �