236 U.S. 101
35 S.Ct. 265
59 L.Ed. 485
BOARD OF COUNTY COMMISSIONERS OF THE CITY AND COUNTY OF DENVER, Petitioner,
HOME SAVINGS BANK.
Argued January 15, 1915.
Decided January 25, 1915.
Messrs. Charles R. Brock, William H. Ferguson, I. N. Stevens, Milton Smith, Charles S. Thomas, and William H. Bryant for petitioner.
[Argument of Counsel from pages 101-103 intentionally omitted]
Messrs. John Maxey Zane, Charles W. Waterman, and Charles F. Morse for respondent.
Mr. Justice Holmes delivered the opinion of the court:
This is an action brought by the respondent upon a certificate of indebtedness and an interest coupon attached to the same, against the petitioner. There was a verdict and judgment for the plaintiff and the circuit court of appeals affirmed the judgment. 118 C. C. A. 256, 200 Fed. 28. The plaintiff held the instrument by indorsement, and was found to have purchased it in good faith before maturity, but the defendant denied the authority to issue the certificate in negotiable form, and sought to raise the question by its third defense, which set up failure of consideration. There was a demurrer to this defense, which was sustained by the circuit court, and the trial took place upon the other issues. The circuit court of appeals declined to consider the correctness of this ruling because no exception was taken to it. But no exception or bill of exceptions is necessary to open a question of law already apparent on the record, and there is nothing in the record that indicates a waiver of the defendant’s rights. Therefore we must consider the merits of the defense. Nalle v. Oyster, 230 U. S. 165, 57 L. ed. 1439, 33 Sup. Ct. Rep. 1043.
The certificate recites the allowance of a claim for ballot machines by the board of county commissioners of the city and county of Denver, and goes on, ‘the board of county commissioners being authorized thereto by the laws of the state of Colorado, act of 1905, hereby issues its certificate of indebtedness for the said sum, and will in one (1) year pay to the order of the Federal Ballot Machine Company the sum of $11,250, with interest on this sum, from the date hereof, at the rate of 5 per cent per annum; the said interest payable semiannually, as per two (2) coupons, hereto attached.’ This certificate was one of ten issued to provide for the payment for ballot machines, and the Constitution of the state authorized provision for payment in such case ‘by the issuance of interest-bearing bonds, certificates of indebtedness, or other obligations, which shall be a charge upon such city, city and county, or town; such bonds, certificates, or other obligations may be made payable at such time or times, not exceeding ten years from the date of issue, as may be determined, but shall not be issued or sold at less than par.’ Art. 7, ? 8, as amended November 6, 1906. A statute in like words previously had been passed, to be effective if the amendment to the Constitution should be adopted, as it was. Laws of 1905, chap. 101, ? 6. See Rev. Stat. 1908, ? 2342. The defense that we are considering is that the foregoing words did not warrant making the certificates of indebtedness negotiable, relying especially upon Brenham v. German-American Bank, 144 U. S. 173, 36 L. ed. 390, 12 Sup. Ct. Rep. 559. But the argument seems to us to need no extended answer. The power to issue certificates of indebtedness or bonds is given in terms, and it is contemplated that these instruments may be sold to raise money for the purpose named. But, however narrowly we may construe the power of municipal corporations in this respect, when they are authorized to raise money by the sale of bonds we must take it that they are authorized to put the bonds in the form that would be almost a necessary condition to obtaining a purchaser,?the usual form in which municipal bonds are put upon the market. Gunnison County v. E. H. Rollins & Sons, 173 U. S. 255, 276, 43 L. ed. 689, 698, 19 Sup. Ct. Rep. 390. What is true about bonds is true about certificates of indebtedness. Indeed, it is difficult to see any distinction between the two as they are commonly known to the business world. The essence of each is that they contain a promise under the seal of the corporation, to pay a certain sum to order or to bearer. We are of opinion that the board of county commissioners was authorized to issue certificates in the negotiable form. Carter County v. Sinton, 120 U. S. 517, 525, 30 L. ed. 701, 703, 7 Sup. Ct. Rep. 650; Gelpcke v. Dubuque, 1 Wall. 175, 203, 17 L. ed. 520, 524; Cadillac v. Woonsocket Inst. for Sav. 7 C. C. A. 574, 16 U. S. App. 545, 58 Fed. 935, 937; Ashley v. Presque Isle County, 8 C. C. A. 455, 16 U. S. App. 656, 709, 60 Fed. 55, 67; D’Esterre v. Brooklyn, 90 Fed. 586, 590; Dill. Mun. Corp. 5th ed. ? 882.