This is an action at law brought by Augustus Frank, a citizen of the state of New York, for the purpose of enforcing the payment of the interest coupons on certain municipal bonds alleged to have been issued by the county of Nemaha, on behalf of Brownville precinct, in said county, to aid in the construction of the Brownville, Fort Kearney & Pacific Railroad, in pursuance of an act of the legislature of the tate of Nebraska. The petition alleges that, by virtue of an act entitled 'An act to enable counties, cities, and precincts to borrow money on their bonds, or to issue bonds to aid in the construction or completion of works of internal improvement in this state, and to legalize bonds already issued for such purposes,' passed on the fifteenth day of February, 1869, the board of commissioners of the county of Nemaha issued the special bonds or written obligations of said Brownville precinct on the twentieth day of August, 1870, to aid in the construction of the Brownville, Fort Kearney & Pacific Railroad, and delivered the same to the company authorized to construct said road; that prior to the issue of said bonds the proposition to issue the same was duly submitted to the voters of said Brownville precinct, in strict accordance with the provisions of the said act of the legislature, and that a large majority voted for said proposition; that during the years 1871 and 1872 the said Brownville precinct, and the board of county commissioners, duly paid the coupons then falling due, by means of a tax levied for that purpose, but for the years 1878 and 1879 they have failed and refused to pay the same, or to levy a tax therefor. The petition also alleges that on or about the twentieth of February, 1871, for a valuable consideration, the bonds and coupons were transferred in good faith to John Fitzgerald, and by him to the plaintiff.
An answer was filed by Nemaha county, as defendant, containing the following matter:
'The total amount of the bonds so issued and sold, being one series, under one proposition, amounted to one hundred thousand dollars. The said bonds and coupons were voted upon the following contract and conditions, and none other: At the time of the vote for said bonds certain persons were attempting to organize a railroad corporation under the name of the Brown ville, Fort Kearney & Pacific Railroad Company, the identical same organization named in said bonds, with a capital stock of two million dollars, but were unable to organize it because unable to obtain a payment on said amount of stock of ten per cent, thereof, as required by law, precedent to the right to do business. They considered and treated said series of one hundred thousand in bonds as one one hundred thousand dollar cash subscription all paid up in cash in advance, and also they treated and considered bonds of the city of Brownville, situated within the said precinct of Brownville mentioned in the petition, of the nominal sum of sixty thousand dollars, as sixty thousand dollars cash subscription paid up in cash in advance, all as capital stock of said railroad company, aggregation one hundred and sixty thousand dollars, so considered and treated as cash capital stock paid in. But, by considering the said bonds of the nominal sum of $160,000 as one hundred and sixty thousand dollars in money paid in on the capital stock, there was still an insufficient amount paid in to enable the company to do business, there being no cash paid in except on a few private subscriptions, and not exceeding ten thousand dollars; so that, even by treating said bonds as money, there was still a deficiency of thirty thousand dollars of the amount prescribed by law as a condition precedent to the organization of the company for the purpose of transacting any of the business for which it was sought to be organized. Defendant, therefore, denies that said railroad company was ever a corporation with power to transact business or to receive municipal bonds for its aid.