sachusetts against a municipal corporation of Maine, and in which one of the questions was as to the real ownership of the coupons, this court said: "It is a suit for the benefit of the owners of the bonds. They are to receive from the plaintiff one half of the net proceeds of the case they have created by their transfer of the coupons gathered together for that purpose. The suit is their own in reality, though they have agreed that the plaintiff may retain one half of what he collects for the use of his name and his trouble in collecting. It is true the transaction is called a purchase in the papers that were executed, and that the plaintiff gave his note for $500, but the time for payment was put off for two years, when it was, no doubt, supposed the result of the suit would be known. No money was paid, and as the note was not negotiable, it is clear the parties intended to keep the control of the whole matter in their own hands, so that if the plaintiff failed to recover the money he could be released from his promise to pay." It was consequently held that the transfer of the coupons was "a mere contrivance, a pretense, the result of a collusive arrangement to create a fictitious ground of Federal jurisdiction." In Little v. Giles, 118 U. S. 596, 603 [30: 269, 271], reference was made to the act of 1875, and the court said that where the interest of the nominal party was "simulated and collusive, and created for the very pur4]pose of giving jurisdiction, the courts *should not hesitate to apply the wholesome provisions of the law." We have held that if, for the purpose of placing himself in a position to sue in a circuit court of the United States, a citizen of one state acquires a domicil in another state without a present intention to remain in the latter state permanently or for an indefinite time, but with the present intention to return to the former state as soon as he can do so without defeating the jurisdiction of the Federal court to determine his suit, the duty of the circuit court is on its own motion to dismiss such suit as a collusive one under the act of 1875. Morris v. Gilmer, 129 U. S. 315 [32: 690]. The same principle applies where there has been a simulated transfer of a cause of action in order to make a case cognizable under the act. never requested the execution of the pre- For the reasons stated the trial court, 1. 2. 3. 4. Although a bill of exceptions does not state, in words, that it contains all the evidence, yet A recital in county bonds that the debt One who surrenders county warrants for county bonds is as much an innocent holder of the bonds as if he had bought them in open market, and is entitled to the benefit of the rule above stated as to the conclusiveness of the recital in the bonds. The cases cited are decisive of the present one. As the coupons in suit were payable to bearer and were made by a corporation, Dudley, being a citizen of New Hampshire, could have sued the defendant, a Colorado corporation, in the circuit court of the United States without reference to the citizenship of his transferrers, or the motive that may have induced the transfer of the coupons to him, or the motive that may have induced Argued him to buy them, provided he had really purchased them. But he did not buy the coupons at all. He is not the owner of any of them. He is put forward as owner for the purpose of making a case cognizable by the Federal court as to all the causes of action en braced in it. The apparent title was put in him without his knowledge and without his request, and only that he might repreBent the interests of the real owners. He 173 U. S. U. S., Book 43. 44 [No. 178.] December 15, 16, 1898. Decided States Circuit Court of Appeals for the Eighth Circuit to review a judgment of that court reversing the judgment of the Circuit Court of the United States for the District of Colorado in favor of defendant in an action brought by E. H. Rollins & Sons, a corporation of New Hampshire, against the N WRIT OF CERTIORARI to the United 689 County Commissioners of the County of Gun- | the evidence need not be shown in any par nison for the amount of certain coupons of ticular or technical form. bonds. The Circuit Court of Appeals gave judgment for only a portion of the amount claimed. Judgment of the Circuit Court and of the Circuit Court of Appeals reversed, and cause remanded for further proceedings. See same case below, 49 U. S. App. 399. The facts are stated in the opinion. Messrs. Thomas C. Brown, C. S. Thomas, W. H. Bryant, and H. H. Lee, for petitioner: The court errs in reversing the judgment on errors committed in the admission or exclusion of testimony, when the record shows that all the testimony was not contained in the bill of exceptions, and the court below directed a verdict for the defendant. Where a court takes a case away from a jury and directs a verdict, the same rules apply as though the court had tried the case alone without a jury. Robbins v. Potter, 98 Mass. 532; Daly v. Wise, 132 N. Y. 306, 16 L. R. A. 236; Maier v. Davis, 57 Wis. 212. Every presumption will be indulged in to sustain the judgment of a trial court; and although improper evidence may have been admitted, it will be presumed that in arriving at a conclusion only proper evidence was considered, and that the judgment of the court below is correct. Hinckley v. Pittsburgh Bessemer Steel Co. 121 U. S. 264, 30 L. ed. 967; Mammoth Mining Co. v. Salt Lake Foundry & Mach. Co. 151 U. S. 447, 38 L. ed. 229; Parker v. Van Buren, 20 Colo. 217; White v. White, 82 Cal. 427, 7 L. R. A. 799; Smith v. Long, 106 Ill. 485; Tower v. Fetz, 26 Neb. 706; Kirkland v. Telling, 49 Wis. 634; Minton v. Pickens, 24 S. C. 592; State v. Seabright, 15 W. Va. 590. Spangler v. Green, 21 Colo. 505. The instructions to the jury, duly excepted to, were reviewable by the circuit court of appeals, and are open to consideration in this court. Pennock v. Dialogue, 2 Pet. 1; Worthington v. Mason, 101 U. S. 149, 25 L. ed. 848; United States v. Rindskopf, 105 U. S. 418, 26 L. ed. 1131; Ward v. Cochran, 150 C. S. 597, 37 L. ed. 1195. The rulings of the court, which were duly objected and excepted to at the time, were reviewable by the circuit court of appeals. Vicksburg & M. R. Co. v. O'Brien, 119 U. S. 99, 30 L. ed. 299; Mexia v. Oliver, 148 U. S. 664, 37 L. ed. 602; Lincoln v. Claflin, 7 Wall. 132, 19 L. ed. 106; Lees v. United States, 150 U. S. 476, 37 L. ed. 1150; Hickman v. Jones, 9 Wall. 197, 19 L. ed. 551; Michigan Ins. Bank v. Eldred, 143 U. S. 293, 36 L. ed. 162. Plaintiff was a bona fide holder of the coupons in question. San Antonio v. Mehaffy, 96 U. S. 312, 24 L. ed. 816; Lexington v. Butler, 14 Wall. 282, 20 L. ed. 809; Macon County v. Shores, 97 U. S. 272, 24 L. ed. 889. A bona fide holder is a purchaser for value without notice, or the successor of one who was such a purchaser. McClure v. Oxford Twp. 94 U. S. 429, 24 L. ed. 129. If any previous holder of the bonds in suit was a bona fide holder for value, the plaintiff can avail himself of such previous holder's position without showing that he himself has paid value. Montclair v. Ramsdell, 107 U. S. 147, 27 L. ed. 431. Though he may have notice of infirmities in its origin, a purchaser of a municipal The court below erred in holding that it bond from a bona fide holder before matuwas error in the trial court to admit in evi-rity takes it as free from such infirmities as dence the financial statements of Gunnison it was in the hands of such holder. county for the six months ending respectively on December 31, 1881, June 30, 1882, and December 30, 1882. Dixon County v. Field, 111 U. S. 83, 28 L. ed. 360; Lake County v. Graham, 130 U. S. 674, 32 L. ed. 1065; Hedges v. Dixon County, 150 U. S. 182, 37 L. ed. 1044; Lake County Comrs. v. Standley, 24 Colo. 1. The court erred in holding that the recitals contained in the bonds estopped the county from proving against an innocent purchaser that the bonds had been issued in excess of the limit of indebtedness authorized by the Constitution of Colorado. Lake County v. Graham, 130 U. S. 674, 32 L. ed. 1060; Graves v. Saline County, 161 U. S. 359, 40 L. ed. 732; Sutliff v. Lake County Comrs. 147 U. S. 230, 37 L. ed. 145. Messrs. John F. Dillon, Edmund F. Richardson, Harry Hubbard, and John M. Dillon, for respondent: Moral justice and equity and fair dealing equally entitle the plaintiff to a recovery. Jasper County v. Ballou, 103 U. S. 745, 26 L. ed. 422; Graves v. Saline County, 161 U. S. 359, 40 L. ed. 732. That the bill of exceptions contains all of Cromwell v. Sac County, 96 U. S. 51, 24 L. ed. 681; Douglas County Comrs. v. Bolles, 94 U. S. 104, 24 L. ed. 46; Marion County Comrs. v. Clark, 94 U. S. 278, 24 L. ed. 59; Nauvoo v. Ritter, 97 U. S. 389, 24 L. ed. 1050. The plaintiff Standley was a bona fide holder of the $5,000 of bonds received by him in exchange for warrants which he surrendered to Gunnison county. Douglas County Comrs. v. Bolles, 94 U. S. 104, 24 L. ed. 46; Montclair v. Ramsdell, 107 U. S. 147, 27 L. ed. 431. The recital in the bonds, "that the total amount of this issue does not exceed the limit prescribed by the Constitution of the state of Colorado," is conclusive as an estoppel in favor of a bona fide holder of the bonds in question. Chaffee County v. Potter, 142 U.S.355,35 L. ed. 1040; Buchanan v. Litchfield, 102 U. S. 278, 26 L. ed. 138; Independent School Dist. v. Stone, 106 U. S. 183, 27 L. ed. 90; Sherman County v. Simons, 109 U. S. 735, 27 L. ed. 1093; Dallas County v. McKenzie, 110 U. S. 686, 28 L. ed. 285; Dixon County v. Field, 111 U. S. 83, 28 L. ed. 360. The recital in the bond in question, that it is issued "for valid floating indebtedness of the said county," creates an estoppel which is conclusive in favor of the bona fide holder of such bonds. Jasper County v. Ballou, 103 U. S. 745, 26 L. ed. 422; Graves v. Saline County, 161 U. S. 359, 40 L. ed. 732; Huron v. Second Ward Sav. Bank, 57 U. S. App. 593, 86 Fed. Rep. 272, 30 C. C.A.38; West Plains Twp. v. Sage, 32 Ú. S. App. 725, 69 Fed. Rep. 943, 16 C. C. A. 553; Kiowa County Comrs. v. Howard, 49 U. S. App. 642, 83 Fed. Rep. 296, 27 C. C. A. 531; Cadillac v. Woonsocket Inst. for Sav. 16 U. S. App. 546, 58 Fed. Rep. 935, 7 C. C. A. 574; National L. Ins. Co. v. Huron Bd. of Edu. 27 U. S. App. 244, 62 Fed. Rep. 778, 10 C. C. A. 637. The issue of bonds to pay off or refund an existing indebtedness does not increase the debt or create a new debt. It merely changes the form of the old debt. Powell v. Madison, 107 Ind. 106; Blanton v. McDowell County Comrs. 101 N. C. 532; Los Angeles v. Tweed, 112 Cal. 319; Sioux City v. Weare, 59 Iowa, 95; Opinion of the Justices in 81 Me. 602, Appx. The so-called "financial statements" cannot be introduced in evidence as against a bona fide holder of the bonds in question containing such recitals as these bonds contain. Sutliff v. Lake County Comrs. 147 U. S. 230, 37 L. ed. 145; Chaffee County v. Potter, 142 U. S. 355, 35 L. ed. 1040; Evansville v. Dennett, 161 U. S. 434, 40 L. ed. 760. No record is constructive notice as to any negotiable paper unless a statute expressly so provides. Burck v. Taylor, 152 U. S. 634, 38 L. ed. 578. The purchaser of negotiable paper does not have constructive notice of any litigation pending, or any judgments which may have been previously rendered, regarding such paper. Lexington v. Butler, 14 Wall. 282, 20 L. ed. 809; Macon County v. Shores, 97 U. S. 272, 24 L. ed. 889; Cromwell v. Sac County, 96 U. S. 51, 24 L. ed. 681; Montclair v. Ramsdell, 107 U. S. 147, 27 L. ed. 431. *Mr. Justice Harlan delivered the opin-[256] ion of the court: This action was brought by E. H. Rollins & Sons, a corporation of New Hampshire, to obtain a judgment against the board of commissioners of Gunnison county, Colorado, a municipal corporation of that state, for the amount of certain coupons of bonds issued by the defendant in 1882. At the close of the evidence the defendant requested a peremptory instruction in its behalf. The circuit court charged the jury at some length, but concluded with a direction to find a verdict for the defendant, which was done, and a judgment in its favor was entered. That judgment was reversed in the circuit court of appeals, and the case is here upon writ of certiorari. 49 U. S. App. 399. The case made by the complaint is as follows: By the laws of Colorado, boards of county commissioners were authorized to examine, allow, and settle all accounts against their respective counties, and to issue county warrants therefor; to build and keep in repair the county buildings, to insure the same, and to provide suitable rooms for county purposes, and to represent the county, and have the care of county property and the management of the business and concerns of the county in all cases where the law did not otherwise provide. On the 1st day of December, 1882, the defendant board caused to be made and executed certain bonds acknowledging the county of Gunnison to be indebted and promising to pay to or bearer the sum therein named, for value received, redeemable at the pleasure of the county after ten years, and absolutely due and payable twenty years after date, at the office of the county treasurer, with interest at eight per cent Warren County v. Marcy, 97 U. S. 96, 24 L. ed. 977; Carroll County v. Smith, 111 U. S. 556, 28 L. ed. 517; Orleans v. Platt, 99 U. S. 676, 25 L. ed. 404; Cass County v. Gil-*per annum, payable semi-annually on the[257] lett, 100 U. S. 585, 25 L. ed. 585; Thompson v. Perrine, 103 U. S. 806, 26 L. ed. 612. Where it is sought to affect a bona fide purchaser for value of commercial paper with constructive notice, the question is not whether he had the means of obtaining, or might have obtained by prudent caution, the knowledge in question, but whether not obtaining was an act of gross or culpable negligence. Wilson v. Wall, 6 Wall. 83, 18 L. ed. 727; Ware v. Egmont, 4 DeG. M. & G. 460; Goetz v. Bank of Kansas City, 119 U. S. 551, 30 L. ed. 515. A person may estop himself from relying upon the constructive notice which records furnish. Brookhaven v. Smith, 118 N. Y. 634, 7 L. R. A. 755; Wilde v. Gibson, 1 H. L. Cas. 605; Stone v. Covell, 29 Mich. 359. If the plaintiff proves the payment of value, then the burden is on the defendant to show that the plaintiff had notice of the illegality or fraud. first days of March and September in each year at the county treasurer's office, or at the Chase National Bank in the city of New York, at the option of the holder, upon the presentation and surrender of the annexed coupons as they severally became due. Each bond contained this recital: "This bond is issued by the board of county commissioners of said Gunnison county in exchange, at par, for valid floating indebtedness of the said county outstanding prior to September 2d, 1882, under and by virtue of and in full conformity with the provisions of an act of the general assembly of the state of Colorado, entitled 'An Act to Enable the Several Counties of the State to Fund Their Floating Indebtedness,' approved February 21st, 1881; and it is hereby certified that all the requirements of law have been fully complied with by the proper officers in the issuing of this bond. It is further certified that the total amount of this issue does not exceed the limit prescribed by the Constitu tion of the state of Colorado, and that this issue of bonds has been authorized by a vote | September, 1886, and made like default of a majority of the duly qualified electors thereafter up to and including September of the said county of Gunnison, voting on 1st, 1892. the question at a general election duly held The plaintiff was the holder and owner of in said county on the seventh day of No- coupons formerly attached to and belonging vember, A. D. 1882. The bonds of this issue to certain bonds of the above issue. It asked are comprised in three series, designated judgment for the aggregate aniount of the 'A,' 'B' and 'C' respectively, the bonds of se-principal of the coupons, with interest on the[259] ries 'A' being for the sum of one thousand amount of each coupon as it became due. dollars each, those of series 'B' for the sum The answer of the county contained a genof five hundred dollars each, and those of eral denial of all the allegations of the comseries 'C' for the sum of one hundred dollars plaint, and in addition set out elever affirmaeach. This bond is one of series 'A.' The ive defenses, which were chiefly based upon faith and credit of the county of Gunnison the alleged fact that the county in issuing are hereby pledged for the punctual payment the bonds set forth in the complaint had atof the principal and interest of this bond." tempted to incur an indebtedness not authorTo each bond were attached coupons for ized by the Constitution of Colorado, or by the semi-annual interest, signed by the the statute referred to in the bonds. county treasurer. On the first day of December, 1882, for the bonds of the county with coupons attached as above specified, the defendant board made an exchange with the parties then holding county warrants, which before that time, in accordance with the statutes in such case made and provided, had been issued to them in settlement of claims pre[258]sented by them against the county. *In every case when warrants were presented they were exchanged for the bonds of the county at par for their face and interest. In each case the blanks were filled out with the name of the party receiving the bonds or exchanging the warrants, and the blank for the place of payment filled in as the banking house of the Chase National Bank in the city of New York. Thereupon the bonds were signed by the chairman of the board of county commissioners, countersigned by the county treasurer, and attested by the county clerk with the seal of the county, and the coupons attached were also filled out, stating the place of payment to be in the city of New York, at the banking house of the Chase National Bank, and stating also the number of the funding bond and the series to which it was attached. The issue of bonds as above set forth was authorized by a vote of the qualified electors to be exchanged for warrants, and the amount thereof was spread upon the records of the county as provided for by the act of February 21st, 1881, entitled "An Act to Enable the Several Counties of the State to Fund Their Floating Indebtedness." In all other respects the terms and conditions of the act were fully complied with. The bonds were duly registered in the office of the auditor of the state. The provision of the Constitution of Colorado prescribing the extent to which counties may become indebted, and to which the bonds referred, is as follows: "No county shall contract any debt by loan in any form, except for the purpose of erecting necessary public buildings, making or repairing public roads and bridges; and such indebtedness contracted in any one year shall not exceed the rates upon taxable property in such county, following, to wit: Counties in which the assessed valuation of taxable property shall exceed five millions of dollars, one dollar and fifty cents on each thousand dollars thereof. Counties in which such valuation shall be less than five millions of dollars, three dollars on each thousand dol lars thereof. And the aggregate amount of indebtedness of any county for all purposes, exclusive of debts contracted before the adop tion of the Constitution, shall not at any time exceed twice the amount above herein limited, unless when, in manner provided by law, the question of incurring debt shall, at a general election, be submitted to such of the qualified electors of such county as in the year last preceding such election shall have paid a tax upon property assessed to them in such county, and a majority of those voting thereon shall vote in favor of incurring the debt; but the bonds, if any be issued therefor, shall not run less than ten years, and the aggregate amount of debt so contracted shall not at any time exceed twice the rate upon the valuation last herein mentioned; provided that this section shall not apply to counties having a valuation of less than one million of dollars." Laws of Col. 1877, p. 62. *The act of February 21st, 1881, referred[260] to in the bonds in question, contains among other provisions the following: In every case where bonds were issued and delivered to the payee or to any person for "§1. It shall be the duty of the county him, the parties received them in exchange commissioners of any county having a floatfor warrants, the amount of the bonds being indebtedness exceeding ten thousani doling the same as the amount of the warrants lars, upon the petition of fifty of the electors and interest thereon that had theretofore of said counties [county] who shall have paid been issued by the county. taxes upon property assessed to them in said From the 1st day of December, 1882, and county in the preceding year, to publish for up until the 1st day of March, 1886, the the period of thirty days in a newspaper pubcounty paid the interest on the bonds semi-lished within said county, a notice request annually in accordance with their terms and of the coupons attached to them. The defendant board made default in the payment of interest due on the first day of ing the holders of the warrants of such coun- tice, a statement of the amount of the warrants of such county which they will exchange at par, and accrued interest, for the bonds of such county, to be issued under the provisions of this act, taking such bonds at par. It shall be the duty of such board of county commissioners at the next general election occurring after the expiration of thirty days from the date of the first publication of the notice aforementioned, upon the petition of fifty of the electors of such county who shall have paid taxes upon property assessed to them in said county in the preceding year, to submit to the vote of the qualified electors of such county who shall have paid taxes on property assessed to them in said county in the preceding year, the question whether the board of county commissioners shall issue bonds of such county under the provisions of this act, in exchange at par for the warrants of such county issued prior to the date of the first publication of the aforesaid notice; or they may submit such question at a special election, which they are hereby empowered to call for that purpose at any time after the expiration of thirty days from the date of the first publication of the notice aforementioned, on the petition of fifty qualified electors as aforesaid; and they shall publish for the period of at least thirty days immediately preceding such general or special election in some newspaper published within such county, a notice that such question will be submitted to the duly qualified electors as aforesaid, at such election. The county treasurer of such county shall make out and [261]cause to be delivered to the judges of election in each election precinct in the county, prior to the said election, a certified list of the taxpayers in such county who shall have paid taxes upon property assessed to them in such county in the preceding year; and no person shall vote upon the question of the funding of the county indebtedness, unless his name shall appear upon such list, nor unless he shall have paid all county taxes assessed against him, in such county in the preceding year. If a majority of the votes lawfully cast upon the question of such funding of the floating county indebtedness shall be for the funding of such indebtedness, the board of county commissioners may issue to any person or corporation holding any county warrant or warrants issued prior to the date of the first publication of the aforementioned notice, coupon bonds of such county in exchange therefor at par. No bonds shall be issued of less denomination than one hundred dollars, and if issued for a greater amount, then for some multiple of that sum, and the rate of interest shall not exceed eight per cent per annum. The interest to be paid semi-annually at the office of the county treasurer, or in the city of New York, at the option of the holders thereof. Such bonds to be payable at the pleasure of the county after ten years from the date of their issuance, but absolutely due and payable twenty years after date of issue. The whole amount of bonds issued under this act shall not exceed the sum of the county indebtedness at the date of the first publication of the aforementioned notice, and the amount shall be determined by the county commissioners, and a certificate made of the same and made a part of the records of the county; and any bond issued in excess of said sum shall be null and void; and all bonds issued under the provisions of this act shall be registered in the office of the state auditor, to whom a fee of ten cents shall be paid for recording each bond." Laws of Col. 1S81, pp. 85, 86, 87. 1. The circuit court of appeals held that the bill of exceptions did not purport to contain all the evidence adduced at the trial, and for that reason it did not consider the question whether error was committed in directing the jury to find for the defendant. We are of opinion that the bill of exceptions should be taken as containing all the evi-[262] dence. It appears that, as soon as the jury was sworn to try the issues in the cause, "the complainants to sustain the issues on their part offered the following oral and documentary evidence." Then follow many pages of testimony on the part of the plaintiffs, when this entry appears: "Whereupon complainants rested." Immediately after comes this entry: "Thereupon the defendants to sustain the issues herein joined on their part produced the following evidence." Then follow many pages of evidence given on behalf of the defendant, and the evidence of a witness recalled by the defendant, concluding with this entry: "Whereupon the further proceedings herein were continued until the 20th day of May, 1896, at 10 o'clock A. M." Immediately following is this entry: "Wednesday, May 20th, at 10 o'clock, the further trial of this cause was continued as follows." The transcript next shows some discussion by counsel as to the exclusion of particular evidence, after which is this entry: "Thereupon counsel for defendant made a formal motion under the evidence on both sides that the court instruct the jury to return a verdict for the defendant." Although the bill of exceptions does not state, in words, that it contains all the evidence, the above entries sufficiently show that it does contain all the evidence. It is therefore proper to inquire on this record whether the circuit court erred in giving a peremptory instruction for the defendant. 2. We have seen that the bonds to which were attached the coupons in suit recited that they were issued by the board of county commissioners "in exchange at par for valid floating indebtedness of the county outstanding prior to September 2d, 1882, under and by virtue of and in full conformity with the provisions of an act of the general assembly of the state of Colorado, entitled 'An Act to Enable the Several Counties of the State to Fund Their Floating Indebtedness,' approved February 21st, 1881;" that "all the requirements of law have been fully complied with by the proper officers in the issuing of this bond;" that the total amount of the issue did "not exceed the limit prescribed by the Constitution of the state of Colorado;" and that such issue had been authorized by a vote *of[268] a majority of the duly qualified electors of the county voting on the question at a gen |