
    New Buffalo v. Iron Company.
    1.. Taylor v. Ypsilanti (supra, p. 60) cited and approved.
    2. An assignee of municipal bonds issued to a railroad company succeeds to its rights by virtue of its contract with the municipality, although at the time of the assignment the statute under which they were issued was declared by the Supreme Court of the State to be repugnant to the Constitution.
    3. Bonds voted in aid of otie company, which, under the law then in force, was subsequently consolidated with; another company, may be delivered to, the consolidated company.
    Error to the Circuit Court of the 'United States for the Western District of Michigan.
    The judgment below was for the amount due on .certain bonds, with interest coupons attached, issued by the township of New Buffalo, in the county of Berrien, and State of Michigan, plaintiff in error, under the authority of a general statute of 'that State, approved March 22, 1869, conferring power upon townships, cities, and villages to pledge their aid, by loan or donation, with, or without conditions,, to any railroad company organized under the laws óf that State, ill the construction of its road. Sess. Laws Mich., 1869, p. 89. It is the same statute whose validity and construction were involved in Taylor v. Ypsilanti, supra; p. 60.' The bonds were voted on the twenty-second day of May, 1869, as a donation in favor of the Chicago and Michigan Lake Shore Railroad-Company, a corporation of Michigan, whose road-line commenced. a,t the north line of the State of Indiana, in Allen • County, running northwardly to the St. Joseph River, in the village of St. Joseph, Michigan; a distance of thirty miles, passing through the township of New Buffalo. When the bonds were voted there was in force a general statute, under which any railroad company of the State, forming a continuous or connected line with any they railroad company, in or out of the State, could consolidate 'with the latter. The statute provided that such new corporation “ shall possess all the powers, rights, and franchises conferred upon such two or more corporations, and shall be subject to all the restrictions and perform all the duties imposed by the provisions of their respective charters or laws of organization.” ' Further : “ All and singular the rights and franchises of' each of said .corporations, . . . and all and singular their rights and interests in and to every species of property and things in actio'n, shall be deemed to'be transferred to and vested in. such new corporation without any other deed or transfér.” Compiled Laws of Mich., 1857, sects. 1994, 1995, p. 653.
    On the 3d of July, 1869, the Lake Shore. Railroad Company of Western Michigan was organized, with authority to construct a road from the northern terminus of the before-men-: tioned road, at St. Joseph River, northerly to the mouth of the Muskegon River, a distance of ninety miles. By. articles of agreement between the two companies, made on the 12th and 13th of July, 1869, and filed in the office of the secretary of state on the-nineteenth day of July, 1869, the two companies, became consolidated into a new corporation, under the name of thé Chicago and Michigan Lake Shore Railroad C&mpany.
    On the day last named the bonds, having been executed on, the 1st of June, 1869, were'deposited in the office of the treasurer of state, wh.o was required by the statute to “hold the same as trustee of the .municipality issuing the same, and for the railroad company for which they were issued.” The road was finished from New Buffalo,to the village of St. Joseph"as early as Feb. T, 1870, and has been in operation ever since. On the fourth day of February, 1870, the governor of the Stale made his certificate, stating that the railroad company had constructed the road in compliance' as well with the statute as with the conditions upon which aid had been voted by the péople, and was, consequently, entitled to receive the bonds from the State treasurer. They were thereupon delivered to. the. consolidated company; who held them until Nov. 4, 1874, when such of them as are here in suit were transferred to the Qambria Iron Company, defendant in error, in payment of antecedent debts due to it by the railroad company.' Upon such transfer the company’s acceptances theretofore given for its debts were surrendered and the debts discharged.
    
      Mr. Henry F. Severens for the plaintiff in error..
    
      Mr. Mitchell J. Smiley, contra.
    
   Me. Justice Haelan,

after stating the facts, delivered the opinion of the court.

1. On behalf of the plaintiff in error it is contended that, by the settled, law of Michigan as it existed when the bonds were issued, they were void. In support of that position we are referred to People v. Salem, 20 Mich. 452, decided May 26, 1870; Bay City v. State Treasurer, 23 id. 499; and Thomas v. Port Huron, 27 id. 320. This question was fully considered in Taylor v. Ypsilanti (supra, p. 60), where we ruled that by the law of Michigan, as expounded by Its Supreme Court,, and acted upon by its legislature and exécutive departments, prior to the decision in People v. Salem, bonds issued in conformity’ with the act of March 22, 1869, were valid- obligations of the municipality by whom they were issued. For the reasons there stated the present objection cannot be sustained.

2. Equally untenable is the proposition that the rights and obligations of the parties are to be determined by the' law, as expounded by the Supreme Court of the State, at the time the defendant in error, in fact, received the bonds. The defendant in error is a holder for value. Railroad Company v. National Bank, 102 U. S. 14. But if not, it is still entitled to whatever rights the railroad company had by virtue,of its contract with the township. That contract was made- and fully performed before the decision in People v. Salem was rendered, and, as already indicated,. was not affected by the .decision- in that case.

3. Nor is it. a material circumstance that this was a donation, and not' a subscription of stock. In Railroad Company v. County of Otoe (16 Wall. 667), it was held that, in the absence of constitutional provisions making, a distinction between municipal subscriptions to stock and municipal appropriations of money or credit, therfe was no solid ground upon which, so far as legislative power was concerned, to rest such a distinction.

Both are for the purpose of aiding in the construction of the road; both are aimed' at the same object, securing a public advantage, obtaining a highway or.an avenue to the markets of the country; both may be equally burdensome tb the taxpayers.” Olcott v. The Supervisors, 16 Wall. 678; Town of Queensbury v. Culver, 19 id. 83.

4. The only remaining objection to the judgment is that the bonds were delivered to the, consolidated company, when they were not voted to that company; We concur with the court below in holding that, the aid' voted must be deemed to have been given in view of the thén. existing statute, authorizing two. or more railroad companies forming a continuous or connected line to consolidate and form one corporation, and investing the consolidated company with the powers, rights,, property, and franchises of the constituent companies. Nugent v. The Supervisors, 19 Wall. County of Scotland v. Thomas, 94 U. S. 682 Town of East Lincoln v. Davenport, id. 801; Wilson v. Salamanca, 99 id. 499; Empire v. Darlington, 101 id. 87; Menasha v. Hazard, 102 id. 81; Harter v. Kernochan, 103 id. 562; County of Tipton v. Locomotive Works, id. 523. The bonds were, therefore, rightly delivered to the new or consolidated corporation.

. Judgment affirmed,

Mr. Justice Gray did not sit in- this cáse,'nbr take any part in deciding it.  