Statement of Facts.

At different times during the months of July and August, 1876, the three books were produced by Bogert at the room of the finance committee in the court house at Hackensack, the county seat of Bergen County, and there all the 800 bonds in blank were signed by Vanderbeek, the director, and by Wygant, the clerk. This was done at the request of Bogert, who represented that this course was advisable, as some of the blanks might be injured or soiled before they were issued, he agreeing to destroy all the unused blanks. The director and the clerk both seemed to have implicit confidence in the integrity of Bogert, and it does not appear that there was any hesitation on their part to comply with his suggestion. The books with the blanks in this condition were left in his hands, but they had neither the seal of the county nor his signature. These were to be attached as the bonds were issued. The outstanding bonds of the county at the time amounted to $362,000, of which sum $14,000 were paid in cash. To meet the balance, 696 bonds were issued, and, with the exception of two of them, were exchanged for the old bonds. Two were sold and the proceeds applied towards the payment of the balance. A register of the bonds thus issued was prepared, as required by law, containing a tabulated statement of the number of each one, to whom issued, with its amount and date of maturity, and was kept by the collector, and was open to inspection by the public.

Of the blanks not used, 104 were left in the possession of Bogert. Two of these were substituted in place of others defaced in preparation. Of the remaining 102 blanks none were required or used for the county, nor was their use ever authorized in any form by its board of chosen directors. Yet, on the 26th of July, 1876, Bogert pledged 66 of them to the Merchants' Exchange Bank as security for a loan made to him individually for $30,000. Payments on this amount were made from time to time until, on May 9, 1878, it was reduced to $9000. Soon afterwards, however, $2000 more were added to this sum, and all the bonds were taken up except twenty-four. Previously to the loan, and on the 14th of March, 1876, Bogert had borrowed of the same bank $40,000, and

Argument for Appellant.

given as collateral two documents purporting to be temporary loan certificates of Bergen County, each for $20,000. Certificates of this character had on different occasions been authorized by boards of chosen freeholders to raise money in anticipation of the collection of taxes. The two certificates, however, pledged to the bank were fictitious and fraudulent papers, never having been authorized by the board. In May, 1878, Bogert was defeated as collector of the county and another party took his office. After that, and on the 28th of September following, at his request, the two loans were consolidated into one, for which he gave a new note for $51,000; took up the fictitious loan certificates, and in their place deposited with the bank, as collateral, seventy-eight of these county bonds. Thus the bank held 102 of them.

Bogert died January 8, 1880, and soon afterwards the issue of these 102 bonds, and their possession by the bank, were discovered, and the present suit was brought to compel their surrender. The court below held the bonds void, and decreed that they be delivered up to the complainants. From this decree an appeal was taken to this court.

Mr. S. P. Nash and Mr. E. L. Fancher [Mr. Alfred J. Taylor was with them on the brief] for appellant.

I. The bonds in controversy were authorized by an act of the legislature of New Jersey, applicable to all the counties of the State. The act imposed no condition precedent to the exercise of the power, and no officials were required to concur in the issuing of the bonds, except those entrusted with the general authority of the county. The case, therefore, was governed by the doctrine of Commissioners of Knox County v. Aspinwall, 21 How. 539, that where such bonds are issued by the proper officials and import a compliance with the law, a purchaser is not bound to look further. See also East Lincoln v. Davenport, 94 U. S. 801; Brooklyn v. Insurance Co., 99 U. S. 362; Hoff v. Jasper County, 110 U. S. 53. A recital in a bond may furnish a basis for estoppel, but it is not essential to an estoppel. See Hackett v. Ottawa, 99 U. S. 86.

II. The court below accordingly erred in holding that the

Argument for Appellant.

county could defeat the bonds because they contained no recitals. This case differs from Northern Bank v. Porter, 110 U. S. 608; and Dixon County v. Field, 111 U. S. 83. There was in this case no vote required, there was no certificate made necessary, the bonds were of the kind authorized, the only dif ficulty being that more than were needed were executed in due form and left in the control of the officer who had the general authority to negotiate the entire lawful issue. In County of Henry v. Nicolay, 95 U. S. 619, 626, county bonds were issued to a railroad company and sold by its agents. The purchaser, said BRADLEY, J., was "apprised by the law that power existed in the county court to issue such bonds, without any election of the people; and there was nothing on their face to show that they were not regularly issued."

III. The case presented here, therefore, is the same that would arise upon a similar transaction where individuals were concerned. When one of two innocent persons is to suffer from the wrong or negligence of a third, it shall be the one who enabled the wrongdoer to commit the wrong. Michigan Bank v. Eldred, 9 Wall. 544; Dair v. United States, 16 Wall. 1.

IV. The negligence of the board of chosen freeholders was gross, and enabled the collector to commit the frauds. The doctrine of estoppel applies in favor of bona fide holders, who dealt with Bogert on the faith of the apparent ownership and authority thus obtained.

V. The same equitable estoppel applies to the so-called temporary bonds with which the board entrusted him. Bogert induced appellants to loan him $40,000 on these bonds, and his check on appellants for that amount went directly to pay the Bergen County Bank. This amount was already charged to him as collector, and the money went to his credit with the county. VI. The bonds legally issued under the act of 1866 ($644,700) were maturing from time to time, and the coupons on them were falling due periodically. It was within the province of the board to raise money to meet these obligations and so to avoid legal proceedings. The proceeds of the temporary bonds went to the uses of the county, and therefore the bank could have enforced the two bonds for $20,000 each, for which

Argument for Appellant.

the others were afterwards substituted. In this view, it is unimportant whether the seventy-eight bonds were delivered to the bank before or after Bogert ceased to be collector. The bank was entitled to be treated as holding the obligations which it surrendered in exchange for them.

VII. The county ought to be liable, even assuming that the bonds were countersigned by Bogert, and received by the bank, after his term of office had expired. The countersigning the bonds was a simple ministerial act which related back to July 1, 1876, the date and time of issue of the bonds. Bogert was county collector at the date of the bonds, and for more than twenty months afterwards. The coupons bear his genuine facsimile, affixed while he was county collector, and accepted by the board of chosen freeholders. Wayauwega v. Ayling, 99 U. S. 112. In Anthony v. Jasper County, 101 U. S. 693, the bonds had features upon their face which showed that they had been antedated to evade a requirement of registration.

VIII. The bonds held by appellant are, in a commercial sense, negotiable paper. Lynde v. The County, 16 Wall. 6. When such bonds are valid on their face they are presumed to be valid. Nichols v. Mase, 94 N. Y. 160, 164. Bogert had lawful custody of the bonds when negotiated. The fact that he was an officer of Bergen County did not throw suspicion on his title or his statements as to the bonds. Railway Co. v. Sprague, 103 U. S. 756. Nor did his personal knowledge, though a director of the bank, affect the bank. Atlantic State Bank v. Savery, 82 N. Y. 291, 307. It is not competent to show fraud or irregularity in the issuance of bonds as against a bona fide holder. A bona fide purchaser takes them freed from any infirmity in their origin. County of Macon v. Shores, 97 U. S. 272; Cromwell v. County of Sac, 96 U. S. 51.

IX. The complainant below appealed to the equitable jurisdiction of the court. But he that seeks equity must do equity. If the doctrine of equitable estoppel applies, the bank is the sufferer from a wrong which the county enabled its trusted agent to commit. It ought in equity to repair that wrong, by paying the amount for which the bank is a bona fide holder of the bonds in question.

Opinion of the Court.

X. But if the county insists on its legal rights, it should be left to its legal rights. Upon its own contention it has a legal defence to the bonds and no ground of equitable relief. Grand Chute v. Winegar, 15 Wall. 373; New York Guarantee Co. v. Memphis Water Co., 107 U. S. 205, 214. At law, the credibility of H. Myers Bogert could be passed upon by a jury. appellants, therefore, submit that the bill of the complainants below should have been dismissed.

Mr. J. D. Bedle and Mr. Hamilton Wallis for appellee.

The

MR. JUSTICE FIELD delivered the opinion of the court. He stated the facts in the language above reported, and continued: There was evidence at the hearing, of a very persuasive character, that the seventy-eight bonds deposited with the bank on the 28th of September, 1878, when the two loans of Bogert were consolidated, were not signed by him, and that the seal of the county was not attached, until after he had ceased to be collector. Our judgment leads to that conclusion. If this be the fact, they fall within the rule in Anthony v. County of Jasper, 101 U. S. 693, 699, where the court said, that "purchasers of municipal securities must always take the risk of the genuineness of the official signature of those who execute the paper they buy. This includes not only the genuineness of the signature itself, but the official character of him who makes it." But, in the view we take of this case, it is not material whether the bonds were signed before or after Bogert had ceased to be collector. The board of chosen freeholders of the county never directed nor permitted their issue. The law under which it derived all its powers provided only for the issue of bonds to meet the indebtedness from those then about to mature. All such maturing bonds had been surrendered for the new bonds, except for a small amount, which was paid in cash. The power of the board under the law was then exhausted. Any further issue was beyond its authority. Unless, therefore, there is something in connection with their issue to estop the board from contesting their validity, they can in no manner bind the county. This is not a case where