Page:Federal Reporter, 1st Series, Volume 8.djvu/791

HOPPEB V. TOWN OF COYINGTON. 777 �"But it does not appear on the face of the bill when "W. Raddiff discovered the alleged fraud, or that he ever did discover the fact, now stated by his heirs, that the judgment had been paid by Rowley, as the agent of the judgment debtor, with funds in his hands belonging to the latter, before the sheriff's sale. * * * And I think, upon a proper construction of the statute, it is not necessary that the complainant should allege in his bill that he has dis- covered the fraud complained of within six years. A demurrer, therefore, will not lie; to a bill for relief on the gi'ound of fraud, although it appears that the fraud occurred more than six years before the commencement of t^ suit, unless it also appears positively, or by necessary intendment, that the fraud was discovered by the party aggrieved more than six years before he flled his bill for relief.' Where that does not appear, the defendant must be left to make his defence by plea or answer, so as to prevent au affirmative issile upon the question of the discovery of the fraud." �The position thus takeu by the New York court I regard as sound. �What has been said necessarily leads to the conclusion that the court mil not, in support of a demurrer, setting up the statute pf limitations, infer from the fact that the alleged fraud occurred more than six years prior to the commencement of the suit, that the com- plainants discovered the facts constituting the frauds before that period of six years. �For the reasons given, an order will be entered overruling the demurrer, and giving the defendants 30 days within which to plead or answer. ���HoppEB V. The Town of Covikgton.* {Circuit Court, D. Indiana. October 12, 1881.) �1. MuNiciPAii Bonds — Power to Issue. �Hunicipal corporations are created for governmental and administrative purposes, and ruit for business purposes. Their power to issue bonds or other commercial paper must be derived from legislative authority, either express or clearly implied. �2. HoLDERS op— Must Take Notice and Ikquihe, Whbn. �The holder of municipal bonds, in which there are no recitals to estop the municipality, is bound to know that they were issued under express legislative authority, and to inquire whether they were issued in the mode and for the purposes provided by the law authorizing their issue. �3. Whbn Not Commercial Papbr. , �Bonds not issued in pursuance of express legislative authority, and in the mode and for the purposes provided by law, possess none of the qualities of commercial paper, but when the municipality is authorized to issue bonds un- der certain conditions, and the bonds contain recitals of the existence of the necessary conditions, such recitals are conclusive in favor of a bona fide pur- chaser. �*Reported by Chai. L. Hollteis, United States Attoruey. ��� �