Steines v. Franklin County.

that is giving them the highest characteristics of negotiable securities But one who takes a negotiable promissory note or bill of exchange, purporting to be made by an agent, is bound to inquire as to the power of the agent. Where the agent is appointed and the power conferred, but the right to exercise the power has been made to depend upon the existence of facts of which the agent may naturally be supposed to be in an especial manner cognizant, the bona fide holder is protected because he is presumed to have taken the paper upon the faith of the representation of the agent as to those facts. But the holder has no such protection in regard to the existence of the power itself. It is precisely this principle that underlies all the decisions on this question, giving this species of paper its firmest support. The holder has only to see that the power authorizing the issue of the bonds exists; but where the right to exercise the power depends upon certain facts, he may rely upon the representation as to the existence of those facts, because they are peculiarly within the cognizance of the agent issuing them. Therefore, where the voters have conferred the power by a vote, the requisite number of votes cast and the regularity of the election are all matters within the knowledge of the county courts or city councils, and the purchasers may well rely upon the truth of their representations touching the premises. As no election was ever ordered and no vote taken in this case, the court had no jurisdiction whatever, and acted wholly without authority, and hence the bonds were void.

The next point of inquiry is whether the act of the legislature, approved March 21, 1868, cured the unauthorized action of the county court and validated the new bonds issued. That act contains the following provisions:

"Section 1. In all cases where the county courts have heretofore laid out, surveyed, and commenced the building and have built macadamized or other roads, or have thrown up embankments, built bridges and culverts, or other necessary work, in their respective counties, the county courts are hereby authorized to borrow money on the credit of the county, and to issue the bonds of the county with coupons attached; but said bonds shall not be of a denomination of less than one hundred or more than one thousand dollars, and shall not run exceeding twenty years, nor bear interest at a higher rate than ten (10) per cent for the purpose of paying for the work done and contracted for in their respective counties.

Sec. 2. Said bonds may be made transferable in such manner as

Steines v. Franklin County.

the county court may direct; and the courts shall be authorized to levy a sufficient amount of revenue annually to pay the accruing interest on bonds authorized by this act; and for that purpose may, if it should be necessary, levy a special tax."

After the adoption of this last act, the county court took up the original bonds and issued others in lieu thereof. These bonds purport upon their face to be issued "under and pursuant to an order of the county court of said county, and by authority of an act of the general assembly of the State of Missouri, approved March 21, 1868, entitled 'An act to authorize county courts to issue bonds for the purpose of paying for the building of bridges and macadamized roads heretofore contracted for and built."

If the act imparts the requisite authority to issue the bonds for the purpose contemplated, I have no doubt about the power of the court to make the exchange in the mode pursued. That the act was framed and passed with a view to meet this very case is unquestionable. It is also true that curative and confirmatory acts are generally specific and particular. But in this State it could not be special without violating the constitutional provision prohibiting special enactments. Its generality, therefore, is not an insuperable objection, no other reason against it being shown. That the legisla ture had the power is, in my opinion, beyond dispute. The case is not distinguishable from The Hann. & St. Jo. Railroad Co. v. Marion County, 36 Mo. 294. In that case, a subscription was made by the county court, under an act that was supposed to be invalid, and we held that a subsequent ratification of the subscription by the court, under an act authorizing the same, would make the contract binding although it had been originally void. The act simply confers the right to do a particular thing, and may be construed as an original

power.

So it has been recently adjudged that where a debt was contracted. by a city, which was void because not authorized by the statutory law of the State, it was made valid by a subsequent statute recognizing the validity of the debt as contracted. The City v. Lawson, 9 Wall. 477. This whole subject was recently examined at length by this court in the case of Barton County v. Walser, 47 Mo. 189, and it is unnecessary to repeat here the views therein offered. The counties are not full corporations in the absolute and unqualified sense of that term, but mere political subdivisions for governmental purposes; and the county courts act under the direction of the

Lungstrass v. German Insurance Co.

statute, in such manner and according to such terms as may be prescribed by the legislature. Such being the case, it was within the undoubted province of the legislature to grant the power and clothe the court with the authority to issue bonds in payment for the work. The circuit cout found for the defendants, and I think its judgment should be affirmed.

Affirmed.

NOTE.-In Marsh v. Supervisors, 10 Wall. 676, the board of supervisors of a county were authorized by statute to subscribe to the stock of any railroad, and to pay such subscription in county bonds, provided a majority of the qualified voters of the county should vote for the same. The board of supervisors subscribed stock and issued in payment the county bonds without the required sanction of the voters. The supreme court of the United States held that such bonds were invalid, even in the hands innocent in fact of any knowledge that the law had not been complied with, and that the supervisors by their subsequent action could not ratify the issuing of the bonds.

But mere irregularities in issuing county bonds will not invalidate them in the hands of bona fide holders. Lynde v. County of Winnebago (U. S. Sup. Ct.), 7 Albany Law J. 125. See, also, State v. Saline County, post. — REP.

LUNGSTRASS V. GERMAN INSURANCE Co., appellant.

(48 Mo. 201.)

Fire insurance policy issued to agent.

A fire insurance company issued a policy of insurance on the goods of its agent who, on the day of its receipt, made an entry in his book of accounts with the company of the amount chargeable against him for the premium. He forwarded no letter of acceptance nor any part of the premium, inasmuch as it was not the custom to forward remittances pertaining to his agency until the end of the month. The next day the goods were destroyed by fire, whereupon he immediately announced the loss to the company. Held, that the company was liable on the policy.

ACTION on a policy of fire insurance. The opinion states the

case.

The appeal is by defendant from a verdict and judgment in favor of plaintiff.

Finkeluburg & Rassieur and Crandall & Linnet, for appellant. Phillips & Vest, for respondent.

Langstrass v. German Insurance Co.

BLISS, J. The plaintiff holds a policy of insurance issued under the following circumstances: He had been appointed agent of defendant for Sedalia, and, on the 28th of October, in response to applications obtained and forwarded by him, the secretary sent him policies numbered 294, 295 and 296, the first being a policy upon his own goods. The premium charged was two and a half per cent, and being dissatisfied with the rate, the plaintiff sent back his own policy for a reduction. It was reduced to two per cent and returned, and the plaintiff claims that he received it on the sixth of November, and that on the same day he made an entry in his account with the company, recognizing the change of rate and accepting the policy as changed. Early in the morning of the seventh the plaintiff's goods were burned, and on the eighth he telegraphed the fact, claiming the benefit of the policy. The company, by its secretary, at once repudiated it, upon the alleged ground that the premium had not been remitted, but now claim it to have been invalid because no notice of its acceptance was sent to the company.

Counsel for appellant contend that this case comes under the rules governing contracts by correspondence, and that the contract was not consummated.

It is true that no contract can arise from a proposition or offer on one side until it is accepted on the other; until then it remains merely a proposition. And it is also true that this acceptance must be evidenced by some act that binds the party accepting. A man's mental resolution that can be changed is not sufficient; both parties must be bound or neither will be: The usual mode of accepting a proposition made by correspondence is By notice of acceptance, and though it was formerly held that it did not ripen into a contract until receipt of the notice, yet the doctrine now is that the contract is complete when the acceptance is forwarded, without reference to the time of its reception. Kentucky M. Ins. Co. v. Jenks, 5 Ind. 96; Hallock v. Com. Ins. Co., 2 Dutch. 280; Tayloe v. M. F. Ins. Co., 9 How. 390. But notice is not the only evidence of acceptance. Any appropriate act which accepts the terms as they were intended to be accepted, so as to bind the acceptor, just as clearly evidences the concurrence of the parties - the bringing their minds together as a formal letter of acceptance. The terms "the nature of the offer, or circumstances under which it is made," or relation of the parties, may indicate another mode; and, if so, its adoption equally binds them.

Lungstrass v. German Insurance Co.

The plaintiff, as agent, was to make his returns monthly, and when the fire occurred the time for making his current monthly return had not arrived. The secretary, on his appointment as agent, had given him a book, being" the tariff of rates and general instruction book, for the exclusive use of agents," of a Cincinnati company, saying to him that the company had adopted their rules until some could be printed in its own name. Among them was the following: "21. Insurance of your own property. If you have property of your own which you desire to have insured *please forward us your application fully made out and signed, and if the risk is such as we can take, will make you a policy at this office at a fair rate, and mail it to you promptly. * * You will enter the risk on your abstract and take credit in your next account, current for commission on the premium, as if the policy had been issued by yourself."

*

There may be some ambiguity in this instruction, but both parties seemed to understand it to mean that, as to all things but the acceptance of the risk, fixing the rate and issuing the policy, the transaction was to be the same as with an outsider through the agent, i. e., as the agent delivers the policy, receives the premiums, and credits the company with them, to be remitted at his next return, so he credits the company with his own premium, to be remitted in like manner. The following letter, in reply to the applications forwarded by him, including his own, No. 294, also shows this understanding:

Here no notice of acceptance and no remittance was required, but plaintiff was charged with the premiums less the commissions, including his own. Had the plaintiff been satisfied with the rate charged him, would any other notice of the acceptance of the policy have been thought of than the entry of the charges to the credit of the company, which was at once made? But he was dissatisfied with his own, and sent it back for abatement. It was returned reduced to two per cent, and, as the plaintiff testifies, received on the 6th of November, and the difference charged back to the company. After the fire, and in response to its announcement, the secretary sends the