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 A TREATISE OF THE LAW 
 
 MUNICIPAL BONDS 
 
 MUNICIPAL COEPOEATIONS 
 
 UNITED STATES 
 
 INCLUDING BONDS ISSUED TO AID RAILROADS. TO WHICH 
 ' ARE ADDED EXCERPTS FROM THE STATE CONSTI- 
 
 TUTIONS RELATING TO THE INCURRING 
 OF DEBT FOR PUBLIC PURPOSES 
 
 T. C. SIMONTON 
 
 Of the New York and New Jersey Bar 
 
 New York and Albany 
 BANKS & BROTHERS, LAW PUBLISHERS 
 
 189G
 
 Entered according to tlie Act of Conyress, in the year Oue Thousand Eight 
 
 Hundred and Ninety-Six, 
 
 By THOMAS C. SIMOXTON, 
 
 in the Office of the Librarian of Congress at Washington. 
 
 St^7r m
 
 ft 
 
 ft: 
 
 PREFACE. 
 
 The author having been for a number of years past 
 corporation counsel for a large city near New York, and 
 having had occasion, as such, to consult the laws in 
 reference to Municipal Bonds, and finding no work en- 
 tirely devoted to the subject had been written, although 
 the subject is treated at considerable length by several 
 eminent writers upon Municipal Corporations, began to 
 collect references on the subject, and to investigate the 
 principles of the law as applied to such bonds, with a 
 view later to i)ut the same in book form. This volume 
 is the result of the work so begun. 
 
 The author has not attempted to collate the statutes 
 of the States pursuant to which bonds are issued, because 
 it is impossible to do so in a single volume, and if prac- 
 ticable, the Legislatures of the various States, meeting for 
 the most part each year, add to, and amend, the existing 
 statutes to so great a degree, that a collation of the stat- 
 utes relating to municipal bonds would be but tempor- 
 arily a full one. 
 
 The author has sought to embrace all the principles of 
 the law relating to municipal bonds from the introduc- 
 tion of a statute authorizing their issue to their final 
 payment cither voluntarily or enforced by suit. 
 
 It is to be hoped that the work will be of use to the 
 profession in general, and to that necessary, and at the 
 present time much abused, class of men, the Bankers 
 and Brokers, without whose aid Municipal Bonds would 
 not be so readily sold, or, if sold, not at so good a price 
 to the corporation issuing them, although the contrary 
 is the view of those who are not familiar with the sub- 
 ject. 
 
 T. C. S. 
 
 New York City, October Ut, 1896.
 
 TABLE OF CONTENTS. 
 
 CHAPTER I. 
 Introduction. 
 
 Section 1. Scope of work. 
 
 2. Term " Municipal Corporation " defined. 
 
 3. Municipal corporations how created — Quasi corporations, 
 
 4. Municipal bond defined. 
 
 CHAPTER II. 
 Power to make Loans and Issue Negotiable Paper. 
 
 Section 5. Express power to issue negotiable paper. 
 
 6. Proceedings when power is express. 
 
 7. The State must have express power. 
 
 8. Imjilied power, wlien riglit to borrow is express. 
 
 9. Former attitude of the United States courts. 
 
 10. Present attitude against such authority. 
 
 11. Result. 
 
 12. Fedei-al courts follow tlie state courts, when. 
 
 13. Implied power to issue negotiable paper when the power to 
 
 borrow is express, depends on the decisions of the state 
 courts. 
 
 14. Implied power to issue negotiable paper. 
 
 15. Courts are divided on this question. 
 
 16. Weight of authority in favor of such power — Cases. 
 
 17. Pennsylvania, Williamsport v. Com'rs. 
 
 18. Ohio, Bank v. Chillic-othe. 
 
 19. Wisconsin, Miles v. Gleason. 
 
 20. Illinois, Law v. People, and other cases. 
 
 21 . Indiana, Richmond v. IMcGirr. and other cases. 
 
 22. New Jersey, cases. 
 
 23. New York, cases. 
 
 24. Other cases in suj)ix)rt of tlie doctrine. 
 
 25. Cases holding that a municipal corporation has no such 
 
 implied power. 
 
 26. Further cases. 
 
 27. A safe rule to follow. 
 
 28. Difference between borrowing on negotiable paper and 
 
 issuing paper to pay for contractual indebtednc^ss. 
 
 V
 
 VI TAHLE OF CONTENTS. 
 
 Section 'JO. Dcx^trinc in Fcdoral courts. 
 
 ;](). SaiiK* — ('i)iintios do not possess implied authority. 
 
 31. Position of Fedend courts. 
 
 32. Summary of tha law on tliis question. 
 
 CHAPTER III. 
 
 Purposes for which Bonds may be Issued and their Issue 
 Compelled. 
 
 Sectiox 33. A municipal corporation can incur debt for a public pur- 
 pose onlj-. 
 
 34. Whether jjurpose is public or private, is a question for the 
 
 courts. 
 
 35. What purposes are public. 
 
 36. Distinguishing features between public and private pur- 
 
 poses. 
 
 37. What have been held to he public purposes. 
 
 38. Railroads arc public inu-poses. 
 
 39. What are private purposes. 
 
 40. Bonds and other municipal paper issued for a private pur- 
 
 pose are void. 
 
 41. State constitutions prohibit aid to private enterprises. 
 
 42. When a municiiial corporation may be compelled to issue 
 
 its bonds or other paper. 
 
 43. When a municipal corporation cannot he compelled to incur 
 
 a debt or issue its paper — Rule laid down by Cooley. J. 
 
 CHAPTER IV. 
 
 Power of Municipal Officers— Boards and Commissions — 
 Fraud and Irregularity of Public Officers. 
 
 Sectiox 44. AVhere authority of public officers must be found. 
 
 45. Pei^sons dealing with them must ascertain their authority. 
 
 46. Acts of de facto officer, who are sucli. 
 
 47. When no legal office there can be no de facto officer. 
 
 48. Boards and Commissions, their powers to issue municipal 
 
 paper. 
 
 49. Misconduct, fraud, irregularity of municipal officers — Ef- 
 
 fect of. 
 
 50. When the corporation will be bound by the acts of its 
 
 officers. 
 
 CHAPTER V. 
 Limitation of Debt. 
 
 Section 51. Limitation where to be found — Wliy imposed. 
 
 52. Effect of prohibition when directed to the Legislature. 
 
 53. Effect when directed to a municipal corporation.
 
 TABLE OF CONTENTS. vii 
 
 Section 54. Persons dealing with a corporation to take notice of lim- 
 itation . 
 
 55. Indebtedness defined. 
 
 56. Basis of calculation, 
 
 57. What should be included. 
 
 58. How taxes may be appropriated after limitation reached. 
 
 59. What is to be excluded in the calculation. 
 
 60. Contracts, for more than one year, to be excluded — Cases. 
 
 61. Contrary view — Cases. 
 
 63. Lial)ilities ex delicto are to be excluded. 
 
 63. Effect — If limitation exceeded, bonds and other paper void. 
 
 64. How the limitation is to be construed. 
 
 CHAPTER VI. 
 
 Consent of Taxpayers to Issue of Bonds. 
 
 Petition— Election. 
 
 Section 65. Petition of taxpayers or voters — When necessary — How 
 consent given — Effect of. 
 63. Question of issuing bonds often submitted to the voters. 
 What states by constitution require it. 
 
 67. When submission x'equired, bonds cannot issue without it. 
 
 68. What irregularities do not affect result of election. 
 
 69. Submission necessaiy, although debt limitation extended. 
 
 70. Effect of constitutional amendments requiring submission, 
 
 71. When election set aside — Its effect. 
 
 73. The proposition submitted to name amount of issue. 
 
 73. Proposition must be distinct and separate. 
 
 74. Proposition, how submitted. 
 
 75. Same — Amount of tax sometimes to be stated. 
 
 76. When proposition may be submitted. 
 
 77. Notice and time of election — What it should contain — 
 
 When election may be held. 
 
 78. Publication of notice. 
 
 79. Votes required to carrj' a proposition, usually a majorit}' 
 
 vote only necessary. 
 
 80. Constitutional requirements on this subject. 
 
 81. The words " inhabitants," •' voters," " electors," " qualified 
 
 electors," construed. 
 83. How result of election should be declared. 
 
 83. Proposition as carried cannot be changed — If done, bonds 
 
 sometimes held invalid — When it may be changed. 
 
 84. Affirmative vote not a contract. 
 
 CHAPTER VII. 
 
 Proceedings to Issue Bonds by Municipal Bodies. 
 
 Section 85. The statute must be stricth- followed. 
 86. Resolution or ordinance necessary.
 
 VIU TAIJLE OF CONTENTS. 
 
 Skltion ST. Wlij' necessary. 
 
 88. When a resolution is sufficient — If ordinance not required. 
 
 89. What the ordinance should provide for — Same remarks 
 
 applies to a i-esolution when it may be used. 
 00. Enactment — At wluit meetings ordinance may be passed — 
 When ayes and nays must be called — Number of votes 
 necessary. 
 
 91. When the mayor may vote. 
 
 92. Readings, number required — Publication between — Amend- 
 
 ments, material, cannot be made. 
 
 93. Approval by the Ma}'or, when necessary — If he neglect or 
 
 refuses when ordinance takes effect — Veto, how to be 
 made — Effect of. 
 
 94. Publication of ordinances — Effect of non-publication, when 
 
 not necessary. 
 
 95. Record of Proceedings — AVliat it should contain. 
 
 CHAPTER VIII. 
 Formal Parts of Bonds— How Executed— Coupons. 
 
 Section 96. To whom made payable. 
 
 97. Place of payment, rule in Illinois. 
 
 98. Number of the bonds, wlien material. 
 
 99. Denomination of the bond. 
 
 100. Date of bond— Effect of date if a Sunday— Bonds take 
 
 effect from delivery. 
 
 101. Interest — Coupons represent it when coupons draw interest 
 
 — Effect if interest stipulated for exceeds the rate in 
 the enabling statute. 
 
 102. Time of Payment — When bond void if changed. 
 
 103. Same — When act silent as to time — Bonds negotiable 
 
 although payable at option of municipality before time 
 stated. 
 
 104. ITow executed — Officers must be expressly authorized to 
 
 do so — ^lust be in office at the time — Countersigning 
 but a ministerial act. 
 10."). Signing, what sufficient, majority of board sufficient — 
 Signing in blank. 
 
 106. Sealing, when necessary — Bonds without declared void, in 
 
 wliat cases — Equitj' will afford relief if seal omitted — 
 Scroll not a substitute — Seal how proved. 
 
 107. Coupons are negotiable — Legislative authority to issue un- 
 
 necessary — When interest may be recovered on them 
 — When must be produced. 
 
 108. Form of Coupons. 
 
 109. When tlie coupons is to be governed by the terms of the 
 
 bond — Coupons receivable for taxes. 
 
 110. Copies of bonds and ordinances.
 
 TABLE OF CONTENTS. ix 
 
 CHAPTER IX. 
 
 Negotiability— Bona Fide Holders— Lost and Stolen Bonds. 
 
 Section 111. What term negotiable means — Bonds what they must 
 contain to be negotiable. 
 
 112. Amount and time must be certain — Coupons must contain 
 
 words of negotiability. 
 
 113. What the transferrer of bonds warrants — That the signa- 
 
 tures are genuine and the jiaper what it pui-ports to be 
 — What agent warrants. 
 
 114. What transferrer does not warrant — Does not warrant 
 
 validity. 
 
 115. Registered Bonds — Not negotiable — Riglits of liolders. 
 
 116. Who are bona fide holders — Before maturity. 
 
 117. Bona fide holders after maturity. 
 
 118. Rights of original holders. 
 
 119. What may be inquired into between the corporation and 
 
 such holders. 
 119a. Lis pendens and judgments as notice. 
 
 120. Presumptions in favor of holders of negotiable paper. 
 
 121. Over-due coupons as notice. 
 
 122. Purchaser of negotiable paper not bound to follow pro- 
 
 ceeds — When they must do so. 
 
 123. Wliat notice affects bona fide holder — Gross negligence 
 
 not sufficient. 
 
 124. Defence against bona fide holders — When corporation 
 
 estopped to set them up. 
 124 a Lost and stolen bonds — When subsequent holder obtains a 
 good title — What alterations are immaterial. 
 
 CHAPTER X. 
 Renewal and Refunding Bonds— Registration of Bonds. 
 
 Section 125. When Renewal and Funding bonds may be issued — Can- 
 not be issued without authority. 
 
 126. What authority necessary to issue such bonds — Must be 
 
 either express or the general power to issue bonds. 
 
 127. When the new bonds are valid although the old ones were 
 void — Cases — AVhen new bonds void. 
 
 128. Riglits of bona fide holders of new bonds — When renewal 
 
 bonds do not create a new debt. 
 
 129. When the renewal bonds must be issued — Usually must be 
 
 before the old ones are paid. 
 
 130. Registration of bonds — When void if not registered. 
 
 When registration unnecessarj'. 
 
 131. When registration conclusive of the facts — Statute or con- 
 
 stitution must require registration — What facts regis- 
 tration concludes.
 
 X TAI5LE OF CONTENTS. 
 
 CHAPTER XI. 
 
 Municipal Paper payable in Gold— How Municipal Paper paid. 
 By Taxation— When out of General or Special Fund or Tax 
 — Sinking Fund— Taxation of Bonds. 
 
 Section 132. When inunicipal paper may be made payable in gold 
 coin — When not. 
 
 133, Municipal debts are paid by taxation — When power to 
 
 tax implied. 
 
 134, When bonds are payable out of the general fund — Rights 
 
 of creditors. 
 1^'). Special assessment bonds — How payable. 
 
 136. When bonds are payable out of a special fund — Rights of 
 
 creditors. 
 
 137. Sinking fund — Special tax — When bonds void unless 
 
 such provisions made. 
 
 138. When bonds not void although such provisions not made. 
 
 Effect of recitals — Courts not likel)- to hold bonds valid, 
 althougli they recite such provision has been made 
 when it has not and state constitution requires it. 
 
 139. Taxation of bonds — They may be taxed unless exempted — 
 
 140. Wliere bonds must be taxed — Tax cannot be deducted 
 
 from the interest due on them. 
 
 CHAPTER XII. 
 
 Sale of Bonds— Sale below Par— Usury— "What the Holder is 
 Chargeable with. Bound by all the Paper discloses. 
 
 Section 141. Sale of bonds— Usually sold at public sale, but may be 
 sold at private sale, unless i)rohibited — Rights of bid- 
 ders. 
 
 142. Transaction sometimes regarded as a loan — Often as a 
 
 sale of chattels. 
 
 143. ^Municipal corporation may pay commission to a broker. 
 
 In New York state cannot pay to any one else. 
 
 144. Delivery of bonds — What officers may make delivery — If 
 
 officers make delivery witliout authority, when corpo- 
 ration bound. 
 
 145. Sale below par — What "Par" means — When bonds may 
 
 be sold below par. 
 
 146. Sale below par i)rohibited — Rightsof subsequent innocent 
 
 holders. 
 
 147. Cases where sale below par was held not to affect the bonds 
 
 in hands of innocent purchasers — Rights of original 
 purcha.sers. 
 
 148. Usury defined — Affect on bonds — States where usurj' 
 
 renders void — Paper affected in all hands.
 
 TABLE OF CONTENTS. XI 
 
 Section 149. Sj'noijsis of the usury laws of the various states. 
 
 150. Holder of municipal paper must at his peril ascertain 
 
 autiiority of corporation to issue it — Bound to inspect 
 all authority referred to in the paper, and bound by all 
 he might have learned. 
 
 151. Purchaser must examine the records — Bound by all he 
 
 might have learned — Cases illustrating the doctrine — 
 When purchaser excused. 
 
 152. Purchaser need not go behind the records. 
 
 153. Purchaser chargeable with all defects the bonds or other 
 
 paper disclose — Bound by all he might have learned. 
 
 154. Same — Cases illustrating the doctrine. 
 
 CHAPTER XIII. 
 Remedies. 
 
 PROCEEDINGS TO RESTRAIN, AND COMPELL, ISSUE OF BONDS — ACTION ON 
 BONDS AND COUPONS— MODE OF ENFORCING PAYMENT — EFFECT OF 
 DIVISION OF A MUNICIPAL CORPORATION. STATUTE OF LUVUTATIONS. 
 FEDERAL COURTS FOLLOW STATE COURTS— LEGISLATIVE CONTROL OVER 
 REMEDIES. 
 
 Section 155. Proceedings to restrain issue of bonds. When action may 
 be brought and by whom. 
 
 156. Equity will afford the relief. 
 
 157. Position of the federal courts. 
 
 158. All state courts afford relief. 
 
 159. When tax may be restrained — When relief may be lost. 
 
 160. Action to compel issue and delivery of bonds. 
 
 161. Action on bonds and coupons. 
 
 162. Pleadings — What they should contain. 
 
 163. Burden of proof — Presumptions — When burden of proof 
 
 shifted on plaintiff. 
 
 164. Proof necessary' tor prima facie judgme7it. 
 
 165. Mode of enforcing payment of municipal paper. Judg- 
 
 ment, usually first necessary. 
 
 166. Mandamna the proper remedy. 
 
 167. May the judgment be inquired into. 
 
 168. Mandannis cannot enlarge power. 
 
 169. What enters into contract. 
 
 170. To whom writ should be directed. 
 
 171. Equity will not assist. 
 
 172. Remedies against a stato. 
 
 173. Legislature may dissolve or divide municipal corporations. 
 
 174. New corporation liable for old debts. 
 
 175. Rights of ci'editors. 
 
 176. When debtor powerless — When legislature may act. 
 
 177. Statute of Limitations.
 
 XU TABLE OF CONTENTS. 
 
 Section 178. New Promise — What necessxiry to take case of the 
 statute. 
 179. AVhen federal courts follow the decLsions of state courts. 
 ISO. Latest di-cisions followfil. Exceptions. 
 
 181. Cases — Illustrating exception. 
 
 182. When the federal courts will not ho controlled. 
 
 183. AVhat the fetieral courts recognize. 
 
 184. State coui-t decisions niiLst have bcH,ni rendered before the 
 
 bonds were issued. 
 
 185. Legislative control over remedies — Wliat becomes part of 
 
 tlie contract with the bondholder. 
 
 186. Same — Inferior secvurity cannot be substituted — Cases. 
 
 187. Same — Cases. 
 
 188. Wlien obligation of contract is impaired. 
 
 189. No vested right to a particular remedy. 
 
 190. "When creditors are without means of enforcing their 
 
 claims. 
 
 CHAPTER XIV. 
 Defences. 
 
 ■WANT OF POVTER — KSTOPPEI> BY RECITAI^; — BY ^VHOM THE QUESTION OF 
 PERFORMANCE OF CONDITIONS PRECEDENT SHALL BE DECIDED. 
 
 Section 191. Want of Power — What the term means always a good 
 defence. 
 
 192. Wliat want f)f power avisos from — When a municipal 
 
 coi-poration may be estopjx^d to plead it as a defence. 
 
 193. Estoppel by recitals — Principle of tlie rule — Bcniafidc 
 
 holder only protected by. 
 
 194. Execution and delivery — EfTect of — Leading case on 
 
 doctrine of estoppel. 
 
 195. Bonds must contain recitals — Contra. 
 
 190. Recital of enabling act sufficient — By whom must be 
 made. 
 
 197. All enal)ling acts must be recited. 
 
 198. Effect of recital of enabling act onlj' — What else should 
 
 be recited. 
 
 199. No recitals, no estoppel, but record of corporation may be 
 
 shown as an estoppel. 
 
 200. Effect of recital when no vote taken — Attitude of federal 
 
 courts. 
 
 201. Same — Attitude of state courts. 
 
 202. Last case criticised. 
 
 203. Effect of recitals. 
 
 204. Doctrine of recitals in New York. 
 
 205. Federal and state courts opposed. 
 
 206. Recitals of ordinances — Effect of.
 
 TABLE OF CONTENTS. Xlil 
 
 Section 207. Effect of recitals on constitutional conditions. 
 
 208. Same. 
 
 209. By whom the question of performance of conditions pre- 
 
 cedent shall be decided. 
 
 210. Same. When to be determined. 
 
 211. Recitals by the officer authorized to execute the bond 
 
 sufficient. 
 
 212. When the officer not authorized to adjudicate. 
 
 213. What officer may make the recitals- 
 
 214. Same — May be the officers authorized to issue the bonds 
 
 or their authorized agent, 
 
 215. Authors conclusions as to wliat officers may make tlie 
 
 recitals. 
 
 216. Eecital of wrong act — Effect of — Valid if jxjwer exists. 
 
 CHAPTER XV. 
 
 Furtlier Effect of Recitals— "When Purpose of Issue must be 
 Recited— Effect of Recital of the Purpose— Bonds Issued in 
 Excess of the Statutory and Constitutional Limit— Re- 
 covery upon void Bonds. 
 
 Section 217. Wlien purpose of the issue must be recited in the bond 
 — Bond void unless purix>se recited. 
 
 218. Effect of recital of puriwse of the issue of the bonds. 
 
 219. Doctrine extended — When ordinance need not recite pur- 
 
 pose, if the enabling act is recited — Cases. 
 
 220. Comments on the cases. 
 
 221. Bonds issued in excess of the statutory limit — When the 
 
 bonds will lie held valid — Valid if tlie amount of issue 
 is to be determined by the officei-s and they make proper 
 recitals in the bonds — R<:'cital of the enabling act suf- 
 ficient in such cases — Exceptions. 
 232. Cases illustrating general doctrine of estopjjel by recitals 
 applied to such bonds. 
 
 223. If there be no rcH'itals in the bonds, then the records of 
 
 the corporation must be lelietl on — When no recitals, 
 purchaser is charged witli all that the records of tlie 
 corporation relative to the issue discloses. 
 
 224. General rule as to recitals — Exceptions — A few cases 
 
 hold that the mere execution of tlie bonds estop the 
 corporation — Case in New York. 
 
 225. Bonds issued in excess of the constitutional limitation. 
 
 Effect of recitals — Greater care required of purcliasers 
 than when the limitation is statvitory. 
 
 226. Attitude of the Federal Courts — Early cases intimated 
 
 that if the bonds contained proper recitals the corpo- 
 nilion would be estoi)p<nl. 
 
 227. Same — Cases holding bonds invalid.
 
 xiv TABLE OF CONTENTS. 
 
 Section 228. "When tlio pui-cliaser must inquire for himself— If the 
 limit is based upon some public record and the bond 
 discloses the amount of the issue, the bond will be void 
 in all hands — Cases illustrating the doctrine. 
 
 229. Same— Cases. 
 
 230. When the bonds though in excess of the limit will be held 
 
 valid— Cliaffee Co. v. Potter, the only case. 
 
 231. Author's comments on the case. 
 
 232. Author's conclusions as to the effect of recitals in bonds 
 
 which exceed the constitutional limit. 
 
 233. Recovery on void bonds — When the money paid can be 
 
 recovered in an action for money liad and received. 
 
 234. Cases illustrating the position of the courts. 
 
 235. Same. 
 
 230. Same — The amount within the limit may be divided jjro 
 rata among the holders of the bonds. 
 
 237. Money must have been applied to a lawful municipal pur- 
 
 pose by the dii'ection of the corporation, otherwise there 
 can be no recovery — Author's conclusions as to the law. 
 
 238. No recovery on void unconstitutional bonds — Exceptions. 
 
 239. No relief in equitj' if the bonds exceed the constitutional 
 
 limit — Cases to contrary 
 
 CHAPTER XVI. 
 
 Estoppel other than by Recitals in the Bond— Curative Acts. 
 
 Section 240. Estoppel by the record of corporation relative to the issue 
 of bonds — Bona fide holder need not look further than 
 the i-ecord. 
 
 241. As against a bona fide holder the records cannot be im- 
 
 peached — Court records. 
 
 242. Estoppel by ratification or acquiescence. 
 
 243. By payment of interest — Cases. 
 
 244. Estoppel by retaining stock— Pendleton Co. v. Amy, 13 
 
 Wall. 297, an extreme case — No vote, j-et bonds valid. 
 24."). Opposite doctrine, the safe one — JIarch v. Fulton Co., 10 
 Wall. 67G. 
 
 246. Laches on part of taxpaj-er — He must act promptly — 
 
 Want of Power can alwaj-s be pleaded — No decided case 
 to contrary. 
 
 247. Ratification by municipality^ of unauthorized issue of 
 
 bonds — No estoppel wliere want of power exists. 
 
 248. I*rinciple upon which these estoppels rests. 
 
 249. EstopiM'l by judgment— iSf. 9 adjiidicata— The general rule 
 
 — Estopf^el bj- judgment enlarged. 
 2.50. Doctrine modified — Cases. 
 
 251. Cases illustrating tlie position of the courts. 
 
 252. Docti-ine of estoppel applies to non-negotiable paper.
 
 TABLE OF CONTENTS. XV 
 
 Section 253. Wlien bonds are void for non-performance of conditions 
 precedent — In such cases immaterial whether they con- 
 tain recitals or not. 
 
 254. Same — Cases illustrating the doctrine. 
 
 255. The force of the statute or constitution renders the bonds 
 
 void. 
 
 256. Curative acts — When such acts may be passed — Their ob- 
 
 jects — Rule laid down by Cooley. 
 
 257. Constitutional defect cannot be cured. 
 
 258. Cases illustrating doctrine. 
 
 259. What may be cured — Whatever the legislature might have 
 
 done, it may afterwards do — Whatever it might have 
 waived it may afterwards waive. 
 
 260. When an unconstitutional act may be cured — If defect is 
 
 only as to form it may, but if as to object it cannot — 
 How curative acts sliould be drafted. 
 
 CHAPTER XYII. 
 
 Railroad Aid Bonds. 
 
 Section 261. Their purpose — The constitution of many of the states now 
 prohibit their aid. 
 
 262. Summary of state constitutions respecting such aid. 
 
 263. Power to issue bonds must be express — When implied — 
 
 When not implied. 
 
 264. Early cases in federal courts authorized issue when tlie 
 
 power was not express. 
 
 265. Early cases overruled — Power must be express. 
 
 266. Further effect whei'e power is express — Power not ex- 
 
 hausted by one subscription — Aid may be extended for 
 depots, machine shops and the like — Power to endorse 
 or guarantee must be express. 
 
 267. A railroad is a public purpose — But not in Michigan — 
 
 Municipal corporation cannot be compelled to aid. 
 
 268. Power, where to bo found — Conditions are usually im- 
 
 posed. 
 
 269. Road to be aided — Must be certain. 
 
 270. What aid may be given — When the maximvim amount of 
 
 aid may be extended to more tlian one road — Corporate 
 existence of road cannot be attacked. 
 
 271. Conditions — May be imposed by the constitution, statute, 
 
 charter of the municipality or of the road, cannot be 
 
 waived — Power to determine cannot be delegated. 
 273. Time of completion of the road— If not completed within, 
 
 bonds need not be delivered, may be restrained — When 
 
 time the essence of the contract. 
 273. Completion of the road — When a condition, bonds cannot 
 
 lawfullv be issued.
 
 Xvi TARLE OF CONTENTS. 
 
 Section 274. Location of the road and Termini — Must be located, 
 where shown on map — What location is sufficient. 
 
 275. Waiver of conditions — When imposed by vote of the 
 
 I)eople, cannot be. 
 
 276. When the conditions may be waived — Condition that 
 
 road run through the municipality cannot be waived. 
 
 277. Subscription — Ordinarily subscription must be made 
 
 before municijiality bound— Effect of constitutional 
 amendment before subscription made — Power to sub- 
 scribe may be curtailed or re)>caled. 
 
 278. When subscription is complete — Manual signing not neces- 
 
 sary — Completed subscription a contract. 
 
 279. Consolidation — When consolidated roads may be aided. 
 
 280. Difference between subscription and donation — Bonds 
 
 donated void in hands of company or holder Avith 
 notice. 
 
 281. Such bonds valid in hands of bona fide holders. 
 
 282. Difference between exchanging bonds for stock and bor- 
 
 rowing on bonds — Bonds exchanged good in hands of 
 bona fide holder. 
 
 283. Rights of bona fide holders of municipal R. R. aid bonds — 
 
 There must be an estoppel of some kind to cure irregular 
 issue — Doctrine in New York and New Jersey. 
 
 CHAPTER XVIII. 
 Constitutional Limitations upon the Enactment of Laws. 
 
 Section 284. Object of constitutional limitations — Where to be found. 
 
 285. Title of acts — Constitutional provisions relating to. 
 
 286. When the title is sufficient — ]Most perfect expression not 
 
 necessary — Matter not fairly within the title to be ex- 
 cluded. 
 
 287. Title of amended act — Wliat sufficient. 
 
 288. Act must contain but one subject — Object of such a pro- 
 
 vision — In New York the prohibition applies only to local 
 acts. 
 
 289. When the act embraces more than one subject if title 
 
 also does .so the act is void. The subject not embraced 
 within the title is inoperative, the balance remains 
 good — When. 
 
 290. Amendments to former acts — Tlie old act need not be set 
 
 out but the section as amended must be introduced. 
 
 291. Amendment by implication — A later inconsistent statute 
 
 repeals a former inconsistent one, or so much as is in 
 conflict with the later one — Laws do not favor a re- 
 peal by implication. 
 
 292. Repeal of local or special laws— Usual rule that a former 
 
 local or special statute is repealed by a later inconsistent 
 act.
 
 TABLE or CONTENTS. XVll 
 
 Section 293. Prohibition against making existing laws a part of a new 
 act — Object of the proliibition — When the new law 
 need not recite the old. 
 
 294. Uniform operation, wliat is meant by tlie term — An act is 
 
 uniform when it opez-ates on all of the same class. 
 
 295. Same — When an act is uniform in operation — Cases. 
 
 296. Local and special laws — What are such — Provisions re- 
 
 quiring such laws — Object of such laws. 
 
 297. Classification of municipalities — Classification in Penn- 
 
 sylvania — Cases illustrating the jiurpose. 
 
 298. Classification in New Jersey — What is found in acts clas- 
 
 sifying municipal coriiorations. 
 
 299. Municipalities are usually graded so that one of a lower 
 
 grade may enter into higher — Act held constitutional 
 although the municipality to which it applies be not 
 distinguished by peculiar features from others. 
 
 300. Ohio, cases illustrating rule in p 299 siqira. 
 
 301. Rule in New York as to what constitutes a special or local 
 
 act — Cases. 
 
 302. Kansas, cases illusti'ating rule in § 299. 
 
 303. Nebraska, cases illustrating rule in § 299. 
 
 304. Illinois, cases illustrating nale in § 299. 
 
 305. Manj^ of the State courts require that the municipal cor- 
 
 poration to which a special act applies must be distin- 
 guished from the others bj' peculiar cliaracteristics. 
 
 306. New Jersej' Courts so hold — (^ases illustrating tlie rule. 
 
 307. California, same rule, cases — Missouri, same rule, cases. 
 
 308. Wisconsin, same rule, cases. 
 
 309. Minnesota, same rule, cases. 
 
 310. Other provisions prohibiting special legislation — No special 
 
 law can be enacted when general law can be made ap- 
 plicable — Such prohibition generally held to be direc- 
 tory — Legislature usually the judge. 
 
 311. Indiana, the Legislature is the proper body to determine 
 
 the question as to the applicability of the act. 
 
 312. Iowa, the question is a judicial one. 
 
 313. Colorado, so also in this State. 
 
 314. Cases — Conclusion — What the author believes to be a 
 
 general act, although not api:)licable to all the munici- 
 palities — Decisions of the State courts must be carefully 
 examined. 
 
 315. Introduction of bills — Limitations upon the time of. 
 
 316. Reading — Number of times necessary' — Courts will not 
 
 interfere as to the manner of readings — Sufficiency of. 
 
 317. Vote, number necessary to pass a bill — Ayes and nays — 
 
 If not called, bill may be declared unconstitutional — 
 When. 
 
 318. Signing of bills by the presiding officers. 
 
 319. By the Governor — Wlien must be signed — Veto — Passage 
 
 over veto. 
 
 <L 2
 
 XVIU TABLE OF CONTENTS. 
 
 Section 320. "When statutes take efFoct — Constitutional requirements. 
 
 321. May the i>rocecding.s of the Lej^iskiture be inquired into — 
 
 In wliat States this may be done — Ellect — In what States 
 it cannot be. 
 
 322. Same — Prior publication of proposed legislation — Pre- 
 
 sumption as to when regularly given. 
 
 323. Same — Regularitj- presumed in what States, but may be 
 
 overcome by proof. 
 
 324. The presumption is that a statute is constitutional. 
 
 325. Construction of constitutional provisions — Courts will liold 
 
 a statute to be constitutional until the contrary is shown 
 — Constructions of the Federal constitution by the 
 United States Court are binding on all state courts. 
 
 326. Judicial notice, what the court will take notice of — Of 
 
 the census, of geographical facts — Of the class a city 
 belongs to — Of State statutes. 
 
 CHAPTER XIX. 
 
 Extracts from the Respective State Constitutions relative to 
 the Incvirring of Debt.
 
 TABLE OF CASES CITED. 
 
 Eeferences are to Pages. 
 
 A. 
 
 Aberdeen v. Sykes, 331. 334 
 Ackerman ?;. HEenck, 8j 
 A^kerman v. Storv, 44"3 
 Ackley School Dist. v. Hall, 126 
 Adims V. East River Saving Inst., 
 
 74 
 Adams v. San Angelo Water Works 
 
 Co., 404, 406 
 ^tna Life Ins. Co. v. Lyon Co., 
 
 72, 171, 324 
 Agawan Nat. Bk, v. South Hadley, 
 
 334 
 Aikman u. School Dist.. 109 
 Aitken v. Town of Randall, 49 
 A. L. Ins. Co. V. Bruce, 395 
 Alexander v. Dulutli. 434 
 Allegheny Co. Home's Appeal, 402 
 Allen V. Cameron, 5 
 Allen V. Com'rs, 402 
 Allen V. Dallas R. R. Co., 153 
 Allen V. Inhabitants of Jay, 46 
 Allen V. Intendant and Council- 
 men, 324 
 AUentown v. Derr, 124 
 Alter V. Cincinnati, 420 
 Ames V. A. P. R. R. Co., 436 
 Amey v. AUeglieny City, 61. 233, 
 Amoskeag Nat. Bk. v. Ottawa, 436 
 Amy V. Dubuque, 241 
 Amy V. Salma. 239 
 Ander.son v. Beal, 265. 289, 290, 393 
 Anderson v. Santa Anna, 243 
 Anderson v. Trenton. 427, 428 
 Antiionv v. Jasper Co., 52, 127, 128, 
 
 173, 175, 20(5. 352 
 Antonio v. Wriglit, 137 
 Appeal of City of Erie, 61, 66 
 Appeal of Harris, 417 
 Arents v. Commonwealth, 136 
 Armstrong v. Village of Ft. Ed- 
 ward, 192 
 Arthur v. Glens Falls, 434 
 Ashley v. Board, 5 
 Ashley v. Sup. of Presque Isle Co., 
 
 167 
 Ashuelot Nat. Bk. of Keene v. 
 School Di-st. No. 7, 19 
 
 Aspinwall v. Com'rs, 48, 366, 385, 
 387 
 
 Atchison Bd. of Ed. v. De Kay, 106, 
 110, 289 
 
 Atchison v. Butcher, 197, 198 
 
 Atchison etc. R. R. Co. v. Jeffer- 
 son Co., 354 
 
 Atlanta v. Gate City R. R. Co.. 405 
 
 Atlantic City Water Works v. 
 Read. 61 
 
 Atlantic T. Co. of N. Y. v. Darling- 
 ton, 63, 73 
 
 Atty.-Gen. v. Amos, 403 
 
 Augusta V. Augusta Bank, 132 
 
 Aurora v. West. 380 
 
 Avery u. Job. 181. 215 
 
 Avery v. Town of Sjiringport, 132 
 
 Ayer.s' Appeal, 417, 418 
 
 B. 
 
 Babcock v. Comp. 348 
 
 Bailey v. Co. of Buchanan. 126 
 
 Bailey v. Lawrence Co., 233 
 
 Bain v. Savage, 357 
 
 Baker v. Citv of Seattle. 88 
 
 Ball V. Presido Co.. 36, 118 
 
 Baltimore v. Gill, 61 
 
 Bambridge r. Loviisville. 163 
 
 Bangor Sav. Bk. r. Stillwater, 23, 
 
 24,34 
 Bank v. Bergen Co 
 Bank v. Brown, 80 
 Bank i\ Statesville 
 Bank of Chillicotlie 
 
 27 
 Bank of Pittsburgh r. Neal. 226 
 Bank of Rome v. Village of Rome, 
 
 3:*,3 
 Bannock Co. v. C. Bunting & Co., 
 
 81, 178 
 Barnctt v. Denison, 158, 293, 295 
 Barnum r. Town of Okolona, 123, 
 
 124, 125 
 Barr v. Auburn, 115 
 Barret r. Court of Schuyler Co., 
 
 262, 343 
 Barrier i'. Baylers, 374 
 Barthol r. Meader, 385 
 
 xix 
 
 285 
 
 131 
 V. Mayor, 24,
 
 TABLE OF CASES CITED. 
 
 References are to Pages. 
 
 Bartle v. Des Moines. 70 
 
 Barton Co. r. Walker, a.")? 
 
 Bass I'. Colinnbus. or)4 
 
 Basset V. City of El Paso, 18G, 231, 
 
 •2oO 
 Bates V. Gerber, 184 
 Bates r. Gregory. 238, 241 
 Bates Co. r. Winters, 212, 385, 389, 
 
 390 
 Battles and Webster v. Louden- 
 
 slager, 153. 161 
 Bavard v. Klinge. 97 
 Bayley v. Taber, 129 
 Beach v. Leachy, 424 
 Beaman v. Lake Co., 31 
 Beard r. City of Hopkinsville, 69 
 Beardsley v. Smith. 228 
 Beaudens r. Ci\])e Girandeau, 439 
 Becker r. Wasiiington. 112 
 Beckwitli v. Racine. 239 
 Belknap v. Miller. 110 
 Bell V. Citv of Americas. 98 
 Bell V. Mobile R. R. Co., 373 
 Beloit V. Morgan. 348 
 Bench r. Hardwick. 418 
 Berlin t<. Waterloo, 82 
 Bernard v. Campbell. 194 
 Bernards v. Morrison, 227, 278, 
 
 280 
 Bernards Tp. r. Stebbins, 132, 133. 
 Biddle V. Borough of Rivington, 77 
 Birdsall r. Russel. 118 
 Bissel V. Kankakee, 207 
 Bissel V. Jeffersonville, 266, 278, 
 
 283. 332, 354, 355. 357 
 Bissel r. Spring Valley, 51, 53, 127, 
 
 129. 130, 349 
 Board v. Bolton, 60 
 Board v. Randolph. 278 
 Board of Com'rs v. JlcClintock, 80 
 Board of Com"rs v. Sellew, 23G 
 Board of Com'rs of Gi'and Co. v. 
 
 King. 232. 234 
 Board of Com"i-s of Kingman Co. v, 
 
 Cornell University, 122, 278 
 Board of Ed. of Atchison v. De 
 
 Kay, 135 
 Board of Liquidation r. McComb, 
 
 253 
 Board of Sup. v. Simmons, 125 
 Board of Sup. of Madison Co. v. 
 
 Brown. 98 
 Bogart v. Lamotte Tp., 106. 337 
 Bolles V. Brimficld, 355, 359 
 Booth V. Woodbury, 44 
 Bowen v. Greensboro. 93 
 Bowers r. Smith. 86 
 Bowles V. State. 90 
 Boyd V. Kennedy. 162 
 BoVle V. New Orleans. 215 
 Bound V. Wis. R. R. Co., 385 
 
 Brady v. Moulton, 434 
 Bradley v. Gilbert, 215 
 Brainard v. N. Y. etc. R. R. Co., 
 
 117 
 Brannan v. Hursell, 120 
 Brasher v. City of Madison, 64 
 Braun r. Bd. of Com'rs of Benton 
 
 Co. 183 
 Breckenridge Co. t'.McCracken, 1, 
 
 131. 179, 224 
 Brenham v. Ger. Am. Bk. 17, 20 
 
 22, 369 
 Brewis v. Duluth, 238 
 Brewster v. Wakefield. 120 
 Briggs V. Town of Phelps. 15G 
 Brighani v. Henderson. 446 
 Bright V. McCullough. 96 
 Broadhead v. Milwaukee, 45 
 Broadway Sav. Inst. v. Town of 
 
 Pelham, 265, 307 
 Brookljm V. Ins. Co.. 208 
 Brooks V, City of PhiladeliDhia, 67, 
 
 72 
 Brooks V. Hyde, 412 
 Brown v. Ames, 148 
 Brown v. Bon Homme Co., 53, 103, 
 
 126, 285. 343, 335 
 Brown v. Gates. 228 
 Brown ■?% Lowell, 410 
 Brown v. Lutz, 111 
 Brown v. Town of Pt. Pleasant, 
 
 222, 223 
 Brown ct al. v. MiUiken Co. Clerk, 
 
 336 
 Brownell v. Town of Greenwich, 
 
 56, 124. 123, 192 
 Brownsville Taxing Dist.r. Loague, 
 
 231 
 Brought on i\ Pensacola, 239 
 Bruce v. Pittsburgh, 63 
 Brummel v. Enders, 147 
 Buchanan v. Litchfield, 61, 69, 263, 
 
 308, 325 
 Bullock V. Curry. 99 
 Bunch's Ex'rs i\ Fluvanna Co., 
 
 150 
 Burffenning v. Chicago R. Co. 447, 
 Burgess v. Mobin, 385 
 Burgess v. Seligman. 243 
 Burnett v. Taylor, 403 
 Burns v. Sewell. 43S, 439 
 Barrel v. Boston, 344 
 Burrit v. State C. Com'rs, 402 
 Butler V. Dunham, 87, 343 
 Butler V. Passaic, 106 
 Butz V. Muscatine, 248 
 
 0. 
 
 Cagwin V. Town of Hancock. 240, 
 247, 285, 333
 
 TABLE OF CASES CITED. 
 
 XXI 
 
 Eeferences are to Pages. 
 
 Cairo R. R. Co. v. Sparta, 49, 124 
 Cairo v. Zane, 157, 374. 392 
 Calalian v. Chipman, 403 
 Calhoun v. Millard, 218, 330 
 Calhoun Co. i\ Galbraith, 117 
 Camden v. Allen, 39 
 Campbell v. Bd. of Pharmacy, 411 
 Campbell v. Kenosha, SoG 
 Carlvle W. L. P. Co. v. City of Car- 
 
 lyie. 68 
 Carpenter v. Lathrop, 208 
 Carpenter v. People, 433 
 Carr r. Coke, 437 
 Carr v. West Carrolton, 420 
 Carrol Co. v. Smith, 97, 248, 263 
 Carrol Co. v. U. S.. 181. 232 
 Cass V. Dillon. 60, 61 
 Cass Co. r. Gillet, 387, 389 
 Cass Co. V. Johnston, 97 
 Catron v. Jones, 406 
 Catron r. Lafayette Co., 71 
 Central S. S. House v. School Dist. 
 
 No. 3, 10 
 Chaffee Co. v. Potter, 171,275, 308, 
 
 309, 310. 314, 397 
 Chamberlain v. Bd. of Ed., 10 
 Chambers Co. v. Clews, 81 , 259 
 Champaigne Co. Bk. v. Smith, 188 
 Cliarity Com'rs v. IMcGuerin, 7 
 Charles ii. Hoboken, 110 
 Chicago V. Halsey, 228 
 Chicago etc. v. Aurora, 123 
 Chicago etc. R. Co. v. Coyer, 78 
 Chicago etc. R. R. v. Makepeace, 
 
 382 
 Chicago etc. R. R. v. Pinckney, 388, 
 
 388 
 Chicago, R. & W. Co. v. Harris, 87, 
 
 331, 382 
 Chicot Co. V. Lewis, 374 
 Childs V. City of Anaoortes, 72 
 Chiniquy v. People, 100, 395 
 Chisholni v. Montgomery. 285 
 Choiserv. People, 226, 358, 393 
 Cln-istie t'. Bnyonne. 411 
 Citizens' Bank i\ City of Terrell, 
 
 313, 321 
 Citizens' Savings & Loan Assoc, v. 
 
 Perry Co.. 204, 265, 266, 397 
 City i\ Lamson , 222 
 City Council of Augusta v. Dunbar, 
 
 188 
 City of Alma v. Guaranty Sav. Bk., 
 
 90 
 City of Auroral'. West, 205 
 City of Beverlj' v. W^aln. 446 
 Citv of Cadillac v. Woonsocket Inst. 
 
 for Sav., 148 
 City of Coayers i\ Kirk. 06 
 Citv of Columbus r. Dcnison, 396 
 City of Elizabeth v. Force, 163 
 
 City of Evansville v. Woodbury. 21 
 City of Fulton v. Northern 111. Col- 
 lege, 257 
 City of Galena z\ Amy. 251 
 City of Houston v. Jankouskie. 242 
 City of Indianapolis v. Skeene et 
 
 al., 208 
 City of Kenosha v. Lamson, 135 
 City of Kenton v. Slate, 434 
 City of Memphis v. Betiiel, 195 
 City of New Orleans v. Clark. 276 
 City of New Orleans v. U. S., 229 
 City of Pokeepsie v. Quintard. 67, 
 
 171 
 City of Quinton v. Warfield, 164 
 City of Reading v. Sliepp. 409 
 City of Rochester v. Quintard, 74 
 City of South Bend v. Lewis, 96 
 City of Springfield %\ Edwards. 69 
 City of Tarkio v. Cooke, 107 
 City of Topeka v. Gillet. 423, 424 
 City of Wahoo v. Reeder, 3 
 Claiborne Co. v. Brooks, 20, 21, 34, 
 
 33, 126, 247. 367 
 Clapp V. County of Cedar, 334 
 C-lark V. City of Jonesville, 440 
 Clark V. Des Moines, 194 
 Clark V. Miller, 232 
 Clarke v. ComYs, 402 
 Clarke v. Iowa City, 241 
 Clarke Co. Ct. v. Paris & R. Co., 
 
 389 
 Classen v. Trenton, 428 
 Claybrook v. Bd. of R. Co.. 99 
 Clay Co. V. Society for Savings. 335 
 Clegg r. School Dist. No. 56, 425 
 Clerk V. Town of Rosedale 
 Cleveland v. Citv of lola, 424 
 Cleveland, P. & A. R. R. Co. v. 
 
 Penn, 189 
 Coates V. Campbell, 45 
 Coatesr. N. Y., 108 
 Coffin V. Bd. of Com'rs, 257, 265, 
 
 270, 278 
 Coffin V. City of Indianapolis. 172, 
 
 191. 294 
 Colburn v. Chattanooga Western 
 
 R. Co., 36 
 Cole V. Black River Falls, 54 
 Coleman v. Marion Co., 110 
 Coleman v. Self, 383 
 Coler V. Bd. of Comrs, 56, 374 
 C.ler ?'. Cleburne Co., 53. 127. 131 
 Color V. Dwight Tp., 54, 264, 274. 
 
 278 
 Coler V. Rhoda School Tp. of Chas. 
 
 Mix Co.. 83, 278 
 Coloma V. Eaves.. 284, 286 
 Comanche Co. v. Lewis. 174 
 Com'rs V. Bolles, 207 
 Com'rs V. Brown, 413
 
 XXll 
 
 TAIJLI-: OF CASES CITED. 
 
 References are to Pages. 
 
 Com'rs V. Clarke. V2-2, '2'2ii 
 
 Com'rs I'. Debof , 40'J 
 
 Com'rs V. Frutchy, 402 
 
 Coin"i-s r. Koiniisiuith, 409 
 
 Coiurs r. Mt-h ill.,\ 409 
 
 Conrrs V. M. & JI. N. Bank. 412 
 
 Com'rs V. PittsburKli. ;i78, 384 
 
 Com'rs V. Kejnokls, 413 
 
 Com'rs V. Rose, 5 
 
 Com'rs V. Severn, 402 
 
 Com'rs V. Sliartcr. 83 
 
 Com'rs r. Tliayer. 92. 245, 378 
 
 Com'rs of Douglass Co. v. Bolles, 
 
 264. 20."). ;5T4 
 Com'rs of Knox Co. v. Aspinwall, 
 
 219. 260 
 Com'rs of Knox v. Nichols, 195 
 Com'rs of C. r. A. N. C. R. Co., 195 
 Com'rs of Leavenworth v. Miller, 
 
 370 
 Com'rs of Shawnee Co. v. Carter, 
 
 357 
 Commonwealth v. Pittsburg, 227, 
 
 228. 307, 368. 384 
 Commonwealth v. Sanuiels. 405 
 Commonwealth v. Williamstown 
 
 (Mass.). 367. 394 
 Concord v. Robinson, 307 
 Concord v. Portsmouth Sav. Bk., 
 
 385, 386, 388, 389 
 Connecticut Life Ins. Co. v. Cleve- 
 land R. R. 132 
 Converse v. Ft. Scott, 374 
 Cook r. Ins. Co., 243 
 Cook(5 V. City of Beatrice, 218 
 Cooper V. Maj-or of Jersey City, 194 
 Cooi)er r. Sullivan Co.. 37G 
 Copeland i\ St. Josepli. 434 
 Coi^es V. Charleston. 368 
 CoquarJ r. School Dist. of Joplin, 
 
 191 
 Cornell University v. Village of 
 
 Maumce. 5 
 Corpus Ciuisti r. Woessner, 73 
 Cotton V. New Providence. 223, 227, 
 
 260. 261. 2()2, 301. 306. 395 
 Council Bluffs v. Steward. 62 
 County of ( 'uUoway v. Foster. 373 
 County of Macon i: Shores, 374 
 Countv of Ralls r. Douglass. 5. 374 
 County of Randolph r. Post. 383 
 Countj- of Tipton v. Loco. Works, 
 
 81, 358 
 Cowdrey v. Canoedea, 80 
 Cowles r. Mercer Co., 237 
 Coxe V. State, 446 
 Craig r. Andes. 77, 78, 397 
 Creighton v. Morrison, 107 
 Crompton v. Zaljriskie, 
 Cromwell v. Countv of Sac, 120, 
 
 152, 153, 156, 226, 348, 350 
 
 Cronin v. Patrick Co.. 147. 150 
 Crosby v. New London etc. R. R. 
 
 220 222 
 CiwtrOxford. 174. 266. 289, 291 
 Culberson r. Fvdton. ()2. 64 
 Cumberland v. Magruder. 73 
 Cumberland Co. r. Randolph, 227 
 Cummings v. Chicigo, 434 
 Curry v. Dist. Tp. of Sioux Co.. 7, 9 
 Cutin V. Bartin, 446 
 
 D. 
 
 Dailey v. Columbus, 29. 16 
 Daly V. Brown, 348 
 Daniel v. Clarke Co., 92 
 Daniels v. Henshaw, 418 
 Darlington v. Mayor etc. of N. Y, 
 
 228, 401 
 Davenport v. County of Dodge. 131 
 Davenport v. Dienschmidt, 62. 71 
 Davenport r. Peoria Ins. Co., 228 
 David V. Portland. 408 
 Da vies v. Des Moines, 66, 184 
 Davies Co. v. Dickinson, 118, 285, 
 
 323, 325, 344 
 Davies Co. v. Dickson. 118, 344 
 Davies Co. v. Dixon, 285 
 Davis V. Clarke, 418 
 Dawson v. Hance. 66 
 Dawson Co. i\ McXamar, 42 
 Day v>. Austin. 95. 98 
 Debou V. The People, 443 
 Decora v. Bullis, 54 
 Deland v. Piatt Co.. 1 
 Delafieldv. Illinois. 194. 198, 215 
 Denison v. Mayor etc. of Columbus, 
 
 390, 395 
 Dent r. Cook, 31 
 Denver C. R. v. Nestor, 408 
 Desmond r. Dunn. 425 
 Desmond v. Jefferson, 22, 24 
 Deveraux v. City of Brownsville, 
 
 239 
 Devine v. Com'rs of Cook Co., 425 
 De Voss V. City of Richmond. 150, 
 
 208 
 Deyo r. Oteo Co., 170, 354 
 Diamond v. Lawi-ence Co., 147 
 Dingley v. Boston, 43 
 Dively v. Cedar Falls, 68 
 Dixon Co. V. Field, 174, 206, 207, 
 
 215, 257, 277, 284, 286, 310, 313, 
 
 316, 325, 326 
 Dodge V. City of Memphis. 325 
 Dodge Co. Com'rs v. Chandler, 42, 
 
 44 
 Doon V. Cummings, 61, 158 
 Donation Fairfield r. Gallatin Co., 
 
 386. 387 
 Douglass V. County of Pike, 97, 248
 
 TABLE OF CASES CITED. 
 
 XXIU 
 
 References are to Pages. 
 
 Douglass V. Lincoln Co.. 173 
 Douglass V. Virginia City, 24 
 Dow V. Bridlenian, 439 
 Dow V. Humbert, 233 
 Dowland v. County of Siblev, 
 Dows V. Town of Ehnwood, 122, 
 
 3.'34, 355, 359 
 Duanesburgh v. Jenkins, 79 
 Dugger V. M. & T. Ins. Co., 445 
 Duke V. Brown, 97 
 Duke r. Williauisburgh Co., 355 
 Duncan v. County Court, 188 
 Dutchess County M. Ins. Co. v. 
 
 Hatchfiekl. IGl 
 Dvers v. Hackworth, 20 
 
 E. 
 
 Earle v. Bd. of Ed.. 429 
 
 East Lincoln r. Davenport, 389 
 
 East St. Louis v. Amy, 00 
 
 East St. Louis v. East St. Louis & 
 
 Co.. 68 
 East St. Louis v. Flannigan, 65 
 East St. Louis v. People, 60 
 East St. Louis v. Underwood, 232 
 East St. Louis v. U. S., 232 
 Eaton R. R. Co., r. Central R, R. 
 
 Co., 44 
 Echols V. City of Bristol, 219 
 Eddy V. People, 383 
 Edmonson v. Herbrandson, 432 
 Edwards v. Bates Co., 242, 347 
 Edwards t\ Herbrandson, 432 
 Egv})tian Levee Co. r\ Hardin, 44 
 Elizabeth r. Force. 118, 153, 161 
 Ellis r. Ellis, 442, 445 
 Ellis V. Hutchinson, 406 
 Ellsworth i\ Nelson, 447 
 Elsen V. City of Ft. North. 67 
 E. M. Darby & Co. v. City of Mo- 
 
 desta, 91. 100 
 Empire v. Darlington, 374 
 Endfield i\ Jordan. 117, 155 
 Ensign 7\ Barse. 405 
 Erie r. Knapp, 228 
 Essex Co. R. R. Co. v. Lunenburgh, 
 
 77 
 Evans v. Brown, 442 
 Evans v. Willistown. 407 
 Evansville v. State, 432, 438 
 Evansville R. R. Co. v. Evansville, 
 
 16. 284 
 Everitt v. Smith. 98 
 Evernham ?'. Hulit, 408 
 Evertson v. Nat. Bk.. 136, 220 
 Ex parte Cowert, 402 
 Ex parte Fiske. 114 
 Ex parte Solma K. R. Co., 219 
 E.v parte Swan, 418 
 
 Ex imrtc Ti^ion. 442 
 Ewing Tp. V Trenton, 443 
 
 F. 
 
 Fairfield v. Gallatin Co.. 386, 387 
 Falconer v. Buffalo R. R. Co.. 379, 
 
 385 
 Farson, Leach & Co. v. Bd. of 
 
 Com'rs 176 
 Farson, Leach & Co. t'. Louisville, 
 
 67 
 Farwell, J. V. Co. v. Matheis, 439 
 Fazende v. Houston, 250 
 Fidelity T. & S. U. Co. v. City of 
 
 Morganfield, 84, 87 
 Fidelity etc. Co. v. Shenandoah 
 
 etc. Co., 134 
 Field V. Clark, 443, 444 
 Fieldman & Co. v. Charleston, 45, 
 
 179 
 Fingal v. Burgess, 215 
 Finlayson v. Vaugh. 65 
 First Nat. Bk. v. Arlington, 131, 
 
 174 
 First Nat. Bk. v. Concord. 208, 331 
 Fiske V. City of Kenosha, 212 
 Fitzgerald v. Walker, 55 
 Flagg V. Elmira. 119 
 Flagg V. Palmyra, 81, 227, 262 
 Flagg V. School Dist. No. 70, 148, 
 
 174, 175 
 Flynn v. State, 7 
 Fosdick V. Perrysbm-g, 387 
 Folsom r. School Directors, 8, 16, 28 
 Foote ^\ Cincinnati, 80 
 Foote V. Hancock, 153 
 Ft. Scott V. Hickman, 242 
 Fowler i\ Strickland, 153 
 Francis v. Howard Co., 21, 35. 206, 
 
 247, 312, 313 
 Freeliolders of Sussex Co. v. Stra- 
 
 der. 4 
 Freeland ?'. Stillman, 9 
 Freeport r. JlarUs. 343 
 Freehill v. Chamlx-rlain. 242 
 French i'. Burlington, 61, 64, 73 
 Friend v. Citv, 120 
 Fuller V. Chicago, 66 
 Fullerton v. School Dist. of Lincoln, 
 
 Neb., 79 
 Fulton V. Town of Riverton. 278 
 Fulton Co. V. The IL & W. R. R. 
 
 Co. 89 
 
 G. 
 
 Ga. P. R. Co. r. Gaines. 391 
 Gaddis?'. Richard Co., 358 
 (iaines i\ Willi;iiiis. 404 
 Galena v. Corwith, 16, 165
 
 XXIV 
 
 TABLE OF CASES CITED. 
 
 References are to Pages. 
 
 (Tanliner v. Chester, 418 
 
 (jraiise r. City of Clarksville, 33, 
 274, 320, 322, 331 
 
 Gelpcke v. City of Dubuque, 147, 
 244, 278 
 
 Geor>,'e r. Oxford. 87, 93 
 
 Georgia M. R. Co. v. State, 402 
 
 (Tennaii A. Ins. Co. v. Youngs- 
 town, 420, 434 
 
 German Sav. Bk. v. Franklin Co., 
 20, 100. 248, 200, 264, 3r>3, 357 
 
 German Sav. Bk. v. Village of Sus- 
 pension Bridge. 193 
 
 Gibbs V. School Dist. No. 10, 131, 
 269. 285 
 
 Gilchrist v. Little Creek, 124 
 
 Gill V. Dunham, 109 
 
 Gillespie v. Palmer. 97 
 
 Gillman v. Davies Co., 38, 323, 366 
 
 Glidewell v. Martin, 445 
 
 Goelet V. EHzabeth, 232 
 
 Goldberg v. Dorland. 434 
 
 Goshen Tp. r. Shoemaker, 335 
 
 Gould ?'. Bar r is, 325 
 
 Gould V. Sterling, 56 
 
 Graham v. Corondelet, 111 
 
 Granada Co. v. Brogden, 345. 355 
 
 Grand Chute v. Winegar, 342, 384 
 
 Grannis i'. Cl\erokee Tp., 359 
 
 Grant r. Davenport, 66, 73 
 
 Green v. Bariy. 101 
 
 Green r. Cape May, 345 
 
 Green v. Neal, Lessee, 249 
 
 Green v. "Weller, 442 
 
 Green Bay v. Biauns, 106 
 
 Green Co. v. Conness, 243 
 
 Green Co. v. Daniel, 118, 224, 228 
 
 Griffin v. IMacon, 241 
 
 Griffith V. Borden, 154. 192, 195, 198 
 
 Gulf etc. R. R. Co. v. Miami Co., 89 
 
 Gunn r. Barry, 389. 
 
 H. 
 
 Hackett r. Ottawa, 47, 158, 295 
 Hackettstown, v. Swackliamer, 28, 
 
 32, 324 
 Hall V. Steele, 445 
 Hamilton Co. v. Mighels, 4 
 Hamlin v. Kassafcr, 53 
 Hannibal R. R. Co. v. Marion Co., 
 
 335 
 Harcourt t\ Good, 368 
 Hardin v. McFarlan, 166 
 Harding v. Rockford, R. R. Co., 80, 
 
 85, 89, 94 
 Harrington i\ Plainview, 375, 395 
 Harris v. Herman, 429 
 Harshman r. Bates Co., 90, 98, 99, 
 
 211. 390. 391 
 Hai'shman v. Knox Co., 231 
 
 Hart V. Murray, 413 
 Hartford Bridge Co. v. EaS:t Hart- 
 ford. 238 
 Hartman r. Greenhow, 137 
 Hasbrook r. Milwaukee. 357 
 Hasting i\ Thompson, 148 
 Hastings r. ColnniLus. 114 
 Hawkin v. Carrol Co., 97 
 Hawkins i\ Thomas, 447 
 Hayes v. Holly Springs. 82 
 Haynes i\ Cape ^lay. 410 
 Heard v. Calhoun School Dist., 
 Hebard v. Ashland Co. 
 Hedge v. Dixon Co., 277. 326. 327 
 Heghilt V. Johnson, 4 
 Heilbron v. Cuthbert, 176 
 Heine v. Levee Com'rs. 236 
 Hequemborg ?•. Dunkirk. 438 
 Herman v. Cincinnati. 421 
 Herman v. Goodyear, 357 
 Hershoff v. Beardsley. 107 
 Hewitt V. Normal School Dist. 28 
 Hoag V. Town of Greenwicli, 125, 
 
 154, 323. 3.34 
 Hoboken r. Year, 114 
 Hodgeman v. Chicago & St. P. R. 
 
 R. Co., 100, 383, 384 
 Hoffman v. Quincy. 185 
 Holmes t\ City of Shreveport. 16.31 
 Home's A])peal, 402 
 Honey v. State, 442 
 Hoag r. Rio Grande Com'rs, 373 
 Hopkins v. Scott, 409 
 Hopper r. Covington, 223, 224, 264 
 Hor])y V. Beverly, 61 
 Hf)rd V. Rogersville etc. R. R. Co., 
 
 85 
 Horton v. Town of Thompson, 211, 
 
 394, 358 
 Ilotchkiss ^y. Banks, 160 
 Hotchkiss V. Plumett. 8, 9 
 Houston V. People, 130, 217 
 Houvv V. Epi)inger. 1.59. 
 IlowaVd V. City of Huron. 233 
 Howard ?'. Francis Co., 20 
 Howard r. Levee Co., 217 
 Howe r. Keeler, 344 
 Howell ?^ Peoria. 215 
 Hubbard, Ex'r, v. Sadler, 30 
 Hudson r. Winslow. 285 
 Hu-rhes V. School Dist.. 240 
 Hull ?•. Miller, 436 
 IIuinboldtTp. V. Long, 87, 260. 289, 
 
 301. 304 
 Hunt ?'. Fawcett etciL, Com'rs. 193, 
 
 105, 199 
 Hunter v. Memphis, 409 
 Hutchinson v. Self, 220. 286 
 Hutchinson & S. R. R. Co. r. Fox, 
 
 87. .331 
 Hyman v. State, 403
 
 TABLE OF CASES CITED. 
 
 XXV 
 
 Eeferences are to Pages. 
 
 I. 
 
 Illinois M. R. R. Co. v. Waynes- 
 ville, 
 
 I., N. & S. R. R. Co. V. City of At- 
 tica. 7<S 
 
 Inhabitants v. Morrison, 264 
 
 In Matter of Application of 
 Church, 1, 31 
 
 In Matter of Application of East 
 River Bridge. A'Z'-i 
 
 In Matter of Elevated R. R. Co., 
 422, 428 
 
 III re Ayres, 237 
 
 In re Ass. Passaic. 428 
 
 In re Douglass, 113 
 
 In re Elizabeth Com'rs, 434 
 
 In re Extension Boundaries of Den- 
 ver, 433, 434 
 
 In re Foley, 440 
 
 In re GueiTeo, 144 
 
 In re Passaic, 418 
 
 In re Prime's Estate, 408 
 
 In re Senate Bill. 437 
 
 In re Senate Bill, 293, 447 
 
 In re Senate Resolution, 437 
 
 In re South Market St., 110 
 
 In re Thomas, 107 
 
 In re Townsend, 40 
 
 InreV. F. Co.. 411 
 
 In re Wetmore, 42, 103 
 
 In re Woodbridge, 94 
 
 Irwin V. Lowe, 83 
 
 J. 
 
 Jackson v. Vicksburg R. R. Co., 
 
 147, 162 
 Jackson v. York R. Co., 220 
 Jackson Co. v. Brush, 214, 2*^7 
 Jacksonville R. R. Co. v. Virden. 
 
 92 
 Jaks V. Helena, 378 
 Jarrot v. City of Moberl}', 370 
 Jefferson v. Hawkins. 104 
 Jefferson Co. ?'. People. 420 
 Jeffries v. Lawrence. 2ol, 385 
 Jenkins v. Andover, 41 
 Jereinia Clancy v. Bd. of Sup. of 
 
 West Co., 423 
 Johnson v. Milwaukee, 432, 434 
 Johnson v. Stark Co., 85, 117 
 Johnson Co. v. Tliayer, 56, 82, 83, 
 
 278, 290, 378, 381 
 Jones V. Com'rs, 340 
 Jones r. Lakeview. 447 
 Jones V. Hurlbert, 64, 05 
 Jonesboro r. Cairo etc. R. R. Co., 
 
 355 
 J. N. AV. & S. E. II. R. Co. V. Virden, 
 
 84 
 
 Judson V. City of Bessemer. 176 
 Just V. Wise Tp., 131 
 
 K. 
 
 Kansas City R. R. v. Aldermen, 
 
 377 
 Katzenberger v. Aberdeen. 367 
 Kayser v. Trustees of Bremen, 374 
 Keese v. Denver, 408 
 Kerthsburg v. Tuck. 354 
 Kelly V. Milan. 34. 48 
 Kelly V. Town of Milton, 344 
 Kenard r. Cass Co., 222. 223 
 Kenosha v. Lamson, 137, 345, 
 Ketchum v. Buffalo, 29, 34 
 Ketchum v. Duncan, 136 
 Kieffer v. Ehler, 155 
 Kiley v. Forsee, 108 
 Kilgore v. Magee, 417, 418, 443 
 Kimball v. Grant Co.. 183 
 Kimball v. Hendee. 10, 99 
 Kimball ?'. Rosenthal, 354 
 King V. Fleming. 120 
 Kingman v. Brocknian, 45 
 Kings Co. V. Johnson, 402 
 Kitchen t'. Magee, 412 
 Klien v. New Orleans. 228 
 Knapp V. Mayor of Hoboken, 31, 
 
 34 
 Kneeland v. Lawrance Co., 160 
 Knox V. Baton Rouge, 185, 276 
 Knox V. Nichols. 376 
 Knox V. Ninth Nat. Bk., 94. 97. 107. 
 
 289, 291, 373, 387 
 Knox Co. V. Aspinwall, 92. 229. 
 
 264, 279, 280, 284 
 Koons i\ Clugish. 408 
 Koshkonong r. Burton, 120 
 Kunkle v. Franklin, 354 
 
 L. 
 
 Lake Co. v. Graham, 173, 277. 312. 
 
 316, 325 
 Lake Co. v. Rollins, 63, 312 
 Lamar W. & E. L. Co. v. City of 
 
 Lamar, 03 
 Lancaster i\ Cheraw R. Co. , 378 
 Land Co. v. Brown, 418 
 Lane v. Embden, 126 
 Lane r. Scliomp, 79 
 Langliorne v. Scott, 49 
 Lankford v. Com'rs of Somerset 
 
 Co., 439 
 Larraboe v. Talbot, 446 
 Launtz r. People. Ill 
 Lawr. People, 01. 65, 28 
 Lawrence Co. v. R. R. Co.. 198 
 Lawson v. Milwaukee & R. R. Co., 
 
 94
 
 XXVI 
 
 TABLE OF CASES CITED. 
 
 Referenc3s are to Pages. 
 
 Layton v. New Orleans, 240 
 L"avi.Mi\vorth r. Barnes, 82, 374 
 Leavenworth eu-. R. R. Co. v. 
 
 Coni'rs l)uii<j:lass Co.. 337 
 Ledwicli r. McKiin, l(i2. 193 
 Lees Co. Sup. v. Rogers, 231, 248, 
 
 3r)5 
 Leffingwell r. "Warren, 244 
 Lehlback ?". Hnviies, 8G 
 Lehman v. McBridge, 408 
 Leitch V. Wells, lol 
 Lewis V. Barljour Co., 175 
 Lewis V. Bourdi'ii Co.. 204 
 Lewis V. Comanche Co., 16 
 Lewis V. Potter. 124 
 Lewis V. Sherman Co. Com'rs 42. 
 Lewis V. State. 447 
 Lewis i\ Widber, 04 
 Lexington r. Butler, 271 
 Lincoln Co. r. Luning. 242 
 Linehan r. Camhridgc. 200. 414 
 Linn v. Clianibcrsburgh Borough, 
 
 01 
 Lippencott ?'. Town of Pana, 83, 
 
 367. 3S0, 387 
 Litchfield v. Ballou, 71, 329 
 Littaner v. GoMman, 149 
 Little Rock v. Bnulc. 23. 120 
 Little Rock v. City of Portland, 06 
 Little Rock v. Ilanniford. 434 
 Little Rock v. Mercliants' Nat. Bk., 
 
 389, 391 
 Livingston Co. v. First Nat. Bk., 
 
 101, 390 
 Livingston Co. v. Portsmouth Bk. , 
 
 389. 391 
 Loan Assoc, v. Topeka, 39, 41, 45, 
 
 178, 179, 337. 344 
 Long V. New London, 307 
 Lotteiy Co. r. Ricour, 442 
 Louis I'. Bourl)on Co., 80 
 Louis f. Brown, 155 
 Louisiana i\ New Orleans, 251, 253, 
 
 254 
 Louisiana v. AVood, 320, 321. 328 
 Louisiana State Bk. v. New Or- 
 leans Nav. Co., 212 
 Louisville v. Hyatt, 
 Louisville & jMosherville R. R. Gov. 
 
 County Court of Davidson Co., 
 
 59 
 Lowber t'. Maj'or etc. of N. Y.. 5 
 Lowell V. Boston. 45 
 Lloyd ?'. City of Altoona, 170 
 Lynchburg v. Norwell. 195 
 Lj-nchburg v. Slaughter. 157 
 Lynde ?". Winnebago Co.. 24, 57, 
 
 126, 131, 137. 200. 203, 334 
 Lyons v. Wood. 412 
 Lytli V. Buffalo. Ill 
 Lythe v. Lansing, 156 
 
 M. 
 
 Macon v. Jones, 188 
 
 Madison Co. Ct. v. Richmond, I. & 
 
 F. R. R. Co., 384 
 Madison Co. v. Priestly, Treas. , 83, 
 
 97 
 Mallory v. Commonwealth, 409 
 Manchester & K. R. R. v. Keene. 
 
 378 
 Manhattan Life Ins. Co. v. Brough- 
 
 ton. 344 
 Marcy v. Tp. of Oswego, 301, 302 
 Marion Co. v. Coler, 180 
 Marsh v. Fulton Co.. 200, 266, 839, 
 
 344, 390 
 Marshall Co. v. Cook. 343 
 Marshall Co. v. Russel, 120 
 Marsliall Co. v. Schenck, 278, 342, 
 
 343, 354 
 Marshall Co. v. Sillinian Co., 371 
 Martin v. Brown, 217 
 Martin v. Lemon, 110 
 Martin v. Somerville Water Power 
 
 Co., 252 
 Mason r. Frick, 147 
 Mason v. Shawneetown, 81 
 Mass. V. 3Io. R. R., 102 
 Mass. M. F. Ins. Co. v. Colo. Ins. 
 
 Co.. 442 
 Mather v. Ottawa, 45 
 Mathias t\ Runnels Co. . 334 
 Mattingly v. District of Columbia, 
 
 354 
 Matter N. Y. & Brooklyn Bridge, 
 
 (Ct. App.) 402 
 Maudlin r. City of Greenville. 216 
 JIauslin r. Council, 215 
 Maxey v. Miller. 392 
 Maxey v. Williamson, 56 
 Maynard ?'. I\larshall, 404 
 Mayor v. Lord, 81, 268 
 Mayor r. N. Y., 110 
 Mayor v. Wetumpka Wliarf Co., 
 
 104 
 Mayor etc. r. Deckert, 446 
 Mayor etc. v. Inman, 307 
 Mayor etc. of Baltimore v. Gill, 
 
 215, 217 
 Mavor etc. of Baltimore v. Ulman, 
 
 107 
 Mavor etc. of Nashville v. Potomac 
 
 Ins. Co., 136 
 Mayor etc. of N. Y. v. Sands, 
 Mavor etc. of Paterson v. Baker, 
 
 3^0 
 McCarthy r. Convrs, 418, 434 
 McClay v. City of Lincoln, 4.34 
 McClure r. Tp. of Oxford, 135, 137, 
 
 200. 210. 277 
 McDowell V. Mass. R. R. C. Co., 98
 
 TABLE OF CASES CITED. 
 
 XXV 11 
 
 Eefarences are to Pages. 
 
 McGraw v. Whitson, 111 
 ]\IcGra\v v. Williams, 53 
 McKee v. Vernon Co., 137 
 McKinney v. Snj-der, 243 
 McLaughlin v. Newark, 440 
 McLean v. Paschel, 437 
 ^IcLure v. Owen, 37 
 Mc JIahon v. San Mateo Co. , 373 
 McManus v. Duluth C. & N. R. R. 
 
 Co., 219, 27G, 377, 378 
 McIMillin v. Co. Judge, 354 
 McMullen v. Ingraham, Cir. J.. 100, 
 
 122, 124 
 McPherson v. Foster, 118, 323, 345 
 Mellon V. Lansing, 381 
 Melvin v. Lisenber, 100, 130 
 Memphis v. Adams, 134 
 Memphis r. Bethel, 192. 195, 226 
 Memphis r. Brown, 154, 191, 230 
 Menard v. Hood, 218 
 ^lenasha v. Hagai'd, 175 
 Mentz V. Cooke, 77 
 Mercer Co. v. Hackett, 57, 136, 197, 
 
 245, 266, 278 
 Mercer Co. v. Hubbard. 222 
 Mercer Co. v. Pittsburgh & E. R. R. 
 
 Co., 88 
 Merchants' Bank v. Bei'gen Co. , 53, 
 
 127, 130. 305 
 Jler. Ex. Bk. v. McGraw. 447 
 Meriwether v. Garret, 249, 254, 255 
 Merrick v. Inhabitants of Amherst, 
 
 44 
 Merril v. Monticello, 19, 22, 34, 35, 
 
 165. 169 
 IMerserau v. Merserau Co., 408 
 Metcalf V. Seattle. 95 
 Metzger v. R. R. Co., 217, 342 
 Meyer v. Brown, 167 
 Merer v. Muscatine, 17, 90, 332, 
 
 368 
 Meyer v. Railway Co.. 215 
 Middleton v. Mulica, 136 
 Milan Taxpayers v. Tenn. R. R. 
 
 Co., 119 
 Miller v. Com'rs, 29 
 Miller v. Handford, 439 
 jMiller v. School Dist. No. 3. 9. 67. 
 
 101 
 Miller v. Wilson. 188 
 Millerton v. Frederick. 71. 173 
 IMills V. Gleason. 24. 27. 343, 344 
 Millsaps V. City of Terrel. 75, 185 
 Mimiehaha Co. r. Tiiorne, 
 Missouri, Heller v. Stremmel, 2 
 Mitchell V. Burlington, 18. 369 
 IMobile r. 0('til)l)eka Co., 395 
 Mobile V. Watson, 185 
 Moiitclair r. Ramsdell. 
 I\Ioiitgomery v. Tp. of St. Marv. 
 
 131 
 
 Montpelier v. Hui-on. 6 
 
 Moore v. Walla Walla. 176 
 
 Moran v. Miami Co.. 278 
 
 Morgan v. Thomas. 388, 390 
 
 Morgan v. U. S., KiO 
 
 Morris Canal & Building Co. v. 
 
 Fisher, 160 
 Morris Co. v. Hickman. 335 
 Morrison v. Packert. 418 
 Morrison v. Bernards Tp. , 78, 222, 
 
 223 
 Morrison v. Lawrence, 110 
 Morrison v. Springer, 432 
 Morrison v. Nevada. 323. 326 
 Mosher v. School Dist., 71, 170, 325 
 Moss V. Oakland, 117 
 Mott V. U. S. Trust Co., 123 
 Moulton i\ Gransville, 218 
 Moultrie Co. v. Fairfield, 60. 366 
 Moultrie Co. v. Rockingham, 60. 
 
 384 
 Moultrie Co. v. Sav. Bk., 278, 388 
 Mount Pleasant v. Beckwith, 239 
 Mundy v. Rahwaj", 253 
 Munson v. Lyons. 335 
 Mui-ane v. St. Louis, 434 
 Murray v. Beckwith, 159 
 Murray i'. Charleston. 189 
 Murray ?'. Lardner, 159, 226 
 Mutual B. L. Ins. Co. v. Elizabeth, 
 
 168, ISO, 360. 361, 284, 306 
 Mutual B. L. Ins. Co. v. Robinson, 
 
 447 
 Mutual Life Ins. Co. r. Bender, 133 
 
 N. 
 
 Nash V. Baker, 391 
 
 Nashville r. Ray, 223 
 
 Nashville etc. R. Co. v. U. S.. 344 
 
 Nat. Bk. of Commerce v. Granada, 
 
 83, 85. 90. 91, 105. 106, 111, 113, 
 
 115. 167. 266. 274. 2X9 
 Nat. Bk. of Republic r. St. Joseph, 
 
 205. 206 
 Nat. Ex. Bk. v. Hartford. 219 
 Nat. Land etc. Co. v. Mead, 439 
 Nebraska Bk. v. Nebraska etc. Co., 
 
 241 
 Neely v. Yorkville, 
 Neilson r. Newark, 240 
 Nesbitt V. Riverside Ind. Dist., 277, 
 
 313, 348 
 Nevada Bk. v. Stemnitz, 377, 380. 
 
 383 
 New Albany Gas Light & Coke Co. 
 
 V. Crumbo, 110 
 New England Co. v. Robinson, 29 
 New Haven etc. R. R. Co. v. Chat- 
 ham, 335
 
 XXVIU 
 
 TABLE OF CASES CITED. 
 
 References are to Pages. 
 
 New London Bk. v. Ware R. R. 
 
 Co.. 223 
 New Orleans r. Clarke, 48, 238, 357 
 New Providence i\ Halsey, 307 
 New York G. L. R. Co. v. Montclair, 
 
 (N. J.) 404 
 Newark Sav. Inst. v. Panhorst, 233 
 Newgars v. City of New Orleans, 
 
 31 
 Newman i\ Emporia, 108 
 Nichols V. Walter, 431 
 Ninth Nat. Bk, v. Knox. 373 
 Nites V. Schoolcraft, Cir. Judge, 
 
 404 
 Nopa Valley R. R. v. Sup. Nopa 
 
 Co., 388 
 Noble V. City of Vincennes, 77 
 Nolan Co. v. State, 186, 354 
 Nolle V. City of Austin, 200 
 Norton v. Dyersburg, 367 
 Norton v. Shelby Co., 6, 53, 343 
 Norton v. Taxing Dist. of Browns- 
 ville, 231, 366, 387 
 North Penn. R. R. Co. v. Adams, 
 
 120 
 Northwestern Mutual Ins. Co. v. 
 
 Overholt. 123 
 Nugent V. Putnam Co., 389, 390 
 Nyantic Sav. Bk. i\ Douglass, 133 
 
 0. 
 
 Odegard v. Albert Lea, 7 
 
 Ogden V. County of Daniss, 1, 367 
 
 O'Hara v. State, 48 
 
 Olcott V. B}-num, 374 
 
 Olcott V. Fon Du Lac, 248 
 
 Olcott V. Sup., 245 
 
 Oiin i\ flyers, 
 
 Omaha Bridge Cases, 157 
 
 O'Neill V. Battie. 9 
 
 Onstott V. People, 377 
 
 Orchard v. School Dist. No. 70, 
 
 196 
 Oregon v. Jennings, 264, 275, 283. 
 
 284, 287, 377 
 Orvis i\ Bd. of Park Com'rs of Des 
 
 Moines, 55 
 Osborne v. Bank of the U. S., 237 
 Osborne r. U. S. Board, 215 
 Osborne Co. v. Adams, 43, 228 
 Oscagnon v. Arms Co.. 226 
 Oteo Co. V. Baldwin, 353. 356, 375 
 Ottawa V. Carey, 45. 47, 297, 344 
 Overseers of Norwich v. Overseers 
 
 of Berlin, 237 
 Owen V. Sioux City, 434 
 
 P. 
 
 Pack V. Barton, 435 
 
 Packard v. Jefferson Co., 85 
 
 Pager. Allen, 215 
 
 Pana t\ BoUes, 275 
 
 Pana r. Bowler, 83, 93, 395, 396 
 
 Pana v. Lippincott, 92, 1345 
 
 Paola & Fall River R. R. r. Ander- 
 son. 109 
 
 Park Bank v. Watson, 153 
 
 Park Com'rs v. Detroit, 44 
 
 Parker v. Common Council, 434 
 
 Parker v. Smith, 395 
 
 Parkersburgh v. Brown, 45, 46 
 
 Parsons I'. Jackson, 148. 156 
 
 Parsons i\ Monmouth, 31 
 
 Pasadena v. Stinson, 447 
 
 Paterson v. Society for A. M., 4, 80 
 
 Paul V. Kenosha, 320 
 
 Payne v. School Dist., 446 
 
 Peit V. Payne, 437 
 
 Pendleton Co. v. Amy, 338 
 
 Penn Co. v. Horton, 447 
 
 Pennington v. Boehe, 137 
 
 Pennington v. Park, 343 
 
 People V. Allen, 77, 453 
 
 People V. Bank, 411 
 
 People V. Bart let, 54 
 
 People V. Batchellor, 49, 100, 101. 
 371, 394 
 
 People V. Bo wen, 438 
 
 People V. Bil. of Com'rs, 409 
 
 People ex rel. Prettyman v. Bd. of 
 Sup., 218 
 
 People V. Breshire, 44 
 
 People V. Brooklyn, 44 
 
 People V. Brown, 227 
 
 People V. Canvassers, 409 
 
 People V. Caruthers, 94 
 
 Peoples. Cass Co., 385 
 
 People V. Clayton, 379 
 
 People V. Com'rs of Highways, 436 
 
 People ex rel. v. Common Council 
 of Buffalo, 252 
 
 People ex rel. Park Com'rs v. 
 Common Council of Detroit, 49 
 
 People V. Dunn, 445 
 
 People V. Dutcher, 375 
 
 People V. Flagg, 49, 344 
 
 People V. Galena Co., 443 
 
 People V. Gillson, 445 
 
 People V. Haines, 215, 216 
 
 People V. Hamil, 40, 387 
 
 People V. Henshaw, 413, 429 
 
 People V. Hewitt, 77 
 
 People V. Home Ins. Co., 188 
 
 People V. Kearing, 44 
 
 People V. Kenosha, 320 
 
 People V. Kenshaw, 77 
 
 People V. Kline, 335 
 
 People r. Knowles, 77 
 
 People V. Logan Co., 101 
 
 People V. Lorrillard et al., 410 
 
 I
 
 TABLE or CASES CITED. 
 
 XXIX 
 
 References are to Pages. 
 
 People V. Malioney, 403, 408 
 
 People V. May, 66 
 
 People V. Mayor of Chicago, 49 
 
 People V. Mead, 132, 246 
 
 People V. Meyers, 218 
 
 People V. McElroy, 435 
 
 People V. Miller, 403 
 
 People V. Morgan, 380, 381 
 
 People V. Morriss, 4 
 
 People V. Ohio Grove Tp., 101, 388 
 
 Peojjle V. Rochester, lO'J . 
 
 People V. Salem, 370 
 
 People V. San Francisco, 87 
 
 Peoi:»le v. Santa Anna, 83 
 
 People V. Schrceder, 111 
 
 People V. Smith, 78 
 
 People V. Starne, 435, 442 
 
 People V. State Treas., 370 
 
 People V. Sup. of Chenango, 441, 
 
 445 
 People r. Supt.. 446 
 People V. Syracuse, 110 
 People!". Tazewell Co., 121 
 People V. Town of Berkly, 92, 96 
 People V. Tov»-n of Harp, 123 
 People V. Town of Mt. Morriss, 228 
 People V. Upson, 408 
 People V. Warden, 434 
 People ex rel. v. Warfield, 97 
 People V. Waynesville, 370 
 People V. Webster, 402, 404 
 People's Bankt'. School Dist., 123, 
 
 211 
 People's Nat. Bk. v. Pomona, 87, 
 
 91 
 Peoria & I. R. R. Co. v. County of 
 
 Tazewell, 89 
 Perkins v. Philadelphia, 402, 404, 
 
 442, 443 
 Perkins v. Smith, 203 
 Perry v. Keene, 40, 49 
 Peters v. Tp. of Warren, 10 
 Phillips V. Town of Albany, 94 
 Pi3rce V. Smith, 402 
 Piercer. U. S., 52 
 Pierson v. O'Connor, 412 
 Pitkin Co. v. Aspin, M. & S. Co., 
 
 406 
 Pittsburgh v. Highes, 434 
 Pittsburgli S. R. Co. v. Allegheny 
 
 City. 390 
 Plainview v. Winona Co., 90 
 Piatt V. People. 101 
 Platteville v. Galena, 383, 384 
 Plymouth v. Painter, 54 
 Poland r. Pleasant Hill, 176 
 Police Jury v. Britton, 22, 34, 35 
 Poi'tage Co. V. Wisconsin R. R. 
 
 Co., 380 
 Porter?'. Douglass, 73 
 Portland R. Co. v. Standish, 88 
 
 Portland Sav. Bk. r. City of Evans- 
 
 ville, 166 
 Portland & Oxford Cent. R. R. Co. 
 
 V. Hartford, 376. 380 
 Portsmouth Sav. Bk. v. Village of 
 
 Ashlev, 193 
 Post V. County of Pulaski. 93, 212, 
 
 358, 392 
 Postr. Sup., 395, 444 
 Potter V. Chaffee Co., 173 
 Potter V. Greenwich, 123 
 Powell V. City of Madison, 67, 173 
 Prescott V. Chicago, 405 
 President v. Rushville, 409 
 Pritz, In re, 433 
 Purdy V. Lansing, 380, 381 
 Purviss V. lloss, 408 
 
 Q. 
 
 Quaker City Nat. Bk. v. Nolan 
 Co., 108, 185, 206, 284, 277, 312, 
 313 
 
 Queenbury v. Culver, 370 
 
 Quill V. City of Indianapolis, 66, 88 
 
 Quincy v. Chapman, 121 
 
 Quincy v. Cooke, 354, 355 
 
 Quincy M. &. P. R. R. Co. v. Mor- 
 ris, 373 
 
 Quinn v. Cumberland Co., 404 
 
 K. 
 
 Rader v. Tp. of Union, 169 
 Railway Sav. Inst. v. Rahway, 223 
 Railroad Co. r. Blanchard, 217 
 Railroad Co. v. Governor, 443 
 Railroad Co. v. Hartford, 379 
 Railroad Co. v. Otco Co., 372, 375 
 Railroad Co. v. Oteo Co., 56 
 Railroad Co. v. Pcalolf , 226 
 Railroad Co. v. Riblet, 403 
 Railroad Co. r. Schultz, 446 
 Railway Co. v. Dunn, 315 
 Railroad Nat. Bk. r. Lowell. 324 
 Rainsburgh Borough f. Lvon, 336 
 Rail's Co. V. Douglass, 86,' 387 
 Rail's Co. V. U. S., 249, 179 
 Randolph v. Post. 384. 395 
 Randolph v. Wood, 428 
 Ray r. Wilson, 236 
 Read r. Atlantic City. 69 
 Read v. Plattsmouth, 323, 338, 354, 
 
 358 
 Reading v. Savage, 417 
 Reading v. Wedder, 391 
 Red Rock v. Henrv, 48, 387 
 Redd V. Henry Co'. 389 
 Reed v. ]\Iaxfield, 434 
 Rees r. Watertown. 229, 236 
 Reeves v. Cont. R. W. Co., 434
 
 XXX 
 
 TABLE OF CASES CITED. 
 
 References are to Pages. 
 
 Reineman r. C. &. C. 11. Co., 89, 
 
 Reinwiek i\ Davenjwrt, 371 
 Revell t\ Annapolis, 434 
 Rice V. Smith, 217 
 Rich r. Chica.j;o. 110 
 Richr. MentzTp.,77, 79 
 Richards v. Snj)orvisors, 71 
 Richnian i\ f5U]K>r visors, 4;)2 
 Richmond r. Crenshaw, 213 
 Richmond v. McGirr, 29 
 Rider f. Mt. Vernon, 413 
 Ri<i;gs ?". Jolmson Co., 230 
 Riley r. Tp. of Garfield, (>, IGo, 1G6, 
 
 228 
 Risley v. Village of Howell, 140, 
 
 150, 278, 297, 300 
 Ritchie i\ Franklin Co., 354 
 Ritchie v. People, 446 
 Roberts v. Bolles, 147 
 Rock Creek v. Strong, 124 
 Rogan V. Watertown, 164 
 Rogers r. Burlington, 17, 18, 57, 
 
 278, 368, 394 
 Rogers i'. Union Railway Co., 404 
 Rome i\ Cabot. 44 
 Rootr. Bd. of Ed.. 412 
 Rousey t\ Wood, 447, 
 Ruohs V. Tp. of Athens, 6 
 Russel r. Place, 344 
 Ryan v. Lynch, 436 
 
 s. 
 
 Sac Co. V. Cromwell, 154 
 Sackett v. New Albany. 62, 64 
 Salkrider v. Bd. of Suj). Saginaw 
 
 Co., 435 
 Salena v. City of Neosho, 68, 112 
 Samson v. People, 226. 392 
 San Antonio r. Meliarty, 132 
 Sandford v. Prentice, 98 
 Sangamon Co. r. Springfield, 401 
 Sanilac v: Auditor (ien., ']()6 
 Saunders v. Provincial Municii^al- 
 
 ity, 403 
 Savannah & M. R. R. v. Lancaster, 
 
 150 
 School Dist. V. Ins. Co., 414 
 School Dist. r. St. Joseph F. M. 
 
 Ins. Co., 425 
 School Dist. V. Xenia Bk., 127, 131 
 Schuyler v. Thomas, 381 
 Schweitzer r'. Libert v. ]13 
 Scipio V. Wright. 211. 243. 247, 394 
 Scotland Co. r. Hill, 152. 155. 387 
 Scotland Co. r. Tiiomas, 86, 390, 391 
 Scott V. Davenport. 60. 61 
 Scoville V. Cleveland. 54 
 Scranlon r. AVhite. 417 
 Scranton School Dist. Appeal, 418 
 
 Sedgwick Co. r. Bunker, 237 
 
 Sevbelle v. Nat. Currency Bank, 
 i47. 162 
 
 Seybert v. City of Pittsburg, 17 
 
 Sej'mour r. Tacoma, 90, 94 
 
 Seven Hickory r. Ellory, 438 
 
 Sewall i\ Brainerd, 136 
 
 Sharpless v. Mayor etc. of Phila- 
 delphia. 40 
 
 Sheboygan Co. v. Parker, 372 
 
 Shelbyville R. R. Co. v. Mayor. 370 
 
 Shepherds Fold r. New York, 44 
 
 Sherlock v. Winnetka. 198 
 
 Sherman Co. r. Simons, 301, 304, 
 425 
 
 Sherman v. Williams. 249 
 
 Sherrow v. Lafayette Co., 81, 337 
 
 Sherwin v. Bugbee, 10 
 
 Sliorter v. Rome. 278 
 
 Siebert v. Lewis, 235. 250 
 
 Simon v. Northup, 405 
 
 Singer Manufacturing Co. v. Eliza- 
 beth, 123 
 
 Sioux City etc. R. R. Co. v. Os- 
 ceola Co., 127 
 
 Skinner v. Santa Rosa, 122, 176 
 
 Smalley v. Yates, 106, 218 
 
 Smith V. Appleton, 253 
 
 Smith V. Broderick. 71 
 
 Smitli V. City of Madison, 29 
 
 Smith V. Clarke Co., 278 
 
 Smitli V. County of Los Angeles, 
 192 
 
 Smith V. Dedham. 66, 68 
 
 Smith V. Judge. 412 
 
 Smith V. Law, 109 
 
 Smith v. Proctor. 9. 95 
 
 Smith r. Sac Co.. 348 
 
 Smith r. Wilmington. 99 
 
 Smith Co. V. Clarke. 374 
 
 Snell r. Bridgewater etc., 409 
 
 Snowden's Ai>peal. 417 
 
 Society for Sav. v. New London, 
 92, 332 
 
 Solomon V. Cartersville, 438 
 
 Soulter i\ Madison, 235 
 
 South Ottawa v. Perkins. 396 
 
 Sower V. PJiiladelphin, 106 
 
 Spaulding i\ Brady, 434 
 
 Spitzer v. Village of Blanchard, 
 269 
 
 Spring V. Russel. 40 
 
 S])ringfield v. Edwards, 64, 65. 71 
 
 Sjn-ingport v. Teutonia Sav. Bank, 
 77 
 
 Spur V. Plank Road Co., 437 
 
 Spurck V. Lincoln etc. R. R. Co., 
 373 
 
 Staatsr. Washington, 109, 111 
 
 Stacy V. Kemp, 120 
 
 Stalcup V. Dixon, 438
 
 TABLE OF CASES CITED. 
 
 XXXI 
 
 References are to Pages. 
 
 Starin v. Genoa, 24G, 394 
 
 Staring v. Town of Granada, 272 
 
 State V. Amer. F. Co. , 408 
 
 State V. Anderson. 412. 420 
 
 State V. Atlantic City. 69 
 
 State V. Babcock, 4, 22, 24, 403 
 
 State ■?'. Bargus, 412 
 
 State V. Bayonne, 15 
 
 State V. Bergen Co., 217 
 
 State V. Berka, 418 
 
 State V. Blackstone, 99 
 
 State V. Blakeslee, 10 
 
 State V. Board of C'ounty Coni'rs, 8 
 
 State V. Bolche. 235 
 
 State V. Boone Co. . 432 
 
 State ?'. Borongh of Clayton, 428 
 
 State V. Bovd,'434 
 
 State V. Brown, 404, 409 
 
 State V. Carr, 112 
 
 State V. Carrol, 53, 94 
 
 State V. City of Cincinnati, 359, 
 
 421, 434 
 State V. City of Morristown, 219, 
 
 383 
 State V. Clark, 9, 10 
 State V. Clarke, 381 
 State V. Cole, 9 
 State V. Com'rs, 183, 331, 402 
 State t'. Cooley. 430 
 State V. County of Wirt, 40G 
 State V. Covington, 421 
 State V. Craig, 7 
 State V. Curran. 4 
 State V. Dallas Co., 373, 387 
 State V. Davenport, 227 
 State i\ Dickerman. 324 
 Stater. Folley, Gl, 73, 86 
 State V. Field. 444 
 State V. Fuller, 401 
 State V. Garroutte, 387, 390 
 State V. Gibson. 428 
 State V. Goldstucher, 7 
 State i\ Guttenburg, 73, 179 
 State i\ Hammer, 42G 
 State V. Hancock, 408 
 Stater. Hardy, 85. 114 
 State V. Harris. 219 
 State V. Hawkins, 418 
 State V. Hine. 10 
 State V. Hoskins. 413 
 State V. Hunter. 424 
 State t'. 111. Cent.R. R.. 434 
 State V. Jacksonville, 228 
 State i\ Jersey City, 45 
 State r. Jones, 442 
 State V. Kansas City, 234, 424 
 State i\ Lockett, 10 
 State V. Luther, 409 
 State V. Macon Co. Ct., 307 
 Stote V. Madison. 251 
 State V. Maffit, 443 
 
 State V. Mallory, 424 
 
 State i\ Marion, 403 
 
 State V. Mayor etc. of Clayton, 428 
 
 State V. Mayor etc. of Hoboken. 114 
 
 State V. McBride, 442 
 
 State V. McConly, 05 
 
 State V. McCracken. 40G 
 
 State V. Mines, 404 
 
 State V. Minneapolis, 381 
 
 State V. Mitchell, 420 
 
 State V. Moore, 428 
 
 State V. Morristown, 380 
 
 State V. Murraj', 443 
 
 Stater. Nelson, 434 
 
 State V. Newark, 111, 200, 354, 414 
 
 State V. Nomland, 404 
 
 State V. Olson, 404 
 
 Stater. Orange, 113. 405 
 
 State r. Parkinson, 65, 66 
 
 State r. Patterson, 402 
 
 State r. Philbrick, 428 
 
 State V. Police Jury, 250 
 
 State r. Powers, 421 
 
 State r. Price, 442 
 
 State r. Rahway, 234 
 
 State i\ Richards, 7 
 
 State r, Roggen, 173, 373 
 
 State r. Saline Co., 87, 88, 215, 216, 
 354, 373 
 
 State r. School Dist., 8, 294 
 
 State r. School Dist. No. 4, 85 
 
 State r. School Dist. No. 19, Sioux 
 Co., 9 
 
 State r. Scott, 428. 
 
 State r. Smith, 420 
 
 Stats r. Snodgrass, 95 
 
 State V. Sullivan, 219 
 
 State r. Schwab, 421 
 
 State V. Thurston, 408 
 
 State i\ Van Home, 336, 341. 383 
 
 State r. Wall, 419 
 
 State r. Welle, 408 
 
 State r. Whiteside, 359 
 
 State r. Wilkinson. 219 
 
 State V. Winlvclmeier, 95 
 
 State r. Wood. 405 
 
 State r. Wrigiit, 428 
 
 State ex rel. Attorney-Gen. r. To- 
 ledo, O., 419 
 
 State ex rel. Dickinson r. Neelv. 82. 
 359, 371 
 
 State ex rel. Marchand r. New Or- 
 leans, 253 
 
 Stated- rei. C. & C. C. Co. r. Wliite- 
 side, 82 
 
 State of Iowa ex rel. v. Tlie County 
 of Wapelk), 244 
 
 State L. R. R. Api)eals. 103 
 
 State Lionborger r. Tolls. 429 
 
 St. Joseph R. R. Co. r. Buchanan 
 Co., 101, 373, 385
 
 xxxu 
 
 TABLE OF CASES CITED. 
 
 References are to Pages. 
 
 St. Josoiih Tp. r. Rogers, 92, 95, 07, 
 
 UTU, 27«. 85."). 350 
 St. Louis r. Sliii'kls, 433 
 St. Louis r. Withans, 109 
 Steines r. Franklin Co., 80, 81 
 Stone V. Charleston. 80 
 Suffolk Sav. Bk. v. Boston. 208 
 Sullivan v. Leadviile, 110 
 Sup. V. Gill>raitli. ;J84 
 Suj). V. People. 40G 
 Sup. V. Schenck, 335, 845 
 Sup. V. U. S.. 230, 232, 248 
 Sup. of Portage r. Wis. Cent. R. R., 
 
 373 
 SutelilTe r. Board. 312, 321 
 Sutlilfe V. Coni'rs. 277, 313 
 Suhro V. Dunn, 212 
 Swan V. City of Arkansas, 103, 105, 
 
 257, 265, 266, 274 
 Sweet V. Syracuse, 48, 74, 402, 360 
 Swikehard v. Micliels, 434 
 Sykt's V. Loffery, 107 
 
 T. 
 
 Talconer v. Buffalo & J. R. R. Co., 
 
 370 
 Talcott V. Town of Pine Grove, 
 
 245, 370 
 Tall V. Jerome. 442 
 Tate V. Parkland. 215. 210 
 Taylor r. Ypsiianti. 243 
 Tei-ry r. M. & F. Ins. Co., 250 
 Territory i\ City of Oklahoma, 68 
 Thavcr r. Jlontgoniery Co., 137 
 The" Ohio L. & T. Co. v. Debalt, 
 
 245 
 The People v. Tazewell Co., 117 
 Thomas v. Dakin. 442 
 Thomas i\ Lansing, 344 
 Thomas r. Ma.son. 228 
 Tliomas r. Morgan Co., 194, 353 
 Thompson v. City of Summer, 93 
 Thompson i\ Lee Co., 118, 350 
 Thompson v. Webster, 445 
 Thompson v. Wiley, 254 
 Thompson, II. E. "& Co. v. City of 
 
 Newton, 91 
 Tidewater Co. t". Caster, 44 
 Topeka v. Gillet, 418 
 Town (.f Andes v. Elv, 287 
 Town of Coloma r. Eaves, 260, 280, 
 
 287, 303 
 Town of Big Grove v. Wells, 373 
 Town of Burton v. Sjjira, 206 
 Town of Chern- Creek v. Becker, 
 
 334. 335, 388 
 Town of Cherry Creek v. Clark, 
 
 395 
 
 Town of Danville i\ Southerland, 
 
 195 
 Town of Duanesburgh i\ Jenkins, 
 
 355, 394 
 Town of Eagle v. Kohn, 331, 352, 
 
 353 
 Town of East Lincoln v. Daven- 
 port, 56, 343 
 Town of Guilford v. Chenango Co. , 
 
 48 
 Town of Hoag i: Greenwich, 191 
 Town of Mentz v. Cooke, 217 
 Town of Middleport v. ^tna L. 
 
 Ins. Co., 307 
 Town of Plattville v. Galena, 100 
 Town of Solon v. Williamsburgh 
 
 Sav. Bk., 132, 133 
 Town of South Ottawa r. Perkins, 
 
 207, 243, 441. 444 
 Town of Springport r. Bank, 342 
 Town of Stillwater v. IMoor. 113 
 Town of Venice r. Murdock, 245, 
 
 247, 273, 278. 394 
 Township of Doon v. Cummings, 
 
 07 
 Township of Midland r. Gage Co., 
 
 390, 391 
 Township of Rock Creek v. Strong, 
 
 123, 124, 175, 370 
 Tracy V. People, 110 
 Travellers' Ins. Co. v. Oswego, 53, 
 
 257, 404, 424 
 Treadwell v. Com'rs. 385 
 Trimbull v. Edwards, 447 
 Trubell v. Colburn, 228 
 Truesdellr. Rochester, 113 
 Trulson v. IMayor of Duhith, 89 
 Turner v. Woodson Co., 119 
 Tuttle V. Polk, 00, 08 
 Tyler v. Beecher, 41 
 
 u. 
 
 Undcrhill v. Trustees, 223 
 
 Union Bank v. Board etc. of Ox- 
 ford, 92, 93 
 
 Union Co. v. Colfax, 44 
 
 Union Ferry Co., 411 
 
 Union Pacific R. R. Co. v. Davis 
 Co. Com'rs, 385 
 
 Union Pacific R. R, Co. v. Lincoln 
 Co., 259 
 
 U. S. V. Bd. of Liquidation etc. of 
 New Orleans, 219 
 
 U. S. V. Boutwell, 235 
 
 U. S. V. Clark Co., 181 
 
 U. S. V. Clark Co., 181, 233 
 
 U. S. r. Cook, 193 
 
 U. S. V. Ft. Scott, 183 
 
 U. S. V. Ivnox Co. , 233
 
 TABLE OF CASES CITED. 
 
 XXXIU 
 
 References are to Pages. 
 
 U. S. V. Lincoln Co., 179 
 
 U. S. V. Macon Co., 104, 233, 233, 
 
 234 
 U. S. V. Macon Co. Ct., 233 
 U. S. V. New Orleans, 179 
 U. S. V. Town of Cicero, 319 
 
 T. 
 
 Valparaiso r. Gardner, 5, 215 
 Van Hoffman v. Quincy, 249, 251 
 Van Hosting v. Madison Citv, 78, 
 
 265, 278, 332, 385 
 Van Husen v. Heames, 404 
 Vanover Justices, 217 
 Van Phul r. Hammer. 432 
 Van Riper v. Parson, 428. 430 
 Vaugh V. School Dist. No. 31, 88 
 Veeder t\ Lima, 84, 375 
 Venice v. Murdock, 20, 333 
 Vermilyea v. Adams Ex. Co., 153, 
 
 162 
 Vicksburgh v. Lombard, 98. 367 
 Village of Ft. Edwards u. Fish, 193, 
 
 195, 197 
 Vincent v. Lincoln Co., 224 
 Virginia Coupon Cases, 137 
 Virginia etc. R. R. Co. v. Lyon Co., 
 
 380. 
 
 w. 
 
 Wadena r. Wiswell. 434 
 Walker r. Cincinnati, 373 
 Walker v. Com'rs Munroe Co., 183 
 Wall r. Austin. 73 
 Walla Walla Water Co. r. City of 
 
 Walla Walla, G8 
 Walnut V. Wade, 98, 219, 278 
 Wardr. U. S., 16 
 Warren v. :Marcy, 268. 278, 282 
 Warren v. Cross by, 408 
 Washburn v. Cass Co., 391 
 Waxahocliie r. Brown, '.Vi. 64 
 Wayne Co. Sav. Bk. v. Suj). etc. of 
 
 Roscommon, 234 
 Webb V. Lafavette Co., 98 
 Weeks v. Smith, 439, 442 
 Weill V. Kenfield, 111, 435 
 Weisner ?". Douglass, 41 
 Welker v. Potter, 108 
 Wells V. Pontotac Co. Sup. , 367 
 Welsh 17. Bramlet, 434 
 Wessmer v. Jay, 45 
 West Cliicago Park Com'rs v. 
 
 Chicago, 55 
 West Cliicago Park Com'rs v. Mc- 
 
 Mullen, 425 
 3 
 
 West Plains Tp. Com'rs r. Sage, 16, 
 157, 331, 334 
 
 Western Sav. Funds' Soc. v. Phila- 
 delphia, 49. 389 
 
 Western U. T. Co. v. Poe, 412 
 
 Westmore v. Story, 110 
 
 Weston V. Syracusy. 68 
 
 Weyand i\ Stoner. 436 
 
 Weyauwega i\ Ayling, 127. 130 
 
 Wlieeler i\ Philadelphia, 410 
 
 Wheelock v. Freeman, 162 
 
 Whelans ' Apjieal, 193 
 
 Wlielen v. City of Pittsburgli, 
 197 
 
 White V. Vermont M. R. R. Co., 
 147 
 
 Whiteside, et al. v. U. S. 16 
 
 Whitewell v. Pulaski Co., 165 
 
 Whitaker v. Hartford R. R. Co., 121 
 
 Whiting V. Potter, 335 
 
 Wilcox V. Smith, 53 
 
 Wiley V. Blaflfton, 432 
 
 Wilkerson v. Belknap Sav. Bk., 
 404 
 
 Wilkinson r. Cheatham, 41 
 
 Wilkinson v. Van Orman, 62 
 
 Williams v. Duanesburgh. 49, 368 
 
 Williams v. Nashville. 200 
 
 Williams v. Roberts, 285 
 
 Williamsburg Sav. Bk. v. Town of 
 Solon, 165 
 
 Williamsport v. Com'rs, 4, 16. 22, 
 23, 24, 198, 229 
 
 Wilson V. Citv Council, 99, 233 
 
 Wilson V. Neal, 122 
 
 Wilson V. Slireveport. 185. 276 
 
 Wilson Co. V. Nat. Bk.. 147 
 
 Windham v. Portland, 3 
 
 Winn V. Macon, 354 
 
 Winston v. Tenn. & P. R. R. Co., 
 80 
 
 Winter r. City Council of Mont- 
 gomery, 
 
 Wisconsin, Eaton i'. Supervisors. 
 2,3 
 
 Wiser v. Blacklev, 133 
 
 Wolf V. Taylor. 404 
 
 Wt)od r. Colfax Co., 425 
 
 Wood r. Louisiana. 173 
 
 Woodley r. Town Council of Ohio, 
 99 
 
 Woodruff ^'. Okolona. 125 
 
 Woodruff V. State. 176 
 
 Woods V. Lawrence Co., 136, 199 
 
 Woodward r. Calhoun Co., 93 
 
 Worthley v. Steen. 430 
 
 Wulftang V. McCallom, 405 
 
 Wullenwaher ?•. Dunnigan, .380 
 
 Wyandotte v. Zeitz, 183 
 
 Wylie I'. Speyer. 163 
 
 Wynehauser v. People, 44(5
 
 X X X 1 V 
 
 TABLE OF CASES CITED. 
 
 References are to Pages. 
 
 Yerly i' 
 Yesler v. 
 123, 381 
 Yesler i\ 
 Yoiing i\ 
 
 Cochran. 406 
 City of Seattle, 91, 
 
 101 
 
 City of Washington, 127 
 Board, 413 
 
 Young V. Board of Ed. Ind. School 
 
 Dist. No. 47, U'i 
 Young i\ Camden Co., 294 
 Young I'. Coni'rs, ;J('». 179 
 Young r. Clarendon Tp.. 34, 172, 309 
 Young ?'. Village of Rushsylvania. 
 
 109
 
 MUNICIPAL BONDS. 
 
 CHAPTER I. 
 
 INTRODUCTION. 
 
 Section. 
 
 1 — Scope of work. 
 2 — Term " Municipal corpora- 
 tion " defined, 
 o — Municipal corporations, how 
 created — Quasi - corpora- 
 
 Section. 
 
 tions — Cannot be attacked 
 collaterally — Towns — Vil- 
 lages — School districts — 
 Their powers. 
 4 — Municipal Bond — Its purpose. 
 
 § 1. This work is intended to treat of the right of all 
 municipalities or subdivisions of the State, be they 
 counties, cities, towns, villages, boroughs, townships, 
 school districts or precincts,^ to issue and place on the 
 market their negotiable bonds, and of all the proceedings 
 i-elative to the issue, sale and disposal thereof, and all 
 matters connected therewith, together with the rights 
 of the holders of such paper. 
 
 1 A precinct or a strip of land, as 
 a strip extending so many miles on 
 each side of a railroad, may bo 
 authorized to aid a railroad, and to 
 grant such aid either by raising 
 tlie money by taxation upon the 
 land within the precinct or strip 
 (Ogden V. County of Davies, 102 U. 
 S. 634 ; Deland v. Piatt Co., 54 Fed. 
 R. 823), or by issuing bonds, wliich 
 are to be paid ultimately by a tax 
 to be levied by the county author- 
 ities specially upon such land. 
 TU'eckenridge Co. v. IMcCracken, 
 Gl F. R. 191. 
 
 The bonds are issued in the first 
 instance by the county authorities, 
 and the suit to enforce their collec- 
 tion is brought against the countv. 
 1 
 
 (This is in cases where the precinct 
 or stvij) is not a cori)oration.) As 
 the court in one case said : " While 
 the district subscribing is the debt- 
 or, yet, in form, the county is the 
 obligor, through the county the 
 indebted district is to act, and 
 through the same agency the in- 
 debted district is to be coerced by 
 the assessment of the tax essential 
 to meet its obligations. Such a 
 district becomes for the purpose of 
 the subscription a corporation 
 quoad hoc." Breckenridge Co. v. 
 McCracken, siq^ra. This case 
 enters very fully into the subject 
 of such bonds and the mode of en- 
 forcing their payment. See also 
 Blair v. Cuming Co., Ill V. S. 363. 
 1
 
 § 3 T^IUXICirAL BONDS. [ciI. I. 
 
 § 2. The term " ^hmicipal Corporation," when used 
 in this work, is intondcd to include any subdivision of 
 tlie State established by law to assist in the government 
 thereof, be the i)urpose for general local government, as 
 cities, towns, boroughs and villages, or special, as 
 counties which are created principally to aid the State 
 in the administration of the laws and school districts, 
 which are created for the sole ])urpose of furthering the 
 educational interest in designated localities. 
 
 While as indicated above the term " Municipal Cor- 
 poration,'' when used in this work, is intended to include 
 all the political subdivisons of a State, it must not be 
 understood that we mean that all subdivisions of a State 
 are recognized as municipal corporations proper. In 
 many of the States, counties^ are not recognized as 
 embraced under the term<, and a town^ or school district^ 
 in others is not included in the term. Therefore when 
 the term *' Municipal Corporation " is found in a State 
 constitution or in a statute whether it shall be deemed 
 to include all or a part of the political subdivisions of a 
 state depends upon the construction of the term as defined 
 by the respective State courts. 
 
 § 3. Municipalities, liow created — Quasi-corpora- 
 tions. — A municipal corporation proper is a public cor- 
 poration having a charter of incorporation, which charter 
 was obtained from the Legislature. It was the practice 
 to incorporate municipal corporations by special charter, 
 and almost all the older municipal corporations are so 
 incorporated, and this method may still be pursued, 
 unless prohil)ited by the State constitution.- In recent 
 years the more common practice is to pass a general 
 act for their incorporation. Often this act divides 
 the corporations into classes, the basis of the division 
 
 1 15 Am. & Eiig. Ency. of Laws, [ * The constitutions of Illinois, 
 953 ; 4 Am. & Eng. Ency. of Laws, Kansas, Indiana, Iowa, California, 
 343 ; Ticdoman on Mun. Corp. § 3. j Arkansas, Florida, Wisconsin, 
 
 2 Wisconsin, Eaton v. Supervis- ' Ohio, Virginia, Tennessee and 
 
 ors, etc., 44 Wis. 489, 
 
 3 Missouri, Heller v. Stremmel, 
 
 50 ^lo. 309 ; Wisconsin, Eaton v. 
 
 Supervisors etc., supra. 
 Q 
 
 West Virginia now contain such 
 prohibitions. Ne'w Jersey only 
 upon notice. Sec. vii. § 9.
 
 CH. I.] INTllODUCTION. § 3 
 
 usually being the number of inhabitants. Under these 
 acts the inhabitants of any portion of the State may 
 become incorporated by their voluntary organization, 
 upon compliance with the conditions and terms marked 
 out as necessary to be pursued by the general act in 
 order that any portion of the State may become a cor- 
 porate body for political and local purposes.^ 
 
 Under these general laws the municipal corporations 
 are voluntary organizations, incorporated for local con- 
 veniences and necessities. Under the method of incor- 
 porating municipal corporations by sjiecial charter their 
 organization was not always voluntary, because the 
 Legislature possessed the power to incorporate the munic- 
 ipality against the express wish of the inhabitants of 
 the locality incorporated, unless restrained by the con- 
 stitution of the State. ^ 
 
 Cities always are, and towns, boroughs and villages ^ 
 usually are regarded as municipal corporations jj roper, 
 if they are chartered corporations, and are created for 
 the purpose of local public convenience and government. 
 
 Counties, while greater in extent of territory than 
 municipal corporations proper, are regarded as quasi- 
 corporations. Their organization is not voluntary. 
 They are usually arbitrarily created by some general act 
 of the Legislature which subdivides the State into coun- 
 ties and fixes their boundary lines. They are created 
 
 ^ See Dillon on Mun. Cor]i. Vol. I. ing them hy name and conferring 
 
 (■4th ed.)§ 41, andtlie very elaborate upon them certain powers, became 
 
 note thereto. in effect municipal or guasi-corpo- 
 
 2 In Alabama, Colorado, Louiai- rations without any formal act of 
 
 ana, Michigan, Minnesota, Maine, incorporation, but soon after the 
 
 IMaryland, Nevada, New York, adoption of the constitution it was 
 
 North Carolina, Oregon and Texas, first expressly enacted that towns 
 
 municipal corporations may be should be corporations. Hill v. 
 
 created by special charter. Boston, 122 ]Mass. 344. 
 
 ^ City of Walioo v. Reeder. 43 N. Before the statute the courts rec- 
 
 W. R. (Neb.) 1145 ; Eaton v. Super- ' ognized their existence as qnasi- 
 
 visors, 44 Wis. 489. 
 
 In Massachusetts, at the first set- 
 tlement of the colony, towns con- 
 sisted of clusters of inhabitants 
 dwelling near each other, which by 
 effect of legislative acts designat- 
 
 corporations, capal)le of holding 
 property and making contracts for 
 the purpose for which they were 
 established. Windliam v. Port- 
 land, 4 Mass. 3S4.
 
 MUNICIPAL BONDS. 
 
 [CH. I. 
 
 primarily for the purpose of assisting the State in the 
 adniinistratio)! of justice, and in matters of education, 
 of military organization, of travel and transportation, ^ 
 •• with scarcely any exception all the powers and 
 functions of the county organization have a direct and 
 (exclusive reference to the general policy of the State, 
 and are, in fact, but a branch of the general administra- 
 tion of that policy.""-^ 
 
 It is the charter of incorporation, either special or 
 general, that distinguishes a municipal corporation from 
 a g »a6' /-corporation.^ 
 
 Another important distinguishing feature is that the 
 incorporation is for the distinct purpose of authorizing 
 the inhabitants of the corporation to enact laws for their 
 local internal concerns, matters in which the other people 
 of the State have no interest. 
 
 The involuntary incorporation of counties and other 
 quasi-cov\^orcitions is also often alleged as a distinguish- 
 ing feature,* but, as we have seen, municipal corpora- 
 tions when organized under a special statute can be 
 created against the wishes of the inhabitants,^ and with- 
 out their assent, unless the constitution of the State 
 forbids. 
 
 A municipal corporation is a political subdivision of a 
 State, the territorial limits of which are defined, and the 
 inhabitants thereof are clothed, as to special local matters, 
 by legislative enactments with the power to govern 
 themselves. This power is subordinate to the authority 
 of the State, and is confined to the purpose of the incor- 
 poration, and also depends upon the necessities of each. 
 
 The larger municipal corporations are clothed with 
 greater power of local government and ujion more va- 
 ried sul)j ects than the smaller. 
 
 The municipal corporation is the people who reside 
 
 1 Williamsport v. Com., 84 Pa. 
 4R7 ; Freehoklers of Sussex Co. v. 
 Strader, 18 N. J. L. 108 ; 15 Am. 
 & Eng. Ency. of Law, Ooo. 
 
 - Hamilton Co. v. Mighels, 7 Ohio 
 St. 109. 
 
 •* Tirdoman on Mun. Corp. § 3. 
 4 
 
 * Hamilton Co. v. Mighels, 7 Ohio, 
 108. 
 
 6 Paterson v. S. U. M., 24 N. J. 
 L. 385 ; State v. Babcock, 25 Neb. 
 709; People v. Morris, 13 Wend. 
 (X. Y.) 335 ; State v. Curran, 12 
 Ark. 321.
 
 CH. I.] 
 
 INTRODUCTION. 
 
 3 
 
 therein, and the common council, or other legislative 
 body, are but the agents of the coriDoration and not the 
 corporation itself.^ 
 
 The charter prescribes the name of the corporate 
 body, and usually provides that it may have and use a com- 
 mon seal, although this right is incident to every corpo- 
 ration, and a seal may be adopted and used without legis- 
 lative authority, and any seal affixed with authority will 
 bind the corporation, although it be not the adopted 
 seal.^ 
 
 The affairs of the municipal corporations are usually 
 carried on by the officers selected by the inhabitants at 
 regular annual elections held for that purpose, and the 
 rights, powers and duties of the various corporations are 
 to be found in the special charter or general laws in- 
 corporating them, and in the general and special acts re- 
 lating to the particular class of municipalities of which 
 they are a part. 
 
 The corporate existence of a municipal corporation can- 
 not be attacked collaterally on a suit to enforce its bonds. ^ 
 
 A de facto corporation exercising the powers granted 
 to a board legally organized is estopped to plead its ille- 
 gality.* 
 
 When a municipal body has assumed under color of 
 authority, and exercised for a considerable period of 
 time, with the consent of the State, the power of a pub- 
 lic corporation, of a kind recognized by the organic law, 
 neither the corporation nor any private party can in pri- 
 vate litigation question the legality of its existence.^ 
 
 ^ Lowber v. Mayor etc. of N. Y., its acts and dealing with tliinl 
 
 5 Abb. (N. Y.) Pr. 32.J ; Valparaiso 
 V. Gardner, 97 Ind. 1. 
 
 2 Dill, on Man. Corp. § 190. 
 
 3 Dill, on Mun. Corp. (4th ed.) g 
 43a, 18.1 n., 418. 
 
 * Allen V. Cameron, 3 Dill. 3 C. 
 C. R. 198. 
 
 & Ashley v. Board. GO F. R. .55, 
 G3 ; County of Ralls v. Douglas, 10.") 
 U. S. 728, The Icgislativi! recogni- 
 tion of a county illegally and fraud 
 ulently organized, gives validity to 
 
 persons. Com'rs v. Rose, 140 U. S. 
 71. See also, Cornell Uf^' '-ersity v. 
 Village of Maumee, G8 F. R. 418. 
 where the city issued bonds as a 
 village, when it should have been 
 termed a city, the bonds were held 
 good and the corporation estopped 
 to set up the fact as a defence. 
 
 AVliere the organization of a 
 county wa-s invalid. becaiLse it con- 
 tained less than the number of 
 i^iuare miles required by the con- 
 5
 
 MUNICIPAL BONDS. 
 
 [CH. I. 
 
 It is the province of the State to question by proper 
 judicial proceedings, the incorporation ; not that of a 
 defendant in a private suit when it has asserted its cor- 
 porate existence and incurred liabiHty to innocent parties 
 on the faith of it.^ 
 
 But it has been held that where the attempted organ- 
 ization is void, because of some act done or omitted, 
 occurring in violation of the constitution or statute, 
 which act done or omitted was declared essential to 
 the very existence of the incorporation, that in such a 
 case the body may plead the invalidity in a suit on its 
 bonds. ^ 
 
 In this case the court said : 
 
 '' Such a rule would not, of course, apply to irregularly 
 organized corporations, or those which obtained such 
 validity by special grant of the State, or compliance with 
 general laws as to be merely voidable organizations, and 
 such as the State by direct proceeding could alone dissolve; 
 but where the constitution or the statute provides that 
 acts done or omissions occurring in efforts to organize a 
 municipal corporation shall render the attempt to organ- 
 ize and the charter invalid and of no force whatever, it 
 is not left to the court to disregard this statutory or 
 constitutional prohibition at the instance of a creditor 
 deceived by the appearance of an organization. First, is 
 tliere a legal corporation ; and second, has it power to 
 issue the bonds proposed to be sold ? He must at his peril 
 determine l»oth questions for himself." 
 
 When a municipal corporation under an unconsti- 
 tutional act has been held to be illegally incorporated by 
 proper proceedings brought in the name of the State, 
 usually by an information filed on behalf of the State, 
 the bonds theretofore issued by the corporation are 
 
 stitution of Kansas, Art. 9, § 1, it 
 was held that as the invalidity did 
 not appear on t\vi face of the act 
 creating the county, it was a de 
 facto county, and its honds were 
 valid. Riley v. Tuwnsiliip of Gar- 
 field, 54 Kan. 463. 
 6 
 
 1 Montpelier v. Huron, G2 F. R. 
 778. 
 
 2 Ruohs V. Town of Athens, 
 (Tenn. 1891) 18 S. W. R. 400. See 
 also Norten v. Shelby County, 118 
 V. S. 42b.
 
 CH. I.] INTRODUCTION". § 3 
 
 invalid. The Legislature would have to be resorted to in 
 order to cure the defect. 
 
 The corporate existence of a municipal corporation is 
 proved by either the original charter or an authenticated 
 copy thereof, or a printed copy of the statute published 
 by authority. 
 
 When this cannot be obtained, secondary evidence may 
 be offered of its corporate existence, which latter consists 
 of continued acts of corporate existence.^ 
 
 Although a county is usually not regarded as a munic- 
 ipal corporation j9ro/9(^r, yet in some States it is regarded 
 as such a corporation.^ 
 
 Towns are also often regarded as g^as^'-corporations 
 unless they have a charter.^ 
 
 Toivnships are subdivisions of a county, created by 
 statute and having power to enact local laws for local 
 necessities. In some of the States their business is trans- 
 acted by a township committee elected by the inhabit- 
 ants, while in other the legal voters meet at certain 
 stated or special times and vote upon the questions affect- 
 ing the corporation.^ 
 
 The decisions of the respective State courts must be 
 consulted in order to ascertain what public corporations 
 are embraced in the terms "town,'' '"village," '"town- 
 ship," " municipal corporation," when used in a statute 
 authorizing the issue of bonds. It is impossible in a 
 work of this kind to attempt to do so. 
 
 1 See Dill, on Mun. Corp. § 84 : 
 TIedeinanon Mun. Corp. § 31. 
 
 2 Curry v. Dist. Tp. of Sioux 
 City, 62 Iowa, 103; Dowland v. 
 County of Sibley, 38 Minn. 430. 
 
 3 In a number of the States the 
 term ' ' town " is held to include 
 cities. In New Jersey, it is so held, 
 but that such meaninpj niay be ex- 
 cluded by a very sli^lit indication 
 of the lawmakers. State v. Rich- 
 ards, 42 N. J. L. 407. In New 
 York it is hold the term when used 
 in a statute alTectinj? the wlmle 
 State may include cities. Charity 
 Com'rs V. McGurrin, G Daly, 350. 
 
 In AVisconsin, the term, if not re- 
 pugnant to any special statutory 
 provision, may include a city, 
 ward or district. State v. Gold- 
 stucher, 40 Wis. 124. In Indiana 
 the term has been held to include 
 cities. Flynn v. State, 24 Ind. 286. 
 See State v. Craig, 132 Ind. 54. In 
 Minnesota the term has been held 
 to include incorporated cities. 
 Odegard v. Albert Lea, 33 Minn. 
 351. 
 
 * For a full discussion of Towns 
 and Townships, see 20 Am. & Eng. 
 Ency. of Law, p. 98 ct scq.
 
 § 3 M'JNICIPAL BONDS. [CH. I. 
 
 As said by an eminent writer on municipal law : "It 
 is quite impossible in any brief space to convey an 
 adecjuate idea of the exact nature and properties of an 
 American Municipal Corporation. 
 
 "There is nothing in tlie law more complex or ab- 
 struse."^ 
 
 It may be said generally that all qtiasi-mumciptil cor- 
 porations have no authority except that conferred upon 
 them by statute. They are creatures of statute, and to 
 the statutes resort must be had to ascertain their corpo- 
 rate authority to act. When found the same jn-inciples 
 apply to the issue of bonds and other paper by them, as 
 apply to the issue of such paper by municipal corporations 
 proper, except that, as is elsewhere shown, the former 
 corporations are not held to have the implied power to 
 issue negotiable paper, unless the power so to do be 
 express or they have the express power to borrow.^ 
 
 School districts jwoper are organized under the gen- 
 eral laws of the State for educational purposes only. 
 Their extent of territory and authority depends upon the 
 statute authorizing their incorporation, or some general 
 or special law.^ In some of the States they have the 
 power of levying taxes direct for their support, while in 
 otliers they, while supported V)y tax, do not levy it 
 directly, but ascertain the amount necessary for their 
 current expenses for the fiscal year, and this amount is 
 certified to the body charged with the duty of levying 
 the taxes and is raised by the latter body. 
 
 The power of a school district to issue bonds for school 
 purposes must be found in the statute under which they 
 are organized or some general or special law, such power 
 is not inherent in the district,* but if the school district 
 have power to borrow money, it may issue its negotiable 
 bonds to evidence the same.** 
 
 iDill. on Man. Coq-). (4th ed.)! 230 ; State v. School Dist, 10 Neb. 
 § 21. I 180 ; State v. Board of Co. Com'rs, 
 
 « See ?.:; ;30. 31, 32. j 48 N. W. R. 46. 
 
 ' Ilotchkiss V. Plunkett, GO Conn. ^ Folsom v. Scliool Directors, 91 
 230. Ill- 404. See § 13. 
 
 * Hotchkiss V. Plunkett, 60 Conn, i
 
 CH. I.] INTEODUCTION. § 3 
 
 These corporations are usually regarded as quasi- 
 muiiicipal corporations, rather than as municipal cor- 
 porations ])roper. ^ 
 
 Their incorporation cannot be attacked in a collateral 
 proceeding, and the acts of a de facto district like that 
 of any other public de facto corporation are binding, and 
 the bonds of such a corporation are valid. ^ 
 
 The officers of these districts are elected or chosen in 
 the manner provided in the acts relating to the districts. 
 
 The business of the districts in many of the States are 
 usually conducted at regular or special meetings of the 
 taxable voters, or residents, or the legal voters, called 
 for the purpose, and it is usually held that a majority 
 vote of those present is sufficient to carry any proposition, 
 including the issue of bonds, unless some statute or the 
 constitution changes this rule.^ 
 
 In Nebraska, under the act of March 31, 1887, § 28, 
 which authorized the board of education of a city to bor- 
 row money upon bonds which can only be issued after the 
 submission of the proposition to the voters at an election 
 called for that purpose, " or at any regular election," at 
 which " a majority of the ballots polled " are in favor of 
 issuing the bonds, that if the proposition is submitted at 
 the regular election, it must receive, in its favor, a num- 
 ber of votes equal to a majority of all the votes cast for 
 any officer at such election. 
 
 ' rVeeland v. Stillman, (Kan.) oO undei" the Laws of 18G4, Chap. 5o5, 
 P. R. SB.") ; Hotchkiss v. Plunkett, wliich provided that an issue of 
 60 Conn. 230. In Iowa they are | school bonds must be authorized by 
 lield to be municipal corporations, a vote " of a majority of all the in- 
 habitants of any school district en- 
 titled to vote, to be ascertained by 
 taking and recording the ayes and 
 nays of such inhabitants attending 
 at any school district meeting." 
 a vote in favor of tlie bonds by a 
 majority of those voting is suffi- 
 
 Curry v. Dist. Tp. of Sioux City, 
 03 Iowa, 102. 
 
 2 State V. School Dist. No, 19 
 Sioux Co., 42 Neb. 499 ; Nat. Life 
 Ins. Co. V. Board of Ed. City of 
 Huron, G3 F. R. 778; O'Neill v. 
 Battie, 63 Ilun, 018. 
 
 'State V. Cole. 51 N. J. L. 277 ; cient to autliorize the issue of bonds. 
 State V. Clark, (N. J.) 19 A. R. 463 ; even though such majority is less 
 Miller v. School Dist. No. 3 (Wyo.) than one-half of the voters actually 
 39 P. R. 879. In Smith v. Proctor, present at the meeting. 
 130 N. Y. 319. it was held that, 
 
 9
 
 § 3 MUNICirAL BONDS. [CTI. I. 
 
 Where the business of the school district is to be trans- 
 acted by the voters or the taxable inhabitants of the 
 district, nothing but the business noticed in the call for 
 the meeting can be transacted.^ Where the meeting 
 was called "for the purpose of taking a vote upon the 
 question of building .a school-liouse and such other ques- 
 tions as are necessarily related to the building of said 
 school-house,"' it was lield that such notice was sufficient 
 to authorize those present to vote a direct tax for the 
 school building. 2 The meetings must be called by 
 the board as a body,'^ unless the statute authorizes one 
 member or more to call it.* 
 
 Unless the statute directs otherwise those assembled 
 at such a meeting may vote by ballot, and where the 
 statute requires that a vote be taken by ballot such a 
 provision is mandatory.^ 
 
 In New Jersey it has been held that a statute which 
 permitted females to vote for school trustees v/as uncon- 
 stitutional,^ but that a statute which permitted them 
 also to vote at a school meeting upon the proposition to 
 issue bonds was constitutional as to the latter and that 
 they could take part in tlie meeting and vote.'' 
 
 The statutes usually prescribe that the clerk or direct- 
 ors or board shall give notice of the meetings. The 
 notice must state tlie purpose of the meeting, and such 
 notice is sufficient if the purpose or object of the meeting 
 <'an fairly be understood from the notice.^ 
 
 When the time and place must be stated, no legal 
 meeting can be held at any other time or place,^ but it 
 may be held within a reasonable time after the time 
 stated.io 
 
 1 State V. Clark. 19 A. R. 462 ; 
 Lamb v. Ilurff. 9 Vr. .310. 
 
 2 Peters v. Tuuiisliip of Warren, 
 98 Mich. 54. 
 
 3 State V. Lockett, 54 Mo. App. 
 202. 
 
 « Kimball v. Ilendee, 30 A. R, 
 894. 
 
 '' Chamberlain v. Board of Ed., 
 31 A. R. 1085. 
 
 8 School Dist. X. Blakeslee, 13 
 Conn. 227. 
 
 * Central S. S. House v. School i « Sherwin v. Bugbee, 16 Vt. 444 ; 
 
 Dist. No. 3, (Mich.) 58 N. W. R. 324. 
 ^ Chamberlain v. Board of Edu- 
 cation. (X. J.) ni A. R. 1035. 
 10 
 
 Chamberlin v. Dover, 13 Me. 466. 
 
 1^ School Dist. V. Blakeslee, 13 
 Conn. 227.
 
 CH. I.] INTEODTJCTION. § 4 
 
 Many of the school districts are governed by a board 
 of education, or trustees, or directors, and their author- 
 ity to issue bonds for school purposes depends upon the 
 statutes relating to them. Sometimes the school dis- 
 trict, or more properly speaking, in such a case, the 
 school corporation or body charged with the educational 
 interests of a municipality, is created by and included in 
 the special charter of the municipality, or under the same 
 general laws under which the municijial corporation 
 becomes incorporated. In such cases it is a distinct cor- 
 poration and its powers are to be found in the charter 
 and other general or special laws relating to it. 
 
 In many of the States such boards or commissions are 
 authorized to issue bonds without first submitting the 
 question to the voters, while in other States such sub- 
 mission is required by the statute or by the Constitution. 
 
 In the absence of constitutional restrictions the Legis- 
 lature may grant to these districts, or boards, or commis- 
 sions any powers it may deem necessary, and make such 
 provisions as to the composition of the board or com- 
 mission it deems best for the public interest. So also as 
 to the territory over which the board shall have author- 
 ity to act. It may embrace a town, or a cit}^ a county, 
 or a part thereof, or a city and adjacent territory.^ 
 
 As the same general principles of law govern the issue 
 of bonds and all the questions connected therewith no mat- 
 ter by what public officer or public corporation issued, 
 the author docs not deem it necessary or advisable to sub- 
 divide the subject of the work so as to treat separately 
 of the questions relating to bonds when issued by the sev- 
 eral public corporations, municipal or g?(«.s7'-municipal. 
 In the index the matters peculiar to each class will be 
 found grouped togetlier.^ 
 
 § 4. The municipal bond is an executed jiromise, usually 
 
 * State V. Hine, 59 Conn 50. See i town of Marseilles issued its bonds 
 also, " Schools," 31 Am. & Eng. j payable to bearer in tlie fourteenth 
 Ency. of Law, p. 748. centurj-. See Laws on Negotiable 
 
 2 The municipal bond cannot be ! Securities, H. D. Jenken (1880, 
 said to be an entirely modern or I London), pp. iv, v, vi. And it is 
 American invention. It was known I now the practice in a number of the 
 in Venice as early as 1171, and the ^ continental cities to issue munici- 
 
 11
 
 :§ '4 MUNICIPAL BONDS. [CH. I. 
 
 under seal, on the part of a municipal corporation to pay 
 to a person named or his order or to bearer a sum certain 
 at a tixed time or some other time agreed upon with in- 
 terest, the interest being usually represented by attached 
 coupons payable at fixed periods until the principal is to 
 be paid. 
 
 The bonds are issued for the purpose of raising money 
 for local municipal necessities. 
 
 The rapid settlement of the vast territory of these 
 United States and the marvellous growth in number of 
 the various municipalities throughout it, as well as the 
 phenomenal increase in population of the latter during the 
 last fifty years, added to the increased municipal conven- 
 iences and necessities required by modern society, have 
 compelled municipal corporations to resort to some means 
 of obtaining money in order to make immediate local im- 
 provements for the health, comfort, convenience and 
 general welfare of their inhabitants, and not to wait be- 
 fore obtaining these, to raise the money therefor by the 
 slow process of taxation. The means pursued to obtain 
 this end is the issue of obligations by the municipal cor- 
 poration, which are sold by it and the proceeds applied to 
 obtain the needed municipal objects. The obligations so 
 issued are to bo afterward paid by taxation. 
 
 It has now become the common practice for municipal 
 corporations to issue and sell their obligations which are 
 now known as "Municipal Bonds," for the purposes afore- 
 said, as well as many other corporate purposes, and this is 
 now so extensively adopted for the purpose of obtaining 
 money for immediate use that it is estimated that at 
 least $150,000,000 of municipal bonds are annually issued 
 in the United States and placed upon the money market. 
 These securities find a ready sale and are regarded, for 
 good reasons, as one of the safest modes of investing 
 money. They are held largely by banks and banking in- 
 stitutions, trust and insurance companies, as well as by 
 individuals, for investment. 
 
 pal interest-bearing paper, which I pal purposes. Municipal Govern- 
 is sold either privately or publicly, ment in Continental Cities, by Al- 
 and the proceeds used for munici- 1 bert Shaw, pp. 130, 208-9, 289. 
 12
 
 CH. I.] INTRODUCTION. § 4 
 
 In a number of the States, so highly are these securi- 
 ties considered, the various moneyed institutions have 
 been authorized by statute to invest in such bonds, 
 although issued by municipal corporations situated in 
 other States. Such statutes, however, usually require 
 that the municipality whose bonds may be thus held be 
 not indebted above a certain percentage.^ 
 
 It is not to be presumed from the above remarks that 
 all municipal bonds are to be considered as a good invest- 
 ment, because the financial standing of the municipality 
 issuing the bonds enters largely into the value of its bonds, 
 although it must be said but a very small percentage of 
 the bonds issued are repudiated, though payment is some- 
 times delayed, so small in fact that it is scarcely ascer- 
 tainable ; provided the bonds are legally issued, ,and it is 
 with this latter subject this volume treats. 
 
 1 The following States have passed 
 siicli laws : Maine, Laws of 1895, 
 Cluipter 161 ; New Hampshire, Act 
 to regulate the investment of Sav- 
 ings Banks, Approved March 20th, 
 1895 ; Vermont, an Act to amend 
 Act No. 13 of the Laws of 1888, 
 relating to investments by Savings 
 Banks and Trust Companies, Ap- 
 proved November 22, 1892 ; Massa- 
 
 chusetts has a number of such 
 laws : Rhode Island, statutes of 
 1882, p. 379 ; Connecticut, Act ap- 
 pro%ed June 23, 1893 ; New York 
 has many such laws. As to Sav- 
 ings Banks, see Laws of 1895, Chap. 
 813; New Jersey Laws of 1881,Cliap. 
 218 ; 1878, Chap. 254 ; 1883, Chap. 
 116. 
 
 13
 
 CHAPTER II. 
 
 POWER TO MAKE LOANS AND ISSUE NEGOTIABLE PAPER. 
 
 Section. 
 
 5 — Express power to issue nego- 
 tiable paper. 
 6 — Proceedings wlien power is 
 
 express. 
 7 — The State must have express 
 
 power. 
 8 — Implied power, when right to 
 
 borrow is express. 
 9 — Former attitude of the United 
 
 States courts. 
 10 — Present attitude against sucli 
 
 authority. 
 11— Result. 
 12 — Federal courts follow the 
 
 State courts, when. 
 13 — Implied jjower to issue nego- 
 tiable paper when the 
 power to borrow is express 
 depends on the decisions of 
 the State courts. 
 14 — Implied power to issue nego- 
 tiable i)apcr. 
 15 — Courts are divided on this 
 
 question. 
 16 — Weight of authority in favor 
 
 of such power, cases. 
 17 — Pennsylvania, Williamsport 
 V. Com'rs. 
 
 Section. 
 
 18— Ohio, Bank v. Chillicothe. 
 
 19 — Wisconsin, Miles v. Gleason. 
 
 20 — Illinois, Law v. People, and 
 other cases. 
 
 21 — Indiana, Richmond v. Mc- 
 Girr, and other cases. 
 
 22 — New Jersey cases. 
 
 23 — New York cases. 
 
 24 — Other cases in support of the 
 doctrine. 
 
 25 — Cases holding that a muni- 
 cipal corporation has no 
 such implied power. 
 
 2G — Further cases. 
 
 27 — A safe rule to follow. 
 
 28 — Difference between borrow- 
 ing on negotiable paper and 
 issuing paper to pay for 
 contractual indebtedness. 
 
 29 — Doctrine of implied jaower in 
 the Federal courts. 
 
 30 — Same — Counties do not pos- 
 sess implied authority. 
 
 31 — Position of Federal courts. 
 
 32 — Summary of the law on this 
 question. 
 
 It is proposed to treat this subject under three distinct 
 heads : 
 
 1. Express power to issue such paper. 
 
 2. Implied power to issue such paper when the power 
 to borrow is express. 
 
 3. Implied power to borrow. 
 
 § 5. Express power to issue negotiable paper. — Fort- 
 unately the power to issue negotiable bonds and other 
 negotiable paper is to be found more often conferred in 
 14
 
 CH. II.] POWER TO MAKE LOANS, ETC. § 7 
 
 express language by either the cliarter of the munici- 
 pality or by some general or special act than otherwise, 
 and when it is expressly conferred fewer questions arise 
 in relation to the paper issued under such authority than 
 when the power to issue is implied. When the authority 
 to issue such paper is expressly conferred there arises, of 
 course, the question whether the enabling act is consti- 
 tutional, whether its object is a public or private one, 
 and the necessary proceedings prior to the issue of course 
 must be taken these ; however, are treated of elsewhere 
 herein. 
 
 The bonds must be issued when the power is express 
 to do so only for the objects specified in the enabling act 
 and cannot include other objects.^ 
 
 § G. Proceedings when power is express. — It is suffi- 
 cient to say here tliat all the proceedings leading up to the 
 issue of the bonds must be strictly followed, and whatever 
 the enabling act requires to be done must be performed, 
 and the act must be strictly conformed to or the issue 
 will be restrained. Usually the act fixes the maximum 
 amount of bonds which may be issued, and in that case 
 it cannot be exceeded ; it also fixes the maximum rate of 
 interest, and that also cannot be exceeded ; it usually 
 specifies the object for which the bonds may be issued, 
 and this must be a public one, It usually designates the 
 body or officers who may authorize the issue of the bonds, 
 in which case they can be issued by no other body or 
 officers ; likewise Avhen it designates what officers shall 
 execute the bonds no other officers can do so. 
 
 If the act is constitutional and all the steps leading up 
 to and including the issue and delivery of the bonds are 
 properly pursued as required l)y law, few, if any, ques- 
 tions, can arise in relation to such bonds, and it is the 
 want of proper care or the wilful disregard of public 
 duty or a fraudulent intent on the part of the officers 
 charged with the duty of issuing or delivering the bonds 
 that cause the bonds to be questioned in such cases. 
 
 ^7. A State must have express power to issue bonds. 
 — It is the general rule that a State, or the officers 
 
 1 State V. Bayonne, 49 N. J. L.308. 
 
 15
 
 § 8 MUNICirAL BONDS. [CH. H. 
 
 of a state for it, cannot issue negotiable bonds unless 
 the Legislature has authorized their issue. All who deal 
 with a State or its officers are bound to ascertain whether 
 the State or its officers have legislative authority to do 
 the act proposed.^ The State itself cannot borrow money 
 through its officers except in pursuance of express power 
 conferred by the legislative department of the govern- 
 ment.^ 
 
 § 8. Implied power when the right to borrow is ex- 
 pressed. The right of a municipality to issue its nego- 
 tiable bonds and other securities when it has the express 
 right to borrow money seems to be plain and is upheld 
 by numerous decisions of the courts. Negotiable bonds, 
 being one of the most convenient and salable forms of 
 municipal securities, are selected and most commonly 
 used when the authority to borrow is vested in a munici- 
 pality.-3 
 
 Express power to borrow money, perhaps, in all cases, 
 but especially if conferred to effect objects for which 
 large or unusual sums are required, as, for example, sub- 
 scriptions to aid railroads and other pu])lic improvements, 
 will ordinarily be implied if there be nothing in the legis- 
 lation to negative the inference to include the power (the 
 same as if conferred upon a corporation organized for 
 pecuniary profit) to issue negotiable paper with all the 
 incidents of negotiability.'* Many of the State courts, 
 while they deny the right of a municipal corporation to 
 issue negotiable paper from any implied power, recog- 
 nize and admit that when the municipality has the ex- 
 press power to borrow it may issue its paper, negotia- 
 ble in form, which will have all the attributes of com- 
 mercial paper.^ 
 
 1 Ward V. U. S., 1 Nolt & II. CGO : | 111. 423 ; Williamsport v. Com., 84 
 Whiteside et al. v. U. S., 93 U. S. I Penn. 487 ; Evansvillc R. R. Co. v. 
 ','")5 ; State of Missouri v. Bank, 45 ' Evans, 15 Intl. 395 ; West Plains 
 
 :Mo. 528. 
 
 - Burroughs on Pub. Securities, 
 p. 172. 
 
 Tp. X. Sage, 69 Fed. R. 943-8. 
 
 * Dill, on Mun. Corp. § 125 (4th 
 ed.). 
 
 ^ Lewis V. Coraanchee Co., 133 j * Holmes v. City of Shreveport, 
 U. S. 198 ; Com. v. Pittsburgh, 34 ; 31 Fed. Rep. 113 ; Folsom v. School 
 Penn. 496 ; Galena v. Corwith, 48 Directors, 91 111. 401 ; Williams- 
 16
 
 CH. II.] POWER TO MAKE LOANS, ETC. § 10 
 
 Mr. Daniel says : " When the power to borrow the 
 money is clear it necessarily involves in its exercise tho 
 execution of a security for its payment ; and negotiable 
 bonds being the common and most acceptable form of 
 municipal securities when given for money legitimately 
 borrowed would undoubtedly be valid. "-^ 
 
 § 9. Former attitude of the United States courts. 
 — The United States Supreme Court in several decisions 
 has adojDted the same doctrine. 
 
 In the case of Rogers v. Burlington, 3 Wall. 65i, it held 
 the power, "to borrow money for any public jDurpose," 
 authorized the city of Burlington to subscribe for stock 
 in a railroad company and issue its negotiable bonds to 
 the company to be sold by it, the proceeds of the sale to 
 be used to pay for the stocks. 
 
 And in another case it held that where a city had au- 
 thority to subscribe to stock in a railroad company " as 
 fully as an individual," such power authorized it to issue 
 its negotiable bonds. '^ And in another that the power of 
 a municipality to borrow money for any object in its 
 discretion authorized it to borrow money upon its nego- 
 tiable bonds and to subscribe for and pay for stock with 
 the money so obtained.^ 
 
 Notwithstanding the fact that it has been the uniform 
 doctrine of the State courts that when the municipal cor- 
 jioration has the express authority to borrow money it 
 may issue its negotiable paper in order to obtain the 
 loan, and that this doctrine has been recognized and ap- 
 plied to its extreme length by the United States Supreme 
 Court in a number of cases, that court in a more recent 
 case has held that tlie naked power to borrow did not 
 include the power to issue negotiable instruments, and 
 that in order to do so the statute must further empower 
 such issue. 
 
 § 10. Present attitude against such power. — The 
 case is that of Brenham v. German American Bank, 144 
 U. S. 173, the court held that bonds issued by the city 
 
 port V. Commissioners, 84 Pa. 487 ; 
 Opinion of Dissenting Judj^es. 
 ^ Daniel on Neg. Inst. § 158 L 
 
 2 Seybert v. City of Pittsbur'^'li. 1 
 Wall. 572. 
 
 3 Meyer v. Muscatin, 1 Wall, 387. 
 
 2 i:
 
 § 10 MUNICIPAL BONDS. [CH. II. 
 
 of Brenhani, which li;ul authority to borrow for general 
 purposes not exceeding $15,UU0, were invalid in the hands 
 of even a bona fide holder of them. The court further 
 held : " That in exercising its power to borrow not exceed- 
 ing $15,000 on its credit for general purposes the city could 
 give to the lender, as a voucher for the payment of the 
 money, evidence of indebtedness in the shape of non-ne- 
 gotiable paper is quite clear, but that does not cover the 
 right to issue negotiable paper or bonds unimpeachable 
 in the hands of a bona fide holder. ... It is easy fortius 
 Legislature to confer upon a municipality when it is con- 
 stitutional to do so the power to issue negotiable bonds, 
 and under the well- settled rule that any doubt as to the 
 existence of such power ought to be determined against 
 its existence it ought not to be held to exist in the pres- 
 ent case." 
 
 The court further held the often quoted cases of 
 Kogers v. Burlington, supra, and Mitchell v. Burlington, 
 4 Wall. 270, to be overruled. 
 
 A very vigorous dissenting opinion was filed by Harlan, 
 Brewer and Brown, J J., in which they said : 
 
 " It seems to us that the court in the present case 
 announces for the first time that an express power in a 
 municipal corporation to borrow money for corporate or 
 general purposes does not, under any circumstances, carry 
 with it, by implication, an authority to execute a negoti- 
 able note or bond for the money so borrowed, and that 
 any such note or bond is void in the hands of .a bona fide 
 holder for value. There are, perhaps, few numicipal 
 corporations any where that have not, under some circum- 
 stances and within prescribed limits as to amount, express 
 authority to borrow money for legitimate corporate 
 purposes. 
 
 *' While this authority may be abused, it is often vital to 
 the public interests that it be exercised. But if it may 
 not be exercised by giving negotiable notes or bonds 
 as evidence of the debt so created, which is the mode 
 usually adopted in such cases, the power to borrow, 
 however urgent the necessity, will be of little prac- 
 tical value. Those wdio have money to lend wiU not 
 18
 
 CH. II.] 
 
 POWER TO MAKE LOANS, ETC. 
 
 §11 
 
 lend it upon mere vouchers or certificates of indebted- 
 ness. 
 
 "The aggregate amount of negotiable notes and bonds 
 executed by municipal corporations for legitimate i3ur- 
 poses under express power to borrow simply, and now 
 outstanding in every part of the country, must be 
 enormous. A declaration by this court that such notes 
 and bonds are void, because of the absence of express 
 legislative authority to execute negotiable instruments 
 for the money borrowed, will, we fear, produce incalcu- 
 lable mischief. Believing the doctrine announced by the 
 court to be unsound, upon principle and authority, we do 
 not feel at liberty to withhold an expression of our dis- 
 sent from the opinion."^ 
 
 § 11. Result. — As said in the able dissenting opinion, 
 millions of dollars of bonds and securities have been is- 
 
 1 The rule laid down in Bi'enham 
 V. Bank has been followed in the 
 United States Circuit Court of Ap- 
 peals for the eighth circuit, in the 
 case of Ashuelot Nat. Bk. of Keene 
 V. School Dist. No. 7, (1893) 50 F. R. 
 514. 
 
 In this case negotiable bonds is- 
 sued by a school district in Ne- 
 braska were declared invalid. The 
 act under which they were issued 
 provided: "Any school district 
 shall have power and authority to 
 bo7'row money to pay for the sites 
 of school-houses, andtoerect build- 
 ings thereon, and to furnish the 
 same by a vote of a majority of the 
 qualified voters." 
 
 Tiie bonds were issued for the 
 said purposes, and recited the title 
 of the act. The court held them 
 to be invalid because negotiable in 
 form, holding that authority to 
 issue negotiable bonds must be ex- 
 press, and that the more power to 
 borrow does not authorize tiie issue 
 of such bonds. 
 
 The court by Thayer. D. J., af tin- 
 referring to the rule laid down in 
 
 Merril v. Monticello, 138 U. S. 073, 
 and Brenham v. Bank, in part said : 
 
 " We think, however, that we 
 may fairly affirm that the two 
 authorities heretofore cited do es- 
 tablish the following propositions : 
 First, that an express power con- 
 ferred upon a municipal corpora- 
 tion to borrow money for corporate 
 purposes does not in itself carry 
 with it an a.uthority to issue nego- 
 tiable securities ; Second, that the 
 latter power will never bo implied, 
 in favor of a municipal corporation, 
 unless such implication is neces- 
 sary to prevent some express cor- 
 porate power fi'om becoming ut- 
 terly nugatory ; and Tliird, that in 
 every case wliere a doubt arises as 
 to the right of a municipal corpo- 
 ration to execute negotiable securi- 
 ties the doubt should be resolved 
 against the existence of anj' such 
 right. 
 
 " Tiie application of these princi- 
 ples to the case at bar satisfies us 
 that the judgment of the Circuit 
 Court was for tiie right party and 
 should not be disturijed."' 
 19
 
 § 12 MUNICIPAL BONDS. [CH. II. 
 
 sued by municipalities under a general power to borrow 
 money and are outstanding in the hands of innocent 
 holders. The effect of this decision may make invalid 
 such securities, although issued and purchased in the 
 utmost good faith, unless the same have been issued after 
 the courts of last resort of the respective States have 
 passed, with approval, upon the act or charter under 
 which they have been issued, or the authority to issue 
 bonds generally under the naked express power to borrow 
 has been affirmed by the court of last resort of the State 
 in the construction of such State laws or the Constitu- 
 tion. 
 
 § 12. When the Federal courts follow the State courts. 
 — It is the doctrine of the United States Supreme Court, in 
 cases of this nature, that it is not bound to follow the 
 decision of the court of last resort of a State made after 
 the bonds are issued and sold, but is only bound to 
 follow decisions made prior to the issue and sale, and 
 even in these cases the decision of the Supreme Court of 
 the State must have been upon the construction of pe- 
 culiar provisons of the State Constitution or laws.^ The 
 Federal courts will adopt the settled decisions of the 
 highest court of a State which has determined the in- 
 tent and character of the power which its political and 
 municipal organization shall possess.^ 
 
 It was urged in the above case of Brenham v. German 
 American Bank, that as the Supreme Court of Texas had 
 recognized the validity of the ver}^ issue of bonds in 
 dispute, in the case of Dyer v. Hackworth, 57 Tex. 245, 
 the court should be guided by that decision, but as the 
 Texas case only decided that it could not enjoin the 
 collection of taxes to pay interest on the bonds without 
 making the holders parties, the court refused and said that 
 there was therefore no adjudication in that case as to 
 the validity of the bonds, it was not bound to follow it, 
 
 1 Brenham V. Ger. Am. Bk., 144' ^ ciairborne Co. v. Brooks, 111 
 U. S. 173 ; Venice v. Murdock, 92 ' U. S. 400 ; Howard v. Francis Co., 
 U. S. 494 ; Ger. Sav. Bk. v. Frank- j 50 Fed. Rep. 44. 
 lin Co., 128 U. S. 526; Dill, on j 
 Mun. Corp. Vol. I. 517. I 
 
 20
 
 CH. II.] POWER TO MAKE LOANS, ETC. " § 14 
 
 and decided the case upon general principles and preced- 
 ents in its own court. . 
 
 § 13. Implied power depends on the decision of the 
 State courts. — It follows, therefore, since this recent doc- 
 trine of the U. S. Supreme Court curtailing the implied 
 power of municipalities to issue negotiable paper, when 
 the power to borrow is express, that the authority for 
 the exercise of such power must rest hereafter ujDon the 
 decision of the courts of last resort of the respective 
 States in the construction of their statutes and constitu- 
 tion in reference to such powers and as to the extent 
 and character of the powers of their political and munic- 
 ipal organizations, which decisions the Federal courts 
 will follow, and not upon the broad principle heretofore 
 adopted, that the express power to borrow carries with it 
 (unless some provision of the Constitution or statute 
 law prohibits) the right to issue negotiable securities to 
 obtain the money. -^ 
 
 § 14. Implied power to issue negotiable paper. — 
 Almost all of the elementary writers are of the opinion 
 that the practice of issuing negotiable paper by a munic- 
 ipality, unless power to borrow be expressly conferred, 
 is wrong, and condemn the practice in vigorous language, 
 and some claim that a municipal corporation cannot 
 issue its negotiable paper without legislative authorit}^ 
 and that where the corporation is authorized to execute 
 some power requiring a large expenditure of money, 
 while they admit that under such circumstances the 
 
 1 Clairbomc Co. v. Brooks, 111 out inquiiy as to its original sound- 
 
 U. S. 400 ; Francis v. Howard, 50 
 Fed. Rep. 44. 
 
 In City of Evansville v. Wood- 
 buiy, 60 Fr. R. 718. The court in 
 this case said : 
 
 " The Federal coiu-ts have main- 
 tained a rule from their organiza- 
 tion, that in all cases depeniling on 
 a State statute they will adopt and 
 follow the adjudications of tlie 
 court of last resort in the State in 
 its construction, when tliat con- 
 struction is well settled, and with- 
 
 ness. This rule is founded upon 
 respect for property rights, as well 
 as of comity, and had its early ex- 
 pression in Chief Justice Marsliall. 
 and has been upheld by an un- 
 broken line of decisions. 
 
 ' ' Therefore the recent decisions in 
 Merril v. Montlcello, 138 U. S. 673, 
 and Brenham v. Bank, 144 U. 8. 
 173, cited in behalf of the plaintKf 
 in error as decisive, are not a])iili- 
 cable." 
 
 21
 
 § 14 MUNICIPAL BONDS. [CH. 11. 
 
 corporation may issue its evidence of debt to its creditors 
 who may be engaged to do the j^ubhc work, deny that 
 in order to obtain the money therefor, it has the imphed 
 authority to issue negotiable paper, which will be free 
 from equities in the hands of third persons, or which it 
 may sell in order to obtain the means to do the public 
 work.^ 
 
 While it must be conceded tliat the above views are 
 wiser and safer than the opposite doctrine, and, if 
 followed by all the State courts, would doubtless, to a 
 very great extent, act as a check upon municipal ex- 
 travagance and compel them to a "pay as you go" 
 policy, which would make them careful in their expendi- 
 tures and prevent tlie incurring of debt to be paid by 
 future generations, yet it must be confessed that the 
 doctrine of most of the State courts is favorable to the 
 opposite view, while the Federal courts are more conserv- 
 ative and adopt the view that tiie power to issue negoti- 
 able instruments by municipal corporations must be ex- 
 pressed, and is not to be implied, and if issued under an 
 implied authority are void in all hands. ^ 
 
 The power to borrow money and issue negotiable paper 
 for the ordinary annual current expenses of municipal 
 government, although supported by a number of cases,^ 
 cannot be condemned in too vigorous language. The 
 ordinary powers of municipal corporations, as the sup- 
 port of the police, of a fire department, of a department 
 of charities and corrections, of public schools, of lighting 
 the streets and public places, of waterworks, the laying 
 out, and improving, and care of streets, of public libraries, 
 of parks, and the many other municipal conveniences and 
 necessities, wliicli are for the protection, or comfort, or 
 education, or even the enjoyment of the inhabitants, are 
 usually all paid for by taxes levied annually upon the 
 property within the corporation. 
 
 * Jones on R. R. Securities, § 283 ; 
 Burroughs Pub. Securities, p. 
 185. 
 
 2 Mayor v. Raj^ 19 Wall. 468; 
 :\IerrilI v. Monticello, 138 U. S. 673 ; 
 Police Jury v. Britton, 15 Wall. 
 22 
 
 566 ; Brenham v. Ger. Amer. Sav. 
 Bk., 144 U. S. 173. 
 
 '^ AVilliamsport v. Commonwealth, 
 84 Pa. St. 487 ; Desmond v. Jeffer- 
 son, 19 Fed. Rep. 488 ; State T. 
 Babcock, 23 Neb. 614.
 
 CH. II.] POWER TO INIAKE LOANS, ETC. § 16 
 
 These are ordinary powers and are exercised contin- 
 uously, and it would seem that the corporation should not 
 have the incidental power to issue its negotiahle paper in 
 order to obtain money wherewith to carry them out, when 
 the charter of the municipality has provided that the 
 money to pay for such expenditures should be obtained 
 by taxation. 
 
 Judge Dillon has stated ^ what he regards to be the 
 true doctrine: "That merely as incidental to the dis- 
 charge of its ordinary corporate functions no municipal 
 or public corporation has the right to invest any instru- 
 ment it may issue, whatever its form, with that supreme 
 and dangerous attribute of commercial paper which in- 
 sulates the holder for value from defences and equities 
 which attach to its inception. This point ought to be 
 guarded by the courts with the utmost vigilance and 
 resolution." 
 
 § 15. The authorities upon this question are much 
 divided, but, as said before, the weight of the decisions 
 are in favor of the view that, when the municipality is 
 authorized or required to make some public improvement, 
 or to aid in one, and the means with which the same is 
 to be carried out are not provided for in the charter or 
 other legislative act authorizing or imposing such a duty, 
 that the municipality may, in order to accomplish the 
 objects, borrow money. It follows from the weight of 
 decisions that the implied power to borrow money in- 
 cludes, by implication, the power to arrange for the pay- 
 ment of the debt so contracted by the issue of negotiable 
 bonds or other securities which shall possess all the 
 characteristics of other commercial paper. ^ 
 
 § IG. Weight of authority in favor of such power — 
 Cases. — Notwithstanding th(3 fact that such a j^ower is 
 dangerous, it seems to be the general doctrine of the State 
 courts tliat, whenever it is necessary to carry out some 
 public; improvement authorized by statute, and tlie means 
 are not provided for therein, and the cost is too great to 
 
 1 Dill, on Mun. Corp. (4th od.) § 
 ^Williamsport v. Com., SI Pu. 
 
 500 ; Bangor Sav. Bk. v. Stillwater, 
 4r, Fed. Kep. 899 ; Little Itock v. 
 Bank, 98 U. S. 308. 
 
 23
 
 § IT MUNICIPAL BONDS. [CH. II. 
 
 bo obtaiiKxl by inimcdiato taxation, and the statute docs 
 not indicate such intent, the municipahty may bon-ow 
 the money necessary and give therefor its negotiable 
 bonds or other securities.^ 
 
 It is a general rule of the State courts that whenever 
 the municipality may contract a debt it may borrow 
 money to pay for it.^ 
 
 A few of the cases illustrating the above are given to 
 show the position of the courts in regard to the issuing 
 of negotiable paper when tbe power to borrow or issue 
 the paper is not given in express words. 
 
 In the case of State v. Babcock, 22 Neb. 614, it appeared 
 that Sec. 37, Ch. 14, Comp. St. 1887, gave to cities of the 
 second class the right to make regulations to secure the 
 general health of the city, and to construct sewers and 
 regulate their use. Under this authority it w^as held 
 that, when it became necessary to construct a sewer, the 
 city had power to borrow money therefor and to issue 
 its bonds for the same. " We are fully aware, "said the 
 court, " of the necessity for great care in the exercise of 
 the right to borrow money by municipal corporations, 
 when the power to do so should not be held to have been 
 conferred except when expressly given, or where abso- 
 lutely necessary to carry out and make effective the 
 power expressly conferred. 
 
 " We think the case falls clearly within the latter class 
 and that the bonds were legally issued." 
 
 In Desmond v. Jefferson, 19 Fed. Rep. 483, express 
 power to organize and regulate a fire department was 
 held to imply the right to issue bonds to obtain the 
 money necessary therefor. 
 
 § 17. Cases in PeiinsylA'aiiia. — In the case of Williams- 
 port V. Com., 84 Pa. St. 487, the court said : *'In its 
 broad sense, the power to borrow money and issue bonds 
 
 1 Douglass V. Virginia Cit}-, 5 Inst. Vol. 2, § 1529 ; Tiedman on 
 Nev. 147 ; Bank of Chillicothe v. Mun. Corp. g 182 ; Bangor Sav. 
 Mayor, 7 Ohio, pt. 2, 31 ; Sturtevant 
 V. Alton, 3 jMcLoan, 393 ; Lynde v. 
 County, 16 Wall. 12 : Mills v. Glea- 
 son, 11 "Wis. 470 ; Daniel on Neg. 
 24 
 
 Bank v. Stillwater, 46 Fed. Rep. 
 899. 
 2 Daniel on Neg. Instr, § 1530.
 
 CH. 11. ] POWER TO MAKE LOANS, ETC. § IT 
 
 therefor cannot be said to be among tlie implied powers 
 of a municipal corporation. For general purposes, such- 
 power does not exist, for the reason that it is not neces- 
 sary for the objects for which it was created. Thus it 
 has never been contended that a municipality may 
 borrow and issue bonds or notes for objects having no 
 necessary relation to the performance of municipal 
 duties. To admit such a principle would be destructive 
 of such organizations, and place the taxpayers of a city 
 at the mercy of the first band of plunderers who should 
 happen to obtain the temporary control of its affairs. 
 The question for our consideration is, whether the power 
 to issue bonds is one of the inherent powers of a munici- 
 pal corporation in a limited sense, that is to say, for 
 the purpose of providing for such expenditure as is 
 strictly germane to the objects for which such corpora- 
 tions are created. We are not without authorities that 
 question, if they do not deny, this power. Judge Dillon, 
 one of the ablest writers upon this branch of law, says, 
 in his treatise of the Law of Municipal Bonds : ' We 
 regard as alike unsound and dangerous that a public or 
 municipal corporation possesses the implied power to 
 borrow money for its ordinary purposes, and as incidental 
 to that power to issue commercial securities.' The 
 ground relied upon by that learned author and others 
 who take that view of the question is, that the power 
 is a dangerous one. But showing that the power is 
 dangerous does not prove that it does not exist. Power 
 is always dangerous. The dangerous nature of a power 
 might be a persuasive argument with the Legislature 
 why it should be denied to a municipal corporation, but 
 cannot be accepted as a conclusive reason that it does 
 not exist. I am willing to concede that the power to 
 issue municipal bonds is dangerous. It affords oppor- 
 tunity to unscrupulous men, hungering for the spoils of 
 rich municipalities, to enter into extravagant contracts 
 at ruinous prices, by mortgaging the resources of the 
 people in advance. The facility of placing municipal 
 bonds at high rates of interest and having many years 
 to run is certainly a great inducement in many cases to 
 
 25
 
 § 17 MUNICIPAL BOXDS. [CII. IT. 
 
 unwise and lavish expenditures. It might have been 
 better for the Legislature in the first instance to have 
 applied the principle of pay as 3'ou go to such corpora- 
 tions, and to have required them to seek legislative 
 action, whenever they sought to incur obligation. 
 This, however, is a question with which we have no 
 present concern." 
 
 The majority of the court, after reviewing the author- 
 ities, further said : "The following cases rest upon the 
 principle, which we think a sound one, that where a mu- 
 nicipal corporation has lawfully contracted a debt, it has 
 the implied power, unless restricted by its charter or pro- 
 hibited by statute, to evidence the same by a bill, bond, 
 note or other instrument ; that the power to contract a 
 debt carries with it, b}^ necessary implication, the right 
 to give an appropriate acknowledgment of such debt, 
 and to agree with the creditor as to the time and mode 
 of payment ; that in the absence of statutory provis- 
 ion there is no rule of law limiting the extent of the 
 credit." 
 
 In this case the bonds were issued to pay pre-existing 
 debts and to obtain money to grade and pave streets, being 
 authorized to do the work by the city charter before the 
 improvements were made ; the bonds were sold at a heavy 
 discount and the proceeds thus obtained applied for those 
 purposes. 
 
 Agnew, C. J., and two associate judges, dissented from 
 the opinion of the court, and held the bonds to be invalid, be- 
 cause part of them were issued in advance of any debt 
 incurred for grading and paving, and as a means of rais- 
 ing money to pay for the future improvements, and 
 because of the sale at a discount. They, however, admitted 
 that a municipal corporation has the implied power to give 
 suitable evidences of an authorized debt actually incurred, 
 but whether such evidence of an actual debt was negoti- 
 able or not was not by them discussed. They denied any 
 incidental power in municipal corporations, as a means 
 of raising money, to execute its ordinary charter power 
 " to issue commercial paper, be it bonds or notes, payable 
 
 to bearer, and negotiable according to the law merchant 
 26
 
 CH. II.] POWER TO MAKE LOANS, ETC. § 19 
 
 and general usage, and either to sell them in the market 
 or pass them off to individuals by way of a loan," 
 
 They also admitted that where express power to borrow 
 is given, a municipal corporation has the right to issue 
 negotiable bonds, bills, and notes. 
 
 The above case is given at some length, because the 
 opinion of the majority of the court carries the implied 
 right of a municipal corporation to borrow money and 
 issue its negotiable paper to the extreme limit ; and the 
 dissenting opinion, while followed by but a few of the State 
 courts, is, in the opinion of the writer, the conservative 
 and safer view of the question. 
 
 § IS. In Ohio the question arose as early as 1S36. The 
 town of Chillicothe possessed authority to erect public 
 buildings, purchase lands, pave streets, and other muni- 
 cipal powers of like character, but the right to borrow 
 money was not expressly granted. 
 
 The suit was upon some bonds of the town issued to 
 obtain money to carry out some of the expressed powers 
 and the question was, whether the right to borrow was 
 granted by implication. 
 
 The court held ^ that in carrying out the expressed pow- 
 ers, or in effecting any legitimate municipal object, the 
 corporation possessed the incidental or implied power to 
 borrow money, and held the bonds to be valid. The prin- 
 ciple laid down in this case has since been followed in the 
 courts of that State. 
 
 § 10. In Wisconsin the Supreme Court, in Miles v. Glea- 
 son, 11 Wis. -470 (1800), affirmed the implied authority of a 
 municipal corporation as incidental to the execution of 
 express general powers to borrow money and issue its 
 bonds therefor, it appearing that the proceeds thereof 
 went into the treasurv (^f the city and were expended 
 by it. 
 
 The court said : " The charter confers the power to pur- 
 chase fire apparatus, cemetery grounds, etc., to establish 
 markets, and to do many other things for the execution 
 of which money would be necessary as .a means. 
 
 " It would seem, therefore, that in the absence of any re- 
 1 Bank v. ChilUcothe, 7 Ohio, pt. 2, p. 31.
 
 § -10 MUNICIPAL liONDS. [CH. II. 
 
 striction, the power to borrow money would j)ass as an 
 incident to these general powers according to the well- 
 settled rule that cor[)oratioiis may resort to the usual and 
 convenient means of executing the powers granted ; for 
 certainly no means is more usual for the execution of such 
 objects than that of borrowing money." 
 
 § 20. In Illinois the question lias been passed upon in a 
 number of cases. It is well settled in that State, that the 
 power to borrow money or create indebtedness is not in- 
 cidental to municipalities, and cannot be exercised unless 
 it is conferred by their charter, or it is a necessary means 
 of carrying out some municipal improvement expressly 
 authorized. 
 
 In the case of Law v. People, 87 111. 385, the court said : 
 '* The law is, and all persons are presumed to know it, that 
 municipal bodies can only exercise such powers as are con- 
 ferred upon tliem by their charters, and all persons dealing 
 with them must see that the body has power to perform the 
 proposed act. Such corporations are created for goveni- 
 meiital and not for coinmerc.'ial purposes. 
 
 ' ' Hence power to borrow money or to create indebtedness 
 is not an incident to such local governments, and the power 
 cannot be exercised unless it be conferred by their charttn-, 
 and no one has the right to presume the existence of such 
 a power, and persons proposing to loan money to these 
 bodies must see that the power exists." 
 
 In the case of Hewitt v. Normal School Dist., 94 111. 528, 
 the court said : 
 
 " The borrowing of money, the purchase of property 
 on time, and the giving of commercial paper are not in- 
 herent in, or even powers usually conferred upon, munic- 
 ipalities, and unless endowed with such powers in their 
 charters, they have no authority to make and place on 
 tlie market such paper ; and persons dealing in it must see 
 that such powers exist. 
 
 "This has long been the rule of this court." 
 
 In the same State, in the case of Folsom v. School Direc- 
 tors, 91 111. 404, the court held that the power to borrow 
 money carries with it the power independent of the statute 
 
 to give the evidence of the loan. 
 
 28
 
 CH. II.] POWER TO MAKE LOANS, ETC. § 23 
 
 § 21. lu Indiana it is well settled that the municipalities, 
 in order to cany out express powers, have the implied 
 power to borrow money. In Richmond v. McGirr, 7S Ind. 
 192-198, where the city had power to purchase real estate 
 for public buildings, the court decided that the common 
 council had the implied power to purchase on credit and 
 to issue negotiable bonds for the purchase money, and 
 on the application of a taxjDayer the court refused to en- 
 join the issue of the bonds. 
 
 In the case of Smith v. City of Madison, 7 Ind. 81, the 
 court, in defining the power of municipal corporations, 
 used the following language : ' ' Municipal charters are 
 to be construed, as to carrying into effect every power 
 clearly intended to be conferred, and every power necessary 
 to be implied for the complete exercise of the power 
 granted." 
 
 In the case of New England Co. v. Robinson, 25 Ind. 
 536, it was further held that "corporations along with 
 the express and substantial powers conferred by their 
 charters, take by implication all the reasonable modes of 
 exercising such powers which a natural person may adopt 
 in the exercise of similar powers." 
 
 The later decisions on this subject are all in accord with 
 the above. ^ 
 
 § 22. In New Jersey, the Supreme Court, in case of 
 Hackettstown v. Swackhamer, 37 N. J. L., p. 191, while 
 denying the power of municipalities to borrow money for 
 the ordinary municipal uses, admitted that " it is practic- 
 able to impose a duty on a municipality requiring the im- 
 mediate use of large sums of money, and in such a sit- 
 uation the inference may become irresistible that it was 
 intended that funds were to be provided by loans." 
 
 The language of the court would indicate that where a 
 duty is imposed upon a municipality requiring the ex- 
 penditure of large sums of money to accomplish the same, 
 that in such cases the authority to borrow and issue nego- 
 tiable securities would be iiii])li('(l. 
 
 § 23. InNew York it was held, in the early and much 
 cited case of Ketchum v. City of Buffalo, 14- N. Y. 356 
 
 1 Daily v. Columbus, 49 Ind. 169 ; Miller v. Commissioners, 6fi Ind.162,
 
 § 23 MUNICIPAL BONDS. [CII. II. 
 
 (185G), that, in the absence of a law to the contrary, th(» 
 city of Buffalo could purchase grounds for a market on 
 credit and issue bonds to pay for the same. 
 
 In this case it appears the city purchased grounds for a 
 market for thirty-five thousand dollars, and gave in pay- 
 ment its bond for that sum payable in twenty-five years, 
 with interest every six months. 
 
 In a suit by a taxpayer to restrain the levy of a tax 
 upon the bond, the Court of Apj^eal refused to entertain 
 the application and held the bond valid, holding the 
 power to establish markets included the power to pur- 
 chase the ground on credit. 
 
 The bond was given to a person from whom the ground 
 was purchased, and the court intimated that there was a 
 difference between issuing bonds to pay for an object and 
 issuing bonds to be sold in the open market, and con- 
 demned the latter course. 
 
 In the case of Hubbard, Executor, v. Sadler, 104 N. Y. 
 Sup. Ct. 223, where it appeared a statute gave to super- 
 visors of certain counties power to pay for and con- 
 struct certain streets and avenues, and to provide by lim- 
 ited or general assessment for the payment of damages 
 awarded for the property taken, they authorized the 
 issue of short term bonds upon which to borrow money 
 for the payment of the awards, and the town was to be 
 reimbursed by the local assessments for benefits, and the 
 deficiency by general taxation. 
 
 The court held that the supervisors had the implied 
 authority to issue the bonds, and that control over the 
 whole subject, as to all incidents and details, and the mode 
 of accomplishing the purpose, was conferred upon the 
 supervisors. The court said : "They could, as they did, 
 and as was right and reasonable in the interest of the 
 land-owner, anticipate the slow collection of such proceeds 
 by borrowing the money needed for payment to pay the 
 awards, giving in exchange the obligation of the town, 
 running only for comparatively brief periods. 
 
 " We think the grant of legislative power was not ex- 
 ceeded by the act of the supervisors in providing, through 
 a temporary loan, for the prompt and immediate payment 
 30
 
 CH. II.] POWER TO MAKE LOANS, ETC. § 25 
 
 of the awards pending the ultimate reimbursement by 
 taxation/' 
 
 The court held the supervisors had this implied power, 
 although the statute also provided in express words for 
 the issue of bonds for other purposes.^ 
 
 § 21. Other cases.— In the case of Holmes v. City of 
 Shreveport, 31 Fed. Eep. 113, it appeared the city was 
 authorized by its charter to contract for certain public 
 works. It agreed to pay certain contractors one-half cash 
 and the balance in ten-year-coupon bonds for the said 
 work. A number of such bonds were issued, and this suit 
 was brought by the holder of some of them to whom they 
 had been passed before maturity. 
 
 The court said: "In deciding now in favor of the 
 validity of these bonds as commercial securities, it cannot 
 be said that we are imposing upon or enforcing against 
 the constituents of the corporation a debt doubtful in its 
 origin, or one not lawfully incurred, or one not justly due 
 to somebody, because it is clear enough that the debt is 
 unpaid, and that the city's agents had, ample power to 
 ordain and direct that the public work should be done, and 
 to legally bind the corjDoration for the debt, that is, for 
 the price of the public works. It being conceded that 
 the city had ample power to bind the corporation to pay 
 for the public works, when performed by the contractors 
 to whom the bonds were issued, I can see no reason in 
 law for denying the city's power to clothe the bonds or 
 promissory notes so issued with such attributes of negoti- 
 ability as will place a bona fide holder of the bonds under 
 the protection of the law merchant." 
 
 § 2.5. Cases against siu'li implied authority. — There are 
 a number of cases which suppcn-t the doctrine that there 
 is no implied power to issue negotiable instruments,^ and 
 one often cited is that of Knapp v. Mayor of Hoboken.^ In 
 this case the city issued to a contractor improvement 
 
 ^ See also In matter of Applica- 
 tion of Church, 92 N. Y. 1. 
 
 2 Dent V. Cook, 4") Ga. .323 ; Rur- 
 rill V. Boston, 3 ClilTo, 590 ; Boa- 
 man V. Lake Co., 42 Miss. 237 ; Par- 
 
 sons V. Monmouth, 70 Me. 2G2 ; 
 Nevvgars v. City of New Orleans, 
 42 La. xVnn. 163. 
 3 39 N. J. L. 394. 
 
 31
 
 § 2G MUNICirAL BONDS. [CII. II. 
 
 certificates, negotiable in form, and tlio court held that 
 they were not negotiable, except so far as to enable the 
 holder to sue thereon in his own name, but that they were 
 subject to all equities existing between the city and the 
 contractor. In another case,^ where the officer of the 
 town borrowed money to defray the ordinary expenses of 
 the town and gave a note therefor, the court held that a 
 municipal corporation had no implied power to borrow 
 money for the ordinary munici])al purposes. 
 
 In Texas it was held that a municipal corporation did 
 not have the implied power to issue negotiable bonds to 
 build public schools, under a general statute which 
 authorized such corporations to establish and maintain 
 free schools, purchase building sites, construct school- 
 houses, and generally to promote free education within 
 the limits of their respective cities and towns. ^ 
 
 § 2(). Judge Dillon, in Gause v. City of Clarksville,^ held 
 that bonds issued by the city to obtain money for the pur- 
 pose of opening, clearing and paving the streets of the 
 city, it having power under its charter to " open, clear, 
 regulate, or improve streets of the city," but no express 
 power to borrow money to do so, or to execute negotiable 
 instruments, that such bonds were void, and after allud- 
 ing to the doctrine of some of the courts that negotiable 
 instruments were valid when issued under an implied 
 power, said : " Such are the mischievous and alarming 
 consequences of the unsound doctrine that a municipality 
 has, by virtue of its ordinary powers and merely as a 
 means of executing its ordinary duties, the power to pledge 
 its credit by the issue and sale of its commercial obli- 
 gations. 
 
 "It is not the law. No such doctrine can permanently 
 stand. 
 
 '* Although it has taken as yet no deep root in our juris- 
 prudence, it has nevertheless obtained a sufficient devel- 
 opment to show its noxious character. . . . We are re- 
 (piired in tliis case only to determine the inherent or in- 
 
 1 Hackottstown v. Swackliauier, 
 37 N. J. L. 191. 
 
 32 
 
 2 Waxaliocliie v. Brown, 67 Tex. 
 519 ; 4 8. W. R. 207. 
 8 5 Dill. 1G5.
 
 CH. II.] POWER TO MAKE LOANS, ETC. § 28 
 
 c-idental powers of the city to raise loans by a sale of its 
 negotiable securities, payable at a distant day. 
 
 ' ' We deny such power. . . . 
 
 " What we decide on this point is that the power to erect 
 wharves and improve streets, conferred by the defendant's 
 charter, does not carry with it the power to raise funds 
 for that purpose by the issue and sale of negotiable 
 securities like those here in this suit." 
 
 In this very suit the court held certain other bonds 
 called " Road Improvement Bonds, " which were given in 
 renewal of other bonds which had been given for stock, 
 in a company authorized to macadamize roads under a 
 special act, and which act permitted the city to subscribe 
 to stock of a company authorized to macadamize roads of a 
 city to be valid, uj^on the implied authority to issue the 
 bonds because necessary in order to obtain money for the 
 stock received from the company. Therefore the case 
 decided that bonds issued to obtain money to carry out 
 the ordinary charter powers were void because there was 
 no express authority to issue them, while other bonds, 
 likewise issued without express power, were valid because 
 their issue was necessary to carry out some express power 
 conferred by a special act — power not conferred by the 
 charter. 
 
 § 27. A safe rule to follow. — AVe consider the doctrine 
 laid down by Judge Dillon in tlie above case to be a very 
 safe one, which can be followed by all courts, viz. : that the 
 corporation has no authority to issue negotiable instru- 
 ments in order to obtain money to carry out the ordi- 
 nary powers conferred Iw charter, but that when authority 
 to do some special act, that is, one not ordinarily the 
 work of the corporation, something which the corjDora- 
 tion is not called upon to do as a matter of course from 
 time to time in the ordinary affairs of the corporation, 
 and the authority to do the particular act is conferred by 
 special statute, that though no express authority to bor- 
 row is conferred, yet in such a case the authority to bor- 
 row may be implied as a necessary means of carrying out 
 the special express powers conferred. 
 
 § 28. Difference between borrowiiii? and is ning 
 
 3 3:j
 
 *; 29 MUNICIPAL BONDS. [CH. TT. 
 
 paper as evidence of iii(lel)te(lness. — A large number of 
 the cases lay particular stress upon the clifferencebetweeii 
 the giving of a note or other evidence of indebtedness to 
 a creditor, or one from whom money is borrowed, and the 
 issuing of bonds and placing them for sale in the open 
 market as commercial securities with all the character- 
 istics of negotiable instruments, subject to no equitable 
 or other defences in the hands of a bona fide holder for 
 value. ^ And in many of the cases, the paper, if negotia- 
 ble in form, is for that reason lield to be void.^ 
 
 § 29. Doctrine in U. S. Courts. — It has become the 
 settled doctrine of the Supreme Court of the United States 
 that there is no implied authority in municipal corpo- 
 rations to make and place upon the market commercial 
 paper of any kind, unless the power so to do is expressly 
 granted by statute, or is clearly implied from some other 
 power expressly given, which cannot be fairly exercised 
 without it.^ 
 
 The case most often referi'ed to to show this difference 
 is that of Police Jury v. Britton, 15 Wall. 566, in which 
 Justice Bradley, who delivered the opinion of the court, 
 said : 
 
 '■ That a municipal corporation which is authorized to 
 make expenditures for certain purposes may, unless pro- 
 hibited by law, make contracts for the accomplishment 
 of the authorized purposes, and thereby incur expendi- 
 tures and issue proper vouchers therefor, is not disputed. 
 This is a necessary incident to the express power granted. 
 But such contracts, as long as they remain executory, are 
 always liable to any equitable considerations that may 
 arise or exist between the parties, and to any modification, 
 abatement or rescission in whole or in part that may be 
 just and proper in consequence of irregularities or a dis- 
 regard or betrayal of the public interest. Such contracts 
 
 » Knapp V. !Ma}-or etc., 39 N. J. 
 L. S94 ; Ketcluini v. Buffalo, 14 N. 
 Y. 356. 
 
 2 Merrill v. Monticello, 138 U. S. 
 673 ; :Mivyoi v. Kay. 19 Wall. 468. 
 See S oO. 
 34 
 
 ^5 Clairborne Co. v. Brooks, 111 
 U. S. 400 ; Ilill V. Memphis, 134 U. 
 S. 198; Kolly v. Millan, 127 U. S. 
 139 ; Young v. Clarendon Tp., 132 
 U. S. 340 ; Bangor Sav. Bk. v. City 
 of Stillwater, 46 Fed. Rep. 899.
 
 CH. ir.] POWER TO MAKE LOANS, E:TC. § 20 
 
 are very different from those which are in controversy in 
 this case (negotiable bonds issued for the purpose of fund- 
 ing a previous indebtedness). The bonds and coupons on 
 which a recovery is now sought are commercial instru- 
 ments, payable at a future day, and transferable from 
 hand to hand. The power to issue such paper has been 
 the means, in several cases which have been brought to 
 our notice, of imposing upon counties and other local 
 jurisdictions burdens of a most fraudulent and iniquitous 
 character, and of which they would have been summarily 
 relieved had not the obligations been such as to protect 
 them from question in the hands of honafide holders. It 
 seems to us to be a power quite distinct from that of in- 
 curring indebtedness for improvements actually author- 
 ized and undertaken, the justice and validity of which 
 may always be inquired into. It is a power that ought 
 not to be imj^lied from the mere authority to make im- 
 provements." 
 
 In the case of Merrill v. Monticello, 138 U. S. Eep. 673, it 
 was held that the implied power to borrow money to 
 enable a municipality to execute the powers expressly 
 conferred upon it, if it exists at all, does not authorize 
 it to create and issue negotiable securities to be sold in 
 the market, and to be taken by a purchaser free from all 
 equities that might be set uj) by the maker. 
 
 In regard to the implied authority of a municipal corpo- 
 ration to borrow money for the purpose of carrying on or 
 making some public authorized improvement, a distinc- 
 tion is made between a municipal corporation proper, that 
 is,a public chartered corporation, and a g»o.s/-corporation, 
 such as counties, school districts, road districts and towns. 
 
 A'Vhile the weiglit of authority is in favor of the im- 
 plied power of municipal corporations proper to issue such 
 paper, the opposite doctrine is applied to g?fa.s/-corpora- 
 tions, and it is generally held that they must be expressly 
 authorized to issue such paper.^ 
 
 1 See § 3. I S. 673 ; Police Jiin' v. Britton. 15 
 
 2 Dill, on Mun. Coni. (4th od.) S Wall. 5G6 ; ]\Iayor "v. Ray. 19 Wall. 
 507; Fi-ancis V. Howard Co., 50 F. 1468. In the ahsence of statutory 
 R. 44 ; Merril v. Monticello, 138 U. 1 authority a county has no jiower to 
 
 35
 
 ^ "0 MUNICIPAL BONDS. [cil. II. 
 
 § 30. The case most often quoted to show the distinc- 
 tion is that of Clairbornc Co. v. Brooks, 111 U. S. 400, 40G. 
 The court below held that as the county had power to 
 erect a court-house, that power iinpHed the power to con- 
 tract out the work and to issue negotiable bonds of a 
 commercial character in payment thereof. Mr. Justice 
 Bradley, who delivered the opinion of the court, review- 
 ing the action of the lower court, said : 
 
 ' ' We cannot concur in this view. The erection of court- 
 houses, jails and bridges are among t>he ordinary po- 
 litical or administrative duties of all counties, and from 
 the doctrine of the charge that all counties have the 
 incidental i)ower, without any express legislative autho- 
 rity, to issue l)onds, notes and other commercial paper 
 in payment of county debts and charges, and if they 
 have this power, then such obligations issued by the 
 county authorities and passing into the hands of bona 
 Jide holders would preclude the county from showing that 
 they were issued improperly, or without consideration, or 
 for a debt already paid, and it would then be in the power 
 of such authorities to utter any amount of such paper 
 and to fasten irretrievable burdens upon the county with- 
 out any benefit received. Our opinion is that mere polit- 
 ical bodies constituted as counties are for the purpose 
 of local police and administration, and having the power 
 of levying taxes to defray all public charges created, have 
 no power or authority to make or utter commercial paper 
 of any kind, unless such power is expressly conferred upon 
 them or implied from some other power expressly given, 
 which cannot be fairly exercised without it." 
 
 This distinction is drawn between (/«as?'-corporations 
 and municipal corporations proper, because the latter are 
 clothed with the powers of local self-government and are 
 chartered, being created either by special charter, or by 
 the inhabitants of a certain district incorporating them- 
 selves under some genin-al law, while the former, espe- 
 cially counties, are su])divisions of the State, without a 
 
 issue bonds. Ci)lburne v. Chatta- ' R. 1042; Young v. Com'rs, 137 Ind. 
 nooga Western R. Co., 94 Tenn. 43 ; I 323. 
 Ball V. Preside Co., (Tex.) 29 S. W. I 
 36
 
 CH. II.] POWER TO MAKE LOANS, ETC. § 32 
 
 charter of incorporation, created for the purpose of assist- 
 ing the State in its government and subject to the control 
 of the State. 
 
 But as counties are now very often also clothed with 
 the power of local government over matters that con- 
 cern only the people within their limits, it may be that 
 the courts will not draw the distinction so sharply, 
 especially when the county authorities are directed or 
 authorized by statute to make some public improvement 
 affecting only the inhabitants of the county, and the 
 power to borrow or issue negotiable paper is not in direct 
 words authorized by the said statute. Should not the 
 greater power include all the lesser, and as borrowing 
 money is included in the latter, why should there be a 
 distinction ? 
 
 § 31. Position of the Federal courts. — It seems to be 
 the settled doctrine of the United States courts, when 
 they are free to follow their own inclination, and are not 
 bound to recognize the decisions of the court of the 
 last resort of the States, that municipalities have not the 
 implied power to issue negotiable instruments in. order 
 to carry out express powers, unless such implied power 
 is absolutely necessary to the accomplishment of the 
 express power. And since the decision in Brenham v. 
 German American Bank, supra, it can hardly be expected 
 that the Federal courts, when free to follow tlieir own 
 inclination, will hold that a municipal corporation has 
 the implied power to issue negotiable paper under any 
 circumstances. 
 
 §32. Summary of the law on the implied power. — 
 The law of the implied power of municipal corporations 
 to issue their negotiable instruments in order to 
 procure money wherewith to carry out their express 
 powers appears to be : 
 
 1. That a municipal corporation has the implied power 
 to issue its negotiable instruments, such as bonds, bills 
 and notes, in order to obtain the money necessary to 
 accomplish some express duty or express autliority, when 
 the amount necessary to carry out the same is so large as 
 to indicate that the same was not to be raised by the 
 
 37
 
 § 32 MUNICIPAL BONDS. [ClI. II. 
 
 slow process of taxation, and it is necessary for im- 
 mediate use, and there is nothing in the legislative act 
 imposing sucli duty or granting such authority or in the 
 general laws of the State that would indicate that the 
 money should be raised by taxation, and the implied 
 authority to borrow is not prohibited. This seems to be 
 the general rule of most of the States. 
 
 2, In the other States, while under the same circum- 
 stances the municipality may not issue its negotiable 
 instruments, yet it may issue its evidence of debt directly 
 to the creditor. Such evidence of debt is not negotiable 
 to the extent of cutting off equities even in the hands 
 of bona fide holders. 
 
 The decisions on this very vexed and important subject 
 
 cannot be reconciled, and it is, therefore, important that 
 
 proposed investors in municipal paper issued under such 
 
 circumstances carefully ascertain the decisions, on this 
 
 subject, of the court of last resort of the State in which 
 
 the municipality is located before investing in such 
 
 paper, though negotiable iu form. 
 38
 
 CHAPTER III. 
 
 PURPOSE FOR WHICH BONDS MAY BE ISSUED AND THEIR 
 ISSUE COMPELLED. 
 
 Section. 
 
 33 — A municipal corporation can 
 incur debt for a public pur- 
 pose only. 
 
 34 — Whether the purpose is jmb- 
 lic or private, is a question 
 for the courts. 
 
 35 — What purposes are public. 
 
 36 — Distinguishing features be- 
 tween public and private 
 purposes. 
 
 37 — What have been held to be 
 public purposes. 
 
 38 — Railroads are public pur- 
 poses. 
 
 39 — What are private puriwses. 
 
 Section. 
 
 40 — Bonds and other municipal 
 paper issued for a private 
 jiurpose are void. 
 
 41 — State constitutions prohibit 
 aid to private enterprises. 
 
 42 — Wlien a municipal corpora- 
 tion may be compelled to 
 issue its bonds or other 
 paper. 
 
 43 — When a municipal corpora- 
 tion cannot be compelled 
 to incur a debt, or issue its 
 paper — Rule laid down by 
 Cooley, J. 
 
 § 83. Municipal corporations can incur debt only for 
 
 public purposes. — It is well settled that a city, town or 
 other municipal corporation, as well as the State itself, 
 can only issue its bonds or other negotiable or non- 
 negotiable paper for public purposes.^ 
 
 When a municipality issues its bonds or other evidence 
 of indebtedness, or becomes indebted in any manner, it 
 imposes a burden upon its taxpayers, and their proj^erty 
 must pay such indebtedness in the form of a tax, or an 
 assessment in certain cases, and as the constitutions of 
 all the States contain a provision that the private property 
 of their citizens shall not be taken for public use without 
 just compensation, therefore, when a municipality under- 
 takes to become indebted for any purpose, and thus cast 
 a burden upon the private property of its inhabitants, 
 and ultimately to pay the debt from taxes or assessments 
 
 1 Loan Asso. v. Topeka, 20 Wall. I 398 ; 
 655 ; Camden v. Allen, 2G N. J. L. I iv. 
 
 Cooley on Taxation, chap. 
 
 39
 
 § 35 MUNICIPAL BONDS. [CH. III. 
 
 collected from such private property, the purpose or ob- 
 ject must be a public one, in wliich the inhabitants of 
 the municipality are interested, and, as said by Chief 
 Justice Black in case of Sharpless v. Mayor etc. of Phil- 
 adelphia, 21 Pa. St. U7 : 
 
 "The Legislature has no constitutional right to create 
 a public debt, or to levy a tax, or to authorize any munici- 
 pal corporation to do it in order to raise money for a 
 mere ])rivate purpose. 
 
 " No such authority passed to the General Assembly by 
 the general grant of legislative power. This would not 
 be legislation. Taxation is a mode of raising money for 
 public purposes. When it is prostituted to objects in no 
 way connected with the general interest or welfare, it 
 ceases to become taxation and becomes plunder. 
 
 '* Transferring money from the owner of it into the 
 possession of those who have no title to it, though it be 
 done under the name and form of a tax, is unconstitu- 
 tional, for all the reasons which forbid to usurp any other 
 power not granted to them." 
 
 § 34. AVhethertho purpose of the law is public or pri- 
 vate is a question of constitutional law to be determined 
 by the court, and this is now the settled rule,^ although 
 several early cases held that the Legislature was the sole 
 judge of the expediency of such laws.^ 
 
 It would appear that the rule by which to determine 
 whether a purpose is public or private, that is, one which 
 the liCgislature may authorize the levying of taxes, is 
 furnished not so much by the law ashy the general con- 
 sideration of public ])()licy and political economy. ^ 
 
 § 35. Wliat purposes are public. — The Legislature 
 may authorize the issue of bonds for all public purposes, 
 all such purposes and objects as are of a pul)lic charac- 
 ter and are necessary for conducting the affairs of the mu- 
 nicipality, for the general welfare of tlie inhabitants, or 
 even for their enjoyment and recreation, and these are 
 
 1 In re Townsend, 39 N. Y. 171 ; 
 Durroughs on Taxation, §§ 13, 23, 
 24. 
 
 2 Spring V. Russell, 7 Me. 273, 292. 
 
 40 
 
 3 Perry v. Keene, 56 N. H. 514 ; 
 15 Am. & Eng. Ency. of Law, p. 
 1241.
 
 CH. III.] PURPOSE FOR WHICH BONDS ISSUED, ETC. § 35 
 
 public purposes. Such, for instance, as the erection of a 
 city hall, of police stations, of school-houses, fire-engine 
 houses, court-houses, jails, almshouses, insane asylums, 
 hospitals and other municipal buildings, of public libra- 
 ries ; the purchase of lands for such buildings and for 
 parks ; the construction of streets and roads, of sewers, of 
 bridges ; the purchase of lands for roads ; the construc- 
 tion of municipal water, gas or electric works for public 
 use ; and the many other public works as well as public 
 necessities required for municipal use. 
 
 Sometimes it is a very nice question whether the pur- 
 pose is public or private, and Mr, Justice Folger, in Weis- 
 merv. Douglass, C4N.Y. 91, said on this point : " When 
 we come to ask in any case what is a public purpose the 
 answer is not always ready, not easy to be found. 
 
 "It is to be conceded that no pinched or meagre sense 
 may be put on the words, and that if the purpose desig- 
 nated by the Legislature lies so near the border line as 
 that it may be doubtful on which side it is domiciled, the 
 court may not set their judgment against that of the 
 lawmaker," 
 
 Mr. Justice Miller, in case of Loan Asso. v. Topeka, 20 
 Wall. G55, said on this subject : 
 
 " In deciding whether, in the given case, the object for 
 which the taxes are assessed falls on the one side or other 
 of this line (between public or private purpose), they 
 must be governed mainly by the course and usage of 
 the government, the object for which taxes have been 
 customarily and by long course of legislation levied, 
 what objects or purposes have been considered necessary 
 to the support and for the proper use of the government, 
 whether state or municipal. 
 
 " Whatever lawfully pertains to this, and is sanctioned 
 by time and the acquiescence of the people, may be held 
 to belong to the public use, and proper for the mainte- 
 nance of good government, though this may not be the 
 only criterion of rightful taxation." ^ 
 
 ^ For public purposes, see Jenkins I Cheatham, 43 Ga. 258; 15 Am. & 
 V, Andover, 103 Mass. 1)4 ; Tyler v. j Eng. Ency. of Law, p. 124G n, 
 Beecher, 44 Vt. 648 ; Wilkinson v. j 
 
 41
 
 ^ 35 MUXICIPAL BONDS. [CH. III. 
 
 Chief Justic Black, in the case of Sharpless v. Mayor 
 of Philadelphia, sxjjra, speaking of the purposes for which 
 taxes could be lawfully levied, has given a comprehensive 
 description of public purposes. 
 
 He said: "Taxes may be imposed for roads of all 
 kinds, canals and bridges, that there may be facilities for 
 transportation of freight and for travel ; for public schools 
 and colleges, that the people may be educated ; for public 
 libaries, that their means of improvement may be in- 
 creased ; for the poor, the dumb, the blind, the insane, 
 lest they suffer from want ; for the police of the State, 
 in regulations for the preservation of health or the de- 
 tection of crime ; for courts of law, that individual rights 
 may be protected and enforced, and that crime, when 
 detected, may receive its fitting punishment; for the 
 preservation of peace and the protection of the country 
 from foreign enemies ; to aid, encourage and stimulate 
 commerce, domestic and foreign, by the establishment 
 of mints, postage s.ystem and maintaining navies to keep 
 open the highways of nations ; to encourage citizens 
 in the defence of their country, by suitable rewards and 
 mementoes for past services in times of war, or by boun- 
 ties for enlistment for future services ; and for the pro- 
 motion of arts and sciences." 
 
 Where the statute of some of the States permits mu- 
 nicipalities to aid in the construction of any railroad or 
 other work of internal improvement, it has been re- 
 peatedly held that such authority does not include pub- 
 lic buildings.^ And where the statute of some of the 
 States authorizes municipalities to issue bonds in aid of 
 any " internal improvements," such general authority has 
 been held to authorize the issue of bonds for a toll bridge,^ 
 
 ^ Dawson Co. v. McNaniar. 10 such authority scliool-liouses could 
 Neb. 276 ; Lewis v. Sherman Co. 1 be erected and negotiable bonds 
 Com'rs, o Fed. Rep. 209. "Wliere a • issued for the purpose of obtaining 
 municipality was autliorized to in- 
 cur an indebtedness for any muni- 
 cipal improvement with the con- 
 sent of the voters, it was held under 
 42 
 
 the mone}'. In re Wetmore, 99 
 Cal. 146. 
 
 2 Dodge Co. Com'rs v. Chandler, 
 96 U. S. 205.
 
 CH, III.] PURPOSE FOR WHICH BONDS ISSUED, ETC. § 36 
 
 waterworks for the city/ and even for aid to a water- 
 power for a grist mill.^ 
 
 In this latter case, it is difficult to understand how the 
 purpose can be deemed to be a public one, because the in- 
 habitants at large of the municipality have no common 
 interest in the purpose, and the benefit or aid is given to 
 the owners of the mill alone. 
 
 § 36. Bistingnishiiig features between puMic and pri- 
 vate purposes. — While no definition can be given that 
 will exactly distinguish those purposes which are public 
 from those that are private, it may safely be said that 
 the purpose is public when all the inhabitants are inter- 
 ested in the work, as public schools, where the children 
 of any inhabitant may attend ; libraries, because for the 
 education of the people, and open to all alike ; waterworks 
 controlled by the municipality, because every resident 
 may have water ; almshouses and insane institutions, 
 because open to all who are unfortunate enough to 
 require their aid or care, likewise hospitals for same 
 reason ; electric and gas works, because necessary to light 
 the public streets and institutions, and enjoyed by all the 
 inhabitants ; police and fire departments, as well as the 
 necessary buildings to house and localize them, for the 
 ])rotection and convenience of the public ; courts to en- 
 force the law ; and so one can enumerate all the known 
 public conveniences and necessities to be found in a city, 
 county and town ; but in all the public works or purposes 
 it will be found that the municipality has the care and 
 supervision of the same, and that the humblest citizen is 
 entitled to the same enjoyment, or same care and protec- 
 tion, and in the same respect, as the most influential. The 
 distinguishing feature between a private and a public 
 work or purpose is that, in the former case, the super- 
 vision and gains are vested in, and received by, but a few 
 of the inhabitants, and sometimes by non-residents of the 
 municipality, while in a pul)lic work or purpose the care and 
 
 1 State V. Babcock, 19 Neb. i S. 363. Soo contra, Osborne Co. v. 
 230. I Adams, lOG U. S. 181. 
 
 - Blair V. Gumming Co., Ill U. 
 
 43
 
 MUNICIPAL BONDS. 
 
 [CH. TIT. 
 
 supervision are lodged in public officers, and the gains, if 
 any, belong to tlie municipality.^ 
 
 § 37. What have heeii held to be public purposes. — 
 The issue of bonds or the levy of taxes for the following 
 purposes have been held to be for public purposes. High- 
 ways and streets,^ toll bridges,^ public bridges,* sewers 
 in cities and towns,^ waterworks,^ providing for fire en- 
 gines,' public buildings,^ cemeteries and parks,^ construc- 
 tion of drains to promote health, ^° bounty offered to en- 
 courage enlistment, ^^ schools and colleges, ^^ docks and 
 wiiarves,^^ charitable institutions under control of private 
 persons, if municipalities can send persons there for care,^^ 
 gas and natural gas works, ^^ grading for drainage for 
 public health, ^'^ drainage for swamp lands for same pur- 
 pose, ^^ a public grist-mill, and improving water-power of 
 a river. ^^ See cases cited in Sedg. on Const, of Stat. & 
 Const. Law, pp. 440-7 cf seq. 
 
 § oS. Railroads are public purposes. — It is the now w^ell 
 settled doctrine that municipalities may, when authorized 
 by statute, and not restrained by the State constitution, 
 issue their bonds to aid in the construction of railroads 
 and canals, either by w\ay of donation or by subscribing for 
 stock. This is upon the ground that railroads and canals 
 are indispensable to the public interests and public pur- 
 poses, and therefore the power of eminent domain may be 
 
 1 Eailroads and canals are lield 
 to be public purposes, and seem to 
 be the only exception to tliis rule. 
 See i< 38. 
 
 2 People V. Brooklyn, 4 N. Y. 420. 
 
 3 Dodge V. Chandler, 94 U. S. 
 205. 
 
 -» Union Co. v. Colfax Co., 4 Neb. 
 450. 
 
 5 State V. Jersey City, 1 Vrooni, 
 148. 
 
 « Rome V. Cabot, 28 Ga. 50. 
 
 "> People V. Breshire. 80 111. 428. 
 
 8 Grecly v. People, CO 111. 19. 
 
 9 Park Coni'rs v. Detroit, 28 Mich. 
 228. 
 
 i» Tide Water Co. v. Coster, 3 C. 
 E. Gr. (N. J.) 518. 
 44 
 
 " Booth V. Woodbury, 32 Con. 
 128. 
 
 ^2 Merrick v. Inhabitants of Am- 
 herst, 12 Allen, 500. 
 
 1=5 Eaton R. R. Co. v. Central R. 
 R. Co.,52N. J. L. 267. 
 
 " Sheplierd's Fold v. New York, 
 7 Am. & Eng. Corp. Cas. 387. 
 
 15 Blooin field C. Co. v. Richard- 
 son, 63 Barb. 447. 
 
 16 Dingley v. Boston, 100 Mass. 
 544, D. 
 
 1^ Egyptian Levee Co. v. Hardin. 
 27 Mo. 495 ; People v. Rearing, 6 
 Vr. (N. J.) 497. 
 
 18 Blair v. Cuming Co., Ill U. S. 
 363.
 
 CH. III.] PURPOSE FOR WHICH BONDS ISSUED, ETC. § 40 
 
 exercised and private lands taken for their corporate 
 purposes, and further, because the municipality granting 
 such aid receives or is supposed to receive a peculiar benefit 
 from their construction, and because the object to be ac- 
 complished is so obviously connected with the munic- 
 ipality and its interest, as to conduce in a special manner to 
 its prosperity and advancement.^ 
 
 § 39. What are private purposes. — The Legislature can- 
 not grant authority to a municipality to issue bonds in 
 aid of a private enterprise. Although the object may be 
 a most commendable one, such as to relieve or aid a large 
 number of citizens who may have been ruined by disaster, 
 such as a conflagration or an epidemic,^ or to aid in the 
 erection of mills or other private buildings,^ or by the 
 erection of a building to be used in part by a private or- 
 ganization.^ 
 
 The policy of the law is against the support of private 
 enterprises by the State, or any of its component parts, and 
 prohibits the aid of municiiDalities as a jDartner or other- 
 wise in purely private ventures.^ 
 
 § 40. Bonds issued for private purposes are void. — The 
 Legislature has no right to authorize or compel a munic- 
 ipality to levy taxes to be used in aid of a manufacturing 
 enterprise of any kind, conducted by a private corpora- 
 tion, or by individuals, or any other private enterprise, and 
 therefore any law which permits the issue of bonds or 
 other paper for such purpose is invalid, and the bonds or 
 other paper are void in the hands of even a bona fide 
 holder.^ 
 
 Mr. Justice Miller, in Loan Asso. v. Topeka, said : " To 
 
 1 See subject, Railroad Aid Bonds, 
 § 2G7 et seq. 
 
 2 Fieldman v. Charleston, 15 Am. 
 & Eng. Corp. Cas. 343 ; Lowell v. 
 Boston, 11 Mass. 4G3 ; State v. 
 Osawkee, 14 Kan. 418. 
 
 3 Wessmer v. Jay, G4 N. Y. fil, 
 
 * Kingman v. Brockman, 26 N. 
 E. R. 998. 
 
 ^ For reference to a number of 
 cases on this subject, see Vol. XV. 
 
 Am. & Eng. Ency. of Law, p. 1234 ; 
 Coatesv. Campbell, (Minn.) 18 Am. 
 & Eng. Corp. Cas. 429; Parkers- 
 burgh V. Brown, 2 Am. & Eng. 
 Corp. Cas. 263 ; Mather v. Ottawa, 
 (Til.) 11 lb. 248. 
 
 '"• Loan Asso. v. Topeka. 20 AVall. 
 65") ; Broadliead v. Milwaukee, 19 
 Wis. 624 : Ottawa v. Carey, 108 U. 
 S. 110. See also cases last cited. 
 
 45
 
 § 40 MUXICIPAf. r.ONDS. [CH. Til. 
 
 lay with one hand the power of the government on the 
 property of the citizen, and with the other, to hestow it 
 upon favored individuals, to aid private enterprises and 
 build up private fortunes, is none the less a robbery be- 
 cause it is done under the forms of law and is called ' tax- 
 ation.' This is not legislation, it is a decree under legis- 
 lative forms." 
 
 In the case of Allen v. Inhabitants of Jay, CO Me. 124, 
 the town, under an enabling act of the Legislature, issued 
 its bonds in the sum of $10,000, for the encouragement 
 of a manufacturing firm in the town ; the bonds were de- 
 clared to be invalid because issued for a private purpose. 
 
 Mr. Justice Appleton, who delivered the opinion of the 
 court, said: "If there is any proposition about which 
 there is entire and uniform weight of judicial authority, 
 it is that taxes are to be imposed for the use of the people 
 of the State in varied and manifold purposes of govern- 
 ment, and not for private objects, or the special benefit of 
 individuals. Taxation originates from and is imposed by 
 and for the State. The town of Jay stands in the same 
 relation to this new mill as to all others, as far as regards 
 any public benefit to be derived therefrom. 
 
 "All labor conduces to the i)ublic benefit, but because all 
 labor, all productive industry, conduces to the public- 
 benefit, does it follow that tlu; people are to be taxed for 
 the benefit of one man, or of one special kind of manu- 
 facturing ? The sailor, the farmer, the mechanic, the 
 lumberman are equally entitled to coerced loans, to enable 
 them to carry on their business with Messrs. Hutchings 
 and Lane (the persons aided). Our government is based 
 upon equality and right. The State cannot discriminate 
 among occupations, for a discrimination in favor of one 
 is a discrimination in favor of all others." 
 
 In Parkersburg v. Brown, 100 U. S.487, Blatchford, J., in 
 holding bonds issued to aid a private enterprise void, said : 
 "There having been a total want of power to issue the 
 bonds originally under any circumstances, and not a mere 
 failure to comply with the prescribed requirements or con- 
 ditions, the case is not one for applying to the city under 
 
 any state of facts any doctrine of estojDpel or ratification, 
 46
 
 CH. III.] PCRPOSE FOR, WHICH BONDS ISSUED, ETC. § 41 
 
 by reason of its having* paid some instalments of interest 
 on the bonds, or by reason of any of the acts of its officers 
 or agents in dealing with the property covered by the 
 trust deed. No such acts can give validity to the 
 statute or to the bonds, howeverthey may affect the prop- 
 erty dealt with, or the relation of the city to such prop- 
 erty." 
 
 In this case the Legislature of West Virginia authorized 
 the city of Parkersburg to issue its bonds to aid persons 
 in a manufacturing company. 
 
 In the case of Hackett v. Ottawa, 09 U. S. 86, bonds, al- 
 though issued to aid in a private enterprise, were held 
 valid because they appeared on their face to have been 
 issued for municipal purj^oses, and passed into the hands 
 of innocent purchasers for value without notice of their 
 true object.^ The effect of recitals, when the face of the 
 bonds recite their purpose, is further treated in another 
 part of this work.^ 
 
 § 41, State constitutions prohibit aid in private 
 enterprises. — The constitutions of the following named 
 States prohibit counties, towns and municipal corpora- 
 tions from giving money or other property to any in- 
 dividual or private corporation whatever, viz, : New 
 York, New Jersey, New Hampshire, Pennsylvania, Ohio, 
 Indiana, Illinois, Wisconsin, Missouri, Texas, Arkansas, 
 Oregon, California, Georgia, Alabama, Florida, Louisiana 
 and Colorado. 
 
 The constitutions of the following States prohibit 
 counties, towns and municipal corporations from loaning 
 money or credit to private corporations, viz, : All tlio 
 States above named except Wisconsin. The prohibi- 
 tion is also found in the constitutions of Tennessee and 
 Nevada. 
 
 The constitutions of New Jersey, New Hampshire, 
 Louisiana, Colorado and California prohibit counties, 
 towns and municipal corporations from becoming a 
 surety, and the constitutions of all the States nainod 
 
 1 See also Ottawa v, Carey, 108 I = See §§ 217, 218, 219, 
 U. S. 110-118. I 
 
 47
 
 § 42 MUNICIPAL BONDS. [CH. IIT. 
 
 prohibit municipal corporations from becoming stock- 
 holders in private corporations. 
 
 It is held that when the constitutional prohibitions 
 prohibit the Legislature of the State from authorizing 
 counties, towns and municipal corporations to aid private 
 enterprises in any manner whatsoever, the statutes in 
 existence relating to such powers by municipal corpora- 
 tions are not repealed, and that the effect of theado[)ti()n 
 of such a prohibitory constitution is prospective ; ^ but if 
 the constitution itself prohibits the municipal corporation 
 from lending its aid or becoming interested in a private 
 enterprise, such proliibition takes effect at once, and all 
 statutes authorizing such aid and in conflict with the 
 constitutions are immediately repealed, unless private 
 rights have become vested thereunder.^ 
 
 § 42. When a municipality may be compelled to 
 issue its bonds or other paper. — A municipal corporation 
 may be compelled by the Legislature, unless restrained 
 by the constitution, to issue its bonds for the settlem.ent 
 of its indebtedness,^ when it has become indebted for 
 some public work, even though the work was done with- 
 out authority, but the Legislature cannot compel the 
 municipality to pay a claim which the city is under no 
 moral obligation to pay,* although it may compel the 
 payment of a claim, or the issue of bonds to pay the 
 same, when the municipality is not legally liable for it 
 and the same is not enforcible at law.^ 
 
 The corporation may also be compelled to issue its 
 bonds for the construction of work, where the work 
 sought to be compelled to be done is of a public nature, in 
 which not only the inhjibitants of the municii)ality but 
 those of the State at large are interested. Such, for in- 
 stance, as the building of abridge or of a highway for the 
 
 1 Sweet V. Syracuse, 27 N. E. R. 
 1081 ; Gillman v. Davis Co.. (Ky.) 
 U A. W. R. 838: Red Rock v. 
 Henry, lOG U. S. 596. 
 
 2 Kelly V. Milan, 127 N. S. : 
 Aspinwall v. Coni'rs, 22 How. 
 4C4. 
 
 3 Town of Guilford v. Chenango 
 
 48 
 
 Co., 13 N. Y. 143 ; New Orleans v. 
 Clarke, 9.1 U. S. G54. 
 
 * Blanding v. Burr, 13 Cal. 843 ; 
 1 Dill. ?*Iun. Corp. ^ 75 (4th ed.). 
 
 5 O'Hara v. State, 102 N. Y. 146 ; 
 New Orleans v. Clark, 95 U. S. 634 ; 
 Am. & Eng, Ency. Law, vol. 15, p. 
 1248.
 
 CH. III.] PURPOSE FOR WHICH BONDS ISSUED, ETC. § 43 
 
 convenience of the travelling puljlic ; of sewers, or a 
 system of drainage for the protection of the health of 
 the inhabitants, and also of the snrrounding country.^ 
 
 § 43. When a municipal corporation cannot be com- 
 pelled to incur debt. — A municipal corporation can- 
 not be compelled to aid a railroad against its will.^ When, 
 however, a municipality acts under a compulsory statute 
 which commands the doing of a work in which the public 
 at large, those outside of the municipality, are not in- 
 terested, the act is construed as permissive, and the 
 bonds issued to carry out the purposes of the act are 
 valid.3 
 
 A municipality cannot be compelled to purchase or 
 contract for, or issue its bonds for, or become indebted 
 for, local conveniences, such as water, electric or gas 
 works, public buildings, libraries, parks and like purely 
 local matters, in which the inhabitants of the municipality 
 are alone interested.* In all such instances the munici- 
 pality is to be regarded as a constituent, and the Legis- 
 lature has no more right to compel it to incur such a 
 debt or make such an improvement than it would have to 
 compel a private individual to do so. It, of course, may 
 permit such improvement, but cannot compel them.^ 
 
 The able opinion of Cooley, J., in the Detroit Park Case, 
 People exrel. Park Commissioners v. Common Council of 
 Detroit (on mandamus to compel the council to raise 
 money to pay for lands for the park), 28 Mich. 228, fully 
 illustrates the general doctrine of the courts on this sub- 
 ject, in which he in part said : 
 
 " In all matters of general concern there is no local 
 right to act independently of the State . . . and tbe 
 
 1 People V. Flagg, 40 N. Y. 401 ; I * People v. Batchellor, 53 N. Y. 
 Dill, on Miin. Corp. (4th ed.) § 73 ; 128; Aitken v. Town of Randall, 
 Perry v. Keene, 56 N. H. 514 ; j 31 Vt. 226 : Dill. :Mun. Corp. Ch. 
 Coolej' on Taxation (2(1 ed.) 688. ' IV. ; People v. Mayor of Chicago. 
 
 2 People V. Batchellor, 53 N. Y. 51 111. 17 : 15 Am. & Eng. Ency. of 
 128. See, however, I^anghorne v. Law. 091 and 1248. 
 
 Scott, 20 Gratt. 661. \ & Western Sav. Fund Soo. v. 
 
 8 Williams v. Dnanosburgh, 66 Philadelphia, 31 Pa. 183; Cooley 
 N. Y. 129 ; Cairo Pt. R. Co. v. Sparta, on Const. Lim. 230-1. See Black's 
 77 111. 50.'}, I Constitutional Law, S 118. 
 
 4 49
 
 § 43 MLNlCirAL BONDS. [CH. III. 
 
 State may exercise compulsory authority, and enforce 
 the performance of local duties, either hy employini^: 
 local officers for the purpose, or through agents or 
 officers of its own appointment. . . . The proposition 
 which asserts the amplitude of legislative control over 
 municii^al corporations, when confined, as it should be, to 
 such corporations as agencies of the State in its govern- 
 ment, is entirely sound. They are not created exclusively 
 for that purpose, but have other objects and purposes 
 peculiarly local, and in which the State at large, except in 
 conferring the power and regulating its exercise, is 
 legally no more concerned than it is in the individual and 
 private concerns of its several citizens. Indeed it would 
 be easy to show that it is not from the standpoint of 
 State interest, but from that of local interest, that the 
 necessity of incorporating cities and villages most dis- 
 tinctly appears. 
 
 It is a fundamental principle in the State, recognized 
 and perpetuated by express provision of the constitution, 
 that the people of every hamlet, town and city of the 
 State are entitled to the benefits of local self-govern- 
 ment. But authority in the Legislature to determine 
 what shall be the extent of the capacity in a city to 
 acquire and hold property is not equivalent to, and does 
 not contain within itself, authority to deprive the city of 
 property actually acquired by legislative permission. 
 
 And when a local convenience or need is to be supplied, 
 
 in which the people of the State at large, or any portion 
 
 thereof outside tlie city limits, are not concerned, the 
 
 State can no more by process of taxation take from the 
 
 individual citizens the money to purchase it, than they 
 
 could, if it had been procured, appropriate it to the 
 
 State use. . . . Fi-om the very dawn of our liberties the 
 
 principle most unquestionable of all has been this : that 
 
 the people shall vote the taxes they are to pay, or be 
 
 permitted to choose representatives for the purpose." 
 50
 
 CHAPTER IV. 
 
 POWER OF MUNICIPAL OFFICERS — BOARDS AND COMMIS- 
 SIONS — FRAUD AND IRREGULARITY OP PUBLIC OF- 
 FICERS. 
 
 Section. 
 
 44 — Where authority of public 
 officers must be found. 
 
 45 — Persons dealing with them 
 must ascertain their au- 
 thority. 
 
 46 — Acts of de facto officer, who 
 are such. 
 
 47 — When no legal office there 
 can be no de facto officer. 
 
 Section. 
 
 48 — Boards and commissions, 
 their powers to issue muni- 
 cipal paper. 
 
 49 — Misconduct, fraud, irregular- 
 ity of municipal officers — 
 Effect of. 
 
 50 — AVhen the corporation will be 
 bound by the acts of its of- 
 ficers. 
 
 § 44. Where authority of public officers must he 
 found. — The authority of a municipal officer to bind the 
 corporation, especially by executing bonds and other 
 instruments for the payment of money, must be found 
 in the charter of the municipality, or in some other legis- 
 lative enactment, or in the proceedings of the municipal- 
 ity itself. In fact the same may be said of every public 
 officer, and persons dealing v^^ith a public officer must take 
 notice of the extent of his powers at their peril. ^ 
 
 The authority of public officers being created by law, or 
 being a matter of public record, of which every person 
 interested is bound to take notice, it is presumed that all 
 persons having occasion to deal with them have notice 
 of their authority, and it is not enough, therefore, for 
 such persons to rely upon any mere presumption as to 
 the officers' authority, but they must see to it that it is 
 in fact sufficient for the assumed purpose.^ The powers 
 of public officers can be ascertained. The}' are matter of 
 public record, to be found in either the statutes or the 
 proceedings of the municipalities ; the powers of private 
 
 1 Bissel V. Spring VaUey, 110 U. 
 S. 162. 
 
 2 Mecham on Public 
 506. 
 
 Officers, § 
 51
 
 J^ 45 MUNICIPAL BONDS. [('II. IV. 
 
 agents cannot always be ascertained ; they are known to 
 the principal and agent alone ; therefore, a private agent 
 may bind his principal against his will, althongh by so 
 doing he violates specific instructions, provided the act 
 done be within the general scope of the agent's authority. 
 Tlie principal in such cases is bound, because third 
 persons, acting in ignorance of the violation, have 
 been induced to enter into a contract and have acquired 
 vested rights. But persons dealing with pubHc agents 
 do not acquire any right, if it turns out that the 
 l)ublic agent exceeded his authority or acted without 
 authority. 
 
 As said by Loring, J., in case of Pierce v. United 
 States, 1 Nolt & H. 270 : "By the law of agency, at the 
 common law, there is this difference between individuals 
 and the government : the former are liable to the extent 
 of the power tliey haA^e apparently given their agents, 
 wliile the government is liable only to the extent of the 
 power it has actually given to its officers." 
 
 In Anthony v. Jasper Co., 101 U. 8. 693, Chief Justice 
 Waite said : " The public can act only through its author- 
 ized agents, and it is not bound until all who are to par- 
 ticipate in what is to be done have performed their re- 
 spective duties. 
 
 " The authority of a public agent depends upon the 
 law as it is when he acts. 
 
 " He has only such powers as are specifically granted. 
 Purchasers of municipal securities must always take the 
 risk of the genuineness of official signatures of those who 
 executed the paper they buy." 
 
 §45. Persons rtealiiig with municipal officers mnst 
 ascertain their authority. — Without further enlarging 
 upon this subject, it will be sufficient to say that who- 
 ever deals with public officers, or in fact with a muni- 
 cipal body, must ascertain for himself, and at his peril, 
 that the officers or body have the power to do the act they 
 assume to do, and if it turns out that the act done was 
 unauthorized, and if the act was tho issue of bonds or 
 other evidence of municipal indebtedness, the loss will 
 
 fall upon the holder of such instrument, and no recitals 
 52
 
 CH. IV.] POWER OF MUNICIPAL OFFICERS, ETC. § 47 
 
 will estop the municipality to show this want of 
 power. ^ 
 
 §10. Acts of (le facto officers who are such. — A de 
 facto officer is one who is in office by some color of right, 
 as where he has been appointed or elected and has failed 
 to conform to some condition or requirement, as to take 
 an oath, give bonds, or the like ; where he holds office 
 under a known election or appointment, but is not eli- 
 gible, or the appointment was irregularly made ; and even 
 when he holds office without a known appointment or 
 election, but exercises the duties of such office and induces 
 peoj^le to submit to or invoke his action ; or where he 
 holds office under color of an appointment or election by, 
 or pursuant to, an unconstitutional law, before it is 
 declared to be unconstitutional ; or where he holds over 
 after his term.^ It is the color of right that distinguishes 
 the c7e /acfo officer from the mere intruder, who is one 
 who, without lawful title, without an appointment or 
 election to the office, without color of right to it, enters 
 upon the office and assumes to act. His acts are void. ^ 
 
 § 47. There can he no officer de facto where therein 
 no legal office, and this point was raised and settled in 
 the United States Supreme Court in the case of Norton 
 V. Shelby County, 118 U. S. 425. Under an act of the 
 Legislature of Tennessee power was given to the county 
 courts to issue bonds to aid railroads. Before the power 
 was executed in this particular case, another act was 
 passed which abolished the county courts and vested its 
 power, including the issue of these bonds, in a board of 
 commissioners ; the bonds in the suit were issued by the 
 board, and afterwards the Supreme Court of the State 
 held the act abolishing the county court and establishing 
 in its stead the board of commissioners, to be uncon- 
 stitutional. The Supreme Court of the United States, in 
 
 1 Bissell V. Spriiif? Valley, 110 U. 
 S. 1G2; Coler v. Cloburne Co., 131 
 U. S. 1G2; Merchants' Bank v. 
 
 2 State V. Carrol, 38 Conn. 440 ; 
 Wilcox V. Smith, 5 Wend. (N. Y. ) 
 331 ; Hamlin v. Kassafer, 15 Orc- 
 
 Bergen Co., 115 U. S. 284 ; Brown I gon, 45G. 
 
 V. Bon Homme Co., 4G N. W. R. | 8 McCraw v. Williams, 33 Gratt. 
 
 173 ; Travellers' Ins. Co. v. Oswego, (Va.) 510. 
 
 55 Fed. Rep. 3G1. ' 
 
 53
 
 § 48 MUNICIPAL BONDS. [CH. TV. 
 
 the suit on the bonds, lu^ld them to be void because, as 
 there was no office, no such board of commissioners, the 
 act establisliing the board being unconstitutional, there 
 could be no officer de facto. The court said : "An un- 
 constitutional act is not a law ; it confers no rights ; it 
 imposes no duties ; it affords no protection ; it creates no 
 office ; it is in legal contemplation as inoperative as 
 though it had never passed.'' 
 
 Although there can be no de facto officer where there 
 is no legal office, yet there can be a de facto officer 
 though he hold office under an unconstitutional act, if 
 there be a legal office.^ 
 
 The title of a de facto officer cannot be attacked col- 
 laterally, nor can the validity of his acts be questioned 
 in proceedings to which he is not a party." 
 
 The acts of de facto officers are as binding upon the 
 corporation, if done within the scope and apparent au- 
 thority of the officer, as if done by an officer legally elected 
 and qualified for the office and in full possession of it ; ^ 
 and the same principle extends to a de facto council or 
 other legislative body of a municipal corporation, and 
 bonds issued by such a body are valid.* 
 
 § 48. Boards and commissions. — -Very often boards or 
 commissions are established by law in large cities, for the 
 purpose of placing the control of certain departments of 
 the municipal government, as the educational depart- 
 ment, the control of parks, of wharfs, of the police, and 
 of street improvements and the like, in the hands of 
 such board or commission, and the acts establishing such 
 board or commission often authorize them to borrow 
 money and give evidence of debt in either the city's cor- 
 porate name or in that of the board or commission. 
 Such acts are constitutional, and if the authority so given 
 
 iCole V. Black River Falls. r)7 ! * National Life Ins.Co. v. Board of 
 Wis. 110. i Ed., 63 FimI. Rep. 773 ; Decorah v. 
 
 •^ Stockle V. Silsbee, 41 IMich. 015 ; ] Biillis, 25 Iowa, 12 ; People v. Bart- 
 Plymouth V. Painter, 17 Conn. 585. j lett, 6 Wend. (N. Y.) 422 ; Scovillo 
 
 3 Mecham on Public officers, § v. Cleveland, 1 Ohio St. 126. 
 328, and cases cited. Coler v. 
 Dwight Tp., 55 N. W. R. 587. ' 
 
 54
 
 Cll. IV.J POWER TO MUNICIPAL OFFICEIIS, ETC. § 49 
 
 is broad enough in scope and the enabling act constitu- 
 tional in form and purpose, bonds or other evidence of 
 corporate debt issued by such a board or commission are 
 as valid as if issued by the legislative body of the 
 city, and are controlled by the same general rules of 
 law.^ 
 
 These boards or commissions are corporations created 
 for municipal purposes,^ although they are not usually 
 regarded as embraced within the term " municipality," or 
 "municipal corporations;"^ but it has been held that 
 where a park commission was endowed with power to 
 sue and be sued, and have a corporate seal, pass ordi- 
 nances, employ a police force, levy taxes, and generally 
 to perform all municipal powers necessary to maintain 
 the parks of a city, that such a corporation was a mu- 
 nicipal and not a gi^a.si-municipal corporation.* 
 
 Often the statute pursuant to which the board or com- 
 mission is appointed, or some general or special act, 
 requires the legislative body of the municipal corporation 
 to issue bonds, the proceeds thereof to be placed to the 
 credit of such board or commission, or turned over to it, 
 to be expended for the public purposes under its charge. 
 Usually these statutes are so drafted that the board or 
 commission designates the amount it deems necessary for 
 some special public improvement under its charge, and 
 the legislative body is then required to issue the bonds to 
 obtain the mone}', and if tliey refuse, manchainis will lie 
 to compel the legislative board to issue and sell the 
 bonds and pay over the proccnnls. 
 
 § 49. Misconduct, fraud or irregularity of municipal 
 officers. — While it is a general rule that municipal corpo- 
 rations are not bound by tbe torts of their officers, nor by 
 their acts done idfra vires, yet when the servants or 
 agents of such a corporation act within their general 
 powers, the municipal corporation, like a private person 
 
 1 Fitzgerald v. Wnlkor. (Ark.) r->r^ 
 Ark. 148 ; Orvis v. Board of Park 
 Com'rs, Des Moines, 56 N. AV. R. 
 249 ; Wost Cliicaffo Park Com. v. 
 Cliicago, lo": 111. 392. 
 
 2 Dill. onMun. Corp. (4tli ed.)j5 49. 
 
 8 Fitzgi^rald v. Walkor, (Ark.) 17 
 S. W\ R. 702 ; 5.") Ark. 148. 
 
 * West riiica.ijo Park Com'rs, v. 
 Chicago. 152 III. :j92. 
 
 55
 
 § 50 MUNICIPAL BONDS. * [CII. IV. 
 
 or corporation, is bound by such acts.^ The fraud, mis- 
 conduct or irregularity of municipal officers or agents 
 cannot be set up as a defence against a bona fide holder 
 of municipal bonds. ^ 
 
 It is a general rule that when the agent has authority, a 
 person dealing with him will be protected from the 
 irregularities of the agent, when tlie act is done within 
 the general scope of the agent's power. 
 
 It being shown by other evidence that the agency 
 existed, and that the act Avas done within the general 
 scope of the power, the princii:)al is bound by the represent- 
 ations of the agent, the truth or falsity of which the 
 party dealing with him had no certain means of ascer- 
 taining.^ Where the statute avithorizing commissioners 
 to issue certain bonds, provided further that but ten per 
 cent should be made payable each year, and in point of 
 fact more than that amount was made payable, the 
 court held that a bona fide holder was not bound b}^ the 
 acts of the commissioners in this respect, and that he had 
 the right to assume that the officers would act as required 
 by law, and that he was not bound to examine the entire 
 series, if such a thing were possible, to see that no more 
 bonds were issued in a single year than the statute per- 
 mitted.* 
 
 § 50. When the corporation will be bound. — When 
 the municipal corporation leaves it to its officers or 
 agents to carry out certain provisions or certain instruc- 
 tions, or to do certain acts in the issue of the bonds, and 
 the officers or agents either neglect or intentionally avoid 
 carrying out such instructions, or for any reason disobey 
 them, and these facts were not known to the person deal- 
 ing with them, and are not ascertainable from the face of 
 the paper, or the records or statutes together or singly, 
 the corporation cannot set up such failure as a defence 
 
 1 :Mf'cliam on Public Officers, § Railroad Co. v. Otto Co., 1 Dill. 
 
 338; Black v. Cohen, 53 Ga. 021 ; 
 
 - Coler V. Board of Co. Com'rs, 
 27 P. R. 619 ; Town of East Lincoln 
 V. Davenport, 94 U. S. 801 ; John- 
 son Co. V. Thayer, 94 U. S. 631 ; 
 56 
 
 Maxey v. Williamson, 73 111. 207. 
 
 3 Gould V. Sterling, 23 N. Y. 458. 
 
 * Brownell v. Town of Greenwicli, 
 114 N. Y. 518, 530.
 
 CH. lY.] POWER TO MUNICIPAL OFFICERS, ETC, § 60 
 
 against the bona fide holder of bonds or other negotiable 
 pajDer, although the original payee or holder may have 
 known tlie facts. Each holder for value before maturity 
 of such paj^er has the right to presume that the officers 
 or agents have carried out their instructions and per- 
 formed the duties imposed upon them. 
 
 Where the county judge of a county in Iowa went 
 to New York City and there signed and sealed, with the 
 corporate seal of the county, the bonds of the county 
 which he was authorized to do at home, the court held 
 that such an irregularity did not affect the bonds in the 
 hands of a bona fide holder.^ 
 
 And in another case, where bonds were issued with the 
 express condition that they should not be sold for less 
 than par, the court held that the bonds, although sold 
 contrary to such directions, were not affected thereby in 
 the hands of a bona fide holder.^ 
 
 As said before, mere irregularities in the issue of the 
 bonds, if negotiable, do not affect them in the hands of 
 a bona fide holder. And where a city had authority " to 
 borrovv^ money for any public purpose," the council issued 
 its bonds as a loan to a railroad, under an ordinance 
 which was recited in the l)onds, the court held the bonds 
 to be valid, although the defence was that the bonds 
 were loaned to the railroad company and the city did 
 not borrow any money, that the action was a mere irregu- 
 larity, and that the purchaser loaned his money, and that 
 it was immaterial that the bonds w^ere first offered in th«} 
 market by the railroad company instead of the city 
 officers.^ 
 
 83. 
 
 iLyndev.TheCounty, IGWall. 6. : ^ Rogers v. Burlington. 3 Wall. 
 2 Mercer Co. v. Ilackett, 1 Wall. I 654. 
 
 57
 
 CHAPTER V. 
 
 LIMITATION" OF DEBT. 
 
 Section. 
 
 51 — Limitation, where tobe found, 
 why imposed. 
 
 52— Effects of prohibition when 
 directed to the Legislature. 
 
 53— Effect when directed to a 
 mimicipal corporation. 
 
 5-t — Persons dealing with a cor- 
 poration to take notice of 
 limitation. 
 .5 — Indebtedness defined. 
 
 56 — Basis of calculation. 
 
 57 — What should be included. 
 
 58 — How taxes may be appro- 
 priated after limitation 
 reached. 
 
 Section. 
 
 59 — What is to be excluded in the 
 calculation. 
 
 GO — Contracts, for more than one 
 year, to be excluded, cases. 
 
 61 — Contra view, cases. 
 
 62 — Liabilities ex delicto are to be 
 excluded. 
 
 63 — Effect, if limitations ex- 
 ceeded, bonds and other 
 paper void — Taxpayer may 
 enjoin collection of bond 
 or levy of stock. 
 
 64 — How the limitation is to be 
 construed. 
 
 § 51. Limitation, where found, why imposed. — To 
 
 prevent the incarriiig of large indebtedness by municipal 
 corporations, and the hasty and often injudicious ex- 
 penditure of public moneys, and to act as a check upon 
 municipal extravagance, almost all of the States have 
 been compelled to provide that municipalities shall not 
 issue bonds or incur debts beyond a certain limit. This 
 limitation is to be found, either in the constitution of the 
 State, or in some general or si)ecial law, or in the charter 
 of the municipality itself. In order to cui-tail the almost 
 unlimited pov/er of the Legislature over municipal cor- 
 porations to authorize them to incur debt or issue bonds, 
 or to permit them to indulge in extravagant and often 
 wholly unnecessary expenditures, the people of a number 
 of the States have, by constitutional amendments, limited 
 the municipality directly, or limited the power of their 
 i-(\spective Legislatures, as to the amount they could 
 
 authorize municipal corporations to expend, as well as 
 58
 
 CH. v.] LIMITATION OF DEBT. § 52 
 
 restricted them as to the objects for which tlie munici- 
 palities could incur any indebtedness.^ 
 
 The constitutions of Illinois, Maine, Iowa, Wisconsin, 
 Missouri and West Virginia forbid municipalities to 
 become indebted to an amount exceeding five per cent, of 
 their assessed valuation. In Pennyslvania and Georgia 
 the limit is seven per cent ; in New York ten per cent, 
 in Indiana two per cent, in South Carolina eight per 
 cent, Colorado three per cent, and in some of these cer- 
 tain exceptions are made. 
 
 In Oregon no county can incur debt exceeding $5,000, 
 except to repel invasion or to suppress insurrection ; in 
 Indiana the limit may be exceeded in order to provide 
 for the people in time of great public calamity ; in 
 Missouri, to erect a court-house ; in New York, a jail, 
 and to issue bonds for a water supply. In California, 
 Missouri and Georgia a municipality cannot contract 
 any debt, other than a temporary one, without the assent 
 of two-thirds of its voters i in West Virginia without 
 three-fifths, and in Colorado without a majority. The 
 territories of the United States are limited to four per 
 cent on the value of taxable property of the corf)oration, 
 county or subdivision thereof.^ 
 
 § 52. Effect of prohibition when directed to the 
 Legislatnre. — When the constitution imposes the 
 prohibition upon the Legislature, and prohibits it from 
 authorizing municipal corporations or other subdivisions 
 of the State or the State officers from incurring indebt- 
 odness beyond a certain amount, such constitutional 
 ])rohibition does not repeal any existing jDowers which 
 
 1 The decisions of the courts of the 
 State wlierein tlie iminicipal cor- 
 poration is situate should he con- 
 sulted, in all questions relating to 
 the limitation upon the power of 
 the corporation to incur a debt, 
 hecause such decisions are based 
 upon the peculiar statutorj-^ or con- 
 stitutional prohibition of the State ; 
 therefore no other safe rule can be 
 laid down, and, as it is impossible 
 to give, in a work of this nature, 
 
 all tiie decisions of the courts of 
 the respective States, it is not at- 
 tempted. The question is treated 
 generall}', and those features which 
 are peculiar to no particular State 
 ai'e given, or if given are so referred 
 to. 
 
 2 Public Act No. 159, 49th Con- 
 gress, July. 188G. Sl'c Uw. extracts 
 from the State constitutions at end 
 of volume. 
 
 59
 
 § o3 J^irXICIPAL BONDS. [CH. Y. 
 
 have been vested by prior statute.^ When a statute 
 authorizes the issue of bonds or other paper and the levy 
 of a tax to pay for them, and prior to their issue the 
 people adopt a constitutional amendment limiting the 
 amount of indebtedness which the Legislature might 
 authorize municipalities to incur, the municipality has 
 authority to issue the said bonds or other paper, and 
 the constitutional amendment does not affect their valid- 
 ity.^ 
 
 Wliere a municipality has authority to subscribe for 
 stock and issue bonds, and a subscription is made and the 
 bonds are ordered to be issued, and before their issue a 
 constitutional amendment is adopted prohibiting the 
 Legislature from authorizing municipalities to subscribe 
 for stock or lend its aid to a railroad, such bonds may 
 still be issued and are valid. ^ 
 
 In both cases the constitutional limitation curtails the 
 future acts of the Legislature and does not affect the 
 power the municipality had when the constitutional 
 limitation was adopted. 
 
 § 53. Effect when directed to a municipal corporsi- 
 tiou. — When the prohibition applies directly to the 
 municipality, it repeals immediately so much of its exist- 
 ing powers as is in conflict with the constitutional pro- 
 hibition,* but such a prohibition will not affect vested 
 rights or executed contracts, or invalidate bonds already 
 issued, or in any manner affect indebtedness already in- 
 curred, although all such exceed the subsequent statu- 
 tory or constitutional limitation.^ 
 
 The adoption of a constitutional provision, or the 
 passage of an act of the Legislature which limits the 
 amount of indebtedness a municipality may contract, is 
 inconsistent with, and repeals, cliarter provisions confer- 
 ring unlimited power of contracting indebtedness, and 
 
 ' Cass V. Dillon, 2 Ohio St. 607 ; 
 Leavenworth v. Jliller, 7 Kan. 499. 
 
 - Moultrie Co. v. Fairfield, 105 
 U. S. 370. 
 
 3 :\Ioultrie Co. v. Rockingham, 92 
 U. S. 631. 
 
 * East St. Louis v. People, 124 111. 
 60 
 
 655; East St. Louis v. Amy, 120 
 U. S. GOO. 
 
 ** Scott V. Davenport, 34 Iowa, 
 208 : Moultrie V. Rockingham Bank. 
 92 U. S. 631 ; Board v. Bolton, 104 
 111. 220.
 
 CH. v.] 
 
 LIMITATION OF DEBT. 
 
 § 54 
 
 the fact that the municipality was indebted in excess of 
 the limit so fixed at the time does not change the rale. 
 While the prior indebtedness is not affected the city can- 
 not add thereto.^ 
 
 When the limit is fixed by statute, bonds issued pur- 
 suant to a special power conferred by a subsequent act 
 are valid, as the latter statute operates to extend the 
 power of the city to contract debts beyond the limit fixed 
 in the former statute.^ 
 
 When the constitutional limitation declares that "no 
 debt whatever shall hereafter be created by or on behalf 
 of the State," the provision applies simply to the State, 
 and not to its subdivisions.^ 
 
 § 54. Persons dealing with the corporation to take 
 notice. — The question whether a municipal corporation is 
 exceeding the limitation of its indebtedness is cast upon 
 the person dealing with the corporation. He nuist ascer- 
 tain for himself whether or not the proposed debt will 
 cause the municipality to exceed the constitutional or 
 statutory limitation,* l)ut the burden of proof is upon 
 the taxpayer in an action to restrain the issue of bonds 
 alleged to be in excess of the debt limitation.^ If the 
 limitation of indebtedness is exceeded the debt cannot be 
 enforced,^ except the corporation be estopped by proper 
 
 * Scott V. Daveniwrt, 34 Iowa, 
 208. 
 
 - Amey v. Allegheny City, 24 
 How. (U. S.) 364 : Ilorby v. Bev- 
 erly, 3 East. Rep. 888. 
 
 •' Cass V. Dillon, 2 Oiiio St. 607. 
 
 •♦ Doon V. Cummings, 142 U. S. 
 36G ; Buchanan v. Litc-hfield, 102 
 U. S. 278 ; Atlantic City Water 
 Works V. Read, 50 N, J. L. 665. 
 
 " Linn v. Chambersburgh Bor- 
 ough, 160 Pa. St. 511. 
 
 « Law V. People, 87 111. 385 : Ap- 
 ])eal of City of Erie, 91 Pa. St. 398 ; 
 French v. Burlington, 42 Iowa. 614 ; 
 llebard v. Ashland Co., 55 Wis. 
 145; Baltimore v. Gill, 31 Md. 
 
 The provision in the Iowa Con- 
 
 stitution relating to the limit of in- 
 debtedness is as follows : 
 
 '• No municipal corporation shall 
 be allowed to become indebted in 
 any manner or for any purpose to 
 an amount in the aggregate exceed- 
 ing five per cent on the value of 
 the taxable property within such 
 corporation, to be ascertained by 
 the last State and county lists pre- 
 vious to the incurring of such in- 
 del)tedncss." Art. xi. g 3. 
 
 Of this, tiie court in Scott v. 
 Davenport, 34 Iowa, No. 8, sjiid : 
 
 "The language of the constitu- 
 tion is broad and sweeping. ... It 
 includes all debts incurred in any 
 manner or for any purpose. It says 
 in effect that whenever the corpo- 
 Gl
 
 §56 
 
 MUNICIPAL BONDS. 
 
 [CH. V. 
 
 recitals or its record, and the limitation is imposed by 
 statute.^ 
 
 It seems to be now well settled tliat the prohibition of 
 indebtedness applies to all forms of debt over which the 
 municipality has control, both express and implied, and 
 to floating as well as bonded indebtedness.^ 
 
 § 55. Indebtedness defined. — Indebtedness of a munic- 
 ipality is defined in the well considered case of Sackett 
 V. City of New Albany, 88 Ind. 473, as follows : " By in- 
 debtedness in this connection we mean an agreement of 
 some kind by the city to pay money where no suitable 
 provision has been made for the prompt discharge of the 
 obligation imposed by the agreement. It was obviously 
 the intention of the Legislature in submitting, and the 
 people in adopting, the thirteenth article of the constitu- 
 tion to arbitrarily restrict the power of municipal corpora- 
 tions to contract debts to a limited per centum of their tax- 
 able property, and to require, when that limitation has been 
 reached, that such corporations shall be prepared to pay 
 for whatever value they may obtain without the incon- 
 venience of any further indebtedness for any purpose 
 whatever." 
 
 § 5G. Basis of calculation. — The assessment of the local 
 assessors for the purpose of taxation is made the basis by 
 either the constitution or statute for determining the limit 
 of indebtedness, and the last regular assessment made 
 preceding the incurring of the debt must be used,^ unless 
 otherwise ordered, and a second assessment for the issue 
 of bonds, unless authorized, is void.* 
 
 Where the constitution prohibits a municipality from 
 becoming indebted beyond the income and revenue pro- 
 
 rate indebtedness in the aggregate 
 shall amount to five percent on the 
 taxable property within the corpo- 
 ration, no fnrther indeljtedness shall 
 be allowed to be created in anj- 
 manner or for any purpose." 
 
 1 See subject, Estoppel by Reci- 
 tals, herein, § 221 et seq. 
 
 2 Litchfield v. Ballou, 114 U. S. 
 190 ; Davenport V. Kliensschmidt, 6 
 
 6-2 
 
 ]\Iont. 502 ; People v. May, 9 Colo. 80; 
 Council BIufl"s v. Steward, 51 Iowa. 
 3S5 ; Am. & Eng. Ency. of Law, 
 Vol. 15, 1125. 
 
 8 Culberson v. Fulton, .127 111. 30 ; 
 Wilkinson v. Van Orman, 70 Iowa, 
 230. 
 
 « State V. Folly, (S. C.) 16 S. E, 
 R. 195.
 
 en. v.] LIMITATION OF DEBT. § 57 
 
 vided for a year, it means income derived from any source, 
 and not that derived from taxation alone. -^ 
 
 The vakiation or assessment to be used as the basis of 
 calculation is that fixed by the city officers for city pur- 
 poses, and not that determined by the county officer for 
 county purposes.^ Although there be some irregularities 
 in the assessment, as where it is not filed within the 
 proper time, yet if the authorities accept it and act on 
 it, it will be regarded as valid and sufficient to be used 
 as a basis of calculation.^ 
 
 § 57. What sliould he incliuled. — It is now generally 
 held the fees and salaries of the officers of the munici- 
 pality and other compulsory debts should be included 
 when calculating the debt, to ascertain whether the pro- 
 posed debt will exceed the limitation of indebtedness. The 
 principal case on this point is that of Lake Co. v. Rollins, 
 130 U. S. GG2. 
 
 In this case the suit was upon the warrants of the 
 county issued for fees and salaries of its officers, and issued 
 after the limit prescribed by the State constitution of Col- 
 orado liad been reached and exceeded by the county of 
 Lake. The court below held that while the power of the 
 county to incur other debts by contract was susjDended, 
 the liability for further amounts, in the shape of fees and 
 salaries and other compulsory oljligations imposed by the 
 will of the Legislature remained, and was enf orcible, and 
 gave judgment against the county. 
 
 The Supreme Court, in an opinion by ]\Ir. Justice Lamar 
 reversing this decision, said, in part: "Neither can we 
 assent to the position of the court below that there is, as 
 to this case, a difference between indebtedness incurred 
 by contracts of the county and that form of debt denom- 
 inated 'compulsory obligations.' 
 
 " The com])ulsion was imposed by the Legislature of the 
 State, even if it can be said correctly that the compulsion 
 was to incur a debt ; and the Legislature could no more 
 
 1 Lamar W. & E. L. Co. v. City 
 of Lamar, 31 S. W. R. 750. 
 
 •^ Bnice V. Pittsburgh, 1G6 Pa. 
 St. 152. 
 
 3 Atlantic T. Co. of N. Y. v, Dar- 
 lington, 03 Fed. Kop. 70. 
 
 63
 
 §57 
 
 MUNICIPAL BONDS. 
 
 [CII. V 
 
 impose it than the county could voluntarily assume it as 
 against the disability of a constitutional prohibition. 
 Nor does the fact that the constitution provided for cer- 
 tain county officers and authorized the Legislature to fix 
 their compensation and that of other officials affect the 
 question." 
 
 This case has been followed in a number of the States, 
 and now seems to be the general doctrine.^ 
 
 In estimating the amount of indebtedness, the un- 
 collected taxes and the levy of the current year are not to 
 be deducted,^ but the uncollected taxes and special assess- 
 ments may be regarded as available for current expenses, 
 and may be deducted from such expenses up to the time 
 of the annual tax sale,^ but after that time the city must 
 prove they have any value before they will be included in 
 determining the power of the city to make a contract for 
 necessary supplies.* 
 
 It is held that, although there may be money in the 
 hands of the city treasurer which can only be api)lied to- 
 wards the payment of certain outstanding bonds, yet the 
 said amount cannot be deducted from the amount of the 
 city's indebtedness,^ but if the city has funds in its treas- 
 ury to meet its indebtedness, or a part of it, the issue of 
 warrants in excess of the limit of indebtedness is not a 
 violation of the limitation, provided the funds, when ap- 
 plied, will reduce the warrants to an amount within the 
 limitation.^ 
 
 1 Sprin.i^fiold v. Edwards. 84 111. 
 626; Sackett v. New Albany, 8S 
 Ind. 473 ; contra, Lewis v. Widber, 
 99 Cal. 412. 
 
 2 Jones V. Hulbut, 15 Neb. 125. 
 
 In City of Council Bluffs v. Stew- 
 art, 51 Iowa, 385, the court held 
 that the uncollected taxes and the 
 levy for the current j'ear are not to 
 be deducted from outstanding; debts 
 for the purpose of ascertaining the 
 real indebtedness. 
 
 The court said : " If the bonds in 
 
 question should be issued upon the 
 
 faith of the uncollected taxes and 
 
 the lew for the current vear, there 
 
 "64 
 
 is no power which could prevent 
 the city authorities from absorbing 
 the taxes as collected in payment 
 of ordinary current expenses. In- 
 deed such a course might be abso- 
 lutely necessary to maintain the 
 city government." 
 
 '^ Brasliear v. Citj^ of Madison, 
 (Ind. Sup. Ct.) 36 N. E. R. 252. 
 
 * French v. Burlington, 42 Iowa, 
 614. 
 
 5 Waxahochie v. Brown, 67 Tex. 
 517. 
 
 6 Dillon on Mun. Corp., Vol. 1, 
 § 135 (4th ed.).
 
 CH. v.] LIMITATION OF DEBT. § 58 
 
 The par value of outstanding bonds and not the interest 
 coupons to accrue should be included in the computation.^ 
 
 Certificates issued by a city on which to procure tem- 
 porary loans, stating that the city owes the holder a speci- 
 fied sum of money, and promising or directing the treas- 
 urer to pay it at a specified time or otherwise, are evidence 
 of debt owing by the city.^ 
 
 § 58. How taxes may be appropriated after limitation 
 is reached.— It is held, notwithstanding the fact that the 
 constitutional limitation of indebtedness has been reached, 
 that revenues may be appropriated in anticipation of 
 receipts,^ but the only manner in which revenue already 
 levied, but uncollected, can be anticipated by a city without 
 becoming indebted, is by the drawing of a warrant, after 
 the tax had been levied, which will have the legal effect 
 and operate as a contract between the corporation and the 
 person receiving it that the city shall incur thereby no 
 liability. 
 
 If the city incurs any liability thereby, it incurs, either 
 absolutely or contingently, a debt. The effect of the 
 warrant must be to impose the duty upon tlie proper 
 officers to collect and pay over the taxes in accordance 
 with the appropriation, and the remedy of any failure in 
 that regard must be against the officers and not against 
 the corporation.* 
 
 The warrant drawn against the taxes levied must 
 virtually operate as an assignment without imposing any 
 liability upon the corporation.^ 
 
 The warrant must be drawn upon a particular fund 
 and uncollected taxes of a particular year, and a warrant 
 addressed to a county or city treasurer, issued after the 
 constitutional limit has been reached, which is in gen- 
 eral form and does not purport to be payable from any 
 particular fund or out of the revenues of the taxes of 
 
 1 Finlayson v. Vauj^li. T)! Minn. 
 ;;:]1 : Jones v. Hinll)cit, 13 Neb. 
 12.-). 
 
 - I^aw V. People, 87 111. 'tH'y. 
 
 ^ State V. Parkinson, ."i Xev. 17: 
 East ?;t. Louis v. Flannigan. 2G 111. , 
 
 5 65 
 
 App. 499 ; State v. I^IcCauly, 1.") Cal. 
 4.30. 
 
 * Springfield v. Edwards, 48 111. 
 C2G. 
 
 ^ Law V. People, 87 111. SSo.
 
 §59 
 
 MUNICIPAL BONDS. 
 
 [CH. V. 
 
 any specified year, is simply an evidence of indebtedness, 
 and therefore void.^ 
 
 It has been held that the addition of an Interest clause 
 to such a warrant would not have the effect of bringiuL;- 
 it within the constitutional limitation.^ 
 
 § i>\). Wliat is exchnled in the calculation. — When a 
 local improvement, such as the building of sewers and 
 the like, is undertaken, and tlie contractor agrees to ac- 
 cept as payment certificates which assess the property 
 improved and to look only to such certificates for his 
 pa}^, the amount of such contracts are not to be estimated 
 in calculating the nmnicipal debt, nor is such contract 
 void even though executed after the limitation has been 
 reached.^ 
 
 Where the bonds are to be paid out of a special fund to 
 be raised by assessments for benefits for local im- 
 provements, and are not to be a general debt of the 
 municipality, such bonds are not to be included in the 
 calculation. In order, however, to be excluded, the bonds 
 must state upon their face that they are to be paid 
 only out of a specified fund.^ 
 
 The ordinary expenses of the city for the current year 
 should not be included in the computation, because such 
 expenses are not to be considered as debts, ^ but are to be 
 paid by the levy and collection of the annual taxes of the 
 same year. If, however, the current expenses exceed the 
 amount of the levy, the excess should be regarded as a 
 debt.« 
 
 1 People V. May, 9 Colo. 404; 
 Fuller V. Chicago, 89 III. 282. 
 
 2 State V. Parkingsoii, 5 Nov. 17. 
 
 * Davies v. Des Moines, 75 Iowa, 
 500 ; Tutle v. Polk. (Iowa) GO N. W. 
 R. 733 ; Little v. Citj' of Portland, 
 (Or.) 37Pac. Rep. 911. 
 
 * Qiiill V. City of Indianapolis, 
 124 Ind. 292. 
 
 6 Grant v. Davenport, 36 Iowa, 
 396 ; Ivanson v. Ilance, 1 Wy. Ter. 
 275 ; City of Coayers v. Kirk, 78 
 Ga. 480 ; Smitli V. Dedhani, 144 
 Mass. 177. 
 GG 
 
 •5 In the case of Appeal of Erio. 
 91 Pa. St. 1198, Gordon, J., quoted 
 the following from Grant v. Daven- 
 port, 36 Iowa, 396 : 
 
 " When the contract made by tlie 
 municipal cori^oration pertains to 
 its ordinary expenses, and is, to- 
 gether with other like expenses, 
 within the limit of its current rev- 
 enues, and such special taxes as it 
 may legally and in good faith in- 
 tend to levy therefor, such con- 
 tract does not constitute the incnr- 
 ring of indebtedness within the
 
 CH. v.] LIMITATION Ol'' DEBT. § 50 
 
 Where a city purchases for its sinking fund a portion 
 of the city loans and they are no longer, as affects the 
 city, a liability, the certificates so purchased, though not 
 cancelled, are no part of the city deht,^ but it is held that 
 an investment of a city of its sinking funds in its own 
 bonds does not work a cancellation of the bonds.^ 
 
 The issue of bonds to pay off or refund an already exist- 
 ing debt does not increase the city debt, but merely 
 changes its form ; ^ but if the proceeds of the new bonds 
 are diverted, and not in fact applied towards the pay- 
 ment of the old bonds or old debt, and the new issue ex- 
 ceeds the limitation, it is held that the purchaser of the 
 new issue is bound to see that the proceeds are properly 
 applied. A case in point is that of Township of Doon v. 
 Cummings, 142 U. S. 300. 
 
 In this case it appeared f;25,000 of bonds were issued 
 by the county for the purpose of paying off a part of its 
 outstanding bonded indebtedness, and but $6,000 of the 
 amount realized from the sale was in fact applied to pay 
 off the outstanding indebtedness, the balances being used 
 to pay off other claims, and the issue, together with the 
 old bonds, exceeded the constitutional limitation. 
 
 The court held the present issue to be invalid and 
 prohibited, because the money obtained from the sale 
 was not applied in full to the pa3'ment of the old bonded 
 indebtedness. 
 
 A dissenting opinion by Justices Brown, Harlan and 
 Brewer held that it was not necessary that the purchaser 
 
 meaning of the constitntional i)ro- 
 vision limiting tlie power of mu- 
 nicipal cori)()iations to contract 
 debt." And then said : '" This, we 
 hesitate not to say, is a sound con- 
 stitutional interpretation, and in a 
 similar case might well be adopted 
 in the construction of our own con- 
 stitution. If the contracts and en- 
 gagements of municipal cor])(>ra- 
 tions do not overroax-h their curroiit 
 
 palities may be : for in such case 
 their engagements do not extend 
 bej'ond their present means of pay- 
 ment, and so no debt is created." 
 
 1 Brooks V, City of Philadelphia . 
 163 Pa. 123. 
 
 2 Elsen V. City of Ft. North, 27 
 S. E. R. 739. 
 
 3 Powell v. :\radison. 107 Ind. 100 : 
 City of Poughkeepsie v. Quintanl. 
 19 N. Y. 8. 941 : Farson L. & Co. % . 
 
 revenues, no objections can lawfully Louisville. (Ky.) 30 S. W. R. 17: 
 be made to theiu, however great ^Miller v. School Dist. &C.,(W\-o. ) 
 the indebtedness of such munici- [ 39 Pac. R. 879. 
 
 67
 
 §G0 
 
 MUNICIPAL BONDS, 
 
 [CH. V. 
 
 see that the money realized from the new issue bo ap- 
 plied to the payment of the old, but that he liad the 
 right to presume that the officers would not betray their 
 trust and would do their duty and apply the money as 
 required by law. 
 
 Where the bonds are payable out of a fund which 
 consists entirely of receipts from local improvements, 
 assessed against the property benefited, they are held 
 to create no debt against the city within the meaning 
 of the constitution.^ 
 
 §60. Contracts for more tliaii one year. — Whether, 
 when a municipal corporation enters into a contract 
 which extends over a period of years, as for water, gas, 
 electric lights and the like, and a certain sum per annum 
 during the entire period is to be paid, such entire con- 
 tract or only the annual payments are to be included when 
 calculating the municipal debt, is a very vexed question, 
 and the decisions of the State courts are not harmonious 
 upon it. The weight of the decisions,^ and which we re- 
 gard to be the proper view of the question, is that such a 
 contract is not prohibited even if the total amount which 
 the corporation will have to pay, will, with the other 
 debts of the municipality, exceed the statutory or consti- 
 tutional limitation. Only the annual pa3'ment of the 
 year when the calculation is made should be considered 
 as a debt. 
 
 The future liability is not considered as an entire debt, 
 but only a continuing provision for future current ex- 
 penses to be taken care of and provided for each year by 
 taxation. 
 
 The case of Walla Walla Water Co. v. City of Walla 
 Walla, 60 Fed. Eep. 957, illustrates the point. 
 
 The city of Walla Walla entered into a contract to pay 
 
 1 Quill V. City of Indianapolis, 23 
 N. E. R. 788 ; Tuttle v. Polk, (Iowa) 
 60 N. W. R. 78.3. 
 
 2 Cavlyle W. L. P. Co. v. City of 
 Carlyle, 31 111. App. 325 ; Walla 
 Walla Water Co. v. City of Walla 
 Walla, 60 Fed. Rep. 957 ; East St. 
 Louis V. East St. Louis & Co. , 98 III. 
 
 08 
 
 415 ; Dively v. Cedai" Falls, 26 Iowa, 
 233 ; Weston v. Syracuse, 17 N. Y. 
 110; Smith v. Dedham, 144 Mass. 
 177 ; Territory v. City of Oklalioma, 
 37 Pac. Rep. 1094 ; Saleno v. City 
 of Neosho. (Mo.)30S. W. R. 190 ; 15 
 Am. & Eng. Ency. of Law, 1130.
 
 CH. v.] LIMITATION OF DEBT. § 01 
 
 $1,500 per annum for twenty-five years, for a water 
 supply for the city. 
 
 The aggregate amount to be paid under the contract, 
 with the then present debts of the city, far exceeded the 
 limit of indebtedness fixed by its charter. 
 
 Handford, J., in the United States Circuit Court, held 
 the contract to be good, and said : 
 
 "By the terms of the contract the city became obli- 
 gated to pay in quarterly instalments, as the same should 
 be earned by compliance with the contract on the part of 
 water company, 
 
 " If any part of the money is not earned the city will 
 not have to pay it. If the money shall be earned the city 
 will avoid an accumulation of debt by paying according 
 to the contract. 
 
 "Notwithstanding the very respectable authorities 
 cited by the counsel for the city I hold that while the con- 
 tract created a binding obligation it does not create a debt. 
 
 "The item of expense under this contract stands pre- 
 cisely the same as other items of regular current expenses 
 incidental to running the government and provided for 
 by contracts or ordinance of the city." 
 
 §61. Contra view. — The courts adoi)ting the contrary 
 view, regard the entire sum as a debt or obligation of the 
 municipality, and that when it enters into such a contract 
 it incurs an indebtedness within the meaning of the con- 
 stitution for the total amount of the contract.^ 
 
 The case of Read v. Atlantic City, -I'J N J. L. 558, is one 
 illustrating this latter doctrine. 
 
 The charter of Atlantic City in New Jersey contained 
 a limitation that its " debt shall at no time exceed 
 $35,000." The city was indebted in this sum when it en- 
 tered into a contract with a water company to supply itself 
 with water for public purposes for an indefinite period, 
 making no provision, however, to raise l)y taxation the 
 amount that the city should be called on to pay under the 
 
 1 Beard v. City of Hopkinsville, 
 (Ky.) 24 S. W. R. 873; Buchanan 
 V. Litchfield, 102 U. S. 278 ; State v. 
 Atlantic City, 49 N. J. L. 558 ; City 
 
 of Springfield v. Edwards, 84 111. 
 G26 ; 15 Am. & Eng. Ency. of Law, 
 1128, n. 7. 
 
 69
 
 ^ 03 MTNUnrAL BONDS. [CH. V. 
 
 contract. It vs^as held that the contract and ordinances 
 were idtra vires, and the same were set aside. After re- 
 viewing the case in Iowa, Ilhnois, Indiana and Pennsyl- 
 vania, Magie, J., said: 
 
 *' It is impossible perhaps to entirely reconcile these 
 cases. The true interpretation of such restriction on 
 municipal indebtedness, in my judgment, lies between 
 the extremes they exhibit. The plain object of such re- 
 strictions is to require that all moneys which are to be paid 
 for municipal expenses after the debt has reached the 
 fixed limit shall be raised by taxation. In view of this 
 object it is clear (and all the cases agree in this) that pro- 
 hibitions against increasing the indebtedness or tlie debt 
 of a municipality are not to be construed as limited to 
 obligations which are debts eo noDiiite, but are to be ex- 
 tended to all contracts whereon the payment of money 
 may be enforced. But where the money to be paid upon 
 such contracts is provided for to be raised by taxation, 
 upon some fixed and definite scheme, such contracts are 
 not, in my judgment, within the prohibitions. Where, 
 however, the money required to meet such contracts is 
 not provided for either by being legally ordered to be 
 raised by taxation and appropriated for that purpose, or 
 by some legislative scheme which positively prescribed 
 that it shall be raised by taxation and appropriated for 
 its payment as needed, then such contracts do increase 
 the indebtedness or debt of municipal corporations with- 
 in tlie meaning of such prohibitions. 
 
 "Any other construction would deprive these restric- 
 tions of the force requisite to reacli and cure the evil in- 
 tended to be prevented thereby.'' 
 
 5^ 62. Liabilities arising ox delicto are not within such 
 statutory or constitutional limitation, and judgments 
 obtained in actions of that nature are not to be included 
 iu the debts of a municipality, the prohibition apj^lying 
 only to contracts or debts voluntarily incurred.^ 
 
 § 63. Effect, if limitation exceeded. — Bonds and other 
 municipal evidence of debt issued in excess of the statu- 
 
 1 Bartle v. Des Moines, 38 Iowa, | 4U : Pill, on Mun. Corp. Vol. 1 
 
 1 (4tli ed.), 137. 
 
 70
 
 CH. v.] LIMITATION OF DEBT. § 63 
 
 tory or constitutional limit are void ^ in the hands of 
 innocent holders, except where the bonds contain recitals 
 which estop the corporation from setting up the over- 
 issue as a defence, as elsewhere shown. ^ 
 
 If the bonds or warrants or other evidence of debt 
 are but a part in excess of the limitation and can be 
 separated, those within the limitation, that is, those 
 issued before the limitation was reached, will be valid, 
 and the balance only void.^ A court of equity will 
 not aid in scaling down the issue so as to discover the 
 valid from the void, nor will money loaned for an im- 
 provement, or work done in excess of such limitation, 
 become a lien upon the works,* and a statute attempting 
 to make such a lien is unconstitutional and therefore 
 invalid.^ 
 
 Any taxpayer ma}' enjoin the issue of bonds in excess 
 of the limitation, or the making of a contract in excess, 
 or the levying of a tax to pay the bonds, or interest there- 
 on, or any other debt which violates such limitation.^ In 
 one ca.se, where the corporation neglected to defend itself 
 in an action brouglit to compel the levying of a tax to 
 pay a debt which exceeded the limit, it was held a tax- 
 payer of the corporation was entitled to intervene in tlie 
 suit and set up the defence that the limit of indebted- 
 ness was exceeded.'^ 
 
 The invalidit}' of a debt, void because in excess of the 
 statutory or constitutional limit of debt, must be pleaded 
 as a defence in the action to recover a judgment thereon, 
 
 1 In McPherson V. Foster, 43 Iowa, 
 the court lield that bonds issued in 
 excess of the constitutional limit of 
 indohtedncss were void in the 
 hands of all persons. So bonds 
 issued in excess of the constitutional 
 limit of indebtedness of the Penn- 
 sylvania constitution were held in- 
 
 Mo. 659 ; Merchants' etc. Bank v. 
 Bergen, 115 U. S. 384. 
 
 4 Litchfield v. Ballou, 114 U. S. 
 190. 
 
 5 Mosher v. School Dist. , 44 Iowa, 
 122. 
 
 6 Springfield v. Edwards, 84 III. 
 G2G ; Davenport v. Klienschmidt, 
 
 valid in the iiands of bona fide ^lont. 502 : Dill, on Mun. Cor[>. 
 liolders. Millei-stown v. Fredericks. Vol. 1 1 (4th ed.), gg 914, 910, 91S. 019 
 114 Pa. St. 435. | n. ; Smith v. Broderick, (Cal.) 40 P. 
 
 •^ Millerstown v. Fredericks, 114 R. 1033. 
 Pa. 435. See §^ 221 et seq. ! ^ Richards v. Supervisors, 69 
 
 3 Catron v. Lafavette Co., 106 Iowa, G12. 
 
 71
 
 03 
 
 MUNICIPAL BONDS. 
 
 [Cll. V 
 
 and cannot be set np against the judgment or against 
 bonds issued to fund such judgment.^ 
 
 Where a HabiUty has been incurred by a municipal 
 corporation, when its total indebtedness, including such 
 liability, is within the constitutional limit, the fact that 
 a subsequent valuation of the city's property for tax- 
 ation reduces the former valuation so as to increase the 
 city's debt beyond the limit will not invalidate warrants 
 thereafter issued to evidence such liability.^ 
 
 After the limitation of debt, whether statutory or con- 
 stitutional, has been reached, no further debt can be law- 
 fully contracted, but as soon as the debt is reduced 
 below the limitation, new debt up to the limit may be 
 legally incurred.^ 
 . While the weight of the decisions are opposed to per- 
 mitting a municipal corporation to incur indebtedness 
 in any form, or for any purpose beyond the constitutional 
 limitation, there are a number of cases which hold that 
 a municipality has the right to incur indebtedness for its 
 
 1 ^tna Life Ins. Co. v. Lyon 
 Co., 44 Fed. Rep. 329. In this case 
 Shiras, J. , for the court yaid : 
 
 " Tlie constitvxtional limitation is 
 not self-acting. The i^roteetion of 
 its provisions must be invoked at 
 the time and in the proper mode. 
 If judgments are obtained against 
 a county, and the same are not 
 reversed, but remain in full force, 
 they are evidence of the liighest 
 nature that the county owes tlie 
 amounts adjudged to be due ; and 
 if the county, having the power to 
 fund its outstanding indebtedness, 
 issues bonds in payment of such 
 judgments, the validity of the 
 bonds cannot be successfully at- 
 tacked, when suit is brought there- 
 on, by showing that, if the defence 
 liad been interposed in the original 
 case, the claim might haA-e been 
 defeated, and that the judgment 
 actuallv rendered might have been 
 "72 
 
 prevented. . . . It requires a proper 
 pleading of the facts, and upon tlie 
 trial proper evidence must be intro- 
 duced or else the defence fails. It 
 makes no difference in the validity 
 of the judgment Avhether the de- 
 fendant failed to plead the defence 
 based upon the constitutional lim- 
 itation, or failed to sustain the de- 
 fence, if pleaded by sufficient evi- 
 dence. In either case the rendition 
 of the judgment establislied the 
 validity of tlie claim against th(* 
 county, and the judgment, so long 
 as it remains unreversed, cannot be 
 questioned on the ground that the 
 amount thereof exceeds five per 
 cent of the taxable property of the 
 count^^" 
 
 2 Childs V. City of Anacortes, 5 
 Wash. St. 452. 
 
 3 Brooks V. Philadelphia, 29 Atl. 
 R. 387 ; 1G2 Pa. St. 123.
 
 CH. v.] 
 
 LIMITATION OF DEBT. 
 
 §64 
 
 ordinary running expenses after the limitation has been 
 reached.-^ 
 § (ji. How the limitation is to bo construed. — The 
 
 Hmitations which restrict municipal corporations in their 
 power to contract debts are to be construed according- to 
 the terms of the constitution or the statute having 
 reference to existing facts, and any construction which 
 would defeat their object should not be favored,^ but 
 when the prohibition is against the incurring of indebted- 
 ness for general purposes, it has been held that the lay- 
 ing of a sidewalk being for a special purpose was not 
 prohibited.^ 
 
 A provision in a city charter that the council shall not 
 have power to pledge the credit of the city for more than 
 a specified sum without submitting the question to the 
 voters of the city is regarded as a definite restriction on 
 the power, and a subsequent statute authorizing a city 
 to issue bonds for a larger amount is subordinate to and 
 does not override the restriction in the charter,* Where, 
 however, the intention of a sul)sequent act, as gathered 
 from all its parts, is to permit the incurring of a debt 
 beyond the limit fixed in the charter, the amount of the 
 debt is not restricted by the charter limitation, but that 
 contained in the subsequent act.'^ \Yhere the limit of 
 tax or debt is fixed by the constitution, and no statute 
 prohil)its a lesser, the limit in the constitution is to be 
 applied. The constitution executes itself. '^ Where a stat- 
 ute authorized a town to issue bonds, " in any amount," 
 in aid of a railroad, such amount cannot exceed the 
 constitutional limit of debt.'^ 
 
 Under the constitution of the State of New York, 
 amended 1885, art. 8, sec. 11, providing that "no coan- 
 
 1 Grant v. Davojiport. 36 Iowa, ,391 : State v. Guttcnbcrg, 39 N. J. 
 
 396; Porter v. DougUuss, 87 Mo. 
 239 : Corpus Christi v. Woessner, 
 58 Tex. 462. 
 
 2 French v. Burlington, 42 Iowa, 
 614. 
 
 3 Hitchcock V. Galveston. 96 U. S. 
 814. 
 
 * Cumberland v. Magruder, 34 Md. 
 
 L. 660 ; State v. FoUey, 16 S. E. R. 
 195. 
 
 ^Stoud V. Consumers' Water Co., 
 (N. J.) 28 Atl. Rep. 578. 
 
 6 Wall V. Austin, 22 S. W. R. 073. 
 
 " Atl. Trust Co. of N. J. v. Dar- 
 lington, 63 F. R. 76.
 
 5 G-4 
 
 MFNICIPAL BONDS. 
 
 [CH. V 
 
 ty . . . or any such city shall bo allowed to become in- 
 debted . . . to an amount which . . . shall exceed ten per 
 eentum of the assessed valuation of the real estate of 
 such county or city subject to taxation," it has been 
 held that city and county may each incur debt to the 
 extent of ten per centum of such value, though the lands 
 in the city are charged with the debts of both city and 
 county.^ In the case of City of Rochester v. Quintard, 
 13GN.Y. 221, it was held that art. S, sec. 11, which Ihnits 
 theindebtedness which maybe incurred by a city having 
 a population of 100,000 or over, or a county containing 
 such a city, to ten per centum of the assessed valuation 
 of real estate, excej^t for w^ater supply or for revenue 
 bonds, and in such cases that the bonds should be payable 
 within twenty years and a sinking fund sufficient to ex- 
 tinguish the debt should be provided, did not apply to a 
 city when its debt limit had not been reached, including 
 among the debts the amount of the bonds issued, and 
 that, therefore, an act authorizing the issue of bonds 
 for a water supply, payable in fifty years, was not uncon- 
 stitutional, since all the debts of the city, including the 
 proposed bond issue, were within the ten per centum. 
 
 In Sweet v. Syracuse, 120 N.Y. 310, it was held that 
 art. 8, sec. 11, does not apply to cities having a popula- 
 tion of less than 100,000, or a county not containing a 
 city of 100,000 or over, except that it forbids the crea- 
 tion by any city of a debt for an}^ purpose other than a 
 city or puljlic purpose, and such cities may contract for 
 any desired amount for such purj^oses. 
 
 1 Adams v. East Iliver 8av. Inst. 
 20 N. Y. S. 13 ; 64 Ilun, G35. This 
 case was affirmed in 130 N. Y. , p. 
 52, and CuUcn, J., as to the construc- 
 tion of such a prohibition, said : 
 
 " If the language is unambiguous, 
 the words jilain and clear convey- 
 ing a distinct idea, there is no other 
 interpretation. 
 
 •' Effect must be given to tiie in- 
 tent as indicated by the language 
 cmploj^ed. Especially should this 
 be so in the interpretation of a 
 written constitution framed delib- 
 74 
 
 erately and with care, and adopted 
 by the people as the organic law. 
 . . . "We must therefore decide tiie 
 case in the very words of the con- 
 stitution (see quctation above). The 
 literal and grammatical reading is 
 that the county sliall not be allowed 
 to incur debt beyond a cei'tain per 
 cent, and that the city shall not be 
 allowed to incur debt beyond the 
 same per cent. Sepai'ate restric- 
 tions are imposed upon both. 
 
 " This is so clear to my mind as to 
 forbid elaboration." 
 
 i
 
 CH. v.] LIMITATION OF DEBT. § 64 
 
 Under the amended constitution of New York, which 
 took effect January 1st, 1895, declaring- that ''all indebted- 
 ness " incurred by any city in excess of the limitation im- 
 ])osed by it, except such as existed when it took effect, 
 should be absolutely void, it is held that such provision 
 does not apply to existing contracts by which a greater 
 indebtedness will be incurred, and that the word "in- 
 debtedness " is used in the sense of obligation, and there- 
 fore includes existing contracts which are not affected 
 by the constitution, but expressly excluded.^ 
 
 In Texas, where the constitution provides that, when 
 a debt is incurred the municipality shall at the same 
 time make provision for levying and collecting a tax 
 sufficient to pay the interest, and also a sinking fund 
 of at least two per cent per annum, the constitu- 
 tion also provides that the tax to be levied for public 
 improvements shall not exceed twenty-five cents on 8100 
 for any one year. The United States Circuit Court '^ 
 held that the limitations prohibited the incurring of a debt 
 above a sum upon which the interest, together with the 
 two per cent for the sinking fund, would exceed the rev- 
 enue derived from a tax of twenty-five cents on the 
 dollar, and consequently held bonds issued in excess of 
 that sum invalid. 
 
 1 Sheeban v. Treasurer of L. I. | - Millsaps v. City o^ Terrell, 60 
 fitv, 33 N. Y. S. 428. I F. II. 193. 
 
 75
 
 CHAPTER YI. 
 
 CONSENT OF TAXPAYERS TO ISSUE OP BONDS- 
 ELECTION. 
 
 -PETITION. — 
 
 Section. 
 
 65 — Petition of taxpaj-ers or 
 voters — When necessarj' — 
 How consent given — Ef- 
 fect of. 
 
 66 — Question of issuing bonds of- 
 ten submitted to the voters 
 — What States by constitu- 
 tion require it. 
 
 67 — When submission required, 
 bonds cannot issue witliout 
 it. 
 
 68 — Wliat irregularities do not 
 affect result of election. 
 
 69 — Submission necessary, al- 
 though debt limitation ex- 
 tended. 
 
 70 — Effect of constitutional 
 amendments requiring sub- 
 mission. 
 
 71 — When election set aside — Its 
 effect. 
 
 72 — The proposition submitted to 
 name amount of issue. 
 
 73 — Proposition must be distinct 
 and separate. 
 
 Section. 
 
 74 — Proposition, how submitted. 
 
 75 — Same — Amount of tax some- 
 times to be stated. 
 
 76 — AVhen proposition may be 
 submitted. 
 
 77 — Notice and time of election — 
 What it should contain — 
 When election may be lield. 
 
 78 — Publication of notice. 
 
 79 — Votes required to carry a 
 proposition, usually a ma- 
 jority vote only necessary. 
 
 80 — Constitutional requirements 
 on this subject. 
 
 81 — The words "inhabitants," 
 "voters,"' "electors,"' "qual- 
 ified electors," construed. 
 
 82 — How result of election should 
 be declared. 
 
 83 — Proposition as carried cannot 
 be changed — If done bonds 
 sometimes held valid — 
 When it may be changed. 
 
 84 — Affirmative vote not a con- 
 tract. 
 
 § 65. Petition of taxpayers or voters. — It is fre- 
 quently made necessary by the statute authorizing the 
 issuing of bonds or other written evidence of munic- 
 ipal indebtedness, that before the officers of the corpo- 
 ration or the judge of the court can issue the bonds or 
 incur the debt, or before an election can be held submit- 
 ting a proposition to incur a debt, that the consent of a 
 certain number of the taxpayers of the locality petition, 
 or their consent be obtained, or that the bonds or other 
 
 evidence of debt be issued ujion a petition of a certain 
 76
 
 CH. VI.] CONSENT OF TAXPAYERS, ETC. § G5 
 
 number of the taxpayers ; and until such jDetition is pre- 
 sented the officers authorized to act cannot doso.^ 
 
 When a taxpayer has given his consent he may re- 
 voke it by a writing before it has been acted upon.^ And 
 where he has signed a petition he may revoke it if he 
 does so before the judge or other officer to whom it is 
 intended to be presented acquires the right to act upon 
 it,^ but the withdrawal must be made before, and not 
 after, the hearing on the petition.* 
 
 Several petitions may, for convenience, be circulated 
 and signed at once, and presented at different times. ^ 
 Where the consent of taxpayers of a certain class is re- 
 quired the petition must show that its signers belong to 
 that class.^ 
 
 Where the affidavit of the assessors was made the evi- 
 dence of the assent of the necessary proportion of the 
 people, it was held that until such affidavit was made 
 the assent of any signer might be withdrawn." And where 
 the assent was to be evidenced by a certificate to be filed 
 and recorded in the office of the town clerk, and it ap- 
 peared that the certificate was filed, but not recorded, a 
 mandamus to compel the issue of the bonds was re- 
 fused.^ 
 
 It has been held that the power vested in a taxpayer to 
 sign his consent cannot be exercised by proxy, ^ but this 
 does not prevent the signature by another of the name 
 of one who is present and assents, and written author- 
 ization to sign attached to the petition is sufficient. 
 
 When the statute autliorizes the court to issue the 
 bonds when a majority of the taxpayers whose names ap- 
 
 ' Craig V. Andes, 93 N. Y. 405, 
 
 - Springportv. ToutoniaSav. Bk., 
 84 N. Y. 40.3. After reference to a 
 committee and before final action 
 lie may witlidraw his name. Noble 
 V. City of Vincennes, 42 Ind. 125. 
 
 •' People V. Kenshaw, 61 Barb. 
 409 ; Biddel v. Borough of Riviiig- 
 ton, (N. J.) 33 Atl. R. 279. 
 
 * Town of Springfield v. Sav. 
 Bank, 84 N. Y. 403. 
 
 5 People V. Hewitt, 5 Lans. (N. Y.) 
 89. 
 
 'Rich V. Mentz Township, 134 
 U. S. 6G2 ; Mentz v. Cook, 108 N. Y. 
 504. 
 
 ' People V. Allen. 52 N. Y. 538. 
 
 ^ Essex Co. R. R. Co. v. Luncu- 
 burgh, 49 Yt. 143. 
 
 ^ Peoples V. Knowlcs, 47 N. Y. 
 415.
 
 § Gi 
 
 MUNICIPAL BONDS. 
 
 [CH. 
 
 VI. 
 
 pear upon the last preceding" tax-list or assessment-roll as 
 owning a majority of the taxable property in the corporate 
 limits make application by petition, the petition, it has 
 been held, must actually be signed by a majority of sncli 
 taxpa3^ers, and that verbal authority to sign their names 
 was not sufficient, and further, that the facts must be 
 proved by affidavit, and that the court could not act upon 
 his personal knowledge.^ 
 
 And where the act required that the petition for an 
 election be signed by a majority of the freeholders, and 
 at a meeting held therefor the names of those who were 
 favorable thereto were publicly announced, and a com- 
 mittee appointed to sign such names. No objection was 
 made, and it was held that this was a sufficient signing 
 and compliance with the requirements of the statute.^ 
 
 The petition must be drawn with care, having reference 
 to the enabling statute, and must comply with it and also 
 the decisions of the courts on the subject.^ It must not 
 be conditional,* and must allege that the necessary con- 
 sent has been obtained in the manner required by the 
 statute.^ 
 
 Where a city was authorized to take stock in a railroad 
 company " on the petition of two-thirds of the citizens, 
 wdio are freeholders," etc., the bonds were issued, and the 
 minutes of the council simply stated that ' ' the freeholders 
 of the city, with great unanimity, had petitioned.-' It 
 was held that the council were the proper judges whether 
 or not the required number had petitioned, and that the 
 city was concluded by the ordinance issuing the bonds 
 from setting up any irregularities.'^ 
 
 Where the statute required that the petition must be 
 signed by '' a majority of the taxpayers, exclusive of those 
 
 ' People V, Smith, 45 N. Y. 772. 
 
 2 In Chicago etc. R. R. Co. v. 
 Coyer, 79 111. 373. 
 
 » I. N. & S. R. R. Co. V. City of 
 Attica, 56 Intl. 476. 
 
 * Craig V. Town of Andes, 93 N. 
 Y. 405 ; contra Bittcnger v. Bell, 
 ()45 Ind. 445. 
 
 ^ 3!orrison v. Bei'nards, 29 N. J. 
 78 
 
 L. 219. In proceedings by injunc- 
 tion by taxpayers, signatures at- 
 tached on Sunday were held to be 
 void. De Forth v. AVisconsin etc. 
 R. Co., 320. 
 
 * Van Hostrup v. Madison City, 1 
 Wall. 291. For sufficiency of peti- 
 tion, i5ee 22 Am. & Eng. Corp. 
 Cases, 54 n.
 
 CH. VI.] CONSENT OF TAXPAYERS, ETC. § •'>(] 
 
 taxed for dogs and highway purposes only," a petition 
 which recited that it contained the assent of " a majority 
 of the taxpayers " was held insufficient, and the bonds 
 issued pursuant to the petition were held invalid, the 
 court holding that the judge who issued the bonds never 
 acquired jurisdiction.^ 
 
 Where the statute required the " consent of a majority 
 of the taxpayers appearing upon the last assessment roll 
 as shall represent a majority of the landed property of 
 the township," the consent of a majority of all the tax- 
 payers and a majority which will also represent a ma- 
 jority of the real estate is necessary.^ 
 
 The "last assessment roll " refers to the roll next pre- 
 ceding the time of acceptance by the people.* 
 
 Under the Wisconsin statute,* which permits persons 
 who were residents of the district on the day when the 
 petition may first he presented, and whose property was 
 assessed on the last assessment roll, except idiots, insane 
 persons and minors, to sign the petition, it has been 
 held that in determining whether the petition was signed 
 by a majority of the resident taxpayers, idiots, insane per- 
 sons and minors must be counted.^ 
 
 In some of the States the school-district boards have no 
 authority to call an election to submit the proposition to 
 issue bonds, unless a certain number of the taxpayers or 
 other designated ])ersons petition tliat such an election be 
 called, and it has been held that where such a petition is 
 presented, the determination of the board is not con- 
 clusive of the qualifications of the petitioners, but that 
 the same may be reviewed in an application to restrain 
 the issue of bonds.^ 
 
 ^ GO. Question of issiiin^r bonds often submitted to tbe 
 voters. — The constitutions of many of the States requin' 
 that the question whether a municipality shall incur 
 
 1 Rich V. ilentz Towiisliip, l;34 
 U. S. 623 ; Town of Mentz v. Cook, 
 108 N. Y. 504. 
 
 2 Lane v. Schomp, 20 N. J. Eq. 82, 
 " Dnanesbuvgh v. Jenkins, 46 
 
 Barb. 294. 
 
 ■• Rev. Stat. 946. 
 
 ° State V. Blackstone, 63 Wis. .^62. 
 
 c Fullerton v. Sciiool Dist. of T.iii- 
 coln, Neb., 59 N, W. R. 896 : -11 Xd.. 
 593. 
 
 ro
 
 §G7 
 
 MUNICIPAL BONDS. 
 
 [CH. 
 
 vr. 
 
 debt and issuo bonds therefor Hball first bo submitted to 
 the taxpa3'ers of the locaHty for approval, and that only 
 after an affirmative vote can the municipality incur the 
 debt and issue the bonds. 
 
 This prior submission of the question to the voters of 
 the municipality is a very common practice in many of 
 the States, and this mode of assent is held to be, in no 
 sense, a delegation of legislative authority, but a ques- 
 tion of acceptance or rejection of power.^ 
 
 The constitutions of the following named States contain 
 provisions which prohibit municipalities from incurring 
 any debt, or increasing the debt above a certain per cen- 
 tum of the assessed valuation, without the consent of the 
 voters : 
 
 California, Colorado, Georgia, Idaho, Kentucky, Mis- 
 souri, Montana, Nebraska, North Carolina, North Dakota, 
 Pennsylvania, Washington and Wyoming. 
 
 The reader is referred to the abstracts from the State 
 constitutions appended to this volume, for fuller infor- 
 mation as to the constitutional requirements on this sub- 
 ject. 
 
 Many of the statutes under which bonds are issued also 
 contain the same provisions, although the constitution of 
 the particular State does not require the submission of 
 the question. 
 
 § C)7. When submission rninirort bonds cannot issue 
 without it. — It may be said generally that when an 
 election is required for this purpose, the officers of the 
 municipality cannot act without it, and their acts in 
 such cases would be void for want of jurisdiction,^ and 
 if they act, or attempt to act, without an election being 
 first held, the issue of the bonds or other evidence of debt 
 will be restrained, and a taxpayer need not wait until the 
 bonds or other paper are called for or issued.^ 
 
 1 Paterson v. Society, 4 Zab. (N. 
 J.) 385; Bank v. Brown, 26 N. Y. 
 457; Foote v. Cincinnati, 11 Ohio, 
 408 ; Stone v. Charleston, 114 Mass. 
 214 ; Black's Const. Law, 281. 
 
 ^ Cowdry v. Canoedoa, IG F. TJ. 
 532 ; Louis v. Bourbon Co.. 12 Kan. 
 80 
 
 ISO : Board of Com'i-s v. McChin- 
 tock, 51 Ind. 325 : Steines v. Frank- 
 lin Co., 48 Mo. 167. 
 
 8 Winston v. Tenn. & P. R. R. 
 Co., 57 Tenn. 60 ; Harding v. Rock- 
 ford. 65 111. 90.
 
 CH. VI.] CONSENT OF TAXPAYERS, ETC. § 67 
 
 And where an election is required to give the munici- 
 pahty power to incur debt and to issue bonds, the prop- 
 osition must, under the statute, be submitted to the people 
 and accepted by them before the bonds can issue. If no 
 election is in fact held, or the proposition not submitted, 
 the bonds or other paper if issued are void,^ although it 
 has been intimated that if the paper contain proper re- 
 citals made by authorized officers of the corporation, the 
 corporation will be estopped from setting up the defect 
 as a defence.^ 
 
 When the constitution requires that the question be 
 submitted, if not done, and if the bonds are issued, they 
 are void, and there can be no estoppel.^ 
 
 The constitution of Idaho, art. 8, sec. 3, provides that 
 " no county shall incur any indebtedness or liability in 
 any manner, or for any purpose, exceeding in that year 
 the income and revenue provided for it for said year, 
 without the assent of two-thirds of the qualified electors 
 thereof, voting at an election to be held for that purpose. 
 It was held that the county without such a vote could 
 not issue bonds, the amount of which exceeded such in- 
 come, though the purpose of the issue of the bonds was 
 to pay existing indebtedness.* 
 
 When a general statute authorizes a munici])al body 
 or a court to issue bonds for a particular purpose upon the 
 assent of the legal voters, and afterwards a subsequent 
 special statute authorizes the issue of such bonds for the 
 same purpose without a vote, bonds may be legally 
 i.ssued pursuant to such subsequent statute witliout ;i 
 vote, provided the constitution of the State does not re- 
 quire such prior submission, and the special act itself is 
 not in conflict with the constitution.^ 
 
 A municipality may, if it choose, submit a question to 
 the voters, although not required to do so,^ but if no 
 
 'Chambers v. Clews, 21 Wall. [ asherrard v. Lafayette Co.,. 3 Dill. 
 317; Steines v. Franklin Co., 48 C. C. R. 23G. 
 
 Mo. 167 ; Flagg v. Palmyra, 3.3 Mo. I * Bannock Co. v. Bunting & Co.. 
 40. explained. 37 P. R. 277. 
 
 - Dill, on Mun. Corp. (4tli ed.) i^ . ^ county of Tipton v. T>oc'omotivo 
 .n?.") ; Mayor v. Lord, fl Wall. 414, '■ Works, 10:5 U. S. 't2:). 
 i:;^ 200. 201. See also g§ 240-252. I « Masonv.Shawneetown. 77111. 533. 
 G bl
 
 §07 
 
 MUXlCirAL BOXDS. 
 
 [CIT. 
 
 YI. 
 
 power existed a submission will not authorize an issue of 
 bonds. ^ 
 
 When the vote is held before the statute authorizinLr 
 it was adopted, it would confer no authority,^ uidess the 
 statute in terms provided that such vote should be con- 
 sidered an approval.^ Where certain townships had 
 voted under an unconstitutional statute to aid a rail- 
 road, and had issued their bonds in pursuance thereof, 
 the Supreme Court of South Carolina'* held an act sub- 
 sequently passed to impose upon the consenting townships 
 the debt which they had so consented to, to be constitu- 
 tional. The court said : 
 
 "Except for governmental purposes proper, we do not 
 think that the Legislature has the power to impose a tax 
 upon the people of any i^articular locality or territorial 
 subdivision of the State without their consent. In this 
 case, however, such consent was given, and that is th(^ 
 avowed hasis upon which the act of 1888 rests. It is 
 argued, however, that such consent has only been mani- 
 fested by an election held without authority of law, and 
 hence should not be regarded. It seems to us that it is 
 not at all material how the assent of the people has been 
 given. All that was necessary was that the Legislature 
 should be satisfied that consent had been given, and the 
 terms of the act, especially the preamble, show plainly 
 that they were notified of that fact," 
 
 The same court held in another case ^ that there ^vas 
 no necessity under the same act to issue new bonds, 
 but that the debt imposed upon the townships by the 
 subsequent act of 1888 was represented by the old bonds 
 to be paid in the manner provided in the subsequent act. 
 
 Where an election is a condition precedent, the proposi- 
 tion submitted to and approved by the vote of the people 
 is the only one upon which the officers of the munici- 
 pality can act. 
 
 1 Hayes v. Holly Springs, 114 U. 
 S. 120. 
 
 2 Berlin v. Waterloo. 14 Wis. 8T.S. 
 
 3 Leavenworth v. Barnes. 94 U. S. 
 
 70 ; Jolmson v. Thayer, 94 lb. 631. 
 89 
 
 * State cxrel. Dickinson v. Neeh- 
 30 S. C. 587 ; 9 S. E. R. 6G4. 
 
 e State ex rel. C. C. & C. Co. v 
 Whitesides, 30 S. C. 579.
 
 CH. VI.] 
 
 CONSENT OF TAXPAYERS, ETC. 
 
 §G8 
 
 § 68. What irregularities do not aflTect vote. — All 
 
 the preliminaries to the elections must conform fully to 
 the course marked out in the statute, and a failure so to 
 do will present sufficient reasons to restrain the issue of 
 bonds or other municipal jDaper on the aj^plication of a 
 taxpayer,^ but irregularities which do not affect the re- 
 sult of the vote and do not go to the jurisdiction, do not 
 affect the validity of the bonds in the hands of a bona 
 fide holder.^ 
 
 In the case of Pana v. Bowler, 107 U. S. 529, it ap- 
 peared that the bonds in suit were issued by the town- 
 ship of Pana to aid a railroad, and recited that they were 
 issued in compliance with the consent of the legal voters 
 thereof at an election held on a certain day named. It 
 appeared that the election was not held by the proper 
 officers, but the bonds were in the hands of a bona fide 
 holder. The court held the township to be estopped 
 from setting up the defence that the proper officers did 
 not preside at the election and held the bonds in the 
 hands of a bona fide holder good.'^ 
 
 The court in this case refused to follow the decision of 
 the Supreme Court in Lippincott v. Town of Pana, 02 
 111. 24,* where like bonds were held invalid in the hands 
 of a bonafiide holder. The court said : 
 
 ^ People V. Town of Santa Anna, 
 67 111. 57. 
 
 2 Johnson Co. v. Thayer, 94 U. S. 
 631 ; Com'rs v. Sharter, 50 Ga, 489 ; 
 Am. & Eng. Ency. of Law, Vol. 15, 
 p. 1275 ; Nat. Bk. v. Granada, 41 
 Fed. Rep. 87 ; Irwin v. Lowe, 89 
 Ind. 510; IMadison v. Priatly, 43 
 Fed. Rep. 87 ; Pana v. Bowler, 107 
 U. S. 529. 
 
 ■'' In the late case of Coler v. 
 Rhoda School Tj). of Cliarles Mix 
 Co., (S. D.) G?, N. W. 158, where the 
 statute pursuant to which tlie honds 
 in suit were issued autliorized tlie 
 school board ujion a petition in 
 writing by a niajoritj' of the resi- 
 dent electors to give notice of an 
 election to submit the proposition 
 
 to issue bonds, it appeared that 
 the election was held and the prop- 
 osition submitted and carried, and 
 the bonds in suit were issued, but 
 no petition was presented, and the 
 notice of election as required by the 
 statute was not given. 
 
 The bonds recited tlic enabling 
 act, and were sold for full value 
 and the money applied to the pur- 
 pose of the issue. The first instal- 
 ment of interest was paid. Tlie 
 court lield the bonds to be valid in 
 the hands of a boiia fide holder, 
 holding that the recitals imported 
 a strict compliance with tlie statu- 
 tory requirements. 
 
 ■* In Lipjiencott v. Town of Pana, 
 93 111. 24, it was held that where 
 83
 
 08 
 
 MUNICirAL BONDS. 
 
 [CH. VI. 
 
 " AVe are not bound to accept the inference drawn by 
 the Supreme Court of Illinois that, in consequence of 
 such irregularity in the election, the bonds issued in 
 pursuance of it by the officers of the township, which re- 
 cite on their face that the election was held in accord- 
 ance with the statute, are void in the hands of bona 
 jide holders. 
 
 " This latter proposition is one which falls among the 
 general principles and doctrines of commercial juris- 
 prudence, upon which it is our duty to form an independ- 
 ent judgment, and in respect of which we are under 
 no obligation to follow implicitly the conclusions of any 
 other court, however able or learned it may be,"^ 
 
 This case also held that the irregularity in the con- 
 duct of the election did not throw upon the holder of the 
 bonds the burden of proving himself to be a bona fide 
 holder, for vahie without notice, nor alter the general 
 rule that when the holder of a negotiable instrument, 
 regular on its face and payable to bearer, produces it in 
 a suit to recover its contents, he is to he prima facie jDre- 
 
 
 the statute required the election to 
 be lieUl in same manner as a general 
 election, that if it was in fact held 
 as a special town meeting, and not 
 as a general election, it will be a 
 nullity and confer no power to issue 
 bonds, and if they are issued they 
 will be void. In this case the bonds 
 recited that they were issued by the 
 township in compliance with the 
 Irgal voters thereof and recited the 
 enabling acts. Tlie court held that 
 tliere was an entire absence of 
 power and not a defective execu- 
 tion of power. And further held 
 that the purchaser, notwithstand- 
 ing the recitals, was bound to look 
 at the records, and if he had done 
 so lie would have ascertained that 
 the wrong officers conducted the 
 election. 
 
 Tn J. N. W. & S. E. R. R. Co. v. 
 Yirden. 104 111. 389, it was held that 
 84 
 
 an election called by the wrong 
 person or body is absolutely void 
 and so are bonds issued pursuant 
 to such an election. 
 
 In Veder v. Lind, 19 Wis. 280, it 
 was held tliat although a bond re- 
 cited that it was issued pursuant 
 to the enabling statute, w-hich it 
 recited, and in pursuance of a vote 
 of the legal voters authorizing the 
 issue, the bond was invalid because 
 the statutory notices of election 
 were not given. 
 
 The court held the holder was 
 bound to look at the record. The 
 supervisors were only to act after 
 an affirmative vote. 
 
 The court in this case acknowl- 
 edged that its decision was not in 
 line with the Federal cases. 
 
 ' See also Fidelity T. & S. U. Co. 
 V. City of Morganfleld, 29 S. W. R. 
 4-13.
 
 CH. Yl.] 
 
 CONSEXT OF TAXPAYERS, ETC. 
 
 § m 
 
 sumed to be the holder of it, for vahie at its date, and 
 became so possessed of it in the usual course of business. 
 
 Iregularities will not invalidate negotiable bonds in 
 the hands of innocent holders, although they are 
 such that, had the question been raised in the proper 
 manner, and before they reached the hands of the inno- 
 cent holders, the bonds would have been held invalid/ 
 
 All the proceedings leading up to the vote must be 
 performed as required by the enabling act, otherwise the 
 issue will be restrained. If the proper notice of election 
 is not given as to time or place the issue will be re- 
 strained,^ or if the proposition contained in the notice of 
 election is not the one submitted the issue will be re- 
 strained.'^ 
 
 The good faith of the electors will not be questioned 
 in collateral proceedings,* nor will promises held out to 
 induce voters to give their consent, and where certain 
 citizens agreed to subscribe an amount equal to the tax, 
 if the proposition to issue the bonds was carried, this 
 agreement was held not to be a bribe. ^ Fraud practised 
 in the election must be shown before the bonds pass into 
 the hands of a bona fide holder in order to be available 
 as a defence. *" 
 
 §69. Submission necessary, although debt limita- 
 tion extended.— Where the charter provided that the 
 amount of the bonded debt should not exceed a certain 
 sura, and that the electors should first apjDrove before the 
 debt was incurred, and subsequently an act was passed 
 which authorized the city to issue bonds to an amount ex- 
 ceeding the sum designated in the charter and repealed 
 "all acts and parts of acts inconsistent with the pro- 
 visions" thereof, it was held that the subsequent act 
 did not repeal the charter provision requiring a vote of 
 
 1 State V. Hardy, (Kan.) 18 Pac. 
 R. 942. 
 
 2 Harding v. Rockford R. R. Co., 
 65 111. 90 ; Nat. Bk. v. Granada, 44 
 F. R. 262 ; McVichie v. Knight, 51 
 N. W. R. 1094. 
 
 ^ Packard v. Jefferson Co., 2 Cal. 
 338. 
 
 4 State V. School Dist. No. 4, i:^ 
 Neb. 139. 
 
 ^ Hord V. Rogersville etc. R. Co.. 
 3 Head (Tenn.) 208. 
 
 6 Johnson v. Stark Co. , 24 111. 
 75. 
 
 85
 
 § 71 MUNICIPAL BONDS. [CH. VI. 
 
 the people, but only extended the limit of the debt to be 
 so authorized.^ 
 
 § TO. Effect of constitutional amendments requiring 
 submission. — When a municipality has authority under 
 exist uig- hiws to issue bonds, without a vote of the people, 
 and the people afterwards adopt a constitution which 
 prohibits the Legislature from passing laws authorizing 
 the issue of bonds without such a vote, the municipality 
 may issue bonds under the original authority, if it re- 
 mains unchanged by the Legislature, without regard to 
 the change in the constitution, because the consti- 
 tutional provision is prospective and curtails only the 
 future acts of the Legislature.^ 
 
 When, however, the constitutional amendment is direct- 
 ed to the municipalities, and prohibits them from incur- 
 ring a debt, unless the legal voters consent, the limita- 
 tion acts at once and repeals all prior authority to incur 
 debts without an election. 
 
 § 71. When election set aside, and its effect. — It is a 
 rule of the courts to sustain rather than defeat the vote 
 of the people, and an election will not be set aside for a 
 mere irregularity or informality which does not in 
 any manner affect the result of the election.^ 
 
 But when the Legislature declares a certain irregularity 
 in election procedure as fatal to the validity of the returns, 
 the courts effectuate the commands ; otherwise they will 
 ignore such irregularities as are free from fraud and have 
 not interfered with a fair expression of the voter's will.* 
 
 And a court, on the application of a taxpayer to restrain 
 the issue of the bonds, will not entertain, as a reason 
 therefor, the inducements held out to the voters. 
 
 It can be stated as a general proposition, that when the 
 electors have not had a fair opportunity to express their 
 will at an election, by reason of fraud or gross irregulari- 
 
 1 State V. Folley, 10 S. E. R. 195. 
 
 2 Scotland Co. v. Thomas, 94 
 U. S. 682 ; Ralls Co. v. Douglass, 105 
 U. S. 728. 
 
 ' Ackerman v. Ha^nck, 147 111. 
 514 ; Lehlback v. Haynes, (N. J.) 
 86 
 
 23 Atl. R. 422 ; United States v. 
 Memphis, 97 U. S. 284 ; Cooley on 
 Const. Lim. 618. 
 
 * Bo%vers v. Smith, (Mo. Sup.) 20 
 S. W. R. 101.
 
 CH. VI.] CONSENT OF TAXPAYERS, ETC. § 72 
 
 ties on the part of the election officers, or on the part of 
 the municipal officers, to such an extent that but for such 
 fraud or irregularities the result of election would have 
 been different from the declared result, that the election 
 will be setaside,^but proceedings to set aside an election 
 will not affect bonds issued as a result of such an election, 
 if in the hands of innocent purchasers. Nor will the fact 
 that such election was fraudulently conducted, or irregu- 
 larities were permitted or j^ractised to such an extent as to 
 have changed the result of the election, affect bonds in 
 thehands of a 6o?? a y?c?e holder, issued pursuant to such 
 an election,^ if the bonds contain recitals which will estop 
 the corporation from setting up the fraud or irregulari- 
 ties,^ or it be estopped by its records.* 
 
 And although the bonds contained no recitals they will 
 be valid, if the proceedings of the municipality, or of the 
 officers authorized to issue the bonds, showed that they 
 had passed upon and accepted such election as a valid one.^ 
 And the corporation may also be estopped by laches 
 or acquiescence on the part of the corporation issuing 
 the bonds. ^ 
 
 § T2. Proposition to name the amount of issue. — 
 When the statute under which the bonds are to be issued 
 requires that the proposition be first approved by the legal 
 voters, and they are to specify the amount of the issue, a 
 failure so to specify will render the vote nugatory, and 
 mandamus will issue to restrain the issue,'' but if the 
 bonds are issued such failure will not invalidate the bonds 
 in the hands of a bona fide holder, if they contain proper 
 recitals to estop the corporation.^ 
 
 When the law requires the voters to specify the amount, 
 
 Fox, 28 P. R. 10T8 ; Chicago K. & 
 W. Co. V. Harris, 80 P. R. 456; 
 Fidelity T. & S. U. Co. v. Morgan- 
 field, (Ky.) 29 S. W. R. 442. 
 
 6 See § 242 ct seq. 
 
 "^ People Nat. Bk. v. Pomona, 48 
 Kan. 55. 
 
 8 State V. Saline Co., 48 Mo. 390 ; 
 George v, Oxford, IG Kan. 72 ; 
 Harding v. Rockford etc. Co., 65 
 111. 90. ' 
 
 87 
 
 1 Dill, on IMun. Corp. (4th ed.) 
 199 and n. 
 
 2 Frand must be set up before 
 i-ights have accrued and the bonds 
 issued. Butler V. Dunham, 27 111 
 474 ; People v. San Fi-ancisco, 27 
 Cal. 655. 
 
 3 Humboldt Tp. v. Long, 92 U. S. 
 642. See Effect of Recitals herein. 
 
 * See § 240. 
 
 fi Hutchinson & S. R. R. Co. v.
 
 §T-2 
 
 MUxrcrrAL bonds. 
 
 [CH. vr. 
 
 tho jn-oposition (.-aniiot be submitted for or nf^ainst any 
 ainount ii<>t exceeding a certain suni,^ and wherever the 
 body to pass on the question is required to specify the 
 amount of money to be expended, or of the bonds to be 
 issued for a particuhir purpose, it will not suffice for them 
 to simply limit tlie amount.^ Where a scliool-district 
 board was autliorized by statute to submit to the voters 
 thereof tluMjuestion of issuing bonds, the statute forbid- 
 ding the issue above a fixed sum at a rate of interest not 
 exceeding six per cent, and requiring them to be payable 
 at a certain period, the notice did not state the time of 
 payment or the rate of interest, the court restrained 
 the issue.^ 
 
 A proposition to issue S-KJO.OOO worth of bonds orsucli 
 lesser sum asmay be sufficient was held to be valid, where 
 the officers had power to issue bonds only to an amount 
 sufficient to fund the indebtedness, which was $-ilO,lso, 
 and bonds to that amount were issued.'* 
 
 Where a statute provided that a school district may, by 
 a majority vote of its voters, issue; bonds up totwo-thiixls 
 of the costs of a proposed school-liouse, it Avas held that 
 a vote which authorized the issue of bonds in excess of 
 two-thirds of sucli cost is sufficient authority for the 
 issue of bonds up to two-thirds of such cost.'' 
 
 A proposition submitted to the voters and carried to 
 issue bonds to '* an amount not to exceed one million 
 dollars " was held to authorize the city council to issue 
 §500,000 of bonds, and that the council had discretion- 
 ary powers within the maximum amount.^ 
 
 Where the word " may " is employed in the constitution 
 or statute relating to the submission of the question to 
 the taxpayers, it is deemed to be mandatory and should bo 
 read as ''shall," and compliance with the terms of tlie 
 statute in such cases is not optional.'^ 
 
 ^ State V. Saliiio Co., 4.1 Mo. 242 ; 
 Mercer Co. v, Pittsburgh & E. K. 
 R. Co., 27 Pa. 389. 
 
 2 fiercer Co. v. Pittsburgh etc. 
 R. R.. 27 Pa. 8t. 389. 
 
 3 State V. School Dist. No. 1, 
 (Mont.) 38 P. R. 462. 
 
 88 
 
 ♦ Baker v. City of Seattle, 2G Pac. 
 Rep. 4G2. 
 
 ^ Vaugh V. Scliool Dist. No. 31, 
 (Or.) 39 Pac. R. 393. 
 
 « Winter v. City Council of Mont- 
 gomery. G~) Ala. 403. 
 
 " Portlana R. Co. v. Standish. 05
 
 CH. VI.] CONSENT OF TAXPAYERS, ETC. § To 
 
 § T3. Proposition must be distinct and separate. — 
 
 The question must be submitted so [is not to confound it 
 with another,^ as in the case of Fulton Co. v. The M, &. W. 
 R. R, Co.,^ wherein Walker, J., said " that the law did 
 not authorize the submission of a proposition for sub- 
 scription of a gross sum to two roads, in the same sub- 
 mission, in such a manner that the voter had no option 
 to vote for the one and against the other. This sub- 
 mission was made in this manner. It is proposed to sub- 
 scribe one hundred thousand dollars, one fourth to this 
 and three-fourths to another road, and the voter, how- 
 ever much in favor of the one and opposed to the other, 
 v/as compelled to vote either for or against the entire 
 subscription." 
 
 In the case of McBryde v. City of Montesano, 31 Pac. 
 Rep, 559, the facts disclosed that two distinct i:)roposi- 
 tions had been submitted, one to fund $20,000 of old debts, 
 and the other to borrow $5,000 for future purposes, 
 and only one ballot was used, so that the voter had no 
 opportunity to express himself separately as to each, the 
 whole election was held void.*^ 
 
 When the proposition to issue the bonds is for an amount 
 in excess of the limitation, the bonds, if issued, are void 
 because the proposition is an entirety and indivisible, and 
 tlie election is simply a void act and confers no power on 
 the officers to issue the bonds.* 
 
 In another case, where the assessment roll was filed so 
 soon before an election that it was not ascertained until 
 after the election that the proposed issue exceeded the lim- 
 itation, the court held the election to be valid as to the 
 
 Mo. 63 ; Gulf etc. R. Co. v. Miami 
 Co., 12 Kan. 230 ; U Am. & Eng. 
 Eney. of Law, 979. In Stiones v. 
 Franklin Co., 48 ^Mo. 107, the court 
 held that when the rights of tliird 
 
 tures shall be made by the county 
 courts . . . the count}' court majf 
 for the purpose of information sub- 
 mit tlie amount to tlie voters," etc. 
 1 Peoria & O. R. R. v. County of 
 
 persons are involved or the public Tazewell, 22 111. 156. 
 
 good requires it the word "maij" 
 used in law should always be con- 
 strued to mean "shall," and it ap- 
 
 2 21 111. 3C8. 
 
 3 Truelson v. Mayor of Duluth, 
 (Minn.) 63 N. W. R.'714. 
 
 jilied this construction to a statute ^ Reineman v. C. & C. R. Co., 7 
 authorizing tlie issue of bonds Neb. 310. 
 which read, " Before any expendi- 1 
 
 89
 
 ^ 7-1 MUNICIPAL BONDS. [CH. VI. 
 
 amount within tlu^ limitation, and restrained the issue only 
 as to the excess.^ 
 
 § 74-. How submitted. — When the statute is silent as to 
 the mode of proceeding by the common council for sub- 
 mitting the proposition to the voters, the same may be 
 submitted by a resolution instead of an ordinance,^ but 
 where the statute or charter of the city requires such a 
 submission to be done by ordinance, it must be signed, 
 recorded and published as required by such statute or char- 
 ter, or the bonds will be void.^ 
 
 After the bonds are issued and are in the hands oihona 
 fide lioldors the mode of submission cannot usually be 
 questioned. As where three distinct propositions were 
 submitted in one, so that the taxpayers were unable to 
 vote upon any one alone, and the bonds were issued and 
 passed into the hands of innocent holders, the court held 
 it too late to raise the objection that the proposition was 
 ini])r<)i)erly submitted.* 
 
 Where the submission of such questions is regulated by 
 the constitution, a material variation of the statute from 
 the constitution would ])e fatal, as where a statute author- 
 ized the submission of the question of aid to a railroad to 
 the resident taxpayers, and the constitution required all 
 such ])r()i)ositions to be submitted to the electors, the 
 autlKnization of the resident taxpayers was held to be 
 void.^ And where the statute permitted the issue of 
 bonds if "two-thirds of the qualified voters voting at 
 such an election" should assent, the statute was declared 
 unconstitutional, because the constitution prohibited such 
 issue, unless assented to by two-thirds of the qualified 
 voters of the municipalit}'.^ 
 
 Where the law required that the amount of stock nec- 
 ess.'iry when a municipality was authorized to subscribe 
 for stock in a private corporation and the amount of the 
 
 > Scym(jur v. Tacoma, 33 P. R. 
 1059. ' 
 
 ■^ City of Alma v. Guaranty Sav. 
 Bank, 60 F. R. 203. 
 
 » Nat. Bank of Commerce v. Town 
 of Granafla. 54 F. R. 100. 
 
 * Mfvpr V.Muscatine, 1 "\Vall-393. 
 "90 
 
 ^ Plainview v. Winona Co., 36 
 Minn. 224. 
 
 « llarshnian v. Bates Co., 92 U. S. 
 569. For cases on manner of sub- 
 mission of question, se6 23 Am. & 
 Eng. Corp. Cas. 54, a.
 
 CH. Vr.] CONSENT OF TAXrAYERS, ETC. § 7G 
 
 bondstobeissued.be named, it was held that the bonds 
 could not issue because the proposition submitted did not 
 state the amount of the bonds to be issued.^ 
 
 It is only necessary to submit to the voters those matters 
 directed to be submitted by the statute, and where unnec- 
 essary matter is submitted the council is not bound to 
 follow the proposition voted on by the people as to such 
 surplusage.^ 
 
 Where it was intended to purchase a plant for electric 
 lighting and pay for the same by the issuance and sale of 
 bonds, it was held lawful to submit the entire matter in 
 one proposition.^ 
 
 § 75. Same. — Where the ordinance for election showed 
 that the question to be submitted was, whether the float- 
 ing debt of a municipality should be funded, and a record 
 of the canvassing board showed that a ihajority of the 
 electors voted to fund the debt, and there was nothing of 
 record to show the record was defective, it was held that 
 bonds issued pursuant to such submission and vote were 
 not invalid, although the notice of election was for the 
 proposition to issue water bonds.* 
 
 The statute sometimes provides that the proposition 
 contained in the notice of election must state the amount 
 of the tax levy to be made for the payment of the bonds. 
 It has been held that this provision was satisfied where 
 the ordinance calling such election stated that the bonds 
 shall be "serials," that one-twentieth of the whole indebt- 
 edness would be paid each year, including interest at six 
 per cent payable semi-annually, and that "the tax levy 
 for the payment thereof amounts during the full period 
 of twenty years to $07,^00 " for water-work bonds, and to 
 $-1:0,750 for sewer bonds.'"^ 
 
 § 76, When propositions may be sulnnitted. — The ques- 
 tion may be submitted at the regular election of the 
 
 1 People's Nat. Bk. v, Pomona, 28 i « Thompson H. E. Co. v. City of 
 P. R. 1089. See also People v. I Newton, 43 F. R. 723. 
 Baker, 23 Rep. 3G4. [ " Nat. Bank v. Town of Granada, 
 
 2Yeslerv.CityofSeattle,lWash. 41 Fed. Rep. 87. 
 308. I 5 E. SI. Darby Co. v. City of Mo- 
 
 desta. 38 Pac. Rep. 900. 
 
 91
 
 §"7 
 
 MUNiriPAL I50NDS. 
 
 [CH. YI. 
 
 inuiiicipality, unl(>ss the statute requires that it he sul> 
 mittt'cl at a special election called for the purpose.^ 
 
 When the statute requires that it he suhmitted at a 
 regular election, a vote taken at a special election is inef- 
 fectual.- Where the statute provided that ''no vote shall 
 he taken unless at a regular election of town or county 
 oiriccrs," a vote taken at any election for either town or 
 county oniccrs was held good.^ 
 
 The animal cliarter election held for the election of 
 municipal officers, though no State or county officers are 
 to he chosen, is a general election, at which a proposition 
 may he suhmitted to the legal voters, unless the act other- 
 wise directs.^ 
 
 Unless the statute which authorized the submission of 
 the proposition to the voters shows a contrary intent, the 
 questii)n may he re-submitted, although once or more prior 
 thereto voted down.^ 
 
 § 77. Notice and time of election.— The notice of elec- 
 tion must be given by the proper officers, or the bonds wMll 
 he void, even in the hands of innocent holders,^ unless the 
 bonds contain recitals made by officers of the municipal 
 corporation who are authorized to pass upon the question 
 which will estop it from the setting up the irregular- 
 ity,' and it also may be estopped by its own laches or 
 records. 
 
 The resolution or ordinance authorizing the submission 
 
 ^ Union Hank v. Board etc. of 
 O.xfonl. (N. C.) 21 S. E. R. 410. 
 
 - I'ana v. Lippincott, 2 111. App. 
 4GG. 
 
 =< Eihvards v. People. S8 111. 340. 
 
 * People V. Town of 15. rkley. (( 'al.) 
 SOP. K. ."illl. 
 
 « Daniel v. Clarke Co., ",4 Mo. 58 ; 
 S«>c. ff>r Sav. v. New L<jndon. 29 
 Ct. 174 ; Woodward v. Calhoun Co., 
 2 Cent. L. J. .396 ; contra. ConiVs 
 V. Thayer, 94 U. S. 641. 
 
 ^ Town of Jaclcsonville R. Co. v. 
 Virden, 104 111. 3.']9. 
 
 ' Pana v. Bowler, 107 U. S. 529 : 
 Knox Co. V. A.'jpinwall, 21 How. 
 5:39 
 
 92 
 
 In St. Joseph Tp. v. Rogers, 16 
 "Wall. 644, one of the points relied 
 upon hy the defence was that tlie 
 town meeting was called and held 
 before the act was [)assed providing 
 for the election and issue of the 
 bonds. 
 
 The court held that as the statute 
 made it the duty of the supervisor 
 who issued the bonds to pass upon 
 tiie ([uestion whether an election 
 liad been properly held, and as the 
 bonds issued by him contained 
 proper recitals, the township was 
 estopped to set up the defence. Not 
 so in Illinois. See note 4 to g 68, 
 siqjra.
 
 CH. VI.] CONSENT OF TAXPAYERS, ETC. § 7T 
 
 of a proposition to the voters for their approval must 
 provide for the giving of a notice of the time and place of 
 election, unless snch time and place is regulated by the 
 enabling act, and if such provision is not made, the city 
 clerk or other officer cannot cause a notice to be given 
 designating such time and place. ^ 
 
 When the statute fixes no time for the holding of the 
 election, the legislative body may, unless the act desig- 
 nates some other body or person, fix the time and place 
 of holding it,^ and if the persons empowered to call an 
 election refuse so to do, mandamus will issue to compel 
 them to call one,^ unless it is discretionary with them 
 whether they will call it or uot.^ 
 
 The notice must be clear and intelligent and give infor- 
 mation of the time of the election and of the proposition 
 to be voted upon, so that the voters may have full knowl- 
 edge of the proposition, and in case of an affirmative 
 vote, the officers of the municipality may know wh;it 
 the wish of the people is, and what they themselves, by 
 the vote, were authorized to do.^ 
 
 The full time of notice must be given, and where thirty 
 days' notice was required of the time of election and it 
 was held eighteen days after the act took effect, and the 
 bonds were issued twenty-five days thereafter, both the 
 election and the bonds were held invalid.® Until the 
 proper notice is given the people have no right to vote. 
 The length of time of notice is as much a part of the pre- 
 liminary steps as the election itself, and a failure to 
 give the proper notice may render the bonds void. 
 
 When the enabling act is silent as to the length of 
 time and kind of notice to bo given of an election, and 
 there is a provision in some general law which requires 
 the kind and length of notice to be given before a 
 municipal corporation incurs a debt, the notice must 
 conform to this general law.' 
 
 1 Thompson v. City of Suinner, 
 7 P. R. 450. 
 
 2 Dill, on Mun. Corp. Vol. 1, g 194. 
 
 3 lb. ^^ 179, 838. 
 
 4 Cooler on Const. Lim. 603. 
 * Cooler on Const. Lini. 303. 
 
 " Ceorge v. Oxford Township. IG 
 Kan. 72. 
 
 " Bowen v. Greensboro, 79 Ga. 
 709 ; Union Bank v. Oxford, (N. C.) 
 21 S. E. R. 410 ; Post v. Co. of 
 Pulaski, 47 Fed. R. 282. 
 
 93
 
 MUNICIPAL BONDS. 
 
 [CH. VI. 
 
 Failure to p^ivc proper notice is not fatal to an election 
 11" tluTc was full knowledge thereof and a full vote.^ 
 
 An ordinance which provided for an election to issue 
 bonds required the city clerk to publish the election 
 notice for thirty days next preceding said election, and to 
 l)ost the same for a like period at certain places. It was 
 held that it was a substantial compliance where the 
 notice was posted twenty-six days prior to election and 
 published for thirty days, but not on the day preceding 
 the election, it not being claimed that the omissions 
 had an}' effect on the result.^ 
 
 AVhere a notice stated that the election would be held 
 in two separate places, when but one place could be named, 
 thus rendering it uncertain where the election would be 
 held, the election was held to be void.^ 
 
 § 78. Publication of notice. — Where the notice is to 
 be given a certain number of weeks prior to election, 
 publication once each week is deemed sufficient.* 
 
 The manual act of posting need not be done by the 
 officers required to give the necessary publication and 
 posting ; it may be done by others for them.^ 
 
 Notice signed by the clerk is sufficient, if done l)y order 
 of tlie board authorized to call the election.^ 
 
 When the statute required thirty days' notice, the issue 
 of the bonds was restrained for failure to give notice, 
 although a majority voted in favor of the proposition.' 
 
 Jj TM. Azotes reiiiiireil to carry tJic proposition. — The 
 constitution or statute usually requires that the matter 
 sul)mitted for popular approval shall receive a majority 
 or some other i)roportion of the legal or qualified voters. 
 
 The courts in almost every instance have construed 
 this to mean, without reference to any constitutional 
 jn-ovisitm on the subject, amajority or other required pro- 
 
 > State V. Carrol, (R. I.) 24 Alt. 
 200. 
 2 Seymour v. Toconia, oU P. R. 
 
 » People V. Carutliers, (S. D.) 36 
 P. R. jjno. 
 * Knox Co. V. Ninth Nat. Bk., 
 
 94 
 
 147 U. S. 91 ; 1)1 re Woodbridge, .30 
 Mo. A pp. Gl:2. 
 
 s Pliilips V. Town of Albany, 58 
 Wis. 340. 
 
 •5 Lawson v. Milwaukee & R. Co., 
 30 Wis. 597. 
 
 " Harding V, Rockfordetc. R. Co., 
 65 111. 90.
 
 CH. VI.] 
 
 CONSENT OF TAXPAYERS, ETC. 
 
 §79 
 
 portion of tlie legal voters, voting at the election when 
 the question is submitted, unless otherwise provided.^ 
 
 Chief Justice Waite in Cass Co. v. Johnston, 95 U. S. 
 3G9, said : "All the qualified voters who absent them- 
 selves from an election duly called are presumed to 
 assent to the expressed will of the majority of those 
 voting, unless the law providing for the election other- 
 wise declares. Any other rule would be productive of 
 the greatest inconvenience, and ought not to he adoi)ted, 
 unless the legislative will to that effect is clearly 
 expressed." 
 
 And in Louisville and Nashville R. R. Co. v. County 
 Court of Davidson Co., 1 Sneed, C3T-69G, the court said : 
 
 '' How can we know how many legal voters there are 
 in a county at a given time ? We cannot judicially 
 know it. If it were i)roved that the vote were much 
 larger than in the last preceding political election, or by 
 the last census by the official returns, or the examination 
 of witness, it would be only a circumstance, certainly not 
 conclusive. But we put our decision of that question on 
 a more fixed and stable ground. 
 
 "When a question at an election is init to the people, 
 and is made to depend upon a majority, there can he no 
 other test of the number entitled to vote hut the ballot- 
 box. 
 
 " If in fact there be some or many who do not attend 
 and exercise the privilege of voting, it must he presumed 
 that they concur with the majority who do attend, if 
 indeed they can he known at all to have an existence.'' 
 
 When the question was submitted with other ques- 
 tions, it was held, in Illinois and Wisconsin, that to be 
 carried it must receive a majority of all the votes cast, 
 and not a bare majority of the votes cast for or against 
 that particular question,^ but in California under art. 11, 
 
 1 Metcalf V. Seattle, 25 Pac. Rep. 
 1010; State v. Siiodgrass, 25 Id. 
 104; Smith v. Proctor, 130 N. Y. 
 319; Day v. Austin, 22 S. W. R. 
 757 ; St. Joseph Town v. Rogers, 16 
 
 Wall. GG4 ; McCrary on Elections, 
 133 ; Am. & Eng. Ency. of Law, 
 Vol. 15, 1297. See People ex rel. 
 V. Trustees, 70 N. Y. 28-33. 
 
 2 People V. Winant, 48 111. 263 ; 
 State V. Winkelmeier, 35 i\Io. 103. 
 95
 
 § so MUNICirAL BONDS. [CH. VI. 
 
 sec. 0, of the constitntioii of that State, it was held that 
 a majority of all the electors voting at such election, and 
 not a majority of the electors voting on the question sub- 
 mitted, was required,^ but in the case of City of South 
 Bend v. Lewis, (Ind.) :3() N. E. R. OSG, it was held that a 
 majority of the voters voting in favor of the proposition 
 was sufficient, although the proposition was submitted 
 on a da}' set for the regular election for cit}^ officers. 
 
 It would seem that a majority of those voting on the 
 l)articular subject should be sufficient to carry it, upon 
 the same principle that a majority vote on any proposi- 
 tion is sufficient, because all have an opportunity to 
 vote, and those who do not choose to avail themselves of 
 the opportunity should be held to assent to the expressed 
 will of the majority of those who do. 
 
 It has been held that the rule that but a majority or 
 other proportion of the votes cast is sufficient to carry a 
 proposition, although the registry lists show a greater 
 number of electors entitled to vote than those who at- 
 tended and voted. ^ This is the rule when a public officer 
 is balloted for, and there can be no reason alleged for a 
 different construction, when the assent of the taxpayers 
 is r<'(iuired to a ])roposition, unless the constitution or 
 statute requires sucli other assent.^ 
 
 § 80. Coustitutioiial requirements. — When the con- 
 
 > Peoi)k' V. Town of Borkk-y, 3G 
 
 V. R. rm. 
 
 ■; IVopk' V. Garner, 47 111. 246. 
 
 ^ VVhero an act in Indiana 
 jiutliitrizfil the several townships 
 thrnnj^h which a gravel road ran, 
 to |)urc-lias«' the s,aine and Lssneand 
 sf'll ni'gotiahle bonds for the pur- 
 |H>sc, if a majority of the voters 
 votf'd in favor of the proposition, 
 
 a niajoritj' of the votes in each 
 townshii). 
 
 It was also contended in this case 
 that the act was in violation of the 
 State constitution which provided 
 tliat "the General Assembly shall 
 provide by law for a uniform and 
 equal rate of assessment and taxa- 
 tion of all property both real and 
 personal." On this point the court 
 
 it was held (Gilson v. Board of held, that so long as the rate of tax 
 Com'rs of Rush Co., 128 Ind. 65) ! is uniform in the taxing district, it 
 that one {nHition for all tiie town- i was not in violation of said seotion, 
 sliijis was sufficient, and but a ma- ' and cited Bright v. McCuUougli. 27 
 ioritv of all the votes cast in all the : Ind. 223 ; Bowles v. State, 37 Ohio 
 townshij)S was necessary, and not St. 35 ; Cooley on Tax. (ed. 1876) 
 
 113. 
 
 9G
 
 CH. VI.] CONSENT OF TAXPAYERS, ETC. § 80 
 
 stitution of the State requires that the assent of the tax- 
 ])ayers or quahfied votes be obtained before bonds may be 
 issued or a debt incurred, it has been held in a number of 
 cases that the assent of a majority of all the voters in the 
 municipality to be affected must be obtained, and that a 
 majority of the votes cast at the election is not sufficient 
 to give assent.^ 
 
 The rulings of the various State courts on this subject 
 are not uniform, and the United States courts have fol- 
 lowed the rulings of the State courts,^ and when the 
 latter have changed have refused to follow.^ 
 
 When the bonds were issued upon a vote of a majority 
 of those voting, the United States Supreme Court has 
 refused to follow a subsequent decision of the highest 
 court of the State, which declared the bonds to be void be- 
 cause a majority of ail the " qualified voters " did not vote 
 to issue the bonds,"^ it being a rule of the Federal courts, 
 when not controlled by the decision of the State courts in 
 the construction of their constitution and statutes, that 
 if a majority of the voters at the election give their con- 
 sent, tliat such a vote is sufficient authority for a munic- 
 ipality to carry out the provisions of the enabling act 
 and issue the bonds. ^ 
 
 The constitution of Georgia provides that no bonded 
 indebtedness for the establishment of certain improve- 
 ments shall be incurred by any municipal corporation 
 without the assent of two-thirds of the qualified voters 
 thereof. It was held tliat the provisions in the Code (§ 
 r)OS), that in estimating whether or not two-thirds of the 
 voters have voted in favor of such indebtedness, the 
 
 1 Hawkin v. Carrol Co., 50 Miss. 
 7.35 ; Duke v. Brown, 9G N. (.'. 127 ; 
 Bayard v. Klin^-e, IG Minn. 249 ; 
 State V. Harris, 96 Mo. 29 ; contra, 
 (Jillespie v. Palmer, 20 Wis. 544; 
 People ex rel. v. Warfield, 20 111. 
 159 ; Am. & Eng. Ency. of Law, 
 Vol. 15. 1279. 
 
 2 Cass Co. V. Johnston, 95 U. S. 
 niK). 
 
 ' DoTiglass V. County of Pike, 101 
 U. S. G77. 
 
 7 97 
 
 * Knox Co. V. Ninth Nat. Bk., 
 147 U. S. 91-99 ; Carrol Co. v. 
 Smith, 111 U. S. 55G. See also 
 Madison Co. v. Priestly Treasurer, 
 43 Fed. Rep. 817. The court in 
 these cases held that two-thirds of 
 the qualified voters meant two- 
 thii-ds of those voting. 
 
 ^ St. Joseph Tp. V. Rogers, IG 
 Wall. G44 ; County of Cass v. John- 
 ston, 95 U. S. 3G0.
 
 § 81 MUNICIPAL BONDS. [CH. VI. 
 
 judicos of election sIkiU base their calculation on the 
 votes cast at the last previous election, was constitiitional, 
 and that bonds issued under such votes were valid. ^ 
 
 If the act authorizing the issue of the bonds is in con- 
 llict with the State constitutions, the bonds will be de- 
 clared void even in the liands of innocent holders. Thus in 
 a case where the act authorized the issue of bonds "if 
 two-thirds of the qualified voters of the township voting 
 at such an election are in favor of the subscription,"' 
 the constitution of the State (Missouri) i)rohibited such 
 subscription " unless two-thirds of the qualified voters'' 
 of the municipality making the subscription "shall assent 
 thereto," bonds issued jjursuant to the vote required by 
 the enabling act, two-thirds of the. voters who voted at 
 the election, were held void.^ 
 
 AVhen the bonds contain proper recitals made by the 
 officers whose duty it was under the law to ascertain 
 the fact that the necessary number of voters voted in 
 favor of the proposition to issue the bonds, a bona fide 
 purchas(u* will be protected, and the municipal corpora- 
 tion cannot set up the defence that the proi^osition did 
 not receive the requisite number of votes as required by 
 the constitution." 
 
 § 81. The M ord *' inhabitants " and other terms con- 
 strued. — The expression, the '"inhabitants,"' means 
 the legal voters, and a majority of such votes is suffi- 
 cient,* and "voters" and " electors " are held to be the 
 sarne.^ 
 
 The term "qualified electors " means those whose com- 
 petency have been passed upon on their admission to 
 registration.^ 
 
 In North Carolina it is held that the term "qualified 
 electors" means the registered voters of the previous 
 
 1 Bell V. City of Aincricus, 70 Ga. 
 ir)2-3. 
 - Ilarshman v. Bates Co., 92 U. S. 
 
 * Walnut V. Wade, 103 U. S. 095 
 Day V. Austin, 22 S. W. R. 757. 
 s Everitt v. Smith, 22 Minn. 53 ; 
 
 •"»f>9. I contra, Sandford v. Printice, 28 
 
 sVicksbur^li v. Lombard, 51 Mo. 358. 
 Mis.s. Ill : Boanl of Supervisors of cMpD^wollv. MassR. &C.Co., 96 
 Madison Co. v. Brown, 07 Miss. 084. N. C. 514 ; Webb v. Lafayette Co., 
 
 98 
 
 J 07 Mo. 354.
 
 CH. VI.] CONSENT OF TAXPAYERS, ETC. § 82 
 
 election, and that, unless authorized by statute, a munic- 
 ipal corporation cannot order a new registration.^ 
 
 Where bonds were authorized by statute to be issued, 
 if two-thirds of the qualified voters voting at such an 
 election should consent, such statute was held to be un- 
 constitutional, because repugnant to the State constitu- 
 tion, which required such consent to be given by two-thirds 
 of the qualified voters of the municipal corporation.^ 
 
 Where a statute authorized a county to aid a railroad, 
 if a majority of the holders of real estate should vote in 
 the affirmative, it was held that a submission of the 
 proposition to all the voters of the county was illegal, 
 and that the levy of a tax to pay such aid was invalid.^ 
 
 It has been held in South Carolina that an act authoriz- 
 ing females to vote at an election upon the question of 
 issuing bonds by a municipal corporation, or incurring a 
 debt, is constitutional.* Statutes of like nature in New 
 Jersey have also been held constitutional.^ 
 
 § 82. How result should be declared. — When the 
 enabling statute provided that the result of the election 
 must be declared by a certain board, the result should 
 be clearly stated, so that it may appear that a majority 
 or other necessary proportion of the vote was cast for 
 the proposition submitted. 
 
 In one case, where the board declared, " that after due 
 canvass the foregoing returns of election are correct,"' the 
 court held it was not a proper return, and did not declare 
 the result of the election, and therefore the issue of the 
 bonds was restrained.'' 
 
 And in another case, where the record recited that 
 "the taxable inhabitants aforesaid voted," without 
 finding or reciting that a majority voted in favor of the 
 proposition, it was held insufficient." 
 
 1 Smith V. Wilmington, 98 N. C. [ City Council, 39 S. C. 397 ; 40 S. C, 
 348. 290. 
 
 2 Harshman v. Bates Co., 92 U. S. j ^ Kimball v. Hendee, 30 Atl. Rep. 
 569. 894. 
 
 3 Bullock V. Curry, 2 Mete. (Ky.) « Claybrook v. Board of R. Co., 
 174. (N. C.)19S. E. R. 593. 
 
 ■tWoodley v. Town Council of " Deland v. Piatt Co., 54Fed. Rep. 
 Ohio, 22 S. E. R. 410 ; Wilson v. | 823. 
 
 99
 
 § 83 :\irxicirAL bonds. [cii. vi. 
 
 § 83. Proposition as carried caiiuotbe changed.— The 
 pfoneral eliVct of an affirmative vote is to empower the 
 proper officers, or the municipal corporation, to proceed 
 and carry into execution the act authorized to be done in 
 the enahhuiif statute.^ And the proposition as accepted 
 h\- the people must be followed, and the provisions of the 
 proposition as submitted and accepted cannot bo changed 
 or departed from, by either the officers charged with 
 the duty of issuing the bonds or making the subscrip- 
 tion, or by the legislative body of the municipality, 
 and in case such a change be made the issue of the bonds 
 will be restrained.^ The people themselves cannot, with- 
 out special authority, waive the conditions, although they 
 vote to do so,^ but where the bonds are issued and are 
 in the hands of a bona fide holder the conditions have, 
 in a number of cases, been considered waived, and the 
 bonds held to be valid.* 
 
 In a case in Miclngan, where the voters authorized a 
 loan to 1)0 paid in instalments extending over a period 
 ()f thirty years, and the supervisors, wiiowere authorized 
 to make the loan and issue the bonds, disregarded the 
 time as authorized and made an issue of bonds, all of which 
 were payable in fifteen j^ears from their date, it was 
 held the bonds were void.* It has been held that when 
 the proposition submitted was for interest annually, the 
 council cannot issue the bonds with interest semi-annu- 
 ally, and that in such a case the issue will be restrained, 
 and the bonds are invalid v.'^hile yet undelivered.^ 
 
 When matters are submitted to the voters which the 
 statute does not require to be submitted, in such a case 
 the proposition as to such matters need not be followed, 
 
 ' People V. Batchellor, 53 N. Y. 
 12S. 
 
 =» Town of Plattville v. Galena, 43 
 Wis. 403 ; German Sav. Bank v. 
 Franklin Co., 128 U. S. 526 ; Hodge- 
 man V. Chicago St. P. R. R. Co., 20 
 Minn. 48 ; contra, Coleman v. 
 Marion Co., 50 Cal. 493. 
 
 ' Illinois ^I. 11. R. Co. v. AVaynes- 
 viUe, 88 III. 4G9. 
 100 
 
 4 Chiniquy v. People, 78 111. 570 ; 
 Melvin v. Lisenby, 72 111. G3 ; Skin- 
 ner V. Santa Rosa, 40 P. R. 742 ; 
 E. M. Darby & Co. v. City of Mo- 
 desta, 38 P." R. 900. 
 
 ' McMullen v. Ingraliam, Cir. J., 
 (Mich.) Gl N. W. R. 2G0. 
 
 •^ Skinner v. Sauta Rosa, 40 Pac. 
 R. 742.
 
 CH. VI.] CONSENT OF TAXPAYERS, ETC. § 84 
 
 but may be changed at the pleasure of the board author- 
 ized to issue the bonds. ^ 
 
 When the proposition empowers the officers named in 
 the enabling act to issue the bonds or other evidence of 
 indebtedness after an affirmative vote has been taken, 
 the officer or officers named, or the municipal body, have 
 no discretion but to carry out the proposition, unless the 
 act itself clothes them with discretion, and it is held that 
 the act of the officers in such cases is ministerial.^ 
 
 Where there was a delay of seventeen months between 
 a vote in favor of the issuance of school-district bonds 
 and their issue, due to financial stringency, it was held 
 that such delay did not invalidate the bonds. ^ 
 
 § 84. Affirmative vote not a contract. — The vote of 
 the people does not make a contract, unless the act itself 
 expressly so provides,* as the object of the act is to em- 
 power the officers of the corporation to enter into a bind- 
 ing contract,'" and until they themselves enter into such 
 contract or make a subscription by signing, or by reso- 
 lution, or ordinance, the municipality is not bound, ^ and 
 the authority may be repealed or changed. '^ 
 
 When it is apparent that the statute authorizing the 
 issue of the bonds and the vote, taken together, authorize 
 an issue of bonds, it has been held that bonds so issued 
 without an order of the court were valid. ^ 
 
 A statute can be so framed that ui)on an affirmative 
 vote the officers named in the act would be at once 
 empowered to issue the bonds, without the necessity of 
 the legislative body of the municipal corporation adopt- 
 ing a resolution or ordinance providing for their issue. 
 
 ^ Yeasler v. City of Seattle, 1 
 Wash. 308. 
 
 » People V. Logan Co., 63 111. 374 ; 
 Piatt V. People, 29 111. 54; St. 
 Joseph etc. R. R. (Jo. v. Buchanan 
 Co. Court, 39 Mo. 485. 
 
 3 Miller v. School Dist. No. 3, 
 (Wyo.) 39 Pac-. R. 879. 
 
 * Gunu V. Barry, 15 Wall. GIO. 
 
 5 People V. Batchellor, 53 N. Y. 
 128. 
 
 * Moultrie v. Rockingham Bank, 
 92 U. S. 631 ; People v. Ohio Grove, 
 51 111. i92. 
 
 ' See cliapter on Proceedings to 
 Issue Bonds. 
 
 * Livin.s^ston v. First Nat. Bk., 
 128 U. S. 102. 
 
 101
 
 CHAPTER VII. 
 
 PROCEEDINGS TO ISSUE BONDS BY MUNICIPAL BODIES. 
 
 Section. 
 
 S-j — Tlie statute must be strictly 
 followed. 
 
 86 — Resolution or ordinance nec- 
 essary, 
 
 87 — Why necessaiy. 
 
 88 — Wlien a resolution is suffi- 
 cient, if ordinance not re- 
 quired. 
 
 89 — What the ordinance should 
 provide for — Same remarks 
 applj' to a resolution, wlien 
 it may be used. 
 
 90 — Enactment — At what meet- 
 ings ordinance may be 
 passed — When ayes and 
 nays must be called — Num- 
 ber of votes necessary. 
 
 Section. 
 
 01 — When the mayor may vote. 
 
 92 — Readings, number required 
 — Publication between — 
 Amendments material can- 
 not be made. 
 
 93 — Approval by the mayor, vvlien 
 necessary — If he neglects 
 or refuses when ordinance 
 takes effect — Veto, how to 
 be made — Effect of. 
 
 94 — Puljlication, of ordinance — 
 Effect of non-publication 
 — Publication, when not 
 necessary. 
 
 9"j — Record of proceedings — 
 What it should contain. 
 
 § 8.5. The statute must be strictly followed.— Wheth- 
 er the authority to issue the bonds is vested in the 
 Ic^^islative body of the municipality, as the common coun- 
 cil ov board of aldermen of a city, town or borough, or the 
 board of freeholders or county commissioners of a county, 
 or the town committee or trustees of a township, or the 
 school-district board of a school district, or in the county 
 court of a county, or in the officers named in the enabling 
 act itself, the mode of proceeding provided for in such act 
 must be strictly followed by the officers or body author- 
 ized to is.sue the bonds, and all the steps prior to their 
 issue must have been performed in the manner required 
 by the enabling statute or any general law relating there- 
 to, or any provision of the State constitution imposing 
 limitations in relation to the issue of the bonds ; other- 
 wi.se their issue will be restrained, or, if issued, the bonds in 
 many cases are held invalid. As the preliminary steps prior
 
 CH. VII.] Pr.OCEEDINGS TO ISSUE BONDS, ETC. 
 
 85 
 
 to the actual proceedings of the corporation relative to 
 the issue of the bonds, as the petition of taxpayers, sub- 
 mission of the question to the voters, the election, the 
 vote, the effect of the vote, have been treated of in the 
 preceding chapter, this chapter is devoted to the proceed- 
 ings necessary to be taken by the legislative body of the 
 municipality in order to provide for the issue of the bonds, 
 assuming it to have been authorized to issue the bonds by 
 an affirmative vote or other necessary prior proceedings, 
 if such prior authority were necessary in order that the 
 municipality might act. When the enabling statute does 
 not designate what body shall issue the bonds, but mere- 
 ly authorizes a city, or a city of a certain class, or a town, 
 or other municipality, to issue for the purpose expressed 
 in tlie act, tlie presumption is that it intends to empower 
 the legislative body of the municipality to issue the bonds, ^ 
 unless some other body has authority to issue bonds for 
 the purpose expressed in the act. 
 
 Usually the affirmative vote of the taxpayers merely 
 authorizes the legislative body of the municipality to pro- 
 ceed and issue the bonds, and such bonds cannot be issued 
 by the ministerial officers designated in the act until such 
 board authorizes the issue, and if issued without sucli 
 authority the bonds are void.^ A statute, however, may 
 be enacted, unless prohibited b}^ the constitution, which 
 will empower the ministerial officers or the officers desig- 
 nated in it to at once issue the bonds after an affirmative 
 vote, or witliout one, and in some of the large cities the 
 financial officers are so authorized.^ 
 
 1 In re Wetmore, 99 Cal. 146. 
 
 ' Swan V. City of Arkansas (1894), 
 61 Fed. Rep. 478; Portsmouth 
 Sav. Bk. V. Village of Ashley, 91 
 Mich. 670 ; Brown v. Bon Homme 
 Co., 46 N. W. K. 17:^. 
 
 3 Under the New York City Con- 
 solidation Act of 18S2, the negotia- 
 hle paper issued by the city is to be 
 known as " Consolidated Stock of 
 the City of New York." Sec. 132. 
 
 The faith and credit of the mayor, 
 aldermen and commonaltv of tlie 
 
 city shall be pledged for the re- 
 demption and payment, and the 
 stock must bear on its face a refer- 
 ence to the act by wiiich its issue 
 is authorized. 
 
 It shall be signed by the mayor 
 and comptroller, and sealed with 
 the corporate seal, and attested by 
 the clerk of the board of aldermen. 
 Sec. 133. 
 
 It may be registered or coupon 
 stock in sums not less than $.~)00. 
 each share, parable in gold coin or 
 103
 
 MTNICIPAL BONDS. 
 
 [cri. 
 
 YIT. 
 
 Where llio original statute authorizing the issue of 
 Ixmds contains certain restrictions as to the mode of pro- 
 ceeding to bo followed in the issue of the bonds, or if the 
 charter of the municipal corporation provides that certain 
 steps bo taken in the issue of bonds, a subsequent amend- 
 ment to the original act in the first instance extending 
 tlu^ amount of the issue or a mere authority in the latter 
 to issue bonds for a designated purj^ose, will not author- 
 ize a departure in the proceedings relative to the issue 
 of tlu^ bonds from the course marked out in the original 
 act or charter, unless the subsequent act or acts indicate 
 that a different course may be pursued.^ 
 
 in tin- l(>;;;il currency of the Unitotl 
 States, at the option of tlie comp- 
 troller, anil be redeemable at a 
 jjerioil of not less than twenty years 
 or more than lift)' j'ears from the 
 date thereof, an<l to bear interest 
 not exceeding six per cent per an- 
 num, payable quarterly or semi- 
 annually in New York City, or any 
 other place fixed by the comptroller 
 at the time of the issue of said 
 stock. Sec. 134. 
 
 Bonds i.ssued in exchange for 
 l)onds issued prior to Ai)ril 16th, 
 1877, may be issued in the denom- 
 ination of ^'20, $.")0, !?100, ft."30(), and 
 upwanls, i)rcferenco in such cases 
 to be given to bidders for the 
 smallest. <]» n nnination. 
 
 The conimi.ssioners of the .sink- 
 ing funil, when authorized by an 
 onlinancu of the common council, 
 may, by a concurrent resolution, 
 exempt from city and county tax 
 (but not Slate ta.\) all bonds issued 
 since June Otli, 1M8(), provided the 
 rate of int«>n"stdoes not exceed four 
 and one-half ]ier centum per an- 
 num ; the bonds sliall .state on their 
 face that they are exempt from 
 such tax and refer to the section 
 (^ 137) and to the ordinance of the 
 common council and the resolution 
 104 
 
 of the said commissioners. Sec. 
 137. 
 
 The bonds or stock are issued by 
 the co:iiptroller in some cases when 
 directed by the commissioners of 
 the sinking fund (sec. 143) and 
 others when directed by the com- 
 missioners of estimate and appor- 
 tionment (sees. 139, 141, 142), and 
 in some cases the ecmptroller may 
 issue, the stock without authoritj' 
 from anj' board so to do (sees. 140, 
 145, 149, 153, 1.54, 15.5). although it 
 is tlie (;ustom of the comptroller in 
 the latter case to secure tlie ap- 
 proval of tlie board of estimate and 
 appoi'tionment fertile issue of such 
 bonds. 
 
 ^ Mayor v. "Wetumpka Wharf 
 Co., 63 ;\la. Oil. 
 
 In this case it appeared the ori- 
 ginal act provided that " no bond 
 shall be i.ssu(>d but upon an entire 
 concurrence of the board of major 
 and aldermen, upon full attend- 
 ance of all tlie members of the 
 board, and when there is no Aa; 
 cancy, which shall be manifested 
 on^j' by an entry of tlie order for 
 issuing being made on the minutes 
 of the board and signed by each 
 member thereof."' 
 
 The original act i)ermitted the
 
 CII. VII.] PROCEEDINGS TO ISSUE BONDS, ETC. § 87 
 
 § 8G. Resolution or ordinance necessary. — The act of 
 
 the legislative body in providing for the issue of bonds is 
 a legislative one, and must be exercised and evidenced by 
 either a resolution or an ordinance, and if the bonds are 
 issued without the adoption of such a resolution or ordi- 
 nance, when required by charter or some statute, there is a 
 want of power, and the bonds will be void notwithstand- 
 ing any recital.^ And where the charter of the municipal- 
 ity or the laws authorizing the issue of the securities re- 
 quire that its legislative acts be done by ordinance, then an 
 ordinance providing for their issue must be passed, and 
 the same either approved by the mayor or other designated 
 officer, or passed over his veto, as the case may be, and 
 published as required by law. In other words, all the 
 steps required by the charter of the corporation or other 
 laws to enact an ordinance and make it operative must 
 be performed. 
 
 § 87. Wliy necessary. — Usually the enabling act under 
 which the bonds are proposed to be issued authorizes the 
 municipality, if it is deemed necessary by its officers, or its 
 legislative body, or its financial board, as the case may 
 be, to issue bonds to provide means for the public purpose 
 designated in the enabling act. The maximum amount 
 of the bonds that may be issued, as well as the maximum 
 rate of interest, are usually stated in the act. 
 
 Sometimes the officers to execute the bonds are named, 
 but the form of the bond, the denomination of the issue, 
 are not usually provided for in the act. Usually the act 
 is so drafted tliat, until the authorities of the municipal- 
 ity desire to take advantage of it and issue the bonds for 
 the public ])urp()se authorized, the act is dormant, so to 
 speak, as to a particular municipality. 
 
 issue of bonds for the construction 
 of a canal, etc. 
 
 An amendment to the act was 
 passed extending the amount, and 
 
 in the liands of a bona fide Jiolder, 
 issued under tlie amended act to 
 be invalid, because tlie proceedings 
 marked out in tlie original btatnt(> 
 
 permitting the money raised from were not followed, 
 the «ale of the bonds to be used for ^ Swan v. City of Arkansas, fil 
 any internal im])rovement. Fed. Rep. 478 : Nat. Bank of Com- 
 
 The court held a bond containing merce v. Granada, 10 U. S. Ap- 
 a recital of the amended act, and peals, 693. 
 
 105
 
 § R9 MUNICIPAL TWNDS. [("H. VII. 
 
 Win '11 it is flesiivd to issuo the bonds for the purpose 
 piovidfd, tlu'ii it becomes necessary that such determina- 
 tion slioiild be evidenced by some action of the mnnici- 
 jiality, and when tlie antliority to issue is lodged with the 
 lepfislative body of the municipality, the determination 
 being a legislative one,^ it must be evidenced in the man- 
 ni>r provided in the charter for the adoption or passage of 
 legislative acts, and such action must provide for the 
 amount of the bonds to be issued, the rate of interest, the 
 persons who are to execute the bonds, and all the other 
 necessary details relating to the issue. 
 
 Where the act autliorizing the issue of bonds required 
 that they should be issued only after an ordinance there- 
 for should be passed, it was held that bonds issued by the 
 mayor, attested by the city clerk and under the corporate 
 seal, were void, because an ordinance providing for such 
 issue was not passed.^ 
 
 ^ S8. When resolution sufficient. — The general rule 
 is that when the charter commits the decision of a matter 
 to the council, but is silent as to the mode, the decision 
 may be evidenced by a resolution and need not neces- 
 sarily be by ordinance ;^ but where the charter requires 
 that the decision be evidenced by an ordinance, then an 
 ordinance must be passed*. 
 
 AVhero the mayor and common council are given 
 authority to issue bonds, they may issue and sell the bonds 
 l)y a resolution of the common council, and a resolution 
 accepting a bid for the bonds cannot bo revoked l)nt will 
 be forced l)y a maiHlaunis. A resolution has ordinarily 
 the same effect as an ordinance, and both are legislative 
 acts.^ 
 
 >> 80. Wliat the ordinance should provide for.— Great 
 care should be exercised in the drafting of the ordinance 
 l)roviding for the issue of the bonds. Its title should ex- 
 
 ' Nat. Bk. of Commerce v. Town I Plnln(1.>l])]iia, 35 Pa. St. 231 ; Green 
 of Granada, 44 Fed. Rep. 262-266. | Bay v. Biauns, .50 Wis. 204. 
 
 - SNvan V. City of Arkansas. 61 | * Newman v. Emporia, 32 Kan. 
 Ffd. Rep. 478. 456. 
 
 "Atchinson Board of Ed. v. De 5 Smalley v. Yates, (Kan.) 26; 
 Kay. 118 U. S. .-)91 : Butl^-r v. Pas- Am. & Eng. Corp. Cases, 578. 
 saic. 44 N. ,J. L. 171 : Sower v. 
 106
 
 CH. VII.] PROCEEDINGS TO ISSUE BOXDS, ETC. § 89 
 
 press the general object of the ordinance, although if it 
 does not, it will not invalidate the ordinance, nor will it 
 be invalidated if it has no title, unless the charter of the 
 city or some general law requires it to have a title. ^ 
 
 Whether it be in the form of a resolution or an ordi- 
 nance, provided it be passed with all the required formal- 
 ities of an ordinance and be of sufficient scope, it will be 
 in effect an ordinance.^ 
 
 The ordinance need not recite the act of the Legislature 
 which authorizes the municipal body to enact it ; if it mis- 
 recite it, and the corporation has the power to perform 
 the provisions of the ordinance, the misrecital will not 
 affect the power.^ 
 
 If the ordinance does not refer to the authority under 
 w^hich it is enacted, and should the bonds recite they were 
 issued under a wrong act, if in fact the municipality had 
 power to issue the bonds, they will, notwithstanding such 
 misrecital, be valid obligations.* 
 
 The ordinance, as before stated, should be drawn with 
 care. The title should state the object of the ordinance ; 
 then usually follows the introduction ordaining or enact- 
 ing the ordinance, after which follow^s the scope and pur- 
 pose of the ordinance. Here when the object is to author- 
 ize the issue of bonds, the bonds should be directed to be 
 issued, the purpose of the issue should be stated, the 
 amount to be issued, the denomination of the bonds, when 
 they shall bear date, time and place of payment, the rate 
 of interest and place of payment thereof, and the officer 
 to make delivery of the bonds should be stated, although 
 the place of payment, if not provided for in the ordinance 
 or statute, may be stated in the bond at such place as the 
 officers executing them select. The ordinance must also 
 designate the officers, usually the mayor or other chief 
 executive officer of the municipality, and the clerk, who 
 are to execute the bonds. This is necessary unless the 
 
 1 HersliolT v. Beanlsley, 45 N. J. j L. 279 ; Creiglitoii v. ^Morrison. CT 
 L. 288; City of Tarldo v. Cook, Cal. 617. 
 
 (Mo.) 25 S. W. R. 202 : In re | 3 Mayor otc. of Baltiinoro v. Ul- 
 Thomas. (Kan.) ;}7 Par. R. 171. man. ;J0 Atl. R. 43. 
 
 -State V. Lambertville, 45 N. J. * Knox Co. v. Nintli N'ut. Bank, 
 
 147 U. S. 91. 
 
 107
 
 § 89 i\irNiriPAL i'.onds. [en. vii. 
 
 statuteaullioriziji.i;- tlu> issue designates such officers. The 
 ordinance usually provides that the bonds be sealed with 
 the corporate seal, altlioni^h such direction is unnecessary, 
 as it will be presumed that the officer sdesignated to exe- 
 cute the bonds have the authority to affix the seal of the 
 corporation to thcni. When the authority to enact the 
 ordinance depends iipon the performance of a condition 
 precedent, as the affirmative vote of the taxpayers and 
 all tlu>stc'})s loading to such vote, or the publication of the 
 intention to pass the ordinance or to issue the bonds, the 
 ordinance need not recite the performance of the prior 
 conditions unless required by statute.^ When the statute 
 or constitution requires that at the time of incurring the 
 debt a sinking fund or an annual tax must be provided to 
 ])ay the interest and principal, the ordinance or some other 
 ]irior or contemporary one must make this provision. 
 And when the act authorizing the issue of the bonds per- 
 mits their issue when, in the judgment of the legislative 
 body of the corporation, it is deemed advisable, the pas- 
 sage (-)f the ordinance providing for their issue is conclu- 
 sive evidence that, in the judgment of the; body, the issue 
 is advisable or necessary, and it need not, unless required, 
 set out in express terms that determination. 
 
 When the bonds are to be paid out of a special fund, 
 the ordinance must provide for such fund, and in case of 
 a failure so to do, it would seem the bonds are void,^ 
 ludess they contain recitals which will estop the cor- 
 ])oration to show such failure. 
 
 It nnist always 1)0 borne in mind that the statute under 
 wlijcli 11 lo ordinance is enacted is the authority for its 
 onactmont, and that the mode of procedure and the con- 
 ditions precedent prescribed therein must be strictly 
 followed. 
 
 What ha.s been said above in reference to the scope and 
 object of an ordinance providing for the issue of bonds 
 a])plios with equal force to a resolution providing for 
 their issue, when a resolution instead of an ordinance, or 
 
 1 Coates V. New York, 7 Cow. 
 .'.S.-) : Kik'V V. Forsee, 57 Mo. 300 ; 
 Wc'lker v. Potter, 18 Oliio St. 85. 
 108 
 
 2 Quaker City Nat. Bk. v. Nolan, 
 59 Fed. Rep. 6G0. See g§ 136, 137, 
 138.
 
 CH. VII.] PROCEEDINGS TO ISSUE BONDS, ETC. § 90 
 
 as well as an ordinance, may be adopted for the pur- 
 pose. 
 
 § 90. Enactment. — The ordinance or resolution author- 
 izing the issue of bonds must be adopted at a meeting of 
 the legislative body authorized to adopt such an ordi- 
 nance or resolution, and when the ordinance must be in- 
 troduced at one meeting and passed at another, it cannot 
 be passed at an adjourned meeting of the one it was intro- 
 duced at, as the adjourned meeting is but a continuation 
 of the former meeting.^ At an adjourned meeting of a 
 regular meeting any business that could lawfully have 
 been transacted at the regular meeting may be trans- 
 acted at the adjourned one, unless the charter or some 
 general law prohibits.^ When no quorum, a minority 
 may adjourn a regular meeting to some other day.^ 
 
 The proceedings to issue bonds must be conducted at 
 legal meetings of the board, and the members cannot act 
 separately, as by signing a paper, or otherwise authorize 
 the issue of bonds.* 
 
 When a special meeting is held the only business that 
 can be done is that named in the call for the meeting,^ 
 unless all the members are present and consent to take 
 up other business. 
 
 When the charter requires the vote of a certain luim- 
 ber of the body authorized to pass or adopt the resolu- 
 tion or ordinance providing for the issue of the bonds, 
 the ayes and nays should be called and recorded, in order 
 to ascertain and establish by the records the fact that a 
 sufficient number of the body voted for the passage or 
 adoption of such resolution or ordinance, and when the 
 charter requires a vote by ayes and nays such roquire- 
 
 1 Staats V. Washington, 45 N. J. to what notice issuflficiont to nicm- 
 1.. 318. 
 
 2 Smitli V. Law, 21 N. Y. 296. 
 8 People V. Rocliester, 5 Lansing, 
 
 (N. Y.) 142. 
 
 * Aiknian v. School Dist. 27 Kan. 
 129. 
 
 5 St. Louis V. Withans, 90 Mo. 
 646. See Gill v. Dunham, U Pac. 
 R. 68 ; Young v. Village of Rush- 
 sylvania, 8 Ohio Cir. Ct. R, 75, as , b}- the body. 
 
 109 
 
 bers of special meeting. 
 
 If a special meeting be called all 
 the members of tlie board must be 
 notified of it and its object ; if not 
 so done the issue of the bonds will 
 be restrained, (Paola & Fall R. R. v. 
 Anderson, 16 Kan. 302.) and the 
 bonds themselves maj' be declared 
 invalid, unless aftei'wards ratified
 
 § 01 MUNICIl'AL BONDS. [cil. YII. 
 
 nu'iit cannot ho disinniscd with,^ and when the proceed- 
 ing's of the hody do not show a vote hy ayes and nays 
 there is no presumption tliat such a vote was taken, ^ 
 ahh()Ui;-h it has heen held otherwise in several cases,^ 
 but where the records show that the vote was unanimous, 
 it is held to be a compliance with this requirement.* 
 
 Unless prohibited l)y the charter or some general or 
 special law a majority of a quorum may, at a regular, or 
 an adjourned regular meeting, or properly called special 
 meeting for that purpose, adopt a resolution or ordi- 
 nance providing for the issue of bonds. ^ Usually, how- 
 ever, the charter, or some general law, requires the 
 sanction of a greater number than a bare quorum in 
 cases of this kind. If there be two branches or boards 
 whose concurrent consent is essential to the j^assage of 
 the ordinance or resolution, such concurrence must be by 
 simultaneously existing bodies. And it has been held 
 that the unfinished business of the two boards must be 
 taken up anew.'' 
 
 The mode of proceeding is regulated by the charter or 
 some general law, and these should be inquired into in 
 order to ascertain what is necessary relative to the en- 
 actment of an ordinance or resolution. 
 
 A regular or special meeting may be adjourned in the 
 inaniitT ])r()vi(led lor in the charter, or some general or 
 special law, or in the rules of the body itself. The clerk 
 may be so authorized to adjourn a meeting, although no 
 member of the board be present.'^ 
 
 ^ !»1. When the mayor may vote.— The charter often 
 
 > In re So. Market St., 20 N. Y. 
 S. 834; Sullivan v. Lcadville, 11 
 Col. 48 ; 18 Pac. R«-p. 7:50 ; Rich v. 
 Chicago, 'At 111. 280 ; Morrison v. 
 Lawrence, 98 Ma.s.s. 219. 
 
 ' Tracy v. People. 6 Colo. 151 ; 
 In re Buffalo, 78 N. Y. 302 ; Rich 
 V. Chicago, ^ 111. 286 ; Village of 
 Belknap v. Miller, 52 111. Apj). 
 617. 
 
 « Louisville v. Hyatt, 2 B. Mon. 
 (Ky.) 177 : Mayor v. New York, 25 
 Wend. 003. 
 IIU 
 
 * New Albany Gas Light & Coke 
 Co. V. Crumbo, 87 N. E. R. 1062. 
 See, however. In re South Market 
 St.,27N. Y. 843. 
 
 ^ Charles v. Hoboken, 3 Dutch. 
 203; Martin v. Lemon, 26 Conn. 
 192 ; People v. Syracuse, 63 N. Y. 
 291. 
 
 " Westmore v. Story, 22 Barb. 
 (N. Y.) 414. 
 
 ^ Atchison Bd. of Ed. v. DeKay, 
 148 U. S. 598.
 
 CH. YII.] PROCEEDINGS TO ISSUE BONDS, ETC. § 93 
 
 authorizes the mayor to vote in case of a tie, and it has 
 been held that if one-half of the members of the council 
 refuse to vote, and the other half vote in the affirmative, 
 the mayor may treat those refusing to vote as opposed to 
 those voting, and decide the question by casting his vote 
 in the affirmative.^ 
 
 § 02. Readings — Amendments. — The charter usually 
 requires that the ordinance be read a certain number of 
 times before final passage, and but once or twice at the 
 first meeting and the remainder at a subsequent meet- 
 ing. This provision is intended to prevent hasty legis- 
 lation, and to give the citizens generally notice of what 
 the legislative body of the municipality are doing. 
 Sometimes the charter requires that the ordinance be 
 published between the readings. All these directions are 
 mandatory, and an ordinance j^assed neglecting them is 
 void.''^ 
 
 The ordinance need not be passed by the same council 
 that introduced it, and if after its introduction a new 
 election is held it can be taken up where the old council 
 left it, and read the balance of the required times, and 
 finally passed.^ 
 
 An ordinance cannot be amended in a material part 
 or changed to embrace a different or enlarged subject.* 
 When any such change is contemplated or necessary the 
 ordinance must be introduced as a new ordinance.^ 
 
 § 93. Approval by tlie mayor — Veto. — Unless the 
 charter or some general law requires it, the ordinance 
 need not be approved by the mayor, but where his ap- 
 proval is essential tiie ordinance will not be operative 
 without it.*^ In such cases his signature attached to the 
 ordinance, stating that he approves it, must be made ; his 
 signature to the journal, unaccompanied by words of ap- 
 proval, has been held not to constitute an approval.'' 
 
 1 Launtz v. Pcoplo, 113 111. 137. 
 
 2 Weill V. Keu*iL>Ul, 54 Cal. 111. 
 
 3 McGraw v. Whitson, 69 Iowa, 
 348; Brown v. Lutz, (Neb.) 54 N. 
 W. R. 8G0. 
 
 * Staats V. "Washington, 44 N. J. 
 L. 605. I 263. 
 
 Ill 
 
 5 State V. Newark, 30 N. J. L. 803. 
 
 « State V. Newark, 25 N. J. L. 
 399 ; People v. Scliroeder, 76 N. Y. 
 160 ; Nat. Bk. of Commerce v. 
 Granada, 54 Fed. Rep. 100. 
 
 "^ Graham v. Corondelet, 33 Mo.
 
 ^ 'J4 MUNICIPAL BONDS. [CH. VII. 
 
 lie cannot delegate others to approve the ordinance 
 for liini.^ 
 
 ^Vllen tlie charter merely directs him to approve ordi- 
 nances, but does not make liis approval essential to their 
 validity, his failure to ai)prove will not render the ordi- 
 nance void.^ 
 
 Usually the charter directs the clerk to present the 
 ordinance to the mayor for his approval or disapproval, 
 and directs that in case he disapproves of it, to return 
 the same to the clerk of the council with his reasons 
 within a certain number of days, and in case of failure 
 so to return it, that the ordinance shall be as valid and 
 bindin<j: as if he had aj^proved of it. 
 
 In such cases he must, if he disapproves it, return it 
 with his veto and his reasons, and in case he fails to 
 return his reasons with the veto, the veto is inoperative.^ 
 
 If he do return his veto and reasons within the proper 
 time, the ordinance is thenceforth a nullity, unless, as is 
 usually the case, the charter prescribes the mode of pass- 
 iuLC the vetoed ordinance over the veto, and after it 
 is so passed tlie mayor cannot re-veto it, but the council 
 so passing tlie ordinance over tlie mayor's veto must be 
 the same one as enacted the ordinance.* 
 
 Sometimes the charter requires that the ordinance be 
 signed by the president of the council, and it has been 
 held that where the mayor was ex-officio such officer his 
 signature as mayor was sufficient.^ When the mayor is 
 absent, the approval of the official designated to act as 
 mayor during the hitter's absence or disability is suffi- 
 cient.^ 
 
 §04. PiiJdication— Effect of non-publication.— Usu- 
 ally the niunicii)al charter or some general law re- 
 (piires that before an ordinance takes effect it shall be 
 published for a certain number of times and in certain 
 papers. 
 
 » Lyth V. Buffalo, 48 Hun, 175. 
 
 ■■' Blanchanl v. Bissel, 11 Ohio St. 
 103. 
 
 ^ Tnios<lall v. Rochester, 3.3 Hun, 
 574. ' 30 S. W. R. 190 
 
 112 
 
 4 State V. Can-. G7 Mo. 38. 
 ^ Becker v. Washington, 94 Mo. 
 375. 
 6 Salona v. City of Neosho, (Mo.)
 
 CH. VII.] PROCEEDINGS TO ISSUE BONDS, ETC. § 94 
 
 In all such cases the puhlication is necessary, and until 
 it is done in the manner pointed out the ordinance is 
 inoperative,^ and bonds issued pursuant to the provisions 
 of such an ordinance are void in the hands of a bona fide 
 holder, unless the bonds contain recitals made by officers 
 whose duty it was to have the ordinance published which 
 estop the corporation. A case in point is that of Na- 
 tional Bank of Commerce v. Town of Granada, 54 Fed. 
 Kep. 100. 
 
 A general law of Colorado (1887, p. 445, sec. 1) provided 
 that all town ordinances should be recorded in a book 
 for that purpose, and authenticated by the presiding 
 officer of the board and the clerk, and all by-laws and 
 ordinances should l)e published in some newspaper and 
 should not take effect until the expiration of five da3's 
 after they were so published. 
 
 It was held that an ordinance calling an election to 
 authorize the funding of the floating debt of the town, 
 which was passed but not recorded or published, never 
 went into effect, and that the bonds authorized by such 
 an election were void. 
 
 The court said : "This ordinance never having been 
 published never went into effect. It had no more legal 
 (>ffect than if it had never been jjassed b}^ the board of 
 trustees." 
 
 The court also held that a recital in the bonds that they 
 were issued under the ordinance did not estop the town 
 from showing that the ordinance was never pul)lished 
 and was therefore void, since neither the mayor nor clerk 
 who signed the bonds had any duty to ])erform in rela- 
 tion to publishing ordinances or detei-mining when they 
 had been published according to law.'*^ 
 
 When the choice of mode of publication is delegated to 
 
 ^ State V. Orange, 23 Atl. Rep. ! town could perform any act. Tlie 
 
 action of the mayor and clerk (who 
 signed the bonds) was not sim])ly 
 irregular, but was without the 
 sanction of any law. The point 
 was never reached at which they 
 could lawfully do anv act under 
 
 1004 ; In re Douglass, 4G N. Y. 42 
 Town of Stilhvati-r v. :Moor. .'53 Pac. 
 Rep. 1024. 
 
 2 The court in this case also said : 
 
 " Here there was no ordinance in 
 force under which the board of 
 
 trustees or any other officer of the the supposed ordinance. It is a 
 7 113
 
 § 01 MrNICIl'AL TIONDS. [CII. VII. 
 
 the rori)orati()n, llie clerk cannot make the selection,^ but 
 wlicii IK) newspaper is specified, publication in the news- 
 })aper or pa])ers which usually print the ordinances will 
 answer,^ anil when the Legislature directs the manner of 
 publication liu' ordinances can be published in no other 
 way.^ If tlu^ statutes provide that a failure to publish 
 shall not affect the validity of the ordinance they take 
 effect from the date of the passage.* 
 
 Publication is not necessary if not required by the 
 charter or some statute.* 
 
 The publication need not be printed in a paper devoted 
 entirely to news, but may contain other matter. The 
 ordinance should be published in full, especially so as to 
 the scope and object of it, although a slight error in the 
 printing will not invalidate it.^ 
 
 The ordinance does not go into effect until after the 
 last day of publication, and where the ordinanca is to be 
 published a certain number of weeks one insertion each 
 week is deemed sufficient, and when it is to bo published 
 for a w^eek one insertion is sufficient.^ 
 
 When the ordinance is to be published so many days, 
 Sundays and holidays are not excluded from the count, but 
 it must be i)ublished the required number of days and 
 times on days other than Sundays or holidays.^ 
 
 case of total want of autliorily to '"Tlicre is tlieii no authority for 
 
 do the act upon any conditions, tlie issue of the bonds to wliidi 
 
 and not a case where the authority j tlie coupons belong." 
 
 to do the act existed, but the con- ^ Byers v. ^It. Vernon, 77 111. 
 
 ditions precedent to the exercise of j 4G7. 
 
 the authority were not observed. ^ Hastings v. Columbus, 42 Oliio 
 
 The statute which pro%-ide3 that St. .IS."). 
 
 ordinances sliall not take elTect un- [ ^ State v. 3Iayor etc. of Iloboken, 
 
 til they are published is a public 38 N. J. L. 110. 
 
 statute of which all pei-sons are I * Schweits'.er v. Liberty, 82 JIo. 
 
 bound to take notice." i 309. 
 
 Parker. J., in the court below [ 6 /,j ,.p Guerrero, 69 Cal. 88. 
 (4S Fed. Kep. 278). said : ; « ^i^ss v. Oakland. 88 111. 109. 
 
 "The statute reipiiring the pulv ' ' Iloboken v. Gear, 27 N. J. L. 
 lication of tlie ordinance was man- 2G.J : State v. Hardy, 7 Neb. .37. 
 datory. and the ordinance without ^ ^ Ex parte Fisko, 13 Pac. Rep. 
 
 the requisite puI)lication isanullit)', 
 and consecjuently of no force or 
 validitv. 
 
 114 
 
 310.
 
 CH. VII.] PROCEEDINGS TO ISSUE BONDS, ETC. § 95 
 
 § 95. Record of proceedings. — The record of the 
 council or other legishitive body in relation to the intro- 
 duction, readings and passage of the ordinance should 
 show in detail the proceedings. 
 
 It should in fact be a true account of all the proceedings 
 of the council in relation to the ordinance. 
 
 In fact it must show compliance by the council with 
 all the statutory requirements, and when the ayes and 
 nays are necessary it must show the vote so taken, and 
 when a certain number of the council is necessary to 
 pass an ordinance it must show that the ordinance was 
 passed by such a vote.^ When, however the record shows 
 that the ordinance was adopted by a unanimous vote, 
 the ayes and nays need not be recorded. ^ 
 
 When the law requires that the ordinance as soon as 
 may be after its passage be recorded in a book kept for 
 that purpose and be authenticated by the signatures of 
 certain officers, as the presiding officer, and the clerk and 
 the mayor, the failure so to record before the issue of the 
 bonds will not invalidate them. The passage of the 
 ordinance can be proved by others means. ^ 
 
 What has been said above in reference to the proceed- 
 ings of municipal bodies relative to ordinances applies 
 with equal force to resolutions of such bodies providing 
 for the issue of bonds, except that the formalities required 
 for the adoption of a resolution are more simple, it being 
 adopted at a single meeting, and usually requires no ap- 
 proval of the mayor or publication. 
 
 1 Olin V. IMj'ers. .55 Iowa, 209 ; 
 Strecliert v. East Saginaw, 33 Mich. 
 104. 
 
 2 Barr v. Auburn, 89 111. 361. 
 
 3 Nat. Bank of Commerce 
 Granada, 41 Fed. Rep. 87-91. 
 
 115
 
 CHAPTER VIII. 
 
 FORMAL PARTS OF BONDS — HOW EXECUTED — COUPONS. 
 
 Skctio.n. 
 
 96 — To wlioni made payable. 
 97 — Place of payment — Rule in 
 
 Illinois. 
 98 — Number of tlie bonds, when 
 
 material. 
 99 — Denomination of the bond. 
 
 100— Date of bond— Effect if date 
 of a Sunday. 
 
 101 — Interest — Coupons represent 
 it — Wlien coupons draw 
 interest — Effect if interest 
 stipulated for exceeds the 
 rate in enabling statute. 
 
 102 — Time of payment — When 
 bonds void, if time is 
 changed. 
 
 103 — Same — Wlien act silent as 
 to time — Bonds negotiable 
 altliougli payable at op- 
 tion of nnmicipality be- 
 fore time stated. 
 
 104 — How executed — Officers 
 must be expre,ssly author- 
 ized to do so— Must be in 
 
 Section. 
 
 office at the time — Coun- 
 tersigning but a ministe- 
 rial act. 
 
 105 — Signing, what sufficient — 
 Majority of board suffi- 
 cient — Signing in blank. 
 
 lOG — Sealing, wlien necessarj' — 
 Bonds without declared 
 void, in what cases — 
 Equity will afford relief 
 if seal omitted — Scroll not 
 a substitute — How seal 
 proved. 
 
 103 — Coupons are negotiable — 
 Legislative authority to 
 issue unnecessar}' — When 
 must be produced. 
 
 108 — Form of coupons. 
 
 109 — When tlie coupons are to be 
 governed by the terms of 
 the bond — Coupons re- 
 ceivable for taxes. 
 
 1 10 — Copies of bonds — And ordi- 
 nances. 
 
 § 9G. To whom made payable.— The bonds are usually 
 printed or litlu)<<raphed upon line paper or parcliment, and 
 Ihe .skill of the printer is expended to make them as 
 filaborate and tasteful in appearance as possible. They 
 usually have coupons attached for each half-year's interest 
 until the principal of the bond is due. 
 
 They are either made payable to bearer, or to the party 
 
 to whom they are issued or bearer, or to some officer of 
 
 the coi-poration or bearer, or simply to bearer, and in such 
 
 cases are transferable by delivery. 
 
 Sometimes they are payable to the order of a certain 
 116
 
 CH. VIII.] FORMAL PARTS OF BONDS, ETC. 
 
 97 
 
 person or corporation, and then they require the endorse- 
 ment of such person or corporation. 
 
 Again they are payable to the holder, which means to 
 bearer. Often they are made payable to a certain person 
 or his assigns, in which latter case, in order to transfer 
 them, such designated person may assign them either to 
 some other designated person or in blank, and, if in blank, 
 while they so remain, they are payable to the holder, and 
 pass by mere delivery. 
 
 Again, they are issued with the payee's name in blank, 
 and any holder may fill in his own name or pass them in 
 blank, and until filled up such bonds j^ass by delivery.^ 
 Where the statute directs to whom the bonds shall be pay- 
 able it has been held to be merely directory.^ 
 
 The amount of the bond must be filled in before or at 
 the time of delivery, and must be for a definite sum, and 
 be payable at a certain time. 
 
 § 97. Place of payment. — The place of payment of the 
 principal and interest coupons may be either in or out of 
 the State, and is usually at some well-known bank or 
 banking-house or at the office of the treasurer of the 
 municipality issuing the bonds. It has been held by the 
 courts of Illinois^ that the place of payment must be with- 
 in the State, unless the statute otherwise provides, but if 
 payable out of the State, such stipulation does not render 
 the bond void, but the treasurer need not comply with 
 such condition and may pay the bond at his office.* The 
 courts of no other State have taken that view of the ques- 
 tion. The Supreme Court of the United States, in a case 
 in which objection to the validity of the bonds was raised 
 because payable out of the State, held that "it was ac- 
 cording to general usage to make such bonds (coupon 
 bonds) and the coupons payable in the city of New York. 
 
 1 Biainard v. N. Y. etc. R. R. Co., 
 25 N. Y. 490. 
 
 'Calhoun Co. v. Galbraith, 99 
 U. S. 214. 
 
 » The People v. Tazewell Co., 22 
 111. 147; Johnson V. County of Stark, 
 24 111. 75. In this last case the court 
 held that because the coupon was 
 
 payable in New York it did not 
 render it void, but the paj-ment 
 could only be demanded at treas- 
 urer's office of the municipal cor- 
 poration issuing it. 
 
 *Endfield v. Jordon, 119 U. S. 
 680. 
 
 117
 
 § 99 MUNICIPAL BONDS. [CH. VIII. 
 
 That it added to the vahie of the bonds and was a benefit 
 to all parties. That the power of a mnnicipal corporation 
 does not depend upon the place of performance, but upon 
 its scope and object."^ 
 
 The bonds usually refer to the statute which authorizes 
 their issue and to the ordinance or resolution of the 
 municipality providing for their issue, although such ref- 
 erence is not necessary to their validity, except in cases 
 of estoppel for irregularities and over-issue treated of 
 elsewhere in this book. 
 
 § 98, Number of bond. — When the bonds are issued 
 in a series they are usually numbered, and the coupons 
 attached thereto are numbered to correspond with their 
 respective bonds. It is held that the number is not a 
 material part of the bond, and that its alteration or 
 erasure will not affect the bond in the hands of a holder 
 without notice ;^ but in the case of an over-issue of bonds 
 it may become material, and if but a part of the bonds 
 exceed the limitation, those sold before the limitation was 
 exceeded, if they can be ascertained by their number or 
 otherwise, may be collected.^ 
 
 § 99. Deuomiiiatioii. — Unless the statute pursuant to 
 which the bonds are issued provides that the l)onds shall 
 be of a certain denomination, the officers or body author- 
 ized to issue the bonds may direct of what denomination 
 they shall be issued. 
 
 Where bonds are authorized to be issued between cer- 
 tain denominations, it has been held that bonds of any 
 denomination within the limits are good, without regard 
 to the denomination mentioned in the proposal.* And 
 
 iTliompson v. Lee Co., 3 Wall, 'order and delivered when certain 
 
 work was performed, the bonds 
 in suit were issued ten months after 
 the date of tlie order and were 
 numbered 90 to 96. The court held 
 tliat the purchaser was put on in- 
 quir}' to ascertain whether tJie 
 bonds were issued in excess of tlie 
 order. The court held the bonds 
 
 338. 
 
 2 Elizabeth v. Force, 29 N. J. Eq. 
 587 ; BirdsaU v. Russel, 29 N. Y. 
 220. 
 
 * Davies Co. v. Dickson, 107 U. S. 
 007 ; McPherson v. Foster, 43 Iowa, 
 48. 
 
 In a case where the order of the 
 Commissioners' Court directed the i void. Ball v. Preside Co. , 29 S. W. 
 issue of SO bonds to be dated witli- ' R. 1042. 
 
 in eleven days from the date of the | •» Green Co. v. Daniel, 102 U. S. 
 llo
 
 CII. VIII.] FORMAL PARTS OF BOXDS, ETC. § 100 
 
 where the amount of the issue could not be conveniently 
 divided into the denomination named in the enabling* act, 
 and were issued in other denominations, the bonds were 
 held valid. ^ 
 
 In E. M. Darby & Co. v. City of Modesta, 38 Pac. R. 
 000, it was held that where a statute required that the 
 ordinance calling a special election to submit the prop- 
 osition of the issue of the bonds, it should state the 
 number and character of the bonds to be issued. 
 
 And the ordinance stated that the number to be issued 
 was fifty bonds of the denomination of 8500. By a sub- 
 sequent ordinance providing for the issue of the bonds 
 the number was changed to forty bonds of $500 each and 
 twenty bonds of $250 each. 
 
 The court held the change did not affect the validity of 
 the bonds and said : 
 
 *' The amount of the bonds or the indebtedness to bo 
 incurred for the specific purpose was not changed. 
 Those directions which are not of the essence of tlie thing 
 to be done, and by the failure to obey which the rights of 
 those interested will not be prejudiced, are not to be re- 
 garded as mandatory. Suth. St. Const, sec. 447. The 
 change did not affect the validity of the bonds, and as no 
 greater burden is imposed upon the taxpayers the appel- 
 lant cannot complain." 
 
 § 100. Date. — The statute under which the bonds are 
 issued usually fixes the time within which the bonds are 
 to be paid and the time is counted from the date of the 
 bond. 
 
 The bonds need not bear date of the date of the ordi- 
 nance providing for their issue ; any date after the passage 
 of the ordinance will, unless restricted, suffice.^ 
 
 Usually the ordinance or resolution designates the date 
 the bonds are to bear. 
 
 Sometimes the bonds or other municipal securities, from 
 want of proper caution, are made to bear date on Sunday. 
 They are not for that reason void unless they are also 
 
 87; Milan Taxpayers v. Tennessee; ^ Turner v. AVoodsonCo., 27 Kan. 
 R. R. Co., 11 Wheat. 329. i 314. 
 
 ) 2 Flagg V. Elmira, 3.] :\ro. 440. 
 119
 
 ^ 101 Mrxic'ii'AL noNDS. [cir. viii. 
 
 (IclivenHl on Sunday, ^ as tlicy take effect only from time 
 of delivery, and until delivered they are not issued. It is 
 no objection that they bear interest from a Sunday, — tluir 
 date. 2 And if they are delivered on Sunday the i)ayee may 
 recover upon the original consideration, although the 
 bonds themselves are void.^ 
 
 When the bonds bear date of a Sunday, parol evidence 
 is admissible to show that they were not in fact deliv- 
 ered upon Sunday.* 
 
 § 101. Interest. — The coupons attached to the bonds 
 represent the interest, therefore no interest can be re- 
 covered on the bond until it matures. After the bond 
 matures and it is not paid, the bond itself draws in- 
 terest from date of maturity, and the rate of interest 
 contained in the bond is the rate to be calculated after 
 maturity of the bond and the coupon,^ although the 
 courts have refused to follow this general rule when 
 the rate provided in the bond or instrument was extor- 
 tionate.^ 
 
 When the principal and interest of the bond is to be 
 paid in a State other than that where it is executed, the 
 parties may contract for the rate in either State ; ^ but 
 the general rule is that the rate where payment is to be 
 made governs unless otherwise provided. 
 
 If the coupons are not paid when due they draw in- 
 terest from date of maturity, and generally no demand 
 is necessary in order to bring suit ; but it is a good defence 
 to a claim for interest on either a coupon or bond that no 
 demand of payment was made and that the corporation 
 had funds on hand to meet the obligation.^ 
 
 Some of the States hold that a demand and refusal is 
 
 1 Conrad v. Kinzi, 1(l."i Ind. 2R1. 
 
 2 Marsliall v. Russel, 44 N. 11. 509. 
 » Sayre v. Wlieeler. 31 la. 112. 
 
 * Stacy V. Kemp, 97 Mass. 106 ; 
 
 "Cronnvcll v. Sac Co., 9G U. S. 
 ol ; Daniel on Neg. Inst., 923 ; Stiir- 
 divant v. Memphis Nat. Bk., GO 
 Fed. Rep. 736. 
 
 King V. Fleming, 72 111. 21. » North Ponn. R. R. v. Adams, 54 
 
 5 Cromwell v. County of Sac, 96 Pa. 97 ; Kosiikonong v. Burton, 
 
 U. S. 51 ; Brannan v. Ilursell, 112 
 Mass. 03. 
 
 6 Brewster v. Wakefield, 22 How. 
 128. 
 
 120 
 
 104 U. S. 008 ; Friend v. City, 131 
 Pa. St. 305.
 
 CH. VIII.] FORMAL PARTS OF BONDS, ETC. § 101 
 
 necessary before interest can be claimed on overdue 
 coupons or bonds, and that the debtor corporation need 
 not seek its creditor.^ 
 
 In Gelpeck v. Dubuque, 1 Wall. 20, the court said : 
 " Municipal bonds with coupons payable to bearer having 
 by universal usage and consent all the qualities of com- 
 mercial paper, a party recovering on the coupon is en- 
 titled to the amount of them, with interest and exchange 
 at the place where, by their terms, they were made pay- 
 able." 
 
 In the case of City of Quincy v. Warfield, 25 111. 317, 
 bonds were issued bearing interest at twelve per cent per 
 annum while the statute authorized but eight per cent. 
 The court held the bonds to be valid, but that interest at 
 eight per cent only could be recovered.^ 
 
 The court said : ' ' All acts performed in excess or be- 
 yond the power delegated must be rejected as unwar- 
 ranted, but if after the rejection of such acts there has 
 been enough done to show a proper execution of the 
 power, the act will be sustained, irrespective of the acts 
 performed beyond the power delegated. In other words, 
 so much of the act done as is within the power granted 
 shall be upheld, whilst all beyond the power shall be re- 
 jected as an excess of power.'' 
 
 In Omaha Nat. Bk. v. Omaha, 15 Neb. 333, it ap- 
 peared the city authorities submitted to the electors a 
 proposition for the issue of 8100,000 of bonds for street 
 paving, the bonds to run twenty years and to draw interest 
 at six percent per annum. The authorities, finding that 
 they could float the bonds at a less rate, issued the bonds 
 bearing interest at five per cent instead of six, and sold 
 them to the plaintiff, which in the present suit sought to 
 rescind the contract and recover the mone}^ paid, upon 
 the theory that the bonds were void by reason of the 
 change in the rate. The court hold that the change was 
 within the power of the authorities, that it was not in 
 
 1 People V. Tazewell Co., 22 111. 
 147 ; Whitaker v. Hartford R. R.. 
 8 R. L. 47. 
 
 2 See also Byrne v. Luninp;, 8 Cal. 
 189; Quincy v. Chapman, 25 111, 
 332. 
 
 121
 
 § 102 MUNICIPAL BONDS. [CH. VIII. 
 
 excess of it, and was for the benefit of the city, and there- 
 fore dismissed the suit.^ 
 
 Where the ordinance submitted to the voters un- 
 necessarily fixed the rate of interest for the bonds which 
 was ai)i)r()V(-d by the legal voters with the other questions, 
 the municipality will not be restrained, at the suit of a 
 taxpayer, from negotiating the bonds at a higher rate, 
 if such higher rate is necessary in order to sell them.^ 
 
 It is no objection to bonds that the coupons be for 
 interest semi-annually, though the proposition to the 
 voters was for interest payable annually,^ although in 
 one case the issue of the bonds was restrained because 
 the proposition submitted was for interest payable annu- 
 ally and the bonds provided that it be paid semi-annu- 
 ally.'' 
 
 § 102. Time of payment. — The time when the bond 
 must 1)0 paid or when it matures must be stated in order 
 to render it negotiable. It must be at a time certain and 
 not depend on a contingency. When the statute fixes the 
 date of payment it must be strictly followed ; ^ but if the 
 statute is silent on this point then the time may be such as 
 
 ' 111 Board of Commissioners v. ranted, and if, after their rejection, 
 Kiii};iiian, 47 Fed. Rep. 149, the there has been enough done to show 
 (•(jurt said: " The general doctrine is a proper execution of the power, 
 tliat where a contract or luidertak- the act will be sustained, irrespec- 
 ing which lias been entered into by tive of the acts beyond the power 
 a corporation is simply in excess of | delegated. But, on the contrary, 
 its corporate powers, and the same if the acts performed beyond the 
 have been fully executed, the de- authority conferred are so insepar- 
 fence of ultra lures cannot be sue- ably connected with the acts prop- 
 cessfuUy pleaded in a suit to en- | erly performed, that, by their re- 
 force negotiable securities or other jection, the power remains unex- 
 obligations wliich have issue out of I ecuted, then the whole transaction 
 the original transaction. ... It I must be rejected as void." 
 is ordinarily held between private' ^Yesler v. City of Seattle. (Wash.) 
 litigants that the plea of ultra I 25 P. R. 1014 ; i Wash. 308. 
 I'irea is not available as a defence. ^ Commissioners v. Clark, 94 
 In Johnson Co. v. Stark, 24 111. 75, j U. S. 278 ; Wilson v. Neal, 23 Fed. 
 the court said: "The doctrine is Rep. 129. 
 
 well recognized that in exercising [ * Skinner v. Santa Rosa, (Cal.) 40 
 a power, all acts performed in ex- Pac. R. 742. 
 
 cess of, or beyond, the po%ver dele- ^ McMullen v. Ingraham, Cir. J., 
 gattid, must be rejected as unwar- (Mich.) 61 N. W. R. 260. 
 122
 
 L 
 
 CH. YIII.] FORMAL PARTS OF BONDS, ETC. § 102 
 
 may be arranged by agreement or selected by the munici- 
 pal ity.i 
 
 When the statute fixes the time within which the 
 bonds must be payable, then any time within that desig- 
 nated may be selected as the time the bonds shall mature, 
 l)ut the statutory time cannot be exceeded without 
 rendering the bonds invalid ; ^ luit it has been held that 
 bonds may be made payable in a shorter time than that 
 provided for by statute. In a case in New Jersey,^ the 
 court said : 
 
 "If the contract was in opposition to express legis- 
 lation, to public policy or to any general principle of 
 law, then such contract must fail ; but its want of coinci- 
 dence with mere naked formalities or statutory directions 
 not intended to be of the essence of the thing authorized 
 will not have such effect. 
 
 " The circumstances that the bonds were required to be 
 payable in twenty years rather than five, or within any 
 other designated period, could not be matter of substance 
 for anything but an immaterial incident to the act autho- 
 rized.''* 
 
 On the other hand, it has been recently held that where 
 a statute authorized the issue of municipal bonds pa}'- 
 able in not less than ten years from date, bonds issued 
 thereunder in eleven days less than ten 3"ears from date 
 were void even in the hands of a bona fide holder.^ And 
 
 1 Chicago etc. Co. v. Aurora, 99 34 Fed. Rep. 114, tlie bonds in suit 
 111. 205. When the statute does ! bore date April 27, 1869, and were 
 not require tliat the time of pay- ' delivered on that day, but it was 
 men tlie submitted to the voters, it set out on iheir face that they ran 
 is unnecessary to present tliat (|ues- 20 years from July 1, 18G9. The 
 tion to them. People v. Town of statute authorized tlie issue of 
 Harp. 67 111. 62. j bonds, " not exceeding twenty 
 
 - Potter V. Greenwich, 20 Hun, I years from date." 
 
 326 : Barnum v. Town of Okolona, 
 148 U. S. 393. 
 
 3 Singer Mfg. Co. v. Elizabeth, 
 42 N. J. L. 249. See also Township 
 of Red Creek v. Strong, 96 U. S. 
 271 ; Mott V. U. S. Trust Co., 19 
 Barb. r)69 : Northwestern Mut Ins. 
 Co. V. Overholt. 4 Dill. 287. 
 
 * In Dows v. Town of Elniwood, 
 
 Tlie court held the bonds valid, 
 holding the difference, between 
 April 27, 1869, their date, and July 
 1. 1869, being onh' a reasonable 
 time for issuing and delivering the 
 bonds. See also Townsliip of Rock 
 Creek v. Strong. 96 U. S. 271. 
 
 5 Pt-ople's Bank v. Soliool Dist., 
 (N. D.) 57 N. W. R. 787. See also 
 123
 
 § 102 jrUNICIPAL BONDS. [CH. VIH. 
 
 wlurc tlio proposition submitted to the vote of the tax- 
 p;iyi>r.s was for bonds to run for ten years and the vote 
 taken was for bonds to run for twenty years, man- 
 ilainus to compel the issue of the bonds was refused.^ 
 
 AVhere bonds were authorized for thirty years at in- 
 terest, bonds payable in thirty-five 3^ears, but with interest 
 only for thirty, were held valid. ^ And under authority to 
 issue bonds payable in fifteen years from the date of the 
 act, bonds issued four years after and made payable in 
 eleven years were held valid. ^ 
 
 Bonds payable in twenty-five years after date with a 
 stipulation that " this bond will be redeemed, if desired, 
 twelve years after date," means that they are to run for 
 twenty-five years, and cannot be redeemed until then 
 without the consent of the holder.* 
 
 In the case of Lewis v. Potter, 26 Hun, 331, it appeared 
 that the Commissioners of the town of Greenwich issued 
 bonds which were by the terms thereof due and payable 
 in twenty years, instead of thirty years, after their date, 
 as required by the statute. The court held such bonds 
 void, and that the court could not reform them to conform 
 to the statute. 
 
 In Brownell v. Town of Greenwich, 51 Hun, Gil, the 
 bonds in suit were issued under the same statute for twenty 
 years, but before their delivery a supplement to the 
 statute had been passed which permitted the issue of 
 such bonds for any i)eriod less than thirty years. These 
 latter l)onds were held valid, because they were not act- 
 ually issued, although dated before the supplement to said 
 act was a law. The court said : "Although the legal 
 
 Barnuin v. Town of Okolona, 148 
 U. S. sm. In McMullan v. Ingham, 
 Circuit Jiulge, (Mich.) 61 N. W. R. 
 2(j0, the bonds in suit were made 
 payalde in fiftcpn years. Pursuant 
 
 osition as carried provided for an 
 issue extending over a period of 
 thirty j-cars. Tiie bonds in suit 
 were therefore declared void. 
 ' Cairo etc. v. Sparta, 77 111. 505. 
 
 to a statute which reipiired. " that , 2 i^^ck Creek v. Strong, 96 U. S. 
 all loans made by a board of county 271. 
 
 s\ipi'rvisors shall be made payable » Gilchrist v. Little Creek, 1 Dill. 
 in fifteen years," the same statute 261. 
 
 required that before bonds be issued 
 the i)roposition be submitted to the 
 voters. This was done and the prop- 
 124 
 
 * Allentown v. Derr, 115 Pa. St. 
 439.
 
 CH. VIII.] FORMAL PARTS OF BONDS, ETC. § 103 
 
 presumption is that these bonds were issued at the time 
 they bear date, yet that presumption may be overcome 
 by proof that they were issued at a different date." 
 
 Where a statute authorized the issue of bonds by towns 
 and counties to aid raih'oads, provided that such bonds 
 should not extend beyond ten years, and bonds were 
 issued thereunder payable in eleven and seventeen years, 
 the United States Supreme Court sustained a demurrer 
 to the declaration on such town bonds and coupons, and 
 held the bonds to be invalid.^ 
 
 Where the municipal bonds are void because payable 
 at a different time than that allowed by law, but the 
 bonds are issued and purchased in good faith, and the 
 municipality had a legal right to issue such bonds, except 
 as to time of payment, the law will imply a promise by 
 the municipality to repay the purchaser the amount paid 
 for such bonds at the time and according to the terms 
 which should originally have been inserted in the bonds. ^ 
 
 § 103. Same. — When the act under which the bonds 
 are issued is silent as to the time of their payment, but 
 there is some general act which provides that all bonds 
 shall be payable within a certain time, or that the loans 
 of the class of municipalities, of which the municipality 
 issuing the bonds is a part, shall be payable within a 
 certain period, the bonds must be payable within the time 
 regulated by the general act.^ 
 
 Where the bond provides that it shall be payable at 
 
 1 Bavnum v. Okolona, 148 U. S. [of the statute, and towns in a sub- 
 393. See also Woodruff v. Okolona, sequent one, to issue tlie bonds, and 
 
 57 Miss. 806. 
 Tlie court in the former case said : 
 "Tlie Legislature of MLssissippi, 
 in authorizing the town of Okolona 
 to subscribe for stock in a railroad 
 company and to pay for the same 
 by an issue of bonds, prescribed 
 that such bonds should not extend 
 
 the limitation as to time was found 
 in the section providing for the 
 issue of the county bonds. The 
 court held the limitation also ap- 
 plied to the town bonds, because in 
 authorizing the towns to issue such 
 bonds in the subsequent section, it 
 provided they should be issued '• in 
 
 beyond ten years from the date of the same manner and with like 
 
 issue, such limitation must be re- effect."' 
 
 garded as in thenatureof a restric- I - lloag v. Town of Greenwich, 
 
 tion on the power to issue the 138 N. Y. 152. 
 
 bonds." In this case the statute ^ Board of Sup. v. Simmons, 
 
 authorized counties in one section ] (Mich.) 62 N. W. R. 2!)2. 
 
 125
 
 ^ lOi ^lUNICIl'AL liONDS. [CH. VIII. 
 
 the i)U'asuro of tin- municipality issuing it, before the 
 time fixed in the bonds, such bonds are still held to be 
 noLCotiable. Because they are payable at a time which 
 must certainly arrive, the holder could not exact payment 
 before the day fixed in the bonds, the debtor incurred no 
 legal liability for non-payment before that day passed.^ 
 
 Where coupon bonds are redeemable at the option of 
 the coi'poration, hefore the date of maturity, the corpora- 
 tion rannot stipulate that all matured coupons must ac- 
 company the l)()n(ls and be presented with them for pay- 
 ment, unless such condition be a part of the bonds, and a 
 deposit to pay such bonds subject to such an unauthorized 
 condition will not stop the running of the interest.^ 
 
 § 104. How executed — Oilicers to sign. — They are 
 signed by the mayor or other chief executive officer of 
 the municipality, or president or chairman of the board or 
 commission, and are usually countersigned or attested by 
 some other officer or officers, usually the clerk and treas- 
 urer. 
 
 The statute pursuant to which they are issued, or the 
 charter of the corporation, or the ordinance or resolution 
 directing their issue, must designate the officer or officers 
 who are to execute the bonds. 
 
 The officers who execute the bonds must be expressly 
 authorized so to do ; they cannot act without authority, 
 and this authority must be a matter of public record.^ 
 
 It has been held that it Avas competent for a county 
 judge to leave his State (Iowa) and go to New York and 
 there procure a new seal and execute and deliver the 
 bonds, and this although the statute of his State provided 
 that, in case of his absence, the county clerk should take 
 his place.* 
 
 AVhere the officers to sign are not designated by statute 
 they must be officers of the municipal corporation.^ 
 
 1 Ailik-y School Dist. v. Hall, 113 : v. Bank, 3 Eng. (Ark.) 277. See ^§ 
 U. S. larj. \Uetseq. 
 
 - Bailey V. County of Buchanan, * Lynde v. Winnebago Co., 16 
 rj4 N. Y. Super. Ct. 237. Wall. 6. 
 
 3 Brown V. Bon Homme Co., 46 ^ Lane v. Embden, 73 Me. 354; 
 X. W. R. 173 ; Clairborne Co. v. ' Middleton v. Mulica, 113 U. S. 433. 
 Brooke. Ill U. S. 400 ; Little Rock 
 12G
 
 CH. Vlir.] FORMAL PARTS OF BONDS, ETC. § l^J 
 
 When the statute or ordinance or resolution prescribes 
 the officer who shall execute them, it must be the officer 
 who is actually holding office at the time of signing,^ but 
 he will be presumed to have signed during his term of 
 office.^ If the statute requires that a particular officer 
 shall execute the bonds, they are not valid without his 
 signature, and purchasers must take the risk of the gen- 
 uineness of the signatures and character of the officials.^ 
 
 When the law requires that the auditor of the State, or 
 some other official besides the municipal officers, shall sign 
 the bonds or register them, such bonds, if not so signed 
 or registered, are not valid obligations of the munici- 
 pality.^ 
 
 Bonds executed by a mayor after the date of the bonds, 
 but occupying that office at the time of their negotiation 
 and deliver)^, is a proper execution.^ And where the bonds 
 were signed by an officer whose term had expired, there 
 being no fraud intended, it was held that the town, hav- 
 ing put the bonds in circulation, was estopped to deny 
 their validity.^ 
 
 1 Coler V. Cleburne, 131 U. S. 162. 
 
 2 School Dist. V. Xenia Bank, 19 
 Neb. 89. 
 
 8 Bissell V. Spring: Valley, 101 U. 
 S. 103; Merchants' Bank V. Bergen, 
 115 U. S. 384. 
 
 * Anthony V. Jasper Co., 101 U. S. 
 693. 
 
 5 Yesler v. City of Washington, 
 25 Pac. Rep. 1014 ; 1 Wash. 30S. 
 
 s Weyanwega v. Ayling, 99 U. S. 
 118. 
 
 In the case of Coler v. Cleburne, 
 131 U. S. 162, where it appeared 
 that bonds were issued by the City 
 of Cleburne under a statute which 
 reipiired that the bonds sliould be 
 sign(>d by the inayf)r, and for- 
 warded by him to the State comp- 
 troller for registration, the bonds 
 were issued pursuant to a valid 
 ordinance and bore date January 
 1st, 1884, which ordinance required 
 that the bonds be signed by the 
 
 maj'or and the city secretary. The 
 terin of the mayor in ofltice January 
 1st, 1884 (the date of the bonds), 
 expired in April following. His 
 name was Hodge. 
 
 After April, tlie citj' had a new 
 mayor, whose name was Odell. 
 
 The bonds were not signed until 
 Jul}% 1884, and were then signed 
 by the former mayor, Hodge, who 
 affixed after his signature the word 
 " Mayor," and the city secretary 
 who remained in office. 
 
 The coupons were likewise 
 signed. Hodge signed tlie bcmds 
 pursuant to a resolution of tlie city 
 council adopted July 3d, 1884. 
 
 The suit was l)rouglit by a bona 
 fule liolder, without notice, upon 
 some of the coupons cut from the 
 bonds, and the city interposed the 
 plea of non est factum. 
 
 The plaintiff contended that the 
 city was estopped to set up this de- 
 127
 
 MUNICIPAL BONDS. 
 
 [ru. 
 
 \' 1 1 1 . 
 
 The acts of commissioners designated in the enabling 
 statute to execute the bonds are the acts of the mu- 
 nicipal corporations.^ 
 
 fence becauso tlio ordinance anthor- 
 ized the bonds to be dated January 
 1st, 1884, and signed by the then 
 mayor, and that tliey were so 
 signed, and that upon their face 
 tliey were apparently regular and 
 signed by tlie person who was 
 mayor at their date, and further 
 tliat tile bonds had been forwarded 
 by him to the State comptroller and 
 registered in the latter's office as 
 recpiired by the statute. The bonds 
 were held void. 
 
 As this case is of importance and 
 is distinguished from some other 
 ca-ses apparently in conflict with it, 
 the opinion of the court is given 
 almost in full. 
 
 Mr. J. Blatchford, who delivered 
 the opinion of the court, said : 
 
 " It is contended for the plaintiflf, 
 that as Hodge, who signed tiie 
 bonds as mayor, was the mayor on 
 January 1, 1884, the date of the 
 bonds, and the jilaintiff was an in- 
 nocent purchaser of them for value, 
 he was not bound to look beyond 
 the bonds themselves, and the en- 
 abling acts authorizing their issue, 
 and that, if there was lawful 
 authority to issue them and the 
 <'ity appeared to h.ave acted upon 
 that authority, he was not obliged 
 to inquiri' further, no mutter wliat 
 irregularity characterized the acts 
 of the oflRcers who issued them on 
 behalf of the city ; that the face of 
 the bonds referred him to article 
 420 of the statutes, and to the ordi- 
 nance of September 13, 1883 ; that 
 an examination of the statute and 
 the ordinance woidd show author- 
 ity to issue tlie bonds ; that the 
 
 records of the city would show that 
 the persons who signed the bonds 
 were the mayor and the secretary 
 of tlie city on the 1st of January, 
 1884, the date of the bonds ; that 
 the indorsement on each bond 
 would show that it had been regis- 
 tered by the comptroller ; and that 
 he had a right to presume that the 
 bonds had been forwarded to the 
 comptroller by the mayor, as pro- 
 vided by the statute, or otherwise 
 tiie comptroller would not have 
 registered them. 
 
 "But we have always held that 
 even bona fide purchasers of mu- 
 nicipal bonds must take the risk of 
 the oflicial chai'acter of those who 
 execute them. An examination of 
 the records of the citj' in regard to 
 the issuing of the bonds would have 
 disclosed the fact that tlie bonds 
 liad not been signed and issued 
 under tlie ordinance of September 
 13, 1883, until July 3, 1884, that W. 
 N. Hodge was not mayor on that 
 day ; and that the person who then 
 signed the bonds as mayor was a 
 private citizen. 
 
 "In Antiiony v. County of Jas- 
 per, 101 U. S. (593, munici))al bonds 
 were signed and issu(>(l in October, 
 1872. on a subscription made in 
 March. 1872, to the stock of a rail- 
 road company, and bore date the 
 day of the subscription. The pre- 
 siding justice who signed the bonds 
 did not become sucli until October, 
 1872. Thus the person who was in 
 office when the bonds were actually 
 signed, signed tiiem. but they were 
 antedated to a day when he was 
 not in office. In the present case, 
 
 1 Brownell 
 128 
 
 V. Town of Greenwich, 114 N. Y. 518.
 
 CH. VIII.] FORMAL PARTS OF BONDS, ETC. 
 
 § 104 
 
 It is held that the act of countersigning is but a min- 
 isterial act, and that an officer whose duty it is to so sign 
 
 the bonds were not signed by an 
 officer who was hi office wlien they 
 were signed, but by a person who 
 was in office on the antedated day 
 on whicli they bore date. In the 
 Jasi)er County case there was a 
 false date inserted in the bonds in 
 order to avoid tlie effect of a regis- 
 tration act which took effect be- 
 tween the antedated date and the 
 actual date of signing. In the 
 present case, thei'e was a false 
 signature. But the principle de- 
 clared in the Jasper County case is 
 equally applicable to the present 
 case. It was there said by Chief 
 Justice Waite, delivering the judg- 
 ment of the court (p. 698): 'The 
 public can act only through its 
 authorized agents, and it is not 
 bound until all wlio are to partici- 
 pate in what is to be done have 
 performed their respective duties. 
 The authority of a public agent de- 
 pends on the law as it is when he 
 acts. He has only such powers as 
 are specifically granted ; and he 
 cannot bind his principal under 
 power that have been taken awa5% 
 by simply antedating his contracts. 
 Under such circumstances, a false 
 date is equivalent to a false signa- 
 ture ; and the public, in the absence 
 of any ratification of its own, is no 
 more estopped l^y the one than it 
 would be by the other. After the 
 power of an agent of a private per- 
 son has been revoked, he cannot 
 bind his principal by simply dating 
 back what he does. A retiring 
 ])artner. after due notice of disso- 
 lution, cannot charge his firm for 
 tlie payment of a negotiable prom- 
 isory note, even in the hands of 
 an innocent holder by giving it a 
 date within the period of the ex- 
 . 9 
 
 istence of the partnership. Ante- 
 dating, under such circumstances, 
 partakes of the character of a for- 
 gery, and is always open to inquiiy 
 no matter who relies on it. The 
 question is one of the authority of 
 him who attempts to bind another. 
 Every person who deals witli or 
 through an agent assumes all the 
 risks of a lack of authority in the 
 agent to do what he does. Nego- 
 tiable paper is no more protected 
 against this inquiry than any otlier. 
 In Bayley v, Taber, 5 Mass. 280, it 
 was held that when a statute pro- 
 vided that pi-omissory notes of a 
 certain kind, made or issued after 
 a certain day, should be utterly 
 void, evidence was admissible on 
 behalf of the makers to prove that 
 the notes were issued after that day, 
 although they bore previous date. 
 . . , Purchasers of municipal secu- 
 rities must always take the risk of 
 the genuineness of the official signa- 
 tures of those who execute the 
 paper they buy. This includes, not 
 only the genuineness of the signa- 
 ture itself, but the official character 
 of him who makes it.' 
 
 " Tills ruling has been since fol- 
 lowed. In Bissell v. Spring Valley 
 Township, 110 U. S. 1G2, where 
 bonds were issued by a township in 
 payment of a subscription to rail- 
 way stock, under a statute which 
 made tlie signature of a particular 
 officer essential, it was held thiit 
 without the signature of that officer 
 they were not the lionds of the 
 township, and that the municijial- 
 ity was not estopped from disputing 
 their validity by reason of recitals 
 in the bond, setting forth the pro- 
 visions of the statute, and a com- 
 pliance with them. The snme prin- 
 120
 
 § 104 
 
 MUNICIPAL BONDS. 
 
 [CH. YIII. 
 
 li;is no aiitliority to (U'tcniiine whether the proper steps 
 have h(vii taken to aiitliorize the issuance of the bonds,^ 
 anil that the omission of such officer to countersign is 
 ix mere defect of execution which a court of equity will, 
 in the absence of a remedy at law, ordinarily supply, and 
 that an injunction restraining the collection of taxes for 
 such bonds will not be allowed, ^ but where the statute 
 makes the signature of an officer essential to the valid- 
 ity of the bond, he must sign it in order to render it a 
 valid obligation, although he has no discretion to with- 
 hold it.3 
 
 Where the statute provided that, after an affirmative 
 vote by the taxpayers, the bonds should be signed by the 
 town magistrate, treasurer and commissioners, it was held 
 
 cil)le is recognized in Nortliern 
 Bank v. Porter Townsliip, 1 10 U. S. 
 GOS, 618, 019. ami :\Ierc-liants' Bank 
 V. Bergen County, 115 U. S. 384, 390. 
 "Tiie case of Weyauwetca v. 
 Ayling 93 U. S. 113, is cited for the 
 l)laintitT. In that case the bonds 
 of a town bore date June 1, and 
 were signed by A as chairman of 
 the board of supervisors, and by 
 B. as town clerk, and were de- 
 
 and said that in the latter case it 
 held that 'the town was estopped 
 from proving that the bonds were 
 actually signed by a former clerk 
 after he went out of office, because 
 tiie clerk in office adopted the signa- 
 ture as his own when he united 
 witli the chairman in delivering 
 the bonds to the railroad company,' 
 wliiie in the former case tlie bonds 
 were not complete in form wlien 
 
 livered by A to a railroad com- i they were issued, and it was only 
 l>any. When sued on the cou- by a false date that tliej' were ai)- 
 pons by a bona fide purcliaser parently so. In the present case, it 
 
 of tlie bonds for value before ma- 
 turity, tlie town i)Ieaded that tlie 
 bonds were not in fact signed by B 
 until July 13, at which date he had 
 ceased to be town clerk, and I lis 
 successor was in office. It was 
 held. Chief Justice Waite delivcr- 
 
 appears affirmatively by tlie bill of 
 exceptions that the person who was 
 mayor of the city at the time the 
 bonds were signed took no part in 
 signing, delivering or issuing them ; 
 that tlioy were not complete in 
 form when they were issued, be- 
 
 ing the opinion of the court, tliat cause they were not signed by the 
 
 the town was estopped from deny- 
 ing the date of the bonds, because, 
 in the al>sence of evidence to tlie 
 
 tlien mayor ; and that it was only 
 bj' a false date thnt they were tlien 
 ajiparently complete in form. 
 
 contrary, it must 1^ a.ssumed that Hence, tlie present case is not like 
 
 the bonds were delivered to the 
 company by A with tlie a.ssent of 
 the then town clerk. 
 
 " In Anthony v. County of Jas- 
 per, tlie court distinguished that 
 case from Wevauwega v. Avling, 
 130 
 
 Weyauwega v. Ayling, but is like 
 Anthony v. County of Jasper." 
 
 1 Houston V. People, 55 III. 398. 
 
 - Melvin v. Lisenby, 72 111. 63. 
 
 ^Bissell V. Spring Valley, 110 
 U. S. 162.
 
 CH. VIII.] FORMAL PARTS OF BOXDS, ETC. § 105 
 
 that, although the bonds were only signed b}^ the treas- 
 urer and magistrate, they were valid, and that the statute 
 was directory in respect to the execution.-^ 
 
 § 105. Signing— What snfflcient.— In some cases it has 
 been held to be a sufficient signing where a lithograph or 
 printed fac simile signature was used, it having been 
 adopted by the maker.^ An invalid signature cannot be 
 made valid by ante-dating or jDost-dating, so as to make 
 it appear that when they were signed the officer signing 
 was then in office, and a false date of this kind for such 
 purpose is equivalent to a forgery and will render the 
 bonds invalid even in the hands of a bona fide holder.^ 
 
 The bonds must be issued strictly in conformity with 
 the enabling statute, and no material deviation from it 
 will be allowed.* Where the body is authorized to sign 
 the bonds, it is held, unless the statute requires otherwise, 
 a signing by the majority of the body is sufficient.^ 
 
 When the commissioners who are authorized to issue 
 bonds constitute by statute a board, the bonds should be 
 signed by the presiding officer of that board, or such other 
 officer or officers as the board designate and in such 
 cases they should not be signed by theindividualmember, 
 of the board. ^ 
 
 Where the name of the officer who was authorized to 
 sign was written by another person at his own request, 
 and afterwards treated as his own, the bonds so executed 
 have been held valid, in the hands of bona fide holders.' 
 
 Where the authority to issue exists, the signing of the 
 bonds in blank and depositing them with a third party to 
 hold until certain conditions are complied with, and 
 
 1 In Bank v. Statesville, 84 N. C. 
 169. 
 
 2Lyde v. County, 16 Wall. 6; 
 Neely v. Yorkville, 10 S. C. 141. 
 
 !> Anthony v. Jasper Co., 101 U. S. 
 693. 
 
 *Coler V. Cleburne, 131 U. S. 
 162. 
 
 s First Nat. Rank v. Arlington, 16 
 Blatclif. (U. S.) 57 : Cxibbs v. School 
 District, (Mich.) 50 N. W. R. 294. 
 
 " Breckenridge Co. v. McCrackon. 
 61 Fed. Rep. 191 ; Davenport v. 
 County of Dodge, 105 U. S. 237. 
 
 ^ School Dist. V. Xenia Bank, 19 
 Neb. 89 ; Montgomery v. Tp. of 
 St. Mary's, 43 Fed. Rep. 302 ; Just 
 V. Wise Tp., 42 Mich. 575 ; Town 
 of Weyauwega v. Ayling, 99 U. S. 
 112. 
 
 131
 
 lOti 
 
 MUNICIPAL BONDS. 
 
 [CH. viir. 
 
 afterwards fillinc: up the blank is a mere irregularity 
 whieli cannot ])reju(lico the rights of an innocent holder.^ 
 
 ^ 10<>, Seal ilia:. — It is essential that the bond should 
 have the corporate seal affixed, but it has been held in 
 many cases that although unsealed it is a valid obligation, 
 l>r(n-ided it be in other respects proper in form and execu- 
 tion, and that the require.nent as to seals was directory 
 and formal, that their omission was immaterial. ^ In all 
 these cases it will be found upon inspection of the statutes 
 under which the bonds were issued that, in addition 
 to the authority to issue the bonds, the corporation 
 had the power to contract the debt, or otherwise pledge 
 the faith of the corporation,^ or the statute did not con- 
 tain any express provision that the instruments be under 
 seal.* 
 
 And where the bonds were not under seal they have 
 been declared void.^ It will therefore be observed that, 
 
 1 NyanticSav. Bank v. Douglass, 
 5 III. App. 579. 
 
 •^ Town of Solon v. Williams- 
 burgh Sav. Bk., 114 N. Y. 125. and 
 cases cited ; People v. Mead, 24 
 N. Y. 124 ; Augusta v. Augusta 
 Bank. 5G Maine, 176 ; Connecticut 
 Life Ins. Co. v. Cleveland R. R., 41 
 Barb. 22 ; Jones on Railroad Secur- 
 ities, ^ 189 ; Bernards Township v. 
 Stobbins, 109 U. S. 341. 
 
 ■■^ In San Antonio v. Mehaaffej-, 90 
 U. S. 312, 315, where the city had 
 authority to subscribe to a railroad 
 company and 'may issue bonds 
 bearing interest or otherwise pledge 
 the faith (.f the city," and it issued 
 bonds which were not sealed, the 
 court .said of them : 'The principal 
 securities delivered to the company 
 were not bonds, because thej' were 
 unsealed," but held them to be in- 
 struments pledging the faith of the 
 city within the scope of the au- 
 thorit_v. 
 
 * In People v. Mead, 24 N. Y. 
 125. the bonds in suit were not 
 under seal, and objection was made 
 132 
 
 to them for that reason. The court 
 said : " But if tlie town had a seal 
 it would not have been proper to 
 affix it to these obligations, for the 
 act directs that they shall be exe- 
 cuted in another manner, namely, 
 under the official signatures of the 
 supervisors and railroad commis- 
 sioners, and these instruments were 
 authenticated in tiiat manner. 
 
 '' Whatever force there may gen- 
 erally be in the words ' bond ' or 
 'bonds' which were used in the 
 act, is overcome by the explicit 
 directions as to their execution, 
 which has been mentioned." 
 
 "'' In Avery v. Town of Spring- 
 port, the coupons in suit were de- 
 tached from bonds issued to aid a 
 railroad (pursuant to Laws of New 
 York, 1869, Vol. 1, p. 677). The 
 act directed that the bonds should 
 be under the hands and seals of the 
 commissioners. The bonds were 
 not sealed. The court held the 
 coupons to be void. 
 
 The court said: "The coupons 
 are not themselves sealed, nor are
 
 CH. VIII.] FORMAL PARTS OF BONDS, ETC. 
 
 106 
 
 in order to avoid all questions as to the validity of the 
 bonds in this respect, they should be under the seal of 
 the municipality issuing them. It has been held, that 
 where the seals were omitted by inadvertence or mis- 
 understanding the court of equity would afford the 
 relief requisite to the party entitled to the benefit of the 
 instruments, to render them en forcible.^ 
 
 It has been held that where a bond recited that it was 
 executed under the hand and seal of the obligor, he was 
 estopped by such recital to show that it was not sealed.^ 
 
 A scroll will not answer in place of a seal, unless the 
 statute which authorizes the use of a scroll in place of 
 a seal in the execution of sealed instruments includes 
 municipal corporations or officers as well as private 
 persons.^ 
 
 any of them executed by more than 
 the signatui'B of one commissioner. 
 
 "They are therefore subject to all 
 the difficulties that the bonds are 
 liable to. The defect, if it be one, 
 being in the execution, which does 
 not pursue the direction of the 
 statute, neither the plaintiff nor 
 any one else can become possessed 
 of the bonds without knowledge of 
 the absence of seals, and of the re- 
 quirements of the statvite in that 
 regard. This action is on the in- 
 struments, and the recovery can 
 only be had on them. The law 
 which authorized bonds to be issued 
 prescribes the form and mode in 
 whicli they are to be executed. 
 They are to be under the hands 
 and seals of the commissioners. 
 Instruments under their seals and 
 not under their hands, or under 
 their hands and not under their 
 seals, are alike not executed in 
 conformity with the statute, and 
 ai'e alike inoperative to ci*eate an 
 obligation against the town." 
 
 1 Wiser V. Blackley. IJohn. Chr. 
 (N. Y.) 607 ; Bernards Town v. 
 Stebhins, 109 U. S. 341. 
 
 - Mutual Life Ins. Co. v. Ben- 
 der, 124 N. Y. 47. 
 
 3 Town of Solon v. Williams- 
 burgh Sav. Bank, 114 N. Y. 125. 
 
 This was an action against the 
 bank brought by the town to com- 
 pel the bank to surrender the bonds 
 because they were not sealed by 
 the commissioners when they is- 
 sued them, as required ])y statute. 
 It appeared from the evidence that 
 after tJieir issue, and before the 
 bank purchased tlie bonds, some 
 unknown jjerson had affixed seals 
 to them, whether a sti'anger or one 
 of tlie prior holders, could not be 
 ascertained. Tlie Court of Appeals 
 of New York, in refusing to com- 
 l)el their surrender, said: "If 
 placed there by some one having 
 no interest in the bonds and with- 
 out any authority, consent or com- 
 plicity of any person having any 
 interest, the seals would not be 
 treated as effecting any alteration 
 of the bonds. ... If, therefore, 
 this was done by a stranger, in the 
 sense of the term applicable in 
 such case, the alteration produced 
 by it would not be effectual to im- 
 133
 
 $ lOi 
 
 MUNICIPAL BONDS. 
 
 [CII. VIII. 
 
 Tlie presence of a seal wliidi purports to be the cor- 
 porate seal, on a bond wliicli recites that it has the cor- 
 porate seal atUxed and is confirniod by the signatures of 
 the officers, is vcy;iiV(\vd ns prima facie the corporate seal 
 of the corporation, but such recital and seal is insufficient 
 to prove that the seal was lawfully affixed and that the 
 corporation is bound by the bond. Proof of authority to 
 execute the bond must be also adduced.* Usually the 
 seal of a municipal corporation must be proved by proper 
 evidence ; the presence of the seal does not prove itself. 
 
 § lUT. Coupons. — The coupons attached to the bonds 
 are separate promises to pay the interest on the bond to 
 the holder when due at the place appointed in the coupons 
 or bond. They usually each designate the time and place 
 of payment. 
 
 They are given as a convenient mode of obtaining pay- 
 ment of interest as it becomes due on the bond, and they 
 are substantially but copies of the stipulation in the body 
 of the bond in respect to the interest, and are so attached 
 
 l)air the ri.t^ht before existing to 
 «'iiforce tile bonds, l)ut, inasmucii 
 as tiiey passed through the hands 
 of other owners bi>fore the}' reached 
 tl>e defendants, it is contended that 
 the finding that it was done by a 
 stranger is not supported, and the 
 presumption arises that tlie seals 
 were affixed by some party having 
 an interest in having them put on, 
 and. tlicrefore, ex])hination is neces- 
 sary to relieve them from the eflect 
 of the alteration. As a general 
 rule, when a material alteration 
 appears to have been made in a 
 written instrument after its execu- 
 tion, evidence is necessary to ex- 
 plain it, and the burden of proof 
 rests upon the party seeking to 
 enforce it to do so to support a re- 
 covery ujMjn it. . . . The plaintifT's 
 counsel seeks to apply tliat rule in 
 respect to the burden of proof to 
 this case, and insists that the de- 
 fendant must bear it. AVliile the 
 134 
 
 burden is with a party seeking to 
 enforce the contract, to relieve it 
 from the effect of any material 
 alteration made in it after its in- 
 ception, that rule is not necessarily 
 ai)plicable to a defendant in an 
 action brought to have a security 
 held by him cancelled upon that 
 ground, when it appears tliat such 
 defendant is in no sense chargeable 
 Willi nulla jUles in that respect. 
 Our attention is called to no au- 
 thority going to that extent. And 
 the proposition does not seem to 
 commend itself to a court of equity 
 whi<;h is supposed, within recog- 
 nized bounds, to exercise discre- 
 tionary powers in such cases." 
 
 The court also held a court of 
 equity would afford the necessary 
 relief by directing that the seals be 
 affixed to the bonds. 
 
 1 Fidelity etc. Co. v. Shenandoah 
 etc. Co., 32 ^Y. Va. 244 ; Memphis 
 v. Adams, 9 Heisk (Tenn.) 553.
 
 CH. VIII.] FORMAL PARTS OF BONDS, ETC. § 107 
 
 to the bond that they may be cut off as a matter of con- 
 venience in collecting the interest, or to enable the holder 
 of the bond to realize the interest due, or to become due, 
 by negotiating the coupons, or to allow him to collect 
 the interest on the bond without the necessity of i)resent- 
 ing the bond every time an instalment of interest be- 
 comes due.^ When the coupon is detached it may be 
 negotiated as money, and in the hands of a bona fide 
 holder before maturity is absolutely his, although the 
 same was obtained by theft or was lost by the owner. So 
 long as a person obtains them before maturity for value 
 and without knowledge of any defects in the title he is 
 protected in his possession of them and entitled to recover 
 their value. 
 
 It is not necessary that legislative authority to issue 
 the coupons be given. The relation between the bond and 
 the coupon is so intimate that authority to issue bonds 
 payable with interest implies the right to issue the cou- 
 pons. ^ 
 
 The coupons need not be presented for payment on the 
 day of maturity, except to hold an endorser, if there be 
 one ; or within a reasonable time after maturity to hold 
 a guarantor. 
 
 The holder of the bond cannot recover the interest 
 thereon unless he has possession of and produces the 
 coupon, but the holder of the coupons may recover the 
 money due on the latter and need not produce or own 
 the bond, except in those cases where the coupon does not 
 contain any promise to pay and the promise is to be 
 found in the bond itself. In such cases it has been held 
 that the bond must be produced in order to show the in- 
 tent and meaning of the coupon, and they are to be con- 
 strued together.^ 
 
 Although coupons are usually i)aid as they fall due, 
 those past due are not entitled to be first paid, wlien 
 they are to be paid out of mortgaged property, but in 
 
 1 City of Kenosha v. Lamson, 9 j ^ City of Kenosha v. I.amson. 9 
 Wall. 482. I Wall. 48:5 ; :\rcClnre v. Township 
 
 2 Board of Etl. of Atcliison v. De of Oxford, 92 U. S. 429. 
 Kay, 148 U. S. 591. I 
 
 185
 
 § 108 MrXICIPAL r.ONDS. [CII. VIII. 
 
 siuli cases if the proceeds are insufficient to pay all the 
 cniipons, as w(^ll as the bonds themselves, the bonds and 
 all the coupons are entitled to a pro rata distribution, 
 priority attaching to neither bonds nor C(nipons.^ 
 
 When coupons are severed they become sei)arate negoti- 
 able instruments ; ^ they are not entitled to days of grace 
 like bills and notes, except in New York, where it has 
 been held that they are entitled to the regular days of 
 grace ; but since days of grace on bills and notes have 
 been abolished in that State, it is presumed coupons are 
 also no longer entitled to grace. 
 
 § luS. Form of coupon— Negotiability.— The fact that 
 no pa3'ee is named in the coupons, or that it contains no 
 words of promise, has been held not to render it invalid 
 and uncollectible,^ although the opposite view has been 
 taken in several cases in New York.^ It has been held 
 that in whatever words the coupons are expressed they 
 are negotiable, provided they indicate by whom they are 
 due, the amount, and when payable.'' 
 
 They are in various forms, usually in that of an ex- 
 press promise to pay to the bearer the interest due, at a 
 fixed time and place, but although the cou])ons themselves 
 contain no promise of payment this does not relieve the 
 payer from liability, if the bonds from which they are 
 detached contain this promise.^ Again, they are in the 
 form of a check or draft upon a banking house in favor 
 of the bearer ; they are then rather a check than a bill of 
 exchange.' Again, they are in the form of a bill or draft 
 but designate no drawer, thus : " Pay to the bearer twenty 
 dollars on the first day of May, ISSO, interest to that date," 
 and signed by the proper officers. Whatever be the form 
 of the coupon the intent and scope of the instrument is 
 the same. It furnishes the holder with evidence of the 
 
 1 Sewall V. Brainenl, .33 Vt. 364 ; 
 Ketclmin v. Duncan, 9G U. S. 009. 
 
 2 Mercer Co. v. Hackot, 1 Wall. 
 83. 
 
 8 Woods V. Lawrence Co., 1 
 
 * Woods V. Lawrence, 1 Black. 
 (U. S. R.) 360. Daniel on Neg. 
 Inst. 1493. 
 
 * Mayor etc. of Nashville v. Po- 
 tomac Ins. Co., 2 Baxt. 296. 
 
 Black. 3C0. | t Arents v. Commonwealth, 18 
 
 * Evertsonv. Nat. Bank, 66 N. Y. Gratt. 750. 
 19. 
 
 136
 
 CH, YIIT.] FORMAL PARTS OF BONDS, ETC. § 109 
 
 amount of interest due upon the bonds at a certain time 
 and place, and his right to receive the same. 
 
 The coupons are usually signed by the mayor or other 
 executive officer of the municipality, or the chairman or 
 president of the board or commission, and sometimes by 
 the other officers who joined in the execution of the bonds ; 
 but unless the statute requires the signature or signa- 
 tures of such other officer or officers to the coupons they 
 need not be signed by them.^ 
 
 The coupons are usually signed by a printed fac-simile 
 of the officer's signatures upon the bonds, and this is a 
 sufficient signature, although not authorized by statute.^ 
 
 § 109. Bond and coupon constrned together — 
 Receivable for taxes. — The connection between the 
 bond and the coupon, when negotiable, is such that 
 although the coupon, is an independent instrument, yet 
 the terms of the bond, in case of a conflict between them, 
 govern the contract for interest, and in case of an omis- 
 sion of a promise to pay supply that omission, and al- 
 though separated from the bond it still remains a part 
 of it and is protected by and subject to the covenants 
 which it contains.^ Where the coupons refer to the bond, 
 a bona fide purchaser is chargeable with notice of all the 
 bond contains.* 
 
 When the statute authorizes the municipal corj^ora- 
 tion to agree in the bond, or the coupon, that the coupons 
 shall be received for taxes, and this provision is inserted, 
 it adds increased value to the bond because it insures 
 the payment of interest above all other claims, as the 
 holder can use the same in payment of his own taxes 
 or sell the same to others who may so use them. jS'o 
 subsequent act can be passed wliicli will impair this con- 
 tract.^ This provision, however, cannot be inserted unless 
 
 ^ Tliayer v. Montgomery Co., 3 
 Dillon C. C. 389. 
 
 2 Pennington v. Boehr, 48 Cal. 
 565 ; McKee v. Vernon Co., 3 Dill. 
 210 ; Lynde v. County, 16 Wall. 6. 
 
 3 State V. Spartenburg R. R., 8 S. 
 C. 129 ; Kenosha v. Lamson, 9 
 Wall. 483. 
 
 4 McClure v. Town of Oford, 94 
 U. S. 429. 
 
 5 Antonio v. Wright, 22 Gratt. 
 833 ; Clark v. Tyler, 30 Gratt. 137; 
 Hartnian v. Greenhow, 102 U. S. 
 672 ; Virginia Coupon Cases, 114 
 U. S. 270. 
 
 137
 
 ^110 MUNICIPAL BONDS. [CH. YIII. 
 
 the statute providiiii;- for the issue of bonds authorized 
 it, because, if a municipal corporation, without authority, 
 ontorcMl into such a contract it would be void as to such 
 provision for want of power. 
 
 § 110. Copies of bonds and ordinances. — 
 
 Form of bonds in Chaffee Co. v. Potter, 142 U. S. 355. 
 
 "No $1000. 
 
 " United States of America, County of Chaffee, 
 State of Colorado. 
 
 "Funding Bonds. 
 
 "(Series A.) 
 
 " The County of Chaffee, in the State of Colorado, 
 acknowledges itself indebted, and promises to pay to 
 
 or bearer, one thousand dollars, lawful money of 
 
 the United States, for value received, redeemable at the 
 pleasure of said county after ten years, and absolutely 
 due and payable twenty years from the date hereof, at 
 the office of the treasurer of said county, in the town of 
 Buena Vista, with interest thereon at the rate of eight 
 per cent per annum, payable semi-annually on the first 
 day of March and the first day of September in each 
 year, at the office of the county treasurer aforesaid, or at 
 the banking house of Kountze Brothers, in the city of 
 New York, at the option of the holder, upon the present- 
 ation and surrender of the annexed coupons as they 
 severally become due. 
 
 " This bond is issued by the board of county commis- 
 sioners of said county of Chaffee, in exchange at par for 
 valid floating indebtedness of the said county, outstand- 
 ing prior to August 31, 1882, under and by virtue of, 
 and in full comformity 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 indel)tedness,' ap])roved Fel)ruary 21, 
 18>>1, and it is hereby certified that all the requirements 
 of law have been fully complied with by the proper 
 
 officers in the issuing this bond. 
 138
 
 CH. VIII.] FORMAL PARTS OF BONDS, ETC. § 110 
 
 "It is further certified that the total amount of this 
 issue does not exceed the limit prescribed by the con- 
 stitution of the State of Colorado, and that this issue of 
 bonds has been authorized by a vote of a majority of the 
 duly qualified electors of the said county of Chaffee, vot- 
 ing on the question at a general election duly held in said 
 county, on the seventh day of November, A, D. 1882. 
 
 "The bonds of this issue are comprised in three series, 
 designated ' A,' and ' B,' and ' C,' respectively ; the bonds 
 of series ' A ' being for the sum of one thousand dollars 
 each, those of series ' B ' for the sum of five hundred 
 dollars each, and those of series ' C ' for the sum of one 
 hundred dollars each. This bond is one of series 'A.' 
 
 The faith and credit of the county of Cliaffee are here- 
 by pledged for the punctual payment of the principal and 
 interest of this bond. 
 
 " In testimony whereof the board of county commis- 
 sioners of the said county of Chaffee have caused this 
 bond to be signed by their chairman, countersigned by 
 the county treasurer, and attested by the county clerk, 
 under the seal of the county, this first day of December, 
 A. D. 1882. 
 
 " Cliairman of Board of Count ij Commissioners. 
 
 "Attest: 
 
 " Couniij Clerk. 
 [county seal.] 
 
 (Countersigned.) " 
 
 " Count y Treasurer. ^^ 
 
 " $ (Coupon.) 
 
 "The county of Chaffee in the State of Colorado will 
 
 pay the bearer dollars at the office of the county 
 
 treasurer, in the town of Buena Vista, or at the Banking 
 House of Kountze Brothers, in the city of New York, on 
 
 the first day of , being six months' interest on 
 
 funding: bond. 
 
 " No Series Countij Treasurer
 
 § no MUNICIPAL BONDS. [CH. VIII. 
 
 Form in Brenhain v. Goriiian American Bank, 142 
 U. S. 173. 
 
 " United States of America. 
 *' State of Texas. City of Brenham. 
 
 " City of Brenham Bonds. 
 
 "No $100. 
 
 Bonds for General Purposes, 815,000. 
 
 ''Twenty years after date, for value received, the 
 city of Brenham promises to pay to bearer one hundred 
 dollars, with interest at the rate of ten per centum per 
 annum from date, paj^able semi-annually, on the first 
 days of September and March of each year, upon pres- 
 entation of the proper coupon hereto annexed, both 
 principal and interest payable at the office of the treas- 
 urer of the city of Brenham. This bond is redeemable 
 after the expiration of ten years from date hereof. 
 
 "This bond is authorized by an ordinance of the city of 
 Brenham, approved June 7, A. D. 1879. 
 
 " In witness whereof the mayor and secretary of the 
 city of Brenham hereunto set their hands 
 [ L. s. ] and affix the seal of the city of Brenham, 
 this 31st day of July, A. D. 1879. 
 
 "M. P. Kerr, 
 
 ' ' Mayor. 
 "C. H. Carlisle, ^ 
 
 " City Secretary.''^ 
 
 " United States of America.^ 
 
 "State of Michigan (Michigan coat of arms). 
 
 "Village of Howell. 
 
 "Improvement Bond. 
 
 " Know all men by these presents, that the village of 
 Howell, in the State of Michigan, acknowledges to owe 
 and promises to pay to J. M. Ashley, Jr., or bearer, the 
 sum of one thousand dollars, lawful money of the United 
 
 1 Risley v. Village of Howell, 64 Fed. Rep. 453. 
 140
 
 CH. VIII.] FORMAL PARTS OF BONDS, ETC. § 110 
 
 States of America, on the first day of in tlie year 
 
 of our Lord one thousand eight hundred and , at 
 
 the Fourth National Bank in the city of New York, with 
 interest at the rate of six per cent per annum, payable semi- 
 annually on the first days of December and June in each 
 year, on the surrender of the annexed coupons as they 
 severally become due. 
 
 ' ' This bond is issued under and by virtue of a special act 
 of the State of Michigan, entitled ' An act to authorize 
 the village of Howell to raise money to make public im- 
 provement in the village of Howell, being 248 of the local 
 act of 1885, of the Legislature of the State of Michigan.' 
 Approved February 25th, 1885, and also under an ordi- 
 nance of the village of Howell passed August 12th, 1885. 
 
 '' In testimony whereof the said village of Howell has 
 caused these presents to be signed by the president and 
 recorder of said village and to be sealed with the seal of 
 said village this twelfth day of August, A. D. 1885. 
 
 [seal.] (Signed) "Jay Carson, 
 
 " President. 
 
 "Geo. H. Chapel, 
 
 ^' Beco7xIer." 
 
 Ordinances. 
 
 An ordinance to provide for the construction of water 
 works in the city of Cleburne, to jn-ovide for issuing 
 bonds, and to levy a tax to pay interest and create a sink- 
 ing fund.^ 
 
 "• Whereas the city council of the city of Cleburne deem 
 it absolutely necessary that some steps should be taken 
 by tlie city of Cleburne to protect the property of the city 
 and citizens against lire ; and whereas it is further mani- 
 fest that the establishment of an efficient system of water 
 works is the most economical protection against fires ; 
 and whereas the Texas Water and Gas Company, a cor- 
 poration, having its chief domicil in the city of Tyler, 
 Smith County, Texas, has made a proposition, with 
 plans and specifications to construct a com])lete sys- 
 
 1 Coler V. Cleburne, 131 U. S. 1G2. 
 
 141
 
 is 1 1 MUNICIPAL BONDS. [CH. VIII. 
 
 tein of waterworks in the city of Cleburne, and for the 
 city of Cleburne (as per plans and specifications now on file 
 in the office of city secretary), for fifty-one bonds of the 
 city of Cleburne for one thousand dollars each, with 
 interest at seven per cent per annum, with coupons 
 attached for interest, payable semi-annually ; and where- 
 as the city council of the city of Cleburne has accepted 
 said i)i-o])osition of said Texas Water and Gas Com- 
 l)any; now therefore — 
 
 "Be it ordained by the city council of the city of 
 Cleburne, that the mayor and city secretary are hereby 
 authorized and fully empowered to execute, sign and 
 deliver for and in behalf of the city of Cleburne, a con- 
 tract with the Texas Water and Gas Company, a cor- 
 poration under the laws of Texas, for the construction of 
 a complete system of water works within the corporate 
 limits of the city of Cleburne, according to the plans and 
 specifications submitted by the Texas Water and Gas 
 Company, through M. T. Brown, vice-president and gen- 
 eral manager of said corporation ; and it is further 
 ordained, that the mayor is forthwith required to have 
 lithographed fifty-one bonds for one thousand dollars 
 each, due twenty years after date, and redeemable at the 
 option of the city at any time after ten years, with forty 
 coupons attached to each, for tliirt3^-five dollars each, 
 payable in the city of New York or in the city of Austin, 
 Texas, the said coupons to fall due the first day of July, 
 1884, and the first day of Januar}-, 1885, and on each 
 subsequent first day of July and first day of January for 
 each and every year up to and including the first day of 
 July, lOOr,, and, after said l)onds are lithographed, the 
 same to be executed, signed and delivered to the said 
 Texas Water and Gas Company, upon the said company's 
 complying with their contract, as therein provided. 
 
 "And it is further ordained by the city council aforesaid, 
 that all the revenues realized from operation of water 
 works aforesaid, over and above the expenditures in 
 operating the same, be, and the same is, hereby appropri- 
 ated and constituted a fund to pay the interest and create 
 142
 
 CH. VIII.] FORMAL TARTS Or BONDS, ETC. §110 
 
 a sinking fund for the final redemption of said bonds as 
 before provided, 
 
 ' ' And it is further ordained by the city council aforesaid, 
 that the following tax shall be annually levied and col- 
 lected, and the same is hereby appropriated, to pay the 
 interest on water-works bonds hereinbefore authorized 
 to be issued, one-fourth of one per cent on each one 
 hundred dollars' worth of property, and that this provi- 
 sion shall remain and be in force until the said water- works 
 bonds are fully paid and satisfied, provided nothing here- 
 in shall prevent the city from remitting the tax or any 
 part thereof herein provided for, in the event the net 
 revenue shall realize a fund sufficient to pay interest and 
 create ten per cent shdving fund on said water-works bonds. 
 
 "And it is further ordained that this ordinance take 
 effect from and after its passage, 
 
 ' 'And it is further ordained by the city council aforesaid, 
 that to the above there shall be levied and collected one- 
 tenth of one per cent, under and by virtue of the power 
 of the city to levy and collect an annual tax to defray the 
 current expenses of its local government, and the same 
 is hereby set apart and appropriated to the payment of 
 the interest and the sinking fund of the bonds herein pro- 
 vided for. 
 
 " Provided, that this section of this ordinance shall be 
 inoperative for such year or years as it maybe found that 
 the tax and revenue heretofore provided for and set apart 
 shall be sufficient to pay the interest and sinking fund as 
 provided. 
 
 " Passed September 13th, 1883. 
 
 " Approved September 13th, 18S3. 
 
 (Signed) " W. N. Hodge, 
 
 ''Mayor. 
 "Attest: W, H. Graves, 
 
 " Secretary.''^ 
 
 Form from Brenham v. German- American Bank, 
 
 143 U. S. 1 73. 
 
 An ordinance to provide for the issue and sale of fif- 
 
 143
 
 § 110 MrNICIPAL BONDS. [(MI. VIII. 
 
 teen tbousanil dollars in coupon bonds of the city, to bor- 
 r.iw inonov for general purposes. 
 
 *' Be it ordained bj^ the city council of the city of Bren- 
 hani : 
 
 " Sec. 1. Tbat the mayor be, and is authorized and em- 
 l)owered to have printed coupon bonds of the city of Bren- 
 liani to the amount of fifteen tbousand dollars. 
 
 '• Sec. 2. Said bonds shall be three (3) of the denomina- 
 tion of one thousand dollars ($1000), fourteen (14) of the 
 denomination of five hundred dollars ($500), twenty- 
 five {'2o') of the denomination of one hundred ($100), 
 dollars, and fifty of the denomination of fifty ($50) dollars. 
 
 •' They shall be made payable to the bearer twenty years 
 after date, at the office of the treasurer of the city of 
 Brenham, with interest from date until paid, at the rate 
 of ten per cent per annum, payable semi-annually, on the 
 first days of September and March, at the office of the 
 treasurer of the city of Brenham, but the city shall have 
 the right to redeem said bonds at any time after five years 
 from date. 
 
 ' * Sec. 3. Said bonds shall be dated and interest begin to 
 
 run on the first day of , A. D. 18 . . . . , provided that 
 
 should any of said bonds be sold at a subsequent date the 
 amount of interest then due shall be endorsed as a credit 
 on the coupons first due. 
 
 " Sec. 4. Said bonds shall be signed by the mayor and 
 countersigned by the city clerk, and the seal of the city 
 shall be affixed and they shall be numbered and registered 
 
 as Scries 2, No , giving the number of the bond issued, 
 
 commencing with No. 1. 
 
 ' ' Sec. 5, Coupons shall be attached to each of said bonds 
 for each semi-annual instalment of interest, which said 
 coupons sliall have printed thereto the signature of the 
 maj'or and tbe city clerk, and shall be received for gen- 
 eral ad valorem taxes of the city. 
 
 '* Sec. 0,. Said bonds shall be negotiated and sold by the 
 
 mayor and tbe finance committee of the city as the same 
 
 may be required for general purposes, but in no case shall 
 
 thev be sold at a greater discount than five per cent, and 
 ' 144
 
 I 
 
 CH. VIII.] FORMAL PARTS OF BONDS, ETC. § 110 
 
 the proceeds thereof shall be placed in the treasury of the 
 city to the credit of the general fund. 
 
 " Sec, 7. That there be, and is hereby, appropriated out 
 of the general ad valorem tax of the city one-eighth of 
 one per cent, or so much thereof as may be necessary, on 
 the assessed value of the taxable property of the city, as 
 a special ' interest and sinking fund, with which to pay 
 the interest on said bonds and liquidate the same, and 
 said fund shall be kept separate frojn the other funds of 
 the city and shall be used for no other purposes. 
 
 "Sec. 8. That this ordinance go into effect and have 
 force from and after its passage. 
 
 "Approved, June ITtli, 1870. 
 
 "M. P. Kerr, 
 
 " Mayor. 
 
 "' Attest : C. H. Carlisle, 
 
 ^^ Secretary. ^^ 
 10 1-45
 
 CHAPTER IX. 
 
 NEGOTIABILITY — BONA FIDE HOLDERS. 
 
 Section. 
 
 Ill — Wliat term " nop^otiable " 
 means — Bt)iuls. what they 
 must contain to be nego- 
 tiable. 
 
 112 — Amount and time must be 
 certain — Couix>ns must 
 contain words of negotia- 
 bility. 
 
 113 — AVhat the transferrer of 
 bonds warrants — That tlie 
 signatures are genuine, 
 and the paper what it i)ur- 
 ports to be — What agent 
 warrants. 
 
 114 — What transferrer does not 
 warrant— Does not war- 
 rant A'alidity. 
 
 llo — Registered bonds, not nego- 
 tiable — Rights of liolders. 
 
 IIG — Who are bona Jidc holders 
 — Before maturity. 
 
 117 — Dona fide holders after ma- 
 turity. 
 
 118 — Rights of original liolders. 
 
 Section-. 
 
 119 — What may be inquired int^i 
 between the corporation 
 and .sucli holders. 
 
 119 a-Lis i)endeiis and judgment 
 as notice. 
 
 120 — Presumi)tions in favor of 
 holders of negotiable 
 jiajter. 
 
 121 — Over-due coupons as notice. 
 
 123 — Purchaser of negotiable 
 pai)er not bound to follow 
 proceeds — When they 
 must do so. 
 
 123 — What notice alTects bona 
 fide holders — Gross negli- 
 gence not sufficient. 
 
 124 — Defences against a bona fide 
 liolder — When cor]}ora- 
 tion estopped to set them 
 up. 
 
 124a-Lost and stolen bonds — 
 When a subsequent hold- 
 er obtains a good title^ 
 What alterations are im- 
 material. 
 
 § 111. IVhiit tlie term *' negotiable " means.— By 
 
 nop:otial)ility is meant the right of a holder of a written 
 instrument for the payment of money to transfer it by 
 either endorsement and delivery, or delivery, so as to vest 
 in the transferee a legal title therein unaffected by equi- 
 ties, and when necessary, to bring suit thereon in his own 
 name to enforce payment. And the very object of mak- 
 ing Ixmds negotial)le is that they may pass from hand to 
 hand like money, and the holder thereof may acquire a 
 perfect title thereto. 
 
 It is nf)wthe settled law, of both the Federal and State 
 
 courts, that when bonds are expressed in negotiable words, 
 146
 
 CH. TX.] NEGOTTABILTTY — BONA FIDE HOLDEKS. 
 
 112 
 
 they are, to all intents and purposes, as negotiable as prom- 
 issory notes and bills of exchange.^ In Pennsylvania the 
 court in case of Diamond v. Lawrence Co, 37 Penn. St. 
 353, said: " We will not treat these bonds as negotiable; 
 on this ground we stand alone. All the courts, American 
 and English, are against us." 
 
 The Supreme Court of that State, however, has since 
 decided that coupon bonds are negotiable.^ 
 
 They are negotiable when payable to a person named 
 therein or bearer, or simply to bearer, and in such cases 
 pass by delivery.^ And they are also negotiable when 
 payable to a party named or order; then they pass by en- 
 dorsement and delivery.* 
 
 And when payable in blank they are held to be intended 
 as negotiable instruments payable to the holder as bearer, 
 and the holder may negotiate them by inserting the name 
 of another in the blank or deliver them in blank. ^ But 
 a bond payable to a person named and his assignees was 
 held in a case in Virginia not to be negotiable.^ 
 
 Although the bonds are now almost always under the 
 seal of the corporation they have, after some vacillation of 
 judicial decisions, become recognized as on an equality 
 with promissory notes and bills of exchange, and like them 
 are governed by the law merchant, and likewise they to 
 be negotiable must have the same characteristics of ne- 
 gotiability. 
 
 § 112. Amount and time must be certain — Coupons. 
 — The bonds must be for a sum certain and bo payable 
 at a certain time, and not depend cither as to amount or 
 time of i:)ayment on a contingency. If they do they are 
 not negotiable.'' 
 
 It has been held that where the place of payment and 
 
 ^ Gelpcke v. City of Dubuque, 1 
 Wall. 175; Seybelle v. Nat. Cur- 
 rency Bank, 54 N. Y. 288 ; Daniel 
 on Nog. Inst., Vol. 2, p. 514. 
 
 '^ Mason v. Frick, 105 Penn. St. 
 1G3. 
 
 3 Roberts v. Bolles, 101 U. S. 119. 
 
 * Wilson Co. V. National Bank, 
 103 U. S. 770. 
 
 White V. Vermont M. R. R. Co., 
 21 How. 575 ; Bruninael v. Entlers, 
 18 Gratt. 894. 
 
 •^ Cronin v. Patrick Co., 4 Hughes, 
 524. 
 
 '' Jackson v. Vicksburg R. R. , 2 
 Woods C. C. 141 ; Parsons v. Jack- 
 son, 99 U. S. 434. 
 
 147
 
 § 113 MUNICIPAL BONDS. [CII. IX. 
 
 the precise amount arc uncertain the bond is deprived of 
 its negotiable character. ^ And where a condition appear- 
 ing: upon the face of a bond which is otherwise negotiable 
 atfects the liability to pay at all events, such bonds are 
 held not to be negotiable.^ 
 
 ^\llere the bonds provided that they should be paid at 
 St. Paul, Minn., Avith New York exchange, it was held that 
 such a provision renders the amount to be paid uncer- 
 tain, and therefore the instrument as not negotiable, and 
 being non-negotiable, it was open to all defences which 
 existed against the original holder.^ 
 
 If the coupons contain no negotiable words they are 
 not negotiable if detached from the bonds. Allen, J., in 
 Evertson v. Nat. Bank, 6Q N. Y. 20, in a suit on coupons 
 containing no words of negotiability, said : "In this, as 
 in other contracts, its negotiability depends upon its terms, 
 and the rule is, with certain exceptions not applicable to 
 this case, that in instruments for the payment of money, 
 if no one be designated as payee, either by name or as 
 bearer, the instrument is not a promissory note. If these 
 warrants are not promissory notes they are not negoti- 
 able. " 4 
 
 The authority to a municipal corporation to issue bonds 
 includes power to make and issue negotiable bonds with 
 negotiable coupons attached.^ 
 
 The subject of the negotiability of municipal bonds be- 
 ing discussed in other parts of this work, is discontinued 
 here. The reader is referred for a full discussion of the 
 requisites of negotiable instruments to such well-known 
 books on the subject as those of Daniel, Parson, Cavanagh, 
 Kandolphe, and others. 
 
 § 11.3. What the transferrer warrants.— The trans- 
 ferrer is deemed to warrant by the mere delivery of bonds 
 and other municipal securities that the paper is the in- 
 
 1 Parsons v. Jackson, 99 U. S. 
 4:3-1. 
 
 2 Dill, on Mun. Coi-p., § 522. See, 
 also. Daniel on Neg. Inst., Vol. 1, 
 
 ^^ Flasg V. School Dist. No. 70, 58 
 N. \V. R. 403 ; Heghitt v. Johnson, 
 148 
 
 28 Fed. Rep. 865. Contrary, Hast- 
 ings V. Thomson, 55 N. W. R. 5G8. 
 
 * See remarks on coupons, §^ 107, 
 108. 
 
 ® City of Cadillac v. AVoonsocket 
 Inst, for Sav., 58 Fed. Rep. 935.
 
 CH. IX.] NEGOTIABILITY — BONA FIDE HOLDERS. § 114 
 
 strument it purports to be ; ^ that the signatures of the 
 officers signing the same are genuine ; ^ and that it is not 
 tainted by usury.^ But in New York the Court of Appeals 
 has held that the transferrer, by the mere delivery of an 
 instrument void for usury, does not impliedly warrant 
 its validity, that in addition to delivery he must have 
 known that it was tainted by usury ; ^ but most of the 
 law-writers and many of the courts of other States hold 
 the contrary view.^ 
 
 Where one sells negotiable paper as an agent he must 
 disclose not only the fact of his agency but also the name 
 of his principal, otherwise he will be held to guarantee 
 the genuineness of the signatures.^ 
 
 § 114. What lie does not warrant. — When, however, 
 the bonds or other securities transferred are the genuine 
 paper of the municipality, but are void for want of power 
 to issue them, the transferrer does not by mere delivery 
 warrant them to be valid, '^ and the transferee cannot 
 recover from him unless the vendee receives from the 
 vendor a warranty that they are valid obligations. 
 
 The case of Otis v. Cullum, 92 U. S. 448, is a case illus- 
 trating this point. 
 
 The city of Topeka, Kansas, under authority of the 
 Legislature, issued its bonds for certain purposes, which, in 
 Loan Asso. v. Topeka, 20 Wall. 055, were declared to be 
 void because issued for private purposes. 
 
 Some of these bonds were sold to the First National 
 Bank of Topeka, and suit was brought against the re- 
 ceiver of the bank to recover back the money j)aid, based 
 upon the grounds of a failure of consideration. 
 
 The court by Swayne, J,, in affirming the judgment of 
 the court below in dismissing the suit, said : 
 
 1 Rogers v. Walsch, Am. Law 1 * Littauer v. Goldman, 73 N. Y. 
 Mag., Vol. 1, §7?,2. 506. 
 
 2 Benj. on Sales {6th 0(1.) 038. The ^ Daniel on Neg. Instruments, 
 vendee must return or olrer to re- Vol. 1, § 733. 
 
 turn the bonds before suit brought, i ^ Brown v. Ames, (Minn.) 01 N. 
 Smith V. McNair, 19 Kan. 3-30. W. R. 448. 
 
 3 Parson N. & B. 39 ; Danl. Neg. I ' Ruohs v. Third Nat. Bk., 94 
 Instr., Vol. 1, § 733. 1 Tenn. 57 ; 28 S. W. R. 303. 
 
 149
 
 11. 
 
 MUNICIPAL BONDS. 
 
 [CII. IX. 
 
 " The plaintiffs in error got exactly what they intended 
 to buy and did buy. They took no guarant}-. They are 
 seeking to recover, as it were, upon one while none exists, 
 Tliey are not clothed with the rights which such a stipu- 
 lation would have given them. Not having taken it they 
 cannot have the benefit of it. The bank cannot be 
 charged with a liability which it did not assume. Such 
 securities throng the channels of commerce which they 
 are made to seek, and where they find their market, 
 they pass from hand to hand like bank notes. Tlie seller 
 is liable ex delicto for bad faith, and ex contractu there is 
 an implied warranty on his part that they belong to him, 
 and that they are not forgeries. When there is no ex- 
 press stipulation there is no liability beyond this. If 
 the buyer desires special protection, he must take a 
 guaranty. He can dictate his terms and refuse to buy 
 unless it be given. If not taken he cannot occupy the 
 vantage ground upon which it would have placed him. 
 It would be unreasonably harsh to hold all those througli 
 whose hands such instruments may have passed liable 
 according to the principles which the plaintiff in error 
 insists shall be applied in this case." 
 
 § 11.5, Registered bonds. — Eegistered bonds are not 
 negotiable ; in fact, the object of registering them is to 
 render them non-negotiable, and after they are registered 
 they are transferable only upon the books of the corpora- 
 tion. Usually such bonds have printed upon their backs 
 a blank form of power of attorney to be executed by the 
 person whose name the bonds stand in on the corpora- 
 tion books, authorizing the corporation to transfer the 
 bonds upon its books to the assignee or transferee to be 
 named therein. They are then registered in the name 
 of tlie transferee and likewise assigned.^ Sometimes 
 
 iCronin V. Patrick Co., 4Hughos, 
 428 ; Savannah & M. R. R. v. Lan- 
 raster, 62 Ala. 503 ; DeVoss v. City 
 of Richmond, 98 Am. Dec. 653. 
 
 In the case of Bunch's Ex'rs v. 
 
 Fluvanna Co., (Va.) 10 S. E. R. 532. 
 
 it appeared that a county court 
 
 ordered that the full amount bo 
 
 150 
 
 borrowed, and that registered bonds 
 be issued and sold. In an action 
 on a corinty bond alleged to be one 
 of those thus issued, payable to 
 ])laintifr's decedent B., the latter 's 
 name did nol appear on the official 
 books of the agent of the coimty, 
 who was directed to receive the
 
 CH. IX.] NEGOTIABILITY — BONA FIDE HOLDERS. §115 
 
 there is a provision in the ordinary negotiable bond that 
 tlie holder may surrender it and receive in its place a 
 registered bond. Such a provision does not affect the ne- 
 gotiability of the bond, but authorizes any holder of it to 
 exercise the oj^tion and obtain in the place of the bond 
 a registered one which will stand on the books of the 
 corporation in his name and transferable in the manner 
 aforesaid. 
 
 Sometimes the ordinary negotiable bond has printed 
 upon it blanks to be filled in by the municipal authorities, 
 so as to render the bond a registered one, at the request 
 of a holder. Just what effect this mode of registration 
 would have upon the rights of a bona fide holder has not 
 been, so far as the writer knows, decided, but he is of 
 the oiDinion that the registration, since the fact would 
 appear upon the bond, would be notice to all purchasers, 
 but not as to the coupons when detached, before matur- 
 ity, from such bonds when in the hands of a bona fide 
 holder, unless the coupons themselves disclosed the fact 
 of such registration. 
 
 The purchaser of a stolen or lost registered bond can- 
 not recover on it, because, it being non-negotiable, the 
 owner from whom it was stolen or who lost it still retains 
 in law the title to it, as he does to any personal prop- 
 erty other than negotiable paper lost or stolen before 
 maturity. 
 
 When the assignment upon the registered bond is filled 
 up, excef)t as to the name of the assignee, which is left 
 
 money on such bonds, and who at 
 the time of trial was dec-eased, 
 tliough siicli books contained a list 
 of names of .persons from wliom 
 money was obtained on tlie bonds. 
 Tlio bonds issued imder tlie order 
 were not negotiable, and recited 
 that they were transferable only 
 on the books of the county, and 
 were sold at par. Though it ap- 
 peared that B.'s name in the bond 
 sued on was in the county clerk's 
 writing, there was no evidence that 
 
 B. paid value for it, or as to how 
 lie obtained it. No demand was 
 made on it for more than fifteen 
 years after it purported to have be- 
 come due. Two companies, who, 
 with the deceased agent, were aji- 
 pointed to raise money on the 
 bonds, testified that they had iv) 
 recollection of selling a bond to I>. 
 The court held that a finding was 
 warranted that the bond was issued 
 without authority, if issued at all, 
 and was v(.)id. 
 
 151
 
 ^ 110 MUNICIPAL BONDS. [CH. IX. 
 
 l>I;mk ami signed by the person in whose name the bond 
 stands in, on the l)ooks t)f the corporation, the bond 
 thi-n becomes negotiable and may be passed from hand 
 to hand until the blank is filled up. 
 
 The remarks contained herein in reference to the power 
 to issue negotiable bonds, the performance of prior con- 
 ditions, the effect of recitals and of estoppels, as well as 
 the manner of enforcing payment, applies with equal 
 force to registered bonds. 
 
 It is only as to questions which apply to commercial 
 paper alone that the law differs as to the rights of the 
 holder of a registered bond as distinguished from a nego- 
 tiable one. 
 
 § 110. Who are bona fide holders.— A bona fide 
 holder of a negotiable bond or other negotiable paper is 
 a second or other subsequent holder of it, who takes it 
 for value in good faith before maturity, and without 
 notice of defects, and such a holder obtains a perfect title 
 and may hold it against the world. It becomes his abso- 
 lutely, with the right to demand payment of it for him- 
 self, and, if necessary, to enforce its. collection in his own 
 name, and his privies have the same rights. 
 
 A person may be entitled to all the rights of a bona fide 
 holder, even if he knows of defects in the title to nego- 
 tiable paper, if he himself receives it before maturity and 
 for value from a bona fide holder. ^ As said by Mr. 
 Justice Field : 
 
 "The rule has been too long settled to be questioned 
 now, that whenever negotiable paper has passed into 
 the hands of a party unaffected by previous infirmi- 
 ties, its character as an available security is establislied, 
 and its holder can transfer it to others with the like im- 
 munity. His own title and right would be impaired if any 
 restrictions were placed upon his power of disposi- 
 tion." 2 
 
 A pledgee, or one who takes negotiable instruments for 
 a debt, or one who pays less than par for them .from a 
 
 » Scotland Co. v. Hill, 133 U. S. I 2 Cromwell Co. v. Sac, 97 U. S. 
 107. 1 59. 
 
 1.52
 
 CH. IX.] NEGOTIABILITY — BONA FIDE HOLDERS. ^117 
 
 former holder, is a bona fide holder and is entitled to all 
 rights as such.-^ 
 
 A person who takes bonds in payment of an antecedent 
 debt is held to be a bona fide holder.^ So also a i^erson 
 who takes bonds in pledge to secure payment for mate- 
 rials furnished is held to be a bona fide holder for value. ^ 
 A person who receives a negotiable bond before maturity 
 for value and without notice, which has been lost or 
 stolen, is a bona fide holder and may hold it against the 
 former owner ; * but if the bonds or coupons were over- 
 due when stolen or lost and a person then receives them 
 for value, he is not a bona fide holder and cannot recover 
 on them.^ 
 
 A bona fide holder can recover the full value of the 
 bonds and coupons, although he paid less for them than 
 their value. ^ 
 
 § 117. Bona fide holders after maturity. — And al- 
 though the holder acquires title to a bond or other nego- 
 tiable instrument after it becomes due, yet if he receives 
 it from one who became a bona fide holder before matu- 
 rity, he is protected by the title of his transferrer and is 
 himself entitled to all the rights of a bona fide holder. 
 This is the rule as to negotiable paper. '^ 
 
 Mr. Burroughs, however, states that a person who re- 
 ceives a municipal bond after maturity, although he pay 
 value for it, takes it subject to all defences which exist 
 between the corporation and the original payee.^ 
 
 It would seem that the same rule should apply to nego- 
 tiable bonds that applies to any other negotiable paper, 
 and that if the person from whom the holder obtained 
 the matured bond was himself a bona fiide holder, or the 
 
 1 Fowler v. Strickland, 107 Mass. 
 553 ; Cromwell v. Sac Co., 96 U. S. 
 5L 
 
 - Foote V. Hancock, 15 Blatch. 
 343. 
 
 8 Allen V. Dallas R. R. Co., 3 
 Woods, 31G. 
 
 •• Elizabeth v. Force, 29 N. J. L. 
 587 ; Battles v. Loundenslayer, 84 
 Penn. 446. 
 
 5 Vermilyea v. Adams Ex. Co., 
 21 Wall. 128. 
 
 G Cromwell v. Sac Co., 96 U. S. 
 51 ; Park Bank v. Watson, 42 N. 
 Y. 490. 
 
 ^Daniel on Neg. Instr.,Vol. 1. 
 g§ 782-786. 
 
 8 Burroughs on Pub. § ?, p. 155. 
 
 153
 
 §11'^ MUNICIPAL BONDS. [CH. IX. 
 
 bona fide lioldfr of oik^ who obtained it before maturity, 
 the last hohlcr should he protected by the title of his 
 trausferrer and have the sauie title to it. The rule as to 
 other negotiable paper is, that if the holder obtain it be- 
 fore maturity and without notice, he obtains a good title, 
 although his transferrer had a bad one, but if he obtains 
 it after maturity he obtains as good a title as his trans- 
 ferrer had.^ And this rule applies to negotiable i)aper 
 payable to bearer because such paper stands upon the 
 same footing as other negotiable paper.^ 
 
 § 118. Kii^hts of oriajiiial liolders. — When aid is to 
 be extended to a railroad company upon certain con- 
 ditions, and the bonds are issued to the company, it is not 
 a bona fide holder, nor is any person who receives the 
 bonds from the company knowing that the conditions 
 were not performed. 
 
 And when negotiable bonds are given to a contractor 
 for work done he is not a bona fide holder, but his trans- 
 feree will be, if he purchase them before maturity, for 
 value and without notice of equities. 
 
 When the municipal corporation has power to issue 
 and sell its negotiable bonds, the transaction between 
 the corporation and the purchaser of the bonds from it 
 is regarded as a loan to the corporation of the purchase 
 l)rice of the bonds. ^ 
 
 And the original purchaser of the bonds cannot be 
 said to be a bona fide holder, because he takes the bonds 
 subject to all irregularities or defects to which he is a 
 party, but aside from this he is not to be held to a great- 
 (>r degree of care than any subsequent purchaser.'* And 
 the corporaticm will be estopped either by its recitals in the 
 bonds, or its records, to set up a defence against the bonds 
 while in the hands of the original purchaser from it, to 
 the same extent as if the bonds were held by a second or 
 other subsequent holder, except as to such defences as 
 
 1 Daniel on Xo^- Inst, g 782 ; 724 a. pliis v. Brown, 1 Flir, 188 ; Griffith 
 
 2 Sac Co. V. Cromwall. 9G U. S. v. Burden, 35 Iowa, 143. 
 
 51. * i\Iemphisv. Brown, 1 Flip, 188 ; 
 
 8 IToag V. Town of Greenwich, Griffith v. Burden, 35 Iowa, 143. 
 133 X. Y. 152. See however Mem- 1 
 154
 
 CH. IX.] NEGOTIABILITY — BONA FIDE HOLDERS. § 119 a 
 
 exist between the original purchaser and the corporation, 
 and they are such as exist between the immediate parties 
 to all negotiable paper, 
 
 § 119. What may be inquired into between tlie orig- 
 ginal parties. — It may be shown that there was no con- 
 sideration paid, or less than a full consideration ; that 
 the bonds were sold for less than par ; that the bonds 
 Were issued for a fraudulent purpose, not apparent on the 
 face of the bonds, or irregularly issued, and that the pur- 
 chaser knew of it, and any other defects of which the 
 purchaser had knowledge may be shown. 
 
 As soon, however, as the original holder parts with a 
 bond or other negotiable municipal paper, which between 
 himself and the corporation is subject to the above de- 
 fences, and it passes into the hands of another person for 
 value before maturity and without notice of the said de- 
 fects, the subsequent holder becomes a bona fide holder, 
 and holds the bonds or other paper free from all such de- 
 fences. 
 
 § 119 a. Lis pendens and judgment as notice. — The doc- 
 trine of lis pendens lias no application to negotiable paper, 
 and the holder of negotiable bonds is not therefore affected 
 by any litigation of which he is not a party, and a decree 
 or judgment in such a suit will not bind him ; ^ but if he 
 purchase such paper after maturity and after it has been 
 adjudged void he is bound by the judgment.^ 
 
 Nowithstanding an injunction restraining municipal 
 officers from disposing of negotiable bonds, such bonds, 
 if negotiated, are in the hands of an innocent purchaser 
 for value before maturity valid obligations.^ 
 
 And a bona fide holder of bonds or other municipal ne- 
 gotiable paper is not affected by a judgment to which he 
 was not a party in a suit declaring the bonds or such 
 other paper void, although he purchased them after the 
 date of the judgment.^ In all these cases, however, the 
 
 lEndfield v. Jorilan, 119 U. S. 
 680 ; Kieffer v. Ehlcr. 18 Pa. St. 
 388 : Leitch v. Wolls, 48 N. Y. 586 ; 
 Scotland Co. v. Hill, 132 U. S. 107 ; 
 Daniel on Neg. Inst. 800 a. 
 
 2 Louis V. Brown, 109 U. S. 162. 
 
 3 Carrol Co. v. Smith, 111 U. S. 
 556. 
 
 * Stewart v. Lansintr. 101 U. S- 
 505. 
 
 165
 
 § 1 21 MUNICIPAL BONDS. [CH. TX. 
 
 bonds or other such ])apor, if adjudged void for want of 
 power, will ho void in any person's hands. 
 
 § 1'20. Presuniptioii tluit holder has good title — 
 The holder of a negotiable bond or coupon is presumed 
 to have paid full value for it, and also that he acquired 
 it before maturity in good faith and in the usual course 
 of business. 
 
 ' But after it has been shown that the bonds were 
 fraudulentl}" issued or were lost or stolen, then the holder 
 must show that he is abona fide holder for value, without 
 notice and before maturity, or the transferee of such a 
 holder. 
 
 § 121. Overdue coupons — As notice. — The presence of 
 overdue coupons coupled with other indications of in- 
 validit}', may prove sufficient to put a purchaser on in- 
 <iuiry,^ but the mere fact that one or two instalments of 
 interest are overdue or unpaid, disconnected with other 
 facts, is not sufficient to affect the position of one tak- 
 ing the bonds, and subsequent coupons, before their matu- 
 rity as a bona fide holder.^ 
 
 As stated by Field, J., in Cromwell v. Sac Co., 90 U. S. 
 51, the presence of such coupons usually denote merely 
 some temporary financial pressure or falling off of ex- 
 pected revenues or income, or other causes having no 
 connection with the original validity of the bonds, and to 
 hold in such cases all bonds and coupons to be dis- 
 honored paper would greatly impair the currency and 
 credit of such securities. 
 
 The presence of a large number of attached matured 
 unpaid coupons has been held to be sufficient notice to 
 put a purchaser on inquiry, particularly when the pur- 
 chaser was a broker or one acquainted with the course of 
 dealing in bonds.^ The character of the business of the 
 purchaser sometimes enters into the question of notice, 
 a man of business affairs being held to a greater degree 
 of care than a person unacquainted therewith.^ 
 
 1 Parsons v. Jackson, 103 U. S. [ 3 Lythe v. Lansing, 147 U. S. 59. 
 'J'Oe. I 4 Briggs V. Town of Phelps, 70 
 
 - Briggs V. Town of Phelps, 70 , Fed. Rep. 29. 
 Fed. Ren. 29. j 
 
 15G
 
 CH. IX.] NEGOTIABILITY — BONA FIDE JIOLDERS. § 1-^ 
 
 § 122. Purchaser not bound to follow proceeds. — 
 
 A bona fide holder of municipal bonds is not bound to 
 follow the proceeds, and if the bonds are issued for a law- 
 ful jDurpose, or if, on their face, they appear to be issued 
 for a lawful purpose, when in fact they are issued with the 
 intent to use their proceeds for an unlawful purpose, and 
 such purchaser had no knowledge of these facts, such 
 fact cannot be pleaded or shown as a defence against 
 such holder.^ 
 
 It was held in a case where an ordinance authorized 
 the issue of bonds for the purpose of securing funds with 
 which to aid indigent families, the fact that such funds 
 were misapplied by the officials did not affect the rights 
 of bona fide holders for value. They were not required to 
 look further than the ordinance to see whether the 
 purpose for which the bonds were issued was a legiti- 
 mate one.^ 
 
 And where the bonds on their face recited that they 
 were issued pursuant to the enabling act, which legally 
 permitted their issue, and the bonds in fact were applied 
 by the common council for an unlawful purpose, they 
 were held valid in the hands of a bona fide holder and the 
 city estopped to plead the illegal use of them.^ 
 
 Even if the bonds do not contain recitals of the pur- 
 
 1 Cairo v. Zane, 149 U. S. 122 ; 
 Omaha Bridge Cases, 10 U. S. App. 
 101, 189 ; West Plains Tp. v. Sage, 
 69 Fed. Rep. 943. In National Life 
 Insurance Co. of Montpelier v. City 
 of Huron, 62 Fed. Rep. 778, the 
 bonds recited they were issued "to 
 raise funds foi the purchase of a 
 school site, and for the erection of a 
 school building thereon." 
 
 They in fact were issued to raise 
 money for the purpose of conduct- 
 ing a campaigr. for the State capi- 
 tal, and thb money was so used. 
 
 The court held the bonds to be 
 valid in the hands of a bona fide 
 holder, holding that the recital in 
 
 the bonds precluded the proposed 
 defence. 
 
 The court in this case said : " That 
 a municipal corporation has given 
 away or squandered the proceeds 
 of negotiable securities which it 
 placed upon the market, cannot 
 affect the rights of bona fide pur- 
 chasei's who had no knowledge of 
 nor part in the gift or waste. They 
 are in no ways responsible for the 
 wise and economical use by the 
 corporation of the funds it bor- 
 rows." 
 
 2 Lynchburg v. Slaughter, 75 Va. 
 57. 
 
 8 Risley v. Village of Howell, 64 
 Fed. Rep. 453. 
 
 157
 
 § 123 MUNICIPAL BONDS. [CH. IX. 
 
 ])oso of the issue, the bona fide holder of a negotiable in- 
 stninu'iit issued by a municipal corporation under a 
 (jein'idl power to borrow money will be protected and 
 the bonds held valid, although the money obtained from 
 the sale of the bonds be misapplied or used for an un- 
 lawful purpose. It is only when a corporation having 
 the i)ower to borrow money for a special purpose issues 
 its bonds and they contain no recitals, and the records 
 of the corporation do not disclose for what purpose the 
 bonds are issued, that the defence of an unlawful use of 
 the funds can be set up against the holder. 
 
 In such a case it may be well said that the money bor- 
 rowed for the unlawful purpose to which it is ap- 
 propriated, and there being no recitals in the bonds, and 
 nothing appearing upon the records to the contrary, the 
 defence is open to the corporation, although the bonds be 
 in the hands of a bona fide holder.^ 
 
 It has been held that bonds issued to refund other 
 bonds are void in the hands of a bona fide holder if the 
 proceeds of the new bonds are diverted and not ap- 
 plied to the payment of the old bonds, and the new issue 
 together with the other indebtedness exceeds the consti- 
 tutional indebtedness." 
 
 § 123. Wliat notice affects bona fide holders. — Gross 
 negligence on the part of a purchaser of municipal nego- 
 tiable i)aper, if he be a bonajlde purchaser, does not affect 
 his title. In addition to gross negligence or careless- 
 ness the ])urchaser must have actual knowledge of 'facts 
 which would be sufficient to place him upon his guard, 
 as where l)onds are lost or stolen, he must have knowl- 
 edge of the fact. It is not sufficient to aifect his title 
 that liad he exercised any degree of care he would have 
 ascertained the bonds were lost or stolen, and that he 
 was purchasing them either from the finder or the thief, 
 as the case might be. Parties about to purchase an un- 
 matured negotiable paper are not bound to make in- 
 
 ' BariH'tt V. Dennison, 145 U. S. 
 135 ; llackett v. Ottawa, 99 U. S. 
 86. Sep ^i; 217, 218. 
 158 
 
 2 Doon Township v. Cummings, 
 142 U. S. 36G.
 
 CH. IX.] NEGOTIABILITY — BONA FIDE HOLDERS. § 123 
 
 quiries in relation to it of which they have no notice 
 either from the paper or communicated to them.^ 
 
 The authorities liold that even gross neghgence in the 
 purchaser does not of itself make him mala fide. 
 
 The leading case on this point is Murray v. Lardner, 
 2 Wall. 110. 
 
 In this case the bonds, which were negotiable bonds 
 payable to bearer, were stolen from their owner Murray 
 and the next morning were purchased by Lardner, 
 who was a broker doing business in New York, and who 
 purchased them in the usual course of his business. In 
 detinue for the bonds brought by Murray against Lard- 
 ner the point was made that the broker had been grossly 
 negligent in taking the bonds and was tlierefore guilty of 
 bad faith. The court I'efused to adopt this view, and 
 held that actual mala fides was necessary to overthrow 
 the title of the purchaser, and that gross negligence did 
 not constitute mala fides. 
 
 Mr. Justice Swayne in this case said : 
 
 " The possession of such paper (negotiable) carries the 
 title with it to the holder. The possession and title are 
 one and inseparable. The party who takes it before due 
 for a valuable consideration, without knowledge of any 
 defect in the title and in good faith, holds it against all 
 the world. Suspicion of defect of title or the knowledge 
 of circumstances which would excite such susjjicion in 
 the mind of a prudent man, or gross negligence on the 
 part of the taker, at the time of the transfer, will not de- 
 feat his title. 
 
 " The result can be produced only l)y bad faith on his 
 part. The burden of proof lies on the person who assails 
 the right claimed by the party in possession. Such is 
 the settled law of this court, and we feel no disposition to 
 depart from it. . . . 
 
 "Where there is no fraud there can be no question. 
 The circumstances mentioned and otliers of a kindred 
 character, while inconsistent in themselves, are admis- 
 sable in evidence, and fraud established, whether by 
 
 1 Murray v. Beckwith, 81 111. 43 ; Houvy v. Eppinger, 34 Wuh. 29. 
 
 159
 
 § 1:^4 MUNICIPAL BONDS. [CH. IX. 
 
 direct or circumstantial evidence, is fatal to the title of 
 the iKjlder." ^ 
 
 In the recent case of Clark v. Evans et al., decided 
 January 2, 1S05, in United States Circuit Court on appeal, 
 the action was commenced in the United States Court 
 in Indian Territory by the holder of a note against the 
 makers, who claimed as a defence that the note had been 
 obtained from them by fraud and was without consider- 
 ation and the plaintiff had knowledge of these facts be- 
 fore she purchased the note. The plaintiff claimed to 
 have purchased the note for value and before maturity 
 and without notice. There was evidence tending to 
 support the contention of each party. 
 
 The court charging the jury in part said : 
 
 " If you believe . . . the plaintiff had knowledge of 
 such facts as would put a prudent man on inquiry, 
 and that inquiry, if prosecuted, would have led to a knowl- 
 edge of the fraud, then you will find for the defendants." 
 
 The U. S. Circuit Court held that "knowledge of such 
 facts as would put a prudent man on inquiry " will not 
 suffice, and granted a new trial. The court cited with ap- 
 proval Murray v. Lardner ;Hotclikiss v. Banks, 21 Wall. 
 354 ; Kneeland v. Lawrence Co., 140 U. S., 209. 
 
 ?j 124. Defences aa:siinst bona fide holder — When cor- 
 poration estopped. — Want of power to defeat his title 
 may always be shown in an action brought on bonds or 
 cou])ons by a bona fide holder. And where the munici- 
 jKility has not the power to issue the bonds they are void 
 in all hands. All the cases admit this principle. 
 
 The broad statement is sometimes made that when the 
 municipal corporation has the power to issue negotiable 
 bonds they are valid in the hands of a bona fide holder 
 and are sul)ject to no defences. This statement must be 
 qualified, and in addition to the mere power and "issue of 
 the bonds there must bo an estoppel of some kind, 
 either : 
 
 1. By recital on the face of the bonds made by autho- 
 rized officers. 
 
 1 See Morgan v. U. S., 113 U. S. | 491 ; Morris Canal & B. Co. r. 
 
 Fisher, 1 Stockt. (N. J. Ch.) 667. 
 160
 
 CH. IX.] NEGOTIABILITY — BONA FIDE HOLDEIIS. § 124 « 
 
 2. By the records of the proceedings of the board, body 
 or officers authorized to issue the bonds. 
 
 3. By payment of interest, retention of consideration, 
 acquiescence, or laches. 
 
 The reader is referred to these subjects treated of else- 
 where herein. 
 
 And although any one of the three estoppels may exist, 
 the bonds will still be void if some constitutional or 
 statutory provision is not complied with, as registration, 
 when the constitution or statute requires the bonds to be 
 registered ; or the creation of a sinking fund, and the 
 statute or constitution declares that unless these con- 
 ditions be complied with the bonds shall not be valid. ^ 
 
 And though the bonds contain recitals, they may 
 still be void in the hands of a bona fide holder, when the 
 law requires that he should ascertain for himself whether 
 or not the bonds should have been issued, or where issued, 
 in part or in whole, in excess of the statutory or consti- 
 tutional limitation.^ 
 
 As the rights of bona fide holders of bonds are treated 
 of in all parts of tlie work, it is unnecessary to further 
 refer to them here. 
 
 §124:0. Stolen and lost bonds. — If the bond or other 
 negotiable instrument issued by a municipal corporation 
 is stolen from or lost by the owner before maturity, and 
 finds its way into the hands of an innocent purchaser, 
 such purchaser can hold it against all the world, even 
 though he purchased the bonds directly from the thief or 
 the finder,^ and as said in the case of Battles and Web- 
 ster v. Laundenslager,S4:Pa. St. 44G, " The latest decisions 
 both in England and in this country have set strongly 
 in favor of the principle that nothing but clear evidence 
 of knowledge or notice, fraud or mala fides, can impeach 
 the prima facie title of a holder of negotiable paper 
 taken before maturity." 
 
 ^ See these subjects treated of 
 elsewliere herein. 
 
 ■^ See suliject of Bonds in exeess 
 of constitutional liuiitatiou herein, 
 J5 221 r^ seq. 
 
 11 IGl 
 
 3 City of Elizabeth v. Force. 29 
 N. J. L. r)87 ; Dutcliess Co. M. Ins. 
 Co. V. Hatchfield, 73 N. Y. 223.
 
 ^ 124 a 
 
 MUNICITAL BONDS. 
 
 [CH. IX. 
 
 If, however, the instrument is incomplete, as if any es- 
 sential i)art is blank, and is afterwards filled in by the 
 thief or holder through the thief, no recovery can be had. 
 
 In the case of Ledwich v. McKim, 53 N. Y. 307, the 
 place of payment was left blank, and before it was fillcKl 
 up by the president, the bonds were stolen. It was held 
 that a bona fide holder could not, by inserting the name 
 of a place in the blank, recover. In Jackson v. Vickes- 
 burgh Co., 2 Woods, l-tl, on precisely similar facts the 
 same result was reached. 
 
 In Mass. v. Missouri R. R., 11 Hun, (N. Y.) 8, the cor- 
 porate seal of the obligors and the endorsement of 
 the trustee were both wanting when the bonds were 
 stolen ; subsequently these were forged, and then the 
 bonds came into plaintiff's hand. The company was held 
 not liable. 
 
 It has been held that the thief's inserting the name 
 of the payee in the blank left for that pur])ose was not 
 such an alteration as would avoid the bond.^ Bankers 
 and brokers, after actual notice of the theft, should retain 
 a memorandum thereof in order to indentify stolen bonds, 
 etc., if presented.^ 
 
 The question whether the custom of bankers and 
 brokers to disregard such notices, together with the mag- 
 nitude of their business, constitutes 7nala fides, is a 
 question for the jury, and the fact that the real owner 
 gave immediate notice of the theft by publication, will not 
 of itself deprive the holder of his right to recover.^ 
 
 The mere changing of the number of a stolen bond by 
 the thief will not avoid the bond in the hands of a sub- 
 sequent bona fide holder, nor is it sufficient to place him 
 upon liis guard.* 
 
 Whether an alteration apparent upon the face of a note 
 or bond is material or not is a question for the court. ^ 
 
 If negotiable municipal bonds are stolen and the city 
 
 1 Boyd V. Kennedy, 9 Vr. 14G. 
 
 2 Vermilye v. Adams Ex. Co., 
 21 Wall. 138. 
 
 ' Seybell v. Nat. Currency Bank, 
 2 Dalv. 383. 
 162 
 
 * City of Elizabeth v. Force, 2 
 Stew. (N. J.) 587. 
 
 & Hill V. Calvin, 4 How. 231 ; 
 Wheelock v. Freeman, 13 Pick. 
 (Mass.) 165.
 
 CH. IX.] NEGOTIABILITY — BONA FIDE HOLDERS. § 124 a 
 
 is notified, it is not protected by the subsequent payment 
 of coupons to one who does not show himself a bona fide 
 purchaser for value before maturity ;^ where the coupons 
 are stolen after they have matured and come into the 
 hands of an innocent purchaser such purchaser will not 
 have a good title to them as against the former holder.^ 
 
 1 Bambridge v. Louisville, 83 Ky. 
 285. 
 
 2 Wylie V. Speyer, 62 How. 107 ; 
 
 Hinckley v. Union Pac. R. R. Co., 
 23 Albany L. J. 38 ; Dill, on Mun. 
 Corp. (4tli ed.) § 555. 
 
 163
 
 CHAPTER X. 
 
 RENEWAL AND FUNDING BONDS — REGISTRATION OF BONDS. 
 
 Section. 
 
 125— When renewal and fund- 
 ing bonds may be issued 
 • — Cannot be issued with- 
 out authority. 
 
 126 — Wliat authority necessary 
 to issue such bonds — Must 
 be either express, or the 
 general power to issue 
 bonds. 
 
 127 — When the new bonds are 
 valid although the old ones 
 were void — Cases — When 
 new bonds void. 
 
 128 — Rights of bona fide holders 
 of new bonds — V/lien re- 
 
 Section. 
 
 newal bonds do not create 
 a new debt. 
 
 129 — Wlien the renewal bonds 
 must be issued — Usually 
 must be before the old ones 
 are paid. 
 
 130 — Registration of bonds — 
 When void if not regis- 
 tered — When registration 
 unnecessary. 
 
 131 — When registration conclu- 
 sive of the facts — Statute 
 or constitution must re- 
 quire registration — What 
 facts registration con- 
 cludes. 
 
 § 125. When renewal and fnnding bonds may be 
 issned. — It is the common practice for municipal corpora- 
 tions, when unable to meet their maturing bonds, or when 
 desiring to fund their floating indebtedness, to issue bonds, 
 which in the first instance are usually called renewal or 
 refunding bonds, and in the latter funding debt bonds, 
 ^lany of the States have passed general laws authorizing 
 the issue of such bonds, and the charters of the munici- 
 palities also have, in many instances, like provisions. 
 
 When the authority to issue such bonds is express and 
 certain, and is followed in detail, there can arise but few 
 (piestions as to the validity of the bonds so issued, but 
 when the authority is vague, or not strictly pursued, many 
 vexed questions arise. 
 
 "Wlien the municipality has the power generally to issue 
 bonds, it may, witliout express autliority, issue bonds in 
 lieu of others overdue, and the municipal authorities are 
 th<^ judges of the propriety of such action,^ but when it 
 
 1 Citv of Quincv v. Warfield, 79 Am. Dec. 330. 
 164
 
 CH. X.] REISEWAL AND FUNDING BONDS, ETC. 
 
 § 125 
 
 has issued bonds without authority, it has no power to 
 issue, without special authority, otiier bonds to replace or 
 take up and pay off the former bonds. ^ 
 
 Where, on the maturity of valid municipal bonds, the 
 municipality, without legislative authority, takes them up 
 and issues others in their stead, not having the means to 
 pay the matured bonds, such second issue are void for 
 want of authority.^ 
 
 It has been held that without authority, but merely 
 from the fact that the city was indebted on its valid obli- 
 gations, it could change the form of such indebtedness 
 and issue renewal or funding bonds to renew or fund its 
 existing debt. The principal case holding this doctrine 
 is that of City of Galena v. Corwith, 48 111. ■423, wherein 
 it was held that " a city being in debt which is evidenced 
 by scrip or by promissory notes may surely change the 
 form of the indebtedness to interest-bearing bonds, and 
 this without express authority in its charter." The court 
 further said that "it is an inherent power and vital, 
 without which such corporations could not live." ^ 
 
 The city, however, had the right to borrow money 
 upon its faith and credit to the amount of twenty thou- 
 
 1 Merrill v. Monticello, 138 U. S. 
 673. 
 
 2 Jefferson v. Hawkins, 23 Fla. 
 223; Whitewell v. Pulaski Co., 2 
 Dill. 249. In Town of Solon v. 
 Williamsburgh Sav. Bk., 114 N. Y. 
 122, it was held that railroad aid 
 bonds issued by cominissioners in 
 the place of other bonds, which 
 were issued to aid a railroad and 
 by it wore surrendered and can- 
 celled by the commissioners, were 
 valid obligations in the liands of a 
 purchaser for value without notice, 
 altliough the later bonds were l)ay- 
 able at a different place and the 
 denomination greater tlian surren- 
 dered bonds. 
 
 The court said: " Tlie practical 
 effect of this subscription of the 
 bonds was not an excessive issue, 
 but the continuance of those issued, 
 
 modified in form, not in substance, 
 and tliese were the only ones, with 
 others outstanding, whicli covered 
 the amount of the stock of the 
 railroad company to which the 
 commissioners had subscribed for 
 the town, and for which they had 
 undertaken to issue its bonds for a 
 like amount." It is to be observed 
 in this case that the commissioners 
 who issued the bonds were not 
 bound by statute or vote to issue 
 the bonds payable at any particu- 
 lar place or bound to issue them of 
 any jiarticular denomination, these 
 details being left by statute to their 
 determination. See also Williams- 
 burgh Sav. Bk. v. Town of Solon, 
 136 N. Y. 460. 
 
 ^ See also Rogan v. Watertown, 
 30 Wis. 259. 
 
 165
 
 j; 126 MUN'icrrAL t?onds. [en. x. 
 
 sand dollars per year, and the bonds issued were to 
 fund a part of the debt so incurred. And in the subse- 
 quent case of Hardin v. McFarlan, 82 111. 110, the court 
 criticised the broad language of the former case, and held 
 that a municipality cannot issue bonds, unless authorized 
 to borrow money, and is not restricted in the means of 
 exercising this power. 
 
 $? 126. What authority necessary. — From a careful 
 review of the authorities it appears that a municipality 
 cannot issue renewal or funding bonds, unless it is ex- 
 pressly authorized so to do, or unless it has the power gen- 
 erally to issue its negotiable bonds or the general power 
 to borrow money. ^ 
 
 The case of Portland Savings Bank v. City of Evans- 
 ville, 25 Fed. Rep. 389, is a case in point. 
 
 The common council of the city was authorized " to 
 borrow m.oney for the use of the city," and under this 
 authority it issued its renewal bonds, and in holding these 
 bonds to be valid the court said : 
 
 '* It involves no inconsistency to say that such a grant 
 of power embraces, not by implication, but by force of the 
 expression, the right of the city, whenever the common 
 council shall deem it necessary or advantageous, to execute 
 new obligations in renewal or redemption of old ones, or 
 in order to obtain money to pa}^ the old ones, if due, or 
 even before they matured, if thereby a reduced rate of 
 interest or other benefit can be obtained." 
 
 An act conferring on a municii)ality authority to re- 
 fund iua1ni-cd and maturing indebtedness has been held 
 to authorize the fundingof debt created after the passage 
 of the act.2 
 
 And where the proceeds of the bonds were misapplied 
 it has hcon hold the city could issue other bonds in their 
 stead. In this case, however, there was no limitation as 
 to the amount that could be issued, and the issue of the 
 additional lionds was necessary to complete the water- 
 works for which the former bonds were issued.^ 
 
 1 Bogart V. Lamotte Tp.. 79 Mich. 
 294. 
 
 2 Rilpv V. Township of Garfield, 
 
 IGG 
 
 (Kan.) 28 Pac. R. 560; 54 Kan. 463. 
 8 Daily v. City of Columbus, 49 
 Ind. 169.
 
 CH. X.] RENEWAL AND FUNDING BONDS, ETC. § 1-7 
 
 § 127. When new bonds are valid, altliongh tlie old 
 
 were void.^When the renewal or funding bonds recite 
 tiiat they are issued for the purpose of funding the exist- 
 ing debt of the city or renewing the old bonds, and the city 
 is authorized to issue such bonds, it is estopped as against a 
 bona fide holder to set up that the antecedent debts were 
 fraudulent.^ 
 
 When the determination of the question of what debts 
 or bonds are to be paid or renewed by the new issue is left 
 to the municipality or its officers, and they are to pass 
 upon the question, and they, in the new issue, make such 
 recitals so as to mislead a purchaser or to lull his suspi- 
 cion and not lead him to inquire whether the old debts were 
 invalid or not, such recitals will estop the municipality 
 from pleading that the old debts were invalid.^ 
 
 The case of Cadellac v. Woonsocket, 58 Fed. Rep. 935, 
 is one in point. 
 
 In this case it appeared the city was authorized : " When 
 deemed necessary by the council to extend the time of 
 payment, new bonds may be issued in the place of former 
 bonds * falling due, ' , . . each bond shall show upon 
 its face the class of indebtedness to which it belongs and 
 from what fund it is payable," the court held that "the 
 general power to issue must be taken to authorize bonds 
 in the usual form of such well-known commercial obliga- 
 tions." The usual form embodies a contract and obliga- 
 tion usual in form. 
 
 The court further held that, as the bonds recited, they 
 were funding bonds and issued to take the place of former 
 bonds falling due, that they showed upon their face the 
 class of indebtedness and the fund out of which they were 
 payable. 
 
 ^ Nat. Bank v. Town of Granada, -where the bonds were issued in ex- 
 41 Fed. Rep. 87. chanj^e for debts of the municipal 
 
 - Hill V. Peekskill Sav. Bank, 101 corporation, as against a bova fide 
 N. Y. 490 ; Ashley v. Supervisors holder, if they contain recitals, the 
 of Presqne Isle Co. , fiO Fed . Rep. 5.5 ; illegality of the old debts cannot be 
 Hitchcock V. Galveston, 9G U. S. shown. See also Hill v. Peekskill 
 350 ; Sykes v. Laflfery, 27 Ark. 407. | Sav. Bk., 101 N. Y. 490. See, how- 
 In Meyer v. Brown, 65 Cal. 583 ; ever, § 128. 
 20 N. E. R. 281, it was held that , 
 
 167
 
 .< 1 127 MUNICIPAL BONDS. f CH. X. 
 
 Ill this rase, tlie former bonds for which these bonds 
 were issued were void, and the court held that the rcfund- 
 in<; l)onds were vaHd. Tiie court said : ''It seems to us 
 that the representation made on the face of the bonds 
 estoi)s tlie city as against a bona fide holder from disputing 
 the fact that the bonds were issued to take up ' old bonds 
 falling due.' Power was conferred by the act upon the 
 common council to issue new bonds to take up bonds fall- 
 ing due. 
 
 ' ' The question whether there were any such bonds was 
 referred to the common council. 
 
 "The council determined to issue new bonds to take 
 them up. 
 
 " It seems to us that upon these circumstances it did not 
 devolve upon the purchaser of the new bonds to look 
 into the validity of the funded old bonds. He might well 
 rely upon the representations made to him on the face of 
 tlu^ lM)n(ls, as to the existence of ' the old bonds falling due.' 
 " The recitals in the new bonds as to the fact of 'old 
 bonds falling due,' and that the new bonds were issued 
 to take up the old, would well lull an intending purchaser 
 into security. 
 
 "The defence it might haA'e made to the old bonds it 
 elected not to make ; it should not now bo permitted to 
 set it up as against a6ojza y/(/(^ holder of its refunding 
 bonds." 
 
 In another case,^ where it was contended that the fund- 
 ing bonds were void, because the original bonds were in- 
 valid, the court said : 
 
 "Suppose the improvement bonds were void, as it is 
 claimed, does it follow that the bonds that were given iu 
 substitution for them are likewise nullities ? It will be 
 observed that if we assume that the city exceeded its 
 power in borrowing the money represented in such im- 
 provement bonds, nevertheless the fact remains that the 
 city had incuiTed honest debts in the laying out and im- 
 provement of its streets, and that the money so borrowed 
 went to the payment of such honest debts. The munic- 
 
 1 Mutual Ben. L. Ins. Co. v. Elizabeth, 42 N. J. L. 235-240. 
 168 
 
 I
 
 CH. X.] RENEWAL AND FUNDING BONDS, ETC. § 1-8 
 
 ipality, therefore, was under a moral obligation to repay 
 the money so borrowed, and the consequence is, that 
 upon well-settled rules it was entirely competent for the 
 Legislature to convert such moral into legal obligations. 
 When, therefore, by this act of 1871, the city was author- 
 ized to renew such bonds, and substitute in their place 
 this class called 'consolidated improvement bonds,' such 
 an authority was a validation of the original loan, and a 
 recasting of it into a new form. I entertain no doubt 
 that such new bonds, corroborated by this legislative sanc- 
 tion, are in all respects valid and enforcible. The rule 
 settled in the case of Eader v. Township of Union, 10 
 Vroom, 519, is entirely pertinent and is quite decisive. In 
 that case it was conceded that the contract then in ques- 
 tion was palpably ultra vires, as it had been made by an 
 ostensible corporate body, which in point of law had no 
 existence, but as the sal)ject of such contract had inured 
 to the benefit of the township of Union, the burden of 
 payment could by legislation be lawfully imposed on that 
 township. I consider, therefore, that on the concession 
 of the illegality of the improvement bonds, still their sub- 
 stitutes were made valid by the legislative act from which 
 they proceed." 
 
 § 128. Rights of bona fide holders — Debt limitation. — 
 When the renewal bonds do not contain recitals of such 
 a character as to mislead an innocent purchaser, or they 
 are made by officials having no authority to make them, 
 such renewal bonds arc void in the hands of a bona fide 
 holder, and the municipality is not estopped from setting 
 up the defence that the oi-iginal bonds were illegally is- 
 sued.^ 
 
 It has recently been held that bonds issued by a munic- 
 ipality under an act wliich permitted their issue to fund 
 the debts of the municipality, are valid in the hands of a 
 bona fide holder, although issued in payment of claims 
 which the officers issuing the bonds knew to he illegal.^ 
 
 A holder of valid bonds who surrenders tliem and re- 
 ceives in lieu thereof bonds which are afterwards held 
 
 1 Merrill v. Monticello, 138 U. S. 
 673. 
 
 2 Mej-er v. Brown, 26 Par. Rep. 
 281. 
 
 1G9
 
 § 128 MUNICIPAL BONDS. [CH. X. 
 
 invalid, may maintain an action on the original bonds, 
 although caiKvllcfl and not in his possession.^ 
 
 A city cannot compel the holder of old bonds to sur- 
 render them and take in their place new ones at a pre- 
 mium, though that is the then market value. ^ 
 
 It has been held,'^ where a city issued currency in such 
 a form as to circulate as money, contrary to statute, which 
 was afterwards paid out by it for valid municipal indel)t- 
 edness, audit afterwards, under a general authority to 
 fund its debts, exchanged its negotiable bonds for such 
 currency, that although the latter was invalid and could 
 not have been enforced, yet as the consideration received 
 by the city for it was lawful and the city was morally 
 bound to pay the currency, and the illegality only ex- 
 tended to tlio form, the bonds so exchanged were valid 
 obligations. 
 
 A municipal corporation may purge a transaction of its 
 illegality,* provided it had the power to incur the debt, 
 and the objection extends only as to the illegal manner in 
 which the power is executed. 
 
 If the original debt was incurred without power and 
 therefore void, and afterwards the evidence of such del)t 
 is surrendered and exchanged for bonds, or other bonds, 
 the writer is of the opinion that such funding bonds would 
 also be invalid, no miitter what recitals they contained, 
 unless the statute authorizing their issue was broad 
 enough to remove the defect of the original want of power, 
 and this defect was statutory and not constitutional, 
 as in the latter case a statute could not cure it, unless the 
 constitutional lack of authority arose from the form of 
 the prior act and not from its object. And this principle 
 is asserted in the case of Mosher v. The Ind. School Dist. 
 of xVckerl}', 44 Iowa, 122. It appeared that it was sought 
 by statute to give to the holders of bonds issued in excess 
 of the constitutional limit of Iowa, a lien for the materi- 
 als furnished in the erection of the school-building erected 
 
 1 Deyo V. Oteo Co., 37 Fed. Rep. I ^ Little Rock v. Merchants' Nat. 
 
 247. 
 
 2 Loyd V. City Altoona, (Pa.) 19 
 Atl. R. 670. 
 170 
 
 Bk.. 98 U. S. a08. 
 
 * Dill, on Mun. Corp. (4tli cd.) 
 §448.
 
 CFI. X.] RENEWAL AND FUNDING BONDS, ETC. § 128 
 
 with the money obtained from the sale of the bonds. 
 The court lield such a statute to be unconstitutional ; that 
 it was but an attempt to change the nature of an indebt- 
 edness prohibited by the constitution. 
 
 And in a case in the Federal court for lowa,^ arising 
 upon a suit to collect bonds issued to refund other bonds 
 which were in part in excess of constitutional limit of in- 
 debtedness of that State, the court said : "In suits, there- 
 fore, upon refunding bonds representing prior indebted- 
 ness, it is necessary, in order to sustain the defence of 
 invalidity, to show that the indebtedness merged in and 
 represented by the refunding bonds was itself invalid, and 
 non-enforcible either in whole or in part."^ 
 
 It is also held that the question of the issue of the new 
 bonds does not require the consent of the legal voters if 
 the statute or constitution does not require it, although 
 that consent was necessary to issue the original ones.^ 
 
 The renewal bonds are not regarded as a new debt, but 
 the mere extension of the former debt, and therefore they 
 are not included in the debt limitation placed upon the 
 municipality, nor does the prohibition in the charter that 
 the municipality shall not create pecuniary obligations 
 which shall not be payable in the current year, or which 
 cannot be paid from the income of the current year, pro- 
 hibit the issuing of renewal bonds, such exchange not 
 creating any new obligation.'* 
 
 1 ^tna Life Ins. Co. v. Lyon Co., 
 44 Fed. Rep. 329. 
 
 2 See, however, Chaffee Co. v. 
 Potter, g 280. 
 
 3 Blanton v. McDowell, 101 N. C. 
 532. 
 
 * City of Poughkeepsie v. Quin- 
 tard, 1.36 N. Y. 275. 
 
 In this case the purchaser refused 
 to take the bonds issued to fund 
 old bonds of the city, issued to pay 
 
 new bonds increased the debt be- 
 yond the limit, and further that the 
 charter of the city prohibited the 
 i3orrowing of money for the pur- 
 pose of funding the debt. 
 
 Tile provision in the charter rela- 
 tive to borrowing was as follows : 
 
 '• The common council shall not 
 have power to borrow, and is ex- 
 pressly proliibited from borrowing, 
 any money on account of the city 
 
 for water works. The new bonds except as herein provided, 
 being issued under a subsequent " The said council shall not create 
 general statute permitting all cities any pecuniary obligations whatever 
 to refund their debt, the pur- on the part of the city which shall 
 chaser claimed that the sale of the not be pavable in the current vear, 
 
 171
 
 §1:20 MUNICIPAL BONDS. . [CH. X. 
 
 § 12l>. When tlie renewjil bonds must l)e issued. — 
 
 The renewal bonds should be issued before the old bonds, 
 intended to be refunded or paid by the sale of the renewal 
 bonds, are paid and cancelled, otherwise the renewal bonds 
 are void in the hands of the purchaser from the city with 
 knowledge of this fact, and the issue of renewal bonds in 
 such a case may be restrained. 
 
 ' It has boon held that renewal bonds issued in the place 
 of bonds theretofore paid, discharged and cancelled, 
 were issued without authority and were void,^ but in 
 this case the bonds were not delivered, and the ques- 
 tion was not therefore between the municipality and 
 a bona fide holder for value without notice, and Ave 
 do not know of a decided case where the question has 
 been passed upon wherein the renewal bonds were issued 
 after the old ones proposed to be renewed were paid and 
 cancelled, and such new bonds had passed into the hands 
 of an innocent holder for value. Certainly, if the recitals 
 in the new bonds were such as to mislead the purchaser, 
 or were such as he had the right to rely upon, the bonds 
 would be valid, but if they contained no such recitals or 
 there was no other estoppel, it would seem in such a case 
 as if the bonds would be void, because the purchaser 
 would be charged with constructive notice of all the pro- 
 ceedings of the municipality and an investigation would 
 disclose the fact that the new bonds had been issued after 
 the old ones had ceased to exist. 
 
 anil whicli cannot be discharged art. 13, " No political or municipal 
 from tlu'incoinc of the same year." corporation in tliis State shall ever 
 
 The court liekl that tlie provision become indebted in any manner or 
 of tlie charter related to new debts for any purpose to an amount in 
 and not to tlie extension of one the aggregate exceeding two per 
 already existing, that the funding centum on the value of tiie taxable 
 ac-t and the charter should be read property within such corporation," 
 together, but if they could not the did not prevent a municipal cor- 
 funding act would repeal by impli- poration from issuing bonds, with 
 cation the charter provision so far , interest coupons, for the purpose of 
 as it related to the object of the funding debts existing ])rior to the 
 funding act. ; adoption of the proliibition. 
 
 In Powell V. City of Madison, 107 i Coffin v. City of Indianapolis, 
 Ind. 106. it was held that the pro- 59 Fed. Rep. 221. 
 hibition in the Indiana constitution, | 
 172 
 
 I
 
 CH. X.] RENEWAL AND FUNDING BONDS, ETC. § 130 
 
 The question, however, depends largely upon the ena- 
 bling act, as a proper construction of that might permit 
 the payment of the old bonds and the issue of the renewal 
 bonds afterwards, and the replacing of their proceeds 
 into the account out of which the old bonds were paid. 
 
 Funding bonds issued to take up county warrants, or 
 to fund a debt, part of which is in excess of the consti- 
 tutional limitation, are void, unless the valid can be sepa- 
 rated and distingviished from the invalid, notwithstand- 
 ing any recitals they may contain,^ unless the bonds 
 expressly recite that they are not issued in excess of the 
 constitutional limitation, and do not disclose any facts 
 which would inform a purchaser to the contrary, and the 
 recitals are made by officers charged with determining the 
 facts recited.^ 
 
 § 130. — Wlieii void if not registered — Wlien not neces- 
 sary. — Some of the States require that all bonds issued 
 by municiiDalities shall be registered with a State official 
 before they can be legally issued. 
 
 The purpose of such acts being to guard against the 
 issue of fraudulent bonds, unless the condition is com- 
 plied with the bonds are not lawfully issued. ^ 
 
 And when the statute or the constitution* declares that 
 unless the bonds are registered by some State or other 
 officer and have his certificate endorsed thereon they 
 shall be void, they are void in the hands of even a bona 
 fide holder, if not so registered and certified, as this 
 provision then is imperativG and all pc^rsons must take 
 notice of it.^ 
 
 In the case of Wood v. Louisiana, 5 Dill. C. C. R. 122, 
 where it appeared a municipal corporation issued bonds 
 valid on their face, but which were antedated to avoid 
 their being registered under a subsequent act, it was held 
 
 1 Lake Co. v. Graham, 180 U. S. [ * The constitutions of Nebraska. 
 662 ; Millerstown Bro. v. Frederick, N. Daivota and Wyoming contain 
 
 114 Pa. St. 435. 
 
 2 Potter V. Chaffee Co., 33 Fed. 
 Rep. 614. 
 
 * Douglass V. Lincoln Co., 2 Mc- 
 Crary. 449 ; Young v. Clarendon, 
 133 U. S. 340. 
 
 sucli provisions. 
 
 ^ State V. Roggen, 22 Neb. 118; 
 Anthony V. Jasper Co., 101 L'. S. 
 693. 
 
 173
 
 § 131 MUNICIPAL BONDS. [CH. X. 
 
 that while tho bonds themselves were void, yet as the 
 corporation had the power to borrow money, and the pro- 
 ceeds of these bonds went into the city treasury and was 
 used for a lawful purpose, an action for money had and 
 received against the corporation could be brought by the 
 purchaser or his assigns for the amount paid for the bonds 
 to the corporation, with interest at the lawful rate. 
 
 Where the statute makes the certificate of the registra- 
 tion officer conclusive as to the facts recited in the bond, 
 the effect of such recitals is the same as if they were made 
 by the municipality itself or its officers, and it, and they, 
 will be estopped by such recitals from denying their 
 truth. 1 
 
 A recital in a municipal bond that it was issued in ac- 
 cordance with authority conferred by an act recited, and 
 in accordance with a vote of a majority of the qualified 
 voters, is sufficient to validate the bonds in the hands of 
 a bona fide holder. The certificate of the auditor of the 
 State thereon that the bond was regularly issued, that 
 the signatures were genuine, and that the bond had been 
 duly registered, is conclusive upon the municipalit3% when 
 the officer so certifying is charged with that duty.'^ 
 
 Where the act directs that a municipal officer keep a 
 registry of the bonds and does not require that the bonds 
 themselves be endorsed, that they were registered, or pro- 
 vide that in case of non-registration they §hall be in- 
 valid, bonds issued pursuant to such a statute are unaf- 
 fected by the neglect of the officer to comply with the 
 directions of the statute.^ 
 
 §131. AVhen ro2:istratioii is conclusive of facts. — In 
 order that the registration of the officer shall be conclu- 
 sive, it is necessary that the statute should so make it, 
 and when the statute does not make the registration 
 conclusive and the bonds are issued without compliance 
 with conditions precedent, the fact that they are regis- 
 tered by the State officer does not make them valid. ^ In 
 
 1 Flapcp; V. School Dist. No. 70, 58 ' » First Nat. Bk. v. Arlington, 16 
 N. W. R. 499. Blatchf. 57. 
 
 - Comanche Co. v. Lewis, 133 * Dixon Co. v. Field, 111 U. S. 83 ; 
 U. S. 198. I Crow v. Oxford Town, 119 U. S. 
 
 1215. 
 174
 
 CH. X.] RENEWAL AND FUNDING BONDS, ETC. § 131 
 
 the case of German Sav. Bank v, Franklin Co., 128 U. S, 
 526-540, Mr. Justice Blatchtord said : " The registration 
 of the bonds by the State Auditor has nothing to do with 
 the nature of the terms and conditions on which the 
 stock was voted and subscribed. Neither the registration, 
 nor the certificate of the register, covers or certifies any 
 fact as to the comphance with the conditions prescribed 
 in the vote, on wliich alone the bonds were to be issued." 
 
 And when the statute makes it the duty of the reg- 
 istration officer before he registers bonds to ascertain 
 whether all the prior conditions have been complied with, 
 his decision, evidenced by registering and certifying the 
 bonds, is final on the facts he is to pass upon and will 
 estop the corporation from alleging non-performance 
 of such prior conditions as a defence.-^ If the act requires 
 that the bonds be registered by an officer and have the 
 fact of registry certified, it is held that if they are so 
 certified, the fact that they were not in fact registered 
 cannot be shown in order to invalidate such bonds.^ 
 
 The purchaser of an unregistered bond acquires no new 
 rights when the statute provides that the bond must be 
 registered to be valid, but when the statute requires 
 bonds to be registered and permits new bonds to be issued 
 to a subsequent holder upon surrender of the old bonds, 
 the municipality will be precluded to set up, as against 
 the transferee, equities existing bet ween it and the trans- 
 ferrer.'^ 
 
 i Fla?:g V. School Dist. No. 70, 58 
 N. W. R. 499 ; Menasha v. Hazard, 
 102 U. S. 81, 87. 
 
 '" Township of Rock Creek v. 
 Strong, 96 U. S. 278. 
 
 3 Lewis V. Barbour Co., 105 U. S. 
 739 ; Anthony v. Jasper Co., 101 
 U. S. 693. 
 
 175
 
 CHAPTER XI. 
 
 MUNICIPAL PAPER PAYABLE IN GOLD — HOW MUNICIPAL 
 PAPER PAID — BY TAXATION — WHEN OUT OF GENERAL 
 OR SPECIAL FUND OR TAX — SINKING FUND — TAXATION 
 OF BONDS. 
 
 Section. 
 
 132 — When miiiiic'ij)al pnper may 
 
 be made payable in gold 
 
 coin — When not. 
 133 — ^lunicipal debts ave paid by 
 
 taxation — When power to 
 
 tax implied. 
 134 — When bonds are paj^able out 
 
 of the general fund — 
 
 Rights of creditors, 
 l:!.") — Special assessment bonds — 
 
 How payable. 
 1 30 — When bonds are payable out 
 
 of a special fund — Rights 
 
 of creditors. 
 137 — Sinking fund — Special tax 
 
 — When l)ondsv()i(l unless 
 
 sucli provision made. 
 
 Section. 
 
 138 — When bonds not Toid al- 
 though such provision not 
 made — Effect of recitals — 
 Courts not likely to hold 
 bonds valid, althougli 
 they recite such provision 
 has been made, when it 
 has not and State consti- 
 tution requires it. 
 
 139— Taxation of bonds— Tiiey 
 may be taxed unless ex- 
 empt. 
 
 140 — Where bonds must be taxed 
 — Tax cannot be deducted 
 from the interest due on 
 them. 
 
 ^ \:V2. Wiien municipal paper may be made payable 
 ill jGToM colli. — Many of the bonds now issued by munic- 
 ipal c'orpcjrations provide that the principal and interest 
 thereof shall be payable in gold coin, and it would seem, 
 from a careful review of the few decisions on this subject, 
 that a municipal corporation may, unless restrained by 
 its charter, or some other law, or the State constitution, 
 contract that tlie principal and the interest of its bonds 
 shall be paid in gold coin, as fully as if the contract were 
 made by an individual.^ But in one case,^ where bonds in 
 
 1 :\Inore v. Walla Walla, 60 Fed. 
 Rep. 0(51 ; Farson, Leach & Co. v. 
 
 40 Pac. R. 900 ; Poland v. Pleasant 
 Hill. 3 Dill. 195 ; Heilbron v. Cuth- 
 
 Board of Com'rs, 16 Ky. L. 856 ; j bert, (Ga.) 23 S. E. R. 206. 
 Judson V. City of Bessemer. 87 Ala. | 2 Woodrufif v. State, 66 Miss. 298 
 240 ; Skinner v. Santa Rosa, (Cal.) (1889). 
 176
 
 CH. XI.] MUNICIPAL PAPER PAYAr,LE IN GOLD. § 132 
 
 suit were issued payable in gold, at a time when gold was 
 at a premium and under an act of the Legislature of Mis- 
 souri (March ITth, 1871), which authorized their issue, 
 and ]3rovided that the bonds should be paid in money, 
 the court held the bonds to be void, and said : 
 
 "When the bonds embraced in this suit were issued 
 ' gold coin ' was not the basis of the business of the 
 country. 
 
 '' It was money, but of much greater value than the cir- 
 culating medium, consisting of the United States treasury 
 notes and national bank notes, of which we take judicial 
 notice, because it is part of the public history known to 
 all the world, and therefore including us. All debts pay- 
 able in dollars were, as now, solvable in legal tenders, but 
 an obligation payable in gold coin can be discharged only 
 according to its terms. 
 
 " In authorizing the issue of the bonds for $100,000, and 
 in the use of tlie term 'money,' the Legislature must be 
 supposed to have meant, in the act cited, that money 
 which constituted the basis of the general business of the 
 country and was a legal tender for the payment of debts. 
 
 "" Therefore there was no authority in the act for the 
 issue of bonds payable ' in gold coin,' and they were void 
 for want of authority for their issuance. " 
 
 This case therefore decided that if, at the time bonds 
 are issued payable in gold coin, gold is at a premium, and 
 the statute does not authorize the issue of gold bonds, but 
 merely bonds payable in money, the term "money" 
 means the usual circulating medium of the time of the 
 issue, and therefore such bonds are void. This can be well 
 understood, if at the time the suit is brought to enforce 
 the payment of the bonds, gold is still at a premium, es- 
 pecially so if the bonds were purchased with money other 
 than gold, but if at the time of the suit and nUvv the 
 bonds had matured, as in the present case, gold was no 
 longer at a premium, wliy should the bonds be held in- 
 valid ? 
 
 When the statute prohibits the issue of bonds pay- 
 able in gold, either in expn^ss words or by im])lication, 
 
 they cannot be made so payablc,and where the statute au- 
 12 177
 
 R 133 MUNICIPAL BONDS. [CH. XI. 
 
 thoriziiig the issue of bonds, or some general statute pro- 
 vides that "all debts should be paid either in standard 
 silver or gold coin of the United States," bonds cannot 
 be issued payable in gold coin, because the municipal cor- 
 poration issuing them must have the option to pay them 
 either in gold or silver and the proposed issue of sucli 
 bonds will be restrained, ^ or if issued the municipality 
 would still have its right to exercise its option. 
 
 § 13;]. Municipal debts are paid by taxation — ^Wlien 
 power to tax implied. — The debts of a municipal cor- 
 poration are paid by taxation. Their form may be 
 changed, as where the general debts are funded and 
 bonds issued to pay them, or bonds falling due when the 
 municipality is unable to meet them, are renewed,yet in 
 the end all the debts are to be paid by taxes levied upon 
 the property of the inhabitants of or situate within the 
 corporation. 
 
 Usu;dly the charter incorporating the municipality or 
 some special or general law authorizes the corporation to 
 levy taxes to pay its debts, and this provision is sufficient 
 to include the levy of taxes to pay the principal and in- 
 terest of bonds or other evidence of municipal indebted- 
 ness, and it is not necessary that the statutes authorizing 
 the issue of bonds or other paper by a municipal corpora- 
 tion should expressly provide that the paper, so author- 
 ized to be issued, should be paid by the levy of taxes, be- 
 cause the p;)wer to pay is inherent in tlie power to borrow, 
 and in order to pay the municipal corporation must im- 
 pliedly have the power to tax in order to raise the money 
 to pay with. 
 
 This proposition is well stated in the case of Loan Asso. 
 V. Topeka, '20 Wall. 055, where the court said : 
 
 "The proposition is a very broad one, that debts con- 
 tracted by municipal corporations must be paid, if paid 
 at all, out of taxes which they may lawfully levy, and 
 that all contracts creating debts to be paid in the future, 
 not limited to payment from some other source, imply 
 an obligation to pay by taxation. ... It is therefore to 
 
 1 Bannock Co. v. C. Bunting & 1 Co., 37 P. R. 277 ; Skinner v. Santa 
 
 I Rosa, 40 Pac. R. 900. 
 178
 
 CH, XI.] :\irNICIPAL PAPER PAYABLE IX GOLD. § 133 
 
 be inferred that when the Legislature of the State au- 
 thorizes a county or city to contract a debt by bond, it 
 intends to authorize it to levy such taxes as are necessary 
 to pay the debt, unless there is in the act itself or some 
 general statute a limitation upon the pov^er of taxation 
 which repels such inference." ^ 
 
 When the municipality contracting the debt has no gen- 
 eral authority to levy taxes to pay its debts, but only 
 limited authority to levy taxes for certain specified pur- 
 poses or for limited sums, which do not include the power 
 to levy taxes to pay its debts generally, or a sum sufficient 
 to pay all its debts, and the act under which the debts 
 were contracted or the bonds or other paper issued does 
 not provide for their payment by taxation, it has been 
 held in such a case that the power to levy taxes to pay 
 the debts incurred pursuant to such an act was doubtful, 
 and a writ of mandamus was refused,^ and the court 
 held the only relief for the creditor was the Legislature. 
 Notwithstanding the above decision it seems to the writer 
 that the act of the Legislature which confers upon a 
 municipal corporation power to issue its bonds, imj^liedly 
 authorizes the levy of taxes sufficient to meet the debt, un- 
 less the constitution of the State prohibited such implied 
 power, or the statute authorizing the debt, or some gen- 
 eral act, contained some provision which rebutted such an 
 implication, and this position seems to be supported by 
 the decisions of the Federal and state courts.^ 
 
 1 See also Desty on Taxation, Vol. 
 2, pp. 1079, 1193; Young v. Com'rs, 
 (lnd.)36N. E. R. 1118; Fieldman 
 & Co. V. Charleston. 23 S. C. 62 : 
 Dill, on Mun. Corp. Vol. 2 (4tli ed.) 
 § 741 ; Tiedeman on Mun.Corp.2.")G. 
 
 2 State V. Guttenberg, 39 N. J, L. 
 660. 
 
 * Loan Asso. v. Topeka, 20 "Wall. 
 
 Com'rs, (Ind. Sup. Cfc.) 36 N. E. R. 
 1118; Breckenbridge Co. v. Mc- 
 Cracken, 61 Fed. Rep. 191. 
 
 The court in the latter case said : 
 " The power to assess, levy and 
 collect a tax would be necessarily 
 implied from the power to create 
 the debt, there being nothing in the 
 act indicating an expectation that 
 
 655; United States V. New Orleans, payment should be made in any 
 98 U. S. 391 ; U. S. v. Lincoln Co., other way and no constitutional 
 5 Dillon, 184 ; Ralls Co. Ct. v. U. S., ' obstacle, either in the character of 
 105 U. S. 733 ; Desty on Tax. Vol. 2, ' the debt or to the granting of such 
 1079, 1193 ; Dill, on Mun. Corp. Vol. ' power by the Legislature being sug- 
 2 (4th ed.), 763 ; Young v. Board of , gested.'' 
 
 179
 
 § 1 :3-4 MUNICIPAL BONDS. [CH. XI. 
 
 § 134. Bonds payable out of a general fund.— The 
 
 bonds and other negotiable paper issued by a muuicipality 
 ordinarily are general debts, and the holder is entitled to 
 have them paid out of the general funds of the city, and 
 it is to be inferred that the Legislature intends to authorize 
 it to raise and pay them, and the interest thereon, as it 
 falls due, by taxation, unless there is in the act authoriz- 
 ing the issue, or some general law, a limitation upon the 
 power of taxation, which repels such an inference.^ 
 
 In a case ^ where it was claimed that the bonds in suit 
 were not a part of the city debt, payment of which could 
 be enforced by general taxation, or out of any fund ex- 
 cept the specific assessment in view of which they were 
 issued, the court, in dissenting from this view, said : 
 
 "The conclusive answer to this objection is that the 
 obligation of the city, which is the foundation of the 
 suit, is not thus restricted in its operation. The agree- 
 ment contained in it is that the city will pay the money 
 designated in it, not that it will pay such sum out of a par- 
 ticular fund. To introduce such a restrictive stipulation 
 would be an unwarranted interpolation. Nor do I find in 
 any of the provisions of law appertaining to the city 
 anything from which such a circumscription of this con- 
 tract can be effected by implication. The law which au- 
 thorized the issuing of these instruments contains no 
 intimation that they are not to be instruments imposing 
 a general obligation to pay the money mentioned in them. 
 They arc the bonds of the city, and such bonds do not 
 have the effect of imposing only a partial obligation. 
 Nor does the fact that the city has a sinking fund de- 
 voted specially to the payment of these bonds as they 
 mature, give rise to such an intendment. Such a con- 
 trivance is doubtless designed to put the city in funds to 
 meet these deljts as they fall d uc, but how such an ex- 
 pectation is to have the effect of converting a general 
 engagement to pay into a particular engagement to pay 
 only out of such fund is not apparent. The alteration 
 of the contract from the unrestricted form of its ex- 
 
 1 Loan Asso. v. Topeka, 20 Wall. I 2 Mutual B. L. Ins. Co. v. Eliza- 
 655, COO. I beth, 42 N. J. L. 235, 241-2. 
 
 180
 
 CH. XI.] MUNICIPAL PAPER PAYABLE IN GOLD. § 134 
 
 pressed terms to the limited form insisted on, is so ma- 
 terial and fundamental, that nothing but the plainest 
 exhibition of a legislative purpose to so circumscribe the 
 operation of these contracts should be permitted to con- 
 trol them in this particular. If the promise of the city 
 was intended to be a qualified one, it was an easy thing 
 for the Legislature to have so declared. The plain terms 
 of the legislative authorization of the instruments con- 
 formably issued are not subject to a conjectural emen- 
 dation. There is no solidity in this objection." 
 
 Even when a special tax is provided the holder is not 
 limited to such a tax, unless it is provided they shall not 
 be paid in any other manner.^ Such bonds are the debts 
 of the corporation, and after the application of the pro- 
 ceeds of a special levy the holder is entitled to have the 
 balance paid out of the general funds of the corporation.^ 
 
 In the case of United States v. Clark Co., 96 U. S. 211, 
 Mr. Justice Strong said: "Limitations upon a special 
 fund provided to aid in the payment of a debt are in no 
 sense restrictions upon the liability of the debtor. Why, 
 then, must not the special tax of one-twentieth of one 
 per cent be regarded as merely an additional jirovision 
 made for the payment of the new debt authorized, rather 
 than as a denial to the creditors of any resort to the or- 
 dinary source from which payment of county debts is to 
 be made ? Why should such a provision be construed as 
 placing the holders of the bond in a worse situation than 
 that of other creditors of the county ? These bonds are 
 a debt of the county as fully as in any other liability. 
 Had the act which gave power to the county to issue 
 them said nothing of any special tax, there could be no 
 question that the holders of the bonds, like other credi- 
 tors, would have a resort to the money in the county 
 treasury collected for the discharge of its obligation ; for 
 it is by the law made the duty of the county court to 
 order the payment out of the county treasury of any 
 sum of money found by them to be due from the county. 
 . . . And it is not to be inferred from a provision giving 
 
 1 Avery v. Job, 36 Pac. Rep. 293. U. S. 669 ; Carrol Co. v. United 
 
 2 United States v. Clark Co., 95 States, 18 Wall. 71. 
 
 181
 
 § 134 MUNICIPAL BONDS. [cil. XI. 
 
 ;i creditor the benefit of a special fund that it was in- 
 tended to place him in a worse condition than that he 
 would have occupied had no such provision been made. 
 And that, too, in the absence of any direction that he 
 nnist look exclusively to that fund. Such is not a reason- 
 able construction of the statute. Such is not a fair im- 
 phcation of its purpose. It accords neither with its letter 
 nor with its spirit. ... It is incredible that the Legisla- 
 ture intended to deny to the purchaser of the bonds any 
 right to look for piiyment beyond such a meagre provi- 
 sion ; or, if it was so intended, that the intention would 
 not have been expressed in precise terms. In the absence 
 of any express declaration that the creditor's right to 
 claim payment shall not reach beyond the fund derived 
 from the small special tax, we cannot think the Legisla- 
 ture proposed rendering the bonds unsalable or almost 
 worthless in the hands of those who might be so unfortu- 
 nate as to hold them. Such an intention w^ould have 
 defeated the object sought to bo secured by giving au- 
 thority for their issue. Nor can we think that the Legis- 
 lature intended to set a trap for purchasers and lead 
 them to suppose that they were obtaining. valuable se- 
 curities, when in fact they would obtain what was next 
 to nothing. The statute justifies no imi)lication of any 
 such legislative intention. If it be said that the Legisla- 
 ture, in limiting the special tax allowed, contemplated 
 no issue of bonds beyond what one-half of one per cent 
 would pay, and did not anticipate the improvidence of 
 purchasers who might buy bonds issued in excess of that 
 sum, it may be answered that still a larger issue was in 
 fact authorized." 
 
 In the case of United States v. Ft. Scott, 99 U. S. 152, 
 the city issued its bonds under statutory authority, for 
 the purpose of defraying the costs of paving, grading, etc. , 
 one of its streets, and the ordinance providmg for the 
 issue stated that they "should be paid, principal and 
 interest, solely from special assessments to be made upon 
 and collected solely from the lots and pieces of ground 
 fronting upon or extending along the streets the dis- 
 tance improved." 
 182
 
 CH. XI.] MUNICIPAL PAPEll PAYABLE IN GOLD. § 134 
 
 The act under which the bonds were issued provided 
 that ' ' for the payment thereof assessments should be 
 made upon the taxable property chargeable therewith ; " 
 that is, upon all lots and pieces of ground to the centre 
 of the block extending along the street or avenue the 
 distance improved. The bonds had printed on them that 
 they were issued pursuant to said act and ordinance. 
 
 The special assessments collected were insufficient to 
 meet and pay the bonds and interest as they became due, 
 and the city refused to pay them out of its general funds. 
 Suit was instituted in the U. S. Court, and Justice 
 Harlan, who delivered the opinion, said in part : 
 
 "Experience informs us that serious, if not insuperable, 
 obstacles in its negotiations, had the bonds upon their 
 face in unmistakable terms declared that the purchaser 
 had no security beyond the assessments upon the par- 
 ticular property improved. If the corporate authorities 
 intended such to be the contract with the holders of the 
 bonds, good faith required an explicit avowal of such 
 purpose in the bond itself, or m some other form, by lan- 
 guage brought home to the purchaser which could neither 
 mislead nor be misunderstood." 
 
 The court further held that as between the city and 
 the owners of the property liable the payment of the 
 bonds should be made by special assessment, but as be- 
 tween the city and the holders of the bonds the city was 
 primarily liable. 
 
 This would seem to be the law adopted in most of the 
 States in regard to improvement bonds, issued for the 
 purpose of making improvements to roads and streets, 
 the cost of which is to be raised in whole or in part by 
 the city,-^ but the courts of Indiana have, owing to the 
 constitution of the State, adopted the opposite rule, and 
 hold that such bonds are not a general debt of a munic- 
 ipality, but must be paid out of the special funds derived 
 from the property benefited by the improvement.^ 
 
 1 State V. Coininissionore, 37 Oliio, 
 52G ; Wyandotte v. Zeitz, 21 Kan. 
 649 ; Kimball v. Grant Co., 21 Fed. 
 Rep. 145. 
 
 ^Strieb v. Cox, 111 Ind. 299; 
 
 Braiin v. Board of Coni'r's of Ben- 
 ton Co., GO Fed. Rep. 47G : Walker 
 V. Com'rs, Munroe Co., 38 N. E. R. 
 
 1095 
 
 183
 
 § ISG MUNICIPAL BONDS. [CH. XI. 
 
 § 135. Special assessment bonds. — A number of the 
 States have authorized their municipal corporations to 
 issue what is commonly known as " Special Assessment 
 Bonds,-' and the enabling act expressly states that the 
 bonds shall not be a general debt of the municipality 
 issuing them, but that they shall be paid with the money 
 obtained from the collection of assessment levied upon 
 the property benefited by some local improvement j^aid 
 for, or made with the money obtained from the sale of 
 these bonds. 
 
 This mode of borrowing money by municipal corpora- 
 tions is often resorted to when the corporation has reached 
 the statutory or constitutional limit of indebtedness ; as 
 such bonds, not being a general debt of the corporation, 
 are held not to be prohibited by the constitution, and are 
 not to bo included in the calculation of the municipal 
 indebtedness in order to ascertain whether or not the 
 corporation has reached its debt limit. ^ 
 
 As these bonds are to be paid out of a special fund, 
 that is, the assessment against the private property of 
 the citizen, when collected by the city, they cannot be 
 considered to be as safe an investment as bonds payable 
 out of the general funds of the city. 
 
 § 13<). When Jk)ii(1s payable out of a special fund. — 
 When bonds are payable out of a special fund, or from a 
 special tax, and the amount levied is insufficient to pay 
 the ])rincipal or interest, a mandamus will not lie to com- 
 pel the levy of taxes beyond the amount authorized. 
 
 In United States v. Macon Co., 09 U. S. 582, 590, Chief 
 Justice Waite said : "If the purchaser had examined the 
 statutes under which the county was acting he would 
 have seen what might prove to be difficulties in the way 
 of payment. As it is he holds the obligation of a debtor 
 who is unable to provide for the means of payment. We 
 have no power by viandamus to compel a municipal 
 corporation to lay a tax which the law does not authorize. 
 We cannot create new rights or confer new powers. In 
 this case it appears that the special tax of one-twentieth 
 of one per cent has been regularly levied, collected and 
 
 1 Davies v. Des Moines, 75 Iowa, 500. 
 18-4
 
 CH. XI.] MUNICIPAL PAPER PAYABLE IN" GOLD. § 137 
 
 applied, and no complaint is made as to the levy of one- 
 half of one per cent for general purposes. What is 
 wanted is the levy beyond this, and that, we think, 
 under existing laws, we have no power to order." 
 
 Where a jDarticiilar fund or a special tax is provided 
 for the payment of the bonds and interest, these provisions 
 become a part of the contract and cannot be rescinded or 
 impaired.^ 
 
 Where the statute under which the bonds are issued 
 creates a special fund for their payment, the city, on the 
 insufficiency of the fund for any one year to meet the 
 annual interest, does not become liable to pay interest 
 on the over-due coupons.^ 
 
 § 137. Sinking fund — Special tax — When bonds void 
 unless such provision made. — The constitution of a 
 number of the States requires that at, or before, the time 
 of the incurring of a debt by a municipality, a sinking 
 fund shall be provided to pay the princij^al and interest 
 of the debt as it falls due, or that provision for the col- 
 lection of an annual tax to pay the debt shall be made. 
 The constitution of the following States have such pro- 
 visions : California, Idaho, Illinois, Kentucky, Missouri, 
 New York ; for water supply, Pennsylvania ; annual tax, 
 South Dakota, Texas, and AVest Virginia. 
 
 It has been repeatedly held that a failure to so provide 
 will render the bonds or other evidence of municipal in- 
 debtedness void.^ 
 
 A case illustrating the doctrine is that of Quaker City 
 Nat. Bank v. Nolan Co., 51) F. R. GGO.* The court held 
 the bonds to be invalid because the Commissioners' Court 
 who issued them failed to provide, as required by the 
 constitution of Texas, provision to assess and collect 
 annually a sum suflicient to pay the interest and create 
 a sinking fund to pay the principal. 
 
 The bonds recited that they were issued in pursuance 
 
 1 IIofTman v. Qiiiiicy, 4 Wall. 535 ; 
 Mobile V. Watson, TlG U. S. 289. 
 See subject Legislative control over 
 remedies herein. 
 
 2 Bates V. Gerber, 23 Pac. Rep. 
 1115. 
 
 3 Milraps v. City of Terrell, 00 Fed. 
 Rep. 193 ; Wilson v. Shreveport, 29 
 La. 673 ; Knox v. Baton Rouge, 36 
 La. 427. 
 
 * Affirmed in GG Fed. Rep. 883. 
 
 185
 
 § 138 MUNICirAL BONDS. [CH. XI. 
 
 of tho act antliorizin^^ their issue, but did not state that 
 all the requiremeuts of the law had been complied 
 with. 
 
 Tho Court also refused to be governed by the decision 
 of the Supreme Court of Texas, Nolan Co. v. State, 83 Tex. 
 l!)0, because the fact that the constitutional provision, 
 requiring that provision for the annual payment of in- 
 terest and the creation of a sinking fund, had not been 
 presented to the State court or passed upon by it. 
 
 The same force and effect no doubt would be given to 
 a statutory provision if it, in express words, provided 
 that, in a case of failure to create such a sinking fund, 
 the bonds should be void. 
 
 If the provision to raise the annual interest and create 
 a sinking fund is sufficient at the time of the inception of 
 the debt, that is all the law contemplates, and the bonds 
 will be valid, notwithstanding that rate may in later 
 years not be sufficient by reason of decreased values or 
 default in payment of taxes, to raise the sum necessarj^ 
 for those purposes.^ 
 
 )jl3S. AVheii the l)oiuls not void, thoiij^li no fund 
 provided. — It has been held, however, in Texas, that when 
 the commissioners appointed to erect a court-house 
 were authorized to issue bonds to obtain the money there- 
 for, but the commissioners were not the body to create 
 a sinking fund and provide for the payment of the in- 
 terest on the bonds before their issue, as required by the 
 constitution, and had no authority to do so, this duty 
 being that of the county government ; and it having 
 failed so to provide, such failure did not invalidate the 
 bonds.^ 
 
 If the bonds recite on their face that all the provisions 
 of the constitution relating to their issue have been com- 
 ])lied with, and this recital is made by the body which is 
 autliorized to issue the bonds or their agents, and also 
 the body required to provide the annual tax, then such 
 bonds are valid in the hands of a bona fide holder, provided 
 the constitution does not, in express language, make 
 
 1 Basset v. City of El Paso, 28 ] 2 Marion Co. v. Coler, G7 Fed. 
 S. W. R. r>.-,4. iRep., 00. 
 
 18G
 
 CH. XI.] MUNICIPAL PAPER PAYABLE IX GOLD. § 139 
 
 such bonds invalid if the provision is not compHed 
 with. 
 
 A case illustrating this doctrine is that of Nat. Life 
 Ins. Co. V. City of Huron, 62 Fed. Rep. 778. 
 
 This was a suit on coupons cut from bonds issued under 
 a statute of South Dakota, where the constitution, sec. 3, 
 art 13, requires that at or before the time of incurring 
 an indebtedness the municipality should provide for the 
 collection of an annual tax sufficient to pay the interest 
 and also the principal when due. The bonds were executed 
 by the officers designated in the enabling statute, and 
 each bond recited "that all acts and conditions and things 
 required to be done precedent to, and in the issuing of, 
 said bonds have duly happened and been performed in 
 regular and due form as required by law." In point of 
 fact no provision whatever was made for the payment of 
 the debt. The court held the bonds and coupons to be 
 valid and the city estopped by the recitals to show that 
 the constitutional provision was not in said respect com- 
 plied with. 
 
 That as the city had the power to comply with the pro- 
 vision and having asserted by said recitals that it had 
 done so, it could not dispute its own recitals to the prej- 
 udice of an innocent holder of the bonds. 
 
 As the constitution of South Dakota does not contain 
 a provision that, in case of failure to provide for the 
 special tax, the bonds should be void, the above decision 
 cannot be regarded as deciding that bonds issued without 
 such a provision as a sinking fund or an annual tax, de- 
 clared to be void by the constitution in case of failure so 
 to provide, would be still valid if they contained recitals 
 which alleged the performance of the constitutional re- 
 quirements. 
 
 It is to be doubted that the courts would declare such 
 bonds to be valid in case of such failure, no matter what 
 recitals they contain in the face of the express language 
 making them void. 
 
 § 130. Taxation of bonds.— Usually municipal bonds 
 and other evidence of debt are not taxed by the munici- 
 pality issuing them, nor are bonds issued bv the State 
 
 1S7
 
 § 140 MUNICirAL BONDS. [CII. XI. 
 
 usually taxed. The reason, the writer presumes, being 
 that as State and municipal bonds are issued bearing a 
 low rate of interest, if taxed like other projjerty by the 
 municipality issuing them, they would not find a ready 
 sale, if a sale at all, at a low rate of interest, therefore it 
 has be(>n the custom not to tax them, but there can be 
 no doubt that they are subject to a tax like all other 
 property,^ unless expressly exempt from taxation by 
 legislation, as is now the case in a number of the 
 States. 
 
 In the case of The City Council of Augusta v. Dunbar, 
 50 Ga. 3S7, where it appeared the city authorities had 
 levied a tax, under its general power to tax, upon bonds 
 issued b}^ the State of Georgia, the court set the tax 
 aside and held that the State ought not to be presumed to 
 have granted to a municipal corporation, without plain 
 words showing the grant, a power of taxation to depre- 
 ciate the State securities, when to do so would be to do 
 what the State itself ought not to be presumed to have 
 done in the absence of clear language so declaring. 
 
 In another case in the same State,^ the court held that 
 a statute which authorized the levy and assessment " upon 
 the taxable property of a State," did not authorize the 
 levy of a tax on the bonds issued by the State when like 
 words, in other statutes, had not been construed to in- 
 clude State bonds. 
 
 §140. Where bonds must be taxed. Bonds out of the 
 State cannot bo assessed against a resident, as they are to 
 be treated as property where they are kept.^ 
 
 Mr. Justice Field, in a case in the United States Supreme 
 Court,'* said : "Public securities consistingof State bonds 
 and bonds of municipal bodies ... by general usage have 
 acquired the character of and are treated as property in 
 
 1 C'hampaigne Co. Bk. v. Smith, 
 7 Chio, 42 ; People v. Home Ins. 
 Co.,29Cal. 533. 
 
 See, liowever, Macon v. Jones. 67 
 Ga. 489, where it was lield tliat a 
 power to tax all i)roperty witliin its 15 "Wall. 323 
 limits did not authorize c city to 
 tax its own bonds. 
 188 
 
 - :MilIer v. Wilson, 60 Ga. 505. 
 
 •' Duncan v. County Court, 69 Mo. 
 454; Desty on Taxation, Vol. 1, p. 
 56. 
 
 * State tax on foreign held bonds,
 
 CH. XI.] MUNICIPAL PAPER PAYABLE IN GOLD. § 1^0 
 
 the place where they are found, though removed from the 
 domicil of the owner." 
 
 The tax on the bonds cannot be deducted from the 
 interest on the bonds and the balance only paid, as was 
 attempted by the city of Charleston, S. C, which passed 
 an ordinance directing that its bonds should be taxed and 
 the amount of the tax be deducted from the interest 
 due on the bonds so taxed. 
 
 The United States Supreme Court^ held that this or- 
 dinance was unconstitutional, as it impaired the obliga- 
 tion of the contract, which the city made with the holder 
 of the bonds to pay a certain rate of interest ; that if the 
 taxes were deducted from the interest the rate would be 
 lowered, and the contract therefore impaired. The court 
 intimated that a municipal corporation might tax its own 
 bonds, but the implied power to do so did not enter into 
 the contract to pay the interest, and was not a part of the 
 contract ; that an express contract to pay the interest 
 could not contain an implication or consist with a reserva- 
 tion directly contrary to the words of the instrument. 
 
 A municipal corporation cannot tax bonds held by a 
 non-resident, if the bonds are also out of the State,''^ but 
 if the bonds are within the State, although the owner is a 
 non-resident, they are subject to taxation. 
 
 In Fidelity, etc. Deposit Co. v. Scranton, 102 Pa. St. 
 ?>S7, it was held that a statute which authorized "any 
 borrower " to contract to pay the taxes of the loan and 
 interest, applied to municipal corporations ; that such an 
 agreement T)y the city of Scranton was valid ; that in 
 issuing and selling its bonds it was a " borrower." 
 
 1 Murray v. Charleston, 96 U. S. 1 ^ Cleveland, P. & A. R. R. Co. v, 
 432. I Penn., 15 Wall. oOO. 
 
 189
 
 CHAPTER XII. 
 
 SALE OF BONDS — SALE BELOW PAR — USURY — WHAT THE 
 HOLDER IS CHARGEABLE WITH — BOUND BY ALL THE 
 PAPKR DISCLOSES. 
 
 Section. 
 
 14I~-Sale of boiuls— Usnallj' sold 
 at jmblic sale, but may be 
 sokl at private sale, unless 
 prohibited — Right of bid- 
 ders. 
 
 142 — Transaction sometimes re- 
 garded as a loan — Often 
 as a sale of chattels. 
 
 143 — Municipal corporation may 
 pay commission to a 
 broker — In New York 
 State cannot pay to any 
 one else. 
 
 144 — Delivery of bonds — What 
 officers may make de- 
 livery — If ofReers make 
 delivery without author- 
 ity, when corporation 
 bound. 
 
 145 — Sale below par — What 
 " Par ■' means — When 
 bonds may be sold below 
 par. 
 
 146 — Sale l)elow par prohibited — 
 Iliglits of subsefjueut in- 
 nocent holders. 
 
 1 17 — Cases wliere sale below par 
 was lield not to affect tlie 
 bonds in hands of inno- 
 
 Section. 
 
 cent purchasers — Rights 
 of original purchasers. 
 
 148 — Usury delined — Effect on 
 bonds — States where us- 
 ury renders void paper 
 affected in all hands. 
 
 149 — Synopsis of the usury laws 
 of the various States. 
 
 150 — Holder of municipal paper 
 must at his peril ascertain 
 authority of corporation to 
 issue it — Bound to inspect 
 all autliority referred to in 
 the paper, and bound by 
 all he might have learned. 
 
 151 — Purchaser nuist examine the 
 recortls — Bound by all he 
 miglit have learned — Cases 
 illustrating the doctrine — 
 Wlien purchaser excused. 
 
 152 — Purchaser need not go be- 
 hind the records. 
 
 153 — Purchaser chargeable with 
 all defects the bonds or 
 other paper disclose — 
 Bound by all he might 
 have learned. 
 
 154 — Same — Cases illustrating the 
 doctrine. 
 
 g 141. Salo of bonds— Public and private sale.— The 
 
 customary mode of disposing of Ixnids by a municipal 
 
 corporation i.s to advertise them for sale in some paper 
 
 devoted to the pul)hVation of financial news and in the 
 
 local papers soliciting bids for tliom, but unless the statute 
 
 or ordinance pursuant to which they are issued, or some 
 190 J ^
 
 CH. XII.] 
 
 SALE OF BONDS. 
 
 § 142 
 
 provision in the charter of the corporation, or some gen- 
 eral law, directs that they be sold at public sale, they 
 may be sold at private sale or through an agent. ^ 
 
 When the bonds are advertised for sale and bids solic- 
 ited and proposals are received, the contract is not com- 
 plete until the municipal corporation has accepted one of 
 the proposals, and it is not liable in damages for refusing 
 to accept an offer, though it be the highest regular offer 
 made.^ 
 
 And after the proposal is accepted and a deposit is made 
 as an evidence of the good faith of the bidder, he need 
 not take the bonds if they are for any reason invalid, and 
 may recover his deposit.^ 
 
 Aftc^r the contract is completed the purchaser may com- 
 pel the delivery of the bonds in an action for specific 
 performance, or sue for datnages, if the bonds are other- 
 wise disposed of without his consent and to his loss. If 
 the bonds are illegal, or irregularly issued, and for this 
 reason not accepted or delivered, it is jDresumed the suc- 
 cessful bidder could not recover damages from the corpora- 
 tion, because the corporation had no authority to sell void 
 bonds, or bonds irregularly issued, and the purchaser had 
 no intention to purchase such. 
 
 § 142. Transaction sometimes regarded as a loan — Also 
 as a sale. — The transaction between the purchaser direct 
 from the municipal corporation, although in appear- 
 ance a sale of bonds, is held in some cases to be a loan,* 
 the purchaser loaning the money to the corporation and 
 receiving from it as security its negotiable bonds, but 
 in a number of cases it is held that the transaction is a sale 
 of the bonds as fully as if they were chattels. 
 
 In Memphis v. Brown, 1 Flip, ISS, Emmons, J., said : 
 
 " These corporation securities under seal, made pa^'able 
 to bearer and intended for sale in the market, are negoti- 
 
 1 Blanton v. McDowell Co., 110 
 N. C. 532. 
 
 - Coquai-d v. School Dist. of Jop- 
 lin. 46 Mo. App. G. 
 
 In this case the notice invitinsr 
 
 bids reserved the right to reject 
 any bid. 
 
 ^ Coffin V. Indianapolis, oO Fe<l. 
 Rep. 221. 
 
 ■* Town of Iloag V. Greenwicli. lo3 
 N. Y. 152. 
 
 191
 
 § 143 MUNICirAL BONDS. [CH. XIT. 
 
 able in as ample and as full a sense as the circulating 
 nicdiuni of the country.'" 
 
 He then cited a large number of cases, and of these he 
 says : 
 
 '' Many go further and decide that these bonds are to 
 1)6 deemed essentially chattels and things in esse, and 
 not mere choses in action. 
 
 ''This has been done as often as exigencies have re- 
 quired it. " 
 
 In Griffith v. Burden, 35 Iowa, 143, the court said : 
 
 " The authority to sell the bonds in the market is an 
 incident attendant upon and growing out of the power 
 to issue them. . . . And it follows that the right and 
 title of the first purchaser directly from the municipality 
 or corporation is as perfectly and fully enforced and pro- 
 tected as if he were a third person buying the bonds in a 
 .subsequent market sale. 
 
 '• The character of the chattel attaches to them." ^ 
 
 § 143. 3Iay pay commissions to broker. — A municipal 
 corporation has the authority to employ brokers to sell 
 its bonds, and agree and pay for such services such 
 compensation as is usually paid for like services by other 
 corporations or persons who employ brokers.^ It has 
 been held in New York that when the person employed 
 is not a broker, but merely a person to assist the munici- 
 pal officers to sell the bonds, and therefore could give no 
 services other than devolved on th(^ municipal officers, 
 the right to employ such persons will not bo implied as 
 incidental to the sale of the bonds. ^ Putman, J., in the 
 case cited, dissented from the opinion of the majority, and 
 held that so long as the person was employed to sell the 
 bonds it made no difference whether he was a broker or not. 
 
 In a recent case in California,* the court held a con- 
 tract by a county board to pay a commission to be void, 
 
 1 Memphis v. Bethel, 17 S. W. | to be done it authorizes all that is 
 K- 191. ! necessary for its performance." 
 
 - Brownell V. Town of Greenwich, 1 » ^i-ij^ytj-ojjg v. Village of Ft. 
 114 X. Y. 519; Mayor etc. of Edward. 84 Hun, 26 
 N. Y. V. Sands. 105 N. Y. 210, 218. I * Smith v. County of Los Angeles, 
 Tlie court in the former case said = ' 99 Cal. 628. 
 '• Wlien a statute commands an act i 
 192
 
 CH. Xir.] SALE OF BO^'DS. § 144 
 
 but in this case the statute did not authorize the hoard 
 to sell the bonds, but did the treasurer of the county with 
 consent of the board, and expressly provided that the 
 bonds should be sold to the highest bidder after advertis- 
 ing bids for the same. 
 
 When, however, the statute pursuant to which the bonds 
 are issued, or some general statute, or the ordinance, or 
 resolution providing for their issue prohibits the sale of 
 the bonds for less than par, then a contract to pay a com- 
 mission will be invalid,^ because the payment of a com- 
 mission will reduce the proceeds received from the sale 
 balow par, but if the agreement in such a case is that the 
 commission shall be paid out of the premiums received 
 from the sale of the bonds it would seem legal, or if the 
 bonds sell above par, a commission may be allowed. 
 
 § 144. Delivery — What officers may make. — The 
 bonds are usually delivered by some officer of the cor- 
 poration acting under the authority of the legislative 
 board, or some of its committees, and when they are 
 delivered by an officer of the municipality without author- 
 ity and he should approjiriate the proceeds, the holder 
 would have no right to enforce payment,^ because a munic- 
 ipality is not liable on bonds stolen and put on the market 
 l)efore they were issued by the municipal corporation, even 
 in the hands of a bona fide holder ;^ but it has been held 
 
 i Hunt V. Fawcett ct al , Co. ct al. (53 N. Y. CM), in speakiiij; of 
 Com'rs, 8 Wash. o90 : 36 P. R. 318; tho implied authority of an agent 
 Whelen's Appeal. 108 Pa. St. 102 ; to deliver or put in circulation a 
 Village of Ft. Edward v. Fish, 33 negotiable instrument, said : '"But 
 N". Y. S. 784. j this authority is not implied from 
 
 2 Poi-tsmouth Savings Bank v. the fact alone that the paper is in 
 Village of Ashley, 91 Mich. 670. In hands other than those of him who 
 this case it appeared the president is to be bound, but from that fact 
 and clerk of the village were au- joined with tliis otlier fact, that it 
 thorized to execute the bonds, but has been by him intrusted to those 
 not to deliver them, or sell thom, hands for the jiurpose and witli llie 
 they without such authority de- intent that it sliall go into use and 
 livered the bonds to the president circulation. . . .'' 
 of a railway company without con- 1 ^ German Sav. Bank, v Vilhige 
 sideration. In a suit on the bonds of Suspension Bridge, 73 llun. .'iOO. 
 by a ?>ou«yt(Ze holder, the court held I See, however, United States v. 
 the bonds invalid. Cook, 12 Blatchf. \0. 
 
 The court in Ledwich v. McKini I 
 
 13 193
 
 § 144 MUNICIPAL BONDS. [CH. XTI. 
 
 that wliero tho treasurer of a city, who had a large num- 
 ber of negotiable bonds lawfully in his hands, embezzled 
 the bonds and coupons, absconded and appropriated tlie 
 proceeds thereof to his own use, that tho city was liable 
 to the bona fide holder of such bonds. ^ 
 
 In this case the charter of the city required that the 
 bonds should be issued and sold only on the concurrence 
 of three members of the board of finance, and the court 
 intimated that had not the agreed facts in the case ex- 
 cluded this requirement its decision would have been con- 
 trary to the one rendered. 
 
 A municipality would perhaps be held liable on its bonds, 
 even though the proceeds of a particular issue were stolen, 
 if it had been the custom for a certain otificer to receive the 
 proceeds of and make delivery of its bonds to the purchas- 
 ers thereof without special directions, and in the instance 
 when the proceeds were stolen, the purchaser had dealt 
 with such officer or officers and paid to him or them the 
 purchase price of the bonds and had received the bonds 
 in return, and there was nothing in the charter or ordi- 
 nance relating to the issue of the bonds which required the 
 ap])roval of some other officer or body to the delivery. In 
 such a case the municipality would be held to be estopped 
 l)y the former course of dealing in such matters to setup 
 the fact that tho bonds were not in fact, in this particular 
 instance, authorized to be delivered by it. 
 
 Two things must concur to create an estoppel by which 
 an owner is prevented from asserting title to and is de- 
 prived of his property by the act of a third person with- 
 out his assent. 
 
 1st. The owner must have clothed the person assum- 
 ing to dispose of the property with apparent title to author- 
 ity to dispose of it ; 
 
 2d. The pen-son alleging the estoppel must have acted 
 and parted with value upon the fact of such apparent 
 ownership or authority, so that he will be the loser if the 
 ai)pearances to which he trusted are not rcal.^ 
 
 When the delivery is conditional the condition will be 
 
 ^ Cooper V. Mayor of Jersey City, I 2 Bernard v. Campbell, 53 N. Y. 
 44 N. J. L. 634. ' | 456. 
 
 194
 
 CH. XII.] 
 
 SALE or BONDS. 
 
 § 14/ 
 
 binding upon all who are cognizant of it or with notice 
 chargeable of it.-^ 
 
 § 145. Sale below par — What is meant by the term 
 *' par." — The term is extensively used in the commercial 
 world and means value for value. " Par value," means 
 pound for pound, or dollar in money for every dollar of 
 security.^ 
 
 A bond or other security is sold at par when it brings 
 its face value, including the interest due, and when it 
 brings more or less than such nominal value, it is sold 
 above or below par. When the exchange is made between 
 the States or different countries, par value is held to be the 
 equivalency of a certain amount of the currency of one 
 country in the currency of another.^ 
 
 An agreement to sell at their face value, bonds with 
 several months' accrued interest, is an agreement to sell 
 for less than par.* 
 
 When the statutes or ordinances do not prohibit the 
 sale of bonds below par it is now generally held that the 
 municipality may sell its bonds for less than par. 
 
 In several early cases,^ it was held that such a transac- 
 tion was usurious, and that the bonds were therefore void. 
 
 And in another case, where warrants were given at the 
 rate of seventy-five cents on the dollar to pay a judg- 
 ment, they were held to be usurious and void.^ 
 
 The present position of the courts is to regard the sale 
 of bonds as a sale of chattels, and whatever they will 
 bring in the market is their fair market value. 
 
 In the case of the City of Memphis v. Betchel, 17 S. W. R. 
 191, it appears that tlie bonds were sold by the city at the 
 rate of eighty-five cents on the dollar. 
 
 The bonds bore interest at the rate of six per cent per 
 
 1 Thomas v. ]\Iorgan Co., SO 111. 
 496 ; Com'rs Knox Co. v. Nichols, 
 14 Oliio, 2G0. 
 
 - Dclaficld V. Illinois 2 Hill (N. 
 Y.) ir,8. 
 
 3 Bouv. L. Diet. 
 
 •» Village of Ft. Edward v. Fish, 
 33 N. Y. R. 784 ; Hunt v. Fawcett, 
 8 Wash. 396. 
 
 ■'' Town of Danvillo v. Southre- 
 land, '20 Gratt. (Va.) 550; Lynch- 
 hurg V. Norwell, 20 Gratt. (Va.), 
 601 ; see also Coinrs of C. v. A. N. 
 C. R. Co.. 77 N. C. 289. 
 
 « Clark V. Des Moines, 19 Iowa, 
 199. 
 
 195
 
 I 146 MUNICIPAL BONDS. [CH. XII. 
 
 aiiiuini. The court held that the sale was not usurious 
 and said : 
 
 "It is fully established by a great preponderance of 
 authorities, that there is a marked difference between in- 
 dividual securities and the bonds of municipal corporations 
 in their origin, character and purpose. 
 
 "The bonds of municipal corporations are now recog- 
 nized as negotiable in as full and complete a manner as 
 bank bills or the national currency of the country." The 
 court then cited authorities to show that they are now re- 
 garded as chattels, and continuing, said : 
 
 " Assuming that these authorities establish the entire 
 negotiability of the city bonds and the right of the city 
 officers to sell them in the market as chattels, it is clear, 
 that under the authority to sell them at their value, al- 
 though that might be a greater discount than legal inter- 
 est, the transaction would be neither usurious nor illegal, 
 and therefore the city can neither raise a question of usury 
 or scaling." ^ 
 
 That the bonds of a municipal corporation may be sold 
 by it for less than par, must be regarded as the general 
 understanding of law makers of the States as well as the 
 officers of the municipalities, because, when it is desired 
 to prevent such sale, that fact is incorporated in the 
 enabling act or in the ordinance or resolution providing 
 for the issue of the bonds. ^ 
 
 § 14C). AVhen sale below pjir prohibited — Rights of 
 subsequent purcliasers. — Usually the statute authorizing 
 the issue of the bonds, or the ordinance or resolution of 
 the corporation providing for the issue of the bonds, con- 
 tains a i)rovision that the bonds shall not be sold for less 
 than par, and it has been stated by several writers that 
 such a sale will render the bonds void even in the hands 
 of bona fide holders, and the two Virginia cases and the 
 Iowa case above referred to are cited as authorities. 
 After a very careful investigation of this subject we be- 
 lieve the law to be that bonds sold below par are not 
 
 i.See also Griffith v. Borden, S.'j j 2 gge, however, the subject of 
 Iowa, 143 ; Orchard v. School Dist. j \Js,\xx\' , post , % 148. 
 No. 70 14 Neb. 378. 
 196
 
 CH. XII.] SALE OF BONDS. § 147 
 
 affected by the provision, in either the enabling act or 
 some general statute, or in the resolution or ordinance 
 of the corporation providing that they shall not be sold 
 for less than par, when such bonds have passed into the 
 hands of a third person, who is a bona fide holder of them 
 without notice, unless the statute expressly provides that 
 if the bonds are sold for less than par they slicdl he void} 
 
 Although the first purchaser cannot so buy them, as he 
 must take notice of the prohibition,^ and therefore cannot 
 purchase them for less tlian par so as to recover on them 
 more than he paid, and may be compelled to surrender 
 the bonds or return the excess,^ yet if he obtain the bonds 
 for less than par and they pass into the hands of a bona 
 fide holder, the latter holds them free from such latent de- 
 fect. 
 
 The disobedience of instructions or fraud of the munici- 
 pal officers in disposing of the bonds cannot affect them 
 in the hands of the bona fide holder, undertime well-known 
 rule that irregularities and misconduct on the part of 
 municipal officers do not affect the title of a bona fide 
 holder of negotiable instruments. 
 
 § 14Y. Cases wliere sale below par was held not to 
 affect the bonds. — But a few of the State courts have 
 rendered opinions on this point, and those which have are 
 referred to. 
 
 The case of Whelen v. City of Pittsburgh, 108 Pa. St. 
 102, is one in point. 
 
 In this case it appears the city was directed by the act 
 under which the bonds were issued to sell the same, but 
 " said bonds shall not be sold for less than par and ac- 
 crued interest, but the councils may allow a reasonable 
 compensation for the sale or negotiation of the said 
 bonds." 
 
 The court held that such a compensation could not be 
 allowed to the purchaser of the bonds as in effect would be 
 a sale for less than par, and that a contract providing 
 
 1 See subject of Usury, § 148 
 et seq. 
 
 2 Atchison v. Butcher, 3 Kan. 
 104-121. 
 
 3 Village of Ft. Edward v. Fish, 
 33 N. Y. S. 784. 
 
 197
 
 i^ 147 MUNICIPAL BONDS. [CH. XII. 
 
 for the sale of the bonds embracing an agreement for 
 such compensation was void and the same was upon the 
 aj)plication of taxpaj^ers by a bill m equity annulled. 
 Some of the bonds had been delivered to the purchasers 
 under the contract, and by them sold to innocent per- 
 sons. The court held that the bonds in the latter's hands 
 were not affected by the sale at less than par.^ 
 
 In the case of Sherlock v. Winnetka, GS 111. 530, where 
 bonds had been sold below par contrary to law, the 
 court held that while such sale would render the mem- 
 bers of the body selling the bonds personally liable, yet it 
 would not render the bonds invalid in the hands of an in- 
 nocent holder. 
 
 In a case in Kansas^ the court held that, between the 
 parties, the bonds would be affected by a sale below par, 
 but held '' that if the bond had been negotiable and had 
 passed into the liands of an innocent holder the defence 
 could not have been made."^ 
 
 In a case m New York, Delafield v. The State of 
 Illinois,'^ the Court of Appeals held that bonds of the 
 State of Illinois sold for less than par by the agent of that 
 State, contrary to the statute under which they were is- 
 sued, which provided that the bonds were " not to be sold 
 for less than their par value,' were unaffected by such sale 
 in the hands of a bona fide holder. The court said : ' ' They 
 are therefore binding to the full amount upon the State, 
 in faitli and honor, wherever they are presented by a 
 bona fide holder, whatever may be the original equities 
 between the State and Delafield," the purchaser. The 
 court held that the original purchaser, who had notice 
 of the prohibition, could be compelled to return all the 
 bonds he had in his possession, or under his control, which 
 he purchased below par. 
 
 The bonds mentioned in the above case were sold on 
 credit without interest, while the bonds bore interest from 
 
 1 See, also, to same effect Wil- 104-121. Rpo, also, to same ef- 
 liamsport v. Com'rs, 84 Pa. 487 : feet, Griffith v. Borden, 35 Iowa, 
 Lawrence Co. v. R. R. Co., 32 Pa. 143. 
 
 144. 309 Wend. 192. See, also, 22 
 
 2 Atcliinson v. Butcher, 3 Kan. Weud 354. 
 
 198
 
 CH. XII.] SALE OF BONDS. § 148 
 
 their date, and the court held this to be a sale for less 
 than par. 
 
 It is lield to be a sale of bonds below par to sell the 
 bonds nominally at par, and then to pay a commission to 
 the purchaser, and a contract so to do is void where the 
 statute directs that the bonds be sold for not less than par. ^ 
 
 The United States Supreme Court, in one case, where 
 bonds were given to a railroad and the statute provided 
 that the bonds " should in no case or under any pretence 
 be sold or assigned or transferred by the said railroad com- 
 pany at less than par value thereof," and the company 
 sold them for about €(> 2-3 cents on the dollar, held the 
 bonds in the hands of a bona fide holder to be valid 
 and unaffected by such sale.^ 
 
 § 148. Usury — Effect of on bonds. — Usury is the tak- 
 ing of a greater compensation for the use of money, or 
 for the forbearance to compel the payment of money, 
 than allowed by law. 
 
 Blackstone^ says that usury is "an unlawful contract 
 upon a loan of money to receive the same again with ex- 
 orbitant increase." 
 
 To be usurious the rate of interest must be greater 
 than that allowed by law of the place of payment as well 
 as the place where made. 
 
 In the following >States the debt, if the contract is 
 usurious, is void in all hands, viz. : 
 
 Arkansas, by the constitution, art. 10, sec. 13, which 
 provides that all bonds, bills, notes and all other contracts 
 at more than ton per cent arc usurious. 
 
 New York, by statute : The debt, if the rate exceed six 
 per cent, is void. 
 
 North Dakota : Forfeits the debt, but docs not affect 
 negotiable paper in the liands of a bona fide holder. 
 
 Minnesota : The de])t is forfeited if the rate exceed ten 
 per cent, but negotiable paper in the hands of a bona fide 
 holder is not affected. 
 
 Oregon : The debt is forfeited to the school fund, but a 
 
 1 Hunt V. Fawcett, 36 Pac. R. I 83. See, also, "\Vf)od.s v. Lawrence 
 3 IS;. Co., 66 U. S. 380. 
 
 2 Mercer Co. v. Ilackett, 1 Wall. , 3 bi. Com. 156. 
 
 199
 
 §148 
 
 MUNICIPAL BONDS. 
 
 [CH. XII. 
 
 bona fide holder may recover from his assignors or the 
 usurer. 
 
 "Whether bonds of municipal corporations in the above- 
 named States, if sold at such an amount below i)ar as to 
 make the rate of interest usurious, will be vcjid is still 
 an open question, but the opinion of the writer is, they 
 would be usurious.^ 
 
 If the bonds are to bo regarded as a chattel and not 
 as a loan, then they would hot be usurious.^ Or if the 
 statutes which make the forfeiture apply only to private 
 corporations and individuals, and not to municipal corpo- 
 rations, the bonds would not be affected, as the courts have, 
 in several cases, held that an act wliich affected ' ' corpora- 
 tions " did not apply to municipal corporations.^ 
 
 In those States which have no usury laws* a sale below 
 
 1 In Nalle v. City of Austin, 22 per annum and the discount was 
 
 only five per cent of their face 
 value. Therefore the bonds are 
 not invalid on that account." 
 
 2 Geo § 145, supra. 
 
 3 The main purpose of the organ- 
 ization of a city or town is i)oliti- 
 cal, and the inhabitants do not, like 
 the members of a private C(jrpora- 
 tion, derive private or personal 
 riglits under the act of incorpora- 
 tion. In common parlance towns 
 and cities are not known as corpo- 
 rations, but as guasi-corporations, 
 and therefore a statute applicable 
 to corixjrations or the officers there- 
 of will not in general include towns 
 or cities if there are no other or 
 additional words, indicating an in- 
 tention to include them. Linehan 
 v. Cambridge, 109 Mass. 212. See, 
 also, State v. Newark, SON. J. L. 
 5."i0-8 : also "Williams v. Nashville, 
 15 S. W. R. 3G4. 
 
 * The following States have no 
 usury laws : Arizona, California, 
 Coloradcj, Florida, Maine, Montana, 
 Utah, Washington and Wyoming. 
 Massaclmsetts and Michigan have 
 practically none. 
 
 S. W. R. CG8, this was an action to 
 cancel certain bonds to restrain the 
 issue of others. 
 
 It was sought to cancel bonds 
 which were sold for ninety-five 
 cents on the dollar. It appeared that 
 the proiKisition to issue the bonds 
 submitted to the people contained 
 no reference as to what i)rico they 
 would bo disposed of. Before tlie 
 election and after the ordinance 
 ordering the election had been 
 adopted, the council passed an 
 ordinance providing tbat the bonds 
 should not be sold for less than par, 
 but before the sale of the bonds this 
 last ordinance was repealed. The 
 court said : 
 
 "The proposition submitted at 
 the election did not limit the rate 
 of interest thj bonds were to bear. 
 
 " The ([uestion of discount in such 
 a case in its final analysis is a mere 
 matter of interest, and ought in no 
 rc?pect to affect the validiti/ of the 
 bonds, provided the discount and 
 the interest expressed do not make 
 the rate usurious. 
 
 "In this case the bonds bore inter- 
 est at the Hw rate of five per cent 
 '200
 
 Cri. Xir.] SALE OF B0ND3. § 149 
 
 par, it would seem, cannot affect the bonds in the hands 
 of innocent holders, unless the statute which provides 
 that the bonds be sold for par makes them void, hy ex- 
 press tvords, if sold for less. The penalty for usury in 
 most of the States is but a forfeiture of the excess of the 
 interest, or of the whole interest, as will appear from the 
 following synopsis of the usury laws of the States. 
 
 § 14:0. Synopsis of the usury laws of the States. — 
 Alabama : A rate not exceeding eight per cent may be 
 taken; if more, then all interest is forfeited and the princi- 
 pal only can be collected. Civil Code, sees. 1750-5i,2ST9. 
 
 Arizona : No usury law ; any rate agreed upon. Eev. 
 St. sec. 21(32. 
 
 Aikansas : Ten jDer cent, if more stipulated for, paper 
 void. Const, art. 19, sec. 13. 
 
 California : No usury law ; any rate agreed upon. 
 Civil Code, sec. 1918. 
 
 Colorado : May stipulate for more than eight per 
 cent. No forfeiture. Mills' Anno. Colo. Statutes (1891), 
 sec. 2253. 
 
 Connecticut : Legal rate six per cent. No forfeiture, 
 but only the legal rate recoverable. Conn. Gen. St. 
 (1888), sees. 2941-3. 
 
 Delaware : Legal rate six per cent, if more taken 
 loaner liable to forfeit amount of loan. Del. Rev. Code, 
 ch. 03, sec. 1. 
 
 District of Columbia : Ten per cent may be stipu- 
 lated for. Usury forfeits interest only. 
 
 Florida : Legal rate eight per cent ; no usury 
 laws. 
 
 Georgia : Legal rate seven per cent, but eight per 
 cent may be bargained for ; greater rate, excess of in- 
 terest (Hily forfeited. Georgia Code, 2050-57. 
 
 Idaho : Legal rate ten per cent, may agree for rate as 
 high as one and a half per cent per month. Forfeiture 
 for higher rate is at rate of ten per cent. 
 
 Illinois : Rate by agreement can be eight i:)er cent. 
 
 Penalty for usury is forfeiture of interest. S. & C. 111. 
 
 Annot. St. 1885, ch. 74, sec. 4-11. 
 
 Indiana : As much as eight per cent can b(^ agreed 
 
 201
 
 § 149 MUNICIPAL BONDS. [CH. XII. 
 
 upon. AVhen no stipulation rate six per cent. Forfeiture 
 is of excess above six per cent. 
 
 Iowa : Ten per cent may be agreed upon. Forfeiture 
 at rate of ten per cent to school fund for usury. 
 
 Kansas : May take as high as ten per cent by agree- 
 ment. 
 
 Forfeiture of all excess over that rate. Kan. G. S. 
 IS^O, sees. 341)8-0. 
 
 Kentucky : Legal rate six per cent. Usury forfeits 
 excess of interest. G. S. ch. C)(>, sees. 1-4. 
 
 Louisiana : Eight per cent may be taken. If more 
 taken does not affect the paper, but the excess may be 
 recovered. Rev. Civil Code, arts. 1939, 2923. 
 
 ]\Iaine : No usury laws. Rate of interest when no 
 agreement six per cent. Rev. St. ch. 45, sec. 1. 
 
 Maryland : Six per cent legal, if more taken excess 
 forfeited. G. L. 1888, art. 40, sees. 1-6. 
 
 Massachusetts : Rate, when no stipulation, six per 
 cent. Bonds of corporations not to bear more than seven 
 percent interest. Pub. St. 1882, ch. 77, sec. 3. Parties 
 may stipulate for any rate except for sums less than $1,000, 
 the rate for such sums to not exceed eighteen per cent. 
 Sup. to P. S. 388, sec. 1. 
 
 Michigan : Parties may agree up to ten per cent. 
 Paper not affected, but the excess of interest not re- 
 coverable. Howell's Anno. St. 1594-96. 
 
 Minnesota : May stipulate for ten per cent. Usury 
 avoids the contract. Innocent purchasers of negotiable 
 paper protected. Kelly's Stat. 2089, 2092. 
 
 Missouri : As high as ten per cent may be stipulated 
 for. Usury forfeits all interest, and renders void all mort- 
 gages and pledges of personal property. Laws 1801, p. 
 170. 
 
 Montana : Parties may stipulate for any rate ; legal 
 rate when no agreement, ten per cent. Comp. Stat. 
 12368. 
 
 Nebraska : Ten per cent may be contracted for. 
 Usury forfeits all interest. Consol. Stat. 1891, sec. 
 2021-2.-.. 
 202
 
 CH. XII.] SALE OF BONDS. § 149 
 
 Nevada : May contract for any rate, when no agree- 
 ment, then ten per cent. G. S. 4900-4, 
 
 New Hampshire : Legal rate six per cent. Contract 
 not invalidated if more taken, but the person receiving 
 interest above the legal rate forfeits three times the 
 amount of the excess. Pub. St. 1891, ch. 203. 
 
 New Jersey : Legal rate six per cent. Usury does not 
 avoid the paper, but forfeits all interest and costs. Act 
 of Feb. 26th, 1878. Usurious contracts made in Mon- 
 mouth County void. Rev. St. pp. 519-20. 
 
 New Mexico : May stipulate for twelve per cent. Usury 
 forfeits doul)le the am.ount of excess of interest above 
 legal rate. Comp. Laws (1884), 1T3G-9. 
 
 New York : Legal rate six per cent. Usury avoids the 
 contract. No corporation, however, can interpose the 
 defence of usury in an action. N. Y. Rev. St. (8th ed.), 
 Vol. 4, pp. 2512-15. Advances of $5,000 and over on 
 warehouse receipts, bills of lading, certificates of deposit 
 and stocks, bills of exchange, bonds or other negotiable 
 instruments pledged as security may bear any rate of 
 interest agreed on in writing. Laws 1882, ch. 237. 
 
 Every banking association and every private banker 
 doing business in New York may charge six j^ercent, and 
 if more charged the whole interest shall be forfeited, and 
 if paid, double the amount may be recovered. Laws 1882, 
 sec. G8. This includes a partnership.^ 
 
 North Carolina : Legal rate six per cent. Usury for- 
 feits the entire interest. 
 
 North Dakota : Legal rate seven per cent, but twelve 
 may be taken if agreed upon in writing. The paper 
 must show the amount agreed upon to be received for 
 use by the borrower and separately the rate of interest to 
 be paid. Usury renders the contract void, except negoti- 
 able paper in the hands of bona fide holders who are not 
 to be affected. Commission beyond the rate of interest 
 maybe paid to a broker, but the interest and commission 
 together must not exceed twelve per cent. Laws of N. D. 
 1890, ch. 184 and ch. 124. 
 
 1 Perkins v. Smith, 116 N. Y. 441. 
 
 203
 
 § no MUNICIPAL BONDS. [CIT. XII. 
 
 Ohio : Rate cannot exceed eight per cent. Excess over 
 legal rate may he deducted. Negotiable paper in the 
 hands of bonajide endorsers is protected. Rev. St. (S. & 
 B.) sees. 3179-83. 
 
 Oregon : Rate of interest not to exceed ten per cent. 
 If contract usurious the entire debt is forfeited to school 
 funds. A. bona fide assignee of a usurious contract may 
 recover against his transferrer or the usurer the full 
 amount paid him. Hill's Oreg. A. L. 1892, sees. 3r)8T-9-l. 
 
 Pennsylvania : No more than six per cent can be 
 taken ; if more, then the excess is forfeited. Contract 
 not affected. Bona fide holders of negotiable paper are 
 protected. Bright, Purd, Digest," Vol. 1, 926. 
 
 Rhode Island: No usury law. When no other rate 
 agreed upon then, six per cent. Pub. Stat. 1882, ch. 
 141. 
 
 South Carolina : Parties may agree for as high as ten 
 per cent, when no agreement then seven the rate. Usury 
 forfeits all interest and costs. 
 
 South Dakota : As high as twelve per cent may be 
 taken. Usury forfeits all interest ; debt not affected. 
 Comp. Laws, sees. 3715-25 (1887), 
 
 Tennessee : No more than six per cent can be taken. 
 Usury affects the excess of interest which is forfeited. 
 Code, ch. 17. 
 
 Texas : As high as twelve per cent may be agreed 
 upon. Usury forfeits all interest ; debt not affected. 
 Sayles' Stats, arts. 2972-81. 
 
 Utah : No usury law ; if no agreement as to rate of 
 interest, then ten per cent. Comp. Laws 1S88, sec. 2119. 
 
 Vermont : No more than six per cent can be taken, 
 excess over that amount cannot be recovered. No for- 
 feiture of debt. Rev. Laws, sees. 199G, 2001, 3590 (1880). 
 
 Virginia : No more than six per cent can be taken. 
 No corporation can jjlead usury. Usury forfeits all in- 
 terest. Code 1887, sees. 2814-26. 
 
 Washington : No usury laws. If no agreement, then 
 
 the rate is ten per cent. Hill's Wash, A. St, 1891, sees. 
 
 2397-8. 
 
 West Virginia : No more than six per cent can be taken. 
 204
 
 CH. XII.] SALE OF BONDS. § 150 
 
 If more taken, the excess is alone forfeited. No cor- 
 poration can i^lead usury as a defence. Code 1891, 500. 
 
 Wisconsin : As much as ten per cent may be agreed 
 upon ; if no agreement, the rate is seven. Usury forfeits 
 all interest, but does not affect the debt. S. & B. Wis. 
 Anno. St. 1688-92. 
 
 Wyoming : No usury laws. When no agreement in 
 "writing as to rate, then the rate is twelve per cent. Rev. 
 St. sees. 1310-11. 
 
 § 150. What the holder is char!2:eahle with. — The 
 purchaser of a municipal bond or other municipal paper, 
 whether negotiable or not, and whether the authority for 
 its utterance be referred to in the paper or not, must 
 ascertain for himself the authority under which the cor- 
 poration has issued it, and if he fails so to do and it turns 
 out that it was issued without authority of law, or for an 
 unlawful purpose, or in a manner contrary to the ena- 
 bling statute, and had he investigated the law he would 
 have ascertained the fact, then the bonds will be invalid 
 in his hands, unless (except in the case of want of power) 
 the paper contains recitals which will estop the corpora- 
 tion from showing the bond to be invalid,^ or the corpora- 
 tion be otherwise estopped.^ 
 
 When the bond or other j^aper refers to the enabling 
 act, or to some resolution or ordinance of tlie corporation 
 providing for the issue of the paper, a purchaser, at any 
 time, must take notice of all the terms and conditions and 
 provisions of the statute, ordinance or resolution so re- 
 ferred to, and he is chargeable with whatever he would 
 have learned had he inspected them. But when the bond 
 recites that it is issued pursuant to the enabling statute, 
 which is constitutional and gives the corporation author- 
 ity to issue the bonds in question, and besides the ena- 
 bling act the ordinance or resolution is referred to, which 
 does not disclose on the face of the bond that it is in con- 
 flict with the enabling act, although an examination of it 
 would disclose the fact, the bona Jide purchaser, without 
 
 1 Cify of Aurora v. West, 22 Ind. 
 8!) : Nat. Bk. of Rep. v. St. Joseph, 
 31 Fed. Rep. 21G. 
 
 2 See subject of estoppel herein, 
 gj? 193 to 21G ; 240 to 232. 
 
 205
 
 § l.")! MUNICIPAL BONDS. [CH. XII. 
 
 knowledge of the nature of the ordinance or resohition, 
 need not examine it,but it will be deemed to be in conform- 
 ity with the recited enabling act.^ 
 
 The holdc^r of bonds must, at his peril, take notice of 
 the existence and term of the law by which it is claimed 
 the power to issue such bonds is conferred, and he is 
 chargeable with notice of the statutory i:)rovisions under 
 which they were issued.^ As said by Chief Justice 
 Waite in McClure v. Township of Oxford, 94 U. S. 420. 
 
 "Everyman is chargeable of that which the law re- 
 quires him to know, and that w^liich, after having been 
 put upon inquiry, he might have ascertained by the exer- 
 cise of reasonable diligence." Where the constitution rc- 
 (piires that at the time of issuing bonds provision shall be 
 made for levying a tax to create a sinking fund for the 
 payment of the principal and interest of the bonds when 
 due, if no such provision is made the bonds are invalid in 
 the hands of a bona fide holder, notwithstanding any reci- 
 tals in them, because the purchaser is bound to know all 
 the law which affects the issue of the bonds, as well as 
 the particular law under which they are issued.^ 
 
 § 1.51. When the purchaser must examine the rec- 
 ords — "When excused. — When the enabling statute re- 
 fers to certain records, as evidence of the existence of 
 certain facts which are required to exist before the issu- 
 ance of the bonds, then the purchaser must examine such 
 records, and they, and not the recitals in the bonds, will 
 control the validity of the bonds.^ An examination of 
 the cases which, require the purchaser to examine the rec- 
 ords and ascertain for himself the existence of certain 
 facts and does not permit him to rely upon the recitals 
 in tlu'lxnid or other paper, will disclose that the condition 
 or r('(iiiir('ments were either constitutional as well as stat- 
 
 1 Risley v. Village of Howell, 04 i 3 Quaker City Nat. Bank v, Nolan 
 Fed. Kep. 4."»3; Town of Brewton |Co., 59 JVd. Rep. GGO. See §§ i:]7, 
 V. Splia, 17 S. R. GCO. 138. 
 
 2 Bank v. City of St. Joseph, 31 '\ ^ Dixon Co. v. Field, 111 U. S. 
 Fed. Rep. 216 ; Anthony v. Jasper , 84 ; Quaker City Nat. Bank v. Nolan 
 Co., 101 U. S. G93 : Francis v. Ho- Co., Vy^ Fed. Rep. GGO ; Francis v. 
 ward Co.. 54 Fed. Rep. 487. I Howard Co., 54 Fed. Rep. 487. 
 
 206
 
 CM. XII.] SALE OF BONDS. § 151 
 
 iitory, or solely constitutional,^ or the determination of 
 the existence of the facts were not left to the officers issu- 
 ing the bonds. 
 
 In the case of Town of South Ottawa y. Perkins, 94 
 U. S. 260-60, bonds were held to be void because the act 
 which authorized their issue was not properly passed by 
 the Legislature of Illinois as required l)y the constitution 
 of that State. Mr, Justice Bradley, delivering the opin- 
 ion of the court, said in part : 
 
 ' ' Not only courts, but individuals, are bound to know 
 the law and cannot be received to plead ignorance of it. 
 The holder of the bonds in question can claim no indul- 
 gence on that score and can take no advantage from the 
 allegation that he is a bona fide purchaser without 
 notice." 
 
 In the case of Dixon Co. v. Field, 111 U. S. 83, 93, the 
 court said : 
 
 " If the fact necessary to the existence of the authority 
 was b}'- law to be determined, not officially b}" the officers 
 charged with the execution of the power, but by ref- 
 erence to some express and definite record of a public 
 character, then the true meaning of tlie law would be 
 that the authority to act at all depended upon the actual 
 objective existence of the requisite fact, as shown by the 
 record, and not upon its ascertainment and determina- 
 tion by any one ; and the consetpience would naturally 
 follow that all persons claitning under the exercise of such 
 a power might be put to the proof of the fact made a 
 condition of its lawfulness, notwithstanding any recitals 
 in the instrument." 
 
 In a case in Illinois, Bissel v. Cit3'of Kankakee, 61 111. 
 249, where bonds in suit had been issued for a private 
 purpose, and the suit was brought by a bona fide holder, 
 the court, by Scott, J., said : 
 
 "The authority of a municipal corporation to issue 
 bonds is derived from public laws, and the avenues to in- 
 formation in regard to the law and ordinances of such 
 corporations being open to public inspection, the holder of 
 such securities will be presumed to have examined them, 
 
 1 See §§ 221 to 232. 
 
 207
 
 § 152 MUNICIPAL BONDS. [cil. XII. 
 
 ami to have known whether the corporation had the req- 
 uisite power to issue the bonds. He has no sucli oppor- 
 tunity in regard to private corporations. Their by-hiws 
 are not open to inspection by those who deal insecurities 
 issued by them, and hence the reason for the distinction 
 that has been taken. 
 
 '* The liolder of the bonds involved in this action had 
 every opportunity to know whether the city had any law- 
 ful right to issue them for the reason that its authority, 
 if any existed, was to be found in the public statutes, and 
 if he did not in fact examine them, as it was his privi- 
 lege to do, before buying them, he will be presumed to 
 have done so, and to have known they were issued 
 without authority of law and therefore void in the hands 
 of any holder, either \vith or without notice,'' 
 
 The purchaser of bonds is not bound by conditions which 
 are not of record or of which the statute does not speak, 
 provided he have no notice of them, as where the enabling 
 statute made no reference to conditions, and the town 
 imposed conditions which were unknown to the holder of 
 the bonds. The bonds having been issued before the road 
 was completed, and at the time the conditions were im- 
 posed, the court held the purchaser not bound by such 
 conditions.^ 
 
 § 152. Need not go behind the records. — A purchaser 
 need not go behind the record of the corporation. The 
 record of the proceedings resulting in the issue of the 
 l)onds is conclusive between the purchaser and the cor- 
 poration.^ A purchaser is not presumed to have notice 
 of private or unusual instructions^ not contained in the 
 ])roceedings relating to the issue of the bonds. As where 
 a treasurer* was authorized to sell city bonds which con- 
 
 ' Brooklyn v. Ins. Co., 99 U. S. 
 SCO. 
 
 2 First Nat. Bk. v. Concord, 50 
 Vt. 257. 
 
 3 De Vos V. City of Richmond, 98 
 Am. Dec. G40. 
 
 * Suffolk Sav. Bk. v. Boston, 149 
 
 by a city to sell its bonds and he 
 transcended the authority, it was 
 held that the purchaser was not 
 compelled to look to the records of 
 tlie council, either for the appoint- 
 ment or instructions of the agent, 
 since they were not necessarily of 
 
 Mass. 364. record. City of Indianapolis v. 
 
 Where an agent was authorized ' Skeene & Others, 17 Ind. 628. 
 208
 
 CH. XII.] SALE OF BONDS. § 153 
 
 tained a promise to pay the same at a certain date, and 
 the treasurer made a contract in writing with the pur- 
 chaser to pay a certain amount before maturity each 
 year. The bonds afterwards passed, without notice, into 
 the hands of others, and it was held that this arrange- 
 ment was not binding upon such subsequent purchasers. 
 Tlie court said of the subsequent purchasers : 
 
 " He must see, at his peril, that the bonds were legally 
 issued. Any purchaser of the bonds in question, if he 
 examined the records of the city, would see that the city 
 treasurer had full authority to issue the bonds in the form 
 in which they were issued. We do not think that he was 
 bound in the exercise of reasonable diligence to go further 
 and look for a private agreement wliich was unusual and 
 which he had no reason to suppose exists. 
 
 "The fact that such an agreement exists and is entered 
 on the records of the committee on finance cannot justly 
 be held to be constructive notice to him." 
 
 ^ 153. Purchaser chargeable with what the bonds 
 disclose. — The bona fide holder of a municipal bond is 
 chargeable with whatever defects appear upon the bond, 
 and with such notice of failure to perform the prior con- 
 dition which the recitals in the bond disclose. When 
 the recitals are such as to put the purchaser upon inquiry, 
 he is bound to pursue the same with diligence, and he is 
 chargeable with whatever defects such an inquir^^ would 
 have disclosed. 
 
 When the recitals in the Ijond are such as to estop the 
 corporation, and are made by officers upon whom the law 
 casts the duty of deciding whether or not the conditions 
 precedent have been performed, and they certify that they 
 have, then a bona fide holder can rest upon these recitals 
 and they are a protection to his title, notwithstanding 
 tliat, in point fact, the prior conditions have not been per- 
 formed and the recitals are false. When the bond dis- 
 closes on its face that there has been a failure to perform 
 the prior conditions, or if they contain notice sufficient 
 to put him upon inquiry, he is bound, as before stated, 
 by all he might have learned had he pursued the in- 
 quiry. 
 
 14 209
 
 § 153 MUNICIPAL BONDS. [CII. XII. 
 
 A case illnsti-ating tliis doctrine is tliat of McClure v. 
 Township of Oxford, K-i U. S. 420. The bonds in suit were 
 issued and bore date April 15th, 1872, and recited the act 
 pursuant to which tliey were issued, and pursuant to a 
 vote of the electors held April Stli, 1872. The act provided 
 that thirty days' notice of the election was to be given, 
 and that the act should go into effect after its publica- 
 tion in the " Kansas Weekly Commonwealth." The act 
 was not published until March 21st, 1872 ; there was not 
 thirty days' notice of the election given, between the time 
 the act went into effect and when the election was 
 held. The court held the bonds to be void for this 
 reason. 
 
 Chief Justice Waite, who delivered the opinion of the 
 court, said : 
 
 '' To be a bona fide holder one must be himself a pur- 
 chaser for value without notice, or the successor of one 
 who was. Every man is chargeable with notice of that 
 which the law requires him to know and of that which, 
 after being put upon inquiry, he might have ascertained 
 by the exercise of reasonable diligence. 
 
 " Every dealer in municipal bonds which upon their 
 face refer to the statute under Avhich tliey were issued is 
 bound to take notice of the statute and all requirements. 
 
 "... These bonds bore date April 15th, 1872, and, pur- 
 suant to the express provisions of the act, contained a state- 
 ment of the purpose for which they were issued, a re- 
 ference to the act under which they are issued, and a result 
 of the vote of the inhabitants on the question of their is- 
 suance, which is stated to have been taken April 8th, 1872. 
 No valid notice of election could be given until the act 
 went into effect, because until then no officer of the town- 
 ship had authority to designate the time or place of hold- 
 ing it. These bonds therefore carried upon their face 
 unmistakable evidence that the form of the law under 
 which they purported to have been issued had not been 
 complied with, because thirty days had not elapsed be- 
 tween the time the law took effect and the date of elec- 
 tion. 
 
 " If a purchaser may be, as he sometimes is, protected 
 210
 
 CH. XII.] SALE OF BOXDS. § 15-4 
 
 by false recitals in municipal bonds, the municipality 
 ought to have the benefit of those that are true. 
 
 ''This suit was brought upon coupons detached from 
 the bonds purchased by the plaintiff in error before ma- 
 turity, but upon their face they refer to the bonds and 
 purport to be for the semi-annual interest thereon. This 
 puts the purchaser upon inquiry for the bonds and charges 
 him with notice of all they contain." 
 
 § 154. Same. — For the reason that the purchaser is 
 chargeable with knowledge of all the defects which the 
 recitals disclose, it has been held that where the statute 
 authorized the issue of municipal bonds to be made payable 
 in not less than ten years from date, that such bonds issued 
 under such statute payable in eleven days less than ten 
 years from the date were void, even in the hands of a 
 bona fide holder, and that an inspection of the act and 
 bond together would have disclosed the defect.^ 
 
 Where a town was authorized to issue bonds in aid of 
 a railroad and the bonds were to be sold and the money 
 so raised invested in the stock of the railroad, instead 
 of selling the bonds they were exchanged for stock, 
 and the bonds recited on their face that they were given 
 " for value received in the stock of the railroad," naming 
 the railroad to be aided, the court held the bonds void 
 because on their face they disclosed the fact that they were 
 issued contrary to the terms of the enabling act, and 
 that if the purchaser had inspected the law under which 
 they were issued, which all purchasers must do, he would 
 have ascertained that fact.^ 
 
 In another case,^ where it appeared under the enabling 
 act the proposition to aid a particular railroad was sub- 
 mitted to the vote of the people and a majority decided 
 in favor of such aid, before the bonds were issued the 
 railroad voted to be aided consolidated with another, and 
 the two companies so consolidated, before the subscrip- 
 tion had been made, assumed another name. After- 
 
 ^ People Bank v. School Dist. No. 
 52, Tu Fed. Rep. 787. 
 2 Horton v. Town of Thompson, 
 
 71 N. Y. 513 ; Scipio v. Wright, 101 
 L'. 8. GO."). 
 
 8 Harshman v. Bates, 92 U. S. 
 569. 
 
 211
 
 ^154 MUNICIPAL BONDS. [CII. XII. 
 
 wards the bonds wore issued reciting on their face the 
 enabUng act, the atitirniative vote and the fact of consol- 
 idation. 
 
 There was no authority in the act to issue the bonds 
 to aid the new company. 
 
 The court held the bonds to be void in the hands of a 
 bona fide holder, and that the recitals in the bonds put 
 the purchaser upon inquiry. 
 
 The court, on the effect of notice contained in the 
 recitals of the bonds, said : 
 
 " As sufficient notice of these objections is contained 
 in the recitals of the bonds themselves to put the holder 
 on inquiry, we think there was no error in the judgment 
 of the Circuit Court."! 
 
 Where the city of New Orleans endorsed a negotiable 
 bond and the endorsement recited that it was " in con- 
 formity with resolution of said council of said munici- 
 pality bearing date the 20th day of July and 5th of Au- 
 gust last," it was held that such recital charged all 
 parties with notice of the authority granted by the res- 
 olutions, and, as the bond was endorsed in excess of the 
 authority contained in the resolution, it was void.^ 
 
 When the instrument refers on its face to the enabling 
 act or some other authority for its issue, the holder is 
 chargeable with such statute or other authority and all 
 limitations and purposes thereof.^ And when the bond 
 recites it is issued pursuant to an order of a court or an 
 order or resolution or ordinance of a municipal body, 
 the holder is l)ound by all he might have learned had he 
 inspected such order, resolution or ordinance.* What- 
 ever authority authorizing the issue of the bond recited 
 therein the purchaser must inspect at his peril. 
 
 1 See, also, Bates Co. v. Winters, 
 97 U. S. 83-91. 
 
 2 Louisiana State Bank v. Or- 
 leans Nav. Co., 3 La. Ann. 297. 
 
 8 Fiske V. City of Kenosha, 26 
 212 
 
 Wis. 29; Sutro v. Dunn, 74 Cal. 
 595. 
 
 * Post V. Pulaski Co., 49 Fed. 
 Rep. 628.
 
 CHAPTER XIII. 
 
 REMEDIES. 
 
 Proceedings to restrain and compel issue of bonds — Action on bonds 
 and coupons — 2Iode of enforcing jiaymeiit — Effect of division of a 
 municipal corporation — Statute of Limitations — Federal courts fol- 
 loiv State courts — Legislative control over remedies. 
 
 Section. 
 
 155 — Proceedings to restrain issue 
 of bonds — When action 
 may be brought and by 
 whom. 
 
 1 56 — Equity will afford the relief. 
 
 157 — Position of the Federal 
 coui-ts. 
 
 158 — All State courts afford relief. 
 
 159 — When tax may be restrained 
 — When relief may be lost. 
 
 160 — Action to compel issue and 
 delivery of bonds. 
 
 161 — Actions on bonds and cou- 
 pons. 
 
 162— Pleadings — What they 
 should contain. 
 
 163 — Burden of proof — Presump- 
 tions — Wlicn burden of 
 proof shifted on plaintiff. 
 
 161 — Proof necessary for prima 
 facie judgment. 
 
 165 — Mode of enforcing payment 
 of municipal paper — judg- 
 ment usually first neces- 
 sary. 
 
 166 — Mandamus the proper rem- 
 edy. 
 
 167 — May the judgment be in- 
 quired into. 
 
 168 — Mandamus cannot enlarge 
 power. 
 
 160 — What enters into contract. 
 
 170— To whom writ should be 
 directed. 
 
 171 — Equity will not assist. 
 
 Section. 
 
 172 — Remedies against a State. 
 
 173 — Legislature may dissolve or 
 divide municipal corpora- 
 tions. 
 
 174 — New corporation liable for 
 old debts. 
 
 175 — Rights of creditors. 
 
 176 — When debtor powerless — 
 When Legislature may 
 act. 
 
 177 — Statute of Limitations. 
 
 178 — New promise — What neces- 
 sary to take case out of 
 the statute. 
 
 179 — When Federal courts follow 
 the decisions of State 
 courts. 
 
 180 — Iiatest decisions followed — 
 Exception. 
 
 181 — Case illustrating excep- 
 tion. 
 
 182 — When the Federal courts 
 will not be controlled. 
 
 183 — What the Federal courts 
 recognize. 
 
 184 — State court decisions must 
 have been rendered before 
 bonds were issued. 
 
 185 — Legislative control over 
 remedies — Wliat becomes 
 part of the contract with 
 the bondholder. 
 
 186 — Same — Inferior security 
 cannot be substituted — 
 Cases. 
 
 213
 
 §155 
 
 MUNICIPAL RONDS. 
 
 [cn. XIII. 
 
 Sectiox. 
 
 1 87 — Same — Cases. 
 
 188 — AVlien obligation of contract 
 is impaired. 
 
 189 — No vesteil right to a partic- 
 ular renieily. 
 
 Section. 
 
 190— When creditors are witliout 
 moans of enforcing their 
 claims. 
 
 ^ 155. Proceed inc:s to restrain issue of bonds — 
 When action may be brought and by whom. — It is the 
 
 general rule of the State courts that a proposed illegal 
 issue, in whole or in part, of bonds and other municipal 
 evidence of debt, may be restrained and the proceedings 
 authorizing their issue set aside. 
 
 Any taxpayer is entitled to this relief upon showing 
 that by the issue his property, in common with that of 
 other taxpayers, will suffer an additional burden if the 
 bonds are issued. 
 
 The mode of relief is either by the common-law writ 
 of certiorari or by proceedings in equity. Under the 
 writ of certiorari the court will proceed to examine the 
 proceedings of the municipal corporation, and if on re- 
 view it is found the corporation has exceeded its powers, 
 or has proceeded in an illegal manner, or the act under 
 which the issue is made is unconstitutional, or the bonds 
 are about to be issued in excess of the constitutional or 
 statutory limitation, the court will reverse or annul the 
 action of the municipality. This remedy is so common, 
 so often used to review the proceedings of municipal cor- 
 ]K)rations wlien they proceed to exercise illegal or un- 
 authorized powers, or to exceed their powers, that it is 
 unnecessary to cite authorities. This remedy, however, 
 is ineffectual when the bonds have passed out of the 
 possession of the municipal corporation or of its officers. 
 Then resort to equity must be had to restrain their issue 
 to innocent holders, as in the case of Jackson Co. Sup. 
 V. Bru.sh,^ where it appeared bonds to aid a railroad were 
 issued and placed in the hands of a third person for a 
 railroad before the performance of certain conditions 
 precedent. The holder was restrained by a bill in equity 
 from delivering them, or making any disposition of them 
 except to deliver them back to the county. 
 
 1 77 III. 59. 
 
 214
 
 C"H. XIII.] REMEDIES. § 157 
 
 § 15G. Equity will afford the relief. — It is the prac- 
 tice in many of the States, in order to restrain the de- 
 livery of bonds illegally issued, to resort to a bill 
 in equity, and it may be said that the great weight 
 of authority is that a taxpa3'er can invoke the aid of 
 a court of equity to prevent an illegal appropriation and 
 disposition of municipal negotiable bonds. And one of 
 the principal grounds for equitable relief is the fact 
 that the bonds or other municipal paper are negotiable. ^ 
 And aid is extended to the taxpayer to restrain the 
 issue of the bonds or delivery of the bonds by the munici- 
 pal officers, or the first purchaser, in order to jDrevent the 
 delivery of such negotiable paper to innocent third persons. 
 Equity also comes to the relief of the taxpayer against 
 the enforcement and execution of illegal contracts or 
 debts that create a charge in the way of debt against his 
 property. For the above reasons, as well as irreparable 
 injury, fraud or misconduct on the part of the public 
 officers issuing -or attempting to issue invalid bonds, or 
 to dispose of an irregular issue of bonds, equity will aid 
 a taxpayer and restrain the bonds or decree their 
 surrender in the hands of other persons taking them 
 with knowledge, or charged with knowledge, of their in- 
 firmities.^ 
 
 In order to obtain the aid of a court of equity it is not 
 necessary to allege or prove special damages to the com- 
 plainant.^ 
 
 § 157. Position of tlie Federal court. — The position 
 of the United States courts in the matter of restraining 
 
 lOsbornev.U. S. Board.OWlieat. [ Hospers v. AVyatt. G:l Iowa, 036; 
 845 ; Dolafiekl v. State of Illinois, ' Page v. Allen, 58 Pa. 338 ; Bovle v. 
 
 (N. Y.) 26 Wend. 192. New Orleans, 23 Fed. Rej). 843 ; 
 
 2 Avery v. Job, 36 P. R. 293 ; 
 Fingal v. Burgess, 29 Atl. R. 641 ; 
 Bradley v. Cxilbert, 46 111. App. 623 ; 
 Manslin v. Council, 33 S. C. 1 ; 
 Valparaiso v. Gardner, 97 Intl. 1 ; 
 Railway Co. v. Dunn. 51 Ala. 178; 
 Howell V. Peoria, 90 111. 105 ; Meyer 
 V. Railway Co.. 52 Mo. 81 ; Rich- 
 mond V. Crenshaw, 76 V^a. 936 ; 
 
 Am. & Eng. Ency. Law, 1120, 1140, 
 1177; High on Injunctions, 1236, 
 1240 ; People v. Haines, 47 N. Y. 
 772 ; State v. Saline Co., 5 Mo. 350 : 
 IMayor etc. of Baltimore v. Gill, 31 
 Md. 375. 
 
 3 Tate V. Parkland. (Kv.) 13 S. 
 W. R. 443. 
 
 215
 
 § 158 MUNICirAL BONDS. [CII. XIII. 
 
 the illegal issue of bonds is ably set forth in the case of 
 Crompton v. Zabriskio, lol U. S. GOl. 
 
 Mr. Justice Field, in delivering the opinion of tlie 
 court, said : 
 
 "To the right of resident taxpayers to invoke the in- 
 terposition of a court of equity to prevent an illegal dis- 
 position of the moneys of the county, or the illegal crea- 
 tion of a debt which they, in common with other prop- 
 erty-holders of the county, may otherwise be compelled 
 to pay, there is at this day no serious question. The 
 right has been recognized by the State courts in numer- 
 ous cases ; and from the nature of the powers exercised 
 by municipal corporations, the great danger of their 
 abuse, and the necessity of prompt action to prevent irre- 
 mediable injuries, it would seem eminently proper for 
 courts of equity to interfere, upon the application of a 
 wrong, when the officers of these corporations assume, in 
 excess of their powers, to create burdens upon property- 
 holders. Certainl}^ in the absence of legislation re- 
 stricting the right to interfere in such cases to public 
 officers of the State or county, there would seem to be no 
 substantial reason why a bill by or on behalf of indi- 
 vidual taxpayers should not be entertained to prevent 
 the misuse of corporate power. The courts may be 
 trusted to prevent the abuse of their process in such 
 cases." 
 
 § ir)8. All State courts afford relief.— It is not the 
 object of this work to enlarge upon the nature of the 
 suit to he brought by the taxpayer in the various States 
 to restrain the issue of illegal, or an excessive issue of, 
 bonds ; it is sufficient to say that such an action will lie 
 in all the States, and that a tax]3ayer of the municipality, 
 one who is, or will be, aff(>ctod by such an issue of bonds, 
 has the right to bring an action in his own name to pre- 
 vent their issue and to call in question the action of the 
 municipality authorizing the same with the view of 
 annulling their proceedings and restraining the sale and 
 delivery of the bonds to innocent purchasers.^ 
 
 1 Maudlin v. City of Greenville, I land, 13 S. "W. Rep. 443 : People v. 
 11 S. W. Ptop. 434 ; Tate v. Parke- ) Haines, 45 N. Y. 773 ; State v. Sa- 
 216
 
 CII. XIII.] REMEDIES. § 159 
 
 Bonds illegally issued may, by a bill in equity filed by 
 a taxpayer, be directed to be cancelled, provided the suit 
 be brought for that purpose within a reasonable time,^ 
 and provided further they contain no recital which in 
 the hands of a bona fide holder will estop the town from 
 pleading the illegality as a defence. 
 
 And where such bonds are in the hands of the original 
 holders, with notice, the municipality may compel their 
 surrender, and when the bonds are void because of want 
 of power, the corporation or any taxpayer may compel 
 their surrender for cancellation no matter who holds 
 them.^ 
 
 § 159. When tax may be restrained. — When the bonds 
 are void for want of power to issue them, or they were 
 issued without the performance of some prior condition, 
 as an election, or provision for the payment of the inter- 
 est or principal as it falls due, or if issued in excess of a 
 statutory or constitutional limitation, and the bonds do 
 not contain recitals which will estop the municipality 
 from setting up the non-performance of such prior con- 
 ditions, or the excessive issue, or it is not otherwise es- 
 topped, the municipality or any officer thereof may be 
 restrained from levying a tax to pay such bonds, or if tlie 
 tax is levied, from paying over to the bondholders the 
 interest or principal.^ 
 
 And in cases of this kind the collector of taxes may 
 refuse to pay the interest or principal of such bonds as it 
 accrues,* unless the statutes make it his duty in express 
 terms to pay the money, in which case he must pay the 
 money and cannot sit in judgment, as the question of the 
 validity of the bonds can be tested in other modes. ^ 
 
 A much stronger case is required to enjoin the collec- 
 
 line Co., 51 Mo. SoO ; Mayor of Bal- 
 timore V. Gill, 31 :\Id. 37o. 
 
 iTown of Mentz v. Cook, 108 
 N. Y. 504; Metzger v. R. R. Co., 
 79 N. Y. 171. 
 
 2 On this subject see Dill. onMun. 
 Corp. Vol. 2. (4th ed.), § llOef seq. ; 
 Pomeroy on Eq. Juris. 259-270. - Martin v. Brown, 55 N. Y. 180, 
 
 217 
 
 3 State V. Bergen, 34 N. J. L. 
 438 ; Vanover Jasticos, 27 Ga. 354 ; 
 Howard V. Levee Co.. 51 111. 130; 
 R. R. Co. V. Blanchard, 54 111. 240 ; 
 Rice V. Smith, 9 Iowa. 570. 
 
 * People V. Mead, 36 N. Y. 224. 
 
 5 Housten v. People, 55 111. 398;
 
 § ^C^0 MUNICIPAL BONDS. [ciI. XIII. 
 
 lion of taxes levied for the payment of interest or prin- 
 cipal of l)on(ls issued on a])parent authority, and whicli 
 have passed into the hands of a bona fide holder, than to 
 prevent the issue of such bonds on specified grounds 
 which miglit have I'estrained their issue. ^ And the right 
 to object may be lost by aquiescence, as if a taxpayer 
 stand by and permit bonds to be issued and interest paid 
 on them, he, rather than the innocent holder, should bear 
 the loss.^ 
 
 § IGO. Action to compel issue and delivery of bonds. 
 — Mandamus is the proper remedy to compel the issue of 
 bonds or other duties which municipal or State officers 
 should perform in relation to their issue. 
 
 Under the laws of New York the comptroller of the 
 city of New York is compelled to issue and negotiate 
 revenue bonds, and out of the money arising therefrom 
 to pay the city's and county's share of the State tax. 
 The court, in People v. Meyers,^ affirmed the judgment 
 below awarding a peremptory mandamns to compel the 
 issue and sale of such bonds with interest from the time 
 the tax should have been ])aid. 
 
 Mandauius will issue to compel the issue of bonds, or 
 the submission of the question of their issue to the voters, 
 by the legislative body of the municipal corporation, 
 when the proceeds of the bonds are to be expended by 
 some other body or commission for a public work.^ 
 
 And in such cases the latter body or commission usually 
 have authority to determine the amount of bonds to be 
 issued for the public work under their charge. 
 
 And where a city contracts to execute and deliver, hav- 
 ing power so to do, its bonds for a particular purpose, 
 mandamus will issue to the city council and the mayor 
 to carry out their contract and issue and deliver the 
 bonds.'' And a municipality itself may, by viandamus, 
 
 1 Cook V. City of Beatrice, (Neb.) 795, 706, 809 : Dill, on Mun. Corp., 
 
 48 N. W. Rep. 828. 
 
 - Moulton V. Evansville, 25 Fed. 
 Rep. 382: Calliam v. Millard, 121 
 N. Y. 09 : Menard v. Hood, 68 111. 
 
 t^§ 519, 547, 548. 
 
 3 138 N. Y. 590. 
 
 * People ex rel. Prettyman 
 Board of Sup., 45 111. 162. 
 
 121. See High on Injunctions, 783 ; i & Smalley v. Yates, 36 Kan. 519. 
 218
 
 CH. XIII.] 
 
 REMEDIES. 
 
 IGl 
 
 compel a State officer whose duty it is to certify or en- 
 dorse its bonds so to do, and in such a case it has been held 
 that the municipality was afterwards estopped to deny 
 their validity.^ A writ of mandamus will issue to en- 
 force a lawful subscription for stock and the issuance of the 
 bonds to pay for the same if the municipal corporation 
 refuse to subscribe or issue when the railroad is entitled 
 to the bonds. ^ 
 
 When it appears that there is a valid reason why the 
 bonds should not issue, as if there is doubt whether 
 the proper vote was taken, or proper notice of election 
 given, or some other prior conditions have not been per- 
 formed by the municipal officers, the court will refuse to 
 grant the writ.^ 
 
 And when a railroad is constructed on a different route 
 than that designated in the proposition, or the company 
 fail to perform some condition imposed upon it to be per- 
 formed before aid is 'given, or does not complete the road 
 within the time designated, mandamus will not issue 
 to compel the delivery of the bonds. ^ 
 
 The mandamus to compel the issue of bonds must be 
 directed to the body having the authority to do so.^ 
 
 § IGl. Actions on bonds and coupons.— As the bonds 
 and coupons when negotiable pass by delivery and are each 
 separate promises to pay, the holder of either may sue on 
 them in his own name, and need not, when the suit is on 
 the coupon, join the holder of the bond or produce it in 
 evidence,^ and such a suit maybe maintained notwith- 
 standing the bond has already been paid and surrendered." 
 When the coupons do not contain any promise to pay, 
 the decisions of the courts arc divided as to the riglit 
 of the holder to sue and recover on them in his own name. 
 
 1 State V. Wilkinson, 20 Neb. 610. 
 
 2 Ex parte Selma R. R. Co., 45 
 Ala. 696. 
 
 3 State V. Harris, 92 ]\Io. 29 ; State 
 V. Sullivan, lij West, 25.5, 
 
 " State V. City of Morristown, 24 
 S. W. Rop. 13 ; Echols v. City of 
 Bristol. ITS. E. Rep. 948 ; McManus 
 V. Duluth R. Co., 53 N. W. R. 980. 
 
 s U. S. V. Board of Liquidation 
 etc. of New Orleans, 60 Fed. Rep. 
 387. 
 
 ^ Com'rs of Knox Co. v, Aspin- 
 wall, 21 How. 54 ; Walnut v. Wade, 
 103 U. S. 695. 
 
 ^ Nat. Ex. Bank v. Hartford, 8 
 R. I. 375. 
 
 Iil9
 
 §1G2 
 
 MrXICIPAL BONDS. 
 
 [CH. XIII. 
 
 Some of the courts hold that he may,^ but the weiglit 
 of the decision is to the effect that such coupons can 
 only be enforced by the holder of the bonds which con- 
 tain the promise.^ 
 
 § 102. Ploadiiig. — It is not proposed to endeavor to 
 give the tonn of pleadings of the various States in a suit 
 to recover on bonds or coupons, but to give a brief refer- 
 ence of what the pleadings should contain in the action.^ 
 
 1 Daniels on Neg. Inst., §§ 1511- 
 V2. 
 
 2 Jackson v. York R. Co., 48 Me. 
 147 ; Crosby v. New London etc. R. 
 26 Conn. 131 ; Evertson v. Nat. 
 Bank, 66 N. Y. 14. 
 
 8 Mr. Justice Clifford in Riggs t. 
 Johnson Co.. 6 Wall. 166, 209, in 
 alluding to the forms of writs and 
 processes and pleadings in the Fed- 
 eral court said : 
 
 " Before proceeding to consider 
 the operation and effect of the in- 
 junction issued by the State court, 
 it becomes necessary to examine 
 more closely into the source, nature 
 and operation of the Federal pro- 
 cess, and the jurisdiction and power 
 of the Circuit Courts in the several 
 States. Circuit Courts were cre- 
 ated by the act of Congress, under 
 which tiie judicial system of the 
 United States was organized, but 
 the act made no provision for the 
 forms of process. Forms of pro- 
 cesses in the Federal courts were 
 regulated by the act of Congress, 
 which was passed five days later. 
 
 " Writs and processes issuing 
 from a Circuit Court were required 
 by that act to bear the test of the 
 Chief Justice of the Supreme Court, 
 to be under the seal of the coui't, and 
 to be signed by the clerk. By the 
 second section of the act it was 
 provided that the form of writs and 
 executions . . . and the modes of 
 proce-ss, in suits at common law 
 . . . should be the same that were 
 220 
 
 then used in the Supreme Courts (.f 
 the States. Subsequent acts adopted 
 substantially those provisions, and 
 made them permanent. Legal ef- 
 fect of those enactments was, that 
 Congress adopted the form of writs 
 and executions, and the modes of 
 process, as then known and under- 
 stood in the courts of the States, 
 for use in the several Circuit Courts. 
 
 " Modes of process, and forms of 
 process, were in use in the States 
 at that period, other than such as 
 were known at common law as un- 
 derstood in the English courts. 
 Radical changes had been made in 
 some of the States, not onlj' in the 
 forms of mesne process and the 
 rules of pleading, but in the modes 
 of process in enforcing judgment, 
 as was well known to Congress 
 when the Judiciary and Process 
 acts were passed. 
 
 " Executions, it is admitted, may 
 be issued by the Circuit Court, but 
 the power of such courts to issue 
 the other writs necessary to the 
 exercise of jurisdiction is equally 
 clear with the single restriction 
 that the writ and the mode of pro- 
 cess must be agreeable to the prin- 
 ciple and usages of law. Usages of 
 law, and not of the common law, it 
 will be observed are the words of 
 the provision, which, doubtless, re- 
 fers to the principles and usages of 
 law as known in the State courts 
 at the date of that enactment. 
 
 ' ' Forms of process, mesne and
 
 CH. XIII.] 
 
 REMEDIES. 
 
 162 
 
 The pleadings in a suit on coupons, if they contain no 
 promise to pay themselves, should expressly show that the 
 
 final, and the modes of process 
 varied in essential particulars from 
 the principles and usuages of the 
 common law, and in many cases 
 they were different in the different 
 States. 
 
 " Intention of Congress in pass- 
 ing the Process Acts was, that the 
 forms of writs and executions and 
 the modes of process and proceed- 
 ings in common-law suits, in the 
 several Circuit Courts, should be 
 the same as they were at the time 
 in the courts of tiie respective 
 States. Instead of framing the 
 forms of process, and prescribing 
 the modes of process. Congress 
 adopted those already prepared and 
 in uso in the respective States, not 
 as State regulations, but as the 
 rules and regulations prescribed by 
 Congress for use in the several Cir- 
 cuit Courts. Adopted as they were 
 by an act of Congress, they became 
 the permanent forms and modes of 
 proceeding and continue in force 
 wholly unaffected by any subse- 
 quent State legislation. Altera- 
 tions can only be made by Con- 
 gress, or by tlie Federal courts act- 
 ing under the authority of an act 
 of Congress. 
 
 " Practical effect of the course 
 pursued was that the forms of writs 
 and executions and the modes of 
 process and proceedings were the 
 same, whether the litigation was 
 in a State court or in tlie Circuit 
 Court of the United States. Tliey 
 were not always the same in differ- 
 ent States nor in different circuits : 
 and in some instances they were 
 widely different in States of tlie 
 same circuit. Those diversities or 
 many of them continue to the 
 present time. Great diversity in 
 the form of real actions and of in- 
 
 dictments were the necessary ef- 
 fects of the system. Different rules 
 of pleading necessarily followed. 
 Modes of process also were different 
 both in respect to mesne and final 
 process. Attachment of personal 
 and real property upon mesne pro- 
 cess is allowed in one district even 
 in the same circuit. 
 
 " Lands of the debtor were sub- 
 ject to seizure and sale on execution 
 in one district, while in another real 
 property was only subject to seiz- 
 ure and an extent corresponding 
 to a modified elegit as at common 
 law. Money judgments in one dis- 
 trict became a lien upon the lands 
 of a judgment debtor, while in an- 
 other the judgment creditor must 
 first seize the lands before he was 
 entitled to any such preference. 
 
 " Remedies on the judgments 
 against municipal corporations par- 
 took of the same diversity in the 
 different districts as that appearing 
 in the modes of process to enforce 
 judgments recovered against pri- 
 vate persons. Judgment against 
 such a corporation might be en- 
 forced in one district by levjing 
 the execution, as issued against the 
 corporation upon the private prop- 
 erty, personal or real, of any in- 
 habitant of the municipality, while 
 in another the appropriate remedy 
 in case the execution against the 
 corporation was returned nulla 
 bona was mandamus to compel tlie 
 proper officers of the corporation 
 to assess a tax for tiie jmyment of 
 the judgment. 
 
 '• Circuit Courts, by virtue of those 
 acts of Congress, became armed 
 with tiie same forms of writs and 
 executions and vested with the 
 authority to employ the same 
 modes of process, as those in vise 
 221
 
 § 1C2 
 
 MUNICIPAL BONDS. 
 
 [CH. xiir. 
 
 bonds h'om which the coupons are detached contain such 
 ]m)iiiiso and profert sliould he made of the bonds.^ The 
 couijons in a suit should be identiiied in the pleadings by 
 a statement of the number of the bond and the date and 
 sum and time of payment.^ 
 
 The coupons, being notes or drafts unsealed, may be ad- 
 mitted in evidence and declared upon under the common 
 money counts.^ Several coupons ma}^ be declared upon 
 in a single count and be distinguished by referring to 
 the numbers of the bonds from which they were detached.* 
 
 In a suit on the coupons the legislative authority for 
 their issuance should appear, either by averment of the 
 act conferring the authority or by setting out the recital 
 in the bond relative thereto, and the relation of the cou- 
 pons to the particular bonds to which they w^ere origin- 
 ally attached siiould appear by way of inducement or re- 
 cital stating the number of the bond, date, sum, etc.,^ 
 but the vote or election provided as preliminary to the 
 issue of the bonds and coupons need not be set out.^ 
 
 But in other cases it has been held that where the offi- 
 cers were to issue the bonds after consent in writing of 
 a certain proportion of the inhabitants had been obtained, 
 it must be shown in the pleadings that such assent was 
 obtained before the bonds were issued.' 
 
 in the State courts. Permanent 
 effect of that wise measure was 
 that tlie forms of writs and execu- 
 tions and the modes of process were 
 the same, whether tlie Utigation 
 was in tlie forms of tlie State or in 
 the Circuit Court of the United 
 States. 
 
 " Remark should be made that 
 those Process Acts in terms apj))}' 
 only to the old States, but the Fed- 
 eral courts in States since admitted 
 into the Union are, in virtue of 
 subsequent enactments, governed 
 by regulations substantially similar. 
 
 " Express provision in the third 
 section of the act of the nineteenth 
 of Ma}'. 1828, is, that writs of execu- 
 tion and otiier final process issued 
 
 on judgments rendered in the Fed- 
 eral courts, and the proceedings 
 thereupon shall be the same in each 
 State as are now used in the courts 
 of such State." 
 
 ^ Crosby v. New London R. R. 
 Co., 26 Conn. 121 ; Jones on R. R. 
 Securities, 338. 
 
 2 Kenard V. Cass Co., 3 Dill. C 
 C. 147. 
 
 3 Mercer Co. v. Hubbard, 45 III. 
 142. 
 
 * New London Bank v. Ware R. 
 R. Co., 41 Conn. 542. 
 
 5 City V. Lamson, 9 Wall. 477. 
 
 « Underbill v. Trustees, 17 Cal. 
 172 ; Brown v. Town of Pt. Pleas- 
 ant, 15 N. E. R. 209. 
 
 ■^ Morrison v. Benards, 36 N. J.
 
 CH. XIII.] REMEDIES. § 162 
 
 And when the statute requires that the bonds shall be 
 registered and certified, or endorsed by a public officer, the 
 pleadings must show that this was done,^ 
 
 But if the statutes or constitution does not provide that, 
 unless the bonds are so registered or endorsed, they shall 
 be void, then it is unnecessary to set forth the fact of 
 such registration or endorsement.^ 
 
 The pleadings need not show that certain duties 
 required to be done by the municipal officers after the 
 issue of the bonds had been performed, as the non- 
 performance of such duties do not affect the validity of 
 the obligations previously issued.^ 
 
 The pleadings must show the authority of the officers 
 to execute the instrument, either by the averments setting 
 out the enabling statute or by an annexed copy of the 
 bond which contains a recital of the act.* 
 
 The appointment of the officers and that their signatures 
 are genuine, and whatever the enabling statute requires 
 to be done, and provides that if not done the bonds shall 
 be invalid, must be shown to have been done in the plead- 
 ings, and they must show that the bonds were issued for 
 the purpose authorized.^ 
 
 An averment in the pleadings that the bonds were is- 
 sued by the municipal corporation is proper, because the 
 officers issuing the bonds are the agents of the corpora- 
 tion.^ 
 
 The plaintiff need not aver that the bonds were is- 
 sued within the debt limitation, because if they exceed 
 it, that fact is a matter of defence to be shown by the 
 corporation.'' 
 
 L. 219 ; Cotton v. Now Providence, 
 47 N. J. L. 401. 
 
 1 Morrison v. Benards, 36 N. J. L. 
 219. 
 
 2 Cotton V. New Providence, 47 
 N. J. L. 401-G. 
 
 8 Railway Sav. Inst. v. Rahway, 
 53 N. J. L. 48. 
 
 C. R. 147; Nashville v. Rav. 19 
 Wall. 468. 
 
 6 Rahway Sav. Inst. v. Rahway, 
 53 N. J. L. 48. 
 
 ^ Brown v. Town of Point Pleas- 
 ant, 15 S. E. R. (N. Y.) 209. 
 
 See Keiinard v. Cass Co.. 3 Dill. 
 C. C. R. 147, and cases cited as to 
 
 * Hopper v. Covington, 118 U. S. the manner of declaring on bonds 
 148. and coupons. 
 
 ^Kennnrd v. Cass Co., 3 Dill. C. i 
 223
 
 §162 
 
 MUNICIPAL BONDS. 
 
 [CH. XIII. 
 
 The declaration where the suit is on a bond issued by a 
 ninnicipal corporation whicli has no "general power to is- 
 sue coniniercial paper must show, either by averment or 
 ill the copy of the bond annexed, that the defendant had 
 power to issue it. The special power must be shown, 
 it is not sufficient to allege generally that it had full power 
 to execute the bond.-^ 
 
 It is held that in an action upon a negotiable bond is- 
 sued by a town authorized by puljlic laws to issue such 
 bonds for certain purposes only, a declaration alleging 
 that the defendant is a municipal corporation existing 
 under the laws of the State, with full power and author- 
 ity pursuant to those laws to execute negotiable com- 
 mercial paper, and that pursuant to those laws it exe- 
 cuted the bond sued on without showing for what pur- 
 pose the bond was made, is bad on demurrer.^ 
 
 In some of the States the law requires that claims 
 against a municipal corporation shall be first presented to 
 a board or officer for allowance and approval, and until this 
 is done suit cannot be brought thereon. These statutes 
 are usually held to apply only to unliquidated claims and 
 accounts,^ 
 
 The court, in Green Co. v. Daniel, 102 U. S. 187, held 
 that the declaration on coupons and bonds of a county 
 was not defective because it did not allege that they had 
 been presented before the action was commenced, for 
 auditing and approval. The court said: *'The claim 
 was, to all intents and purposes, audited by the court when 
 the bonds were issued. The validity and the amount of 
 the liability were then definitely fixed, and warrants on 
 the treasury given jjayable at a future day." 
 
 In Breckenridge County v. McCracken, 61 Fed. Eep. 
 V.H, the petition to enforce the bonds stated that "an 
 election was duly held." The court said : 
 
 " This is substantially an averment that the election 
 was held according to 1-aw. It was not, however, impor- 
 
 1 Hopper V. Covington, 118 U. S. 
 148. 
 
 2 Hopper V. Covington, 118 U. S. 
 148. 
 
 224 
 
 3 Vincent v. Lincoln Co., 63 Fed, 
 Rep. 705.
 
 CH. XIIL] 
 
 REMEDIES. 
 
 tant that the pleader should aver the preliminary facts 
 requisite to the exercise of the power granted l)y the Legis- 
 lature to subscrihe for the stock and issue bonds in pay- 
 ment. ... If there was any defect in the preliminary 
 steps to the exercise of that power, it is for the defendant 
 to plead and show such irregularity. The performance 
 or non-performance of acts requisite to the valid exercise 
 of the power are matters of defence." 
 
 The defence may plead any matter which shows the 
 bonds to be void in the hands of the plaintiff, as want 
 of power or non-performance of precedent conditions, and 
 that the plaintiff is not a bona fide holder, non est factum 
 and the like." ^ 
 
 § 1C)?>. Burdeu of proof— Presumption. — When the 
 bonds contain recitals that they arc issued pursuant to 
 an enabling act which is recited, and the act is constitu- 
 tional, and they are in the hands of a bona fide holder, and 
 it is sought to avoid the bonds by showing they were is- 
 
 1 See § 124, 191, 192. Under the 
 plea of non eat factum, the United 
 States Supreme Court (Montclair v. 
 Rarasdell, 107 U. S. 147) has held 
 that it was not competent to prove 
 either fraud or ilief^ality in the in- 
 ception of the honds, and com- 
 pell the plaintiff to i)rove that he 
 paid value for them, and that the 
 refusal of the court helow to in- 
 struct the jury, that " if the evi- 
 dence satisfied tlie jury that there 
 were circumstances of fraud or 
 illegality in the inception of the 
 honds, or in the circumstances un- 
 der which the}' were issued and dis- 
 posed of hy the commissioners, 
 tlien the plaintiiT cannot recoveron 
 the honds without some proof that 
 lie purchased them for value or 
 save some consideration for them." 
 was propoi". The court said: "If 
 any previous holder of the honds in 
 suit was a ho)\a fide holder the 
 plaintiff, witliout showing: that he 
 had himself paid value, could avail 
 15 
 
 himself of the position of such 
 previous holder." The court also 
 said : " The plea of non est factum 
 did not put in issue the fact that he 
 was the holder." Of the plaintiff 
 the court said : 
 
 "It was not necessary that he 
 should, in the first instance, prove 
 cither that he paid value or that 
 the conditions preliminary to the 
 exercise by the commissioners of 
 the authority conferred hy statute 
 were, in fact, i>erformed hefore the 
 bonds were issued. The one was 
 presumed from the possession of 
 the bonds ; and the other was es- 
 tablished by the statute authorizing 
 an issue of the bonds, and hy proof 
 of the due appointment of the com- 
 missioners and their execution of 
 the bonds, with recitals of compli- 
 ance with the statute. So weliave 
 often ruled in numerous cases with 
 wiiich the profession are familiar, 
 and which need not be cited." 
 
 225
 
 § 1G3 MUNicrrAL bonds. [ch. xiii. 
 
 sued ill excess of the statutory limitation, the burden of 
 proof is upon the municipal corporation to show that the 
 holder had knowledge of the over-issue.^ 
 
 When railroad bonds are issued contrary to an amend- 
 ment to a constitution the burden of proof is upon tlie 
 holder to show that they were issued pursuant to an en- 
 abling statute which continued the right to issue the 
 bonds after the adoption of the constitution,^ 
 
 In an action on coupons the fact that the plaintiff is 
 the holder of the coupons and they are payable to bearer 
 is sufficient evidence of ownership, and casts the burden of 
 disproving ownership on the corporation.^ 
 
 Title and possession are one and inseparable to clothe 
 the instrument with the pr/»ia facie presumption that 
 the holder paid value for it and received it in the usual 
 course of business before maturity and without notice of 
 prior equities, and the burden to prove otherwise is upon 
 the defendant.* 
 
 Tlie defendant may give evidence to show that the con- 
 sideration is illegal, that the bond was fraudulently 
 issued, or that the conditions precedent were not per- 
 formed, or that it has been lost or stolen before the plaintiff 
 received it, and if he proves such a defence the burden 
 is then shifted on the plaintiff to prove that he is a 
 bona fide holder.^ 
 
 After the burden of proof is shifted upon the plaintiff, 
 the court, after hearing all the evidence of the plaint- 
 iff to show himself to be a bona fide holder, if it is 
 satisfied, conceding all the inferences which the jury 
 could justifial)]y draw from the testimony, that the evi- 
 dence was not sufficient to warrant a particular verdict, 
 may so instruct the jury.*^ Although it will not be im- 
 
 1 Color V. Santo Fe Co., 27 Pac. 
 R. G19. 
 
 - Choiser v. People, 36 Am. & 
 Eng. Corp. Cas. 608 ; Samson v. 
 People, 30 N. E. R. 781. See. liow- 
 ever, Hutchinson v. Self, lo3 111. 
 542. 
 
 3 Memphis V. Bethel, 17 S. W.191. 
 
 ^ Murray v. Lardncr, 2 "Wall. 
 2-26 
 
 110 ; Bank of Pittsburgh v. Neal. 22 
 How. 96; Cromwell v. Sac Co., 
 94 U. S. 351. 
 
 5 Com'rs V. Clarke, 94 U. S. 278 ; 
 Cromwell v. Sac Co., 90 lb. 51 ; 
 Steward v. Lansing, 104 U. S. 505. 
 
 « Railroad Co. v. Fraloff, 100 U. 
 S. 24 : Oscangon v. Arms Co. , 103 
 U. S. 261.
 
 CH. XIII.] EEMEDIES. § 165 
 
 proper for the court to leave the case to the jury on the 
 evidence.^ 
 § 164. Proof necessjiry for prima facie judgment. — . 
 
 In a suit on bonds issued pursuant to a statute referred 
 to in the bonds, the utmost a holder need do to entitle 
 him to a prima facie judgment is to prove the signa- 
 tures to the bonds and establish the fact that the officers 
 signing the same were in fact such officers at the date 
 of signing, and when the bonds are executed by the com- 
 missioners it is not necessary that he should prove that 
 the conditions preliminary to the exercise by the com- 
 missioners of the authority conferred on them were in 
 fact performed before the bonds were issued. 
 
 The possession of the bonds is 2)ri))ia facie evidence of 
 the fact that he is a bona fide holder of them for value,, 
 and the recitals, in the bonds of the statute, the proof of 
 the appointmient of commissioners and of their signa- 
 tures, is like evidence that the preliminaries have been 
 complied with.^ 
 
 § 165. Mode of enforcing' payment of mnnicipal 
 paper — Judgment usually first necessary. — Usually, be- 
 fore the court will lend its aid to compel a municipal 
 corporation to pay its outstanding matured paper, it is 
 necessary that a judgment be first obtained which estab- 
 lishes the fact that the city is indebted to the plaintiff and 
 determines the amount of such debt, after which the 
 courts will issue a writ of mandamus to compel the pay- 
 ment of the judgment ; but it is held in most of the State 
 courts that a prior judgment is not always necessary 
 to obtain a maudamns, and that a writ will issue with- 
 out first obtaining a judgment, in all cases where it is 
 made the duty of the municipality to levy or collect a 
 special tax to pay a certain class of debts, and there 
 is no valid defence alleged or claimed, and the power to 
 tax is not doubtful.^ 
 
 1 Steward v. Lansing, 104 U. S. 
 505. 
 
 2 Bernards v. Morrison, 133 U. S. 
 533 ; Cotton v. New Providence, 47 
 
 3 State V. Davenport, 12 Iowa, 
 335; Commonwealth V, Pittsburgh, 
 34 Pa. St. 496: Flagg v. Pal- 
 myra, 33 Mo. 440 ; People v. Brown, 
 
 N. J. L. 401. 1 55 N. Y. 180 ; Cumberland Co. v. 
 
 227
 
 § ICG MUXICITAL BONDS. [CH. XIII. 
 
 The lioldcr of the unpaid bonds or coupons must, how- 
 ever, make a demand on the i)roper officers to pay the 
 bonds or coupons or to levy a tax to pay the same before 
 lie can apply for the writ. 
 
 And the demand and refusal must be alleged in the 
 petition for the writ.^ 
 
 In the Federal courts the writ will not issue until a 
 judgment be first obtained.^ 
 
 After the creditor has obtained a judgment against a 
 municipal corporation he is without remedy to enforce 
 it in the usual mode were the judgment against a pri- 
 vate person or corporation by the issue of an execution 
 and the levy and sale of the debtor's property, because 
 tlie property of a municipal corporation cannot be taken 
 in execution and sold, and the judgment does not attach 
 to such property.^ Nor can the revenues of a munic- 
 ipality, in the hands of its officers, be seized or taken 
 to satisfy such a judgment.* 
 
 It has been held, however, in a few cases, that property 
 of the corporation not held or used by it for any public 
 purpose or held in trust may be taken in executi(Mi.* 
 
 And in the New England States it is held in a number 
 of cases that the creditor of the corporation can take in 
 execution, to satisfy his judgment against the town, the 
 private property of its citizens.® 
 
 § 106. Mandamus tiie proper remedy, — Mandamus 
 is the proper, and would seem to be the only, remedy by 
 means of which a judgment recovered against a munic- 
 
 Randolph, (Va.) 10 S. E. Rep. 722 ; 
 Rik'v V. Garfield Tp., 54 Kan. 
 4G3; Tlioinas v. Mason. 39 W. Va. 
 52G. 
 
 1 State V. Jacksonville, 22 Fla. 
 21 ; People v. Town of Mt. Morris, 
 (111.) 27 N. E. R. 7.")7. As to what 
 a relator who is holder of bonds or 
 coupons must show in order to ob- 
 tain a mandamus to compel the 
 levy of a tax to pay them, see 
 Commonwealth v. Pittsburgh, 34 
 Pa. St. 496. 
 
 2 Green Co. v. Daniel, 102 U. S. 
 187 ; Osborne v. Adams Co., 7 Fed. 
 Rep. 441. 
 
 ^Chicago V. Halsey, 25 111. 595 ; 
 Darlington v. Mayor etc., 31 N. Y. 
 1G4. 
 
 « Trubell v. Colburn, 64 111. 376 ; 
 Klien v. New Orleans, 99 U. S. 
 149 ; Erie v. Knapp, 29 Pa. St. 173. 
 
 G Brown v. Gates, 15 W. Va. 131 ; 
 Davenport v. Peoria Ins. Co., 17 
 Iowa, 276. 
 
 ^ Beardsley v. Smith, 16 Conn. 
 368.
 
 CH. xiir.] 
 
 EEMEDIES. 
 
 16G 
 
 ipal corporation can be collected, except in those States 
 where the statute has provided other means of enforcing 
 payment.^ 
 
 According to the well established principles and usage 
 of the common law, the writ of mandamus is a remedy 
 to compel any person, corporation, public functionary 
 or tribunal to perform some duty required by law, 
 where the party seeking the relief has no other remedy, 
 and the duty sought to be enforced is clear and indis- 
 putable.^ 
 
 When a creditor obtains a judgment against the munic- 
 ipal corporation he is entitled to have the whole power 
 of the corporation put in motion to obtain means to pay 
 his claim. ^ 
 
 Peremptory mandamus may issue to compel a city 
 treasurer to pay over interest money in city bonds, al- 
 though the money in his hands may have been appro- 
 priated by the city council to other purposes, provided 
 the amount thus withdrawn from the treasury is not 
 absolutely needed for the ordinary expenses of the 
 city.* 
 
 When the power to levy a special tax is permissible in 
 form, and the council may levy it if it is deemed advis- 
 
 1 Rees V. Watertown, 19 Wall. 
 107 ; Dill, on Mun. Corp. (4th ed.) 
 §849. 
 
 2 Mr. Justice Grier, in Knox Co. 
 V. Aspinwall, 24 Ho\v. 376. 
 
 Mr. Justice Grier, in the last 
 case, said ; '• Even assuming 
 that a general law of Indiana 
 permits tlie public property of 
 the county to be levied on and 
 sold for the ordinary indebtedness 
 of the county, it is clear that the 
 bonds and coupons issued under the 
 special provisions of tliis act were 
 not left to this uncertain and in- 
 sufficient remedy. The act pro- 
 vides a special fund for the paj'- 
 ment of these obligations, on the 
 faith and credit of which they were 
 negotiated. 
 
 " It is especially incorporated into 
 the contract that this corporation 
 shall assess a tax for the special pur- 
 pose of i)aying the interest on these 
 coupons. If the commissioners 
 either neglect or refuse to perform 
 this plain duty, imposed on them 
 by law, the only remedy which the 
 injured party can have for such re- 
 fusal or neglect is the writ of man- 
 
 dCDIlUS. 
 
 " Why should not the Circuit 
 Court of the United States be com- 
 petent to give to suitor this only 
 adequate remedy ? " 
 
 3 City of New Orleans v. United 
 States, 49 Fed. Rep. 40. 
 
 * VVilliamsport v. Com'rs, 90 Pa. 
 St. 498. 
 
 2-29
 
 § 1013 
 
 MUNICITAL EOXDS. 
 
 [CII. XIII. 
 
 able, it is held in such cases that the court, by a manda- 
 mus, can compel the levy of the special tax, and the 
 lanii^iia^e, although permissive in form in such cases, is 
 deemed to be peremptory.^ 
 
 In the Federal courts amanclamus when issued cannot 
 be interfered with by the State courts,'^ and under such 
 
 1 Meinpliis v. Brown, 97 U. S. 
 300 ; Supervisors v. United States, 
 4 Wall. 435. In this last case there 
 is a citation of cases. 
 
 ■•^ In Rij?gs V. Johnson Co., 6 
 Wall. 166, where it appeared that 
 railroad aid bonds were issued pur- 
 suant to a statute of Iowa, and 
 afterwards the State court, revers- 
 ing their former decisions, held 
 such bonds invalid, and judgment 
 was recovered against the county 
 in the Circuit Court for the District 
 of Iowa, the latter court refusing 
 to follow the later decisions of the 
 State court. 
 
 The State court at the suit of a 
 taxpayer issued an injunction per- 
 petually enjoining the corporation, 
 defendants, from levying the special 
 tax devoted to the payment of the 
 bonds. 
 
 The defendants, the count}', con- 
 tended, among other defences, that 
 the injunction of the State court 
 prevented them from obeying a 
 iiutu(l(t)nus issued on the judgment 
 and that tlie Federal courts had no 
 power to issue amandainusin view 
 of the injunction. 
 
 The court by CliiTord, J., among 
 other things, said : 
 
 •• Wiiere a State has autliorized a 
 municijial corporation to contract 
 and to exercise the local power of 
 taxation to the extent necessar}' to 
 meet the engagement, the power 
 thus given cannot be witiulrawn 
 until the contract is satisfied. 
 
 ■• Regulnritj' of proceedings in 
 the primnrv suit are not open to 
 230 
 
 inejuiry, and it is conceded that the 
 judgment was in regular form ; 
 and if so, then the power of the 
 Circuit Court to issue final process, 
 agreeably to the principles and 
 usages of law, to enforce the judg- 
 ment, is undeniable. 
 
 " Authority of the Circuit Courts 
 to issue process of any kind which 
 is necessarj' to tiie exercise of jur- 
 isdiction and agreeably to the prin- 
 ciples and usages of law, is beyond 
 question, and the power so con- 
 ferred cannot be controlled either 
 by the process of the State courts 
 or by any act of a State Legisla- 
 ture. . . . 
 
 *' Tested bj' all these considei'a- 
 tions, our conclusion is, tiiat the 
 propositions of the defendants can- 
 not be sustained, and tliat the Cir- 
 cuit Courts in the several States 
 may issue the ■writ of mcmdcnnus 
 in a proper case, where it is nec- 
 essary to the exercise of their re- 
 spective jurisdictions, agree.ably to 
 the principles and usages of law. 
 
 " Where such exigency arises 
 they may is.sue it, but when so em- 
 ployed, it is neither a prerogative 
 writ nor a new suit, in the juris- 
 dictional sense. On the contrary, 
 it is a proceeding ancillaiy to the 
 judgment which gives the juris- 
 diction, and when issued, becomes 
 a substitute for the ordinary pro- 
 cess of execution to enforce the 
 payment of the same as provided 
 in tiie contract. 
 
 " Next suggestion of the defend- 
 ants is, that if the writ is issued,
 
 CH. XIII.] 
 
 REMEDIES. 
 
 167 
 
 a mandamus the officers of municipal corporations may 
 be compelled to perform their duty and levy and collect 
 the taxes, whether general or special, necessary to pay 
 the judgment, and in some cases where the State officers 
 have refused to act the Federal courts have appointed 
 United States marshals as commissioners for that pur- 
 pose.^ 
 
 § 107. May the judgment be inquired into. — Although 
 the record of the judgment cannot be contradicted in 
 mandamus proceedings, ^ yet it has been held that, on an 
 application for mandamus to compel the levy of a tax to 
 pay a judgment obtained on bonds, a municipal cor- 
 poration may show in opposition thereto that the bonds 
 are void, and were issued without power, and the court 
 will take cognizance of the facts. The court, in Browns- 
 ville Tax Dist. V Loague, 120 U. S. 403-505, on this subject, 
 said : " The power invoked (mandamus) is not the power 
 to tax to pay judgments, but the power to tax to pay 
 bonds, considered as distinct and independent, and there- 
 fore, when the relator is obliged to go behind his judg- 
 ments, as money judgments merely, to obtain the remedy 
 pertaining to the bonds, the court cannot decline to take 
 cognizance of the fact that the bonds are utterly void 
 and that no such remedy exists," 
 
 When a special tax is devoted to the payment of a cer- 
 
 and they should obey its com- 
 mands, they may be exposed to a 
 suit for damaj^es or to attachment 
 for contempt and imprisonment. 
 No such apprehensions are enter- 
 tained by the court, as all experi- 
 ence sliows that the State courts at 
 all times have readily acquiesced 
 in the judgments of this court in 
 all cases confided to its determina- 
 tion under the constitution and tlie 
 laws of Congress. Guided by the 
 experience of the past, our just ex- 
 pectations of tlie future are that 
 the same just views will prevail. 
 Shoul<l it be otherwise, however, 
 the defendants will find the most 
 
 ample means of protection at liand. 
 Proper coui'se for them to pursue, 
 in case they are sued for damages, 
 is to plead the commands of the 
 writ in bar of the suit, and if their 
 defence is overruled, and judgment 
 is rendered against them, a writ of 
 error will lie to the judgment 
 under the twenty-fifth section of 
 tlie .Judiciary Act."' 
 
 ^ Lees Co. Suji. v. Rogers, 7 
 Wall. 175. 
 
 2 Harshman v. Knox Co., 122 U. 
 S. 306. iiec also Norton v. Taxing 
 District of Brownsville, 129 U. S. 
 479. 
 
 231
 
 § 108 MUNICIPAL BONDS. [CH. XTII. 
 
 tain class of bonds, a rocovery of a judgment on the bonds 
 will not merge the indebtedness so as to destroy the 
 classification or take from the bonds the right to the 
 special tax, and vicoidainns will still lie to compel the 
 levy of the special tax to i)ay the bonds. ^ 
 
 g 108. Maiiilamus cjiMuot enlarge power.— The writ 
 of uKUidamus confers no power upon those to whom it is 
 directed. It merely compels them to perform the powers 
 already conferred upon thera,^ therefore it is a good 
 defence to a mandaniiLS that the officer directed to per- 
 form the act required does not possess the legal authority 
 to do so, nor can a mandamus compel an officer to violate 
 the law of his own State,^ but an officer who refuses to 
 obey a mandamus, when properly issued, may be punished 
 for contempt,* and is liable in damages for the non-per- 
 formance of his duty. The damages, however, in such 
 cases are but nominal.^ 
 
 A court cannot, by mandamus, direct a common council 
 to act beyond their charter, although it is well settled 
 that the power to incur a debt involves the power to levy 
 taxes, and it is not essential that the statute authorizing 
 the issue of the bonds provide for such levy,^ 3'et if the 
 ?»o)/(7r^)??^s direct the levy of taxes beyond the limit of 
 taxation it will not be granted.^ And where the corpora- 
 tion has no power to issue the bonds it cannot be com- 
 pelled by mandamus to levy a tax to pay them.^ 
 
 "When the limit of indebtedness is reached, it cannot 
 be exceeded. If, however, a subsequent act authorizes 
 the incurring of a debt, the power may be exercised, 
 notwithstanding the limit. The subsequent act is con- 
 
 1 East St. Louis v. Underwood, 
 105 111. 308 : E. St. Louis v. U. S., 
 110 U. S. 231. 
 
 2Unit(Hl States v. Clark Co., O.') 
 U. S. 769 ; Carroll Co. v. United 
 States, 18 Wall. 71 ; Board of 
 Com'rs. of Grand Co. v. King, G7 
 Fed. Rep. 202. 
 
 5 Newark Sav. Inst. v. Panhorst, 
 7 Diss. (U. S.) 99. The rule in New 
 York is to allow the creditor the 
 wliole of his claim. Clark v. Miller, 
 54 N. Y. 528. 
 
 '' Wilson V. City Council of Flor- 
 ence, 19 S. E. Rep. 4. 
 
 " United States v. Macon Co. 
 
 3 United States v. Knox Co., 2 Court, 35 Fed. Rep. 482; Goelet v. 
 McCrary C. C. 625. Elizabeth, 3 N. J. L. 49 ; Supervi- 
 
 * Dow V. Humbert. 91 U. S. 294. I sors v. U. S., 18 AVall. 71. 
 
 i 8 u. S. V. Macon Co., 99 U. S. 582. 
 232
 
 CH. XIII.] REMEDIES. § 168 
 
 strued as enlarging the power of the corporation to 
 incur the additional debt and mdndamiis will issue to 
 compel the levy of a tax beyond the limit. ^ 
 
 Where a judgment is recovered against a municipal 
 corporation, the amount of which exceeds the constitu- 
 tional taxing power, tlie court may issue a peremptory 
 writ directing the city to levy the full amount of the tax 
 it is authorized by charter to levy, and to pay on such 
 judgment any surplus in any city fund remaining after 
 the current expenses of the city for the fiscal year have 
 been paid.^ 
 
 Where there is a statutory limit to the rate of taxation, 
 and by a subsequent act the inunicipality is authorized to 
 issue bonds, and a special tax by said act is to be applied to 
 their payment, the municipality can levy the special tax 
 be3'ond the limit, but it cannot levy a tax beyond the 
 original and special rate,^ 
 
 Mandamus will not be issued to compel the county 
 treasurer to pay interest couiDons, taken from county 
 bonds, out of any other than specific funds raised for that 
 purpose, and in his hands, until the board of commis- 
 sioners has issued an order upon him to do so, since the 
 statutes provide that ''all moneys received by him for 
 the use of the county shall be paid by him only on a war- 
 rant of the board of commissioners, drawn according to 
 law," and it will not be issued to compel the county treas- 
 urer to pay interest coupons taken from county bonds, 
 when the answer of the treasurer contests the validity of 
 the coupons, and their validity does not clearly appear.* 
 
 When the bonds and coupons are to be paid out of a 
 special fund, or by special tax, then mandamus can only 
 issue to compel the payment out of such funds or by such 
 special tax, and if these prove insufficient wandamus^xWl 
 not lie to compel a general levy of taxes. ^ 
 
 1 Amy V. Allegheny City, 24 
 How. 364. 
 
 2 Howard v. City of Huron, 60 
 N. W. R. 803. 
 
 3 U. S. V. County of Macon, 99 
 U. S. 563. 
 
 * Bailey v. Lawrence Co., (S. D.) 
 51 N. W. R. 331. 
 5 United States v. Macon Co., 99 
 
 U. S. 582. 
 
 233
 
 § 109 MUNICIPAL BONDS. [CII. XIII. 
 
 It has been held that where a writ of mandamus has 
 been granted to compel the township snpervisors to as- 
 sess taxes to pay bonds then dne, and the assessment has 
 been made, another writ will be granted to compel a 
 further assessment to pay bonds which matured subse- 
 (juently to the lii'st writ, but not to compel an assessment 
 to cover the uncollected portion of the first assessment, 
 imtil the sale for delinquent taxes of the lands on which 
 the first assessment was made.^ 
 
 Where the statute governing the payment of judg- 
 ments against counties makes itoptional with the county 
 commissioners to pay either by the levy of a special tax, 
 or by warrants drawn upon the county fund, and gives 
 such commissioners discretion as to levying such tax, the 
 county cannot be compelled by mandamus to pay a judg- 
 ment against it by the levy of a tax.^ 
 
 "Where the statute authorizing the issue of bonds pro- 
 vided that they should be paid as far as possil)le from a 
 certain revenue, and the balance should be paid by the 
 common council out of taxes which the council was to 
 raise, it was held that the common council could be com- 
 pelled by mandamus to raise the balance of the money 
 required.^ AVhcre there is money in the treasury of a city 
 subject to appropriation by the council for the payment 
 of a judgment against such city, the holder of the judg- 
 ment may, by mandamus against the council, compel its 
 payment.* 
 
 § IGO. What enters into the contract. — The law, as it 
 stood at the time of the making of the contract, enters 
 into and forms a part of the contract itself. A city or- 
 dinance, in pursuance of which bonds are issued, provid- 
 ing for the payment of principal and interest, is a part 
 of the contract between the city and the holder of the 
 bonds. ^ Where the enabling statute which authorized 
 
 1 Board of Com'rs Grand Co. v. 
 King, GT Fed. Rep. 202. 
 
 2 United States v. Macon Co., 99 
 U. S. 582. I 30 S. W. R. 893. 
 
 3 State V. Railway, 49 N. J. L. 
 384. 1 
 
 234 
 
 * State etc. v. Kansas City, 58 
 Mo. App. 124, 
 s Bassett v. City of El Paso, (Tex.)
 
 CH. Xlir.] REMEDIES. § 170 
 
 the issue of the bonds provided for a special tax to pay 
 them, this tax enters into the contract, and the holder of 
 the bonds is entitled to have this special tax continued 
 or some other equally efficacious mode substituted to pay 
 them. ^ The United States Court," in a case where, by 
 subsequent legislation, the State substituted another 
 remedy which clogged and retarded the collection of the 
 bonds and took away the sjoecial tax provided for in the 
 enabling act, refused to recognize the subsequent act 
 and held it unconstitutional, and issued a mandamus 
 directing the levy of the special tax. 
 
 § 170. To whom writ should be directed. — The writ of 
 mandamus should be directed to the officers of the mu- 
 nicipality who are authorized to levy the taxes under its 
 charter, and although usually directed to the officers 
 by name, yet in case of the resignation, death or expira- 
 tion of office, the proceedings do not abate, but continue 
 to their successors in office.^ 
 
 In one case it was held that mandamus against a public 
 officer did abate by his death, and could not be revived 
 against his successor, but this ruling seems to have been 
 based upon a peculiar statute.* 
 
 The writ must be directed to all those, if more than one, 
 whose duty it will be to execute the writ. 
 
 The writ should be directed to the officers in their 
 official names, and to the officers in their proper capacity, 
 and be served upon those who are to make the return.^ 
 
 The alternative writ is in the nature of a declaration, 
 and must allege, in issuable form, all facts necessary to 
 show the relator entitled to the relief he seeks against the 
 identical person from whom relief is sought.*^ 
 
 It is sufficient in the alternative writ to describe the 
 officers in their official capacities, and when the per- 
 emjjtory writ is granted they may then be named. AVhcre 
 ; the legislative body is named in the peremptory writ, that 
 
 1 See ^§185, 18G, 187. 
 
 2 Siebert v. Lewis, 122 U. S. 284. 
 8 Soulter V. Madison, 15 Wis. 30. 
 
 Dill, on Mun. Corp.(4th ed.) i;§ 8G1 b. 
 884. 
 
 4 Unitod States v. Boutwell, 17 
 Wall. 604. 
 
 5 Dill, on Mun. Corp. §§ 874-75 
 and cases cited. 
 
 6 State V. Bolche, 89 Mo. 188. 
 
 235
 
 MUNICIPAL BONDS. 
 
 [CII. XTII. 
 
 is held to be sufficient, and a service on its clerk a proper 
 service.^ 
 
 When the money to pay the judgment is collected and 
 in the hands of an officer then the writ should be directed 
 to him.^ 
 
 § 171. Equity will not assist. — A court of equity will 
 not lend its aid to collect the judgment. The case of 
 Eees V. Watertown, 19 Wall. 107, is a case illustrating the 
 point. In that case it appeared the officers had resigned, 
 and there was no existing legal corporate authority which 
 could be compelled to levy a tax. It was sought by a bill 
 in equity to have the property of the municipality sub- 
 jected to the payment of the trust debt with which it was 
 claimed the property was encumbered. The court re- 
 fused the equitable relief demanded, and held that the 
 remedy was at law by mandamus and said : ' ' The remedy 
 is in law and theory perfect and adequate ; the difficulty 
 is in its execution only, the want of a remedy and the 
 inability to obtain the fruits of a remedy are quite dis- 
 tinct, and yet they are confounded in the present proceed- 
 ing." This case was affirmed in Heine v. Levee Com- 
 missioners, 19 Wall. 055, where the court further said : 
 " So far as the present case is concerned the State has 
 delegated the power of taxation to the levee commis- 
 sioners. 
 
 " If that body has ceased to exist the remedy is in the 
 Legislature, either to assess the tax by a special tax or to 
 vest the power in some other tribunal."^ 
 
 § 172. Remedies a?;?aiiist a State. — When the bonds 
 are issued by the State itself and it defaiilts in the pay- 
 ment of either the principal or interest, the citizens of the 
 State or of any other State cannot bring suit in any court 
 to enforce payment, unless the State has provided some 
 
 ' Board of Co. Com'rs v. Sellew, 
 19 Albany L. J. 241. 
 
 2 Ray V. Wilson, 10 So. R. 613. 
 
 As to proceedings on Mandcunufi , 
 see Dill, on Miin. Corp. §§ 849 to 
 887 : High on Extraordinary Rem- 
 edies; 'ilevriW on Mandamus; Beach 
 
 236 
 
 on Public Corporations, §§ 1599 to 
 1609. 
 
 2 On this subject see Dill, on 
 Mun. Corp. (4th ed.) §§ 849 et seq. ; 
 Buroughs on Public Securities, p. 
 539 et seq ; Tiedman on Mun. Corp. 
 g§ 37.5-376 ; Mecliem on Public Of- 
 ficers, § 927 et seq.
 
 CH. XIII.] REMEDIES. § 173 
 
 redress, which most, if not all of them, have, and this 
 redress will be found in either the acts of the Legislature 
 or in the constitution itself of the State. ^ 
 
 The mode of redress is usually to ascertain the amount 
 due and to whom, and the Legislature then makes pro- 
 vision for the payment. No execution can issue, as the 
 property of the State cannot be taken in execution. 
 
 Mandamus will not lie unless the moneys, out of which 
 payment can legally be made, are in the hands of some 
 State officer, and he refuses to make the payment. 
 
 § 173. Les^islatiire may divide or dissolve mmiicipal 
 corporations. — The Legislature has the power, unless re- 
 strained by the constitution, to alter the boundaiy lines 
 of a municipality, by dividing the same into other munici- 
 palities, or by annexing other territory, or annexing the 
 municipality itself to another, and even to dissolve the 
 corporation itself and create another in its stead em- 
 bracing the same, or more or less, territory under 
 another corjDorate name. In all such cases the holder of 
 the bonds and other evidence of debt of the original cor- 
 poration is much interested. 
 
 It is the usual custom in such cases for the Legislature 
 to make provision in the act which makes the change to 
 ascertain and fix the proportion of the old debts the 
 separated portions should become liable for ; and when 
 such provision is made, the findings of the body appoint- 
 ed to ascertain the amount of old debts each portion of 
 the old corporation should be liable for, and the funds it 
 should receive, is final, unless provision for an appeal to 
 the courts is given. ^ 
 
 A¥here a municipality is divided, the old corporation 
 
 1 By the eleventh aniendinent of Osborne v. Bank of the U. S., 9 
 
 the Federal constitution the States Wheat. 738 ; la re Ayres, 123 U. S. 
 
 are prohibited from being svied in 443. See also Cowles v. Mercer 
 
 the Federal courts. Tliis prohibi- Co., 7 Wall. 118. 
 tion does not extend to suit where- 1 "^Sedgwick Co. v. Bunker, 1(5 
 
 in a State is not a party to the Kan. 498 ; Ovei'seers of Norwich 
 record. It has been decided in a v. Overseers of Berlin, 18 Johns. 
 
 number of cases that the prohibi- 
 tion does not extend to counties 
 or other subdivisions of a state. 
 
 (N. Y.) 382. 
 
 237
 
 § 174 MINICIPAL BONDS. [CH. XIi:. 
 
 will continue to hold all the corporate propert}- within 
 its limits and will be liable for all debts,^ and it the old 
 corporation is unable to pay, it has been held ecj[uity 
 would compel payment by the new territory. ^ 
 
 When one corporation is annexed to another all the 
 rights, property and interest of the annexed corpora- 
 tion becomes vested in the other, and the latter be- 
 comes, by such annexation, without legislation to that 
 effect, liable for all the debts of the corporation an- 
 nexed.^ 
 
 As said in New Orleans v. Clarke, 95 U. S. 053, " The 
 act which annexed Carrolton to New Orleans provided 
 that all property, rights and interests of every kind of 
 the former city should be vested in tlie latter, and that 
 the debts and lialjilities of Carrolton, including the 
 funding and improvement bonds, should be assumed and 
 paid by the city of New Orleans, and that city was in 
 terras declared liable therefor. 
 
 ^" Independenthj of this legislation the liabilities of 
 Carrolton would have devolved with its property upon 
 New Orleans, on the annexation to that city, so far, at 
 least, that they could be enforced against the inhabitants 
 and property brought by annexation within its juris- 
 diction." 
 
 § 174. New corporation Imble for old debts.— When 
 a city is dissolved and a new corporation created in its 
 place which practically embraces all the property of the 
 old, it is held that the new corporation is liable for the 
 debts of the old corporation."^ 
 
 1 Hartford Bridge Co. v. East iiia, April 24. ISHS, which provided 
 
 for the consolidation of the city 
 and coiintj^ of Sacramento and 
 provided for " liquidating;, funding 
 and paying" the outstanding debts 
 of the old city government by the 
 issuance of negotiable bonds, to 
 pay which the act provided that a 
 sinking fund sliould be created and 
 55 per cent of the revenue was to 
 be set apart for that purpose. The 
 court held that the surrender of the 
 old debt and the acceptance of the 
 
 Hartford, 16 Conn. 149; Mount 
 Pleasant v. Beckwith, 109 U. S. 
 514. 
 
 - Brewis v. Dulutli, 3 IMcCrary 
 (U. S.) 219. 
 
 3 Bates v. Gregory, 2G Pac. Rep. 
 891. 
 
 ♦ In Meyer v. Brown, 65 Cal. .583. 
 on an application tor mandamua to 
 compel the levy of a tax to pay 
 bonds, the bonds in suit were is- 
 sued pursuant to an act of Califor- 
 238
 
 CH. XIII.] REMEDIES. § 1 
 
 lO 
 
 The Legislatures of several of the States have attempted 
 to relieve over-burdened cities from the payment of the 
 debts by dissolving the old corporation and creating in 
 its stead, out of practically the same territory, another 
 which it was supposed could not be compelled to 
 pay the debts of the former corporation, but the 
 courts have held the new corporation liable for the 
 old debts. ^ 
 
 In Hill V. Kahoka, 35 Fed. Rep. 32, it appeared that the 
 town of Kahoka was, in 18G7, duly incorporated under a 
 general law of Missouri, and among other acts had issued 
 some railroad aid bonds. Its charter was forfeited in 
 1880 on proceedings by quo ivarranto, and the city of 
 Kahoka was incorporated, embracing practically the same 
 territory and population. Suit was instituted against the 
 new corporation upon some of the coupons annexed to 
 said bonds and judgment was rendered against the city. 
 The court said : 
 
 *' Municipal corporations cannot extinguish their debts 
 by changing their names or organizing under new 
 charters. A debt once contracted by a municipal cor- 
 poration will survive as a debt against whatever cor- 
 porate entity is subsequently created to take its place 
 and exercise its power of local government over sub- 
 stantially the same people and territory." 
 
 § 175. Rights of creditors. — Where a corporation is 
 legislated out of existence and its territory is annexed to 
 another, or other similar corporation or corporations, it 
 has been held that a creditor of the old corporation could 
 file a bill in equity to compel each of the corporations, to 
 which parts of the old corporation were added, to pay to 
 him the proportionate share of his debt, based upon tho 
 proportion of the value of the old corporation each cor- 
 poration received b}- annexation.^ 
 
 bonds created a contnict whicli 
 could not be inipnired bj' subse- 
 quent legislation, and that vutnda- 
 
 Ilill v. Kahoka, 35 Fed. Rep. Wi 
 Devereaux v, Cit}" of Brownsville^ 
 29 Fed. Rep. 742 : Broughton v 
 
 mus would issue to compel the levy Pensacola, 93 U. S. 20G, 
 
 of the tax by the legal successors 
 of the consolidated city and town. 
 1 Amy V. Selma, 77 Ala. 103 ; 
 
 - Mount Pleasant v. Beck with. 
 100 U. S. 514; Beckwith v. Racine, 
 7 Biss, 142. 
 
 239
 
 § 177 MUNICIPAL BONDS. [CH. XIII. 
 
 AX'lion a public corporation is abolished, and out of it 
 several new ones are created, and the act does not pro- 
 vide for the ascertainment and division of the old debts, 
 it has been held that each of the new corporations is 
 liable for all the debts of the old one.^ In which case it 
 is presumed the one paying would be entitled to contri- 
 bution from the others. And in New Jersey, where a 
 statute divided a township between another township 
 and a city, and directed that the debts of the old township 
 should be paid by the other corporations, it was held that 
 the creditors of the old township could sue the city or 
 the township to which the old township was annexed.^ 
 
 § ITG. AVhen debtor powerless— When Legislature 
 may act. — It would seem that when a public corporation 
 is dissolved by the Legislature, and no other formed in 
 its stead, and there are no funds out of which to pay debts, 
 except those raised by taxation, the creditor of the dis- 
 solved corporation is powerless to enforce his debt and is 
 left without a remedy, unless it be to apply to the very 
 body, the liCgislature, which placed him in this unfort- 
 unate position.^ 
 
 If no provision is made for an apportionment of the 
 debts of a municipal corporation at the time it is divided 
 or dissolved, the Legislature may, by a subsequent act, 
 make the apportionment of the debts and of the funds, 
 and when in the act consolidating two municipalities it 
 provides that the property in each shall be liable only for 
 the old debts of each, the Legislature may, by a subse- 
 (juent act, provide that the rate of taxation shall be the 
 same in the whole consolidated corporation, and that it 
 shall be liable for all {]w debts of both old corporations.^ 
 
 ^ 177. Statute of Limitations. — The coupons are so 
 connected with the bonds from which they are detached 
 that they partake of the same contractual nature as the 
 l)onds and are governed by the same statute, notwith- 
 
 ■* Layton v. New Orleans, 12 La. 
 ol5. On this subject see Dillon on 
 Mun Corp. ^'§63, 70, 187, 188, 180 ; 
 (;ooley on Const. Limit. 229-30 ; 
 Beach on Pub. Corp. g 396 et seq. 
 
 1 Hughes V 
 
 School Dist. 
 
 , 72 Mo. 
 
 G43. 
 
 - Neilson v. 
 
 Newark, 
 
 49 
 
 N 
 
 J. L. 
 
 24G. 
 
 
 
 
 
 3 See g 100. 
 240 
 
 
 

 
 CH. XIII.] KEMEDIES. § 177 
 
 standing the fact that if considered alone they would be 
 of a different nature and be controlled by the statute in 
 a different way as to the time of maturity. When the 
 bond from w^hicli they are detached is a specialty, the cou- 
 pons are to be likewise considered, but the statute begins 
 to run against a detached coupon from the date of its 
 maturity and not that of the bond from which it is de- 
 tached.^ And it also begins to run on the coupons from 
 the time they respectively mature, although attached to 
 the bond, 2 though it does not begin to run against the 
 bond until its own maturity. 
 
 The coupons furnish separate causes of action which 
 are complete at the maturity of the coupons, and it would 
 be exceptional and unreasonable to hold that the statute 
 should not then commence running, therefore actions 
 on the coupons may be barred before action on the bonds 
 maturing at a late date would become so.'^ 
 
 Although the bonds may contain a condition that, in 
 case of default in the payment of the coupons, the bonds 
 themselves may be declared due at the option of the 
 holder, and he may then sue for both principal and in- 
 terest, the statute does not commence running from the 
 time of such default because of such condition.* 
 
 It is held that when a suit cannot be brought for the in- 
 terest on the coupon because barred by the statute, it 
 cannot be recovered by suing for interest on the bond. ^ 
 Where a statute providing that the holders of claims 
 against a city, due before a certain time, might present 
 them for refunding, did not limit the time wdien such 
 claims should be presented, still, failure to present 
 such claims, until they had become barred by limitation, 
 would give the city the right to refuse to issue bonds for 
 such barred claims.^ Where the Legislature, after the 
 issue of bonds, creates a special fund out of which the in- 
 
 1 Clark V. Iowa City, 20 Wall. 
 583. 
 
 2 Amy V. Dubuquo, 98 U. S. 470. 
 
 * Nebraska Bank v. Nebi-aska, 
 etc. Co., 14 Fed. Rep. 763. 
 6 Griffin v. Macon, 36 Fed. Rep. 
 
 3 Clark V. Iowa City, 98 U. S., 20 885. 
 Wall. 583. I Bates v. Gregory, 20 Rac. Rep- 
 
 I 891. 
 1 6 241
 
 § 178 MUNICIPAL BONDS. [CH. XIII. 
 
 terest and principal is to bo paid, and the bondholder 
 presents his coupons or bonds for registration or payment 
 in the manner provided, it has been held that the Statute 
 of Limitations will not run against the coupons or bonds 
 so presented, until the money is received in the treasury 
 in accordance with the terms of the act.-' 
 
 § ITS. \ew promise. — A new promise to pay to be 
 effectual and interrupt the running of the statute must 
 be made by the officers of the corporation under authority 
 of the board having control of the finances, and be made 
 to the person holding the bonds or other evidence of city 
 debt, or to some person acting for him.^ 
 
 In the case of City of Houston v. Jankouskie, 13 S. W, 
 E. 'liid, on a suit to recover on bonds barred by the statute, 
 the holder of the bonds for the purpose of proving a new 
 promise introduced in evidence the annual statements of 
 the secretary of the city of Houston for the year 18S5, in 
 which the item under head of liabilities appeared, "M. 
 Reichman, past due bonds, $2, 600," the bonds in suit were 
 a part of the 8^,000 described, and a further statement 
 of the secretary, "Approximate estimate of accrued inter- 
 est on bonds ... on $2,000 Reichman bonds six years at 
 ten per cent $15, GOO," was introduced for same purpose. 
 !Xo evidence was introduced to show that the secretary 
 had any authority to make any acknowledgment or 
 promise that would bind the city. The court held that 
 the actions of the official did not affect the city or 
 constitute a new pn^mise, and further, that such a publi- 
 cation was not a promise. 
 
 In an action on the coui)()ns or the bonds, an offer by 
 the municipal corporation to compromise its bonds made 
 witliin the statutory period and which is declined by the 
 holders of the bonds in suit, but accepted by the holders 
 of like bonds, is not a promise to pay or an acknowledg- 
 ment of the debt which will interrupt the running of the 
 statute.^ 
 
 1 Lincoln Co. v. Luniug, 1:33 U. S. 
 529 ; Frehill v. Chamberlain, 65 
 Cal. 603. 
 
 2 Fort Scott V. Hickman, 112 U. S. 
 
 242 
 
 150 ; McKinney v, Snyder, 78 
 Pcnn. St. 497. 
 
 3 Edwards v. Bates Co., 55 Fed. 
 Ptep. 473.
 
 CH. XIII.] REMEDIES. § ^81 
 
 An offer to compromise unaccepted cannot be made the 
 basis of a promise to pay, and cannot even be admitted in 
 evidence.^ 
 
 § 170. When Federal courts follow tlie decisions of 
 the State courts. — The Federal courts have by a uniform 
 course of decisions given stabihty to municipal bonds and 
 have estal)lished the doctrine that such bonds, negotiable 
 in form, in the hands of a bona fide holder, are valid not- 
 withstanding irregularities in their issue, or even the non- 
 performance of prior conditions, if the bonds contain 
 proper recitals which allege that the bonds were legally 
 issued, or the municipality has otherwise estopped itself, 
 provided the municipal corporation had the power to 
 issue them. 
 
 And this course of the Federal courts has been so uni- 
 formly in favor of compelling municipal corporations to 
 pay their bonds when they had power to issue them, and 
 they are in the hands of innocent holders, that a large 
 part of the litigation relating to such bonds finds its way 
 into these courts. 
 
 § ISO. Latest statute decision followed— Exceptions. 
 — The Federal courts follow the latest decisions of the 
 highest courts of a State, if the decisions are founded upon 
 the construction of the State constitution or statute law 
 of the State, or upon some peculiar custom,^ provided the 
 bonds or other municipal paper Avere issued after the de- 
 cision of the State court of last resort ; but when the 
 municipal paper was issued after a decision of the State 
 court of last resort had construed the law relating to the 
 issue of the paper, and subsequently to its issue the same 
 court reverses its former rulings and holds the bonds 
 void, the Federal courts will not follow the last decision 
 of the State courts.^ 
 
 § 181. Case illustrating exception. — The case often 
 
 1 Cook V. Insurance Co., 70 Mo. 
 15. 
 
 2Sciopio V. Wright, 101 U. S. 
 665 : Burgess V. Seligman, 107 U. S. 
 20 : Green Co. v. Conness, 109 U. S. 
 104 ; Anderson v. Santa Anna, 116 
 
 U. S. 356 ; Town of South Ottawa 
 V. Perkins. 94 U. S. 260. 
 
 8 Douglass V. County of Pike. 101 
 U. S. 677 ; Taylor v. Ypsilanti, 105 
 U. S. 60. 
 
 243
 
 § 181 MUNICIPAL BONDS. [CH. XIII. 
 
 referred to illustrating this position of the Federal courts 
 is that of Gelpcke v. Dubuque, 1 Wall. 175. 
 
 In this case it appeared the city of Dubuque had 
 issued bonds to aid in the construction of two railroads 
 extending beyond the limits of the city, and by a series of 
 decisions extending between 1853 and 1851> the Supreme 
 Court of Iowa had held that the Legislature of the State 
 had the constitutional authority to em])ower municipal 
 corporations to issue such bonds. The Supreme Court of 
 Iowa, after said bonds had been issued and sold, in the 
 case of State of Iowa ex rel. v. The County of AVapello, 
 13 Iowa 300, overruled, by an unanimous opinion, the 
 former decisions of the same court, and held that such 
 an act was unconstitutional and the very bonds under 
 discussion void. 
 
 Justice Swayne, who delivered the opinion of the court. 
 in holding the bonds to be valid and refusing to follow 
 the last decision of the Iowa Supreme Court, said : 
 
 "It is urged that all these decisions (the earlier ones) 
 have been overruled by the Supreme Court of the State 
 in the later case of the State of Iowa ex rel. v. The 
 County of Wapello, and it is insisted that in cases involv- 
 ing the construction of a State law or constitution, this 
 court is bound to follow the latest adjudication of the high- 
 est courts of the State. Lefhngwell v. Warren, 2 Black, 
 599, is relied upon as authorit}^ for the proposition. In 
 that case this court said it would follow the latest settled 
 adjudications. 
 
 " Whether the judgment in question can, under the cir- 
 cumstances, be deemed to come within that category, it 
 is not now necessary to determine. It cannot be ex- 
 pected that this court will follow eveiy such oscillation, 
 from whatever cause arising, that may i:>ossibly occur. 
 
 " The earlier decisions, we think, are sustained by reason 
 and authority. They are in harmony with the adjudica- 
 tions of sixteen States of the Union. Many of the cases 
 in the other States are marked bv the profoundest legal 
 ability. . . . However we may regard the late case in Iowa 
 affecting the future, it can have no effect upon the past. 
 
 The sound and true rule is, that if the contract when 
 244
 
 CH. XIII.] REMEDIES. § 1S2 
 
 made was valid by tlie laws of the State as then expounded 
 by all departments of the government and administered in 
 its courts of justice, its validity and obligation cannot be 
 impaired by any subsequent action of legislation or de- 
 cision of its courts, altering the construction of the 
 law.i 
 
 " The same principle applies where there is a change of 
 judicial decision as to the constitutional power of the 
 Legislature to enact the law. To this rale, thus en- 
 larged, we adhere. It is the law of this court. 
 
 " To hold otherwise would be as unjust as to hold that 
 rights acquired under a statute may be lost by its repeal. 
 . . . We shall never immolate truth, justice and the law, 
 because a State tribunal has erected the altar and decreed 
 the sacrifice. " 
 
 Justice Miller filed a very elaborate dissenting oj^in- 
 ion. 
 
 § 182. When the Federal courts will not be con- 
 trolled. —The Federal courts upon questions of mercantile 
 or commercial law or usages which are not peculiar to any 
 place will not yield their judgment to that of the State 
 courts or be controlled by them, unless they are in accord 
 with the rulings of the Federal courts.^ 
 
 In a case in Pennsylvania,'' where the court held mu- 
 nicipal bonds, negotiable in form, to be non- negotiable, 
 the United States Court refused to be controlled by the 
 decisions of the Penns3'lvania Court, because the question 
 was one of commercial law, and the court held the bonds 
 to be negotiable.* 
 
 This doctrine is further illustrated by the case of Town 
 of Venice v. Murdock. 92 U. S. 494, in a suit to enforce 
 bonds issued under a New York statute. It was, at the 
 time of the decision, the uniform rule of the New York 
 courts that, where the statute authorizing the issue of 
 
 1 The Ohio L. & T. Co. v. Debalt, 
 16 IIow. 4;J'2. 
 
 - Olcott V. Supervisors, 16 "Wall. 
 678 ; Talrott v. Town of Pino Grove, 
 19 Wall. 666 : Com'rs Johnston Co. 
 V. Thayer, 94 U. S. 642. 
 
 •^ Dimon v. Lawrence Co.. '.Vi 
 Penn. u.")2. 
 
 * Mercer Co. v. Ilackett, 1 Wall. 
 93. 
 
 245
 
 § 182 MUNICIPAL BONDS. [CH. XIII. 
 
 railroad aid bonds directed that the prior consent in writ- 
 ing* of a certain percentage of the taxpayers should be 
 oljtained, and that the officers authorized to issue tlie 
 bonds should make and file, attached to such consent, 
 an affidavit that the persons so consenting were the re- 
 quired number of the taxpa3'ers, such affidavit was but 
 j)rima facie evidence of the facts contained therein 
 and that the findings of such officers were not conclusive.^ 
 
 The Supreme Court of the United States in the above 
 case held that the affidavit of such officers was conclusive, 
 and that it was not bound to follow the New York case to 
 the contrary. 
 
 The court said : "We are aware that in the State of 
 New York it has been held adversely to the opinions we 
 have expressed (citing the New York cases). 
 
 " It is argued, however, that the New York decisions are 
 judicial constructions of the statute of that State, and 
 that therefore they furnish a rule by which we must 
 be guided. 
 
 ' ' The argument would have force if the decisions in fact 
 presented a clear case of statutory construction ; but they 
 do not. They are not attempts at interpretation. 
 
 ' ' They would apply as well to the execution of powers or 
 authorities granted by private persons, as they do to the 
 issue of bonds under the statute of April IGth, 1852. They 
 assert general principles, to wit : that persons empowered 
 to borrow money and give bonds therefor, for the purpose 
 of paying it to an improvement company, are not au- 
 thorized to deliver the bonds directly to the company, a 
 doctrine denied in this court, in the Supreme Court of 
 Pennsylvania, and even in the Court of Appeals of New 
 York (People v. Mead, 24 N. Y. 121). 
 
 " They assert also that where an authority is given to an 
 officer to execute and issue bonds on assent of two- 
 thirds of the voters of a town, the assent to be obtained 
 I)}- the officer and filed in a public office, with an affidavit 
 verifying the assent, the verification amounts to noth- 
 ing, subserves no purpose, and that a bona fide holder of 
 
 ' Cagwin v. Town of Hancock, I 84 N. Y. 533; Starin v. Genoa, 23 
 
 I N. Y. 430. 
 246
 
 CH. XIII.] REMEDIES. § 183 
 
 the bonds is bound to prove that the requisite number of 
 voters did actually assent. 
 
 "They assert this as a general projDosition. They do 
 not assert that the statute so declares, or that such 
 is even its implied requisition. There is therefore l)efore 
 us no such case of the construction of a State statute by 
 State courts as requires us to yield our own convictions 
 of the right and blindly follow the lead of others, eminent 
 as we freely concede they are." 
 
 The New York courts, since the above decision, have 
 still continued to hold to the same opinion, and while re- 
 ferring to the above case of Town of Venice v. Murdock, 
 refused to be controlled by it.^ 
 
 The Supreme Court, in the case of Sciopio v. Wright, 
 101 U. S. C05, reversed its decision in the case of Town- 
 ship of Venice v. Murdock, supra, wherein they refused to 
 follow the decisions of the Court of Appeals of New 
 York to the effect that power to subscribe to the stock 
 of a railroad and to borrow money by an issue of bonds 
 did not authorize an exchange of bonds for stock of 
 the railroad, and in this latter case the Supreme Court 
 of the United States held the bonds so exchanged void and 
 followed the uniform decisions of the New York cases, 
 on the ground that this was the settled construction of a 
 State statute. 
 
 § 183. What the Federal eor<rts recognize.— The 
 Federal courts follow the decisions of the State courts on 
 questions of the extent and character of the powers 
 which the various political and municipal organizations 
 shall possess, and the settled doctrine of its highest courts 
 on this subject will be regarded as authoritative by the 
 courts of the United States, for it is a question that re- 
 lates to the internal constitution of the bod}' politic of 
 the State. ^ 
 
 The Federal courts recognize and apply the rule that 
 after a statute or constitution has been settled by judicial 
 construction of the court of the last resort of the State, 
 
 1 Ca.2;\vin v. Town of Hancock, 
 84 N. Y. 533. 
 
 2Clai1)orne Co. v. Brooks. Ill 
 U. S. 406 ; Francis v. Howard. 50 
 Fed. Rep. 44. 
 
 247
 
 § 184 MUNICIPAL BONDS. [CII. XIII. 
 
 the constniction becomes, so far as contract rights are 
 concerned, as much a part of the statute as the text it- 
 self. ^ 
 
 § 184. State court decisions must have been ren- 
 dered before bonds were issued. — The decision of the 
 State court of hist resort, in order to be binding upon the 
 Federal courts, even though such decision is upon the 
 construction of the State constitution, must be rendered 
 before the bonds or other municipal paper were issued, 
 if such decision of the State court is in conflict with pre- 
 vious decisions of the Federal courts,^ but if such decision 
 is not in conflict with the former decisions of the Federal 
 courts, they will follow it, but the decision of the State 
 court must have been upon the construction of the con- 
 stitution or some statute.^ 
 
 In one case, that of Butz v, Muscatine, 8 Wall. 875, 
 the Supreme Court of the United States refused to fol- 
 low the decision of the court of last resort, althougli 
 upon the construction of a statute, and the United 
 States courts had never before passed upon the question 
 upon the ground that as the bonds were issued before 
 the act was construed by the State court, the court was 
 not bound to follow it, but could adopt its own construc- 
 tion. 
 
 This case has never been followed and is unlikely to 
 be, as it would lead to endless confusion. 
 
 The Federal courts will follow the decision of the 
 State courts on questions of the construction of the State 
 constitution or enactments^ and hold bonds to be invalid 
 issued after such decision of the State courts.^ 
 
 The Federal courts will not follov/ the decision of the 
 State courts, if the decision be based upon the con- 
 struction of an act which is claimed to impair the obli- 
 gation of a contract, because of the provision in the con- 
 stitution of the United States that "no State shall pass 
 
 1 Douglass V. Piko Co., 101 U. S. 678 ; Lee Co. v. Rogers, 7 Wall. 
 607. 181 : Supervisors v. United States, 
 
 * Carrol Co. v. Smith. Ill V. S. , 18 Wall. 71. 
 .■556. i * Gerraan Sav. Bk. v. Franklin 
 
 8 Olcott V. Fon Du Lac, 16 Wall. ' Co. 128 U. S. .526-8. 
 248
 
 en. XIII.] REMEDIES. § 185 
 
 any law impairing the obligation of contracts. If State 
 courts were allowed to construe acts impairing the obli- 
 gation of contracts, which construction the Federal 
 courts were bound to follow, the decision of the State 
 courts instead of that of the United States Supreme 
 Court would construe this provision of the constitution, 
 and as said in Green v. Neal, Lessee,-' to this provision 
 should be added the additional provision that "no State 
 court shall change its rulings so as to impair the oljli- 
 gation of contracts entered into under its former rul- 
 ings." 
 
 § 1S.5. Le^islatiAe control over remedies — What 
 becomes part of contract with the bondholder. — ^The 
 holders of municipal indebtedness are limited in their 
 remedies for enforcement of their claims, and are unable 
 to resort to the general means for their collection,'^ there- 
 fore a more modified rule exists as to the power of the 
 Legislature to curtail their remedies than applies toother 
 creditors. 
 
 As a general rule the property of a municipal corpora- 
 tion cannot be taken in execution to satisfy the debt, 
 and the usual, and it might be said the only, means to 
 obtain the money to satisfy a debt due to a creditor 
 from the corporation is by mandamus.^ All the laws 
 in force, when bonds or other indebtedness are issued 
 which authorizes the levy of a tax to pay the principal 
 or interest thereof, are a part of the contract between 
 the municipality and the holders of such bonds or other 
 evidence of indebtedness, and to repeal such laws is to 
 impair the obligation of the contract.^ 
 
 Any property or security or means of payment whic-h 
 was, at the time of the issue of bonds, devoted to their 
 payment, cannot be diverted to other purposes, nor the 
 statute so devoting them repealed. And where a sinlc- 
 ing fund was pledged by the act creating the debt to 
 
 1 G Pet. 299. ( ■« Ralls Co. v. U. S., 10.5 U. S. 7:]:? ; 
 
 2 Meriwether v. Garret, 102 U. S. Van Hoffman v. Quincy, 4 Wall. 
 472. 53.5. 
 
 « Sherman v. Williams, 19 S. W. 
 R. 606. See § 166. 
 
 249
 
 §186 MUNICirAL BONDS. [CH. XIII. 
 
 its payment, it was held that the Legislature had no 
 authority to divert the fund to other purposes.^ And 
 the creditor may, by injunction, restrain the corporation 
 from carrying out such a law.^ 
 
 And when the ordinance under which the bonds are 
 issued devotes certain property, or provides certain means 
 for the payment of the principal and interest of the bonds, 
 such provision cannot be afterwards ref)ealed, or the 
 income devoted to other purposes, as such a provision 
 enters into and becomes a part of the contract.^ 
 
 The laws of the State, with the construction placed up- 
 on them by the courts of last resort of the State, are a part 
 of the contract, and such construction will be recognized 
 and enforced by the courts of the United States in an action 
 brought upon bonds or other written evidence of debt 
 issued by municipal corporations.^ 
 
 § 18G. Same — Inferior security cannot be snbstitnted 
 Cases.— When the act under wliich tlie bonds are issued 
 provides that a special tax shall be raised to pay the 
 interest and the principal when it shall become due, such 
 provision becomes a part of the contract between the 
 bondholder and the municipal corporation issuing the 
 bonds, and is protected by the constitution of the United 
 States which prohibits the States from passing au}^ laws 
 which will impair the obligation of the contracts, and 
 this provision cannot be repealed or changed, unless 
 another remedy equally efficacious is substituted. 
 
 The case of Siebert v. Lewis, 122 U. S. 284, is one which 
 illustrates this doctrine. 
 
 In this case it appeared that under an act of Missouri 
 passed March 28th, ISGS, which authorized the issue of 
 bonds, and provided "that in order to pay the interest and 
 principal thereof the County Court shall from time to time 
 levv and cause to be collected, in the same manner as 
 county taxes, a special tax" to pay the interest and prin- 
 cipal of the bonds. 
 
 1 Teny V, Wisconsin M. & F. Ins., i 716 ; Fazende v. Houston. 34 Fed. 
 18 Wis. 87. j Rep. 95 ; Bassett v. City of El Pasa, 
 
 ' Fazende v. Houston, 34 Fed. ' (Tex.) 30 S. W. R. 893. 
 Rep. 95. I * German Sav. Bank v. Franklin, 
 
 8 State V. Police Jurr. Ill U. S. ! 128 U. S. 526. 
 250
 
 CH. Xrri.] REMEDIES. § 187 
 
 The bonds were issued and subsequently the Legislature 
 passed an act which repealed the jirovisions of the former 
 act, and instead of the special tax provided that taxes for 
 the State, county and school should be levied as thereto- 
 fore, but that no other tax should be levied, except on 
 petition and order of a Circuit Court. 
 
 Subsequently the relator obtained a judgment on 
 some of the bonds in the Circuit Court of the United States 
 and applied for a writ of mandamus to enforce the col- 
 lection of the special tax under the act of March 23, 1868. 
 The Supreme Court, to which the matter was carried, held 
 that the provision in the act which authorized the levy 
 and collection of the special tax to pay the bonds was a 
 part of the contract with the creditor, and could not be 
 repealed, unless a remedy equally efficacious was sub- 
 stituted, and that the subsequent act did not provide as 
 efficacious a remedy, but one that was, in fact, clogged with 
 limitations and conditions and tended to delay and em- 
 barrass a creditor. The court said: "The question is 
 not whether a tax shall be levied in Missouri without 
 authority of law, but which of several of its laws are in 
 force and govern the case," and the court held the act 
 of 1868 was in force as to the relator's judgment and 
 directed that a mandamus issue. 
 
 § 187. Same — Cases. — And where the act under which 
 the bonds are issued, or the charter of the city, directs 
 that the principal and interest of the bonds should be 
 raised and paid by taxation, this provision enters into the 
 contract between the city and the bondholder, and cannot 
 be repealed or changed to the disadvantage of the liolder 
 of the bonds. ^ 
 
 In Van Hoffman v. Quincy, 4 Wall. 535, where a statute 
 authorized a municipal corporation to issue bonds and 
 levy a tax to pay them, and the bonds were issued and a 
 subsequent act restricted the power of taxation, the court 
 held that the power of taxation was a contract within 
 the meaning of the constitution, and could not be with- 
 drawn until the contract was satisfied, and that the Legis- 
 
 1 City of Galena v. Amy, 5 Wall. I Louisiana v. New Orleans, 102 U. S. 
 705 ; State v. Madison, 15 "Wis. 33 : 1 203. 
 
 251
 
 § 188 MUNICirAL I50XDS. [CH. XIII. 
 
 latiiro, as well as the corporation, were bound by it, and 
 any subsequent act restricting the power of taxation, if 
 it materially affected the right of the creditor, was, as to 
 all prior debts, a nullity. 
 
 In Mundy v. Eahway, 43 N. J. L. 338, where the bonds 
 in suit had been issued by the city of Rahway, and the 
 charter of the city at the time conferred upon the com- 
 mon council power to raise by tax each year such sum or 
 sums as the}^ should, deem expedient for payment upon 
 the city debt and such part of the principal thereof as 
 should be due and payable, and also made it the duty of 
 the assessors to assess the sum required. Subsequently 
 the Legislature passed a supplement to the act in relation 
 to the issue of wiits of mandamus, the effect of such 
 supplement being to deprive the bondholder of his im- 
 mediate right to a viaudanius, and in effect subordinate 
 his claim to that of creditors of the city, whose claims 
 were not yet due. The court held the statute to be un- 
 constitutional and said : " The act would strip him (the 
 bondholder) of his priorit}'", and attempts what, in Martin 
 V. Somerville Water Power Co., 3 Wall. Jr. 20G, was de- 
 cided to be beyond legislative power. It is as if the 
 Legislature enacted that no execution should issue to en- 
 force a pre-existing judgment to the prejudice of the in- 
 terests of creditors whoseclaims were not due," and as to 
 the power to tax contained in the charter, said, ' ' The pow- 
 er continued to exist when the relator's bonds were issued 
 and still remains. Such a power in public officers be- 
 comes adut}^ whenever the enforcement of private rights 
 depends upon its exercise, and the language by which it 
 is conferred, though permissive in form, is considered as 
 in fact peremptory." 
 
 § 188. When obligation of contract is impaired. — 
 The obligation of the contract is impaired in the con- 
 stitutional sense by any law which prevents its enforce- 
 ment, or which materially abridges the remedy for en- 
 forcing it, which existed when it was contracted and 
 does not supply an alternative remedy equally adequate 
 and efficacious.-^ 
 
 1 People ex rel. v. Common Council of Buffalo, 140 N. Y. 300. 
 252
 
 CH. Xirr.] REMEDIES. § 189 
 
 The Supreme Court, in Louisiana v. New Orleans, 102 
 U. S. 203, in speaking of the obligation of a contract, said : 
 " The obligation of a contract, in the constitutional sense, 
 is the means provided by law by which it can be enforced 
 b}" which the parties can be obliged to perform it. What- 
 ever legislation lessens the efficacy of these means im- 
 pairs the obligation. If it tends to postpone or retard 
 the enforcement of the contract, the obligation of the 
 latter is to that extent weakened. The Latin proverb, ^Qui 
 cito dut his dat,^ He who gives quickly gives twice, has 
 its counterpart in a maxhn equally sound, ' Qui serious 
 solvit, m unis solvit, ' He who pays too late, pays less. And 
 authorization of the postponement of payment or of means 
 by which such postponement might be effected, is in con- 
 flict with the constitutional inhibition." 
 
 When the statute which authorized the issue of bonds 
 provides that the municipality issuing the bonds shall 
 not issue any other bond or incur any other debt until 
 the bonds are paid, such a provision becomes a part of the 
 contract, and the Legislature cannot afterwards authorize 
 the corporation to issue other bonds or incur a further 
 debt until the first bonds are paid.^ 
 
 Nor can the constitution of a State be amended so as to 
 impair the obligation of a contract.^ The contract should 
 be read as of the time it is made, and of bonds as of 
 tlie time they were issued, and the holder of the latter 
 is entitled to all the provisions then in force for the \r<\y- 
 nient of his debt, and no substantial change can legally 
 be made which will tend to lessen his security. 
 
 § 180. No vested ric^lit to a particiiliir remedy. — A 
 creditor has no vested right to a particular form of remedy, 
 and the Legislature may change or modify remedies with- 
 out incurring a violation of the constitutional provision, 
 provided there still remain to the creditor a substantial 
 and available remedy, but if the statute loads the remedy 
 with conditions and restrictions, so as to render it practi- 
 cally worthless, or abrogates valuable rights secured by 
 
 1 Smith V. Appleton, 19 Wis. 4G8 ; I = state ex rel. Marchand v.' New 
 Board of Liquidation v. McComb, Orleans, 37 La. 687. 
 
 92 U. S. .jS. 
 
 253
 
 s 
 
 190 MUNICIPAL BONDS. [CH. XIII. 
 
 contract, it violates the obligation of the contract, and 
 is then in contravention of the constitution.^ 
 
 § 11)0. When creditors are without legal remedy. — 
 
 Creditors of a public corporation can be and frequently 
 are, delayed and sometimes entirely deprived of all means 
 of enforcing their remedy against the corporation and 
 collecting their debts, by legislative acts passed subse- 
 quently to the inception of their debts, and this by the re- 
 moval of the agencies through which the courts must 
 act in enforcing the remedy of the creditors.^ 
 
 A case illustrating this doctrine is found in Thompson 
 V. Wiley, 46 N. J. L. 476, the facts appearing being that 
 the city of Elizabeth became hopelessly insolvent and 
 unable to meet its obligations, and in order to protect 
 itself from its creditors a bill was drafted and introduced 
 into the Legislature which became a law (P. L. 1884, p. 84), 
 the scheme of which was to authorize the governor, 
 upon proof that the local assessors failed to perform their 
 duty, or in case of a vacancy in that office, to appoint 
 three persons to be known as Commissioners of Taxation, 
 whose duty it should be to assess taxes only for the cur- 
 rent expenses of the city. The statute further provided 
 that " all taxes levied in pursuance of this act shall be 
 applied solely to the purpose for which tliey are levied, 
 and it shall be unlawful to appropriate, or use, or direct, 
 or order their appropriation or use for any other purpose 
 or purposes whatsoever." The governor appointed the 
 commissioners and they proceeded to act, and thus suffi- 
 cient revenue was obtained to defray the current expenses 
 of the city, and no means was provided whereby taxes could 
 be raised to pay any of its old debts, and no officers were 
 in existence who could be compelled by mandamus to 
 raise by taxation money to pay such debts. 
 
 The Supreme Court held the act constitutional, and 
 refused to grant a mandamus, holding that the commis- 
 
 1 Louisifvna t. New Orleans, 102 
 U. S. 203 ; Cooley on Const. Limit. 
 351^42 ; Black on Const. Limit. 
 § 138. 
 
 254 
 
 2 Meriwether v. Garret, 102 U. S. 
 
 472.
 
 CH. XIII.] REMEDIES. § 190 
 
 sioiiers had no power to levy taxes to pay the debts of 
 the city. 
 
 The Legislature afterwards passed an act in relation to 
 encumbered cities (P. L. N. J. 1885, p. 127), which author- 
 ized cities that were insolvent to compromise with their 
 creditors and to issue bonds in settlement, and afterwards 
 another act was passed which directed that the assessors 
 in such cities should assess a special tax to pay the in- 
 terest on such bonds. Under these various acts Elizabeth 
 has been able to delay its creditors and has compromised 
 its debt. 
 
 In Meriwether V. Garrett, 102 U. S. 4^2, G18, Mr. Justice 
 Field in part said : 
 
 " When creditors are unable to obtain payment of their 
 judgments against municipal bodies by execution, then 
 they can proceed by mandamus against the municipal 
 authorities to compel them to levy the necessary tax for 
 that purpose, if such authorities are clothed by the Legis- 
 lature with the taxing power, and such tax when collected 
 cannot be devoted to other uses, but if the authorities 
 possess no such power, or their officers have been abolished 
 and the power withdrawn, the remedy of the creditor is 
 with tlie Legislature, which alone can give them relief. 
 No Federal court, either on its law or equity side, has any 
 inherent jurisdiction to allow a tax for any purpose, or to 
 enforce a tax already levied, except through the agencies 
 provided by law. However urgent the appeal of the 
 creditors and the apparent hopelessness of their position 
 without the aid of the Federal court, it cannot seize the 
 power which belongs to the legislative department of the 
 
 State and wield it in their behalf." 
 
 255
 
 CHAPTER XIV. 
 
 DEFENCES. 
 
 Want of power — Estoppel by recitals — By rrhom the question of jJcr- 
 formanee of conditions precedent shall he decided — Recitals of 
 ivrong act. 
 
 Section. 
 
 191— Want of power— What tlie 
 term means — Always a 
 good defence. 
 
 192 — From what want of power 
 arises — When a municipal 
 corporation may be es- 
 topped to plead it as a 
 defence. 
 
 193 — Estoppel by recitals — Prin- 
 ciple of the rule — Bona 
 fide holder only protected 
 by. 
 
 194 — Execution and delivery — 
 Effect of — Leading case 
 on doctrine of estoppel. 
 
 195 — Bonds must contain recitals 
 — Contra. 
 
 196 — Recital of enabling act suffi- 
 cient — By wlioni must be 
 made. 
 
 197 — All enabling acts must be 
 recited. 
 
 198— Effect of recital of enabling 
 act only — What else 
 should be recited. 
 
 199 — No recitals, no estoppel, but 
 record of corj)oration maj* 
 be shown as an estoppel. 
 
 200 — Effect of recital when no 
 vote taken — Attitude of 
 Federal courts. 
 
 201— Same— Attitude of State 
 courts. 
 
 Section. 
 
 202 — Last case criticised. 
 
 203— Effect of recitals. 
 
 204 — Doctrine of recitals in New 
 York. 
 
 205 — Federal and State courts op- 
 posed. 
 
 206 — Recitals of ordinances — Ef- 
 fect of. 
 
 207 — Effect of recitals on consti- 
 tutional conditions. 
 
 208— Same. 
 
 209 — By whom the question of 
 Ijerformance of contlitions 
 precedent shall be de- 
 cided. 
 
 210 — Same — When to be deter- 
 mined. 
 
 211 — Recitals by the officer au- 
 thorized to execute the 
 bond sufficient. 
 
 212 — When officer not authorized 
 to adjudicate. 
 
 213 — What ofJicer maj' make the 
 recitals. 
 
 214 — Same — Maj^ be the officers 
 authorized to issue the 
 bonds or their authorized 
 agent. 
 
 215 — Author's conclusions as to 
 what officers may make 
 the recitals. 
 
 210— Recital of wrong act— Effect 
 of, valid if power exists. 
 
 § 101. ^Vaiit of power — Always a good defence. — 
 
 This expression is used in reference to municipal cor- 
 25G
 
 CH. XIV.] DEFENCES. § 192 
 
 porations in relation to their issue of written evidence 
 of debt to denote the utter lack of authority in the cor- 
 poration to issue the paper. 
 
 The expression is used for that purpose by all text- 
 writers on municipal corporations as well as by the courts 
 in cases founded upon municipal paper. 
 
 If the corporation has no power to issue the bonds or 
 other evidence of corporate debt, the same are invalid in 
 the hands of every person,^ and the purchaser of munici- 
 pal paper must ascertain for himself, whether the cor- 
 poration has the power to issue the paper. Therefore one 
 of the first steps to be taken by intending purchasers of 
 municipal paper is to investigate if there is any author- 
 ity for the issue of the paper, and if the statute, whether 
 it be the charter of the corporation or some general or 
 special law, under which the paper is, or is about to be, 
 issued, is constitutional, or if constitutional is sufficient 
 in scope to permit of the issue of the paper, and also to 
 ascertain whether the purpose of the act is public or pri- 
 vate. 
 
 § 192. Want of power arises from tlie followin;^ causes. 
 — 1. Because the bonds are issued without authority of 
 any statute. 
 
 2. Because the statute under which the bonds are issued 
 contravenes some provision of the State constitution. 
 
 3. Because the bonds are issued for some private and 
 not a public purpose. 
 
 4. Because the power exercised is different from that 
 delegated. 
 
 5. Because some of the conditions precedent to the 
 issue of the paper, as for instance the signatures of a cer- 
 tain number of taxpayers, the presentation of a petition, 
 or the consent of the electors, have not been o])tained or 
 performed, or no election has been held although re- 
 quired, and only upon such compliance are the bonds to 
 issue. 
 
 1 Coffin V. Board of Comrs, 57 
 Fed. Rep. 137 ; Dixon Co. v. Field, 
 111 U. S. 83 ; Swan v. City of Ar- 
 kansas. Gl Fed. Rep. 478 ; Citj' of 
 
 Fulton V. Northern 111. College, 42 
 N. E. R. 138 ; Travellers" Ins. Co. v. 
 Township of O.swego, 55 Fed. Rep. 
 361. 
 
 17 257
 
 § 103 MUNICIPAL BONDS. [CH. XIV. 
 
 C. Because tho total amount of paper issued exceeds 
 the statutory or constitutional limit. 
 
 In the first two cases the jjapcr is void for want of 
 power and cannot be cured by any act of the municipal 
 corporation. 
 
 In the last four cases the paper, although issued with- 
 out authority, or in excess of authority, may yet be held 
 good in the hands of a bona fide holder because of re- 
 citals contained in the paper made by the officers of the 
 corporation issuing it which assure the purchaser that 
 the paper is lawfully issued ; provided there exist statu- 
 tory authority for the issue of pa])er such as the paper in 
 the hands of the bona fide holder purports to be, and al- 
 though the paper contains no recitals tho municipality 
 may be estopjDed by its acts from repudiating it. ^ 
 
 The true meaning of the term " Want of Power " is 
 the total lack of authority in the corporation to act, and 
 every act done by the municipal corporation without 
 power is void and cannot be made valid by any act of the 
 corporation or its officers, therefore the last four cases can- 
 not logically, except where no election lias been held al- 
 though necessary,^ be construed to arise from want of 
 power, when the term is used in its true sense. They arise 
 from irregular or illegal use of the power, and for that 
 reason are illegal.^ 
 
 ^ 103. Estoppel by recitals — Principle of that 
 rule. — Although, as heretofore shown, w^ant of power may 
 arise because some of the conditions precedent to the 
 issue of the bonds or other municipal paper have not been 
 complied with, have been irregularly complied with, and 
 only upon the performance of such prior conditions were 
 the bonds to issue, yet the courts, by a course of adjudi- 
 cations, have qualified this rule, if the bond itself recites a 
 compliance with the conditions precedent, and is in the 
 liands of a bona fide holder. As between the immediate 
 parties, it is held that the inqiiiry is open whether the 
 conditions precedent have in fact been complied with, and 
 
 1 See, §§ 240-2.15, post. 
 « See §g 200, 201,202. 
 
 258 
 
 ^ See § 124, as to what defence 
 may be set up against a bona fide 
 holder.
 
 /:. XIV.] DEFENCES. § 1^'^ 
 
 ."^ not the issue will be enjoined, or in the hands of 
 'le original parties or holders with notice an action to 
 enforce, if no estoppel exists, can be successfully de- 
 fended.^ 
 
 The principle upon which the rule of estoppel rests in 
 cases of this kind is, that the municipality having de- 
 clared by its recitals in its bonds that all the conditions 
 precedent and necessary to emi^ower it to issue the bonds 
 under the enabling statute have been complied with, and 
 thereby leads the purchaser to believe that such facts are 
 true, so that he makes no investigation of them but 
 rests solely upon such recitals,it is estopped when the jDur- 
 chaser seeks to recover upon such bonds and coupons 
 from showing that they were in fact untrue. It cannot 
 deny its statements or decision so recited. 
 
 It is necessary, however, that the bonds or other evidence 
 of debt containing the recitals, in order to operate as an 
 estoppel, should l)e in the hands of a bona fide holder 
 who obtained the same before maturity and for value 
 and without notice, or in the hands of a person who ob- 
 tained the same from such a bona fide holder. See the 
 remarks on bona fide holder in another part of this work 
 for a fuller discussion of the particular branch of the 
 effect of recitals.^ There can be no estoppel before the 
 issue of the bonds. ^ 
 
 The recitals in bonds are binding only as to matters of 
 fact and not as to matter of law, of which latter every 
 person is bound to take notice and is conclusively pre- 
 sumed to have done so.^ 
 
 § 104^. Execution and delivery — Effect of — Leading 
 cases on doctrine of estoppel. — The mere execution 
 and issue of bonds which do not contain a recital of the 
 performance of prior conditions will not estop the munic- 
 ipality from setting up the fact of non-performance of 
 such conditions. Such execution and issue is but prima 
 facie evidence of compliance with i)rior conditions, and 
 
 1 Chambers Co. v. Clews, 21 Wall. 
 318. 
 ^ See % UQ et seq. 
 
 ' Union Pac. R. Co. v. Lincoln 
 Co., 8 Dill. (U. S.) 300. 
 
 * U. S. V. Town of Cicero. 41 Fed. 
 Rep. 83. 
 
 259
 
 § 194 MUNICIPAL BONDS. [CH. XIV. 
 
 the contrary may be shown, ^ unless the miinicipalit}- 
 be estopped for other reasons, such as laches, acquies- 
 cence, payment of interest or principal.^ 
 
 The leading, as well as the earliest, case upon the subject 
 of the effect of recitals contained in bonds is that of 
 Commissioners of Knox Co. v. Aspinwall, 21 How. (U. S.) 
 539, decided in 1858. 
 
 The doctrine in this case has never been overruled,'" al- 
 though in several subsequent cases it has been attacked 
 in vigorous dissenting opinions by the minority of the 
 United States Supreme Court, ^ particularly in that of 
 Town of Coloma V. Eaves, 92 U. S. 481, but the majority 
 of the court, in a very elaborate opinion, sustained the 
 former doctrine as to the effect of recitals. 
 
 In this case the action was brought by a bona fide holder 
 of certain coupons attached to negotiable bonds of the 
 County of Knox in the State of Indiana. The bonds were 
 issued m payment of a subscription to a railroad, and the 
 ground of defence was that the notice of election which 
 the statute required to be given was given by the board 
 of commissioners, instead of by the sheriff of the county, 
 as the enabling act required. The bonds each recited : 
 " This bond is issued in part payment of a subscription of 
 $200,000 by the said County of Knox to the capital stock 
 of the Ohio and Mississippi Railroad Company, in pursu- 
 ance of the third section of act, etc. (reciting the enabling 
 act), passed by the General Assembly of the State of In- 
 diana and approved January 15th, 1819." 
 
 The act under which the bonds in this case were issued 
 did not designate who were to decide as to the j^erform- 
 ance of the prior conditions, but authorized the board of 
 county commissioners to execute the bonds. 
 
 Therefore two separate questions were decided by this 
 case : one as to the effect of the recitals contained in the 
 
 1 Lyde v. AVinnebago Co., 16 j ^ ggg these subjects elsewhere 
 Wall. 13 ; Marsli v. Fulton Co., 10 1 herein. § 195 and note. 
 Wall. 676; Dill, on Mun. Corp. j » Dill, on Mun. Corp. (4th ed.)g 523 
 (4th ed.) § 522. See, however. Mutual 
 Ben. L. Ins. Co. v. Elizabeth, 42 N. 
 J. L. 23") : Cotton v. New Provi- 
 dence, 47 N. J. Lt 401. See § 195. 
 260 
 
 and notes. 
 
 * Humbolt Town v. Long ct al. 
 92 U. S. 642.
 
 CH. XIV.] DEFENCES. § 19/ 
 
 bonds, and the other as to the impHed autliority of the 
 officers to pass upon the question of performance of the 
 precedent conditions. 
 
 As to tlie first, Mr. Justice Xelson, rendering the opinion 
 of the court, said : 
 
 "Another answer to this ground of defence is that the 
 purchaser of tlic bonds had a right to assume that tlie vote 
 of the county, which was made a condition to the grant of 
 the power, had Ijeen obtained from the fact of the sub- 
 scription by the board to the stock of the raih'oad com- 
 pany and the issuing of the bonds. The bonds on their 
 face import a compHance with the law under which they 
 are issued (quoting the recital of the bond above set forth). 
 
 "The purchaser was not bound to look further for evi- 
 dence of a compliance witli the conditions to the grant of 
 the power." 
 
 § 195. Bonds must contain recitals — Contra. — The 
 above language would seem to imply that the mere 
 execution of the bonds would estop the municipality from 
 showing the non-performance of the prior conditions. 
 But as the bonds recited the enabling act, these remarks 
 of the court wore made as a further and unnecessary ar- 
 gument in sustaining the opinion, and the suggestion 
 therein contained has not been followed in any of the sub- 
 sequent decisions of the Federal, or, so far as the writer 
 knows, State courts, except in Xew Jersey and Missouri,^ 
 
 1 IMutual B, L. Ins. Co. v. Eliza- 1 courts, relative to the^veight given 
 betli, 43 N. J. L. 235; Cotton v. recitals in bonds, and reciting with 
 
 New Providence, 47 N. J. L. 401. 
 See subject of statutory over-issue. 
 In the case of ^lutual Benefit Life 
 Ins. Co. V. Elizabeth, 42 N. J. L. 
 235, where it was claimed that tlie 
 renewal bonds in suit were in ex- 
 cess of the limitation prescribed by 
 
 approval the opinion of Mr. Justice 
 Bradley in Town of Colonia v. 
 Eaves, infra, and after criticising 
 the doctrine of estoppel as ap]")li('(l 
 to recitals in some cases, said : 
 
 " For my own part I am not able 
 to concur in the view that a legisla- 
 
 statute, it does not appear from five intention to make a particular 
 tlie case that the bonds contained officer a tribunal to decide whetlwr 
 recitals of any kind, and the de- ; the jirercquisites to the exercise f>f 
 
 cislou of the court is put vipon the 
 mere issue of the bonds. 
 The court, after reviewing some 
 
 the authority existed at the time of 
 its exercise, can be raised by con- 
 struction alone, when tlie same act 
 
 of the decisions of the Federal I provides that the existence of such 
 
 261
 
 §195 
 
 ML^NICIPAL BONDS. 
 
 [CH. XIV. 
 
 and in some subsequent opinions of the United States 
 courts is expressly overruled.^ And yet when one famil- 
 
 prerequisites shall be made a matter 
 of record . . . such inference is, in 
 my judgment, in anotlier class of 
 cases, entirely legitimate. I refer 
 to those instances in which the au- 
 thorit}' of the agent is made to de- 
 pend on a certain state of facts, 
 whose existence or non-existence is 
 exclusively, or at least peculiarlj-, 
 within the knowledge of such agent. 
 ... In such case tlie deduction be- 
 comes well-nigh irresistible that 
 the tenure of the instruments of 
 this character was not intended to 
 be so obscure and precarious. . . . 
 The facts upon which the question 
 whether a given bond was, in re- 
 newal of bonds which liad been 
 issued in contemplation of the as- 
 sessments, mentioned in the act of 
 March 29th, 1871 (the act under 
 which the bonds in suit were issued) 
 were not ascertainable to a reason- 
 able degree of certainty by any one 
 who was not an officer of the city 
 conversant with its affairs. 
 
 " Therefore the i)laintilT in this 
 case was not called upon to endea- 
 vor to look into the situation, but 
 had the right to rely on the action of 
 the municipal ofncers. who by issu- 
 ing the bonds affirmed that the re- 
 quisite condition of things existed." 
 
 The syllabus of this case would 
 lead one to believe that the bonds 
 in suit contained recitals, it being 
 as follows : — 
 
 '• 3. When a municipal council is 
 authorized to issue bonds when cer- 
 tain facts exist, and sucli facts are 
 exclusively within tiie knowledge 
 of the council, it is to be infen-ed 
 that the lawmakers intended to 
 make such council the judge 
 wliether such condition precedent 
 has been fulfilled, and a purchaser 
 262 
 
 can rely securely on the statements 
 to that effect contained in the 
 bonds."' 
 
 In Cotton V. New Providence, 47 
 N. J. L. 401, the above case is cited 
 with approval. 
 
 Another case which asserts the 
 same principle is tliat of Barrett v. 
 County Court of Scluiyler Co., 44 
 Mo. 197. The bonds in suit contained 
 no recitals, and were issued bj' a 
 county court to pay for a subscrip- 
 tion to a railroad. 
 
 The defence was that the condi- 
 tions imposed upon tlie road had 
 not been complied with, and also 
 that no election had been held to 
 authorize the subscription. Tlie 
 bonds in suit were in the hands of 
 a bona fide holder. 
 
 The court, after referring to other 
 acts of alleged estoppel, said : 
 
 ' ' Besides, the issue of the bonds 
 in 1859 was a ratification of tlie 
 subscription, and warranted the 
 purchaser of them in assuming tliat 
 such election, if required by law, 
 had been duly held, and that the 
 condition to the subscription had 
 either been complied with or 
 waived." 
 
 See also Flagg v. Palmyra, 33 ]\Io. 
 440. 
 
 1 Mr. Justice Bradley delivered 
 the following concurring opin- 
 ion : — 
 
 " I dissent from the opinion of 
 the court in this case, so far as it 
 may be construed to reaffirm the 
 first point asserted in the case of 
 Knox County v. Aspinwall, to-wit. 
 that the mere execution of a bond 
 by officers charged with the duty 
 of ascertaining whether a condition 
 precedent has been performed is 
 conclusive proof of its performance.
 
 CH. XIV.] DEFENCES. § 195 
 
 iar with the mode of issuing niuniciiDal bonds gives tlie 
 matter a thought, it would seem that the execution and 
 
 If, when the law requires a vote of 
 taxpayers, before bonds can be is- 
 sueil, the sui)ervisor of a township, 
 or the judge of probateof a county, 
 or other officer or magistrate is the 
 officer designated to ascertain 
 wli ether such vote has been given, 
 and is also the proper officer to exe- 
 cute, and who does execute the 
 bonds, and if the bonds themselves 
 contain a statement or recital that 
 such a vote has been given, then 
 the bona fide inirchanev of the bond 
 need go back no further. 
 
 " He has a right to rely on the 
 statement as a determination of the 
 question. But a mere execution 
 and issue of the bonds witlioutsuch 
 recital is not, in my judgment, con- 
 clusive. It may be prima facie 
 sufficient ; but the contrary may be 
 shown. 
 
 "This seems to me to be the true 
 distinction to be taken on the sub- 
 ject : and I do not think the con- 
 trary has ever been decided by this 
 court. 
 
 " There have been various dicta to 
 the contrary, but the cases, when 
 carefully examined, will be found 
 to have all the prerequisites neces- 
 sary to sustain tlie bonds, according 
 to my view of the case. Tliis view 
 was distinctl}' aimounced by this 
 court in the case of Lynde v. The 
 County of Winnebago, 16 Wall. 13. 
 
 "In the case now under con- 
 sideration, there is a sufficient re- 
 cital in the bond to show that the 
 proper election was lield and the 
 proper vote given ; and the bond 
 was executed by the officers whose 
 duty it was to ascertain these facts. 
 On this ground. and tliis alone, I con- 
 cur in the judgment of tlie court." 
 
 In Buchanan v. Litchfield (102 
 
 U. S. 278. 292-3), Mr. Justice Har- 
 lan, who delivered the opinion of 
 the court, i)iter alia said : — 
 
 "The jjresent action cannot be 
 maintained unless we should hold 
 that the mere fact that the bonds 
 were issued without any recitals of 
 the circumstances bring them with- 
 in the limit fixed by the constitu- 
 tion, was, in itself, conclusive proof, 
 in favor of abonafide holder, wliich 
 authorized them to be issued. We 
 cannot so hold." 
 
 In Carrol Co. v. Smith, 111 U. S. 
 556. the bonds in suit merely stated 
 that the subscription to the capital 
 stock of a railroad company was 
 authorized by certain statutes men- 
 tioned in the bonds. 
 
 The defence was that the bonds 
 had not been authorized bj' a two- 
 thirds vote of the registered voters. 
 
 The court, by J. Matthews, said: — 
 
 " We do not think the plaintiff in 
 error is precluded from raising this 
 question by any recitals in the 
 bonds. They contain no statement 
 of any election called or held, or of 
 the vote by which the issue of the 
 bonds was authorized. They do 
 not embody even a general state- 
 ment that the bonds were issued in 
 ]iursuance of the statutes referred 
 to. The utmost effect that can be 
 given to th(nn is that of a statement, 
 tliat a subscription to the capital 
 stock of the railroad companj- was 
 authorized by the statutes men- 
 tioned, and that tlie sum mentioned 
 in the bonds was part of it. They 
 serve simply to point out the partic- 
 ular laws under wliich the trans- 
 action may lawfully have taken 
 place. They say nothing whatever 
 as to anj' compliance with tlie re- 
 quirements of the statute in respect 
 2G3
 
 §19(3 
 
 MUNICIPAL BONDS. 
 
 [CII. XIV 
 
 issue of the bonds should have as much force and operate 
 as an estoppel as fully as the mere recital in the bond of 
 the enabling act, without any recital alleging perform- 
 ance of prior conditions. The bonds are usually executed 
 by persons who do not know the effect of a recital of tlie 
 act as an estoppel, and it is usually recited by them merely 
 for the purpose of informing purchasers of the power 
 of the municipality to make the issue, and with no idea of 
 impliedly asserting by its recital performance of prior 
 conditions. 
 
 § lOG. Recital of enabling act sufficient— By whom 
 must be made. — However, it is now well settled that 
 the mere recital in the body of the bond that it is issued 
 pursuant to, or in conformity with, the enabling act 
 reciting it will operate as an estoppel and prevent the 
 corporation from setting up as a defence against an 
 innocent holder that in fact the prior conditions have 
 not been performed ;^ provided, however, that the re- 
 citals are made by persons charged with the duty of 
 determining whether or not the prior conditions were 
 performed, and the municipality had the power to 
 issue the bonds, because if there be a want of authority 
 to make the issue, the bonds are void, no matter what 
 
 to whicli the board of supervisors 
 were autliorized and appointed to 
 determine and certify. They do 
 not, therefore, within the rule of 
 decision acted on by this court, con- 
 stitute an est()])pel wliich prevents 
 inquiry into the alleged invalidity 
 of the bonds." 
 
 In Lewis V. Bourbon Co., 12 Kan. 
 186, where the bonds in suit con- 
 tained no recitals, it was held that 
 ever}' holder was bound by notice 
 of whatever appeared upon the face 
 of the records. 
 
 In IIo]iper v. Covington, 11<S U. 
 S. 14S, where the suit was on a bond 
 which contained no recitals, the 
 court said : 
 
 "The bonds in suit contain no 
 statement of the purpose for which 
 264 
 
 they were issued and no rec-ital 
 which can bind tlie town by way of 
 estoppel, any one suing on the bond 
 is bound to allege and prove the 
 authorit}' of the town to issue them. 
 . . . In each of the cases cited, the 
 defects suggested were in the req- 
 uisite preliminary proceedings, and 
 the bonds sued on appeared, by re- 
 citals, upon their face to have been 
 issued according to law." 
 
 1 Knox Co. V. Aspinwall, 21 How. 
 539 ; ComVs of Douglass Co. v. 
 Bolles. 94 U. S. 104 ; Citizens Sav. 
 & Loan Asso. v. Perry Co., 156 U. S. 
 692 ; Oregon v. Jennings, 119 U. S. 
 74 ; Coler v. Dwiglit, 55 N. W. R. 
 587 ; Inhabitants v. Morrison, 13:5 
 U. S. 523 ; German Bank v. Frank- 
 lin Co., 128 U. S. 526.
 
 Cri. XIV.] DEFENCES. ' § 198 
 
 recitals they contain.^ In Dixon Co. v. Field, 111. U. S. 
 S3, the court said : "It is not necessary that the recital 
 should enumerate each particular fact essential to the 
 existence of the obligation. 
 
 ' ' A general statement that the bonds have been issued in 
 conformity with the law will suffice so as to embrace 
 every fact which the officers making the statements are 
 authorized to determine and certify."^ The statement 
 that the bonds were issued " in pursuance to a vote of 
 the electors of Anderson County, September 13th, ISGO,*'' 
 was held in favor of an innocent holder to be equivalent 
 to a statement that the vote was one lawful and regular 
 in form, and the court refused to permit evidence to be 
 given that the proper notice of election was not given. ^ 
 
 § 107. All eiiabliiii? acts must be recited. — But when 
 the bonds are issued pursuant to more than one act, or 
 some other act or acts besides the enabling act, or the 
 State constitution in some manner controls or effects 
 the issue by imi^osing prior conditions or requirements, 
 then, unless the bonds recite that they are issued pursu- 
 ant to all such acts or the constitutional requirement, 
 if some of the precedent conditions imposed by the non- 
 recited act or the constitution were in fact not performed, 
 the municipality will not be estopped from alleging the 
 same as a defence.^ 
 
 § 198. Effect of recital of enabling act only.— The 
 mere recital in the municipal paper that it is issued pur- 
 suant to, or in conformity with, the enabling act, the 
 title and time of approval or passage of which are re- 
 cited, will estop the municipality from pleading as a 
 defence the non-performance only the precedent con- 
 ditions required to be i)erformed by the act. but does not 
 estop tlie municipality from pleading the non-perform- 
 ance of other necessary steps in the issue of the bonds, 
 
 1 Broadway Sav. Inst. v. Town of I ^ Anilerson Co. v. Boal, 110 U. S. 
 Polhain, 83 Hun (N. Y.) OG ; Coffin 227. 
 
 V. Board of Com'rsof Kearnoy Co., * Citizens' Sav. Asso. v. Perry Co.. 
 57 Fed. Rep. 137 ; Swan v. City of 156 U. S, 692 ; Nat. Life Ins. Co. v. 
 Arkansas, 61 Fed. Rep. 278. Huron, 62 Fed. Rep. 778. 
 
 - Douglass Co. V. Bolles, 94 U, S. | 
 104. ) 
 
 265
 
 § -200 MUNicrrAL bonds. [ch. xiv. 
 
 as for instance the passage of an ordinance, its signing by 
 the mayor and pubhcation, or the adoption of a resoki- 
 tion or other action necessar}' to he done or taken before 
 the bonds are actually executed and issued. 
 
 In order to work an estoppel in such cases the bond 
 must contain recitals of the performance of such subse- 
 quent acts, either in detail or in some language sufficient 
 to embrace a recital of the performance of all such sub- 
 sequent necessary acts, and the recitals must be made 
 by the officers whose duty it is to pass upon the question 
 of compliance.^ 
 
 When the bonds recite upon their face that they are 
 issued pursuant to an ordinance of the common council 
 of the municipality, or pursuant to a vote of the quali- 
 fied voters of the city, or pursuant to a petition of the 
 necessary number of legal voters, such recital estops 
 the municipality from denj^ing the truth of the recitals. ^ 
 
 § 199. No recitals, then no estoppel. — If the bonds con- 
 tain no recitals, then the municipality will not be estopped 
 to show the non-performance of the necessary prior con- 
 ditions or any other fact as a defence, unless it be other- 
 wise estopped,^ and when the bond refers to a wrong act, 
 non-performance of prior conditions of the non-recited 
 enabling act may be shown as a defence, but in all such 
 cases the record of the municipality may be placed in 
 evidence to prove performance.* 
 
 ^ 2i>o. Effect of recital wlieii no vote taken— Atti- 
 tude of Federal courts. — The question whether the 
 bonds or other municipal paper issued in pursuance of an 
 enabling act, which authorized their issue after the ques- 
 tion whether they should issue or not had been submitted 
 to the legal voters, and had received a majority, or otber 
 proportionate vote, and the bonds recited either the 
 
 ^ Swan V. City of Arkansas, 61 
 Fed. Rep. 478 ; Nat. Bank of Com- 
 merce V. Town of Granada, 5i Fed. 
 Rep. 100. 
 
 8 See § 240 et seq. 
 
 * Crow V. Oxford, 119 U. S. 215- 
 22 ; Citizens' Sav. Asso. v. Peny 
 Co., 156 U. S. 692-701 : Dill, on 
 
 - Bissel V. Jeffersonville, 24 IIow. Man. Corp. 522; Marsli v. Fulton. 
 
 134 ; Van Hustrupv. Madison City, 
 1 Wall. 291 ; Mercer Co. v. Hackett, 
 1 Wall. .'^n. 
 266 
 
 10 Wall. 676 ; § 195, supra, and note.
 
 CH. XIV.] DEFENCES. § 200 
 
 enabling act, or that and the further fact that such a 
 vote had been taken, when in fact no vote was had, 
 would be valid or not in the hands of a bona fide holder, 
 has never, so far as the' writer can learn, been directly 
 decided in the Federal courts. The question has in 
 several cases been referred to in deciding on the validity 
 of municipal bonds, which, however, did not call for a 
 direct decision on the point in question. 
 
 It would appear, however, from the language used in the 
 cases that if the point were directly presented to the 
 Supreme Court of the United States, and the validity of 
 the bonds depended upon such recitals, and the bonds 
 were issued by the officers of the municipality who had 
 power to pass upon, or were required to pass upon the ques- 
 tion of compliance of the precedent conditions, that that 
 court, following the natural result of the doctrine of 
 estoppel by recitals contained in municipal paper, as 
 established by it, would sustain the bonds. 
 
 The two following cases illustrate the attitude of the 
 Supreme Court of the United States on this point, although 
 the question was not directly presented, nor did the valid- 
 ity of the bonds depend upon the question whether or 
 not a vote at all had been taken. 
 
 In the case of Northern Bank v. Porter Township, 110 
 U. S. 60S-1T, Mr. Justice Harlan, in delivering the opinion 
 of the court, used the following language in reference to 
 the effect of recitals, when in fact no vote was taken : 
 
 " Had the statute of Ohio conferred upon a township in 
 Delaware County authority to make a subscription to 
 the stock of tliis company upon the approval of the 
 voters at an election previously held, then, a recital, 
 by its proper officers, such as is found in the bonds in 
 suit, would have estopped the township from proving 
 that HO election vas in fact held, or that the election was 
 not called and conducted in the manner prescribed by law, 
 for in such a case it would be clear that the law had re- 
 ferred to the officers of the township, not only tlie ascer- 
 tainment, but the decision, of the facts involved in the 
 mode of exercising the power granted.'' 
 
 In the case of Commissioners etc. v. Bolles, 04 U. S. 104:- 
 
 2G7
 
 § 201 MUNICIPAL BONDS. [CH. XIV. 
 
 ]00, where the bonds recited the enabling act, and the 
 further fact that they were issued in pursuance of, and 
 in accordance with, the vote of a majority of tlie quahfied 
 electors of the said County of Douglass, at a special elec- 
 tion regularly called and held on September 12th, 18G5, 
 Mr. Justice Strong, in delivering the opinion of the court 
 of the effect of these recitals, said : 
 
 " The}' are untrue if the board had not followed the 
 directions of the law, and if there had not been a popular 
 vote at an election approving the issue of those bonds. 
 The truth or falsity of the assertion cannot be inquired 
 after here, for, as we have said, the recitals are practically 
 an annunciation of the board that all the steps required 
 by law had been taken, Behind such a recital, as we have 
 seen, a bona fide holder for value is not bound to look, ex- 
 cept for legislative authority." ^ 
 
 § 201. Same — State courts — Decisions. — In Missouri 
 the question has been directly presented and been decided 
 against the validity of the bonds, the court holding 
 that when an election is required before the bonds may 
 issue and no election is in fact held, that there is want 
 of power in the municipality to make the issue, and there- 
 fore the bonds are void in the hands of all persons. The 
 court also referred to the decisions of the U. S. Supreme 
 Court up to that time (1871), and limited the language 
 used therein to the facts before the court. ^ 
 
 1 See also I\Iayor v. Lord. 9 Wall, tliat the bonds were ordered to be 
 414 ; Warren V. Marcy, 97 U. S. 96. printed "in accordance witli the 
 See § 211. orders voted on by the people of 
 
 2 Steins V. Franklin Co., 48 Mo. Lathrop on the 6th day of Novem- 
 167; Carpenter v. Lathrop, 51 Mo. ber, 1869." 
 
 483. I The testimony of the clerk 
 
 In Carpenter, Jr., v. Inhabitants showed that sixteen votes were 
 
 of Town of Lathrop, 51 Mo. 483. cast in all, in favor of the subscrip- 
 
 The bonds in this case recited that tion. But no testimony indicated 
 
 they were issued pursuant to an 
 order of the trustees autiiorized by 
 a vote of tlie people of said town at 
 
 when an election was held or that 
 tliere were any judges of election, 
 or that any poll-books were kejit, 
 
 a special election lield for that pur- ; or that a return of the votes had 
 pose. been made to any body or officer 
 
 The record of the trustees r.howed authorized to decide the result, 
 that an election was ordered and It was lield the issue of the bonds 
 268
 
 CH. XIV.] 
 
 DEFENCES. 
 
 §201 
 
 In the case of Spitzer v. Village of Blanchard, (Supreme 
 Court of Michigan) 4G N. W. K, 400, it appeared bonds 
 were issued for the payment of a fire apparatus. The 
 bonds were executed by the clerk and president of the 
 village, and contained the recital that they were issued 
 " in conformity with the general law of the State under 
 which the said village is incorporated, and authorized by 
 the board of trustees at a regular meeting thereof." 
 
 The village had no power to issue the bonds except by 
 authority of an affirmative vote. No election was held. 
 
 The plaintiff was a bona fide holder without notice, 
 and insisted tliat the village was estopped by the said 
 recitals, but the court held the bonds to be void, and on 
 the question of estoppel by the recitals said : 
 
 " In this case there was no authority in the council or 
 in the president or clerk to issue the bonds in the suit, 
 unless first authorized to do so by a vote of the electors, 
 and the law did not make the president and clerk the 
 judges of the fact as to whether there had been an elec- 
 tion or not, and consequently the recitals in the bonds 
 
 was unautliorized. and that the 
 holder could not recover. 
 
 The holder must show that an 
 election was held. 
 
 It was lield in Michigan that a 
 recital in a school bond signed by 
 two or three meml)ers of a school- 
 district board, that the bond is 
 issu<'(l pursuant to a vote of the 
 qualified electors, at a special 
 school meeting held at a designated 
 date and place, in accordance with 
 law, is sufficient to jirotect a hnna 
 fide holder, though the records of 
 the board do not show its authoritj' 
 to issue the bonds. It was further 
 held that the boai"d was the propor 
 tribunal to determine whether the 
 proi)er proceedings had been taken. 
 That it was a question of fact. 
 (Jiblw V. School Dist. No. 10, 88 
 Mich. 334. 
 
 On the otiier hand, it has been 
 
 held in Missouri that the recitals in 
 a IxMul of a i)ublic corporation, as a 
 school district, are neither prima 
 facie nor conclusive evidence of 
 the required authority to issue the 
 same, and that in an action thereon 
 all the steps necessary to confer 
 the authority to issue them must 
 be proved, whether the bonds re- 
 cite that these steps have been 
 taken or not. Heard v. Calhoun 
 School Dist., 4.") Mo. App. 66G. In 
 this case it was held that as the 
 records of the school-district board 
 showed that the proceedings neces- 
 sary to be taken Jiad been per- 
 formed, sucli record.s were prima 
 facie evidence of regularity, and 
 that the authority to issue tlie bon<l 
 having thus been estal)lished. ir- 
 regularities in their issue could not 
 affect bona fide holders. 
 
 260
 
 § 203 MUNICIPAL BONDS. [CH. XIV. 
 
 that they had been issued in accordance with hiw bound 
 no one and protected no one dealing with tlie bonds." 
 
 § 202. Last case criticised. — This case, itwouklseem, 
 is in direct conllict with the decisions of the Federal courts 
 so far as the question as to whether the trustees or 
 their agents, the ]:)resident and clerk of the village, were 
 authorized to pass on the question of performance of 
 prior conditions. The trustees were to issue the bonds 
 after an affirmative vote. 
 
 That was their authority to maiie the issue, and cer- 
 tainly they were to pass upon the question whether or not 
 a vote was taken, and whether it was in the affirmative 
 or not, after which, if affirmative, they were to make the 
 issue, and as the bonds contained a recital of the ena- 
 bling act the writer is of the opinion that the trustees or 
 their agents had authority to make the recital. If, how- 
 ever, the case had been decided upon the want of power 
 in the trustees to make the issue, because of the want of 
 an election, the judgment of the court would have been 
 put upon grounds easily understood, because no recitals 
 will estop a corporation from showing that it had not 
 the power to issue the paper. We are of the opinion that 
 when a vote is a necessary prior condition to the issuing 
 of bonds, or the incurring of a debt, that if no vote is 
 taken, no election in fact held, that the municipal author- 
 ities have no power to make the issue or incur tlie de])t, 
 and that in such a case the corporation should not be 
 estopped to set up the omission as a defence. The acts 
 of the corporation in issuing the bonds should be held 
 to be ultra vires. 
 
 § 2i>3. Effect of recitals— Cases.— Clifford, J., in St. 
 Joseph Township v. Rogers, IG Wall. Gl-i, rendered a very 
 able and concise opinion on the general effect of recitals 
 contained in municipal paper, a part of which is as fol- 
 lows : '' Bonds ])ayable to bearer issued by a municipal 
 corporation, if issued in pursuance of a power conferred 
 by the Legislature, are valid commercial instruments, but 
 if issued by such a corporation which possessed no power 
 from the Legislature to grant such aid, they are invalid 
 
 even in the hands of an innocent holder. Such power is 
 270
 
 CH. XIV.] DEFENCES. § 203 
 
 frequently conferred to be exercised in a special manner 
 or subject to certain regulations, conditions or qualifica- 
 tions, but if it appears that the bonds issued show by 
 their recitals that the power was exercised in the manner 
 required by the Legislature and that the bonds were issued 
 in conformity with these regulations, and pursuant to 
 those conditions and qualifications, proof that any or all 
 of those recitals are incorrect will not constitute a defence 
 in a suit on the bonds or coupons, if it appeared it was 
 the sole province of the municipal officers who executed 
 the bonds to decide whether or not there had been an 
 antecedent compliance with the regulations, conditions 
 or qualifications which it is alleged were not fulfilled." 
 
 An extreme case illustrating the effect of recitals is 
 that of Lexington v. Butler,^ decided by the United 
 Supreme Court in IsTl. 
 
 The facts appearing were that the city was authorized to 
 subscribe to a railroad u^xju a majority vote. The prop- 
 osition submitted to the voters contained certain con- 
 ditions, among them being that other parties should 
 subscribe $1,0UU,0UU. The proposition was carried, but 
 the other parties did not subscribe. The city refused to 
 siibscribe and issue the bonds. Afterwards they did so 
 on the order of the court. This order was appealed from 
 and set aside by the Court of Appeals of the State, which 
 held that until the other parties subscribed the one mill- 
 ion dollars the city had no authority to subscribe or issue 
 its bonds. 
 
 The bonds were signed by the mayor and clerk and 
 recited the enabling act. 
 
 The court held the bonds to be valid in the hands of a 
 bona fide holder, and tliat the recital ijrecludcd the c-ity 
 to set up the non-subscription of the other parties as a 
 defence. 
 
 The court said : ''As the repeated decisions of this 
 court have established the rule that when a corporation 
 has poicer under any circunisfcuiccs to issue negotiable se- , 
 curities, the bona fide holder has a right to jn-esume that / \ 
 they were issued under the circumstances which give the 
 
 1 4 Wall. 283. 
 
 271
 
 § 204 MUNICIPAL BONDS. [CH. XIV. 
 
 requisite authority, and that they are no more liable to 
 be impeached in the hands of such a holder than any 
 other commercial paper." 
 
 In this case there was no want of power to issue because 
 the statute and vote gave the power, but it was exercised 
 in an irregular manner. The holder had the right to pre- 
 sume that the conditions, whatever they were, had been 
 complied with, .being so assured by the recital of the 
 enabling act. 
 
 § 204. Doctrine of recitals in New York. — The courts 
 of New York have not gone the length of those of the 
 Federal courts and other State courts in the matter of 
 estoppel by recitals in bonds when issued in aid of rail- 
 roads.^ 
 
 The early case of Staring v. Town of Granada, 23 N.Y. 
 430, wherein it appeared a town was authorized to bor- 
 row money to subscribe for stock in a railroad corporation 
 provided the written assent of two-thirds of the resident 
 taxpayers was first obtained. The officers, who were 
 named in the statute to make the issue, were directed be- 
 fore doing so to make affidavit that the persons who as- 
 sented to such issue of bonds in writing were two-thirds of 
 all the residents. The officers named to make the affidavit 
 to such assent were the supervisors and the assessors of 
 the town. They made the necessary affidavit and filed the 
 same with the clerk of the county, as directed by 
 the statute and then issued the bonds. Each bond re- 
 cited that it was issued under the enabling statute re- 
 citing it. The principal defence to the suit on the bonds 
 was that the necessary number of the residents had not 
 signed the assent, and that the affidavit of the town 
 othcers that they had was untrue. 
 
 The court held the bonds to be void for this reason, and 
 that the affidavit was \mt prima facie evidence and could 
 be proved to be untrue in an action to enforce the bonds. 
 
 The doctrine of the above case has been rej^eatedly 
 followed in later decisions in the same State.^ 
 
 1 The constitution of New York 
 now prohibits such aid. 
 
 2 Cagwin V. Town of Hancock, 
 
 272 
 
 84 N. Y. 532 ; Craig v. Town of 
 Andes, 93 N. Y. 405; Ontario v. 
 Hill, 99 N. Y. 324.
 
 CH. XIV.] DEFENCES. § 20G 
 
 § 205. Federal and other State conrts opposed.— This 
 
 doctrine is in direct opposition to that of the Federal and 
 most of the State courts. 
 
 The Supreme Court of the United States, in the case of 
 Town of Venice v. Murdock, 92 U. S. 41)4, in a suit brought 
 to enforce bonds issued under the New York statute, 
 refused to follow the above doctrine of New York courts, 
 and held the recitals contained in the affidavits conclu- 
 sive, and the bonds valid. 
 
 Mr. Justice Strong, delivering tho opinion of the court, 
 said: "It is obvious that if the act of the Legislature 
 which authorized an issue of bonds in aid of the con- 
 struction of the railroad on the written assent of two- 
 thirds of the resident taxpayers of the town, intended that 
 the holder of the bonds should be under ol^ligation to 
 prove by parol evidence that each of the two hundred 
 and fifty-nine names signed to the written assent was a 
 genuine signature of the person who bore the name, the 
 proffered aid to the railroad was a delusion. 
 
 " No sane person would have bought a bond with such 
 an obligation resting upon him whenever he called for 
 payment of pi^ncipal or interest. 
 
 " If such was the duty of the holder it was alwavs his 
 duty. 
 
 " The Legislature created a tribunal to determine 
 whether two-thirds of the resident taxpayers had con- 
 sented. They were the appointed agents to obtain the 
 assent, and were to make an affidavit that the persons 
 whose written assent was attached to the statement 
 comprised two-thirds of tlie resident taxpayers. That 
 statement, with their affidavits, was to be fded in the 
 county clerk's office. All this indicates unmistakably 
 that it was their appointed province to decide whetlier 
 the conditions precedent to the exercise of their authority 
 to issue the bonds had l)oen complied witli.'' 
 
 The court refused to be controlled by the decisions of 
 the New York courts, holding tliat the doctrine of New 
 York courts was not founded u])on the construction of 
 the statute under which tlie bonds were issued. 
 
 § 200. Recitals of ordinances. — If the ordinance pro- 
 IS ^^
 
 § '201 MUNICIPAL BONDS. [CH. XIV. 
 
 viding for the issue of the bonds recites that the condi- 
 tions precedent have been compHed with, the munici- 
 paUty will be estopped to deny compliance, and the effect 
 is the same as if the recitals were in the bonds them- 
 selves.^ 
 
 The recital in the bond that it was issued pursuant to 
 an ordinance of the municipality will not estop the cor- 
 poration from showing that in point of fact no ordinance 
 for the issue of bonds was in fact passed.^ 
 
 A recital in municipal bonds that they are issued un- 
 der an ordinance "adopted" does not estop the town 
 from showing the ordinance was never published as re- 
 quired by law, and is therefore void, unless the officers 
 who signed the bonds had some duty to perform in re- 
 lation to the i^ublishing of or determining when they had 
 been published according to law,^ but recitals made in 
 the bonds by the officers who have charge of the issue, 
 and are expressly or impliedly authorized to determine 
 whether the conditions precedent have been complied 
 with, will estop the town.* 
 
 § 207. Eliect of recitals on constitutional condi- 
 tions. — Wlien the constitution of a State provides that at 
 the time the bonds or other municipal paper are issued that 
 some act must be done, as, for instance, the creating of a 
 sinking fund to provide for the payment of the principal 
 and interest when it falls due, or providing for the levy- 
 ing of a tax to pay the principal and interest, or the doing 
 of some other act by the body issuing the bonds or incur- 
 ring the indebtedness and the performance of such consti- 
 tutional requirement is not complied with, but the paper 
 is issued, and it recites in terms that all the acts neces- 
 sary to be done have in fact been performed before the 
 issue of the paper, or any other expression, the purport 
 of which is to allege full compliance of the necessary acts, 
 and the recitals are made by the municipal officers who 
 
 1 Gause v. City of Clarksville, 1 
 Fed. Rep. 353. 
 
 2 Swan V. City of Arkansas, 61 
 Fed. Rep. 478. 
 
 3 National Bank of Commerce v. 
 
 274 
 
 Town of Granada, (C. C. A.) 54 Fed. 
 Rep. 100. 
 
 " Coler V. Dwight School Tp. of 
 Richmond Co., (N. D.) 55 N. W. R. 
 
 587.
 
 CH. XIV.] DEFENCES. § 207 
 
 are qualified to pass upon the question of performance 
 and make such recitals, the municipality will be estopped 
 to show that in point of fact the constitutional require- 
 ments have not been comi)lied with. 
 
 In such cases the constitutional prior conditions are to 
 have no more force and effect than statutory ones, and 
 the corporation will be estopped by such recitals as fully 
 as if the precedent conditions were but statutory.^ 
 
 The case of National Life Insurance Company v. City 
 of Huron, 62 Fed. Rep. 778, is one in point. It is well con- 
 sidered and illustrates the general doctrine of estoppel by 
 recitals as well as the question under discussion, and is 
 therefore given almost in full. 
 
 The bonds were issued by the Board of Education of the 
 city, pursuant to a general statute, and after the question 
 of issue had been submitted to the legal voters and de- 
 cided in the affirmative. They were signed by the presi- 
 dent of the board, attested by its clerk, and countersigned 
 by its treasurer, the statute having directed them to be so 
 signed, as did also a resolution of the board. 
 
 The bonds recited : " That all acts and conditions and 
 things required to be done precedent to and in the issuing 
 of said bonds have duly happened and been performed in 
 regular and due form as required by law," and also re- 
 cited the enabling act. 
 
 The action was brought upon three hundred coupons, 
 cut from one hundred and twenty bonds of said issue. 
 
 Among the points raised by the defence was the fact 
 that the constitution of South Dakota, sec. 2, art. 13, re- 
 quired that any city, county, town or school district or 
 other subdivision incurring indebtedness shall, at or be- 
 fore the time of so doing, provide for the collection of an 
 annual tax sufficient to pay the interest and also the prin- 
 cipal thereof when due. 
 
 This was not done, and Sanborn, Circuit Judge, who 
 delivered the very able opinion of the court, said : 
 
 '• Whether or not this provision of the constitution is 
 
 1 Pana v. Bollos. 107 U. S. 529- 3r)5. See, however, §^ 137, 138 
 539 : Orc?;on v. Jennings, 110 U. S. siqira. 
 74 ; Chaffee Co. v. Potter, 142 U. S. ] 
 
 275
 
 § '207 MUNICIPAL BONDS. [CH. XIV. 
 
 mandatory or simply executory . . . are questions which 
 we will not now consider. We remark in passing that the 
 cases of Wilson v. Shreveport, 29 La. Ann. OTo, Knox v. 
 City of Baton Eouge, 30 La. Ann. 427, and City of New 
 Orleans v. Clark, U5 U. S. 044, which suggest that bonds 
 may be void that are issued in violation of constitutional 
 provisions, which require the provision for the collection 
 of an annual tax to pay them to be contained in the act 
 or ordinance which authorizes their issue, have no rele- 
 vancy to the question before us. ... It is well settled 
 that all purchasers must take notice of the existence and 
 contents of the statute or ordinance under which the 
 bonds declare that they are issued. If, as in National 
 Bank of Commerce v. Town of Granada, supra, the ordi- 
 nance recited in the bonds was never passed, or never took 
 effect, the mayor and the clerk of the town who signed 
 the bonds could not enact it into an ordinance by refer- 
 ring to it, and the purchasers must take notice that no act 
 of theirs could give these agents the necessary authority 
 to issue the bonds. If, as in Coffin v. Board, C. C. A. 
 2SS, the statute recited in the bonds expressly prohibited 
 their issue at the time they were issued, puix'hasers must 
 take notice of that provision of the law ; and the recitals 
 in the bond to the effect that all requirements have been 
 complied with will not relieve them of this notice, because 
 no compliance or act of the county or its commissioners 
 would enable them to make a lawful issue of the bonds 
 at the time they were issued. 
 
 " The distinction between these cases and that at bar is 
 marked and manifest. An examination of the statutes 
 or ordinances recited in the bonds in those cases disclosed 
 the fact that it was not in the power of representatives 
 who issued them, by any act of theirs to make a lawful 
 issue of the bonds, and that if they have done every act 
 and ])erformed every condition in their power the bonds 
 would still have been unauthorized. In the case at bar 
 there was no lack of power in the board of education to 
 make a lawful issue of bonds when those in suit were 
 issued. Article 3 under which they were issued provided 
 that the taxable propertv of the whole corporation should 
 •276
 
 CH. XIV.] DEFENCES. § 208 
 
 be subject to taxation by them (section 1825, Comp. Laws 
 Dak.), and that they should annually levy a sufficient 
 amount to pay the interest on all the bonds they issued 
 under this article and to create a sinking fund for the pay- 
 ment of the principal (section 1833, lb.). An ordinance 
 or resolution of this board, passed at or before the issuance 
 of the bonds, providing for the collection of such an annual 
 tax until the bonds and coupons were paid, would have 
 complied with the provision of tlie constitution. If 
 this was not passed it was not from lack of power in the 
 board, but from failure on its part to exercise the power 
 with which it was vested in the manner provided by the 
 constitution. 
 
 "It is this difference between the inadequate exercise 
 of ample power and the total absence of power to be exer- 
 cised, that widely separated this case from Dixon Co. v. 
 Field, 111 U. S. 83 ; 4 Sup. Ct. 315 ; Northern Bank of 
 Toledo V. Porter Tp. Trustees, 110 U. S. G08 ; 4 Sup. Ct. 
 254 ; McClure v. Tp. of Osgood, 94 U. S. 429 ; Lake Co. 
 V. Graham, 130 U. S. 674 ; 9 Sup. Ct. G54 ; Nesbit v. In- 
 dependent Dist., 144 U. S. GIO, G17 ; 12 Sup. Ct. T4G ; 
 Sutliffe V. Commissioners, 14T U. S. 230-35 ; 13 Sup. 
 Ct. 318 ; and Hedges v. Dixon Co., 150 U. S. 182, cited 
 by counsel for defendant." 
 
 The court further said, " that an estoppel may arise in 
 a proper case upon a recital that an act has been per- 
 formed which was required by a constitution, as well as 
 upon the recital of the performance of an act required by 
 statute." 
 
 § 208. Same.— In the case of Quaker City v. Nolan, 
 
 59 Fed. Rep. GGO, in suit brought on bonds which recited 
 
 that they were issued pursuant to the enabling statutes 
 
 which were referred to by title and date of approval, but 
 
 contained no other recital, the defence was that no 
 
 sinking fund has been provided when the bonds were 
 
 issued as required by the constitution of Texas. The 
 
 court held the bonds to be void for this reason, and said 
 
 incidentally that no recital would estop the municipality 
 
 from pleading the non-performance of the constitutional 
 
 provision. It will be observed that in this latter case the 
 
 277
 
 § -09 
 
 MUNlCirAL BONDS. 
 
 [cii. xrv. 
 
 constitution of the State made void all debts if the provi- 
 sion was not complied with.^ 
 
 The effect of recitals in the bond, when the municipal- 
 ity has power to issue the same, as an estoppel against 
 the corporation pleading as a defence the non-perform- 
 ance of precedent conditions and requirements or the 
 falsity of the recitals, being now so well settled by the 
 adjudication of .the Federal as well as the State courts, it 
 is not deemed necessary to pursue the subject farther in 
 this particular branch of the question. The reader will 
 find in many other parts of this work the subject inci- 
 dentally referred to.^ 
 
 § 209. By Avlioni the quostioiii of performance of con- 
 ditions precedent shall be decided. — Thequestion in each 
 case has been, and ever v/ill be, was it the intention of the 
 statute authorizing the issue of municipal bonds, or other 
 municipal paper, to endow the common council, or other 
 legislative body of a municipality, or the officers issuing 
 the bond or other paper, to adjudge that the conditions 
 precedent to the issue or the other requirements neces- 
 sary to be done at or before the issue of the paper have 
 been performed, and that the findings of such tribunal 
 shall determine the question, once for all, between the 
 
 1 See § 137. 
 
 2 In tlie following cases tlie re- 
 citals in the bonds were held to 
 estop the municipality from show- 
 ing the non-performance of prece- 
 dent conditions. Mercer Co. v. 
 Hackett. 1 Wall. 83 ; Gelpcke v. 
 Dubu.iuc, 1 Wall. 175-203 ; Rogers 
 V. Burlington, 3 Wall. 354 ; Mar- 
 shall Co. V. Schenck, 5 Wall. 772 ; 
 Bissel V. Jeffersonville, 27 How. 
 287 ; Moran v. Miami Co. , 2 Black. 
 (U. S.) 722-24 ; Van Hostrup v. 
 Madison City. 1 Wall. 291 ; St. 
 Joseph Township v. Rogers, 16 
 Wall. 644 ; Moultrie v. Savings Bk.. 
 92 U. S. 631 ; Town of Venice v. :\Iin- 
 dock, 92 U. S. 494 ; Johnson Co. v. 
 Thaver, 94 U. S. G31 : Warren Co. 
 V. Marcv. 97 U. S. 96 ; Walnut Tp. 
 
 278 
 
 V. Wade, 103 U. S. 674; Moultrie 
 Co. V. Fairfield, 105 U. S. 370; 
 Northern Bank v. Porter Township, 
 110 U. S. 608 ; Smith v. Clark Co., 
 54 ]Mo. 58 ; Bernard's Tp. v. Morri- 
 son, 133 U. S. 523 ; Shorter v. Rome, 
 52 Ga. 621 ; National Life Ins. Co. 
 of Montpelier v. Board of Ed. of 
 Huron, 62 Fed. Rep. 778 ; Coler v. 
 Rhoda Sch. Tp. of Charles Mix Co., 
 63 N. W. R. 1.58 ; Risley v. Village 
 of Howell, 64 Fed. Rep. 453 ; Coler 
 V. Dwight Sch. Tp., 3 N. D. 249; 
 Coffin V. Board of Com'rs of Kear- 
 ney Co., 57 Fed. Rep. 137 ; Board 
 of Com'rs of Kingman Co. v. Cor- 
 nell University. 57 Fed. Rep. 149 ; 
 Board v. Randolph, 80 Va. 614; 
 Fulton V. Town of Riverton, 43 
 Minn. 395.
 
 CH. XIV.] DEFENCES. § 209 
 
 municipal corporation and the bona fide holder of the 
 paper issued, after such a determination, when the paper 
 recites performance of all such necessary prior conditions 
 and requirements ? 
 
 When the statute in express terms provides that these 
 questions are to be determined by the officers named 
 therein, and their determination shall be final and conclu- 
 sive, there is no difficulty in arriving at a proper con- 
 clusion in a given case ; but when the fact whether or not 
 this determination is to be passed upon by the officers or 
 body authorized to issue the paper is to be implied from 
 a reading of the whole statute, then the question is de- 
 batable and has given rise to numerous decisions in the 
 Federal and State courts. 
 
 The very question under discussion arose for the first 
 time in this country in the case of Knox Co. v. Aspin- 
 wall.i 
 
 In that case the defence on the part of the county was 
 that the notice of election was not given by the officers 
 designated by the enabling statute. The court by Nel- 
 son, J., said : "Who is to determine whether or not the 
 election has been properly held and a majority of the 
 votes cast in favor of the subscription ? ... Is it to 
 be determined by the court in a collateral way, in every 
 suit upon the bond or coupon attacked, or by the board 
 of commissioners, as a duty imposed upon it before mak- 
 ing the subscription ? . . . The right of the board to 
 act in the execution of the authority is placed upon the 
 fact that the votes had been cast in favor of the subscrip- 
 tion ; and to have acted without first ascertaining it, 
 would l:ave been a clear violation of the duty ; and the 
 ascertainment of the fact was necessarily left to the in- 
 quiry and judgment of the board itself as no other tri- 
 bunal was provided for the purpose. The board was one 
 from its organization and general duties, fit and compe- 
 tent to bo the depository of the trust thus confided to it. 
 Tlu; persons composing jt were elected by the county, 
 and it was already invested by the highest functions con- 
 cerning its general police and fiscal interest. . . . AVe 
 
 1 21 How. 530. 
 
 279
 
 § 210 MUNICirAL BONDS. [CH. XIV. 
 
 do not say that tlie decision of the board would be 
 conclusive in a direct proceeding to inquire into the 
 facts previous to the execution of the power and before 
 the rights and interest of third persons had attacked, but 
 after the authority has been executed, the stock sub- 
 scribed, and the bonds issued and in the hands of innocent 
 purchasers, it would be too late, even in a direct proceed- 
 ing, to call it in question. Much less can it called in ques- 
 tion, to tlie prejudice of a bona fide holder of the bonds 
 in this collateral Avay." 
 
 The bonds were in this case issued by the same officers 
 who were to determine whether the prior conditions were 
 performed. 
 
 § 210. Same. — In the case of Town of Coloma v. Eaves, 
 92 U. S. l-S-t, decided in the October term, 1875, the doc- 
 trine of Knox Co. V. i^spinwall was attacked with great 
 vigor in the opinion of the dissenting judges, but the 
 majority of the court upheld the doctrine of the former 
 case. 
 
 The bonds in this latter case contained the following 
 recitals : 
 
 "■ This bond is issued under and by virtue of a law of 
 the State of Illinois, entitled ^A.n act to incorporate the 
 Chicago and Rock River Railroad Company,' approved 
 March 24:, 1860, and in accordance with a vote of the elec- 
 tors of said Township of Coloma, at a regular election 
 held July 2Sth, 18(39, in accordance with said law and 
 under a law of the State of Illinois entitled 'An act to 
 fund and provide for the paying of the railroad debts of 
 counties, townships and cities, in force April IGth, I860.'" 
 
 The bonds were signed by the supervisors and town 
 clerk, who were designated in the statutes as the officers 
 to execute the bonds " if it should appear" that a ma- 
 jority of the legal voters of city, town or township voting 
 had voted for subscription. Upon the question of the 
 authority of these officers to decide that the conditions 
 precedent had been complied with, Mr. Justice Strong, 
 delivering the opinion of the court sustaining the valid- 
 ity of the bonds, said : "At some time or other it is to 
 
 be ascertained whether the directions of the act have 
 280
 
 CH. XIV.] DEFENCES. § 210 
 
 been followed ; whether there was any popular vote ; or 
 whether a majority of the legal voters present at the elec- 
 tion did, in fact, vote in favor of the subscription. The 
 duty of ascertaining was plainly invested somewhere and 
 once for all, and the only persons spoken of who have 
 any duties to perform respecting the election and action 
 consequent upon it are the town clerk and supervisor, or 
 other executive officer of the city or town. It is a fair 
 presumption, therefore, that the Legislature intended that 
 these officers, or one of them at least, should determine 
 whether the requirements of the act prior to the subscrip- 
 tion to the stock of the railroad company had been met. 
 
 " ' If it should appear, ' tlie act said. Appear when ? 
 Why, ]ilainly before the subscription was made and 
 the bonds were executed, not afterwards. Appear to 
 whom ? In regard to this there can be no doubt. Mani- 
 festly not to a court after the bonds had been put on the 
 market and sold, and when payment is called for, but if 
 it shall appear to the persons whose province it was made 
 to ascertain what had been done preparatory to their 
 own action, and whose duty it was to issue the bonds if 
 the vote appeared to them to justify such action under 
 the law. 
 
 "These persons were the supervisor and town clerk. 
 Their right to issue the bonds was made dependent 
 upon the appearance to them of the performance of the 
 conditions precedent. 
 
 *' It certainly devolved upon some person or persons to 
 decide this preliminary question, and there can be no 
 doubt who was intended by the law to be the arbiter." 
 
 j\Ir. J. Strong, referring to the rule laid down by Judge 
 Dillon ^ on this subject, further said : 
 
 " Where the legislative authority has been given to a 
 
 1 Dillon on ]\Iun. Corp. Vol. 1. [ has boon conii)lic(l with, then it 
 (4tli etl.) S 52:3. "If upon a true may well be that their recital of 
 construction of the legislative en- their determination of a matter in 
 actment conferring the authority, jxtin which thej' are authorizeil to 
 the corporation or certain oflficers, I decide will, in favor of the bond- 
 er a given body or tribunal, are holder for value, bind the corpora- 
 invested with power to decide tion." 
 whether the condition precedent I 
 
 281
 
 § 211 MUNICIPAL BONDS. [CH. XIV. 
 
 iniuiicipality or to its officers to subscribe for the stock of 
 a railroad company and to issue municipal bonds in pay- 
 ment, but only upon some precedent condition, such as a 
 popular vote favoring the subscription, and where it may 
 be gathered from the legislative enactment that the 
 officers of the municipality were invested with power to 
 decide whether the conditions precedent have been com- 
 plied with, their recital that it has been made in the 
 b(^nds issued by them is conclusive of the fact and bind- 
 ing upon the municipality, for the recital is a decision of 
 the fact by the appointed tribunal." 
 
 ^ 211. Recital by the officers autliorizeil to execute 
 the bonds sufficient. — In the case of Warren v. Marcy, 07 
 U.S. 96, 10-i, the bonds were executed by the clerk of the 
 board of supervisors under their order and direction and 
 recited that they were issued " in conformity with a vote 
 of the electors of said county cast at an election held on 
 the 23d day of September, ISGO. " 
 
 Mr. Justice Bradley, who delivered the opinion of the 
 court, said: "We have sustantially held (referring to 
 former cases) that if a municipal body has lawful power 
 to issue bonds or other negotiable securities, dependent 
 only upon the adoption of certain preliminary proceedings, 
 such as a jjopular election of the constituent body, the 
 holder in good faith has a right to assume that such 
 preliminary proceedings have taken place, if the fact be 
 certified upon the face of the bonds themselves by the 
 authorities whose primary duty it is to determine it. 
 Now that is the case here. The bonds are executed 
 by the lioard of supervisors, or, which is the same thing, 
 1)y tJieir clerk under their order and direction. 
 
 " They certify on their face that they are issued in con- 
 formity with the vote of the electors of said county, cast 
 at an election held on the 23d day of September, 180!). 
 
 "J7^2s, according to the cases, is a sufficient authen- 
 tication of the fact that an election was duly held, to 
 protect a bona fide holder for value." 
 
 It will be seen from the above case that the execution 
 of the bonds by the clerk, under authority of the board of 
 
 supervisors, estopped the county from setting up as a 
 
 282
 
 err. xrv.] defences. § 211 
 
 defence the non-performance or irregular jDerformance of 
 prior conditions. 
 
 It does not appear tliat the clerk was authorized to 
 make the recitals or execute the bonds containing reci- 
 tals, but the opinion rests upon the fact that the bonds 
 he did execute pursuant to his authority as agent of the 
 board contained the said recitals. 
 
 In another case,^ it appeared that the common coun- 
 cil of the city was authorized by the Legislature to sub- 
 scribe for the stock in a railroad company and issue 
 bonds for the subscription on petition of three- fourths of 
 the legal voters of the city. 
 
 The council adopted a resolution to subscribe, reciting 
 in the preamble that more than three-fourths of the legal 
 voters had petitioned for it, and authorized the mayor and 
 city clerk to sign and deliver the bonds for the sum sub- 
 scribed. The bonds contained recitals that they were 
 issued by authority of the city council, and that three- 
 fourths of the legal voters had petitioned for the same as 
 required by the charter. 
 
 In a suit by an innocent holder on unpaid coupons, it 
 was held inadmissible for the city to show that three- 
 fourths of the legal voters had not signed the petition, 
 that the recitals, as well as the records of the proceed- 
 ings, estopped such a defence. In this case it will be 
 observed the bonds were executed by the mayor and 
 city clerk under authority of the common council. 
 
 In Oregon v. Jenning, 110 U. S. Ti, the bonds issued 
 referred to the act under which they were issued. The 
 issue was submitted to a vote of the people ; the terms 
 of the vote were that the bonds should not be issued and 
 the vote should be void unless the road was completed 
 by a day specified. The road was not completed by that 
 day. The court, in holding the bonds to be valid in the 
 hands of a bona fide holder, said : "■ \Yitliin the numerous 
 decisions of this court upon the subject, the supervisors 
 and town clerk, they being named in the statute as the 
 officers to sign the bonds and the * corporate authorities' 
 to act for the town in issuing them, were the persons 
 
 1 Bissell V. JeffersonviUe, 24 How. (U. S.) 287. 
 
 283
 
 § 212 MUNICIPAL BONDS. [CH. XIV. 
 
 interested with the duty of deciding, before the issue 
 of the l)()nds, whether the conditions determined at the 
 election existed, if they have certified to that effect in 
 the bonds, the town is estopped from asserting as against 
 a bona fide holder that the conditions prescribed by the 
 popular vote were not complied with. They state in each 
 bond that the faith, credit and property of the town are 
 by the bond -solemnly pledged for the payment of the 
 principal and interest named in it, under authority of 
 the act of March oOth, 18G9, reciting its title, and that the 
 sixty bonds amounting to $50,000 are the only bonds issued 
 by said town of Oregon under and by virtue of said act."' 
 
 § 212. When officers not authorized to adjudicate, 
 — When the enabling statute requires that certain facts 
 shall exist, as for instance the assessable v^alue of the 
 real estate, or the assent of a certain number of the legal 
 voters at the last election, and points to the public rec- 
 ords from which all the facts may be ascertained and 
 which are open to the inspection of the general public as 
 fully as to the officers authorized to issue the bonds, in 
 such cases the officers to issue the bonds are not a tribunal 
 to decide whether or not the facts so ascertainable exist 
 or not before making the issue, and their recitals that 
 the facts exist which permit the issue will not estop the 
 municipality from proving them to be false. ^ 
 
 And in some cases it has been held that unless the 
 existence of the particular facts upon which the issue of 
 bonds is to be made rests in the peculiar knowledge of 
 the officers authorized to make the issue, or unless they 
 have means of knowing the facts not open to the public 
 generally, the officers are not a tribunal to pass upon 
 and determine conclusively the existence of the neces- 
 sary facts upon which the issue may be made,^ except 
 when the statute directs them to pass upon the question 
 in express words or by necessary implication.^ 
 
 1 Dixon Co. V. Field, 111 U. S. 84 ; ( 3 Oregon v. Jennings, 119 U. S. 
 Quaker City Nat. Bk. v. Nolan Co., I 74 ; Coloma v. Eaves, 92 U. S. 484 ; 
 59 Fed. Rep. 6G0. See §g 221, 225. j Evansville Co. v. Evansville, 15 Ind. 
 
 - Mutual Benefit L. Ins. v. Eliza- I 395 ; Dill, on Mun. Corp. § 523. 
 beth. 42 N. J. L. 235 ; Knox Co. ' 
 Aspinwall, 21 How. 529, 
 284
 
 CH. XIV.] 
 
 DEFENCES. 
 
 §213 
 
 And it is a rigid rule that a municipal corporation will 
 not be estopped by recitals, declarations, or public records 
 of agents or public officers who are not authorized to 
 make them.^ 
 
 § 213. What officers may make the recitals. — The 
 recitals in the bond or other municipal paper must be 
 made by the officers or board charged with the duty of 
 issuing the paper and determining whether the prior 
 conditions and iDreliminary requirements have been per- 
 formed,^ or the agents of such officers or board, who them- 
 selves must be officers of the municipality. 
 
 Sometimes the officers who are to execute the bonds 
 are named in the enabling act, but the officers when not 
 so named must be directed by either the ordinance or 
 resolution of the body authorized to issue the paper, and 
 by their official title, to execute the paper l)y and on 
 behalf of the municipality. The bond usually recites 
 
 1 Brown v. Bon Homme Co., 46 
 N. W. Rep. 173 ; Bank v. Bergen 
 Co., 115 U. S. 384; Davies Co. v. 
 Dixon, 117 U. S. 657 ; Cagwin v. 
 Hancock, 84 N. Y. 583 : Hudson v. 
 Winslow, 35 N. J. L. 437 ; Williams 
 V. Roberts. 88 111. 11. 
 
 In Chisholm v. Montgomery, 2 
 Woods (U. S.) 584, Mr. Justice 
 Bradley said : — 
 
 •• The plea that the city is es- 
 topped Ijy the act of its officers, by 
 tlie resolutions of tiie city council, 
 or b}- tlie negotiable form or matter 
 in the bonds themselves, from de- 
 nying the autliority of such officers 
 to pledge the faith of the city in aid 
 of said plank roads, and to issue 
 the bonds in question, cannot be 
 maintained. Public officers cannot 
 ac(iuire authority b\' declaring that 
 they have it. They cannot thus 
 shut the mouth of tlie public whom 
 they represent. The officers and 
 agents of private corporations, en- 
 trusted by them with the manage- 
 ment of their own business and 
 property, may estop their princi- 
 
 pals, and subject them to the con- 
 sequences of their unauthorized 
 acts. But tlie body politic cannot 
 be thus silenced by the acts or dec- 
 larations of its agents. If it could 
 be, unbounded scope would be 
 given to the peculations and frauds 
 of public officers. I hold it to be 
 a sound proposition, tliat no munic- 
 ipal or political body can be es- 
 topped by the acts or declai-ations 
 of its officers from denying their 
 authority to bind it. 
 
 " Finally, tiie plea that the plaint- 
 iffs were bona fide holders of the 
 bonds cannot avail where the de- 
 fence is want of power to issue 
 them. Of this defect the plaintiffs 
 were bound to take notice. Had 
 the power to issue the bonds e.\- 
 isted, and had the question been 
 whether certain preliminary condi- 
 tions had been complied with, the 
 plea might, under certain condi- 
 tions, liave been a good on«'." 
 
 2 Gibbs V. School Dist., ^Mich.) 5» 
 N. W. R. 294. 
 
 285
 
 § 21-i MUNICIPAL BONDS. [CH. XIV. 
 
 that the municipality lias caused it to ho executed Ly the 
 officers who execute it and to have the corporate seal 
 affixed. 
 
 Justice Matthews, in Dixon Co. v. Field, 111 U. S. 04, 
 said : 
 
 '* If the officers authorized to issue the honds upon a 
 condition are not the appointed tribunal to decide the 
 facts which- constitute the condition, their recital will 
 not he accepted as a substitute for proof. 
 
 " In others words, where the validity of bonds depends 
 upon an estoppel, claimed to arise upon the recitals of 
 the instrument, the question being as to the existence of 
 power to issue them, it is necessary to establish that the 
 officers executing the bonds had lawful authority to 
 make the recitals and to make them conclusive. The 
 very ground of the estoppel is that the recitals are the 
 official statements of those to whom the law refers the 
 puljlic for authentic and final information on the subject." 
 
 It is not necessary that the enabling act should in ex- 
 press terms designate the officers or body who are to de- 
 cide whether or not the preliminaries have been complied 
 with, and as said in Bernards Township v. Morrison, 13;> 
 U. S. 523, *' Express direction and authority for commis- 
 sioners or other officials to decide that preliminary con- 
 ditions have been complied with, are seldom found in 
 acts providing for the issuing of bonds. It is enough 
 that full control in the matter is given to the officers 
 named." 
 
 Where it may be gathered from the legislative enact- 
 ment that the officers of the municipality were invested 
 with the power to decide whether the condition precedent 
 has been complied with, their recital that it has been 
 made in the bonds issued by them and held in the hands 
 oi a bona fide holder is conclusive of the fact and bind- 
 ing upon the municipality, for the recital is itself a de- 
 cision of the fact by the appointed tribunal.^ 
 
 §21-1. Same. — The recital in the bond of compliance 
 with the conditions precedent in order to bind the cor- 
 
 1 Town of Coloma v. Eaves, 93 U. S. 484. 
 286
 
 CH. XIV.] DEFENCES. § 214 
 
 poratioii must purport to come from some officer or board 
 charged by law with the duty of ascertaining the fact 
 that the conditions precedent have been fully performed/ 
 as for example from the officials signing the bonds on be- 
 half of the corporation.^ When there is no express desig- 
 nation of the officer to pass upon this question, then the 
 recital must come from those officials to whom full con- 
 trol is given .^ This power cannot be delegated by the 
 corporation to others than its own officers.^ 
 
 From the opinion of Mr. Justice Bradley in Town of 
 Coloma V. Eaves, it would appear that the bond con- 
 taining the recital, in order to work an estoppel, should 
 be executed by the same person who was authorized to 
 pass upon the question of perform ance of i)rior conditions 
 and authorized the issue of the bonds. He said : 
 
 "Bat if the law required a condition jDrecedent, such as 
 a vote of taxpayers, and a suj^ervisor, judge of probate or 
 other officer is designated to ascertain whether the vote 
 has been given, and he is also the officer to execute the 
 bonds, and he does execute the bonds which contain a re- 
 cital that the vote has been given, then the bona fide 
 purchaser need go no further. He has a right to rely on 
 the statement as a determination of the question." But 
 in a later case he modified his former opinion and said : 
 ' ' The holder in good faith has the right to assume that 
 
 1 Humbolt V. Long, 93 U. S. 642. | larly performed. That their re- 
 
 2 Oregon v. Jennings, 119 U. S. [ citals in the bonds estopped the 
 74 ; Town of Andes v. Ely, 158 U. S. ; townsliip from setting n\> as a de- 
 313. I fence irregularity in the proceed- 
 
 3 In tlie case of Inhabitants of ings. 
 
 the Township of Bernards V, Morri- Tlio defence sought to bo inter- 
 son. 133 U. S. 523, the court held posed being that the consent of a 
 that the fact that the commissioners majority of tlie taxpayers had not 
 were special officers ai)iK)inted for been given, that tlie affidavit of tlie 
 thepurposeof issuing tlie bonds, by assessor that tlie proper consent 
 the court did not make their acts had been obtained was not true, 
 less binding. Tliat as they were and also that tlie conimissionei-s 
 given by the act, after their ap- , who issued the bonds did not bor 
 
 pointment, full control over the 
 issue, it was to be conclusively pre- 
 sumed that the conditions prece- 
 dent ujion which they were to issue 
 the bonds, had been duly and regu- 
 
 12 28 
 
 row monej' upon them, but dis- 
 posed of them without lawful con- 
 sideration. 
 ■• Jackson Co. v. Brusli. 77 111. T)^.
 
 § 215 MUNICIPAL BONDS. [c'll. XIV. 
 
 sucli preliiniiiaiy proceedings have taken place, if the 
 fact be certified upon the face of the bonds themselves, 
 by the authorities whose primary duty it is to determine 
 it. Now that is the case here. The bonds are executed 
 by the board of supervisors, or, which is the same thing, 
 by their clerk under their order and direction." 
 
 § 215. Author's conclusions as to what officers may 
 make tlie recitals. — In some of the cases heretofore 
 referred to, the officers who signed the bonds, and 
 under what authority, is set out so as to show who exe- 
 cuted the bonds containing the recitals. It will be found 
 that the officers who executed the bonds containing the 
 recitals Avere directed and authorized to execute them, 
 either by the statute authorizing their issue, or by the 
 board or body authorized by statute to make the issue, 
 and in no case does it appear, when the bonds are executed 
 by officers other than those who are authorized by statute 
 to issue them, that they were authorized to make any 
 recitals therein. It would therefore appear that when the 
 officers who are directed to execute the bonds, either by 
 the enabling statute or some resolution or ordinance, are 
 not the same officers who are authorized to issue the bonds, 
 that if such ministerial officers execute bonds containing 
 recitals of prior performance or other necessary require- 
 ments, or such recitals as will lull the suspicion of an in- 
 nocent holder, such recitals will estop the municipality 
 to deny their truth to the same extent as if made by the 
 officers, board or body empowered to issue the bonds. ^ 
 
 Such recitals, if sufficient, so made will estop the 
 municipality as to any act which the officers, board or 
 body should have done up to and including the last neces- 
 sary act to be done by the body authorized to make the 
 issue, but it will not include or cover any act, the i)erform- 
 ance of which must be done after the board or body 
 authorized to issue the bonds have performed all the re- 
 quirements which the law required them to perform, 
 unless the omitted act was made the duty of the officers 
 executing the bonds to perform. 
 
 A case in point is that of National Bank of Commerce 
 
 1 See note to § 208 for citation of cases. 
 
 288
 
 CH. XTV.] DEFENCES. § 216 
 
 V. Town of Granada, 54 Fed. Rep. TOO. The Donds were 
 executed by the mayor and clerk of the town, they being 
 named in the enabUng act to execute them ; they were 
 also at a meeting of the town trustees ordered to execute 
 the bonds. The defence was that the ordinance submitting 
 the question of the issue to the voters was never published 
 as required by a general statute relating to ordinances 
 and by-laws. 
 
 Each bond contained a recital that it was issued " un- 
 der ordinance of the city council of the city of Granada 
 adopted," etc. 
 
 The court said : ''If the recital in this case had stated 
 in terms that the ordinance has been published it would 
 not have estopped the town because neither the ma3'or, 
 clerk, nor both, were invested with authority to determine 
 that question, and anything they might say or certify 
 on the subject, save as witnesses in court, would not be 
 evidence anywhere or bind any one. . , . The law does 
 not refer the public to those officers or to either of them 
 for information of the publication of town ordinances, and 
 their statements upon that subject have no more binding 
 force than those of any other citizen of the town." 
 
 § 21(5. Recital of wrong act. — It sometimes happens 
 through carelessness or otherwise that the bonds recite, 
 as the authority for their issue, the wrong act, or the act 
 is misstated in some of its parts ; such bonds are never- 
 theless valid and binding upon the corporation, if it, in 
 fact, has the legal authority to issue bonds for the pur- 
 pose for which such bonds were issued.-^ 
 
 Sometimes the bonds are issued by mistake in accord- 
 ance with a law which has been repealed. Such bonds 
 
 1 Knox Co. V. Ninth Nat. Bank, i iicnrjx irate cities," etc.. is immate- 
 147 U. S. 91 ; Anderson Co. Com'rs rial provided tlie act autliorize tlie 
 V. Beal. 113 U. S. 227 ; Crow v. Ox- issue of tlie bonds. Atchison Board 
 ford, 119 U. S. 2ir). Ameremisre- of Ed. v. DeKaj', 148 U. S. 491. 
 cital of the title of the enabling act This same case also held that where 
 in the bond, as where a bond the school board has authority to 
 recited that it was issued under issue bonds, such bonds l)ind the 
 authority of an act entitled " An | municipal corporation of which the 
 act to organize cities," etc., when board is a part of its government. 
 it should have been, "An act to I 
 
 19 2^0
 
 § 216 MUNICIPAL BONDS. [CH. XLV. 
 
 have been held valid when it appeared that they had been 
 issued in substantial compliance with other laws in force, 
 but the holder of such b<jnds cannot be aided by recitals, 
 inasmuch as they rely upon the laws not referred to in 
 the bonds. ^ But if the bonds, in addition to the wrong 
 act, recite some other fact upon which their issue was 
 authorized, as where, after reciting they were issued 
 pursuant to an enabling act, reciting it, which was the 
 wrong act, they further recite that they were also issued 
 " in pursuance to the vote of the electors of Anderson 
 Count}^, September 13th, 1869," it is held that such re- 
 cital is equivalent to the statement that the vote was a 
 lawful one, regular in form, and such as the law then in 
 force required in respect to prior notice. - 
 
 In a suit on bonds where the question is under which 
 of two acts they were issued, their validit}^ being admit- 
 ted, it is unnecessary to prove every separate step which 
 otherwise might be required to show the legality of the 
 issue for which the plaintiff contends. 
 
 Any statement on the records of the county may be 
 evidence, and from all the facts and circumstances it is 
 to be determined under which act the municipality pro- 
 ceeded.^ 
 
 Where the wrong act is recited in the bond through in- 
 advertence, but the municipality has power to issue the 
 bonds, it may be shown by the proceedings of the munici- 
 pality that all the necessary steps under the law which 
 authorized such issue has in fact been performed, and 
 such bonds will be valid in the hands of bona fide 
 holders ; * but where the bonds recite an act, the prior con- 
 ditions of which have not been performed, and it is sought 
 to hold them valid under some other act not referred to in 
 the bonds, the proceedings prior to the issue must show 
 that the preliminary conditions have in fact been per- 
 formed pursuant to such non-recited act, otherwise 
 
 1 Johnson Co. v. January, 94 U. S. 
 202 ; Gilson v. Daj'ton, 123 U. S. 59. 
 
 2 Anderson Co. v. Beal, 113 U. S. 
 239. 
 
 290 
 
 3 Knox Co. V. Ninth Nat. Bk., 
 147 U. S. 91. 
 
 * Anderson Co. v. Beal, 113 U. S. 
 327.
 
 CH. XIV.] DEFENCES. § 216 
 
 they will be held void in the hands of even a bona fide 
 holder.^ 
 
 When the act recited is unconstitutional the bond will 
 still be valid, if there be some other statute which, though 
 not recited, authorizes the issue of the bonds for the 
 stated purpose and the prior conditions under the non- 
 recited act have been complied with.^ 
 
 1 Crow V. Oxford, 119 U. S. 215. 
 
 2 C. B. U. P. R. R. Co. V. Smith, 
 23 Kan. 745. 
 
 291
 
 CHAPTER XV. 
 
 FURTHER EFFECT OF RECITALS — AVHEN PURPOSE OF ISSUE 
 MUST BE BECITED — EFFECT OF RECITAL OF THE PURPOSE 
 --BONDS ISSUED IN EXCESS OF THE STATUTORY AND 
 CONSTITUTIONAL LIMIT — RECOVERY UPON VOID BONDS. 
 
 Section. 
 
 217 — When purpose of the issue 
 must be recited in the 
 bond — Bond void unless 
 purpose recited. 
 
 218 — Effect of recital of purpose 
 of the issue of the bonds. 
 
 219 — Doctrine extended — When 
 oixlinance need not recite 
 purpose if the enabling 
 act is recited — Cases. 
 
 220 — Comments on the cases. 
 
 221 — Bonds issued in excess of 
 the statutory limit — 
 When the bonds will be 
 held valid— Valid if the 
 amount of issue is to be 
 determined by the officers 
 and they make proper re- 
 citals in the bonds — Reci- 
 tal of the enabling act 
 sufficient in such cases — 
 ■ Exceptions. 
 
 222 — Cases illustrating general 
 doctrine of estoppel by 
 recitals applied to such 
 bonds. 
 
 223 — If there be no recitals in the 
 bonds, then the records of 
 tlie corporation must be 
 relied on — When no reci- 
 tals, purchaser is charged 
 witli all that the records 
 of the corporation relative 
 to the issue disclose. 
 
 224 — General rule as to recitals — 
 Exceptions — A few cases 
 292 
 
 Section. 
 
 hold that the mere execu- 
 tion of the bonds estop the 
 corporation — Case in New 
 York. 
 
 225 — Bonds issued in excess of 
 the constitutional limita- 
 tion — Effect of recitals — 
 Greater care required of 
 purchasers than when the 
 limitation is statutory. 
 
 226— Attitude of the Federal 
 courts — Early cases inti- 
 mated that if the bond 
 contained proper recitals 
 the corporation would be 
 estopped. 
 
 227 — Same — Cases holding bonds 
 invalid. 
 
 228 — When the purchaser must 
 inquire for himself — If 
 the limit is based upon 
 some public record and 
 the bond discloses the 
 amount of the issue, the 
 bond will be void in all 
 hands — Cases illustrating 
 the docti'ine. 
 
 229 — Same — Cases. 
 
 230 — When the bonds tliough in 
 excess of the limit will be 
 held valid — Chaffee Co. v. 
 Potter the only case. 
 
 231 — Author's comments on the 
 case. 
 
 232 — Author's conclusions as to 
 the effect of recitals in
 
 CH. XV.] FURTHER EFFECT OF RECITALS. 
 
 §217 
 
 •Section. 
 
 bonds whicli exceed the 
 constitutional limit. 
 
 233 — Recovery on void bonds — 
 When the money jjaid can 
 be recovered in an action 
 for money had and re- 
 ceived. 
 
 234 — Cases illustrating the jiosi- 
 tion of the courts. 
 
 235~Same. 
 
 236 — Same — The amount vrithin 
 the limit may be divided 
 2iro rata among the hold- 
 ers of the bonds. 
 
 Section. 
 
 237 — Money must have been ap- 
 plied to a lawful munic- 
 ipal purpose by the direc- 
 tion of the corporation, 
 otherwise there can be no 
 recovery — Author's con- 
 clusions as to the law. 
 
 238 — No recovery on void uncon- 
 stitutional bonds — Excep- 
 tions. 
 
 239 — No relief in equity if the 
 bonds exceed the consti- 
 tutional limit — Cases to 
 the contraiy. 
 
 § 217. When purpose of issue must be recited in the 
 honds. — Usually the bonds recite the purpose for which 
 they are issued, and recite the title of act of the Legis- 
 lature and of the ordinance pursuant to which they are 
 issued. 
 
 They need not contain recitals^ unless the law requires 
 that the purpose of the issue shall he recited in the 
 bond itself, and when such bonds fail to disclose on 
 their face the purpose for which they are issued, they 
 are not negotiable, so far, at least, as to cut off de- 
 fences against even innocent holders. A case illustrat- 
 ing the rule is that of Barnett v. Dennison, 145 U. S. 
 135. 
 
 In this case the charter of the city under which the 
 bonds were issued required that bonds should sjDecify for 
 what purpose they were issued. The bonds in question 
 were issued pursuant to an ordinance of the city for the 
 purpose of redeeming the outstanding city scrip or other 
 indebtedness, the bonds referred to the ordinance giving 
 the date of its passage and approval, but not its title or 
 contents or purpose, and the bonds did not specify for 
 what purpose they were issued. The bonds were, in fact, 
 issued for a purpose entirely different from that specified 
 in the ordinance, viz. : in aid of a refrigerator car com- 
 
 1 See § 122. 
 
 293
 
 §-17 
 
 MUNICIPAL BONDS. 
 
 [(MI. XV. 
 
 pany which had agreed to erect at Dennison its plant, 
 which the company failed to do. 
 
 The court said in view of the requirement of the said 
 statute : " It is certainly a reasonable requirement that 
 the bonds issued shall express, upon their face, the pur- 
 pose, for which they were issued. 
 
 '' In any event it was a requirement for which the pur- 
 chaser (the plaintiff) was bound to take notice, and if it 
 appeared upon their face they were issued for an illegal 
 purpose they would be void. If they were issued without 
 any purpose appearing at all on their face, the purchaser 
 took the risk of their being issued for an illegal purpose, 
 and if that jDroved to be the case, they are as void in his 
 hands as if he had received them with express notice of 
 their illegality." 
 
 It was held that bonds purporting to be "refunding 
 bonds " issued to take up " bonds falling due" sufficiently 
 complied with the Michigan statute requiring each munic- 
 ipal bond to show upon its face "the class of indebted- 
 ness to which it belongs and from what fund it is pay- 
 able." ^ 
 
 Ordinarily the recital of the fact that the bonds were 
 issued in i)ursuance of a certain ordinance would be notice 
 
 1 City of Cadillac v. Woonsocket 
 Int. , 58 Fed. Rep. 935. On this sub- 
 ject see State v. School Dist., 84 
 Kan. 237.; Young v. Camden Co., 
 19 j\ro. 309. 
 
 AVlieve the charter of the city 
 of Indianapolis authorized tlie 
 council to make " original loans " 
 with the limitation, that "such 
 loans may be made only for the 
 purpose of procuring money to 
 be used in the legitimate exer- 
 cise of corporate powers of such 
 city and for the payment of legiti- 
 mate corporate debts," the court, 
 in Coflfin v. City of Indianapolis. 59 
 Fed. Rep. 221 said : " Tliis limita- 
 tion eA-idently means that wlien the 
 city proposes to borrow money the 
 
 294 
 
 ordinance shall state the purpose of 
 the loan, in order that it may ap- 
 pear that the money procured is to 
 be used in the legitimate exercise 
 of coi-porate power, or for the pay- 
 ment of legitimate corporate debts. 
 If the city may issue and sell its 
 bonds to raise money without stat- 
 ing any lawful jiurpose for which 
 the money is to be used, the bonds 
 would be valid if the money was 
 used for a legitimate corporate pur- 
 pose and invalid if the money was 
 illegitimately used. Such a con- 
 struction would place upon the 
 purchaser of the bonds the burden 
 of seeing to the riglitful application 
 of the money if he would jnaintaiii 
 tlieir validity."
 
 CH. XV.] FURTHER EFFECT OF RECITALS. § 218 
 
 that they were issued for a purpose specified in sucli or- 
 dinance, and the city would be estopped to show the fact 
 to be otlierwise ; ^ but wliere tlie statute requires such 
 purpose to be stated upon the face of the bonds, it is no 
 answer to say that the ordinance authorized them for a 
 legal purpose, if in fact they were issued without consid- 
 eration and for a different purpose.^ 
 
 § 218. Effect of recital of purpose of tlie issue of tlie 
 bonds. — The effect of the recital in the bond of the pur- 
 pose for which it is issued will estop the municipal cor- 
 poration to plead that it is issued in fact for a private or 
 unlawful purpose, but in order to work an estoppel in 
 such cases the corporation must have had authority to 
 issue the paper for the purposes recited at the time issued, 
 and the statute or statutes which authorized the issue 
 must be recited on the face of bond or other paper. As 
 the subject is an interesting one the important cases illus- 
 trating the doctrine are given at length. 
 
 The earliest and leading case on this subject is that of 
 Hackett v. Ottawa, 09 U. S. 80. 
 
 In this case the city of Ottawa, after an affirmative 
 vote of the qualified electors of the city ratifying an or- 
 dinance of the city council to provide for a loan for munic- 
 ipal purposes, issued its bonds in the sum of $60,000. 
 The bonds recited the ordinances which expressed that 
 the loan was for municipal purposes. The recitals of the 
 ordinances were as follows : " And also in accordance 
 with a certain ordinance passed by the city council of 
 said city on the fifteenth day of June, A. D. 18()1>, enti- 
 tled ' An ordinance to provide for a loan for municipal 
 purposes,' whicli ordinance was ratified by a majority of 
 all the qualified voters at an election holden on the 
 twentieth day of July, A. D. 18(;!), and in conformity with 
 an ordinance ])assed by the city council of said city on 
 the thirtieth day of July, A. D. 1800, entitled 'An ordi- 
 nance to carry into effect the ordinanceof June 15th, 1809, 
 entitled An ordinance to provide for a loan for municipal 
 
 1 Ottawa V. National Bank, 105 I ^ Barnert v. Dennison, 145 U. S. 
 U. S. 342. 135. 
 
 295
 
 § 218 MUNICIPAL BONDS. [CH. XV. 
 
 purposes.'" The bonds also recited that they were 
 "issued by the city of Ottawa by virtue of the charter 
 of said city," and the sections of the charter were re- 
 ferred to. 
 
 It was contended on the part of the city that the bonds 
 were invalid because the purpose for which the bonds 
 were to be used was not a public one, and that the ordi- 
 nances disclosed that fact. The court held the bonds to be 
 valid upon the recitals contained on their face, and did 
 not pass upon the question whether the purpose for 
 which the bonds were issued was a public or private 
 one. The court held the plaintiff to be a bona fide holder 
 for value without notice and on the subject of estoppel 
 said : 
 
 " For all corporate purposes, as we have seen, the coun- 
 cil, if instructed by a majority of the voters attending at 
 an election for that purpose, had undoubted authority 
 under the charter to borrow money upon its credit and to 
 issue bonds therefor. The bonds in suit, by their recital 
 of the title of the ordinances under which they were 
 issued, in effect assured the purchaser that they were to be 
 used for municipal purposes, with the previous sanction 
 duly given of a majority of the legal voters of the city. 
 If he would have been bound under some circumstances 
 to take notice, at his peril, of the provisions of the ordi- 
 nances, he was relieved from any responsibility or duty 
 in that regard by reason of the representation upon the 
 face of the bonds that the ordinance under which they 
 were issued, were ordinances ' providing for a loan for 
 municipal purposes.' Such a representation by the con- 
 stituted authorities of the city, under its corporate seal, 
 would naturally avert suspicion of bad faith upon their 
 part and induce the purchaser to omit an examination 
 of the ordinances themselves. It was substantially a 
 declaration by the city, with the consent of a majority of 
 its legal voters, that purchasers need not examine the 
 ordinances, since their title indicated a loan for municipal 
 purposes. 
 
 " The city is therefore estopped by its own representa- 
 tions to say, as against a bona fide holder of the bonds, that 
 296
 
 CH. XV.] FURTHER EFFECT OF RECITALS. § 219 
 
 they were not issued or used for municipal or corporate 
 purposes. It cannot now be heard, as against him, to 
 dispute their vahdity. Had the bonds upon their face 
 made no reference whatever to the charter of the city or 
 recited only those provisions which empowered the coun- 
 cil to borrow money upon the credit of the city, and to 
 issue bonds therefor, the liability to the city could not be 
 questioned. Much less can it be questioned in view of 
 the additional recital in the bonds that they are issued 
 in pursuance of an ordinance providing for a loan for 
 'municipal purposes,' that is, for purposes authorized by 
 its charter." 
 
 In the subsequent case of Ottaw^a v. National Bank' 
 of Portsmouth, 105 U. S. 343, on a suit on a part 
 of the same issue of bonds, the former case was ap- 
 proved. 
 
 In the case of Ottawa v. Carey, 108 U. S. 110, a part of 
 the same issue of bonds were held to be invalid because 
 the holder thereof took them with full knowledge of in- 
 firmities, the bonds being donated to private persons 
 as a bonus for developing the water power in the city or 
 its vicinity for manufacturing purposes. 
 
 In these cases tlie bonds were signed by the mayor and 
 clerk, and their authority to execute them is not disclosed 
 by the reported cases. 
 
 §219. The doctrine extended. — The case of Eisley v. 
 Village of Howell, 64 Fed. Rep. 453, not only illustrates the 
 point in question but also illustrates the construction 
 to be placed upon all the recitals in a bond in their 
 effect as an estoppel, and therefore is given at some 
 length. 
 
 The bonds were executed by the president and recorder 
 of the village, they being named in the enal)ling act to 
 execute them. 
 
 The bonds on their face recited the act under which 
 
 they were issued, and the further fact that they were also 
 
 issued "under the ordinance of the village of Howell 
 
 passed August 12tli, 1885 ;" they also each contained on 
 
 their face the words "Improvements bonds." 
 
 The village had power under the act to issue bonds for 
 
 297
 
 § 219 MUNICIPAL BONDS. [CH. XV. 
 
 the purpose of obtaining money to make public improve- 
 ments in the village. 
 
 Under a resolution of the common council, the question 
 was submitted to the voters whether the village should 
 issue $20,00U of bonds under said act for the purpose of 
 obtaining money to make public improvements, and the 
 vote decided the question in the affirmative. Afterwards 
 the common council of the village passed the ordinance 
 referred to in the bonds, which provided for the issue of 
 $20,000 of bonds, but unlawfully directed that they be 
 made payable to the agent (Ashley) of a railroad com- 
 pany, or bearer, and to be used to aid a railroad. (The 
 constitution of the State of Michigan prohibited such 
 aid.) 
 
 Some of the bonds found their way into the hands of 
 Risley, the plaintiff, who was a bona fide purchaser with- 
 out notice, other than that contained on the face of 
 the bonds themselves. The court held the bonds to be 
 valid in his hands, as the village had power to issue the 
 bonds, and that the recital of the ordinance did not put 
 him on inquiry to ascertain its scope and object, and that 
 the purchaser could presume that the ordinance was a 
 lawful one and passed in conformity with the enabling 
 statute. On the subject of the effect of the recitals in 
 the bonds in question, the court said : 
 
 "In order to determine what effect should be given to 
 this part of the recitals in the bonds, reference must be 
 had to the whole instrument under the just and familiar 
 rules of construction. In one part of each of the bonds 
 it was represented that it was an ' improvement bond.' 
 
 This taken in connection with the subsequent reference 
 to the statute meant that it was a bond used to provide 
 means for a public improvement. 
 
 In another place it was represented that the bond was 
 issued under and by virtue of a special act of the State of 
 Michigan entitled ' An act to authorize the village of 
 Howell to make public improvements in the village of 
 Howell, being act No. 248 of the local acts of 1885, of the 
 Legislature of the State of Michigan, approved February 
 25th, 1885, and also under an ordinance of the village of 
 298
 
 CH. XV.] FURTHER EFFECT OF EECITALS. § 220 
 
 Howell passed August 12th, 1885." What was the mean- 
 ing of this representation ? 
 
 To say that a thing is clone ' under and by the author- 
 ity of a statute referred to,' is equivalent to saying that 
 it is -'done in conformity with it and authorized by it.' . , . 
 Bringing all the recitals of the bonds together they amount 
 to a representation that they were issued to raise money 
 to defray the expenses of a public improvement of a kind 
 to be determined by the common council, that the r<'quire- 
 ments of the law had all been complied with, and that 
 an ordinance in conformity with the law had been passed 
 directing their issuance ; for if the ordinance were not 
 in conformity with the law, inasmuch as it preceded the 
 issuing of the bonds, it falsified the preceding statement 
 that the bonds were issued in conformity with the stat- 
 ute." 
 
 This case was decided in the court below, 57 Fed. Rep. 
 544, against the holder of the bonds, the court holding that 
 the reference to the ordinance was notice of its provi- 
 sions and the purchaser was bound to inspect the same, 
 and that had he done so he would have learned that the 
 purpose of the issue was an unlawful one. 
 
 In a recent case ^ decided by the Supreme Court of 
 Alabama, w^here it appeared the town had legislative 
 authority to issue bonds for waterworks, it i)assed an 
 ordinance to issue bonds for waterworks and also to pro- 
 vide for electric lights. The bonds recited the enabling 
 statute and also referred to the ordinance, but did not 
 give its title or purpose. 
 
 The town sought to show that the 1)onds were illegal, 
 because issued for the electric lights, but th(^ c(nirt held 
 the town estopped by its recitals in the bonds from set- 
 ting up the illegal purpose. 
 
 § 220. Coininonts on tlie last two cases.— It seems to 
 the author that the last two cases referred to above are 
 a step in advance of the Ottawa cases. In the Ottawa 
 cases the ordinance recited the pur])oseof tlie issue of the 
 bonds, and this purpose was in accord with the recited 
 statute which authorized the issue of the bonds for the 
 
 1 Town of Brewton v. Spira, 17 S. R. 660. 
 
 299
 
 § 221 MUNlCirAL BONDS. [CH. XV. 
 
 purpose named in the recited ordinance, l)ut in the cases 
 of Eisley v. Village of Howell and Brewton v. Spira the 
 purpose of theordina nee referred to in the bonds was not 
 disclosed at all, and whether public or private or in accord 
 or conflict with the recited enabling statutes could only be 
 ascertained upon inspection of the ordinances, therefore 
 they and the Ottawa cases are not parallel ones, and do 
 not rest entirely upon the same reasons to sustain them. 
 
 The cases of Risley v. Village of Howell and Brewton 
 V. Spira rest upon the construction of recitals in munic- 
 ipal i^aper when construed as a whole, and in addition 
 to the doctrine laid down in the Ottawa cases upon the 
 further doctrinfe, and which they go to establish, that 
 when a bond recites that it is issued pursuant to the ena- 
 bling statute, and also recites as a further authority for 
 its issue an ordinance or any other fact, which is not 
 inconsistent Avith the enabling statute recited, and such 
 further recital (although if investigated would lead to 
 the discover}^ that the bond is invalid) does not disclose 
 that it is not in harmony with the enabling act, such fur- 
 ther recital or recitals are to be construed as a part of and 
 consistent with the enabling statute, and as if the further 
 recitals had not been made. 
 
 § 221. l$onds issued in excess of statutory limit — 
 When tlie bonds are held valid. — Municipalities are, in 
 many cases, either by their respective charters, or by the 
 enabling act authorizing the issue of bonds, or by some 
 general act, limited as to the amount of debt they may 
 incur and the amount of bonds or other municipal paper 
 they may issue. 
 
 Bonds have been issued in many instances by munici- 
 l^alities, tlie amount of which, in whole or in part, ex- 
 ceeded tlio amount fixed as a limit by some statute, and 
 have found their way into the hands of innocent holders, 
 and the question as to the rights of such holders to col- 
 lect and enforce payment for such bonds has been passed 
 upon in a number of cases. 
 
 The doctrine of the courts in cases of this kind is that 
 if the amount of the issue is left to be determined by the 
 municipal officers, or by the officers named in the enabling 
 300
 
 CH. XV.] FCTRTHER EFFECT OF RECITALS. § 221 
 
 act, who are authorized to issue the bonds, and this 
 question is to be determined before the bonds are issued 
 according to the terms of the enabbng statute, and 
 although the statute does not in express words place the 
 determination of the question whether the amount of the 
 issue will exceed the limit with the officers authorized to 
 issue the bonds, but that it is the intention of the statute 
 so to place such determination may be gathered from 
 tlie act,^ then if the bonds or other municipal paper con- 
 tain recitals that the issue does not exceed the statutory 
 limit, or merely recites that they are issued pursuant to, 
 or in conformity with, the enabling statute, the munici- 
 pality will be estopped to set up the fact of such over- 
 issue.2 
 
 And when the amount of bonds that can be legally 
 issued is to be determined by the assessment rolls, which 
 are public records, and which are to be used as a basis 
 of calculation in the manner pointed out by the statute 
 wliich contains the limitation, or by any calculation 
 based on other public records, and the question is to 
 be decided by the officers who are to issue the bonds, 
 their determination and the recitals in the bonds, 
 which is the evidence of such determination, will 
 estop the municipal cor])oration from setting up as 
 a defence the over-issue,-^ but there are a few cases 
 which hold that unless the })ublic records from which 
 the calculation is to be made are peculiarly, if not ex- 
 clusively, under the control of the officers authorized to 
 determine the question of the amount, or more accessible. 
 to them than to strangers, or unless the facts upon wliich 
 the basis of calculation is to be made are pecidiarly within 
 their knowledge, the bonds will be held invalid.* 
 
 When the issue is in excess of the statutory limit the 
 doctrine of the courts has been to hold the purchaser to 
 
 1 On this subject, see § 209 et seq. j 8 Humbolt Tp. v. Long, 93 U. S. 
 
 2 Humbolt Township v. Long, 92 , 642. 
 
 U. S. 643 ; Marcy v. Townsliip of * JIutual B. L. Ins. Co. t\ Eliza- 
 Oswego, 93 U. S. 637; Dill. Mun. | betli, 42 N. J. L. 2.^) : Cotton v. 
 Corp. (4th ed.) § 539 and note : New Providence, 47 N. J. L. 40L 
 Sherman Co. v. Simon, 109 U. S. | 
 735. I 
 
 301
 
 § 222 MUNICIPAL BONDS. [CH. XV. 
 
 a much less degree of care than when the limitation is a 
 constitutional one. 
 
 § 222. Cases illustrating the doctrine. — In order to 
 further illustrate the doctrine of the courts as to the 
 effect of recitals contained in bonds, when they are issued 
 in excess of the statutory limitation, reference is made 
 to some of the cases. 
 
 The earliest case in the Federal courts is that of Marcy 
 V. Township of Oswego, 92 U. S. C3T ; this is also one of 
 the leading cases on the subject. 
 
 In this case the amount of bonds issued was $100,000, 
 and exceeded in part the statutory limitation. Each bond 
 recited : '' This bond is executed and issued by virtue of, 
 and in accordance with, an act of the Legislature of said 
 State of Kansas entitled ' An act to enable municipal 
 townships to subscribe for stock in any railroad and to 
 provide for the payment of the same,' approved Fel). 
 25th, 1870, and in pursuance of, and in accordance with, 
 the vote of three-fifths of the legal voters of the said 
 township of Oswego at a special election duly held on 
 the 17th day of May, A. D. 1870." 
 
 The bonds Avere each signed by the chairman of the 
 board of county commissioners, and attested by the 
 county clerk under the seal of the count}^, and each re- 
 cited that the board had caused it to be executed. The 
 enabling statute also directed the said officers to execute 
 the bonds. 
 
 The bonds were, after execution, registered in the 
 •office of the State auditor and certified by him in ac- 
 cordance with an act of the Legislature. He certified 
 that each bond had been legally and regularly issued. 
 
 The statute provided that the amount of the bonds 
 voted by any township should not be above such a sum 
 as would require a levy of more than one per cent per 
 annum on the taxable property of such township to pay 
 the yearly interest. 
 
 The act did not in express terms provide that the county 
 commissioners, who were to issue the bonds, should de- 
 termine the amount of bonds that could be legally issued 
 
 by any township under the act. It will be observed that 
 302
 
 CH. XV.] FURTHER EFFECT OF RECITALS. § 222 
 
 the bonds contained no statement in direct terms that 
 they were not issued in excess of limitation. 
 
 The court held the bonds valid because of the recitals. 
 
 Mr. Justice Strong, who delivered the opinion of the 
 court, said : 
 
 "The board (of county commissioners) was to order 
 the election if certain facts existed, and only then. It 
 was required to act if fifty freeholders, who were voters 
 of the township, petitioned for the election ; if the 
 petition set out the amount of stock proposed to be sub- 
 scribed for ; if that amount was not greater than the 
 amount to which the township was limited by the act ; 
 if the petition designated the. railroad company ; if it 
 pointed out the mode and terms of payment, of course 
 the board, and it only, was to decide whether these things 
 precedent to the right to order an election were actual 
 facts. No other tribunal could make the determination. 
 So also the subsequent issue of the bonds containing the 
 recitals above quoted that they were issued ' by virtue 
 of and in accordance with,' the legislative act, and ' in 
 pursuance of, and in accordance with, the vote of the 
 township " was another determination. . . . They are all 
 by the statute referred to the inquiry and determination 
 of tlie board, and they were all determined before the 
 bonds and coupons came into the hands of the plaintiff ; 
 he was therefore not bound, when he purchased, to look 
 heyoud the act of the Legislature and the recitals which 
 the bonds contained. ... In view of these facts and of 
 the decisions heretofore made by this court the question 
 cannot be considered an open one. We have recentl}- 
 reviewed the subject in the case of Town of Coloma v. 
 Eaves, and reasserted what had been decided before ; 
 namely, that where legislative authority has been given 
 to a municipality to subscribe for the stock of a railroad 
 company and to issue municipal bonds in payment of the 
 subscription, on the happening of some precedent con- 
 tingency of fact, and wliere it may be gathered from the 
 legislative enactment that the officers designated to exe- 
 cute the bonds were invested with power to decide 
 
 whether the contingencv had happened or whotlicr the 
 
 ;5(t3
 
 § 223 MUNICIPAL BONDS. [CH. XV. 
 
 fact existed which was a necessary condition precedent 
 to any subscription or issue of the bonds, their decision 
 is final in a suit by the bona fide holder of the bonds 
 'against the municipality, and a recital in the bonds that 
 the requirements of the legislative act have been com- 
 plied with is conclusive. And this is more emphatically 
 true when the fact is one peculiarly within the knowl- 
 edge of the persons to whom the power to issue the 
 bonds has been conditionally granted." 
 
 In the subsequent case of Humbolt Township v. Long, 
 92 U. S. G-12, the court cited and approved the above case, 
 and said in part : 
 
 "There is no essential difference between this case and 
 that. The assessment rolls of the township may have 
 been proper evidence for the consideration of the board 
 of county commissioners when they were inquiring what 
 the value of the taxable property of the county was, but 
 the bonds are not invalid in the hands of a bona fide 
 holder by reason of their having been voted and issued in 
 excess of the statutory limit as shown by the rolls. What- 
 ever may be the right of the township as against those 
 who issued the bonds, it cannot be set up against a bona 
 fide holder of the bonds that the amount issued was too 
 large, in the face of the decision of the board and their 
 recital that the bonds were issued pursuant to and in ac- 
 cordance with the act of 1870." 
 
 § 223. Same— If no recitals, then the record mnst 
 be relied on.— In the case of Sherman Co. v. Simons, loi) 
 U. S. 735, the suit was on coupons cut from bonds issued 
 by the commissioners of Sherman Co., Nebraska, under a 
 statute of that State approved Feb. 18th, 1875, which 
 authorized the issue of bonds for funding the warrants 
 and orders of the counties named in the act. 
 
 The act contained the following provisions : 
 
 "Provided that no more of the bonds authorized to be 
 issued by virtue of the act shall be issued than is neces- 
 sary to pay off and redeem such warrants so outstanding ; 
 and provided further that the said commissioners shall 
 not issue said bonds to exceed in value the amount of said 
 indebtedness up to January 1st, 1875, nor shall said bonds 
 804
 
 CH. XV.] FURTHER EFFECT OF RECITALS. § 224 
 
 be negotiated at a less price than eight3^-five cents on 
 the dollar." 
 
 The defence was that although on January 1st, 1875, 
 there was but $16,000 of debts, bonds were issued for 
 $45,000, and also that the bonds were negotiated for less 
 than eighty-five cents on the dollar. 
 
 The bonds recited the act, and the court held them to 
 be valid for that reason and the further reason that the 
 records of the commissioners showed they had estimated 
 the debts at 845,000. 
 
 Unless the bonds contain recitals which estop the 
 municipality from showing the over-issue the holder is 
 charged with notice of whatever the records of the pro- 
 ceedings of the officers or body authorized to issue the 
 bonds would disclose. In Merchants' etc. Bank v. Ber- 
 gen Co., 115 U. S. 384, where bonds were issued in excess 
 of the amount ($250,000) authorized by the enabling 
 act, Field, J., said : " Any further issue was beyond its 
 authority. Unless, therefore, there is something in con- 
 nection with the issue to estop the county from contest- 
 ing their validity they can in no manner bind the count}'. 
 In these borids there are no recitals. The bank, in taking 
 them, was bound to ascertain whether or not they were 
 authorized. Had it examined the register of bonds issued 
 to take up the matured bonds, which was a public record 
 of the county and open to inspection, it would have 
 learned that the bonds it received were not of the number 
 so authorized.'' 
 
 § 224. General Rule — Exceptions. — AVhile it is the 
 general rule that unless the bonds issued in whole or in 
 part in excess of the statutory limit contain recitals which 
 will, as heretofore shown, estop the municipal corpora- 
 tion to plead the fact of over-issue, the holder must then 
 rely upon the record of the proceedings of the officers or 
 body authorized to issue the bonds and to determine the 
 amount that can bo legally issued, in order to show that 
 the question was adjudicated upon and settled and deter- 
 mined, there are cases wliich hold that where the limit 
 is to be ascertained by the municii)al officers from records 
 or data which arc peculiarlv within theknowledcfcorcon- 
 20 " 305
 
 § 224 MUNICIPAL BONDS. ' [CH. XV. 
 
 trol of the officers, or they have better access to the infor- 
 mation than other persons and can ascertain the anionnt 
 \vith more certainty than strangers, then the bonds will 
 be held valid in the hands of a bona fide holder from the 
 mere fact of their execution and issue. 
 
 A case in point is that of ]\Iutual Ben. Life Ins. Co. v. 
 Elizabeth, 42 N. J. L. 235. The city was given authority 
 to issue bonds for the amount of assessments ratified and 
 unpaid on a certain day. What assessments were ratified 
 and unpaid on that day could only be ascertained by an 
 examination of the city's books and accounts, and only 
 with reasonable certainty by its officers. Bonds large- 
 ly in excess of the limit were issued. AVhether the 
 bonds contained any recitals does not appear from the 
 case. 
 
 The court held the bonds valid in the hands of bona fide 
 holders, upon the principle that the purchaser had a right 
 to rely upon the action of the officers issuing the bonds, 
 who thus affirmed that the conditions requisite to their 
 issue existed, and that the amount of the assessments on 
 the day named was peculiarly within the knowledge of 
 the municipal officers. 
 
 In another case in the same State, Cotton v. New Provi- 
 dence, 47 N. J. L. 401, the limit of the issue of the bonds 
 depended on the valuation of the real property of the 
 township for a certain year, to be ascertained from the 
 assessment rolls for that year. Whether the duplicate 
 assessment rolls were a public record or not was not de- 
 termined. 
 
 The court said : " It is clear that the duplicate in this 
 case, although a puT)lic document, was not readily access- 
 ible to intending purchasers, but was especially ac- 
 cessible to the township officers and the commissioners 
 entrusted with this power. 
 
 " When they /.s-.s^tec? the bonds they averred the issue 
 was within the limit. Construing the act by the rule 
 laid down in the case cited (Mutual Ben. Life Ins. Co. v. 
 Elizabeth), the legislative intent that their decisions 
 on this subject should be final appears. The holder of 
 the bonds had a right to relv thereon." 
 306
 
 CH. XV.] FURTHER EFFECT OF RECITALS. § 225 
 
 In the above case the bonds were executed by commis- 
 sioners appointed by the court. 
 
 No reference to any recitals in the bonds was made, and 
 the mere fact of their execution was held to be the evi- 
 dence of the decision of the officers. The ruling in this 
 case was affirmed in New Providence v. Halsey, 119 
 U. S. 33G.1 
 
 Where an officer was authorized by a statute of New 
 York to issue certain certificates up to a certain amount 
 and he issued certificates in excess of the limit, and those 
 so issued recited the enabling act, the court held the ex- 
 cess to be invalid and said : 
 
 "The proposition that the recitals in the certificates 
 were conclusive upon the facts therein stated cannot be 
 sustained under the decisions of this State. ... It is 
 settled that one who purchases instruments of the charac- 
 ter of those in suit, although he does so in good faith, 
 must see to it that they are authorized by the statute 
 under which they purport to be issued. ... I know 
 of no authority to the effect that a municipal corporation 
 is not i^ermitted to assert and prove against a bona fide 
 holder of its bonds the fact that they were not authorized 
 by any legislative body. . . . When an instrument re- 
 fers on its face to a statutory power, every holder is 
 made chargeable thereby with notice of the statute and 
 its limitations." 
 
 The court further held that as the recitals were made 
 by the officer who was not authorized to pass upon the 
 question as to whether or not the facts existed wliicli per- 
 mitted the paper to bo executed, the town was not bound 
 by the recitals.^ 
 
 § 225. Bonds issued in exeoss of constitutional 
 limitations — Ettect of recitals. — Where the limitation 
 is imposed by the constitution of a State, or by the con- 
 •stitution and a statute, the decisions of the courts have 
 established, it would seem, a somewhat different degree 
 of care on the part of the purchasers than when the 
 limitation is purely statutory. Many of the State consti- 
 
 1 See g 195, and note. I - Broadway Sav. Inst. v. Town of 
 
 IPelhani, 83 Ilun, 06. 
 
 HOT
 
 § 226 MUNICIPAL BONDS. [CH. XV. 
 
 tutions adopted in late years contain restrictions upon the 
 l)owei' of their respective Ijegishitures which curtail the 
 ahnost absolute powers formerly possessed by those bodies 
 to authorize or permit municipal corporations to become 
 indebted, or in some cases to compel them to contract 
 debts or make internal improvements or grant aid with- 
 out the consent of the municipal authorities. Principal 
 among such restrictions is that which limits the amount 
 of debt which a municipal corporation may incur or the 
 Legislature authorize. The courts, recognizing the will of 
 the people as expressed through their State constitution, 
 have sought to aid in the enforcement of such limitations, 
 and have, in relation to the question of estoppel by recitals 
 contained on the face of a bond, adopted a much stricter 
 doctrine when the bond is issued in excess of a consti- 
 tutional limitation than when in excess of a statutory 
 one. 
 
 They hold the purchaser to a closer investigation of the 
 facts and records relating to, or in any manner con- 
 nected with, tlie incurring of the debt and the issuing of 
 the bonds, when the bonds or other paper are, either in 
 whole or in part, beyond the limitation or standard fixed 
 by the constitution, than when the limitation is a statutory 
 one, and if from such an inspection he could have ascer- 
 tained that the issue was in excess of the constitutional 
 limitation, the bonds will be declared invalid notwithstand- 
 ing any recitals, unless the recitals in express terms state 
 that the issue is not in excess of the constitutional limi- 
 tation, and the amount of the issue of the bonds is not 
 ascertainable from the bond itself.-^ 
 
 § 22G. Attitude of the Federal courts.— Tliat the Fed- 
 deral courts would in a proper case hold a municipal cor- 
 poration to be so estopped by its recitals in its bonds was 
 strongly intimated in one of the earliest, if not the ear- 
 liest, case decided by the U. S. Supreme Court, wherein 
 the question of estoppel by recitals to plead such excess 
 arose. 
 
 The case is that of Buchanan v. Litchfield, 102 U. S. 
 2YS. The bonds in this case were issued in excess of the 
 
 1 Chaffee Co. v. Potter, 142 U. S. 355. 
 308
 
 CH. XV.] FURTHER EFFECT OF RECITALS. § 226 
 
 constitutional limitation of the State of Illinois. Each 
 bond recited that it was issued under authority of "an 
 act of the General Assembly of the State of Illinois enti- 
 led 'An act authorizing cities, incorporated towns, and 
 villages to construct and maintain water works," ap- 
 proved April 15th, 1873, and in pursuance of an ordinance 
 of said city of Litchfield No. 181, and entitled ' An ordi- 
 nance providing for the issuing of bonds for the construc- 
 tion of Litchfield water works,' aj)i3roved December 4th, 
 1873." 
 
 The bonds were executed by the mayor and city clerk 
 under authority of said ordinance. 
 
 The court held the bonds void in the hands of a bona 
 fide holder, because the recitals did not cover the consti- 
 tutional defect, and on this latter point said : 
 
 "Had the bonds made the additional recital that they 
 were issued in accordance with the constitution, or had 
 the ordinance stated in any form that the proposed in- 
 debtedness was within the constitutional limit, or had the 
 statute restricted the exercise of authority therein con- 
 ferred to those municipal corporations whose indebtedness 
 did not, at the time, exceed the constitutional limit, there 
 would have been ground for holding that the city could 
 not, as against the plaintiff, dispute the fair inference to 
 be drawn from sucli recital or statement, as to the extent 
 of its existing indebtedness." 
 
 The above language intimated that if a proper case were 
 presented to it, the court would hold the corporation 
 issuing the paper estopped to plead the fact that it was 
 issued in excess of a constitutional limitation. No such 
 case apparently came before it until that of Chaffee Co. 
 V. Potter, supra, which was a case wherein the bonds in 
 express terms recited that they did not exceed the con- 
 stitutional limitation ; but before referring to the case, it 
 is deemed best to refer to other cases decided by the same 
 court, wherein the bonds upon which, or the coupons cut 
 therefrom, the suit was founded, were issued in whole or 
 in part in excess of the constitutional limit, and which 
 bonds were held void therefore, and the purchasers or 
 
 holders thereof charged with notice of the fact of the over- 
 
 309
 
 § 227 MUNICIPAL BONDS. [CH. XV. 
 
 issue, ill order that the grounds upon wliicli tlie bonds in 
 CliAffee Co. V. Potter were held valid may be the better 
 understood. 
 
 § 227. Same — Cases lioUliug bonds invalid.— The lead- 
 ing case when the issue is in excess of the constitutional 
 limitation, and the one almost always referred to in all 
 subsequent cases, as the grounds upon which the bonds 
 are declared void, and the one which has fixed the duty of 
 purchasers of such bonds, is that of Dixon Co. v. Field, 
 111 U. S. 83. 
 
 The bonds in this case were issued in excess of the con- 
 stitution of Nebraska, art. 12, sec. 3, which limited the 
 power of a county to issue bonds to an amount not exceed- 
 ing ten per cent of the assessed valuation of the county. 
 
 The amount of the issue of the bonds was $87,000 and 
 exceeded the constitutional limitation. 
 
 Each bond disclosed that tlie total issue was $87,000, 
 and each contained upon its face the following recital : 
 
 "This bond is one of the series of eighty-seven thou- 
 sand issued under and in pursuance of an order of the 
 county commissioners of the County of Dixon, in the State 
 of Nebraska, and authorized by an election held in said 
 county on the 27tli day of December, 1875, and under and 
 by virtue of chapter 35 of the general statutes of Nebras- 
 ka and amendments thereto, and the constitution of said 
 State, art. 12. Adopted October, 1875." The defence 
 was that the bonds were issued in excess of the constitu- 
 tional limitation. The plaintiff contended that the county 
 was estopped by its recitals in the bonds from setting up 
 the defence. Attention is called to the fact that the 
 bonds each recited they were issued under, not only the 
 enabling act but also the constitution of the State, 
 and the article containing in sec. 3 of it the constitu- 
 tional limitation. 
 
 The court held the bonds to be void because issued in 
 excess of the constitutional prohibition. 
 
 Mr. Justice Matthews, delivering the opinion of the 
 
 court', said : "If the fact necessary to the existence of 
 
 the authority was by law to be ascertained, not officially 
 
 by the officers charged with the execution of the power, 
 310
 
 CH. XV.] FUKTHER EFFECT OF EECITA.LS. § 227 
 
 but by reference to some definite record of a public charac- 
 ter, tlienthe true meaning of the law would be, that the 
 authority to act at all depended upon the actual objective 
 existence of the requisite fact as shown by the record, and 
 not upon its ascertainment and determination by any one, 
 and the consequence would necessarily follow that all 
 persons claiming under the exercise of such a power 
 might be put to the proof of the fact made by it a condition 
 of its lawfulness, notwithstanding any recitals. 
 
 ' ' In the present case there was no power at all conferred 
 to issue bonds in excess of an amount equal to ten per 
 cent upon the assessed value of the taxable property in 
 the county. In determining the limit of power there were 
 necessarily two factors : the amount of the bonds to 
 be issued, and the amount of the assessed value of the 
 property for purposes of taxation. The amount of the 
 bonds issued was known. 
 
 " It is stated in the recital itself it was $87,000. The 
 holder of each bond was apprised of that fact. The 
 amount of the assessed value of the taxable property in 
 the county is not stated, but ex vi termini it was ascer- 
 tainable in one way only, and that was by reference to 
 the assessment itself, a public record equally accessible 
 to all intending purcliasers of bonds as well as to the 
 county officers. This being known, the ratio between 
 the two amounts was fixed by an arithmetical calcula- 
 tion. No recital involving the amount of the assessed 
 taxable valuation of the property to be taxed for the pay- 
 ment of the bonds can take the place of the assessment 
 itself, for it is the amount as fixed by that record that is 
 made by the constitution the standard for measuring the 
 limit of the municipal power. Nothing in the way of 
 inquiry, ascertainment or determination as to that fact 
 is submitted to the court's officers. They are bound, it is 
 true, to learn from the assessment what the limit u])<)n 
 their authority is, as a necessary preliminary to the exer- 
 cise of their functions and the performance of their 
 duties ; but the information is for themselves alone. All 
 the world besides must have it from the same source and 
 
 for themselves. The fact as it is recorded in the assess- 
 
 311
 
 § 228 MUNICIPAL BONDS. [CH. XV. 
 
 ment itself is extrinsic, and proves itself hy inspection 
 and concludes all determinations." 
 
 § 228. Wlieu tlie purchaser must inquire for him- 
 self. — The above case established the doctrine that where 
 the limitation is based upon some public record, as the as- 
 sessment rolls, and the amount of the debt which may be 
 incurred is a certain per centum thereof or a given rate 
 of taxation based thereon, then any purchaser of bonds 
 or other paper is chargeable with notice of the amount 
 of debt that can legally be incurred, and when that 
 debt is evidenced by municipal paper, which on its face 
 discloses the total amount of paper issued, the purchaser 
 must consult the assessment roll, and from that he must 
 ascertain, at his peril, after examining the constitutional 
 limitation (as every purchaser is bound to know all the 
 laws under which municipal paper is uttered), whether or 
 not the total issue of the paper exceeds the constitutional 
 limit. 
 
 The doctrine lias been followed in all the subsequent 
 cases Avhen the paper was in whole or in part issued in ex- 
 cess of the constitutional limit. ^ A few cases further il- 
 lustrating the doctrine are as follows : In Lake County 
 V.Graham, 130 U. S. 07-4, the suit was on coupons de- 
 tached from bonds of the county of Lake. The bonds 
 were exchanged for warrants of the county amounting 
 to $500,000. The amount was in excess of the constitu- 
 tional limitation of Colorado (sec. 0, art. 11). It was ad- 
 mitted that unless the recitals in the bonds estopped the 
 county from alleging the constitutional limitation the 
 bonds were invalid. 
 
 Each bond recited that it was one of 710 funding bonds, 
 each of like date, comprised in three series A, B and C, 
 the whole amounting to $500,000 ; and further, that each 
 bond was issued under and by virtue of and in full com- 
 pliance with the enabling act, which was recited, and 
 that all the provisions and requirements of the act had 
 
 1 Quaker City Nat. Bank v. Nolan Lake Co. v. Rollins, 130 U. S. 662 ; 
 
 Co., 59 Fed. Rep. 660; Sutcliffe v. Lake Co. v. Graham, 130 U. S. 
 
 Board, 147 U. S. 230 ; Francis v. 674 ; Nesbit v. Riverside Ind. Dist., 
 
 Howard Co., 54 Fed. Rep. 487 : 144 U. S. 610. 
 312
 
 CH. XY.] FURTHER EFFECT OF RECITALS. § 229 
 
 been fully complied with by the proper officers in issuing 
 the bonds, and that their sale was authorized by a vote of 
 the qualified voters. 
 
 The court held the bonds to be void, that the purchaser 
 was informed by the bond itself of the amount of the is- 
 sue, and that he was bound to ascertain the amount of 
 the assessed value of the property, and that it was but 
 a mere calculation then to learn that the issue of the 
 bonds exceeded the constitutional limitation. As to the 
 recitals, the court said, they made no express reference 
 to the constitution and contained no statement that the 
 constitutional requirements had been observed. 
 
 The court referred to and followed the doctrine laid 
 down in Dixon Co. v. Field, that the purchaser must 
 look to the records in order to ascertain the amount of 
 debt that could be created. 
 
 § 229. Same — Cases. — The Supreme Court of Texas, in 
 case of Citizens' Bank v. City of Terrell, 7S Tex. 45G ; U 
 S. W. R. 1003, made use of the following terse language 
 as to the effect of recitals on over-issue of bonds. The 
 bonds in this case were in excess of the constitutional 
 limit. " Where the authority to create the debt at all, 
 or l)eyond a given amount, is made to depend upon evi- 
 dence furnished by official records, the same rule in re- 
 gard to recitals contained in bonds given for the debt 
 should not be applied. Every holder of such l)onds is 
 charged with a knowledge of the provisions of the law 
 relating to their issuance, and if the law points to the 
 records as evidence of the existence of the facts required 
 to authorize their issuance, or to limit the amount of the 
 debt the city may create, such records and not the 
 recitals in the bonds must be looked to by every one 
 who proposes to deal in the bonds." 
 
 The above language was cited with approval in Quaker 
 City Nat. Bank v. Nolan Co., 50 Fed. Rep. GGO, 008. 
 
 In Francis v. Howard Co., 5-i Fed. Rep. 487, where 
 
 the bonds were in excess of the constitutional limit, the 
 
 court said : "All the decisions of tlie Supreme Court of 
 
 the United States from Dixon Co. v. Field, 111 U. S. 83, to 
 
 Sutcliffe V. Board, 147 U. S. 230, agree that the purchasers 
 
 313
 
 § 230 MUNICirAL BONDS. [CH. XV. 
 
 of bonds issued by inuiiicipalities under authority of 
 laws which limit the amount of bonds to be issued to a 
 certain percentage of the assessment roll or to a given 
 rate of taxation based on such rolls, are charged with 
 notice of the amount of bonds which can be validly 
 issued based on such assessment rolls." 
 
 § 230. When the bonds will be held valid. — We now 
 come to the case of Chaffee Co. v. Potter, 142 U. S. 355, 
 wherein the bonds, although issued in excess of the con- 
 stitution of Colorado (sec. G, art. 11), were held valid. 
 This is the only case up to the jDresent time wherein the 
 bonds so issued have been declared to be valid. 
 
 The bonds were issued und^^r authority of an act of the 
 Legislature of Colorado, which authorized counties to 
 fund their floating indebtedness (Laws Colo. 1881, p. 85), 
 and under the very same act the bonds in the case of Lake 
 Co. V. Graham, siq^ra, were issued, and declared invalid. 
 The form of the bond in this case was drafted, so we are 
 informed, by an eminent writer on municipal law, with 
 the view of estopping the county from pleading as a de- 
 fence the over-issue of the debt ; that his work was well 
 done is shown by the fact that for the first time the courts, 
 both the U. S. Circuit and the U. S. Supreme Court, held 
 bonds issued in excess of a constitutional limitation to 
 be valid. 
 
 Each bond in this case recited: " This bond is issued 
 
 by the Board of County Commissioners of said Chaffee 
 
 County in exchange at par for valid floating indebtedness 
 
 of the said county, outstanding prior to August 31, 1882, 
 
 under and by virtue of, and in full conformity with, the 
 
 provision 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 21, 1881, and it is hereby certified 
 
 that all the requirements of law have been 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 constitution of the 
 
 State of Colorado, and that this issue of bonds has been 
 
 authorized by a vote of a majority of the duly qualified 
 314
 
 CH. XV.] FURTHER EFFECT OF RECITALS. § 230 
 
 electors of the said County of Chaffee, voting on the ques- 
 tion at a general election duly held in said county on the 
 seventh day of November, A. D. 1S82. The bonds of this 
 issue are comprised in three series, designated A, B and 
 C, respectively ; the bonds of series A being for the sum 
 of one thousand dollars each ; those of series B for the 
 sum of five hundred dollars each ; and those of series C 
 for the sum of one hundred dollars each. This bond is 
 one of series A." 
 
 The recitals in the bonds in the case of Lake Co. v. Gra- 
 ham were identical with the above, except that they did 
 not contain the statement that " the total amount of this 
 issue does not exceed the limit prescribed by the consti- 
 tution of the State of Colorado," and each bond in Lake 
 Co. V. Graham disclosed the amount of the issue. 
 
 Each of the bonds were signed by the chairman of the 
 board of county commissioners, countersigned by the 
 county treasurer, and attested by the county clerk, they 
 being named in the act to execute the bonds. Each bond 
 recited that the County Commissioners of Chaffee County 
 had caused the bond to l)e executed by said officers. 
 
 The recitals were therefore made by the officers named 
 in the enabling act to execute the bonds. The case being 
 a very important one on the point under discussion, 
 is given almost in full. Lamar, J., who delivered the 
 opinion of the court, and who also delivered that in Lake 
 Co. V, Graham, said : 
 
 " The defences set up in the answer were : that the 
 bonds had not been authorized by a vote of the qualified 
 voters of the county, and no bonds had been authorized 
 to be exchanged for the warrants of the county, and the 
 board, therefore, never had any jurisdiction to issue 
 them ; that the bonds, and each of them, were issued in 
 violation of sec. G, art. 11, of the constitution of the State, 
 and the debt which they assumed to fund was contracted 
 in violation of said ])rovision of the constitution, and 
 that the bonds were issiied by the l)oard of county com- 
 missioners without any consideration valid at law, 
 as plaintiff well knew when ho received the coupons 
 
 sued on. 
 
 315
 
 § 230 MUNICIPAL BONDS. [CH. XV. 
 
 " A demurrer to the answer on the ground that it was 
 not a sufficient defence to the action was sustained by 
 the Circuit Court, and the defendants electing to stand by 
 their pleading, judgment was entered in favor of the 
 plaintiff for tlie full amount of his claim, with in- 
 terest, 33 Fed. Rep. Ol-i. This writ of error is prosecuted 
 to review that judgment. 
 
 "The ground upon which the Circuit Court based its 
 decision and judgment was that the county should be 
 estopped, by the recitals in the bonds, from pleading the 
 defences set up in the answer. 
 
 " The act of the Legislature, under the authority of which 
 the bonds were issued, is set out in the margin. It is the 
 same act under which certain bonds were issued by Lake 
 County, C'olorado, which bonds were under consideration 
 in Lake County v. Graham, 130 U. S. 674. 
 
 "The bonds in that case were quite similar to those now 
 under consideration, differing only as regards their re- 
 citals in this, that the bonds here contain the ad- 
 ditional recital that ' the total amount of this issue does 
 not exceed the limit prescribed by the constitution of 
 the State of Colorado,' and do not show upon their face, 
 as did those in that case, how many bonds were issued, 
 or how large each series was. We held in that case that 
 the county was not estopped from pleading the constitu- 
 tional limitation, because there was no recital in the 
 bonds in regard to it, and because also the bonds showing 
 upon their face that they were issued to the amount of 
 $,500, ')00, the purchaser having that data before him was 
 bound to ascertain from the records the total assessed 
 valuation of the taxable property of the county, and de- 
 termine for himself, by a simple arithmetical calculation, 
 whether the issue was in harmony with the constitution, 
 and that the bonds, having been issued in violation of 
 that provision of the constitution, were not valid oljliga- 
 tioiis of the county. Our decision was based largely upon 
 the ruling of this Court in Dixon County v. Field, 111 
 U. S. 83. To the views expressed in that case we still 
 adhere ; and the only question for us to consider there- 
 fore is : Does the additional recital in these bonds above 
 316
 
 CH. XV.] FURTHER EFFECT OF RECITALS. § 230 
 
 set out and the absence from their face of any thing show- 
 ing the total number issued of each series and the total 
 amount in all, estop the county from pleading the 
 constitutional limitation. 
 
 " In our opinion these two features are of vital impor- 
 tance in distinguishing this case from Lake County v. 
 Graham, and Dixon County v. Field, and are suf- 
 ficient to operate as an estoppel against the county. Of 
 course the purchaser of bonds in open market was bound 
 to take notice of the constitutional limitation of the 
 county with respect to indebtedness which it might incur. 
 But when upon the face of the bonds there was an ex- 
 press recital that that limitation had not been passed, 
 and the bonds themselves did not show that it had, h& 
 was bound to look no further. An examination of any 
 particular bond would not disclose, as it would in the 
 Lake County case and in Dixon County v. Field, that, 
 as a matter of fact, the constitutional limitation had been 
 exceeded, in the issue of the series of bonds. The pur- 
 chaser might even know, indeed it may be admitted that 
 he would be required to know, the assessed valuation of 
 the taxable property of the county, and yet he could not 
 ascertain by reference to one of the bonds and the assess- 
 ment roll whether the county had exceeded its power, 
 under the constitution, in the premises. True, if a pur- 
 chaser had seen the whole issue of each series of bonds 
 and then compared it with the assessment roll, he might 
 have been able to discover whether the issue exceeded 
 tlie amount of indebtedness limited by the constitution. 
 But this is not the test to apply to a transaction of this 
 nature. It is not supposed that any person would i)ur- 
 chase all the bonds at one time, as that is not the usual 
 course of business of this kind. The test is : What 
 does each individual bond disclose ? If the face of one 
 of the bonds had disclosed that, as a matter of fact, the 
 recital in it, with respect to the constitutional limitation, 
 was false, of course the county would not be bound by 
 that recital, and would not be estopped from pleading the 
 invalidity of the bonds in this particular. Such was the 
 
 case in Lake County v. Graham and Dixon County v. 
 
 317
 
 § 231 MUNICIPAL BONDS. [cil. XV. 
 
 Field, but that is not this case. Here, by virtue of the 
 statute under which tlie bonds were issued, the county 
 commissioners were to determine the amount to be issued, 
 which was not to exceed the total amount of the indebted- 
 ness at the date of the first publication of the notice re- 
 questing the holders of county warrants to exchange their 
 warrants for bonds at par. The statute in terms gave 
 to the commissioners the determination of a fact, that is, 
 whether the issue of the bonds was in accordance with 
 the constitution of the State under which they were issued, 
 and required them to spread a certificate of that deter- 
 mination upon the records of the county. The recital in 
 the bonds to the effect that such determination had been 
 made, and that the constitutional limitation had not 
 been exceeded in the issue of the bonds, taken in connec- 
 tion with the fact that the bonds themselves did not show 
 such recital to be untrue, under the law estojDS the county 
 from saying that it is untrue. . . . 
 
 " We think this case comes fairly within the principle 
 of those just cited ; and that it is not governed by Dixon 
 County A'. Field, and Lake Count}^ v. Graham, but dis- 
 tinguished from them in the essential particulars above 
 stated." 
 
 § 231. Author's comments on Chaffee Co. y. Poertt. — 
 It will be observed that the grounds upon which the bonds 
 in this case were held to be valid are, as distinguished 
 from all the other cases wherein bonds were held void 
 because in part or in whole in excess of the consti- 
 tutional limit, that the bonds did not on their face inform 
 the purchaser of the total amount of the issue, and that 
 if he should have ascertained the amount of the assessed 
 value of the property from the county records and have 
 made an arithmetical calculation as pointed out by the 
 constitution, he would not have discovered that the issue 
 was in excess of the limit, because the bond did not dis- 
 close to him the amount of the bond issue ; and the de- 
 cision is placed upon the additional fact that the recital 
 ill the bonds itself assured the purchaser that the issue 
 was within the constitutional amount and did not ex- 
 ceed it. 
 318
 
 CH. XV.] FURTHER EFFECT OF RECITALS. § 232 
 
 The absence of information of the amount of the issue 
 and the presence of the recital assuring the purchaser that 
 the total issue did not exceed the limitation are the dis- 
 tinguishing marks between this and all the other cases 
 which have held bonds issued in excess of the constitu- 
 tional limit void. 
 
 What would have been, or what will be, should a case 
 arise, the decision of the courts, had one of these dis- 
 tinguishing features been absent, is uncertain. In the 
 case of Dixon Co. v. Field, supra, the bonds contained the 
 statement that they were issued " under and by virtue of 
 chapter 35 of the general statutes of Nebraska and 
 amendments thereto, and the constitution of said article 
 12, adopted October, 1875," and as the words, " By virtue 
 of " the enabling statute have been held, and are usually 
 held, in favor of bona fide holders to import full com- 
 pliance with the statute, the same construction should be 
 placed upon them when they have reference to the con- 
 stitution. In this latter case they refer not only to the 
 State constitution, but to the very article containing the 
 limitation, and their object was to assure a purchaser that 
 the bonds were issued in conformity with the constitu- 
 tional limitation. Therefore, we find absent in this case 
 but one of the two distinguishing features in Chaffee Co. 
 V. Potter, that is, the amount of the issue of the bonds 
 in this case is stated, while in the other it is not, yet the 
 bonds were declared illegal. It is very doubtful if the 
 court would hold bonds or other municipal paper to be 
 valid, no matter what they recite, if they are issued in 
 excess of a constitutional limitation and the prohibition 
 limits the amount of debt which may be incurred to some 
 percentage of a public record, when the bonds or other 
 paper show upon their face the total amount of the 
 issue. 
 
 § 232. Author's conclusions as to effect of re- 
 citals. — The rule in n^gard to recitals in bonds issued in 
 excess of a constitutional limitation therefore appears 
 to be : 
 
 1. That when the bond shows upon its face the total 
 
 amount of the issue, the purchaser is bound to ascertain 
 
 319
 
 § 234 MUNicirAL BONDS. [cir. XV. 
 
 at his peril whether or not the amount of the issue ex- 
 ceeds in whole or in part the limit established by the con- 
 stitution, notwithstanding any recitals the bond may 
 contain. 
 
 2. That when the bond does not show on its face the 
 amount of the total issue and recites that the total issue 
 does not exceed the amount of debt the municipality could 
 lawfully contract at the time of the issue under the con- 
 stitution, or words of like import, and these recitals are 
 made by the officers named in the enabling statute to 
 execute the bonds, or by the body authorized to issue the 
 bonds, or their designated agents, who must be officers of 
 the municipality, whose authority to execute the bonds 
 is to be found in the records of such body, and the duty 
 of the body or officers authorized to issue the bonds is to 
 determine before issue the amount of bonds that could be 
 lawfully issued, which duty may be either express or im- 
 plied from the language of the enabling act, then the 
 bonds will be held valid in the hands of a bona fide 
 holder, although issued in excess of the constitutional 
 limit. 
 
 § 233. Recovery upon void bonds — When the money 
 can be recovered. — When a municipality has issued and 
 sold its bonds, which are invalid, either from failure to 
 perform the conditions precedent, from want of power, 
 or because the issue exceeds the statutory or constitu- 
 tional limitation, or some other cause, it would appear 
 from the cases ^ that the holder may, except in case of an 
 issue in excess of the constitutional limitation, or want of 
 power for other constitutional reasons, recover from the 
 municipality the money paid in an action for money had 
 and received, and it has been held that it is unnecessary 
 to offer to return the void bonds before bringing suit, 
 provided they are produced at the trial. ''^ 
 
 § 234. Cases illustrating position of the courts. — A 
 few cases illustrating the position of the courts on the 
 
 1 Paul V. Kenosha, 22 Wis. 266 ; 
 Louisiana v. Wood, 102 U. S. 294 ; 
 Gause v. City of Clarksville, 1 Fed. 
 Rop. 353. 
 
 320 
 
 2 Paul V. Kenosha, 22 Wis. 266 ; 2 
 Dill. (4th ed) § 938.
 
 CH. XV.] FURTHER EFFECT OF RECITALS. § 234 
 
 subject is given, wherein the money was sought to he re- 
 covered on bonds void because of some statutory defect. 
 
 In the case of Citizens' Bank v. City of Terrell, (Tex.) 
 14 S. W. R. 1003, it was held, wliere there was an excessive 
 issue of bonds, that "if the bonds issued were delivered 
 at different dates, those first delivered up to the amount 
 of the debt the city could lawfully create should be paid 
 and the others should be treated as nullities, but if the 
 bonds were delivered at the same time, so that none had 
 priority over the others, the amount of the valid debt 
 should be distributed equally between the bonds. 
 
 " If no other means existed of distinguishing the order 
 of issue, then from necessity the number of the bonds 
 should be looked into, but this should not be done if there 
 is any other way to determine the fact." 
 
 In the case of Louisiana v. Wood, 102 U. S. 204, it 
 appeared that the City of Louisiana, Mo. , having power 
 to borrow money for the payment of its debts, issued 
 bonds for the purpose of raising the means to pay its 
 interest-bearing debt and the expenses of its government. 
 
 The bonds recited that they were issued under the 
 authority of the city charter and an ordinance passed pur- 
 suant thereto. They were not, in fact, executed until 
 July IGth, 1ST2, but were antedated as of January 1st, 
 1872, for the purpose of evading a law of the State passed 
 March 2Sth, 1S72, which enacted that no bond thereafter 
 issued by any county, city or incorporated town, for any 
 purpose whatever, should be valid or negotiated until it 
 is registered by tlie State auditor and his certificate of 
 such registration endorsed thereon. The defendant in 
 error purchased the bonds from an agent of the city, and 
 had no knowledge that the bonds were antedated, or that 
 the recitals on the face of tlie bonds were not true. 
 
 Chief Justice Waite, after stating the facts, delivered 
 
 the opim'on of the court, and liokl the bonds to be invalid, 
 
 but also held that the defendant in error was entitled to 
 
 recover the amount p.n'd ; that the city was in the 
 
 market as a borrower and received tlu; money in that 
 
 character. That it would be a wrong to permit the city 
 
 to keep the monev and repudiate the bonds. The city 
 21 "^ 321
 
 § 235 MUNICIPAL BONDS. [CH. XV. 
 
 had the authority to borrow and the objection went only 
 to the way it was done. 
 
 § 235. Same.— InEead v. Plattsmouth, lOT U. S. 568, 
 it appeared negotiable coupon bonds were issued with- 
 out authority of law. Eead purchased the bonds for full 
 value and without knowledge of their invalidity. The 
 money was used to erect a school-house for which it 
 was intended. By an act of the Legislature subsequently 
 passed, the bonds were sought to be made valid. 
 
 It was contended on the part of the city, first : that at 
 the time the bonds were issued there was no law which 
 authorized them ; second, that the curative act of the 
 Legislature was itself void, because it was in contravention 
 of the constitution of the State which provided that the 
 Legislature of the State "shall pass no special act con- 
 ferring corporate powers." 
 
 The court held that " as the city of Plattsmouth was 
 bound by the force of the transaction to repay to the 
 purchaser of its void bonds the consideration received 
 and used by it or a legal equivalent, and that the statute, 
 which recognized the existence of that obligation, and 
 confirmed the bonds themselves, provided a medium for 
 enforcing it according to the original intention and 
 promise, could not be said to be a special act conferring 
 upon a city any new corporate power." 
 
 The bonds were sustained. 
 
 In another case, Gause v. City of Clarksville, 1 Fed. 
 Rep. 353, the bonds sued upon were declared to be void 
 because the city did not possess the power to borrow and 
 issued negotiable securities. The opinion of the court 
 was delivered by Justice Dillon, who said: "But the 
 plaintiff may amend and add, in respect to these bonds, 
 counts in the nature of counts for money had and re- 
 ceived. Adhering to the decision of this court by Treat, 
 J., in Wood V. Louisiana, at the last term, the present 
 holders of the bonds will then be treated as the assignee 
 of the original holder, a payee in respect of the money 
 actually lent to the city ; and if after the city obtained 
 it the same was in fact expended for the erection and 
 
 repair of wharves or the improvement of streets, or 
 322
 
 CH. XV.] FURTHER EFFECT OF RECITALS. § 236 
 
 possibly, if expended for other authorized municipal 
 purposes, the amount advanced with the lawful interest 
 may be recovered." 
 
 In Hoag V. Town of Greenwich, 133 N. Y. 152, the 
 bonds were issued payable in twenty years instead of 
 thirty years as required by the statute authorizing their 
 issue. The court held the bonds themselves, for this 
 reason, to be void, but that as the commissioners had 
 authority to borrow the money which the bonds were 
 meant to secure, they by doing so bound the town to 
 secure it, and that as the parties acted in good faith 
 a promise on the part of the town to repay the money 
 would be implied in the manner prescribed by the statute, 
 and an action thereon against the town would lie. 
 
 § 236. Same — Fund to be divided pro rata. — In 
 DaviesCo. v. Dickinson, 117 U. S. 0.57, the county voted 
 a subscription of $250,000 to a railroad company. Bonds 
 to that amount were first issued, and afterwards other 
 bonds in excess of that amount were also issued. As a 
 record of the sale of the bonds had been kept and the ex- 
 cessive issue could be ascertained and separated from the 
 valid issue, the court held that these facts could be 
 shown in a suit brought by the holder of some of the 
 bonds issued in excess, although the judge had certified 
 to them as being valid in the same manner as he had 
 also certified on the issue of the other valid bonds. 
 
 In another case, where the bonds were issued in excess 
 of the statutory limitation, the total issue being for 
 $92,500, when but $25, 150 could have been issued, the court 
 directed that the $25,150 be divided X)'>'0 rata among the 
 holders of the $02,500 of bonds, and that as the county 
 had paid interest on the total issue, it was entitled to 
 credit for the money so paid without interest, to be de- 
 ducted from the $25,150.1 
 
 In a case in lowa,^ where it appeared that bonds were 
 issued partly in excess of the constitutional limitation, 
 
 1 Gillman v. Davies Co., 14 S. W. Iowa, 48. See also Morton v. Ne- 
 
 E. 838. 
 
 2 McPhevson v. Foster Bros.. 4.3 
 
 vada, 41 Fed Rep. 1S.2-S.
 
 MUNICIPAL BONDS. 
 
 [CII. XV. 
 
 the total issue being for $15,000, when hut $2,057.50 
 could lawfully he issued, a court of equity held that each 
 bond of the whole issue was valid to the extent it repre- 
 sented a portion of the debt that could lawfully be con- 
 tracted. 
 
 In one case,^ where the holder of a part of the over- 
 issue brought suit to recover on the bonds he held, the 
 court gave judgment for the defendant corporation, be- 
 cause it was impossible to ascertain what bonds had 
 been issued prior to the limitations of the debt and what 
 after. 
 
 The court, by Sliiras, J., in dismissing the action said : 
 "It seems to me that the only means of solving the 
 difficulties of the situation is for the plaintiff and the other 
 non-resident bondholders to unite in a proper proceeding 
 in equity against tlie county and such other bondholders 
 as shall refuse to act as complainants, and in such suit 
 it can finally be determined for what amount the county 
 can be held liable, and the rights of the respective bond- 
 holders in and to this sum can be decreed." 
 
 § 237. Money must have been applied to lawful 
 purpose. — The money received from the sale of void 
 bonds or other corporate paper must be used by the 
 municipal corporation for some lawful corporate purpose 
 and under the direction of the corporate body, or its use 
 for such purpose be ratified afterwards by such corporate 
 body.2 
 
 If a municipal officer without authority borrows 
 money and uses it for the corporation, the money can- 
 not be recovered from the city upon tlie paper issued 
 by such officer, or in an action for money had and re- 
 ceived, unless the corporation ratified the action of its 
 officer.^ 
 
 ^ yEtna Life Ins. Co. v. Lyon Co., 
 44 Fed. Rep. 329-34.5. 
 
 2 Railroad Nat. Bk. v. Lowell, 100 
 Mass. 214 ; Allen v. Intendant and 
 Councilmen, 89 Ala. 641. Where a 
 school district contracted for a loan 
 on bonds wliich were afterwards 
 declared tf) be void, it was held it 
 324 
 
 was liabh' for the money advanced 
 in good faith under the contract 
 which was used for school purposes. 
 State V. Dickerman (Mont.), 40 P. 
 R. 698. 
 
 ^ Agawam Nat. Bk. v. South Had- 
 ley, 128 Mass. 503-7 ; Hackettstown 
 V. Swackhamer, 37 N. J. L. 191.
 
 CH. XV.] FURTHER EFFECT OF RECITALS. 
 
 S 238 
 
 The law in relation to the recovery of money by the 
 holder of void bonds seems to be, unless the corporation 
 be estopped by its recitals in the bonds or its records, to 
 set up the illegality, as follows : 
 
 1st. That the holder of void bonds, if he obtained 
 them in good faith before maturity and for full value, or 
 through such a former holder, may sue the municipal 
 corporation, not upon the bonds, but for money had and 
 received, and may recover in such action, provided the 
 municipal corporation had the power to do the work or 
 make the public improvement, for which the money was 
 obtained and used. 
 
 2d. That if the municipal corporation did not have 
 the authority to do the work and make the public im- 
 provement, or if the money was obtained for a public 
 object, the municipality had authority to do, but the 
 money was used for some purpose about the doing of 
 which the municipality had no authority to act, then the 
 holder cannot recover at all.^ 
 
 288. No recovery on void uiicoiistitiitional bonds 
 — Exceptions. — It is the well settled doctrine that bonds 
 issued in excess, or partly in excess, of the constitutional 
 limitation are void in all hands,^ unless those issued 
 within the limitatif)n can be separated from those beyond 
 
 1 In Dodge v. City of Memphis, 
 51 Fed. Rep. 165, the court, by 
 Thayer, J., after referring to a 
 number of cases where a recovery 
 was had in an action for money had 
 and received, said : 
 
 " Tliey show no doubt that wlieii 
 a municipal corporation sells bonds 
 wliich are void, and receives the 
 money, it may be com})elled to re- 
 store it in an action for money had 
 and received. So, wlien a munic- 
 ipal corporation is autliorizod to 
 purchase propertj' for any purpose, 
 or to contract for the erection of 
 public buildings, or for any other 
 public work, and it enters into such 
 autliorized contract, but jiays for 
 the property acquired or \vt)rk done 
 
 in negoitable securities, which it 
 has no express or imj)lied power to 
 issue, it may be compelled to pay 
 for that which it has received in a 
 suit brought for that purpose. In 
 no case, however, does it ajijiear 
 that a suit has been sustained on a 
 void bond treating it as non-negoti- 
 able and as sometliing entirely dif- 
 ferent from what the parlies in- 
 tended it should be." 
 
 2 Dixon Co. V. Field, 111 U. S. 83 ; 
 Buchanan v. Litchfield, 102 U. S. 
 278; Davies Co. v. Dickinson, 117 
 U. S. 057 ; Mosher v. Ind. Scliool 
 Dist., 44 Iowa, 12.3; Gould v. Baris, 
 68 Tex. 511 ; Lake Co. v. Graham, 
 130 U. S. 674. 
 
 32ft
 
 § 239 MUNICIPAL BONDS. [CH. XV. 
 
 it. If, however, they contain recitals such as in Chaffee 
 Co. V. Potter, referred to elsewhere herein, they will be 
 held valid. ^ 
 
 When the bonds are in excess, in whole or in part, of the 
 constibutional limit, or without a vote when required by 
 the constitution, and the valid cannot be separated from 
 the invalid, the Federal courts ^ hold that no action as for 
 money had and received would lie against a municipal 
 corporation, because the constitution prohibited the incur- 
 ring of a debt beyond a certain limit or without such prior 
 affirmative vote, and although it used the money it re- 
 ceived from the bonds for municipal purposes, such use 
 was prohibited by the constitution, because it could not 
 incur a debt for any purpose beyond a certain limit or 
 without such a vote.^ 
 
 When, however, bonds are void because of some failure 
 on the part of the municipal officers to perform or comply 
 with some provision of the constitution, as to create 
 a sinking fund or provide an annual tax to pay the princi- 
 pal and interest of the bonds, or to register or have regis- 
 tered the bonds, and the money arising from the sale of said 
 bonds is applied by the corporation to the object for which 
 they were issued, the holder of the bonds, while not per- 
 mitted to recover on them, should be allowed to recover 
 from the corporation in an action for money had and re- 
 ceived, or other proper action, the money so borrowed 
 and used by it for the lawful purpose.* 
 
 ^ '2?)9. No relief in equity. — A court of equity will not 
 aid the holder of void bonds. 
 
 • See § 230. 
 
 2 Morton v. Nevada, 41 Fed. Rep. 
 183; Sutcliffe v. Lake Co. Com'rs, 
 147 U. S. 230 ; Dixon Co. v. Field, 
 111 U. S. 355 ; Hedges V. Dixon Co., 
 150 U. S. 183. 
 
 8 See, however, § 236. 
 
 * In Rainsburg Borough v. Fyan, 
 127 Pa. St. 74. the court held that 
 where bonds wei-e issued by a bor- 
 ough and no provision was made for 
 an annual tax sufficient to pay the in- 
 
 326 
 
 terestand principal thereof within 
 thirty j^ears, as required bj-- sec. 10, 
 art. 9 of the Pennsylvania constitu- 
 tion, that, although the bonds were 
 void, yet that an action to recover 
 the money loaned could be sus- 
 tained, because the money so bor- 
 rowed was used to pay an existing 
 valid indebtedness, and that there 
 was but a mere excliange of one 
 creditor for another.
 
 CH. XV.] FURTHER EFFECT OF RECITALS. § 239 
 
 The following cases illustrate the position of the equity 
 courts in this respect. 
 
 In Litchfield, v. Ballon, 114 U. S. 100, it was sought by 
 a bill in equity to have the money which the city had re- 
 ceived from the defendant in error on its void bonds, issued 
 in excess of the constitutional limitation, and used by the 
 city for the construction of its water works, decreed to 
 be a lien upon such works, to the extent of the money so 
 advanced. 
 
 The opinion of the United States Supreme Court was 
 delivered by Mr. Justice Miller, who said : 
 
 " The language of the constitution is that no city shall 
 be allowed to become indebted in any manner or for an}" 
 purpose to an amount exceeding five per centum of the 
 value of its taxable property. It shall not become indebt- 
 ed, shall not incur any pecuniary liability. It shall not 
 do this in any manner. Neither by bonds or notes, nor 
 by express or implied promises. Nor shall it be done 
 for any purpose, no matter how urgent, how useful, how 
 unanimous the wish. The prohibition is as effectual 
 against the implied as against the express promise, and 
 is as binding in a court of chancery as in a court of 
 law." The court refused to grant the relief prayed and 
 reversed the decree of the court below, which had sus- 
 tained the view of the plaintiff. 
 
 Where bonds were is.sued pursuant to a statute in sat- 
 isfaction of a judgment obtained against the corporation 
 upon warrants issued in excess of the constitutional limit, 
 the court held the bonds valid in the liands of an innocent 
 purchaser, and that they could not be attacked in his hands 
 by showing that the municipal authorities fraudulently 
 omitted to interpose the defence when the warrants were 
 sued upon.^ 
 
 In Hedges V. Dixon Co., loO U. S. 182, the appellant 
 Hedges, who held most of the whole issue of bonds issued 
 partly in excess of the constitutional limitation, offered 
 to surrender the l)f)nds in excess to be cancelled and 
 sought to have the balance decreed to be paid by the 
 
 1 Sioux City etc. R. R. Co. v. Osceola Co. . 4r) Iowa. IfiS : 52 lb. 26. 
 
 327
 
 § 239 MUNICIPAL BONDS. [ciI. XV. 
 
 county. The court refused to grant the aid or interfere, 
 and held that, in the absence of fraud, accident or mis- 
 take, a court of equity would not act,^ 
 
 The bonds in this case were negotiable and made pay- 
 able to the railroad company or bearer. They were de- 
 livered to the company and by it negotiated. The bonds 
 were issued after an affirmative vote of the voters, and 
 they, in the proposition submitted, fixed the amount of 
 the issue, which exceeded in part the constitutional limit 
 of indebtedness as fixed by the constitution of jM'ebraska. 
 
 The court, in refusing the aid, laid particular stress 
 upon the fact that the vote authorized an issue of a certain 
 sum, and that the court had no authority to change this 
 sum or to say that the voters intended to authorize an 
 issue of bonds to an amount not exceeding the limit of 
 debt the county then might have contracted for. 
 
 The language of the court on this point is as follows : 
 " What the county authorized and carried into execution 
 in the present case, both by the vote and by the donation, 
 was one entire transaction, and if it should be so reformed 
 as to curtail the entire issue of bonds to such an amount 
 as was within the constitutional limits of the county to 
 donate, it would be something different from that which 
 was voted by the county and carried into effect by the 
 issue of the bonds. This would involve the making of a 
 different donation from what the county voted and in- 
 tended to make to the railroad company." The court 
 also laid particular stress upon the fact that the county 
 did not receive the proceeds of the bonds and apply them 
 to some lawful public purpose. On this point the court 
 said : " The circumstances and conditions which gave 
 the holders of the bonds an equitable right in those cases 
 (referring to Louisiana v. Wood, 102 U. S. 294, and Eead 
 V. Plattsmouth, 107 U. S. 56S), to recover from the munic- 
 ipality the money which the bonds represented, do not 
 exist in the case under consideration, where the county 
 received no part of the proceeds of the bonds and no direct 
 money benefit, but merely derived an incidental advan- 
 tage arising from the construction of the railroad, upon 
 
 1 See g 236. 
 
 328
 
 CH. XV.] FURTHER EFFECT OF RECITALS. § 239 
 
 which advantage it would be impossible for the court to 
 place a pecuniary estimate, or to say that it would be 
 equal to such portion of the bonds in question as the 
 county could lawfully have issued. Moreover, by the 
 provisions of the constitution of the State of Nebraska, 
 and by the express terms of the proposition submitted to 
 the vote of the people of Dixon County, the bonds in 
 question were issued as a donation to the railroad com- 
 pany, and, being intended as a donation, it cannot prop- 
 erly be said that the purchasers of these bonds from 
 the railroad company paid any consideration therefor to 
 the county so as to raise any equity as against it for the 
 amount represen ted by the bonds or any part thereof. Any 
 equitable demand which might under the circumstances 
 have existed against the county, on the tlieory of con- 
 sideration received,- was in favor of the railroad comi)any 
 which constructed the railroad and thereby conferred all 
 the incidental benefits which the county derived from 
 the transaction. If any equitable claim arises in favor 
 of the holders of the bonds, it must be against the rail- 
 road company from ^vdiom the bonds were purchased and 
 by whom their payment was guaranteed, as that company 
 was the recipient of the legal consideration realized 
 upon the negotiation of the bonds." 
 
 As we have elsewhere seen,^ courts of equity have 
 granted relief in cases where the total issue of the bonds 
 exceeded only in part the constitutional limit of indebt- 
 edness, and the proceeds of the bonds have been applied 
 to the public purpose for which they were issuinl, ])y 
 scaling down the total issue to the lawful amount tlicy 
 could have, in the first instance, been issued for, and 
 dividing that amount j7?-o rata among the bondholders. 
 
 1 See § 236. 
 
 329
 
 CHAPTER XVL 
 
 ESTOPPEL OTHER THAN BY RECITALS IN THE BOND — 
 CURATIVE ACTS. 
 
 Section. 
 
 240 — Estoppel by the record of 
 corporation relative to the 
 issue of bonds — Bona fide 
 liolder need not look fur- 
 ther than the record. 
 
 241 — As against a bona fide 
 liolder the records cannot 
 be impeached — Court rec- 
 ords. 
 
 242 — Estoppel by ratification and 
 acquiescence. 
 
 243 — By payment of interest — 
 Cases. 
 
 244 — Estoppel by retaining stock 
 — Pendleton Co. v. Amy, 
 13 Wall. 297, an extreme 
 case — No vote, yet bonds 
 valid. 
 
 245 — Opposite doctrine, tlie safe 
 one — Marsh V. Fulton Co., 
 10 AVall. 676. 
 
 246 — Laches on part of taxpayer 
 — He must act promptly — 
 Want of power can al- 
 ways be pleaded — No de- 
 cided case to contrary. 
 
 247 — Ratification by municipality 
 of unauthorized issue of 
 bonds — No estoppel where 
 want of power exists. 
 
 248 — Principle upon which these 
 estopj)els rest. 
 
 249 — Estoppel by judgment — Res 
 adjudicata — The general 
 rule — Estoppel by judg- 
 ment enlarged. 
 
 Section. 
 
 250 — Doctrine modified — Cases. 
 
 251 — Cases illustrating the posi- 
 tion of the courts. 
 
 252 — Doctrine of estoppel applies 
 to non-negotiable paper. 
 
 253 — When bonds are void for 
 non-performance of con- 
 ditions precedent — In 
 such cases it is immate- 
 rial whether they contain 
 recitals or not. 
 
 254 — Same — Cases illustrating 
 the doctrine. 
 
 255 — The forc;e of the statute or 
 constitution renders the 
 bonds void. 
 
 256 — Curative acts — When such 
 acts may be passed — Their 
 objects — Rule laid down 
 by Cooley. 
 
 257 — Constitutional defects can- 
 not be cured. 
 
 258 — Cases illustrating doctrine. 
 
 259 — What may be cui-ed — What- 
 ever the Legislature might 
 have done, it may after- 
 wards do — Whatever it 
 might have waived it may 
 afterwards waive. 
 
 260 — When an unconstitutional 
 act may be cured — If de- 
 fect is only as to form it 
 may, but if as to object it 
 cannot — How curative 
 acts shovild be drafted. 
 
 § 2-iO. Estoppel by record. — A municipality may also 
 
 be estopped by its records when the decision or determi- 
 330
 
 CH. XVI.] ESTOPPEL OTHER THAN BY RECITALS. § 240 
 
 nation of the prior conditions are to be determined by 
 the officers named in the enabling statute or by the 
 legishitive body or certain officers of the municipality, 
 and their determination is to be reduced to some matter 
 of record, as an affidavit of some of the officers to be 
 filed in a public office or the minutes of the proceedings, 
 or an ordinance or resolution of the municipality relating 
 to the issue of the bonds, and such public evidenre of the 
 determination of the performance of the prior conditions 
 shows that the question has been passed upon and settled, 
 and afterwards the bonds or other municipal paper is 
 uttered and finds its way into the hands of an innocent 
 holder, the municipality will be estopped, although the 
 bonds contain no recitals, to show that the records are in 
 factuntrue, and the holderof the bonds need not look fur- 
 ther than such records for proof of the performance or 
 observance of the conditions required to authorize the 
 issue. -^ 
 
 A case illustrating the doctrine is that of Black v. 
 Commissioners, 99 U. S. 686-696. 
 
 It appeared the bonds were issued in payment of a sub 
 scription to a railroad. They contained no recitals. The 
 defence was that a majority of the voters had not voted 
 in favor of the subscription. The suit was on overdue 
 coupons detached from the bonds. 
 
 The court said : 
 
 " The bonds, it is true, contain no recitals. If they 
 did contain a recital that an election had been held, and 
 that a majority had voted for the issue of the bonds, the 
 recitals would have been conclusive upon the county, and 
 a purchaser would have needed to look no furtlier than 
 to the act of the Legislature. This is according to all our 
 decisions. But in the absence of any recital it may be 
 conceded that he was bound to inquire whether a ma- 
 jority vote had been returned for the issue of the bonds. 
 
 1 First Nat. Bk. v. Concord, 50 
 Vt. 257; Hutchinson & R. Co. v. 
 Fox, 48 Kan. 70 ; Gause v. Clarks- 
 ville, 1 McCrary, 78 ; Aberdeen v. 
 Sykes, 59 Miss. 286 ; Town of Eagle 
 
 V. Kohn. 84 111. 202 : Cliicago & R. 
 R. V. Harris. 30 Pac. R. 456 ; State 
 V. Commis., 37 Ohio St. 526 ; West 
 Plains Tp. v. Sage, 69 Fed. Rep. 
 943. 
 
 331
 
 § 210 MUNICIPAL BONDS. [CH. XVI. 
 
 But where was he to inquire ? Pkiiuly only of the board 
 whose province it was to ascertain and declare the result 
 of the election. Had he gone to their records they would 
 have shown that the popular vote was in favor of the 
 bond issue. 
 
 ' ' He was not bound to canvass the vote for himself or to 
 revise and correct a mistaken canvass, any more than he 
 was bound to inquire into the qualification of the elec- 
 tors, and if, relying upon the canvass of the board and 
 the declared result, he accepted the obligations of the 
 county, it would be a strange doctrine were we to 
 hold that a second canvass, made many years afterwards, 
 could reverse the first and annul the rights that had been 
 acquired under it. There is no such law. For all legal 
 purposes the result of an election is what it is declared to 
 be by the authorized board of canvassers, until their de- 
 cision is reversed by a superior court, and a reversal has 
 no legal effect upon acts done prior to it." 
 
 And in another case, where it appeared the common 
 council of a city was authorized to subscribe for stock in 
 a railroad and to issue bonds in payment therefor on 
 petition of three-fourths of the legal voters of the city, 
 the council, before the issue of the bonds, decided that 
 three-fourths of the citizens had petitioned for the 
 issue, the court held that the council was the tribunal to 
 determine whether the required number had petitioned, 
 and it having so decided and issued the bonds the city 
 could not afterwards set up as a defence that the requisite 
 number had not petitioned.^ In this case the bonds also 
 recited the act. 
 
 And where the act which authorized the issue of the 
 bonds was not to take effect until approved by two-thirds 
 of the electors present at a city meeting held for that 
 purpose, and a copy of its doings lodged in the office of 
 the Secretary of State, the court held that the purchasers 
 of such bonds were not bound to look beyond the certi- 
 ficate thus lodged.^ 
 
 ^ Bissell V. Jeffersonville, 24How. 2 g^c. for Savings v. New Lon- 
 287. See also Van Hostrup v. Mad- don, 29 Conn. 174. 
 ison City, 1 Wall. 291 ; Meyer v. 
 Muscatine. 1 Wall. 393. 
 332
 
 CH. XVI.] ESTOPPEL OTHER THAN BY EECITALS. § 241 
 
 The courts of New York State held under the statutes 
 which, before the adoption of the present constitutional 
 prohibition, permitted municipalities to aid railroads, 
 that, although the statute authorizing the issue of town 
 bonds to aid railroads expressly provided that the affidavits 
 attached to the written assents of the requisite number 
 of residents were to be made by the officers who were to 
 issue the bonds and were required to state that the assent 
 was signed by the requisite number of such residents, 
 and to be filed in a public office, yet the affidavits should 
 not be conclusive of the facts stated, unless the law ex- 
 pressly so made them,^ although the courts acknowledged 
 that the Federal courts held the contrary doctrine.^ 
 
 In the case of Bank of Rome v. Village of Rome, 19 
 N. Y. 20, where it appeared that the commissioners of 
 the railroad fund of Home were authorized to subscribe 
 for stock in a railroad company and to issue bonds with 
 which to pay for the same after five hundred thousand 
 dollars had been subscribed to the stock of the railroad 
 company by third parties. By the enabling act the com- 
 missioners were not to negotiate, sell, or transfer the 
 bonds until after they had made and subscribed a certi- 
 ficate in writing, that the said subscription of five hun- 
 dred thousand dollars had actually been made, and in 
 their judgment and belief, in good faith, and by persons 
 of ability sufficient to pay their subscriptions in full, 
 and that such certificate should be filed with the clerk 
 of the board of trustees of the village of Rome. 
 
 The commissioners filed such certificate. 
 
 The court held the certificate to be conclusive, and that 
 it could not be shown as against the bona fide holders 
 of the bonds that the facts set forth in the certificate 
 were untrue. 
 
 § 211. Records cannot be shown to J)C false. — The 
 record of the proceedings of a municipality relating to 
 the issue of the bonds cannot, as against a bona fulc 
 holder, be shown to bo false, and they import absolute 
 
 1 Cagwin v. Hancock, 8t N. Y. I ^ Town oi Venice v. Murdock, 93 
 fy?>2. I U. S. 94. 
 
 333
 
 §241 
 
 MUNICIPAL BONDS. 
 
 [CH. XVI. 
 
 verity, and in a collateral proceeding, after the rights 
 of third persons have accrued, cannot be impeached by 
 parol. ^ 
 
 And where a recital is placed on the minutes of the 
 corporation that bonds are issued for a certain lawful pur- 
 pose, it cannot be shown, as against bona fide holder for 
 value, that the real object of their issue was illegal.^ 
 
 Where the records of a municipal corporation show 
 that all the steps necessary to legally issue the bonds 
 have been performed, and the same book of records, but 
 not among the proceedings relative to the issue of the 
 bonds, discloses the fact that the bonds were illegally 
 issued, such latter recorded fact cannot be admitted, as 
 against a bona fide holder, to defeat the title of such 
 holder.^ 
 
 A purchaser of a municipal bond containing proper 
 recitals made by tlie authorized officers is not bound to 
 inspect the records of the body issuing the bond, or bound 
 by matters in the book of records which would, had he 
 inspected them, informed him that the bonds were issued 
 for an illegal purpose.* 
 
 It is the general doctrine of the Federal and State courts 
 that the proceedings of a court or judge authorized to 
 issue, or cause to be issued, municipal bonds, cannot be 
 attacked collaterally, but must be reviewed, if at all, by 
 some other court of higher jurisdiction.^ 
 
 1 Bissell V. City of Jeffersonville, 
 24 How. 288 ; Matliias v. Runnels 
 Co., 66 Fed. Rep. 494; Clapp v. 
 County of Cedar, 5 Iowa, 15 ; Lynde 
 V. Winnebago Co., 16 Wall. 6. 
 
 2 Aberdeen v. Sykes, 59 Miss. 236. 
 
 3 West Plains Tp. v. Sage, 69 
 Fed. Rep. 943. 
 
 4 West Plains Tp. of Meade Co. v. 
 Sage, lb. 
 
 5 Town of Cherry Creek v. Becker, 
 123 N. Y. 161 ; Hoag v. Town of 
 Greenwich, 133 N. Y. 157 ; Lynde 
 V. The County, 16 Wall. 6 ; Freem. 
 on Judg. ^ 135. 
 
 In Mathias v. Runnels Co. , 66 Fed. 
 334 
 
 Rep. 494, where the records of a 
 county court showed that an order 
 directing the issue of the bonds and 
 of an annual tax to pay them had 
 been passed in February but was 
 inserted among the oi'der of busi- 
 ness in the July term, it was held 
 after tlie bonds were issued, that as 
 against a bona fide holder it could 
 not be shown that the order was 
 not passed at the time it purported 
 to be. 
 
 In one case where the vote to 
 issue bonds was taken by a division 
 of voters instead of by ballot, and 
 tlie record of the town clerk showed
 
 CH. XVI.] ESTOPPEL OTHER THAN BY RECITALS. § 243 
 
 § 242. Estoppel by ratification and acquiescence. — 
 
 A municipal corporation may be estopped by its own acts, 
 other than by its recitals or its records, from denying 
 the validity of its bonds or other paper, when such bonds 
 or other paper are invalid by reason of some irregularity 
 in the exercise of the express power to issue, such as a 
 failure to properly comply with all the preliminary steps 
 necessary under the statute to be performed prior to the 
 issue of the bonds. 
 
 It has been repeatedly held, by both the Federal and 
 State courts, that the failure of a taxpa3'er or the cor- 
 poration itself to enjoin the issue of the bonds followed 
 by recognition of them, such as the payment of interest 
 on them or of the principal of some of them,^ the reten- 
 tion of the consideration, as where they have been given 
 in exchange for stock, the retention of the stock, ^ to 
 operate as an estoppel upon the municipality from 
 setting up non-compliance with the conditions precedent 
 as a defence in an action brought on either the coupons 
 or the bonds by a bona fide holder.^ 
 
 A reference to some of tlie cases wherein this doctrine 
 of estoppel wfis applied will ilhistrate it. 
 
 § 24;i By payment of interest. — In the case of Super- 
 visors V. Schenck, 5 Wall. 781, it appeared that counties 
 were authorized by statute, upon a proper vote, to sub- 
 scribe for stock and pay in bonds. An election was 
 ordered by the county court, when in fact it sliould liave 
 been ordered by the board of supervisors. At the election 
 the proposition was carried and the supervisors sub- 
 scribed and issued tlie bonds, received the stock, ordei'ed 
 the levy of taxes and paid the coupons attached to the 
 
 that it was clone by ballot, it was 
 held that the town and its officers 
 were estopped to show that no ballot 
 was taken. New Haven etc. R. 
 Co. V. Chatani. 42 Conn. 40."). 
 
 1 People V. Kline, G3 III. 304 : 
 
 2 Tliird Nat. Bk. v. Seneca Falls, 
 If) Fed. Rep. 783 ; "Wliiting v. Potter, 
 18 Rlatchf. If).-). 
 
 ^ Rrown v. Bon ITomnie. 46 N. 
 W. R. 173 : Portsnioutli Sav. Bk. v. 
 Sprinf,-fi<'l(l. 4 Fed. R(>p. 27G : Clay 
 
 Goshen Township v. Shoemaker, 12 i Co. v. Soc. for S.mv., ini U. S. .'i70 : 
 Ohio St. 024 ; Munson v. Lyons, 12 ^lorris Co. v. Hickman, 31 Kan. 
 Blatchf. (U. S.) .539 ; Hannilial R. 729. 
 R. Co. V. Marion Co., 36 Mo. 295. '
 
 § 243 MUNICIPAL BONDS. [CH. XVI. 
 
 bonds as they fell due for a ])eriod of from nine to ten 
 years. The court held that by its acquiescence, conduct 
 and acts the county had ratified the bonds, at least in 
 the hands of an innocent holder, and that the county 
 was estopped to set up the irregularity mentioned as a 
 defence. 
 
 In the case of Brown et al. v. Milliken County Clerk, 
 42 Kan. 761), where it appeared the funding bonds in 
 suit were issued in exchange for former bonds issued in 
 aid of a railroad, and the proceedings in relation to the 
 issue of the funding bonds were defective, the defence 
 sought to be interposed being that they were illegally 
 issued (1) because in excess of the amount authorized by 
 law ; (2) in excess of the amount stated in the notice of 
 election ; (8) because the notice of election gave only 
 fifteen days' notice, whereas the statute required thirty 
 days. It appeared that the township for a number of 
 years levied and collected taxes for, and paid the interest 
 on, the funding bonds, and paid a part of them off ; 
 they kept the original bonds and cancelled them. The 
 court held that the defences could not be pleaded, and 
 that by said acts it was estopped to plead such irregular- 
 ities. 
 
 In the case of State v. Van Horn, T Ohio St. 331, it 
 appeared the bonds in suit were issued to aid a railroad, 
 that in fact had not been located and should have been 
 located before the bonds were sold, and the township 
 received the proceeds. 
 
 It also paid the interest for a period of three or 
 four years. The county retained possession of the 
 money and refused to pay further the interest on the 
 bonds. 
 
 The court held, that although the railroad was not 
 located, the county by said acts was estopped. 
 
 In the case of Calhoun v. Millard, 121 N. Y. 09, on 
 
 suit brought in equity by certain taxpayers of the town 
 
 to have its bonds issued in aid of a railroad, which bonds 
 
 were invalid for irregularities in their issue, surrendered 
 
 up for cancellation by the then present holders, who were 
 
 bona -fi/le holders before maturity and without notice. 
 "336
 
 CH, XVr.] ESTOPPEL OTHER THAN BY RECTTALS. § 243 
 
 The town had recognized the bonds as vaKd and for nine 
 consecutive years paid the interest on the same. 
 
 The court refused to entertain the complaint and said 
 in part : 
 
 " The town and the taxpayers permitted the bonds to 
 be dealt with and taken by savings banks and others for 
 nearly ten years, not only without, so far as appears, a 
 word of warning or protest, bat by affirmative acts of 
 recognition encouraged investment therein as safe and 
 valid securities. . . . They are now in the hands of bona 
 fide holders. The denial of relief in this case may result 
 in the enforcement of the bonds in question and also of 
 other town bonds issued and held under similar circum- 
 stances. But in contrasting the relative conduct and 
 situation of the town and of the taxpayers on the one 
 side, and the purchaser of the bonds on the other, we 
 cannot say that such a result will be repugnant to any 
 principle of justice or equity." 
 
 It has been held that where a town has issued bonds 
 and paid interest upon them for six years without 
 qiiestioning their validity, a court of equity will not, at 
 the town's instance, cancel them in the hands of an 
 innocent purchaser for value, even though they were 
 actually invalid.^ 
 
 On the contrary, in another State, it has been held 
 that the payment of interest on a bond which does not 
 show on its face any authority for its issue, and which 
 was in fact illegally issued, will not operate either as a 
 ratification or estoppel.^ 
 
 The act of paying one instalment of interest has been 
 held not to estop the municipality from setting uj) 
 irregularities in the issue. ^ 
 
 Pa3nnent of interest will not be sufficient to ostoj) a 
 municipal corporation from setting up that it liad no 
 power to issue its bonds.* 
 
 1 Cherry Creek v. Becker, 123 N. 
 Y. 161. Payment of interest for 
 two years has been lielrl to estop 
 the corporation. Leavenworth etc. 
 R. R. Co. V. Comrs. of Douglass 
 Co., 18 Kan. 170. 
 
 " Bogert V. Townsliip of Lemotte, 
 79 Mich. 294. 
 
 8 Loan Asso. v. Topeka, 20 "Wall. 
 655. 
 
 * Sherrarcl v. Lafayette Co. , 3 
 Dill. 3 C. C. R. 236. 
 
 22 337
 
 §244 
 
 MUNICIPAL BONDS. 
 
 [cH. xvr. 
 
 § 244. Estoppel by retaining stock. — The case of 
 Pendleton Co. v. Amy, i;3 Wall. 207, is an extreme case 
 on this subject.^ 
 
 The county was authorized to purchase stock on condi- 
 tion of a popular vote. It issued its bonds without such 
 a vote being taken and received in exchange a certificate 
 of stock in a railroad company, which it held for seven- 
 teen years before the suit on the bonds was brought by 
 an innocent holder. 
 
 The bonds contained no recitals and there had been no 
 payment of interest or principal. 
 
 1 The court in this case, by Strong, 
 J., sail! : 
 
 " A purcliaser is not always 
 bound to look further than to dis- 
 cover that the power has been con- 
 ferred, even though it be coupled 
 witli conditions precedent. If the 
 right to subscribe be made depend- 
 ent upon the result of a popidar 
 vote, the officers of the county 
 must first determine whether the 
 vote has been taken as directed by 
 law, and wliat the vote was. When, 
 therefore, they make a subscription 
 and issue county bonds in payment, 
 it may fairly be presumed, in favor 
 of an innocent purchaser of the 
 bonds, that tlie condition which the 
 law attached to the exercise of the 
 power has been fulfilled. To issue 
 the bonds without the fulfilment 
 of tlie precedent conditions would 
 be a misdemeanor ; and it is to be 
 presumed that public officers act 
 riglitly. We do not say this is a 
 conclusive presumption in all cases; 
 but it has mox'e than once been de- 
 cided that a county may be estopped 
 against asserting that tlie conditions 
 attached to a grant of power were 
 not fulfilled. The estoppel in these 
 cases was either by recitals in the 
 bonds that the conditions prece- 
 dent had been complied with, or by 
 the fact that the county had sub- 
 3.38 
 
 sequently levied taxes to pay inter- 
 est on the bonds. In the present 
 case it does not appear in the i^lead- 
 ings whether or not the bonds con- 
 tained any such recitals,nor whether 
 the officers of the county had levied 
 taxes to pay interest on them, or 
 whether any interest has been paid. 
 Tliese grounds of estoppel do not 
 exist. But if such acts and such 
 recitals are sufficient to protect 
 bona fide purchasers against an 
 attempt to set up non-compliance 
 with the condition attached to the 
 grant of power to issue the bonds, 
 it is not easy to see why the plead- 
 ings do not show an estoppel in 
 this case. The county received in 
 exchange for tlie bonds a certificate 
 for the stock of the railroad com- 
 pany, which it held about seventeen 
 years before the present suit was 
 brought, and which it still holds. 
 Having exchanged the bonds for 
 the stock, can it retain the proceeds 
 of the exchange, and assert against 
 a purchaser of the bonds for value, 
 that though the Legislature em- 
 powered it to make them, and put 
 them upon the market, upon cer- 
 tain conditions, they were issued 
 in disregard of the conditions ? We 
 think thej' cannot, and, therefore, 
 that the third plea cannot be sus- 
 tained."
 
 CH. XVI.] ESTOPPEL OTHER THAN BY RECITALS. § 245 
 
 The court held, three of the judges dissenting, that 
 purchasing and retaining the stock under these circum- 
 stances estopped the county from setting up as a defence 
 the want of popular election authorizing the issue of the 
 bonds. 
 
 § 245. Opposite doctrine. — In direct opposition to this 
 case is that of Marsh v. Fulton Co., 10 Wall. 67G. 
 
 The county issued bonds, without the sanction of a 
 popular vote, and paid interest on them for a number of 
 years, and also paid a part of the bonds. The bonds con- 
 tained no recitals. 
 
 The court held the bonds to be void because the town, 
 without the popular vote, had no authority to issue the 
 bonds, the defect being want of power to act at all. 
 
 Field, J., said: "They (the supervisors) could not, 
 therefore, ratify a subscription without a vote of the 
 county, because they could not make a subscription in the 
 first place without such authorization.''^ 
 
 The latter case seems to us to be the better law. The 
 power to issue the bonds depended upon an affirmative 
 vote of the people, and if no vote was taken there was 
 want of })ower in the county to issue the bonds ; and any 
 act done where there is want of power is illegal and void. 
 
 ^ Field, J., delivering the unani- 
 mous opinion, said: "But it is 
 earnestly contended that tlie plain- 
 tiff was an innocent purcliaser of 
 the bonds without notice of their 
 validity. If such were the fact, we 
 do not perceive how it could affect 
 the liability of the county of Fulton. 
 This is not a case where the party 
 executing the instruments pos- 
 sessed a general capacity to con- 
 tract, and where the instruments 
 might, for such a reason, be taken 
 witliout special inquiry into their 
 validity. It is a case wliere the 
 power to contract never existed — 
 where the instruments might, with 
 equal authority, have been issued 
 by any other citizen of the county. 
 It is a case, too, where the holder 
 
 was bound to look to the action of 
 the officers of tlie county and as- 
 certain wliether the law had been 
 so far followed by them as to justify 
 the issue of the bonds. The author- 
 it}' to contract must exist before 
 any protection as an innocent pur- 
 chaser can be claimed by the holder. 
 This is the law even as respects 
 commercial paper, alleged to liave 
 been issued under a delegated au- 
 thority, and is stated in tlie case of 
 Floyd Acceptances." In speaking 
 of notes and bills issued or accepted 
 I)v an agent, acting under a general 
 or special power, the court says : 
 '* In each case the person dealing 
 with the agent, knowing that he 
 acts only by virtue of a delegated 
 
 power, must, at liis peril, see that 
 '."•on
 
 §246 
 
 MUNICIPAL BONDS. 
 
 [CH. XVI. 
 
 § 24:6. Laches on part of taxpayer. — While it is held 
 that the statute of limitations does not run against the 
 right of a taxpayer to contest the validity of an election 
 by \Yhicli it was determined to issue l)onds, yet such action 
 must be brought within a reasonable time after the elec- 
 tion and before the rights of third persons have accrued, 
 and where the action was delayed for three years after 
 the election and issuance of the bonds, relief by injunction 
 was denied to restrain the commissioners from collecting 
 the taxes to pay the interest on the bonds. ^ 
 
 the paper on which he relies comes 
 within the power under wliich the 
 agent acts. And this appUes to 
 every person wlio takes the paper 
 afterward ; for it is to be kept in 
 mind that the protection which 
 commercial usage throws around 
 negotiable paper cannot be used to 
 establish the authority by which 
 it was originally issued. It is also 
 contended that if the bonds were 
 issued without authority, their issue 
 was subsequently ratified, and va- 
 rious acts of the supervisors of the 
 county arc cited in support of the 
 supposed i-atification. These acts 
 fall verj' far short of showing any 
 attempted ratification even by the 
 supervisors. But the answer to 
 them all is, that the power of rati- 
 fication did not lie with the super- 
 visors. A ratification is, in its effect 
 upon the act of an agent, equivalent 
 to the possession bj' him of a pre- 
 vious authority. It operates upon 
 the act ratified in the same manner 
 as though the authority of the agent 
 to do the act existed originally. It 
 follows that a ratification can only 
 be made when the partj^ ratifying 
 possesses the power to perform the 
 act ratified. The supervisors pos- 
 sessed no authority to make the 
 subscription or issue the bonds in 
 the first instance without the pre- 
 vious sanction of the qualified voters 
 of the county. The supervisors, in 
 340 
 
 that particular, were the mere 
 agents of the county. They could 
 not, therefore, ratify a subscription 
 without a vote of the county, be- 
 caiise they could not make a sub- 
 scription in the first instance with- 
 out such authorization. It would 
 be absurd to say that they could, 
 without such vote, by simple ex- 
 pressions of approval, or in some 
 other indirect way, give validity to 
 acts when they were directly, in 
 terms, prohibited by statute from 
 doing those acts until after svich 
 vote was had. That would be equi- 
 valent to saving that an agent, not 
 having the i^ower to do a jwirticular 
 act for his principal, could give 
 validity to such act by its indirect 
 recognition. We do not mean to 
 intimate that liabilities may not be 
 incurred by counties independent 
 of the statute. Undoubtedly they 
 may be. The obligation to do jus- 
 tice rests upon all persons, natural 
 and artificial, and if a county ob- 
 tains the mone}' and property of 
 others without authority, the law, 
 independent of any statute, will 
 compel restitution or compensation. 
 But this is a veiy different thing 
 from enforcing an obligation to be 
 created in one way. when the statute 
 declares that it shall only be created 
 in another different way." 
 
 1 Jones V. Conrrs, 107 N. C. 248. 
 In the case. State v. Van Home,
 
 CH. XVI.] ESTOPPEL OTHER THAN BY RECITALS. 
 
 §246 
 
 Where, however, the town or taxpayers act with 
 reasonable diligence, a court of equity will restrain the 
 
 7 Ohio St. 331, the court, by Swan, 
 J. , said : 
 
 ' ' If the location of the road should 
 have been first made, any tax- 
 payer of the township, for himself 
 and all others interested, could, at 
 any time before the issuing or ne- 
 gotiation of tlie bonds, have inter- 
 vened and enjoined their issue as 
 unauthorized, on acount of the 
 road not having been located. 
 They, however, either intentionally 
 or from neglect to assert their legal 
 rights, and without protest or in- 
 terference, suffered the election to 
 taJie place, their public agents, the 
 trustees, to subscribe for stock, to 
 issue tlie bonds and receive the pro- 
 ceeds. They also afterward, and 
 for the period of three or four years, 
 paid the interest by taxation, and 
 thus gave credit to the bonds of the 
 township. Tliey now desire to re- 
 tain the money of the original bond- 
 holders, refuse topaj' interest, deny 
 their obligations to ]:iay back the 
 principal, disaffirm the acts of their 
 public agents, who under the forms 
 of law and by their direct instiga- 
 tion through the ballot-box, issued 
 and negotiated these bonds. They 
 had an opportunity, before inno- 
 cent third persons could be injured 
 or committed to the acts of their 
 public agents, to enjoin their pro- 
 ceedings, and protect themselves : 
 they did not seek that protection ; 
 but now, when they have received 
 all the fruits of the contracts of 
 tlieir agents from third pei'sons who 
 have acted upon their recognition 
 of the authority of their agents, ' 
 they ask the privilege of denj-ing 
 this recognition, and thus escape ! 
 from their obligations. It is too 
 late for them to do so, as against 
 
 innocent third persons. They are 
 concluded, not simply by the acts of 
 their public agents, but by their 
 own. It is true, that when public 
 officers exceed tiie powers vested in 
 them by general laws, their acts are 
 no longer official, but void : and 
 this principle would be applicable 
 to the case before us, if the trustees 
 had derived their sole authority to 
 make the contract under considera- 
 tion from the law, without any in- 
 terposition, sanction, or authority 
 from the taxpayers of the town- 
 ship. But, in the case before us 
 the trustees derived their authority 
 to subscribe for the stock of the 
 railroad, and to issue the bonds, 
 specifically from their constituency, 
 the taxpayers of the township. 
 The trustees, unless authorized by 
 the taxpayers, derived no authority 
 to act from the laws under con- 
 sideration. In fact, the whole trans- 
 action under the legislation was for 
 the purpose of consvmnnating an 
 agreement, havhig all the sub- 
 stantial elements of a private con- 
 tract, between the taxpayers as 
 principals, who by vote made the 
 trustees their agents to contract for 
 them on one side, and the railroad 
 and bondholders on the other. The 
 rules of law applied to individuals, 
 and founded upon the clearest prin- 
 ciples of justice and sound morals, 
 sliould be eciually applicable to 
 these parties. The taxjxij-ers, as 
 principals, and by their votes, in 
 the forms of law set their agents in 
 motion, professed to clothe them 
 with special authority to make a 
 special contract with tliird persons 
 for their benefit ; by voting, insti- 
 gated those agents to make the sub- 
 scription and issue the bonds : and 
 341
 
 MUNICIPAL BONDS. 
 
 [CH. XVI. 
 
 levy of a tax to pay the interest, or will entertain an action 
 for the surrender and cancellation of the bonds if they 
 do not contain recitals, and two years after the issue of 
 the bonds was held to be a reasonable time.^ 
 
 Want of power can always be pleaded as a defence, and 
 no acts of the corporation or its officers will estop that 
 fact from being x^l^aded, although the action is brought 
 by a hona fide bondholder, and we have failed to find a 
 decided case holding otherwise. When a constitution re- 
 quires a public sanction to a subscription by a municipal- 
 ity to railroad stock, such provision prevents the subse- 
 quent acts of the municipal officers from operating as a 
 ratification without the assent of the voters. ^ 
 
 The misconduct, irregularity or fraud of the officers of 
 the corporation issuing the bonds or other paper cannot 
 be set up as a defence against a bona fide holder of the 
 bonds,^ and fraud in the election authorizing the issue of 
 bonds must be set up in time before the rights of third 
 persons have intervened. The municipality, or a tax- 
 payer thereof, must act promptly in such cases, and a 
 failure to enjoin the issue of the bonds will estop the 
 corporation from pleading such matters as a defence in a 
 suit brought by innocent holders of the bonds.* 
 
 thus induced, on tlie faith of this 
 recognition, innocent third persons 
 to part with their money and re- 
 ceive, in heu thereof, these bonds. 
 If the trustees of the township and 
 the taxpayers supposed, until very 
 recently, as they probably did, 
 that the subsequent permanent 
 establisliment and location of the 
 railroad tlirough the township was 
 sufficient to authorize the issuing 
 of the bonds, Avliether that location 
 was made before or after the elec- 
 tion, it is equally just to presume 
 that the bondliolders, who parted 
 with their money, entertained the 
 same belief. The one was certainly 
 as much bound to know as the 
 other : and if botli were mistaken, 
 no principle of lawor justice would 
 342 
 
 demand that the taxpayers should 
 retain the fruits of the mistake, and, 
 at the same time, repudiate those 
 very acts of their own which mis- 
 led the bondholders, and induced 
 them to part with their money ; in 
 truth, blowing hot to get the bondr 
 liolders' money, and blowing cold 
 to rid themselves of the obligation 
 to refund it." 
 
 1 Town of Springport v. Bank, 75 
 N. Y. 379 ; Metzger v. E. R. Co., 79 
 N. Y. 171. 
 
 2 Dill, on ]\Iun. Corp. Vol. 1 (4th 
 ed.)§ 548; Norton v. Shelby Co., 
 118 U. S. 425. 
 
 3 Town of East Lincoln v. Daven- 
 port, 94 U. S. 801 ; Grand Chute v. 
 Winegar, 15 Wall. 355. 
 
 * Marshall Co. v, Schenck, 5 Wall,
 
 CH. XVr.] ESTOPPEL OTHER THAN BY RECITALS. 
 
 § 247 
 
 § 2i7. Ratification by the nniiiicipality. — Where 
 bonds are issued by the officers of a muiiicipahty without 
 the authority of the legislative body, which, however, 
 has the right to issue the same, and the bonds are after- 
 wards recognized to exist, as by the payment of the 
 interest on them, the retention of their proceeds, and the 
 placing of the same among its liabilities, or in a state- 
 ment of liabilities or other like recognition, the munici- 
 pality by such acts will be held to be estopped to deny its 
 liability on them and will be held to have ratified the 
 former unauthorized acts of its agfents.-^ 
 
 781 ; Butler v. Duiiliaiu, 27 III. 
 474. 
 
 1 Brown v. Bon Homme Co. , 46 
 N. W. R. 173; Mills v. Gleason, 11 
 Wis. 470 ; Freeport v. Marks, 59 
 Pa. St. 253; Marshall Co. v. Schenck, 
 5 Wall. 772. 
 
 It was lield wliere bonds were 
 issued and sold and the proceeds 
 received before a city was incor- 
 porated, and after its incorporation 
 was completed it levied a tax to 
 pay the interest on the bonds that 
 it ratified the issue. Mills v. Glea- 
 son, 11 Wis. 470. 
 
 And in another case where a 
 number of years after a subscrij)- 
 tion was made l)y a municipality, it 
 issued its bonds to pay for tiie sub- 
 sci'iption, the court lield the issuing 
 of the bonds to be a ratification 
 which would warrant a purchaser 
 to assume that all the conditions 
 precedent had been performed. 
 Barrett v. Schuyler Co., 44 Mo. 
 197. 
 
 In Marshall Co. v. Cook, 38 111. 
 45, it appeared the election was 
 ordered by the countj'^ court when 
 it should have been ordered by the 
 board of supervisors. The vote was 
 in the affirmative. The supervisors 
 issued the bonds. It further ap- 
 peared that for a number of years 
 the county raised and paid the 
 
 annual interest of $6,000 on the 
 bonds, and also that the county 
 voted yearly on the stock it re- 
 ceived. 
 
 The court held the bonds in suit 
 void, because of want of jiower, 
 holding that as the election was not 
 called by the proper officers there 
 was in fact no election under the 
 State ; that it was the duty of the 
 purchaser to examine the record, 
 and had he done so he would have 
 ascertained that the election had 
 been called by the wrong bodj''. 
 
 It does not appear wlietlier the 
 bonds contained recitals or not. 
 
 WJiere a town pursuant to a 
 statute issued its bonds to aid a 
 railroad and received in exchange 
 the raihoad bonds, and for several 
 years tlioroafter it treated its own 
 bonds as valid by levjdng a tax to 
 pay the interest thereon and pajing 
 it, and afterwards it sold the rail- 
 road bonds and used the proceeds, 
 it was held tliat, as against a bona 
 fide holder, it couhl not set up 
 irregularities in tlie issue of its own 
 bonds. That it was estopped by its 
 own course of deaUng. Penning- 
 ton V. Park, 50 Vt. 178. 
 
 In Barrett v. County Court of 
 
 Schuyler Co., 44 Mo. 197, on 
 
 mandamus to enforce a tax to pay 
 
 bonds, it apiwared that the county, 
 
 343
 
 §247 
 
 MUNICIPAL BONDS. 
 
 [CH. XVI. 
 
 When the municipality has no authority to issue the 
 bonds, such act being ultra vires, it cannot ratify them 
 by any act/ but in such a case the Legislature may 
 
 by its duly authorized agent, voted 
 upon the stock received for the 
 bonds at the regular meetings of 
 the I'ailroad, from the time of its 
 subscription in 1854 until April, 
 1867. The court said : "If there 
 were defects in the original sub- 
 scription, the subsequent action of 
 the county in representing and vot- 
 ing upon the stock subscribed must 
 be held for the purpose of this suit 
 a waiver of such matters." 
 
 1 Howe V. Keeler, 27 Conn. 538. 
 
 In Thomas v. Lansing, 14 Fed. 
 Rep. 618, 627, the court said : " The 
 present case falls within the prin- 
 ciple adjudged in Marsh v. Fulton 
 Co., 10 Wall. (U. S.) 676, because 
 the power of the town to contract 
 never existed. 
 
 ' ' In such case there can be no pro- 
 tection of the holder as an innocent 
 purchaser, and no ratification of a 
 power which never existed by such 
 alleged acts of ratification as are 
 shown in this case." 
 
 In Kelly v. Town of Milton, 127 
 U. S. 137, where, in a suit to enjoin 
 the collection of bonds illegally is- 
 sued by the town, the suit was dis- 
 continued upon a compromise, and 
 the mayor, in pursuance thereto, 
 signed a consent that a decree be 
 entered declaring the bonds to be 
 valid and binding, the court, by 
 Blatchford, J., lield the bonds to 
 be invalid, notwithstanding the 
 said decree, and said : 
 
 " The act of the mayor in sign- 
 ing that agreement could give no 
 validity to the bonds if they had 
 none at the time the agreement 
 was made. The want of authority 
 to issue them extended to a want 
 of authoritv to declare them valid. 
 344 
 
 The mayor had no such authority. 
 Tlie decree of the court was based 
 solely upon the declaration of the 
 mayor in the agreement that the 
 bonds were valid, and that declara- 
 tion wa^ of no more effect than the 
 declaration of the mayor in the 
 bill in chancery that the bonds 
 were invalid. The adjudication in 
 the decree cannot, under the cir- 
 cumstances, be set up as a judicial 
 determination of the validity of the 
 bonds. Russell v. Place, 94 U. S. 
 606 ; Manhattan L. Ins. Co. v. 
 Broughton, 109 U. S. 121, 125. 
 This was not the case of a submis- 
 sion to the court of a question for 
 its decision on the merits, but it 
 was a consent in advance to a par- 
 ticular decision by a person who 
 had no right to bind the town by a 
 consent, because it gave life to in- 
 valid bonds ; and the authorities of 
 the town had no more jwwer to do 
 so than they had to issue the bonds 
 originally. There is nothing in- 
 c;onsistent with this view in Nash- 
 ville etc. R. Co. V. United States, 
 113 U. S. 261, where it was held 
 that a decree in equity by consent 
 of parties, and ujion a compromise 
 between them, was a bar to a sub- 
 sequent suit upon a claim therein 
 set forth as among the matters 
 compromised and settled, although 
 not in fact litigated in the suit to 
 whicli the decree was rendered. 
 In that case both parties had full 
 power to make the compromise 
 involved." 
 
 See also Mills v. Gleason, 11 Wis. 
 470; Ottawa v. Carey, 108 U. S. 
 110; Davics Co. v. Dickson, 117 
 U. S. 657 : Burril v. Boston, 2 ClifT 
 (U. S.) 590: People v. Flagg, 17
 
 CH. XVI.] ESTOPPEL OTHEK THAN P,Y ItECITALS. § 247 
 
 ratify them or authorize the municipality to do so, if not 
 prohibited by the constitution.^ If so prohibited, the act 
 cannot be ratified.^ 
 
 The unauthorized acts of pubHc officers may be ratified, 
 cither by some express act of tlie corporation or by the 
 subsequent course of deaUng of the corporation relative 
 to the unauthorized act, from which a ratification will be 
 presumed, as, for instance, retaining the proceeds of the 
 act, or acquiescing in it by payment of interest on a part 
 of the principal of the unauthorized debt,^ but a municipal 
 corporation cannot ratify an unauthorized act which it 
 had not the power itself to make, or has not the power at 
 the time of the ratification.* 
 
 An act done in violation of law or public policy cannot 
 be ratified.^ 
 
 In Supervisors v. Schenck, 5 Wall. T72, 781, the court 
 said : 
 
 ''Questions of ratification most frequently arise in re- 
 spect to the acts or omissions of agents, but the general 
 rule is the same in all cases where the act done was one 
 which it was competent for the party attempted to be 
 charged to do. 
 
 "When the principal, upon a full knowledge of all the 
 circumstances of the case, deliberately ratified the acts, 
 doings, or omissions of his agent, ho will be bound 
 thereby as fully to all intents and purposes as if he had 
 originally given him direct authority in the premises to 
 the extent to which such acts, doings, or omissions reach. 
 
 " Eatification is inoperative if the party attempted to be 
 charged was not competent to make the contract in ques- 
 tion when the same was made, nor when the supposed acts 
 of ratification were performed, or if the contract was ille- 
 
 N. Y. 584; Pana v. Lippencott, 2 
 111. App. 400 ; Young v. Board of 
 Education Ind. School Dist. No. 47, 
 (Minn.) 55 N. W. Rep. 1112. 
 
 1 BoUes V. Brumfield, 120 U. S. 
 739; Granada Co. v. Brodgen, 112 
 U. S. 261. 
 
 Iowa, 48 ; Loan Asso. v. Topeka, 
 20 Wall. 655. 
 
 ' Supervisoi's v. Schenck, 5 Wall. 
 » ( «,— < o 1 . 
 
 * Me'cheni on Public Officers, § 
 529. 
 
 ° Highway Com. v. Van Dusan, 
 
 2 McPherson v. Fiske Bros., 43 40 Mich. 439; Green v. Cape May, 
 
 41 N. J. L. 45. 
 
 345
 
 § 248 MUNICIPAL BONDS. [CH. XVI. 
 
 gal, immoral or against public policy. Like an individual, 
 a corporation may ratify the acts of its agents done in the 
 excess of authority, and such ratification may, in many 
 cases, be inferred from acquiescence in those acts, as well 
 as from express adoption. Such ratification may be by 
 express consent, or by acts and conduct of the principal 
 inconsistent with any other hypothesis than that he ap- 
 proved, and intended to adopt what has been done in his 
 name, and it was held, in Peterson v. Mayor of New York, 
 that the principle is as applicable to corj)orations as to 
 individuals, 
 
 ' ' Where the officers of the corporation openly exercised 
 powers affecting the interest of third persons, which pre- 
 supposes a delegated authority for the purpose, and other 
 corporate acts subsequently performed show that the cor- 
 poration must have contemplated the legal existence of 
 such authority, the acts of such officers will be deemed 
 rightful and the delegated authority will be presumed," 
 
 § 248, Principle upon wliich these estoppels rest. — 
 The principle upon which the municipal corporation in 
 the cases of estoppel just discussed, which are those other 
 than by recitals contained in the bonds or by the records 
 of the proceedings relative to the issue of the bonds or 
 other municipal negotiable paper, rests upon the equi- 
 table rule that the corporation, by its acts, the issue of the 
 bonds, or the payment of interest thereon or the princi- 
 pal of some, or the retention of the consideration, as 
 where it received stock and retains it, and other like cases, 
 assures all innocent holders that the conditions precedent 
 upon which the bonds were to issue have happened and 
 been performed, and that the bonds or other paper were 
 issued after the municipality was satisfied of the perform- 
 ance thereof, or that the state of facts upon which the 
 paper was to be issued existed when it was issued. The 
 courts will not i^ermit the municipal corporation after 
 these continued affirmative acts to say, in a suit brought 
 by a bona fide holder to enforce the payment of the prin- 
 cipal or interest of such paper, that the paper was, in fact, 
 irregularly issued, unless it had no power to issue the 
 paper. If it had the power to issue the paper, then such 
 346
 
 on. XVI.] ESTOPPEL OTHER THAN BY RECITALS. § 249 
 
 acts work an estoppel, and irregularities in the exercise 
 of the power cannot be set up as a defence against the 
 bona fide holder of the paper. 
 
 The taxpayer is also estopped in such cases to question 
 the paper, the acts of the officers of the corporation being 
 deemed his acts, they being his agents. If he acts at all, 
 he must either restrain the issue or bring a suit to en- 
 force the surrender of the issue before the paper reaches 
 the hands of a bona fide holder, whom the corporation by 
 payment of interest or principal has induced to purchase. 
 If he sits still in the meantime, his laches and acquies- 
 cence will be deemed to work an estoppel against him, 
 
 § 249. General Rule— Estoppel by judgment — Res 
 adjudicata. — The general rule of estoppel by former 
 judgment is that a judgment rendered by a court of 
 competent jurisdiction, on the merits, is a bar to any 
 future suit between the same parties or their privies, 
 upon the same cause of action, so long as it remains un- 
 reversed,^ and the defendant may plead that the plain- 
 tiff recovered a judgment against him upon the very 
 same cause of action upon which he now sues ; or that in 
 the former suit on the same cause of action, he, the 
 defendant, then recovered judgment, and the plaintiff 
 may show that in a former suit involving the same 
 merits, he recovered a judgment against the defendant, 
 in which case the defendant is estopped from setting up 
 in the new suit any defence he made or might liave made 
 in the first suit. 
 
 Applying the doctrine of estoppel by former judgment 
 to actions upon bonds and coupons, it has been held that 
 where judgment for the defendant has been given on 
 demurrer in an action on the coupons of bonds, on the 
 ground that the cause of action was barnnl by the statute 
 of limitations, such judgment is res adjudicata between 
 the parties or their privies in a second suit on tli(^ bonds, 
 in which judgment is also demanded for the amount of 
 the coupons.^ 
 
 It has been held that where the holder of a number of 
 
 1 Black on Judgments, § 504. I ^ Edwards v. Bates Co., 5.5 Fed. 
 
 I Rep. 430. 
 
 347
 
 ^ 250 MUNICIPAL BONDS. [CH. XVI. 
 
 bonds of the same issue brings suit upon a part of them 
 and a judgment is rendered against him, that in a sub- 
 sequent suit upon the remainder the former judgment 
 may be set up as a bar.^ 
 
 In Beloit v. Morgan, 1 Wall. 611), which is a case in 
 point, Mr. Justice Swayne said : 
 
 " The parties were identical and the title involved the 
 same. All the objections taken in this case might have 
 been taken in that. . . . The court had full jurisdiction 
 over the parties and the subject. 
 
 "Under such circumstances a judgment is conclusive 
 not only as to the res of that case, but as to all further 
 litigation between the same parties touching the same 
 subject matter, though the res itself may be different." 
 
 § 250. Doctrine modified — Cases. — The Supreme Court 
 of the United States, however, in Cromwell v. Sac Co., OG 
 U. S. 51, has limited this broad doctrine, and has held 
 that the former judgment must have been rendered, not 
 only upon the bonds of the same issue but uj^on tlie same 
 points as are raised in the second action. In the first 
 action,^ on a part of the bonds, the bonds were held 
 void for fraud and illegality, the plaintiff not showing 
 himself to be a hona fide holder. In the present suit on 
 other bonds of the same issue the plaintiff offered to 
 show that he was a bona fide holder for value of the 
 bonds sued on. The court below refused to permit such 
 evidence and held the former judgment, which was 
 pleaded, conclusive. 
 
 The Supreme Court held that such evidence should 
 have been admitted, and set aside the decision of the 
 lower court, and held that when the subsequent suit is 
 between the same parties, but upon a different claim, the 
 judgment in the first suit operates only as an estoppel 
 when the points in issue or controverted are the same. 
 
 The United States Supreme Court, in the case of Nesbit 
 V. Kiverside Independent District, 144 U. S. 610, followed 
 the modified rule laid down in Cromwell v. Sac Co., and 
 refused to follow tlie strict doctrine of Beloit v. Morgan. 
 
 iDaly V. Brown, 4 N. Y. 71:1 2 Smith v. Sac Co., 11 Wall. 139. 
 Babcock v. Comp., 13 Ohio St. 11. I 
 348
 
 CH. XVI.] ESTOPPEL OTHER THAN BY RECITALS. § 251 
 
 111 this case the plaintiff in error was the holder of fivo 
 bonds made by the defendant. The bonds exceeded the 
 constitutional limitation of debt. In a former suit, 
 brought by the plaintiff in the United States Circuit 
 Court at Des Moines, Iowa, on coupons detached from 
 two of the bonds, judgment was rendered in favor of the 
 plaintiff, the court resting its judgment upon the re- 
 citals in the bonds holding that they estopped the munic- 
 ipality from showing that the issue of the bonds was in 
 excess of the limitation. The Supreme Court held that 
 each matured coupon upon a negotiable bond is a separ- 
 able promise, distinct from the promise to pay the bonds 
 or other coupons, and gives rise to a separate cause of 
 action, and that when the second suit is upon other 
 coupons, or on the bonds themselves, though between the 
 same parties, the judgment in the former suit operates 
 as an estoppel, only as to the point or question actualli/ 
 litigated and determined, and not as to other matters 
 which might have been litigated and determined. 
 
 The court also held that the defendant was not estopped 
 by the former judgment from showing in the present 
 case that in addition to the facts presented in the former 
 suit, the fact that the holder of the bonds had notice of 
 their invalidity and the further fact that the bonds them- 
 selves created an over-issue. 
 
 § 251. Cases. — In the case of Bissel v. Spring Valley 
 Township, Vli U. S. 225, the court laid down the doctrine 
 that although the claim in the subsequent suit is a differ- 
 ent one, yet, if it is between the same parties, the former 
 judgment will conclude the parties in the subsequent suit 
 as to the matter litigated and determined in the former 
 suit. 
 
 In this case, the plaintiff in error was also the 
 plaintiff in a former suit to recover upon coupons de- 
 tached from seventy-three bonds of the denominations of 
 $1,000 each. The defence in the suit on the coupons was 
 that the bonds had not been signed by the officer of the 
 municipality or by any other person for bini. 
 
 The facts were presented by demurrer. The court 
 found for the municipality. The subsequent suit, the one
 
 § 252 MUNICIPAL BONDS. [CII. XVT. 
 
 above referred to, was brought upon other coupons de- 
 tached from the same bonds and the defence was 7~es 
 adjudicata, and the record of the former action was in- 
 troduced in evidence. 
 
 The plaintiff offered to prove the due execution of tlie 
 bonds and that he was a bona fide holder without notice. 
 The court refused to permit such evidence to be offered 
 and gave judgment for the municipality. 
 
 Justice Field, delivering the opinion of the court, said : 
 
 " In Cromwell v. Sac Co., 94 U. S. 351, we drew a dis- 
 tinction between the effect of a judgment as a bar or 
 estoppel against the prosecution of a second action be- 
 tween the same parties upon a different claim or demand. 
 In the latter case, which is the one before us, we held, 
 following numerous decisions to that effect, that the 
 judgment in the prior action operates as an estoppel only 
 as to those matters in issue or points controverted upon 
 the determination of which the finding or verdict was 
 rendered. The inquiry in such case, therefore, must 
 always be as to the point or question actually litigated 
 and determined in the original action, for only upon such 
 matters is the judgment conclusive in another action 
 between the parties upon a different demand." 
 
 The court distinguished this case from Cromwell v. 
 Sac Co. 
 
 The Court of Chancery, in the State of New Jersey, in a 
 suit brought by a municipal corporation to compel the 
 surrender for cancellation of its bonds by the executrix 
 of a deceased testator, who had in his lifetime brought 
 suit upon some of the matured coupons of the same in 
 the Supreme Court, which suit was decided against him, 
 it appearing in the suit that the bonds had been lost by 
 a former holder and the defendant, the testator, was un- 
 able to prove himself a bona fide holder, held the former 
 judgment, which was pleaded, to be sufficient evidence to 
 compel the surrender of the bonds, especially as no proof 
 was offered by the executrix to show that the testator 
 had been a bona fide holder of the bonds. ^ 
 
 § 252. Doctrine of estoppel applies to iion-iiegotial)le 
 
 1 Mavoretc. of Patersonv. Baker, 26 Atl. Rep. 324. 
 350
 
 CH. XVT.] ESTOPPEL OTHER THAN BY RECITALS. § 253 
 
 l)aper.— The doctrine of estoppel by recitals contained in 
 municipal paper, or by the judgment and determination 
 of the municipal officers or body charged with the duty 
 of issuing the paper to be found in the record of the pro- 
 ceedings of such officers or body, or any other mode of 
 estoppel, applies as well to non-negotiable as negotiable 
 paper, although in most of the cases where tlie doctrine 
 of estoppel has been so applied the paper was negotiable, 
 yet negotiability has no necessary connection with the 
 doctrine, as the principle of estojDpel by the acts of a 
 corporation or its autliorized agents will apply as fully to 
 a promise to i:)ay, non-negotiable in form, as to one that 
 is negotiable. It is the doing of the act or the making of 
 the statement or the determination of the question which 
 estops the corporation from disputing or denying the 
 performance of the act, or of showing that the statement 
 is false, or that the prior determination of the question 
 was a mistaken one to the prejudice of a person who, 
 without knowledge of the true circumstances, has been 
 so led to part with his money and receive in exchange for 
 it the municipal paper whether negotiable or not.^ 
 
 § 253. When bonds are void for non-performance of 
 conditions precedent. — When the statute authorizing 
 the issue of the bonds declares in express terms that 
 unless the conditions precedent are performed the bonds 
 shall not be issued, or shall not be binding obligations, 
 such bonds, if issued, and the conditions necessary to be 
 performed prior to their issue are not in fact performed, 
 are void in the hands of even a bona jlde holder notwith- 
 standing any recitals.^ 
 
 Bonds issued under such statutes are not valid and 
 l)inding because of the express provisions of tlie statute, 
 of which, of course, all persons are bound to take notice, 
 and until the conditions are performed the nmnicipality 
 has not the power to issue tlie bonds, and if issued with- 
 out the performance of the conditions imposed by the 
 statute there is a want of power to issue, and as a want 
 
 1 Burroughs on Pub. Securities, 
 327. 
 
 2 Jeffries v. Lawrence, 43 Iowa, 
 
 498. Some State constitutions liave 
 same provLsiou. 
 
 351
 
 § 254 MtrNicirAL bonds. [ch. xvi. 
 
 of power is a good defence against a bona fide holder, 
 notwithstanding any recitals in the bonds, such bonds are 
 void. 
 
 § 254. Same — Cases. — In case of Anthony v. Jasper 
 Co., 101 U.S. G^yd, where the statute under which the 
 bonds in suit were issued required that before the bonds 
 should obtain validity or be negotiated they should be 
 registered by the State auditor, the bonds were not so 
 registered and were held to be void for such failure. 
 
 Chief Justice Waitesaid in part : " Dealers in munici- 
 pal bonds are charged with notice of the laws of the State 
 granting authority to make the bonds they find on the 
 market. 
 
 ' ' This we have always held. If the power exists in the 
 municipality the bona fide holder is protected against 
 mere irregularities in the manner of its execution, but 
 if there is a want of power, no legal liability can be cre- 
 ated. When the bonds in question were put out the law 
 required that, to be valid, they must be certified to by 
 the auditor ; in other words, the officer was to certify 
 them before their execution was complete, so as to bind 
 the public for their payment." 
 
 The case of Town of^Eagle v. Kohn, 84 111. 292, is an- 
 other case further illustrating the point. 
 
 A suit against tlie town of Eagle was brought by an 
 innocent holder for value to recover on coiipons cut from 
 bonds issued by the town to a railroad company, Dec. 
 1st, 1870, in payment for stock in a railroad pursuant to 
 a vote of the legal voters of the town. 
 
 In that vote certain conditions as to time had been 
 prescribed upon which the bonds should be issued. Those 
 conditions had not been complied with. 
 
 The question arose in the case whether the declaration 
 of the statute that the bonds should not be valid and 
 binding until such conditions precedent should have been 
 complied with, was to be confined in its operation to the 
 railroad company to which the bonds should have been 
 issued, or whether it extended to innocent holders for 
 value. The court hold that although the statute did not 
 declare that the bonds should be void, its declaration 
 352
 
 CH. XVI.] ESTOPPEL OTHER THAN BY RECITALS. § 255 
 
 that they should not he valid and binding until the con- 
 ditions precedent should have been complied with, was an 
 imperative and peremptory declaration that the bonds 
 should not be valid and binding until the conditions 
 named should have been complied with, even in the hands 
 of innocent holders without notice. 
 
 This latter case was followed in German Savings Bank 
 V. Franklin, 128 U. S. 526, in a suit to enforce bonds 
 issued under the same statute. 
 
 It has been held, however, that the statutory conditions 
 may be complied with after the issue of the bonds in 
 cases of this kind, and that such compliance will render 
 the bonds valid. ^ 
 
 § 255. Statute or constitution renders the bonds 
 void. — The non-performance of conditions precedent, 
 which render the bonds invalid in the hands of all per- 
 sons referred to above, has such force and effect by 
 reason of the statute under which they are issued, 
 although some general law relating to the issue of 
 bonds, or the constitution of the State, may in like man- 
 ner render bonds invalid unless the conditions precedent 
 are performed. 
 
 In this class of municipal paper the doctrine of estoppel 
 has no application, because the provision that such jDaper 
 shall be invalid unless the conditions are performed, 
 affects the very power of the corporation to issue them, 
 and where there is want of power to issue bonds or 
 other paper they are void in all hands, as elsewhere 
 shown. ^ 
 
 § 256. Curative acts — When sucli acts may bo 
 passed. — The aid of the Legislature is very frequently 
 invoked to cure, by a subsequent law, some irregularity 
 or omission in the precedent conditions of the issue of 
 bonds, or in their execution, and to make them valid 
 ol)ligations when they otherwise would be invalid, and 
 all such curative acts are valid unless ])rohil)itod by the 
 constitution.^ It has been so often held, that there is 
 
 1 Town of Eagle v. Kohn. 84 III. 
 292 ; Thomas v. Morgan. 59 111. 479. 
 
 2 See subject Want of Power. 
 
 ■''OteoCo. V. Baldwin. Ill U. S. 
 1: Granada Co. v. Brogden. 112 
 U. S. 2G1 : Bolles v. Brunififld. 120 
 
 23 353
 
 §257 
 
 MUNICIPAL BONDS. 
 
 [CH. XVI. 
 
 now no question about it, that the Legislature may pass 
 acts to validate bonds and other evidence of debt issued 
 by municipalities, which were not legally binding upon 
 them because of some defect in the execution of the power 
 or failure to follow or perform some of the conditions 
 precedent, unless the defect be constitutional.^ 
 
 Cooley, in his admirable work on " Constitutional 
 Limitations," sec. 371, has expressed the law on this sub- 
 ject in the following concise language : 
 
 " The rule applicable to cases of this description is sub- 
 stantially the following : 
 
 *' If the thing wanting, or which failed to be done, and 
 which constitutes the defect in the proceedings, is some- 
 thing the necessity for which the Legislature might have 
 dispensed with by prior statute, then it is not beyond the 
 power of the Legislature to dispense with it by subse- 
 quent statute. And if the irregularity consists in doing 
 some act, or in the mode or manner of doing some act, 
 which the Legislature might make immaterial by prior 
 law, it is equally competent to make the same immaterial 
 by a subsequent law. " 
 
 § 257. Same — Constitutional defect cannot be so 
 cured. — Laws passed to remedy the defective execution 
 of powers, when intended to carry out the manifest in- 
 tention of the parties, and not affecting vested rights, 
 are not unconstitutional though retroactive.^ 
 
 The act validated must be such as the Legislature 
 might previously have authorized. It cannot make good 
 by a retrospective act a former unconstitutional act.^ 
 
 U. S. 759 ; Kunkle v. Franklin, 13 
 Minn. 127 : Keithsburgv. Frick, 34 
 111. 405 ; Dows v. Elmwood, 34 Fed. 
 Rep. 114 ; Nolan Co. v. State, 17 S. 
 W. R. 823; Quincy v. Cook, 107 U. S. 
 549 ; Read v. Plattsmonth, lb. 568 ; 
 Ritchie v. Franklin Co., 32 Wall. 
 67 ; Marshall v. Schenck, 5 Wall. 
 770 ; Mattingly v. Dist. of Colum- 
 bia, 97 U. S. 687 ; Kenosha v. Lam- 
 son, 9 Wall. 477 ; Winn v. Macon, 
 21 Ga. 275 ; Atchison etc. R. Co, v. 
 Jefferson Co., 17 Kan. 29 : State v. 
 354 
 
 Saline Co. Ct., 48 Mo. 390; State 
 V. Newark, 3 Dutch. (N. J.) 187 ; 
 Black's Constitutional Law, p. 545 ; 
 Dill on I\Iun. Corp. (4th ed.) §§ 
 77-70. 
 
 1 Bass V. Columbus, 20 Ga. 484 ; 
 McMillin v. Co. Judge, G Iowa, 390 ; 
 Deyo V. Oteo Co., 37 Fed. Rep. 246. 
 
 2 State V. Newark, 27 N. J. L, 
 185. 
 
 3 Kimball v. Rosenthal, (Sup. Ct. 
 Wis.) 5 Cent. Law Journal 372. 
 See, however, § 260 and note.
 
 CH. XVI.] ESTOPPEL OTHER THAN BY PECITALS. § 258 
 
 111 case of irregularities, the Legislature may generally 
 validate bonds which would be otherwise invalid,^ if the 
 Legislature could have ordered or authorized the issue of 
 the bonds in the first place,^ and no constitutional pro- 
 hibition has intervened.^ And it has been held that the 
 Legislature may ratify the issue of bonds for which there 
 was absolutely no authority for their issue,* provided, of 
 course, there were no constitutional objections. 
 
 Laws of this character are favored by the courts, so 
 long as no rights of third persons are unjustly affected.^ 
 
 The mistakes or irregularities to be cured need not be 
 cured by the direct act of the Legislature, but the act 
 may be so drawn as to leave it optional with the legis- 
 lative body or the voters of the municipality to determine 
 whether the mistake or irregularity shall be cured.® 
 
 The Federal courts have held bonds to be valid when 
 ratified by an act of the Legislature, not prohibited by 
 the constitution, though the Supreme Court of the State, 
 after the act was passed and the bonds issued, decided 
 adverse to the doctrine.'' 
 
 § 258. Cases illustrating the doctrine. — In the case 
 of Town of Duanesburgh v. Jenkins, Com'r, 57 N. Y. 
 177, it appeared that a commissioner, acting for the 
 town, was authorized to execute and deliver the bonds 
 and subscribe for stock upon certain consents of the 
 taxpayers being obtained and proofs filed. The proofs 
 were defective, but the commissioner issued the bonds. 
 Afterwards an act was passed, declaring that wh(>re 
 bonds had been issued by the commissioner of a town, 
 and the railroad shall have been constructed through the 
 town, the bonds should be valid and binding upon the 
 town, without reference to the sufficiency of the proof, 
 
 1 Granada Co. v. Brodgen, 112 ** St. Joseph v. Rogors. 10 "Wall. 
 U. S. 261. GG6. 
 
 2 Duke V. Williamsburg Co., 21 " Bissell v. JefTersonville, 24 How. 
 S. C. 414; Quincy v. Cook, 107 287-295. 
 
 U. S. 549. I ' Dows V. Eliinvood, 34 Fed. Rep. 
 
 8Jonesboro v. Cairo etc. R. R. 114; BoUes v. Brimfield, 120 U. S. 
 Co., 110 U. S. 192. 759. 
 
 * Kenosha v. Lawson. 9 Wall. 77 ; 
 Loe Co. V. Rodgers. 7 lb. 181. 
 
 35r>
 
 § 258 MUNICIPAL BONDS. [CH. XVI. 
 
 and the amount should be levied, raised and paid as pro- 
 vided in the original act. The court held the Legislature 
 could release the prior condition, and the bonds were 
 binding upon the town. 
 
 The court said : "The measure of consent on the part 
 of the town and its taxpayers or electors was fixed at the 
 will of the Legislature originally, . . . and if it origin- 
 ally rested with the Legislature to fix the terms on which 
 the town might act, the same power will suffice to remit 
 a part of the conditions imposed, or to heal any defects 
 which might have occurred in the performance by the 
 town of those conditions." 
 
 In the case of Oteo County v. Baldwin, 111 U. S. 1, 
 the court said : 
 
 " As the Legislature had power to authorize the issue 
 of bonds without any precedent action of the voters of 
 the county, it could validate the issue of the bonds by 
 curing and legalizing defects in respect to voting. The 
 bonds were assigned by the railroad company, and came 
 to the plaintiff after the acts of 18C9 were passed, and he 
 became a bona fide holder of them on the faith of those 
 acts. The doctrine is well settled in this court, that the 
 Legislature of a State, unless restrained by its organic 
 law, has the right to authorize the municipal corporation 
 to issue bonds in aid of a railroad, and to levy a tax to 
 pay the bonds and interest on them, with or without 
 a popular vote ; and to cure, by a retrospective act, 
 irregularities in the exercise of the power conferred. 
 Thompson v. Lee County, 3 Wall. 320 ; Campbell v. 
 City of Kenosha, lb. 194." 
 
 The United States Supreme Court has held that a 
 Legislature may pass a curative act, validating bonds 
 issued by a municipal corporation, where the defect con- 
 sisted in the fact that the submission of the question as 
 to whether or not they should be issued was under the 
 wrong act.^ Also where the vote was taken upon the 
 wrong day.^ But where the retroactive act attempts to 
 
 1 Campbell v. Kenosha, 5 Wall. I - St. Joseph v. Rogers, 16 Wall. 
 194. 1 663. 
 
 356
 
 CH. XVI.] ESTOPPEL OTHER THAN BY EECITALS, § 259 
 
 change the character of the bonds in form and substance, 
 or to impose new burdens, or alters the original contract, 
 it has been held to be unconstitutional, because it impairs 
 the obligation of the original contract.-^ 
 
 § 259. What may be cured. — If the contract is one 
 which the Legislature might originally have authorized, 
 the case falls within the principle above laid down, and 
 the right of the Legislature to confirm it must be recog- 
 nized ; but the Legislature cannot compel a municipality, 
 by a retrospective act, to issue bonds or cure a defective 
 issue for purposes purely local without the consent of the 
 municipality.^ 
 
 When the securities have been issued by the wrong 
 officer or agent, the Legislature has the power to confer 
 upon the officer or agent who was to issue them the power 
 to ratify them.^ 
 
 And where bonds or other negotiable paper are issued 
 TDearing a greater rate of interest than allowed by law, 
 or are voidable under a statute, because sold for less than 
 par, the Legislature, by a subsequent act, can cure all 
 such statutory defects and purge such contracts of 
 usury.* 
 
 As before stated, the defects sought to be validated by 
 the subsequent legislation must be such that the Legis- 
 lature in the first place could have waived, and the object 
 of the act must not be such as is prohibited by the con- 
 stitution. 
 
 It has been hold that an act legalizing void bonds, void 
 because the city when it issued them did not have the 
 power so to do, was not a special act conferring corporate 
 powers, contrary to the constitution of Nebraska ; that 
 such an act, though special in form, did not confer 
 corporate powers ; that the statute operated upon the 
 transaction itself, which had already previously boon 
 
 ^ Commissioners of Sliawnee Co. 
 V. Carter, 3 Kan. 134 ; New Orleans 
 V. Clark, 95 U. S. G44 ; Bissell v. 
 Jeffersonville, 24 How. 287-295. 
 
 2 Hasbrook v. IMilwaukec, 1 AVis. 
 
 8 Barton Co. v. Walker, 47 Mo. 
 202; Bissell v. JefTersonville, 24 
 How. 295. 
 
 * Herman v. Goodjear, 56 Conn. 
 210 ; Bain v. Savage, 76 Va. 904. 
 
 367
 
 § 260 
 
 MUNICIPAL BONDS. 
 
 [CH. XVI. 
 
 consummated ; tliat it operated upon the rights of the 
 parties as determined by the equity of their circum- 
 stances.-^ 
 
 It has been held in Illinois that the Legislature could 
 not validate bonds which were void because the election 
 was called and ordered by the wrong officers.^ The 
 United States courts have, however, as elsewhere shown, 
 held bonds to be valid in the hands of bona fide holders, 
 although the election was called by the wrong officers.^ 
 
 The Legislature cannot by a subsequent act make valid 
 bonds which were issued without the consent of the peoj^le, 
 if such consent is a prerequisite of the constitution,* as, 
 for instance, where the constitution required that before 
 bonds could be donated to a railroad company an affirma- 
 tive vote of the i:)eople must be had, and the bonds are 
 donated without such vote, a subsequent act cannot be 
 passed which will validate such bonds. ^ 
 
 § 260. When an unconstitutional act may be cured. — 
 If the act under which the bonds or other municipal 
 paper are issued is unconstitutional only as to the form 
 in which it is drafted, arid the object of the act is not 
 prohibited by the constitution, the bonds or other paper 
 may be validated by a subsequent act so drafted as to 
 avoid the unconstitutional form of the prior act, as if, 
 for instance, the Legislature by a special act, and for 
 that reason unconstitutional, because the constitution 
 required all acts relating to the internal affairs of munic- 
 ipalities to be general, empowered a municipality to 
 make some local improvement, such as the construction 
 
 1 Eead v. Plattsmouth, 101 
 568. 
 
 U. S. 
 
 2Gaddis v 
 119. 
 
 3 See § 68. 
 
 * Hoiten V 
 71 N. Y. 513 
 
 Richard Co.. 92 111. 
 
 Town of Thompson, 
 County of Tipton v 
 Loco Works, 103 U. S. 522. 
 
 6 Choisser v. People, 140 III. 21 ; 
 Post V. Pulaski Co., 49 Fed. Rep. 
 628. In the former case the propo- 
 sition submitted to the people was 
 to subscribe to stock of a railroad, 
 358 
 
 and not to donate bonds. Of the 
 amendatory act, the court said, 
 " In the present case the amenda- 
 tory act of 1SG9, if effectual, at all, 
 can be held to operate by way 
 of validating a contract for a dona- 
 tion, which by reason of want of 
 power, as well as the absence of 
 either an intention or opportunity 
 on the part of the legal voters of 
 the county to give their consent 
 was ultra vires and void."
 
 CH. XVI.] ESTOPPEL OTHER THAN BY RECITALS. 
 
 § 260 
 
 of a sewer or the erection of a public building, and to 
 issue bonds in order to pay for the same, the object of 
 the act being within the power of the Legislature and 
 the constitutional objection being only as to the form of 
 the enabling act, a subsequent act could be passed, gen- 
 eral in form, which would validate the bonds. ^ 
 
 The curative act should be concise and to the point, 
 and should be broad enough to cover the mistake sought 
 to be cured, in plain and clear language. 
 
 And the intention to validate the bonds must appear 
 from the act itself. 
 
 Where a municipal corporation incurs a legal liability 
 under an unconstitutional statute, the curative statute 
 should be so drawn as to impose the debt upon the cor- 
 poration, and not attempt to validate the original un- 
 constitutional statute. - 
 
 1 State V. Whiteside, 9 N. E. R. 
 661 ; Gi-annis v. Cherokee Tp., 47 
 Fed. Rep. 427; State v. City of 
 ^incinnati, 40 N. E. R. 508. 
 
 In this case the first section of 
 the original statute was unconsti- 
 tutional, because special in its oper- 
 ation, the word "present" render- 
 ing it so. Tlie first section was 
 amended with the word "present" 
 omitted. The court held that the 
 whole statute, after amendment, 
 liad the same effect as if re-enacted 
 with the amendment, and that 
 hence an unconstitutional statute 
 may be enacted into a constitu- 
 tional one, so far as its futui'e 
 operation is concerned by removing 
 its objectional provisions or sup- 
 plying others to conform it to the 
 rcquiremeilts of tlie constitution. 
 
 Wiiere tiie voters before they 
 have authority to vote to issue 
 
 bonds, do so, and the question is de- 
 cided in the affirmative, the statute 
 or constitution requiring a vote 
 before the issue, the Legislature by 
 a proper act can ratify the election 
 and authorize the issue in tlie same 
 manner as if the act had been 
 authorized by the Legislature in 
 the first instance. Dowes v. Ehn- 
 wood, 34 Fed. Rep. 114, US ; BciUes 
 V. Brimficld, 120 U. S. 7.19. Bonds 
 issued under an unconstitutional 
 act are proper subjects of com- 
 pi'oraise, if their issue was not for 
 an unconstitutional purpose, and 
 new bonds issued in their stead 
 ixnder a constitutional act are vahd. 
 State V. Hannibal & St. J. R. R. 
 Co., (Mo.) 11 S. W. R. 746. 
 
 - State ex rel. Dickinson v. Nccly, 
 .SO S. C. 587 ; 9 S. E. R. 664 : Gran- 
 nis v. Cherokee Tp. of York Co., 
 47 Fed. Rep. 427. 
 
 359.
 
 CHAPTER XVII. 
 
 RAILROAD AID BONDS. 
 
 Section. 
 261- 
 
 262- 
 263- 
 
 264- 
 
 26o- 
 266- 
 
 267- 
 
 268—: 
 
 269- 
 270- 
 
 271—' 
 
 -Their purpose — Tlie consti- 
 tution of many of the 
 States now prohibit their 
 aid. 
 
 -Summary of state constitu- 
 tions respecting such aid. 
 
 Power to issue bonds must 
 be express — When im- 
 plied — When not iiuplied. 
 
 •Early cases in Federal courts 
 authorized issue when the 
 power was not express. 
 
 Early cases overrviled — 
 Power must be express. 
 
 ■Further effect where power 
 is express — Power not ex- 
 hausted by one subscrip- 
 tion — Aid may be ex- 
 tended for depots, ma- 
 chine shops and the like — 
 Power to endorse or guar- 
 antee must be express. 
 
 A railroad is a public pur- 
 pose — But not in Michigan 
 — Municipal corporation 
 cannot be compelled to 
 aid. 
 
 Power, where to be found — 
 Conditions are usually im- 
 posed. 
 
 Road to be aided — Must be 
 certain. 
 
 AVhat aid may be given — 
 When the maximum 
 amount of aid may be ex- 
 tended to more than one 
 road — Corporate existence 
 of road cannot be at- 
 tacked. 
 
 Conditions — Mav be im- 
 
 360 
 
 Section. 
 
 posed by the constitution, 
 statute, or charter of the 
 municipality or of the 
 road — Constitutional, can- 
 not be waived — Power to 
 determine cannot be dele- 
 gated. 
 
 272 — Time of completion of the 
 road — If not completed 
 within, bonds need not be 
 delivered, may be re- 
 strained — Wiien time the 
 essence of tlie contract. 
 
 273 — Completion of the road — 
 When a condition, bonds 
 cannot lawfully be issued 
 unless complied with. 
 
 274 — Location of the road and 
 termini — Must be located 
 where shown on map — 
 Wliat location is suffic- 
 ient. 
 
 275 — Waiver of conditions — 
 When imposed bj- vote of 
 the people cannot be. 
 
 276 — Wlien the conditions may 
 be waived — Condition tliat 
 road run through the 
 municipality cannot be 
 waived. 
 
 277 — S u b s c r i ption — Ordinarily 
 subscription must be made 
 before municipality bound 
 — Effect of constitutional 
 amendment before sub- 
 scription made — Power to 
 subscribe may be cur- 
 tailed or repealed. 
 
 278 — When subscription is com- 
 plete — Manual signing not
 
 CH. 
 
 XVII.] 
 
 RAILROAD AID BONDS. 
 
 §261 
 
 Section. 
 
 necessar y — Completed 
 subscription a contract. 
 
 279 — Consolidation — When con- 
 solidated roads may be 
 aided. 
 
 280 — Difference between sub- 
 scription and donation — 
 Bonds donated void in 
 hands of company or 
 holder with nf)tice. 
 
 281 — Sucli bonds valid in hands 
 of bona fide holders. 
 
 282 — Difference between cx- 
 
 Section. 
 
 changing bonds for stock 
 and borrowing on bonds — 
 Bonds exchanged good in 
 hands of bona fide holder 
 — Not in New York. 
 283— Rights of bona fide lioldei*s 
 of municipal R. R. aid 
 bonds. There must be an 
 estoi)pel of some kind to 
 cure irregular issue — Doc- 
 trine in New York and 
 New Jersey. 
 
 § 2G1. llailroad aid bonds— Tbeir purpose.— These 
 
 bonds are issued to aid in the construction of railroads by- 
 municipal corporations in order to develop the resources 
 of the municipality and the surrounding country in 
 opening markets and increasing trade and facilitating 
 travel to and from the municipality giving the aid and 
 other cities and towns. 
 
 There can be no question but that the aid thus extended 
 has immeasuraljly helped to develop the general business 
 and resources of the country, and many railroads have 
 been thus built that would not otherwise have been. 
 
 But like any other unlimited power it became abused 
 in time, and schemers finding that all that was necessary 
 to obtain such aid was to have passed a legislative act 
 authorizing a municipal corporation to issue its bonds to 
 help build a proposed road, or to assist one already con- 
 structed on the verge of bankruptcy, made it a practice 
 to have such laws enacted and then induce the officers of 
 a municii)al corporation, either by misrepresentation or 
 actual briber}', to issue bonds ff)r the construction of 
 railroads, which in some cases were never constructed, 
 or if constructed, then so poorly or througli such an im- 
 poverished country that the roads were forced to susjx'ud 
 operations, and pass into other hands, while the project- 
 ors operatcMl in their stock. 
 
 By these and other fi'audulent m(\-uis, or by reason of 
 
 lending their aid to unnecessary roads, the municipal 
 
 debt became so alarminglv large that the people of many 
 
 361
 
 § 262 MUNICIPAL r.ONDS. [CH. XVII. 
 
 of the States found it necessary, in order to protect them- 
 selves from their own lawmakers, to so amend their 
 respective State constitutions as to either prohibit entirely 
 any such aid or to surround the same with such limita- 
 tions upon the legislative power, usually the prior con- 
 sent of the taxpayers of the municipality, as would tend 
 to check, if not entirely prohibit, the giving of such aid. 
 
 § 2G2, Summary of State constitutions respecting 
 such aid. — The following is a summary of the constitu- 
 tions of the States respecting the power of the various 
 States to aid raih'oads, as found in their respective present 
 constitutions, showing those States that are entirely pro- 
 hibited to render such aid ; those that, while authorizing 
 aid, the aid is limited, and those where their constitutions 
 do not prohibit or limit such powers. 
 
 Alabama : Neither the State or any subdivision can aid 
 a railroad. 
 
 Arkansas : Prohibits the State or any subdivision to 
 loan its credit for any purpose whatsoever. 
 
 California (art. 4, sec. 31) : Prohibits the Legislature 
 from passing laws which permit the State or any sub- 
 division of it from loaning its credit or aiding any j^er- 
 son, association or corporation, municipal or otherwise, or 
 from subscribing to stock or becoming a stockholder in 
 any corporation. 
 
 Colorado (art. 11, sec, 1 and 2) : Prohibits the State or 
 any subdivision to lend or pledge its credit in any man- 
 ner or in aid of any person, company or corporation or 
 to make a donation to, or to subscribe to the stock of, a 
 corporation or company. 
 
 Connecticut : No county, city, town, borough or other 
 municipality shall ever subscribe to the capital stock of 
 any railroad corporation, or purchase its bonds, or make 
 donations to, or loan its credit, directly or indirectly, in 
 aid of any such corporation. Existing bonds or debts 
 l^rior to the adoption of the constitutional inhibition not 
 to be affected, and additional aid may be rendered to pro- 
 tect former aid given. 
 
 Delaware : No limitations. 
 
 Florida : The State is prohibited from granting aid to 
 362
 
 CH. XVII.] RAILROAD AID I?ONDS. § 2G2 
 
 railroad companies, and the Legislature from authorizing 
 any county, city, borough, township or incorporated dis- 
 trict to become a stockholder in, or aid or loan its credit 
 to, any company or individual (art. 3, sec. T). 
 
 Georgia : Same as Florida (art. 7, sees. 5 and C), 
 
 Illinois : Neither the State nor any county, city, town, 
 township or other municipality can subscribe to the stock 
 of, or issue bonds to pay for stock, of a railroad company 
 or private corporation, or aid such company or corpora- 
 tion. The prohibition not to affect subscriptions which 
 had been authorized and voted for under existing laws 
 (art. 4, sec. 20 ; art. 8, sec. 3 and amendment). 
 
 Indiana : Counties only are prohibited from subscrib- 
 ing for stock of and issuing bonds to pay therefor, or 
 lending their credit to railroad companies (art. 10, sec. O). 
 
 Iowa : The State cannot loan its credit in aid of any 
 individual, association or corporation, or become a stock- 
 holder in any association or corporation, or become 
 responsible for debts of an association or corporation 
 unless incurred in time of war for the benefit of the 
 State (art. 7, sec. 1 ; art. 8, sec. 3). 
 
 Under a statute of 1S80, sees. 554—555, subscriptions by 
 a municipal corporation to a railroad company's capital 
 stock thereafter made, shall be null and void, and no 
 assignment of them shall give them validity. This, of 
 course, could be repealed, and then aid could be given, as 
 aid to railroad companies has been held to be constitu- 
 tional by the courts of the State (Steward v. Board of 
 Sup., 30 Iowa, 0). 
 
 Kansas : The constitution contains no limitation upon 
 aid to railroads, and authority to grant aid by donation 
 or subscription and issue bonds l)y municipal corporation 
 will 1)0 found under a general statute which requires 
 that whenever two-fifths of the r(\sident taxpayers of a 
 municipality petition that aid be given, then the question 
 is to be submitted to a vote of the people, etc. For the 
 course to be pursued see Laws ISTO, chap. 18S7 ; also see 
 chap. 141, Laws 187T, for aid to narrow gaug(> railroads. 
 
 Kentucky : No constitutional prohibition against muni- 
 cipal aid. 
 
 363
 
 § 202 MUNICIPAL BONDS. [CH. XVII. 
 
 Louisiana : The State cannot aid a railroad or con- 
 tract or authorize the contraction of a debt except to 
 repel an invasion or to suppress an insurrection. And no 
 subdivision of the State can aid or assist any corjioration 
 or association whatsoever, or purchase or subscribe to the 
 stock of any corporation or association (art. 5G). 
 
 Maine : The credit of the State shall not be, directly or 
 indirectly, loaned. Municipal corporations are not pro- 
 hibited from aiding railroad companies ; but no debt or 
 liability can be incurred which, with previous debts, 
 shall exceed five per centum of the last regular valuation 
 of the municipal corporation (art. 22, amendment of 
 1877). 
 
 Maryland : Municipalities are not prohibited from aid- 
 ing a railroad, but counties can give or loan their aid 
 only when authorized by an act of the General Assem- 
 bly, which shall be published for two months before the 
 next election for members of the House of Delegates in 
 the newspaper published in the county, and said act shall 
 also be approved by a majority of all the members of the 
 General Assembly at its next session after said election 
 (sec. 54). The State cannot directly or indirectly aid a 
 l^rivate corporation. 
 
 Massachusetts : There are no constitutional limitations 
 of debt for State, county or city purposes. Aid to rail- 
 roads may be given by either. 
 
 Michigan : The credit of the State shall not be granted 
 to or in aid of any person, association or corporation (art. 
 14, sec. G). Municipalities are not prohibited by the con- 
 stitution from granting such aid, but the courts of the 
 State have uniformly held such aid unconstitutional. 
 
 Minnesota : The credit of the State cannot be given to 
 aid any person or corporation. The Legislature of the 
 State cannot authorize a municipal corporation to become 
 indebted to aid a railroad to an amount that shall exceed 
 five per centum of the value of the taxable property as 
 shown by the last assessment. 
 
 Mississippi : The State is prohibited from aiding by 
 pledge or loan any person, association or corporation, or 
 to become a stockholder in an association or corporation, 
 364
 
 CH. XVII.] RAILROAD AID BONDS. § 262 
 
 The Legislature is prohibited from authorizing munici- 
 palities to loan moneys or grant aid to railroads (Con- 
 stitution 1890, sees. 66, 183, 258.) 
 
 Missouri : Municipalities cannot aid railroads (Const. 
 1875, art. 9, sec. 6). 
 
 Montana : No constitutional prohibition against such 
 aid. 
 
 Nebraska : State cannot loan its aid. Municipalities 
 cannot be a stockholder or subscribe for stock, but may 
 make a donation if approved by the qualified voters at an 
 election (see art. 12, sec. 2). 
 
 Nevada : The State cannot assist railroad corporations, 
 nor can any county, city, town or other municipality. 
 
 New Hampshire : Neither the State nor any subdi- 
 vision can aid a private corporation or association. 
 
 New Jersey : Neither the State nor any subdivision 
 thereof can give money or property, or loan its credit or 
 money to, or in aid of, individuals, associations or cor- 
 porations, or become security for, or be directly or in- 
 directly the owner of, any stock or bonds in such associa- 
 tion or corporation (art. 1, sec. 19), Amended Const. 1875. 
 
 New York : Neither the State nor any subdivision 
 can directly or indirectly aid a railroad company (A- 
 mended Const. 1871, (art. 8, sec. 10). 
 
 North Carolina : Municipalities may aid a railroad 
 with the consent of the taxpayers (art. 8, sec. 7). 
 
 North Dakota : No prohibition as to municipalities 
 except on limit of debt. 
 
 Ohio : The State cannot aid a railroad nor can the 
 Legislature authorize municipal corporations to do so 
 (art. 8, sec. 4- and 6). 
 
 Oregon : No prohibition except as to limit of debt. 
 
 Pennsylvania : Neither the State nor a subdivision 
 can aid a railroad. 
 
 Rhode Island : No prohibition against such aid, but 
 restrictions. 
 
 South Carolina : State aid requires consent of the 
 people. No restrictions as to municipalities. 
 
 South Dakota : No constitutional prohibition as to 
 
 aid railroads. 
 
 565
 
 § 262 MUNICIPAL BONDS. [CH. XVII. 
 
 Tennessee : Municipal aid may be given to railroads 
 provided the proposition be submitted to the voters and 
 it receive three-fourths of the votes cast at the election 
 (art. 2, sec. 20). 
 
 Texas : Aid by the State or any subdivision is pro- 
 hibited, 
 
 Vermont : No constitutional prohibitions. 
 
 Virginia : The State cannot assist railroads. No con- 
 stitutional prohibition as to cities, counties^ towns, etc. 
 
 West Virginia : The State cannot aid railroads. 
 There is no constitutional prohibition against such aid 
 by municipalities aiding railroads. 
 
 Wisconsin : The State is prohibited to aid a railroad 
 company, but the constitution contains no such prohi- 
 bition as to municipal corporations, and such aid has 
 often been authorized by statute (Laws 1872, ch. 182 ; 
 Laws 1873, ch. 277-289 ; Laws 1874, ch. 317). 
 
 Wyoming : No constitutional prohibition, but amount 
 of indebtedness is limited. 
 
 The Territories cannot aid a railroad (Act of Con- 
 gress, July 30th, 188C)). 
 
 See the extracts from the State constitution appended 
 to this volume. 
 
 The constitutions of some of the States as above showm 
 j^rohibit the municipal corporations themselves to lend 
 such aid, while in others the prohibition is directed to 
 the Legislature and proliibits it from authorizing munic- 
 ipalities to lend their aid. In the former case, as we 
 have elsewhere seen, such constitutional prohibitions act 
 at once upon the municipality, and it cannot thereafter 
 give such aid except to carry out vested rights.^ And 
 when the prohibition is directed to the Legislature it 
 -does not repeal existing statutes which permit municipal 
 corporations to lend such assistance, but is prospective 
 and operates only upon the future acts of the Legisla- 
 ture." 
 
 1 Norton v. Brownsville, 129 U. S. 
 479 ; Aspinwall v. Comrs., 22 How- 
 ard, 464. 
 
 366 
 
 •2 Sweet V, Syracuse, 27 N. E. R. 
 1081 ; Moultrie v. Fairfield, 104 
 U. S. 370 ; Gillam v. Davies Co., 14 
 S. W. R. 838.
 
 CH. XVII.] RAILROAD AID BONDS. § 263 
 
 § 263. Power must be express.— It is now settled that 
 without legislative authority a municipal corporation 
 has not the power to lend its aid to assist a railroad 
 company. 1 And this power must be in express language 
 authorizing it to subscribe for the stock and issue its 
 negotiable bonds, or to donate its bonds, or in such lan- 
 guage that the power to issue the bonds will be implied 
 as a necessary adjunct to carry out the object of the act.^ 
 But when the power to levy and collect taxes is, in con- 
 nection with the power to aid the railroad, conferred l)y 
 the act, then the implication will be excluded.^ And 
 where a statute authorized towns to subscribe for shares 
 in the capital stock of a railroad company and to raise 
 by Joans or taxes the money required to pay the instal- 
 ments of the subscription, such authority was held to 
 confer on the town by implication, the power to issue 
 bonds. ^ Authority to a municipal corporation to sub- 
 scribe for stock in a railroad company, " as fully as an 
 individual," authorizes the corporation to issue negotiable 
 bonds in payment of the stock. ^ 
 
 Power in a town to subscribe for stock in a railroad 
 company does not include power to issue municipal bonds 
 in payment of the subscription when the act contem- 
 plates payment by taxes. ^ 
 
 An act authorizing any municipality to issue and de- 
 liver bonds is applicable to any municipality that may 
 subsequently be incorporated.^ 
 
 The enabling act must contain authority to grant the 
 aid and issue the bonds in express words or the authority- 
 
 ' Norton v. Dyersberg, 127 U. S. i Ins. Co.. 83 111. 502 : Lipponcott v 
 
 139 ; Concord v. Robinson, 121 lb. 
 1G5 ; Jones on R. R. Securities, g§ 
 222. 22G 28!}. 
 
 2 Mayor etc. v. Inman, 57 Ga. 370 ; 
 Vicksburgb v. Lombard, 51 Miss. 
 111. 
 
 •* Claiborne Co. v. Brooks, 111 
 U. S. 40G: Wells v. Pontotac Co. 
 Sup., 102 U. S. 632 ; Ogden Co. v. 
 Davies, 103 U. S. 604. Bonds in 
 such cases are invalid, if issued. Rep. 559 
 Town of Middleport v. .-Etna Life 
 
 Pana, 92 111. 24. 
 
 * Commonwealth v. Williams- 
 town, (Mass.) 30 N. E. R. 472. 
 
 ^ Commonwealth v. Pittsburgh, 
 41 Pa. St. 278. 
 
 « Kelly V. Milan, 127 U. S. 1.39 ; 
 Norton v. Dyersberg, 127 U. S. 160 ; 
 Katzenberger v. Aberdeen, 121 
 U. S. 172. 
 
 ■^ Long V. New London, 5 Fed. 
 
 so:
 
 § 264 MUNICIPAL BONDS. [CH. XVII. 
 
 to borrow or donate such aid, or subscribe to the stock, 
 must be given, from which the authority to issue the 
 bonds will be implied.^ There must be express authority 
 to aid the railroad, a few cases, how^ever, hold the opposite 
 doctrine.^ 
 
 § 264. Early cases iu federal courts. — In the United 
 States Courts in a few cases negotiable bonds were issued 
 to aid railroads when there was no express authority so 
 to do. 
 
 In case of Meyer v. Muscatine, 1 Wall. 3S4, the charter 
 of that city gave it power "to borrow money for any 
 object in its discretion. " Under this power the city issued 
 its negotiable bonds in aid of a railroad, and the bonds 
 were declared valid under the said power. In another 
 case, Rogers v. Burlington, 3 Wall. 654, bonds issued 
 under authority of the charter which provided. " That 
 whenever, in the opinion of the city council, it is expedient 
 to borrow money for any public purpose the question 
 shall be submitted to the voters," etc. 
 
 The proposition to aid a railroad by the issue of bonds 
 was submitted to the citizens and decided in the affirm- 
 ative. The bonds were then issued and were held 
 valid. The court considered the building of the road a 
 public purpose for which it might, under its charter, bor- 
 row money. In this case the bonds were given directly 
 to the railroad aided and no money was borrowed on 
 them by the city. 
 
 A vigorous dissenting opinion was filed by Field, J., 
 whicli was concurred in by Chief Justice Chase and Jus- 
 tices Miller and Grier, and their principal objection was 
 that the bonds were not sold and no money borrowed, 
 but that they were loaned to the railroad company, and 
 that borrowing money and loaning credit were not 
 convertible terms, although they also dissented be- 
 cause, in their opinion, a municipal corporation could 
 
 1 Commonwealth etc. v. Pitts- 
 burgh, 41 Pa. St. 278 ; Rienman v. 
 Covington R. R., 7 Neb. 310 ; Har- 
 court V. Good, 39 Tex. 456 ; Wil- 
 liams v. Duanesburgh, G6 N. Y. 139. 
 368 
 
 See cases Am. & Eng. Ency. of 
 Law, Vol. 15; p. 1242; DiU. on 
 Mun. Corp. § 161 (4th ed.) notes. 
 
 2 Copes V. Charleston, 10 Rich. 
 S. C.) 491.
 
 CH. XVII.] EAILKOAD AID BONDS. § 266 
 
 not aid a railroad unless specially authorized so to do 
 by statute. 
 
 § 205. Early cases overruled — Power must be ex- 
 press. — These cases have since been overruled, and in 
 the case of Young v. Clarendon Township, 132 U. S. 340, 
 it was held to be the settled law that a municipality has 
 no po^ver to issue its bonds in aid of a railroad, ex- 
 cept by legislative permission. 
 
 And in the case of Brenham v. German American 
 Bank, 144 U. S. 173, where it appeared the city of 
 Brenham, under a provision of its charter, had power 
 to borrow for general j)urposes, a sum not exceeding 
 $15,000 on the credit of the city, issued negotiable 
 bonds for said sum, $12,000 of which were sold 
 and the proceeds devoted to aid a railroad, the court 
 held all the bonds to be invalid, because express au- 
 thority to issue negotiable bonds was not conferred, 
 and further held that the cases of Rogers v. Bur- 
 lington, supra, and that of Mitchell v. Burlington, 
 4 Wall. 2 TO, wherein the former case was affirmed, were 
 both overruled. The court cited with approval a num- 
 ber of cases which held that a municipal corporation 
 must have legislative authority to aid a railroad, and 
 that the power to subscribe for stock did not authorize it 
 to issue negotiable bonds, holding that in order to issue 
 negotiable bonds express power must be conferred, and 
 that it cannot be implied. 
 
 It may be stated as the settled doctrine of the Federal 
 courts, when they are free to follow their own inclina- 
 tion, that even when a municipal corporation has express 
 authority to aid a railroad, as by taking stock or other- 
 wise, and the enabling act does not in express words 
 authorize the municipality to issue its negotiable bonds, 
 that it cannot issue its bonds, and if it does the bonds 
 are invalid, and that the power to issue such bonds will 
 not be implied.^ 
 
 2G0. Further effect wheu power is express. — Power 
 to aid is not exhausted by one subscription, if the sub- 
 
 1 Brenham v. Ger. Am. Bk., 144 U. S. 173; Hill v. Mempliis, 134 
 
 I U. S. 198, 203. 
 24 369
 
 § 267 MUNICIPAL BONDS. [CH. XVH. 
 
 scription made is not for the maximum amount fixed in 
 the act, unless the statute indicates a contrary intent.^ 
 
 Power to aid a railroad includes power to subscribe for 
 stock and issue bonds, or to donate bonds, as the enabling 
 act may provide, for any material part of the road, as 
 depots and side tracks of an existing road,^ or machine 
 shops necessary for its maintenance.^ 
 
 The constitutional prohibition against taking private 
 property for public use, etc., does not operate to prohibit 
 municipal aid to railroads or other similar public objects,* 
 nor the prohibitions against depriving a person of his 
 property without due process of law, nor does the provi- 
 sion that taxation shall be uniform render a statute 
 giving such aid unconstitutional. ° 
 
 The authority to aid a railroad company by subscribing 
 for its stock does not empower it to endorse the bonds of 
 the company, and such endorsement is void.^ 
 
 In order that a municipal corjDoration may endorse or 
 guarantee paper or become surety it must have express 
 statutory power so to do.'^ 
 
 § 207. Railroad a public purpose. — It is now firmly 
 settled that a railroad is a public improvement or object 
 in the sense that it may be legally aided by a municipal 
 corporation or by the State itself, unless the constitution 
 of the State contains an inhibition against such aid. 
 This has been so decided in all the state courts,^ except 
 those of Michigan. In Iowa the courts have ruled both 
 ways. In the former State the courts ^ have persistently 
 refused to adopt the doctrine, although the Supreme 
 Court of the United States ^° has set aside these State 
 decisions when a case has been properly brought before 
 
 1 People V. Waynesville, 88 111. [ « Blake v. Macon, 53 Ga. 172. 
 469. I ^ Dill, on Mun. Corp. (4th ed.) 
 
 2 Township of Rock Creek v. j 471. 
 
 Strong, 96 U. S. 271. 
 3Jarrott v. City of Moberly, 5 
 
 8 Township of Pine Grove v. Tal- 
 cott, 19 Wall. 666; Commrs. of 
 
 Reporter, 583. ; Leavenworth v. Miller, 7 Kans. 479. 
 
 * Queenbury v. Culver, 19 Wall. » People v. Salem, 20 Mich. 425 ; 
 94. I "^ Pine Grove Tp. v. Talcott, 19 
 
 6 Shelbyville R. R. Co. v. Mayor, Wall. 666. 
 59 Am. Dec. 782. ' 
 
 370
 
 OH. XVII.] 
 
 RAILROAD AID BONDS. 
 
 § 267 
 
 them upon which they could act and were not bound by 
 the decisions of the Micliigan courts. 
 
 In Iowa the question was decided in a number of cases 
 adversely to the proposition that such aid could be ren- 
 dered,^ but afterwards this ruling was set aside and the 
 courts have since decided in favor of such aid.^ 
 
 These roads are held to be public to the extent that 
 they may be assisted by a municipal corporation, because 
 as said by Chief Justice Black, in Sharpless v. Mayor, 
 etc., of Philadelphia :^ "The public has an interest in 
 such a road when it belongs to a corporation as clearly as 
 they would have if it were free, or as if tolls were payable 
 to the State, because travel and transportation are cheap- 
 ened by it to a degree far exceeding all the tolls and 
 charges of every kind, and this advantage the public has, 
 over and above those of rapidity, comfort, convenience, 
 increase of trade, opening of markets, and other means 
 of awarding labor and promoting wealth."* 
 
 While a railroad is held to be such a public purpose 
 that a municipality may be permitted to aid it ; yet a 
 municipal corporation cannot be compelled to render such 
 aid, and a statute attempting to enforce such aid is un- 
 constitutional.^ All authority to aid railroads must be 
 
 ^ Stokes V. Scott Co., 10 Iowa, 
 666 ; McClure v. Owen, 26 Iowa, 
 243. 
 
 2 Steward v. Polk Co., 30 Iowa, 
 t) ; Rc'iiwick v. Davenport, 47 Iowa, 
 511. 
 
 3 21 Pa. St. 169. 
 
 * On this subject see Public Pur- 
 pose herein, also Bloonifield Gas L. 
 Co. V. Richardson, 63 Barb. N. Y. 
 437 ; Jones on R. R. Securities, 
 § 228. 
 
 5 The People v. Batchellor, 53 N. 
 Y. 128 ; State ex rel. Dickinson v. 
 Neely, 30 S. C. 587. 
 
 The courts of Illinois have held 
 that the Legislature could not com- 
 pel a municipal corporation, a 
 town, to issue its bonds in aid of 
 a railroad, and that where a sub- 
 
 scription to a railroad was made 
 pursuant to an unauthorized vi)te 
 of the people, a subse(iuont valid 
 curative act could not lie passed 
 legalizing the subscription, and di- 
 recting the supervisors and clerk 
 to issue bonds, because by the act 
 the town would be compelled to 
 aid the railroad without its consent. 
 The court lield that an act author- 
 izing the legislative body of a mu- 
 nicijial corporation, in such a case, 
 to issue the bonds would have been 
 valid. 
 
 That an act in sucli a case to l)e 
 valid must leave it to tlie discretion 
 of the nnmicij>al authorities to de- 
 cide whether they will issue bonds 
 and not compel them to do it. Mar- 
 shall V. Silliman, 61 111. 21S. 
 871
 
 § 209 MUNICIPAL BONDS. [CH. XVII. 
 
 permissive in character, and the question whether such 
 aid will be rendered must be left to the decision of either 
 the inhabitants of the municipal corporation or its 
 officers. 
 
 § 268. Power, where found — What conditions may 
 be imposed, — Tho power to assist railroads is to be found 
 in eitlier the charter of the municipality or in some 
 general or special act of the Legislature or in the charter 
 of the railroad itself. Somewhere it must exist as before 
 shown. 
 
 The act usually designates the officers who are to issue 
 the bonds, and these officers may be persons who are not 
 officers of the municipality or chosen by it.^ 
 
 The statute may, and usually does, provide that before 
 the aid be granted, that certain conditions on the part of 
 the road to be assisted be performed. 
 
 It sometimes provides as a prior condition, that the 
 question of granting the aid be submitted to a vote of 
 the people, and only upon its receiving a designated pro- 
 portion of the votes cast the officers may act. Sometimes 
 it requires that a certain number of the taxpaj^ers peti- 
 tion to the legislative body of the municipality request- 
 ing that it give such aid, or a like petition is presented 
 to a county judge or other designated official before the 
 aid can be extended. The Legislature may impose such 
 conditions and surround the aid with sucli safeguards as 
 it may deem best for the protection of the people. When 
 the constitution imposes a certain condition there can be 
 no reason why the Legislature cannot impose additional 
 ones, provided the latter do not conflict with the former. 
 
 § 269. Road to he aided. — Usually the road to be as- 
 sisted is designated by name in the enabling act, and it 
 usually passes through the municipality granting the 
 aid, or very near to it. 
 
 It is held, however, that the road to be aided need not be 
 within the State in which the municipality granting the 
 aid is located, provided, of course, the enabling act is broad 
 enough in such a case to permit of the issue of the bonds. ^ 
 
 1 Sheboygan Co. v. Parker, 3| ^ j^ajii-oad Co. v. Oteo Co., !&• 
 Wall. 93. I Wall. 667 ; Quiiicy M. & P. R. R. 
 
 372
 
 •CH. XVII.] EAILROAD AID BONDS. § 270 
 
 Power to aid a particular branch or division of a road 
 will not authorize aid to the whole road.^ 
 
 It was held that under the general railroad law of 
 Missouri, the order submitting the i)roposition to aid a 
 railroad need not specify the name of the corporation, 
 where the proposition described the proposed route of the 
 proposed road with the requisite certainty.^. 
 
 The proposition to issue aid to one or the other of two 
 roads is void because uncertain. The road to be aided 
 must be designated with certainty.^ 
 
 Where the road voted to be aided was the " Del 
 Norte Summit Wagon Eoad Co.," and the bonds were 
 issued to "The Del Norte and Wagon Toll Road Co.," 
 the bonds were held to be valid.* 
 
 Where a road passed through a county on the north 
 side of a river and the charter of the road authorized 
 that counties on the north side, through which the road 
 passed, could issue its bonds, and a county on the south 
 side of the river issued its bonds to aid the road, it was 
 held that the bonds were void in the hands of a bona fide 
 holder.^ It has been held that the road to be aided need 
 not be named in the notice of election.^ Is it sufficient 
 to designate the route.' 
 
 § 270. What aid may be given. — "Where a statute 
 authorized a county to issue bonds to assist in the con- 
 struction of any railroad passing through the county, 
 such aid, however, not to exceed five per centum of the 
 assessed value of the property of the county, it was held 
 
 Co. V. Morris, 84 111. 411 ; Walker I county commissioners the power 
 V. Cincinnati, 21 Ohio St. 14 ; Bell to determine which of two coni- 
 V. Mobile R. Co., 4 Wall. 598; St. ' panics shall be aidod. Spurck v. 
 Joseph R. Co. V. Buchanan Co., 39 I Lincoln etc. R. Co., 14 Neb. 293. 
 Mo. 485 ; contra, State v. Dallas | * Hoog v. Rio Grande Co. 
 Co., 73 Mo. 329. f Comnu-s., 34 Fed. Rep. 778. 
 
 1 Town of BiR Grove v. Wells, G5 i '^ State v. Saline Co., 51 Mo. .3.50. 
 111. 263. ! 6 Marshall v. Silliinan. Gl III. 218 ; 
 
 2 Ninth Nat. Bk.v! Knox, oT Fed. I coj?/ra, State v. Roggen. 22 Neb. 
 Rep. 75; Comrs. Johnson Co. v.; 118; McMahon v. San Mateo Co., 
 Thayer, 94 U. S. C31 ; County of 4G Cal. 214. 
 
 Calloway v. Foster, 93 U. S. 567. | " Knox Co. v. Ninth Nat. Bk.. 147 
 8 State V. Roggen, 22 Neb. 118. ! U. S. 91 ; Commissioners v. Thayer, 
 The people cannot delegate to . 94 U. S. 631. 
 
 373
 
 § 270 MUNICIPAL BONDS. [CH. XVH. 
 
 that bonds to the extent of five per centum may be 
 issued to each road traversing the county, when so 
 ordered by a vote of the people.^ 
 
 Under a statute providing- that any county may sub- 
 scribe to the stock of any raih'oad in the State and issue 
 its bonds, the subscription not to exceed one hundred 
 thousand dollars, it was held the county may subscribe 
 for that sum to two or more roads ;^ and where a county 
 may subscribe a certain sum, and it subscrihes a less 
 sum, it may afterwards make a second subscription if both 
 taken together do not exceed the limit. ^ Where the mu- 
 nicipal corporation has authority to aid a railroad under 
 two different acts, it is held it may aid it under each.* 
 
 The corporate existence of a railroad company in a 
 suit to enforce municipal bonds issued to it, or in aid of 
 it, cannot be called in question, if it in fact was a corpora- 
 tion de facto und not cZcj^n-e when the bonds were issued.^ 
 Nor can the fact that it was illegally organized, or not 
 organized within the time required by the charter, be 
 set up as a defence to the bonds. ^ In order to work a 
 forfeiture of such a charter, process on behalf of the 
 State must be taken against the company itself.'' The 
 bona fide purchaser of bonds need not ascertain for 
 himself that the railroad company is properly incorpo- 
 rated, or was so incorporated at the time of the issue of 
 the bonds to aid it.^ 
 
 Where a city was authorized to donate lands for right 
 of way and other privileges to a railroad, it w\as held 
 that the city might donate the bonds voted to procure 
 the lands, instead of using them to purchase the right of 
 way. And the bonds were held valid. ^ 
 
 1 Coler V. Board of Commrs. I worth v. Barnes, 95 U. S. 70, 73. 
 Sante FeCo., 27 Pac. R. 619. | o Olcott v. Bynum, 17 Wall. 44 ; 
 
 2 CliicotCo.v. Lewis, 103 U.S. 165. ' Smith v. Co. of Clark, 54 Mo. 58. 
 
 3 Empire v. Darlington, 101 U. S. 
 87 ; Earner v. Baylers, 34 N . E. 
 Rep. 503. 
 
 * City of Cairo v. Zane, 149 U. S. 
 122. 
 
 ^ Comrs. of Douglass Co. v. BoUes, 
 94 U. S. 101; County of Leaven- 
 374 
 
 ^ Kayser v. Trustees of Bremen, 
 16 Mo. 88. 
 
 8 County of Macon v. Shores, 97 
 U. S. 272 ; Ralls Co. v. Douglass, 105 
 U. S. 758. 
 
 9 Converse v. Ft. Scott, 92 U. S. 
 503.
 
 CH. XVII.] RAILROAD AID BONDS. § 271 
 
 A statute authorizing a municipal corporation to donate 
 its bonds to aid a railroad is valid. ^ 
 
 § 271. Conditions. — As before stated the enabling 
 statute, or some general law, or the charter of the mu- 
 nicipality or of the company, or the constitution of the 
 State may surround the aid to be given to railroad com- 
 panies with such conditions and limitations as may seem 
 best to protect the interest of the inhabitants of the mu- 
 nicipality granting the aid, or the proposition submitted 
 to the voters and accepted by them may contain such con- 
 ditions. 
 
 When the conditions are imposed by the constitution 
 they must be strictly followed, and any material deviation 
 will be fatal, not only as between the immediate parties, 
 but also as to bona fide holders of the bonds.^ 
 
 If neither the constitution nor statute contain con- 
 ditions, the proposition may be submitted with any con- 
 ditions the body submitting it may deem proper.^ 
 
 The conditions are usually that the proposition to aid 
 the railroad be submitted to and accepted by the voters 
 before the municipal officers can make the subscription 
 and issue the bonds. Often the time within which the road 
 must be completed is made a condition. Again, the com- 
 pletion of the road, the location of the road, or that its 
 termini be established at certain points, are made prior 
 conditions. 
 
 The power to determine when the conditions are 
 performed, and to then deliver the bonds, is an official 
 trust and cannot be delegated to strangers, but must be 
 performed by the officers named in the enabling act. As 
 said in Jackson v. Brush :* "The reasons for these prop- 
 ositions are oV)vious. In the first place, the people never 
 assented that any one other than the proper officers of 
 the county should judge of the performance of the 
 
 1 Oteo Co. V. Baldwin. Ill U. S. 
 1 ; Railroad Co. v. County of Oteo, 
 16 AVall. 607. 
 
 This point is extensively dis- 
 cussed in the latter case. 
 
 2 Harrington v. Plainview, 27 Officers, § 567. 
 
 375 
 
 Minn. 224; Dill, on Mun. Corp 
 
 (4thed.)S •'>:^1. 
 
 3 People V. Dutchor. 56 111. 141 ; 
 Veeder v. Lima, 19 Wis. 280. 
 
 * 77 111. 59 ; Mechem on Pub.
 
 § 272 MUNICIPAL BONDS. [CH. XVH. 
 
 ditions precedent on which the subscriptions had been 
 voted ; and, in the second place, should a controversy 
 arise, it is all-important that the bonds should be in the 
 hands of these officers until the matter should be finally 
 adjudicated. . . . Functions to be exercised by county 
 officials cannot, without special authority given by law, 
 be delegated to strangers with power to act in their 
 stead." 
 
 Where the act does not designate any person or tri- 
 bunal to determine whether the conditions have been 
 performed, the body authorized to issue the bonds must 
 necessarily determine the question.^ 
 
 And where the facts, upon the existence of which bonds 
 are to be issued, are exclusively or peculiarly within the 
 knowledge of the city council which is authorized to 
 issue the bonds, it will be inferred that the lawmakers 
 intended to make such council the judge whether such 
 conditions had been fulfilled.^ 
 
 It is proposed to treat each of these conditions sep- 
 arately. 
 
 The submission of the question, the notice of election, 
 the election itself, and the vote, are treated of elsewhere 
 herein. The others now follow. 
 
 § 272. Time of completion is often a prior condition, 
 made so by the statute authorizing the subscription to the 
 stock and the issue of the bonds, or by the proposition 
 submitted to the voters, and when it is a condition that 
 the road must be completed by a certain time, such a 
 condition between the jiarties will be strictly enforced ; ^ 
 and if not completed within the time, the delivery of the 
 bonds may be restrained, and cannot be enforced, and 
 need not be delivered.'* 
 
 When the statute makes it a condition precedent that 
 
 1 Knox Co. Y. Nichols, 14 Oliio 
 St. 260. 
 
 - Mutual Ben. L. Ins. Co. v. Eliz- 
 abeth, 42 N. J. L. 235. 
 
 8 Portland & Oxford Cent. R. R. 
 Co. V. Hartfoid, 58 Me. 23 ; Tal- ' at considerable length, 
 coner v. Buffalo & J. R. R. Co., 69 | 
 N. Y. 491. 
 376 
 
 * Cooper V. Sullivan Co. , 65 Mo. 
 542 ; McManus v. Duluth, C. & N. 
 R. Co., 51 IVfinn. 30; 52 N. W. R. 
 980. 
 
 This latter case discusses the point
 
 CH. XVII.] RAILROAD AID BONDS. § 272 
 
 the road be completed within a certain time, it is strictly 
 enforced, and whether the time at which the road is to 
 be completed is of the essence of the contract is a ques- 
 tion to be determined by the rules applied to other con- 
 tracts.^ 
 
 Where the language of the enabling act does not re- 
 quire the completion to be treated as a condition pre- 
 cedent, time will not be considered as the essence of the 
 contract, and the court will compel the issue of the 
 bonds. ^ 
 
 Where a subscription was made on condition that no 
 bonds should be issued unless the company should, within 
 a specified time, locate its machine shops at a certain 
 place, and it having failed to do so, it was held that there 
 was no authority to make the subscription and issue the 
 bonds, and that a tax levied to pay the interest on the 
 bonds could not be collected.^ 
 
 In the case of German Savings Bank v. Franklin Co., 
 128 U. S. 526, where the bonds in suit were issued pur- 
 suant to an enabling act, the condition imposed being 
 that the road should be completed by June 1st, 1872, they 
 were held void because the road was not completed until 
 November 1st, 1879, and no change was made in the con- 
 dition. In this case, however, attention is called to the 
 fact that the bonds contained no recitals of the enabling 
 act. Where the bonds recited that they were issued 
 under authority of an act, reciting its title, it was held 
 that such recital estopped the municipal corporation issu- 
 ing them, from showing, as a defence in a suit brought 
 by a bona fide holder, that the road was not completed 
 within the stipulated time.* 
 
 A condition in the vote that the aid shall not be ex- 
 tended unless the road shall be completed, ready for use, 
 within a specified time, is comi)lied with wlion the road 
 is built so as to be in as reasonably fit condition, and as 
 
 1 Kansas City R. R. v. Aldermen, 
 47 :\Io. 349 ; McManus v. Dulutli, C. 
 N. R. R. Co., 52 N. \V. R. mO. 
 
 2 Nevada Bank v. Steinniitz, 64 
 
 Cent. R. R., 121 Mass. 460 : Kansas 
 City V. Aldermen. 47 Mo. olfl. 
 
 8 Onstott V. IVoi.le. 123 111. 489. 
 
 * Oregon v. Jennings, 119 U.S. 
 
 Cal. 301 ; Sup. of Portago v. Wis. ' 74. 
 
 1 6 37'
 
 §273 
 
 MUNICIPAL BONDS. 
 
 [CH. XVII. 
 
 safe and convenient for the public use, as new roads 
 usually are in similar localities.^ 
 
 If the bonds are delivered before the road is finished, 
 and it is not completed within the stipulated time, it is 
 the duty of the railroad company to return the bonds, 
 and if it refuse, a taxpayer may comi^el it to return the 
 bonds to the municipal corporation to be cancelled.^ 
 
 When time is the essence of the contract, no excuse 
 upon the part of the corporation to be aided will avail if 
 the road is not completed within the designated time.^ 
 
 When the municipal corporation receives the stock of 
 a railroad company and retains it, it cannot set up as a 
 defence against the bonds that the road was not com- 
 pleted within the time limited.* When the vote, as re- 
 corded, does not stipulate as to when the railroad shall 
 be completed, a railroad company, acting in good faith 
 on such record, may complete the same within a reason- 
 able time, and the records cannot be changed by the clerk 
 so as to contain a time, although such time was expressed 
 in the vote,^ When the Legislature extends the time 
 for the .completion of the road, the municipality will not 
 be released from its liability for stock subscribed for or 
 bonds to be donated when the contract was completed 
 and the aid delayed until the road was finished.^ 
 
 § 273. Completion of the road.— Another condition 
 may be that before the municipality can subscribe for 
 the stock and issue its bonds, or donate bonds that the 
 road should be completed, and unless the road is com- 
 pleted, ready for service, the issue of the bonds, if made 
 before such completion, will be restrained, and if issued 
 are not valid in the hands of the railroad company or any 
 other person with notice. And it was held not sufficient 
 that the cars were running, transporting freight and 
 
 1 Manchester & K. R. R. v. Kcene, 
 62 N. H. 81. 
 
 2 Clarke v. Town of Rosedale, 12 
 So. R. (Miss.) 600. 
 
 3 McManus v. Duluth, C. & N. R. 
 R. Co., 52 N. W. R. 980 ; see 30 Am. 
 & Eng. Corp. R. Cases, 262 ; 22 lb. 
 130. 
 
 378 
 
 * Lancaster v. Cheraw R. Co., 28 
 S. C. 134. 
 
 ^ Sawyer v. Manchester etc. R. 
 Co., 02 N. H. 135. 
 
 sjaks V. Helena, 41 Ark. 213; 
 Com. V. Pittsburgh, 41 Pa. St. 271.
 
 CH. XVII.] RAILEOAD AID BONDS. § 273 
 
 passengers, if the road was not completed.^ And where 
 the road was to he completed before the bonds were to 
 issue, and they were placed in the hands of a third party 
 to hold and be delivered when the road was located and 
 constructed through the town, and before its completion 
 a constitutional amendment was adopted which pro- 
 hibited aid to railroads, it was held that the holder could 
 not compel the delivery of the bonds,^ because the commis- 
 sioners, until the road was completed, could not subscribe 
 for the stock or issue the bonds, and the constitutional 
 amendment prohibited both when the road was com- 
 pleted. In another case, where, under a general statute, 
 towns were authorized to make appropriations or dona- 
 tions to railroads when their tracks should be located 
 and constructed through the town, a town in 18C9 A'oted 
 to make an appropriation for that purpose if the railroad 
 would run its tracks through the town. The company 
 assented to and accepted the proposed assistance. After- 
 wards a new constitution was adopted by the State 
 (Illinois) which prohibited such aid, but the town, after 
 the adoption of the constitution, issued its bonds. 
 
 The United States Supreme Court held the bonds to be 
 invalid in the hands of a bona fide holder, because the 
 company was not to be aided until the road was com- 
 pleted, and before it was completed the constitution pro- 
 hibited such aid. 
 
 There was no vested right in the road to the aid, and 
 the obligation of tlie contract was not impaired. 
 
 It is not essential to compliance with a condition of 
 completion of the road that a new line should be built, 
 the purchase and adoption as a part of its road of a line 
 already constructed along the proposed route is suffi- 
 cient ;^ but a loan of another road, adopted as a part of 
 the line, terminable at will, is not sufficient.^ 
 
 It may be stipulated that, as the road is built, bonds 
 may be issued at a specified rate per mile of com- 
 
 1 Railroad Co. v. Hartford, 58 
 Me. 23. 
 
 2 Falconer v. Buffalo R. R. Co., 
 69 N. Y. 291. 
 
 3 Stockton & V. R. R. Co. v, 
 Stockton. 51 Cal. 528. 
 * People V. Clayton, 88 III. 45. 
 
 379
 
 ^ 274 
 
 MUNICIPAL BONDS. 
 
 [CH. XVII. 
 
 pleted track, and in such a case the bonds, if issued 
 by a board or officers quaHfied to so issue them, are 
 valid. 1 
 
 § 274. Location of road and termini. — The location 
 of the road is very frequently made a prior condition, 
 and between the parties it is generally strictly enforced, 
 and, unless complied with, mandamus will not issue to 
 compel the delivery of the bonds. And where it is a 
 condition precedent that the railroad should be con- 
 structed over a certain route, or establish its termini 
 at certain points, such conditions will be strictly con- 
 strued, and upon a failure to perform them, the issue 
 of the bonds may be enjoined by any taxpayer, or if 
 issued may still, in the hands of the company or any 
 other holder, with knowledge, be decreed to be sur- 
 rendered uj) for cancellation.^ 
 
 Where a railroad company represented as an induce- 
 ment that it would locate its depot on a certain section, 
 and after the voters had voted that the bonds should 
 issue, the depot was located on another section, the 
 <30urt restrained the issue of the bonds. ^ 
 
 It has been held that constructing the road within 
 two thousand feet of a mill, when the condition was 
 that it should be constructed within twelve hundred feet 
 of it, did not fulfil the condition, and mandamus to 
 compel the issue of the bonds was refused.* It may be 
 stated generally that when the conditions have not been 
 substantially complied with the issue of the bonds will 
 be restrained. 
 
 As to what is a substantial compliance is often a diffi- 
 cult question to decide. It has been held in the United 
 States Supreme Court that when the location at a par- 
 ticular place is a condition precedent, practical compliance 
 
 1 Nevada Bank v. Steiniiiitz, 30 
 Pac. Rep. 970. 
 
 2 Portage Co. v. Wisconsin R. R. 
 Co., 121 Mass. 460; Portland R. R. 
 Co. V. Hartford, 58 Me. 23; State 
 V. Morristown, (Tenn.) 24 S. W. R. 
 13 ; People v. Morgan, 55 N. Y. 
 
 380 
 
 587 ; Purdy v. Lansing, 128 U. S. 
 557. 
 
 8 Wullenwaher v. Dunnigan, 
 (Neb.) 47 N. W. R. 420. 
 
 * Virginia etc. R. Co. v. Lj'on Co. , 
 6 Nev. 68 ; Aurora v. Wcst^ 22 Ind.
 
 CH. XVIT.j RAILROAD AID BONDS. § 274 
 
 with the terms is sufficient, and the building of the 
 road a fraction of a mile away is immaterial.^ 
 
 A condition precedent that the railroad company 
 should, before a certain day, have completed, ironed and 
 equipped its line of road from a village to a certain city, 
 and have the same in operation for carrying freight and 
 passengers, is substantially complied with by construct- 
 ing the road within a quarter of a mile of the village, 
 and from that point entering the town on the tracks of 
 another road and using its depot. ^ 
 
 Where the county was not authorized by name to 
 subscribe, but the charter of the company authorized 
 counties, through, near, into, or from which, the railroad 
 would run, to subscribe, it has been held that the road 
 need not be located at the time of the subscription, and 
 that the proposition submitted to the voters need not 
 describe the road,^ but in another case it was held that 
 there must be a sufficient location to identify the counties 
 authorized to subscribe. And where the company fixed 
 the eastern point but no western terminus nor any defi- 
 nite route, this was held an insufficient location to 
 authorize the issue of the bonds.^ In another rase, it was 
 held that where the company fixed both termini, it 
 might select the most advantageous route, and that 
 counties not in direct line between the termini, and not 
 directly on the line of the road, were authorized to sub- 
 scribe, if they would be licnefited liy the road.^ And in 
 another case, under similar authority, it was held that 
 the road must be located before the county could sub- 
 scribe.^ 
 
 When the termini is to be established at certain points, 
 it must be so located before mandamus will issue com- 
 pelling the bonds to be delivered." 
 
 Where the condition in a vote was that the railroad 
 
 1 Johnson Co. v. Tliayer, 9 1 U. S. 
 631. 
 
 2 State V. Clark, 23 Minn. 422. 
 
 '* Comrs. of Johnson Co. v. Thayer. 
 94 U. S. 631. 
 
 * Melin v. Lansing, 19 Blatchf. 
 512. 
 
 5 Schuyler v. Thomas, 98 U. S. 
 169. 
 
 6 People V. Morgan, .'j.'i N. Y. 587. 
 ' State V. 3Iinneapolis, 32 Minn. 
 
 .501 ; Purdy v. Lansing, 128 U. S. 
 5.57; People v. Morgan, 55 N. Y. 
 587. 
 
 381
 
 § 275 MUNICIPAL BONDS. [CH. XVII. 
 
 company should establish and maintain a division ter- 
 minus at a point situated between two cities, it was held 
 the condition was fulfilled where the terminus was estab- 
 lished at a point on the road between the two cities a 
 few rods from the direct line between them.^ 
 
 Where the vote stipulated that the road should be 
 built between certain cities, and the bonds were to issue 
 at a certain amount per mile, and the road was not built 
 the entire distance between the termini, the court by a 
 divided vote, held the bonds to be valid. ''^ 
 
 Where the condition was that, before the warrants 
 should issue, the company should have built and put in 
 operation its railroad, with cars running thereon, by 
 lease or otherwise, said road to be built from the city A., 
 at or near the depot of another road, to another city M., 
 the road was built from M. to within 111 feet of the 
 limits of A., at which point it intersected the roads of the 
 old company and from there ran its cars over the old 
 road to its depot. 
 
 The court held this to be a substantial compliance with 
 the conditions.^ 
 
 Wliere the act under which the bonds were issued 
 required that the road be located before the election was 
 held to vote on the proposition to aid the road, but the 
 election was held prior to the location, the court held, in 
 a suit brought by an innocent holder on the bonds, that 
 the defence could not be interposed, that the people who 
 should have known of the necessity for the prior location 
 voted to issue the bonds before the road was located and 
 afterwards took no steps to prevent the issue of the 
 bonds, but on the contrary acquiesced in the exchange 
 of the bonds for stock. It was too late to set up the 
 irregularity against a bona fide holder,* 
 
 § 275. Waiver of conditions. — As between the mu- 
 
 1 Chicago etc. R. R. Co. v. Harris, 
 30 P. R. 4.16. 
 
 2 Nevada Bank v. Stcinmitz, 04 
 Cal. 301. 
 
 3 Chicago & R. R. Co. v. Make- 
 peace, 24 P. R. 1104. See 30 Am. & 
 
 382 
 
 Eng. R. Cases, 245, n. for what will 
 be considered a compliance as to 
 termini. 
 
 * State V. Van Home, 7 Ohio St. 
 331.
 
 CH. XVII.] RAILROAD AID BONDS. § 276 
 
 nicipality and the company to be aided, when the prior 
 conditions are imposed by a vote of the people, the con- 
 ditions cannot be waived. 
 
 As where the condition was that the road should be 
 completed within a certain time, if not so completed the 
 condition cannot be waived, and the issue of the bonds 
 will be restrained.^ 
 
 Where the proposition to aid a railroad indicated the 
 route of the proposed road and the proposition was ac- 
 cepted, it was held that the modifications of the location 
 by the officers of the municipality were void, and that 
 the issue of the bonds pursuant to the proposition, as 
 modified, would be restrained.^ 
 
 And where the bonds were issued upon the vote of the 
 people on condition that the road should be completed 
 before a certain time, and this was not done, and the 
 bonds were issued nevertheless, it was held the bonds 
 were void.^ 
 
 And where a railroad petitioned for aid and stipulated 
 that the road would be completed by a certain time, and 
 the electors to whom the matter was submitted voted to 
 give such aid, and the road not being completed within 
 the time, the council extended the time, it was held that 
 such extension was illegal, that the council had no power 
 to vary the contract as authorized by the vote of the 
 citizens.* 
 
 The reason the municipal officers cannot waive condi- 
 tions imposed by a vote of the people under statutes 
 which authorize such conditions to be imposed by them 
 is that the conditions wore not imposed by the authority 
 of the municipal officers.^ 
 
 § 2T(i. AVheii the conditioiis may bo waived. — There 
 are a few cases which are to the effect that the conditions 
 may be waived, and in one case,-^ where the time of com- 
 
 ^ Hodgman v. Chicago & S. R. 
 R., 20 Minn. 48. 
 
 * Clark V. Town of Roscdak 
 (Miss.) 12 So. R. 600. 
 
 2 State V. City of iNforristown, 24 j ^ piatteville etc. v. Galena. 4.3 Wis. 
 S. W. R. 13; Plattville v. Galena, ' 493 ; Hodgman v. Chicago R. R., 
 43 Wis. 493 ; contra. Coleman v. 20 Minn. 48. 
 Supervisors, 50 Cal. 493. « County of Randolph v. Post, 93 
 
 8 Eddy V. People. 127 111. 428. I U. S. .502. 513. 
 
 3S.3
 
 § 276 MUNICIPAL BONDS. [CH. XVII. 
 
 pletioii was extended Ijy the county court, the court, in 
 sustaining the bonds, said : 
 
 " We should unreasonably restrict the rights and 
 powers of a municipal corporation were we to hold that 
 it did not possess the power to alter its legally made con- 
 tract by waiving conditions found to be injurious to its 
 interests, or that it could not estop itself like other par- 
 ties to a contract." ^ 
 
 It must be stated as the general rule of the state 
 courts that the conditions cannot be waived when they 
 are imposed b}-^ a vote of the people.^ And it is held that 
 the people themselves, without authority so to do, can- 
 not at a subsequent election waive the former conditions,^ 
 although in another case it was held the second vote 
 was valid unless prohibited.^ 
 
 The Legislature may authorize a waiver after the vote 
 is taken or the subscription made, unless restrained by 
 some provision of the State constitution.'' 
 
 When the authority is granted to the legislative body 
 of a municipal corporation to aid a railroad without sub- 
 mitting the question for approval to the voters, and cer- 
 tain prior conditions are imposed upon the railroad com- 
 pany by the municipal corporation before aid is to be 
 given, it s.eems to the writer that such conditions could 
 be waived, because the same power which imposed the 
 conditions would naturally have authority to waive or 
 change them.^ 
 
 And where the vote of the people merely authorizes 
 the municipal officers to aid the company, but imposes no 
 
 1 See, also, Commonwealth v. ( osition was carried, it was held 
 Pittsburgh, 43 Pa. St. 391 ; Moul- the court could not re-submit the 
 trie V. Rockingham, 92 U. S. 631. proposition with different condi- 
 
 2 Town of Platteville v. Galena, tions. Madison Co. Court v. Rich- 
 43 Wis. 493; Hodgman v. Chicago I mond, I. & F. F. R. R. Co., 80 
 R. R. Co., 20 Minn. 48. | Ky. 16. 
 
 •^ Illinois M. R. R. Co. v. Waynes- j * Supervisors v. Gilbraith, 99 
 ville, 6 Rep. 457. j U. S. 214. 
 
 Where a county court was au- ^ Comrs. v. Pittsburgh, 41 Pa. St. 
 thorized to submit to the voters a '■ 278. 
 
 proposition to aid a railroad with f c Grand Chute v. Winegar, 15 
 such conditions as the court deemed j Wall. 373 ; Randolph v. Post, 93 
 proper, nnd it did so. and the prop- U. S. 502.
 
 CH. XVII.] r.AILROAD AID BONDS. § 277 
 
 conditions, if the municipal officers do so, they should he 
 held to have the power to waive them.^ 
 
 If matters are submitted which the law does not 
 require, these may he waived.^ 
 
 There is one condition, it would seem, that cannot be 
 waived, which is that the railroad shall build its road 
 through the town subscribing the stock. ^ 
 
 § 277. Subscription. — After an affirmative vote has 
 been had, the prior consent of the voters being necessary 
 before the subscription can be made for stock, the effect 
 of such vote is simply to empower the proper officers to 
 make a subscription. Such authority is only executory, 
 and may be repealed or limited.^ And, if before the sub- 
 scription is made, or can legally be made, the State 
 adopt a constitution which prohibits municipalities from 
 giving such aid, then the bonds cannot be issued, or if 
 issued, are void.^ 
 
 In Falconer v. Buffalo etc. R. R. Co., ^ where, by the 
 terms of the vote, it was made a condition precedent 
 that the route must be first adopted and the track on the 
 road laid, before the bonds could be delivered, and 
 before the conditions imposed by the vote were fulfilled, 
 the amended constitution of New York, of 187-i, was 
 adopted, which prohibited municipalities to subscribe for 
 stock of a railroad compaii)^, or to aid or assist one, 
 the court held that this provision prohibited the issue of 
 the bonds ; that no right to have* or issue the bonds was 
 created until the conditions were performed, and until 
 that time the contract was incomplete ; and as the con- 
 stitution went into effect before the conditions were ful- 
 filled the aid could not be extended. 
 
 1 St. Joseph & Co. V. Buchanan 
 Co., 39 Mo. 485. 
 
 2 Ycsler v. City of Seattle, 1 Wash. 
 308 ; People v. Cass Co., 77 lU. 438. 
 
 N. Y. 491 ; Bates Co. v. Winters, 
 97 U. S. 83 ; Union P. R. R. Co. v. 
 Davis Co. Comrs., 6 Kan. 2i)G ; 
 Bound V. Wisconsin R. R. Co., 45 
 
 3 Concord V. Portsmouth Sav.Bk., Wis. 543 ; Aspinwall v. Conirs., 22 
 92 U. S. 625 ; Barthol v. ^Moader, | How. 3G4. 
 
 72 Iowa, 125 ; Burgess v. i\Iol)in, 70 ' ^ Concord v. Portsmoutli Sav. 
 lb. 630 ; Tread well v. Comrs., 11 Bk., 92 U. S. 625. 
 
 Ohio, 183. See, however. Van Hos- 
 trop V. Madison City, 1 Wall. 291. 
 * Falconer v. B. J. R. R. Co., 69 
 
 25 385 
 
 69 N. Y. 491. See. also, Jeffries 
 Lawrence, 42 Iowa, 498.
 
 § 277 MUNICIPAL BONDS. [CH. XVII. 
 
 The constitution of Illinois, which became operative 
 July 2, ISTO, prohibited any city, town, township or 
 other municipality to subscribe to the capital stock of, or 
 to make a donation to, a railroad : " Provided, however, 
 that the adoption of this article shall not be construed as 
 affecting the right of any such municipality to make 
 such suhscriptions^ where the same have been author- 
 ized under existing laws, by a vote of the people of such 
 municipality prior to such adoption," The Supreme 
 Court of the United States,^ held that the exception only 
 applied to subscriptions voted for at a prior election, but 
 did not include a donation, although voted for and 
 accepted by the railroad comj)any before the constitution 
 went into effect, and that the constitutional prohibition 
 annulled the right to make such donation. 
 
 The court, ^ however, has since reversed its opinion be- 
 cause the Supreme Court of Illinois had, prior to the date 
 of the former decision, held a donation to be included in 
 the exception, and held such a donation to be good. And 
 in doing so, said in part : '' But we were not informed, 
 when the case was decided, that any judicial construction 
 had been given to the constitutional provision. It now 
 appears that the Supreme Court of Illinois had previously 
 considered it, and decided that donations, equally with 
 subscriptions, if sanctioned with a popular vote before 
 the adoption of the constitution, are not prohibited by it, 
 and that they are excepted from the prohibition by the 
 proviso. ... In such a case we think it our duty to 
 follow the state courts, and adopt as the true construc- 
 tion that which those courts have declared." 
 
 1 Concord V. Portsmouth, 93 U. S. I the constitution of Illinois of 1870, 
 625. which forbade the issue of such 
 
 2 Fairfield v. Gallatin Co., 100 
 U. S. 47. See, also, Chicago etc. R. 
 R. Co. V. Pinkney, 74 III. 277. 
 
 bonds unless "authorized under 
 existing laws by vote of the people 
 prior to such adoption," and which 
 
 The election to be within tlie sav- bonds recited that they were duly 
 ing clause of the constitution must authorized by a maiprity of the 
 be a valid election. Lippencott v. j voters at an election held prior to 
 Pana, 93 111. 24. | the adoption of the constitution, 
 
 In the case of Hutchinson v. Self, I the court held that the burden to 
 153 111. 542, where the bonds in suit | show the illegality of the bonds 
 were issued after the adoption of was cast on the propertv-holder. 
 386
 
 CH. XVII.] RAILROAD AID BONDS. § 277 
 
 If the constitutional prohibition is directed to the 
 Legislature, it then only acts as a limit upon future 
 legislation and does not repeal or operate upon existing 
 enabling acts. If the subscription is made, and bonds 
 issued, after the adoption of such a constitutional prohi- 
 bition, either as a donation or in payment of the stock, 
 the subscription and bonds are valid. ^ 
 
 The Supreme Court of Missouri, after announcing and 
 following the above doctrine in several cases,^ after- 
 wards adopted a contrary ruling,^ which latter ruling 
 the Supreme Court of the United States, having fol- 
 lowed the former ruling, refused to follow, because it 
 would prejudice bona Jide holders of bonds issued by 
 municipal corporations in Missouri before it reversed its 
 former rulings.* 
 
 If the inhibition directed to the municipalities does not 
 entirely prohibit the aid, but contains certain conditions, 
 then the subscription cannot be made under the old laws, 
 but these must be changed so as to conform with the 
 terms of the inhibition, as where the new constitution 
 required that the stock should be paid for when sub- 
 scribed, it was held that it forbade a municipal corporation 
 to subscribe for stock without paying for it at the time, 
 although it had that power under a former enabling 
 statute.^ 
 
 1 Fosdick V. Perrysburg, 14 Oliio 3G4 ; Norton v. Brownsville, 129 
 St. 472 ; Scotland Co. v. Hill, 132 ; U. S. 490. In the latter case, 
 U. S. 107 ; Ralls Co. v. Douglass, Brownsville under an act of Feb. 8, 
 
 105 U. S. 128; Cass Co. v. Gillett, ' 1870. was authorized to issue bonds 
 100 U. S. 585 ; Red Rock v. Henry, in aid of a railroad company on a 
 
 106 U. S. 596; People v. Haniil, majority vote. Before such vote 
 1'54 111. 666 ; Donation Fairfield v. held was the amended constitution 
 Gallatin Co., 100 U. S. 47 ; Lippen- , took effect, which prohibited such 
 cott v. Pana, 92 111. 24 ; Knox Co. aid, unless "with the assent of 
 V. Ninth Nat. Bk., 147 U. S. 91. | three-fourths of the votes at .said 
 
 2 State V. Macon Co. Ct.. 41 Mo. ; election." Five days after thecon- 
 453; State V.Sullivan Co., 51 Mo.527. stitution went into effect, proceed- 
 
 8 State V. Gavionette, 67 :Mo. 455 ; ings to hold an election under the 
 State V. Dallas Co. Ct., 72 Mo. 329. statute were instituted, and after- 
 
 * Ralls Co. V. Douglass, 105 U. S. 
 128; Scotland Co. v. Hill, 132 U. S. 
 107. 
 
 ^ Aspinwall v. Com'rs 22 How. 
 
 wards an election was held under 
 the statute at which all the votes 
 were cast in favor of issuing the 
 bonds to aid the road. 
 
 3S7
 
 § 278 
 
 MUNICIPAL BONDS. 
 
 [CH. XVII. 
 
 The charter of a railroad company authorizing a munici- 
 pal subscription is deemed to be a contract between the 
 State and the company, and it is held that this provision 
 in the charter is not affected by a constitutional amend- 
 ment which prohibits counties, cities and towns from 
 granting such aid, and that a subscription authorized by 
 such a charter may be made after the adoption of such 
 a constitutional provision, and that the bonds issued in 
 pursuance of it will be valid. ^ 
 
 But when the power is given under a general law and 
 not contained in the charter of the company, the power 
 to subscribe may be curtailed or repealed, if done before 
 the subscription is made.^ 
 
 After the subscription has been made it cannot be im- 
 paired any more than any other contract,^ and as the 
 subscription is valid, so are the bonds.* After the sub- 
 scription has been made a contract exists, and the bonds 
 may be compelled to be issued,^ and the creditors of the 
 company may enforce it.^ 
 
 Tlie municipal authorities may, before the rights of 
 others have become vested, rescind by a subsequent or- 
 dinance or resolution, a former ordinance or resolution 
 relating to the issue of bonds or the making of a contract, 
 provided the enabling statute does not prevent such re- 
 scission ; but after the rights of others have accrued, 
 there can be no rescission. '^ 
 
 § 278. When subscription is complete. — The subscrip- 
 tion is regarded as completed after the officers have sub- 
 scribed for the stock on the books of the company, although 
 
 Tlie court held the power to issue 
 the bonds under the statute, not 
 having been acted upon until after 
 the adoption of the amended con- 
 stitution, could not be exercised, 
 and that as it was in conflict with 
 tlie constitution it must be i-eformed 
 to compl}^ with the present consti- 
 tution. 
 
 1 Jones, R. E. Securities, § 274. 
 
 - Town of Concord v. Portsmouth 
 Sav. Bk., 92 U. S. 625 ; Dill, on Mun. 
 Corp. (4th ed.) §§ 70, 539. 
 388 
 
 3 Town of Cherry Creek v. Becker 
 etal, 123 N. Y. 161. 
 
 * Moultrie Co. v. Rockingham 
 Sav. Bk., 92 U.S. 631. 
 
 s People V. Ohio Grove Tp., 51 111. 
 192 ; Napa Valley R. R. v. Sup. 
 Napa Co., 30 Cal. 435 ; Chicago etc. 
 R. R. Co. V. Pinckney, 74 111. 277. 
 
 6 Morgan Co. v. Thomas, 76 111. 
 120. 
 
 ■^ Town of Cherry Creek v. Becker 
 et al., 123 N. Y. 161 : People v. Ohio 
 Grove Tp., 51 111. 192.
 
 €H. XYII.] RAILROAD AID BONDS. § 278 
 
 an actual signing on the books of the company is not es- 
 sential to create a contract, the obligation of which can- 
 not be impaired.^ 
 
 A resolution or an ordinance of the municipal corpora- 
 tion, if properly framed, will act as a subscription wlien 
 so intended, and ujoon acceptance will constitute a con- 
 tract which cannot afterwards be annulled by a consti- 
 tutional amendment.^ 
 
 The statute submitting the question to the voters, may, 
 and sometimes does, provide that an affirmative vote of 
 the people, upon a proposition to aid a railway, and issue 
 bonds, shall constitute a subscription, and in that case 
 a contract is made which cannot be impaired.^ 
 
 Sometimes the enabling statute authorizes the making 
 of a subscription at any time, but delays the issue of the 
 bonds in payment, until some condition be fulfilled, as 
 the completion of the road. When a subscription is 
 made under such a statute it becomes a contract which 
 cannot be impaired, and the bonds, when the condition 
 is fulfilled, must be issued.'* 
 
 The order of a court which recited that the county sub- 
 scribed for a certain number of shares, if concurred in 
 by the necessary number of judges, or where there is 
 one judge, the order made by him, is a subscription. 
 And in a case where the question arose the court said : 
 
 "We cannot, therefore, regard this order as a mere 
 offer or pledge to subscribe the fifty shares in this par- 
 ticular road, l)ut as actually taking, and in sul)stance 
 and legal effect subscribing for, that number of shares.^ 
 
 When a contract is entered into, or a subscription is 
 
 ' Nugent V. Putnian Co., 19 Wall. 
 241 ; Cass. Co. v. Gillett, 100 U. S. 
 585; Bates Co. v. Winters, 112 
 U. S. 325. 
 
 A subscription, conditional upon 
 the subscription of another town 
 cannot be rescinded after the latter 
 lias subscribed. Eedd. v. Henry 
 Co., SGratt. 695. 
 
 2 Town of Concord v. Portsmouth ^ 
 92 U. S. 625; Western S. F. S. v. 
 
 Philadelphia. 21 Pa. St. 174; Cunn 
 V. Barry, 15 Wall. 623. 
 
 3 East Lincoln v. Davenport, 94 
 U. S. 801. 
 
 * Livingston Co. v. Portsmouth 
 Bk., 128 U. S. 102 : Town of Omcord 
 v. Portsmouth Sav. Bk.. 92 U. S. 
 625. 
 
 5 Clarke Co. Ct. v. Paris & R. Co., 
 11 Ben. Monroe. 143. 
 
 889
 
 §279 
 
 MUNICIPAL ]JOXDS. 
 
 [CH. XVI 1. 
 
 once made by municipal corporation, it creates a con- 
 tract protected by the constitution, which may be en- 
 forced by mandamus} 
 
 Unless the statute authorizes it, a railroad company 
 cannot agree to favor a municipahty holding stock, 
 which it received in return for its aid.^ 
 
 § 279. Cousolidatioiis. — Generally a municipality is 
 not bound to issue bonds to aid a railroad formed by the 
 consolidation of the corporation, to which it has con- 
 tracted to issue its bonds, and another one,^ but if the cor- 
 poration to be aided had power to consolidate with an- 
 other at the time the election was held or subscription 
 made, or the Legislature had the reserve power to author- 
 ize a consolidation, the new company formed by the con- 
 solidation is entitled to all the rights of the old company, 
 and it may compel the issue of bonds to it, which 
 were voted or subscribed to the old company.^ 
 
 But wdiere the subscription is authorized by a prior 
 vote to be made to a designated company, and there is no 
 legislative authority to consolidate with another com- 
 pany, and the company voted to be aided, does, in fact, 
 consolidate with another, bonds, if issued to the consoli- 
 dated company, are void.^ The reason is that the people 
 voted to assist a designated company, wliich had no 
 power to consolidate when the vote was taken, and the 
 bonds are issued to assist that company, and also another 
 company not voted for, or authorized to be aided. 
 
 An inspection of the law authorizing the issue would 
 disclose that aid was to be extended to one company, 
 while the bonds would disclose that they were issued to 
 aid another.^ 
 
 1 Nugent V. Putman, 19 Wall. 
 241 ; Morgan Co. v. Thomas, 70 111. 
 130. 
 
 2 Pittsburgh S. R. Co. v. Alle- 
 gheny Co., 79 Pa. St. 210. 
 
 3 Harsham v. Bates Co., 93 IT. S. 
 569. 
 
 * Denison v. Major etc. of Colum- 
 bus, 63 Fed. Rep. 775 ; Living- 
 ston v. First Nat. Bk., 128 U. S. 122 : 
 390 
 
 Bates V. Winters, 112 U. S. 325; 
 Scotland Co. v. Thomas, 94 U. S. 
 682 ; 4 Am. & Eng. R. R. Cases, 336. 
 
 !> Harshman V. Bates Co., 93 U. S. 
 569 ; Township of Midland v. Gage 
 Co., 56 N. W. R. (Neb.) 317 ; March 
 V. Fulton Co., 10 Wall. 676. 
 
 estate v. Gar route, 67 Mo. 445; 
 Marsh v. Fulton Co., 10 Wall. 676, 
 683.
 
 CH. XVII.] EAILIiOAD AID BONDS. § 280 
 
 When a vote has been taken to aid a designated com- 
 pany, and it had authority to consohdate with another 
 comiDany, and it does so before the subscription is made, 
 the subscription may be made to the stock of the consoli- 
 dated company, and the bonds may be issued for such 
 stock. ^ 
 
 When the company voted to be aided changes its cor- 
 porate name, it is still entitled to such assistance.^ 
 
 The issue of bonds will be restrained from delivery to 
 a consolidated company, when the vote was to issue 
 bonds to aid a designated company, and it had, at the 
 time of voting the aid, no legislative authority to con- 
 solidate.^ 
 
 In one case, but not generally follow^ed, a vote was 
 taken to aid a company, and before the subscrijDtion was 
 made, it consolidated with another company under a 
 general law. It was held that the county could not be 
 compelled to subscribe to the consolidated company.* 
 
 It is held that the old company may consolidate with 
 another, incorporated in another State, and that the aid 
 may legally be given to the new company.^ 
 
 It has been held that before tlie aid voted to a com- 
 pany can be legally demanded by the consolidated com- 
 pany, that the consolidated company must form a com- 
 pleted, continuous track so that trains may be run 
 without break, over the old company's tracks and that 
 of the company with which it has consolidated.'' 
 
 § 280. Difference between snbseription and dona- 
 tion. — The authority to subscril)e and issue bonds does 
 not authorize a municipal corporation to donate its bonds. 
 Where a municipal corporation was authorized ])y pop- 
 
 i Washburn v. Cass Co., 3 Dill. 
 251 ; Livingston Co. v. Portsmouth 
 Bank, 128 U. S. 102 : Scotland Co. 
 V. Thomas, 94 U. 8. G82. 
 
 2 Reading v. Wedder, 6G 111. 80. 
 
 3 Townsliip of Midland v. Gage 
 
 ities, p. 457, et se<]. : Dill, on JIun. 
 Corp. (4th ed.) g 541. 
 
 '^ Livingston Co. v. First Nat. Bic. 
 of Portsmouth. 128 U. S. 102. Tliis 
 case discusses the right of railroads 
 to consolidate, and the rights flow- 
 
 Co., 56 N. W. R. 317; Nash v. ing therefrom. 
 
 Baker, 56 N. W. R. 376. \ ^ Georgia P. R. Co. v. Gaines, 88 
 
 ■* Harshman v. Bates, 92 U. S. Ala. 377. 
 569. See Burroughs on Pub. Secur- 
 
 391
 
 § 281 MUNICIPAL BONDS. [CH. XVII. 
 
 ular vote to subscribe for 8100,000 of stock in a railroad 
 company and issue its bonds in payment thereof, and 
 the officers of the municipality agreed to sell the stock 
 back to the company in exchange for $5,000 of the said 
 bonds, as a matter of fact only $95,000 of the bonds 
 were issued and delivered to the company, and no stock 
 was received by the municipality. The bonds were held 
 to be invalid, because they were a gift and not a sub- 
 scription, and the gift was not authorized by the statute 
 or the vote.^ 
 
 In another case, where the popular vote authorized the 
 municipal corporation to issue bonds to pay for $100,000 
 of stock, and the municipal officers agreed to sell, and 
 did sell, the stock back to the railroad company for 
 $30,000 of the bonds, it was held that the $70,000 of the 
 bonds were void, because in effect but a gift.^ 
 
 In both of the above cases the bonds had not passed 
 into the hands of innocent holders, but were still in the 
 possession of the railroad company. 
 
 § 281. Such bonds valid in Lands of bona fide 
 holder. — But when such bonds have passed into the 
 hands of innocent holders they are valid. ^ A case in 
 point is that of City of Cairo v. Zane, 140 U. S. 122, 
 wherein it appears that the city was authorized, by a 
 pojDular vote, to subscribe for $100,000 of stock in a rail- 
 road company and issue its bonds therefor, and after- 
 wards the city council agreed to sell to the company all 
 the stock for a return of $5,000 of the city bonds, and 
 after the exchange of the stock and delivery of the whole 
 issue of bonds therefor, the stock was sold to the com- 
 pany for the $5,000 of bonds. 
 
 It was held that the transaction was not a donation of 
 the $95,000, and if any wrong was done ])y the council in 
 thus disposing of the stock, it did not vitiate the bonds 
 in the hands of a bona fide purchaser. 
 
 The bonds in this case recited that they were issued in 
 
 1 Choisser v. People (111.), 29 
 N. E. R. 546 ; Post v. Pulaski Co. 
 49 Fed. Rep. 628. 
 
 392 
 
 2 Samson v. People (111.), 30 
 N. E. R. 689. 
 
 SMaxey v. Williamson, 73 111. 
 207.
 
 CH. XYII.] RAILROAD AID BONDS. § 282 
 
 pursuance of an ordinance passed by the city council, 
 authorized by a vote of the citizens of the city, and in 
 accordance with the hiws of the State of Illinois, without 
 referring further to the ordinance or laws. 
 
 The act also required that the bonds should be regis- 
 tered in the State auditor's office upon filing of an 
 affidavit that the prior conditions had been performed. 
 
 The court held that the fact of the registration and the 
 filing of the affidavit protected the bonds in the hands of 
 a bona fide holder, and that if he was bound to look at 
 the records, then the affidavit was conclusive of the facts 
 recited, and the court rested its decision upon these 
 facts, rather than u|)on the fact that a bona fide, holder 
 of bonds is not bound by misconduct or fraud of munici- 
 pal officers, as appeared to be the reason for holding 
 like bonds valid in the case of Anderson County v. Beal, 
 113 U. S. 227, where, after the bonds were voted, the 
 county passed an order directing a subscription in accord- 
 ance with the terms of the vote, and also provided that 
 "the stock above subscribed for by this board in behalf 
 of Anderson County is hereby sold and transferred for 
 and in consideration of one dollar, the receipt whereof is 
 hereby acknowledged to James F. Joy, president of said 
 railroad com])any, and the chairman of this board is 
 hereby authorized to sign a transfer of said stock to said 
 James F. Joy," etc. 
 
 The defence was that the stock was in fact returned to 
 the railroad, and that the transaction was a donation. 
 The court said, p. 240 : 
 
 "When the bonds were delivered to the company the 
 transaction was complete, and the bonds, as they after- 
 wards passed to bo)ia fide holders, passed free from any 
 impairment by reason of any dealing of the lx)ard with 
 the stock subscribed for, to wliich the county became 
 entitled by the issue and delivery of the bonds. The 
 board may have committed an improper act in parting 
 with the stock, but that is no concern of a bona fide 
 holder of the lionds or coupons." 
 
 § 282. Difforeiipo between ex.thjuijj:iny: \)inn\> lor 
 
 stock and borrowing. — There is a marked difference be- 
 
 393
 
 § 282 
 
 MUNICIPAL BONDS. 
 
 [CH. XYII. 
 
 tween the exchange of bonds for stock and the borrowing 
 money on their bonds by niunicii^al corj^orations and pay- 
 ing for the stock. 
 
 In the former case the raih'oad company may sell the 
 bonds so obtained at any figure, and in the latter the 
 railroad company receives for its stock its par value. 
 
 It was held the settled doctrine in New York, before 
 the constitution prohibited aid to railroads, that the 
 bonds could not be exchanged for the stock, but must be 
 sold by the municipal corporation and the stock paid for 
 in cash ; and the bonds, if exchanged, were void in the 
 hands of all holders with notice of that fact,^ although in 
 the other State courts, as well as in the Federal courts^ 
 the distinction is not observed, ^ 
 
 The courts of New York so consistently followed its 
 first ruling on this subject, that the United States Su- 
 preme Court adopted this ruling when bonds issued under 
 former New York statutes came before it.^ 
 
 1 Starin v. Town of Genoa, 23 
 N. Y. 439; Horton v. Town of 
 Thompson, 71 lb. 513. 
 
 2 Venice v. Murdock, 93 U. S. 494 ; 
 Commonwealth v. Willianistown, 
 (Mass.) 30 N. E. R. 472. In Rogers 
 V. Burlington, 3 Wall. 654, 667, 
 where the city had authority "to 
 borrow money for any public pur- 
 pose," and it issued its bonds and 
 delivered tliem to the railroad com- 
 pany, instead of borrowing monej^ 
 on them and using the money to 
 buy the stock, the court said: " Per- 
 fect acquiescence in the action of 
 tlie officers of the city seem to have 
 been manifested by the defendants 
 until the demand was made for the 
 payment of interest. 
 
 " Tliey never attempted to enjoin 
 the proceedings but suffered the 
 bonds to be issued and delivered to 
 tlie company, and when that Avas 
 done it was too late to object that 
 the power conferred in the charter 
 had not been properly executed. 
 394 
 
 8 Scipio V. Wright, 101 U. S. 665. 
 Where a statute of New York re- 
 quired that bonds issued to aid a 
 raih'oad be sold and their proceeds 
 be invested in the stock of the rail- 
 road company, and the bonds 
 were issued which recited the 
 enabling act and that they were 
 issued " for value received in the 
 stock of ■' naming the company, and 
 were delivered directly to the com- 
 pany to be aided, the Court of 
 Appeals of New Y'ork held the 
 bonds in the hands of a bona fide 
 holder to be invalid, in People v. 
 Batchellor, 53 N. Y. 128 ; but in the 
 later case of Town of Duanesburgh 
 V. Jenkins, 57 N. Y. 177, reversed 
 its former decision, and in Horton 
 V. Town of Thompson, 71 N. Y. 513, 
 adopted the doctrine laid down in 
 People V. Batchellor, supra. On 
 the 28th of April, 1871, the Legisla- 
 ture of New Y^ork passed an act to 
 legalize bonds issued under said 
 act, but delivered to the railroad
 
 CH. xvn.] 
 
 RAILROAD AID BONDS. 
 
 283 
 
 § 283. Rights of bona fide holders of Municipal aid 
 
 bonds. — As we have heretofore seen, the failure to per- 
 form the prior conditions on the part of the raih-oad 
 company, unless waived, will render the bonds, while in 
 the possession of the company, or that of a holder with 
 notice, void ; ^ and if not issued, their issue will not be 
 ordered, and may be restrained on the application of any 
 taxpayer. It remains to be shown what effect the non- 
 performance of such conditions will have upon the bonds 
 after they have passed into the hands of a bona fide holder. 
 It may be stated generally that such bonds, in the 
 hands of a bona fide holder, without notice of the non- 
 performance of the conditions, are valid, and against 
 him the fact of non-performance cannot be set up as a 
 defence,^ unless the j^rior condition was one which was 
 required to be performed by the constitution of the 
 State, or the statute expressly declared the bonds should 
 be void, unless the conditions were fulfilled, in which 
 latter cases the bonds will be invalid.^ 
 
 company instead of being sold, as 
 required by tlie original act. 
 
 The United States Supreme Court 
 in Thompson v. Perrine, (1880) 103 
 U. S. 806, held that such a curative 
 act was valid, and the bonds held 
 by the defendant in error (Perrine) 
 wliich he acquired after tlie decision 
 in Town of Duanesburgh v. Jenkins, 
 and before that of Horton v. Town 
 of Thompson, were valid, although 
 the latter case held sucli curative 
 act to be unconstitutional. T)ie 
 court said : 
 
 " If the recitals in the bonds 
 gave notice that tlie acts of 1868 
 and 1869 forbade their exchange 
 for stock and required them to be 
 sold and their proceeds invested in 
 such stock, the purchaser is also 
 presumed to have known, not only 
 that such exchange had been legal- 
 ized by the act of 1871, but that 
 the authority of the Legislature to 
 pass that act was sustained by the 
 
 decisions of the liighest court of llie 
 State, rendered prior to its passage. 
 His rights, therefore, should not 
 be affected by a decision rendered 
 after they accrued, wJiich decision 
 is in conflict with the law as de- 
 clared not only by this court in 
 numerous cases, but by the Iiigliest 
 court of the State, at and before tlie 
 time he purchased tlie lionds." 
 
 ' Mobile Sav. Bk. Octibbeka Co., 
 24 Fed. Rep. 110; Stockton R. R. 
 Co. V. Stockton, 51 Cal. 328 ; Parker 
 V. Smith, 3 111. App. 3r)6. 
 
 2 Randolph v. Post, 93 U. S. 502 ; 
 Chinquy v. People, 78 III. 570; 
 Town of Cherry Creek v. Clark. 123 
 N. Y. 161 ; Jones on R. R. S.'curi- 
 ties, § 291 ; Dill, on [Mun. Corj). 
 520 ; Burroughs on Pub. Securiti<'s, 
 357 : A. L. Ins. Co. v. Bruce, 105 
 U. S. 328; Pana v. Bowler, 107 
 U. S. 529-39. 
 
 ' Harrington v. Plainview, 27 
 Minn. 224 ; Post v. Supervisors. 105 
 395
 
 § 283 MUNICIPAL BONDS. [CH. XVII. 
 
 The bonds, however, in order to i^rotect the innocent 
 holder, when the prior conditions have not been per- 
 formed, or their performance waived, must contain 
 such recitals ; usually that they are issued pursuant 
 to the enabling act, reciting it, that assures the holder 
 that all the prior conditions have been performed, and 
 this recital must be made by the board, body or officers 
 of the municipal corporation who are authorized, ex- 
 pressly or impliedly, to pass upon the question of per- 
 formance, or by their agents appointed by them.^ (See 
 the chapter on recitals in another part of this work. 2) 
 If the bonds do not contain recitals, or contain improper 
 or insufficient recitals, they will still be valid if the 
 records of the board, or coui»t, or body, or officers author- 
 ized to issue the bonds and pass upon the question of 
 performance, show" that such board, court, body or offi- 
 cers did in fact pass upon it and determine that the con- 
 ditions were jDerformed.^ 
 
 If the performance of the prior conditions have not 
 been determined and their determination evidenced, 
 either in the bonds by the proper recitals, or by the records 
 of the proceedings relative to their issue, the bonds, al- 
 though in the hands of innocent holders, are open to the 
 defence of the non-performance of prior conditions, and 
 the mere fact of their issue is not conclusive evidence of 
 the performance of prior conditions. In one or two cases 
 in New Jersey, such, however, has been held to be con- 
 clusive evidence of the performance of prior conditions.^ 
 
 The courts of New York State have not given to re- 
 citals in bonds issued to pay for stock in a railroad com- 
 pany, so far as the determination of the question by the 
 officers authorized to issue the bonds relates to whether 
 the proper consent of the taxpayers has been given is 
 concerned, the conclusiveness such determination is 
 
 U. S. 667 ; South Ottawa v. Perkins, 
 94 U. S. 260. See §§ 253, 254, 255. 
 
 1 Denison v. Mayor etc. of City 
 of Columbus, 62 Fed. Rep. 775; 
 
 2 See i;§ 193-216. 
 8 See § 240. 
 
 * Cotton V. New Providence, 47 
 N. J. L. 401 ; :\Iut. R. L. Ins. Co. v. 
 
 City of Columbus v. Denison, 69 I Elizabeth, 13 Vr. 235. See g§ 224. 
 Ped Rep. 58 ; Pana v. Bowler, 107 | 
 U. S. 529. I 
 
 39G
 
 CH. XVII.] RAILROAD AID BONDS. § 283 
 
 given by the Federal and other State courts. In that 
 State such determination, whether found in the recitals 
 of the bond, or the affidavit of the officers, is regarded as 
 jjrima facie, and may be disputed even against ixhona 
 fide holder.^ 
 
 All the acts imposing conditions must be recited in the 
 bonds, and this is illustrated by the case of Citizens' Sav- 
 ing and Loan Association v. Perry County, 150 U. S. 
 292. The bonds in suit were voted to be issued after the 
 railroad company had located their shops at a certain 
 place. They were never located, but the bonds were 
 issued by the county court. 
 
 The court held the bonds to be void in the hands of a 
 bo } I a fide holder, because they did not recite they were 
 issued by virtue of the statitte under which the condition 
 was imposed, and that, therefore, the county was not 
 estopped from setting up the non-performance of the 
 conditions precedent. This case also refers to other de- 
 cisions of the court, where the court held the municipality 
 to be estopped from setting up the non-performance of 
 precedent conditions, when the acts under which the 
 bonds were issued were referred to in the bonds. 
 
 What would be the effect of the non-performance of 
 some conditions in relation to railroad aid imposed by 
 the constitution, if they were not performed, and the 
 bond in the hands of a bona fide holder should recite that 
 it was performed, and tliis recital was made by officers 
 who were to issue the bonds upon the performance of such 
 constitutional condition, is hard to determine. We have 
 seen that bonds issued beyond the constitutional limit, 
 containing such recitals so made, were held valid by the 
 Supreme Court of the United States ; ^ and in another 
 another case,^ bonds which contained recitals that the 
 constitutional provision, requiring that the time of 
 the issue of the bonds a sinking fund should be provided 
 to pay the principal and interest, had been provided, 
 
 1 Craig V. Andes, 93 N. Y. 40.j ; 
 Starin v. Genoa, 23 N. Y. 440. 
 
 2 Chaffee Co. v. Potter, 142 U. S. 
 355. 
 
 3 Nat. Life Ins. Co. v. Huron, 02 
 Foci. Rep. 778. 
 
 397
 
 ^ 284 MUNICIPAL BONDS. [CH. XVII. 
 
 when in fact no such provision was made, were held 
 valid. 
 
 In the light of the above cases, it would seem that the 
 Federal courts would be bound to hold such bonds valid. 
 
 The municipal corporation may be also estopped by its 
 own acts, although the bonds contain no recitals and the 
 records of proceeding do not estop them. (See chapter on 
 Estoppel by Laches, etc.^) 
 
 1 See §§ 243-253. 
 398 
 

 
 CHAPTER XVIII. 
 
 CONSTITUTIONAL LIMITATIONS UPON THE ENACTilENT OF 
 
 LAWS. 
 
 Section. 
 
 284 — Object of constitutional 
 limitations — Where to be 
 found. 
 
 285 — Title of acts — Constitutional 
 provisions relating to. 
 
 286 — When the title is sufficient 
 — Most perfect expression 
 not necessary — Matter not 
 fairly within the title to 
 be excluded. 
 
 287— Title of amended act— 
 What sufficient. 
 
 288 — Act must contain but one 
 subject — Object of such 
 a provision — In New York 
 the prohibition applies 
 only to local acts. 
 
 289 — When the act embi-aces 
 more than one subject if 
 title also does so the act 
 is void — Tiie subject not 
 embraced within the title 
 is inoperative ; the balance 
 remains good — AVIien. 
 
 290 — Amendments to former acts 
 — Tlie old act need not be 
 set out, but the section as 
 amended must be intro- 
 duced. 
 
 291 — Amendment by iinplicatiDn 
 — A later inconsistent stat- 
 ute repeals a former 
 inconsistent one, or so 
 much as is in conflict 
 ■with tlie later one — I^aw 
 does not favor a repeal by 
 implication. 
 
 292 — Repeal of local or sjiecial 
 laws — Usual rule that a 
 
 Section. 
 
 former local or special 
 statute is repealed by a 
 later inconsistent act. 
 
 293 — Proliibition against making 
 existing laws a part of a 
 new act — Object of the 
 pi-ohibition — When tlie 
 new law need not recite 
 tlie old. 
 
 294 — Uniform operation, wliat is 
 meant by the term — An 
 act is uniform when it 
 operates on all of tlie 
 same class. 
 
 295 — Same — When an act is uni- 
 form in operation — Cases. 
 
 29G — Local and special laws — 
 What are such — Provi- 
 sions requiring such laws 
 — Object of such laws. 
 
 297 — Classification of munici- 
 ]>alities — Cla.ssification in 
 Pennsylvania — Ca.s(>s il- 
 lustrating the jnirpose. 
 
 298 — Classification in New Jei-sey 
 — What is found in acts 
 classifying muuiciiial cor- 
 porations. 
 
 299 — Municipalities are u.'^ually 
 graded so tliat one of a 
 lower grade may enter 
 into a higher — Act held 
 const itutional alt hough 
 the municipality to which 
 it ajiplies b(^ not di.s- 
 tinguished by peculiar 
 features from others. 
 
 300 — Ohio — Ca.scs illustrating 
 rule in § 299, supra. 
 309
 
 MUNICIPAL BONDS. 
 
 [CH. XVIII. 
 
 Section. 
 
 301 — Rule in New York as to 
 what constitutes a spe- 
 cial or local act — Cases. 
 
 302 — Kansas — Cases illustrating 
 rule in §299. 
 
 308 — Nebraska — Cases illustrat- 
 ing rule in § 299. 
 
 304 — Illinois — Cases illustrating 
 • rule in § 299. 
 
 305 — Many of the State courts 
 require that the municipal 
 corporation to which a 
 special act applies must 
 be distinguished from the 
 others by peculiar charac- 
 teristics. 
 
 306 — New Jersey — Courts so hold 
 — Cases illustrating the 
 rule. 
 
 307 — California — Same rule — 
 Cases — Missouri — Same 
 rule — Cases. 
 
 808 — Wisconsin — Same rule — 
 Cases. 
 
 809 — Minnesota — Same rule — 
 Cases. 
 
 310 — Other provisions jirohibit- 
 ing special legislation — 
 No si^ecial law shall be 
 enacted when general 
 law can be made api>lica- 
 ble — Such prohibition 
 generally held to be di- 
 rectory — Legislature usu- 
 ally the judge. 
 
 311 — Indiana — The Legislature is 
 the proper body to deter- 
 mine the question as to 
 the aiiplicability of the 
 act. 
 
 312 — Iowa — The question is a 
 judicial one. 
 
 313 — Colorado — So also in this 
 this State. 
 
 314 — Cases — Conclusion — What 
 the author believes to be 
 a general act, although 
 not applicable to all the 
 municipalities — Decisions 
 400 
 
 Section. 
 
 of the State courts must 
 be carefully examined. 
 
 315 — Introduction of bills — Limit- 
 ations upon the time of. 
 
 316 — Readings — Number of times 
 necessary — Courts will 
 not interfere as to the 
 manner of readings — Suf- 
 ficiency of. 
 
 317 — Vote — Number necessary 
 to pass a bill — Ayes and 
 nays — If not called bill 
 may be declared uncon- 
 stitutional — When. 
 
 318 — Signing of bills by the pre- 
 siding officers. 
 
 319 — By the Governor — When 
 must be signed — Veto — 
 Passage over veto. 
 
 320— When statutes take effect 
 — Constitutional require- 
 ments. 
 
 321 — May the proceedings of the 
 Legislature be inquired 
 into — In what States this 
 may be done — Effect — 
 In what States it cannot 
 be. 
 
 322 — Same — Prior publication of 
 proposed legislation — Pre- 
 sumption as to, when regu- 
 larly given. 
 
 323 — Same — Regularity pre- 
 sumed in what States, 
 but may be overcome by 
 proof. 
 
 824 — The presumption is that a 
 statute is constitutional. 
 
 325 — Construction of consti- 
 tutional provisions — 
 Courts will hold a stat- 
 iite to be constitutional 
 until the contrary is 
 shown — Construction of 
 the Federal constitu-tion 
 by the United States 
 court is binding on all 
 State courts. 
 
 326— Judicial notice— What the
 
 CH. XVIII.] CONSTITUTIONAL LIMITATIONS. § 285 
 
 Section. 
 
 class acitj- belongs to — Of 
 State statutes. 
 
 Section. 
 
 court will take notice of 
 — Of the census — Of geo- 
 gi'aphical facts — Of the 
 
 § 284. Constitutional provisions — Where found. — 
 
 The constitutions of all the States contain certain provi- 
 sions affecting the general passage of laws. These pro- 
 visions provide that the Legislature conij^ly with certain 
 conditions relative to the form as well as to the sub- 
 stance of the statutes which they enact. And they have 
 been adopted with the view of curtailing the enactment 
 of laws upon certain subjects as well as to compel more 
 intelligent action upon the part of the legislators. 
 
 Subject to such restrictions and prohibitions found in 
 a State constitution or the Federal constitution, the Leg- 
 islature of a particular State has complete power over 
 municipal corporations therein/ especially so in refer- 
 ence to authorizing tliem to contract debts and issue and 
 sell their negotiable bonds and other evidence of debt, 
 and, as we have seen elsewhere, may even compel them 
 to issue their bonds to pay their just debts, and may also 
 compel them to incur debt for some public improvement 
 not local in its nature.^ Without further digressing 
 from the matter in hand, what is proposed to be treated 
 here relates to the constitutional requirements imposed 
 upon the Legislature in the enactment of laws, which 
 relate to or affect municipal corporations. 
 
 § 285. Title. — Most of the State constitutions contain 
 provisions, the object of wliicli is to have the title of the 
 act express its object. The provision usually reads : "No 
 bill shall be passed containing more than one subject, 
 which shall be clearly expressed in the title " (Penn. 
 Const, sec. 3, art. 3), or "No private or local bill sliall 
 embrace more than one subjrrt and that sliall be declnriMl 
 in its title" (N. Y. St. Const, art. 3, sec. K,), or ''No 
 private or local law . . . shall embrnce more than one 
 subject and that shall be expressed in its title" (111. 
 Const, sec. 33, art. 3). 
 
 SpringfioM. fia 111. 60; Dill, on 
 Mun. Corp. (4tli ed.) § 65. 
 2 See S 43. 
 
 1 Darlington v. Mayor of N. Y.. 
 31 N. Y. 164; State v. Fuller, 34 
 N. J. L. 27 : Sanc-ainon Co. v. 
 
 26 401
 
 § 286 
 
 MUNICIPAL BONDS. 
 
 [CH. XVIII. 
 
 The object of these constitutional provisions is to in- 
 form the legislators of the proposed legislation, and to 
 prevent them from being deceived into voting for an ob- 
 ject of which they know nothing or have no notice. The 
 title is to inform them, as well as the public, of the gen- 
 eral provisions of the proposed legislation, so that when 
 the bill becomes a law, it becomes such after intelligent 
 action has been taken upon it. An act without a title or 
 enacting clause is void.^ 
 
 The constitution of New York, which requires that the 
 subject of the act be expressed in the title, applies only 
 to local laws.^ 
 
 § 286. When title sufficient.— The title need not be 
 an index to all the contents.^ It is sufficient if the 
 title expresses substantially the subject. It is not nec- 
 essary that the most perfect expression should be adopted,^ 
 but it is necessary that the title be such as fairly to 
 suggest or give a clue to the subject. 
 
 If the title fairly gives notice of the subject of the act 
 so as to reasonably lead to an inquiry into the body of 
 the bill, it is all that is necessary.^ 
 
 The cases in the various State courts wherein the title 
 of acts have been brought into question are so numerous 
 that it is impossible to cite or quote all of them.^ 
 The above rules we believe will cover all the cases. 
 
 It must be remembered that the title of the act is 
 a part of it, and that it limits its scope and is used in 
 interpreting its words. '^ 
 
 1 Burritt v. State C. Com'rs, 120 
 111. 322 ; State v. Patterson, 98 N. C. 
 660. 
 
 2 People V. Webster, 28 N. Y. 
 646. 
 
 ^ Allegheny Co. Home's App., 77 
 Pa. St. 77. 
 
 4 Matter of N. Y. & B. Bridge Ct. 
 Appeals, 72 N. Y. 527-33. 
 
 5 Home's App. 77 Pa. 77. 
 
 6 People V. Miller, 38 Mich. 383 ; 
 Sweet V. Syracuse, 129 N. Y. 316 ; 
 Com. V. Frutchey. 11 Pa. Co. Ct. 
 R. 112 ; Georgia ^1. Pv. Co. v. State, 
 
 402 
 
 15 S. E. R. 298 ; Pierce v. Smith, 
 (Kan.) 29 P. R. 565; State v. 
 Com'rs, 45 Kan. 743 ; People v. 
 Hamil, 134 111. 646; Ex parte 
 Cowert, 92 Ala. 94 ; Clark v. 
 Com'rs, 54 Kan. 634 ; Com, v. 
 Severn, 164 Pa. 462 ; Kings Co. 
 V. Johnson, 104 Cal. 148, or 37 P. R. 
 870. 
 
 ■^ Allen V. Com'rs. 
 R. 219 ; R. R. Co. v. 
 St. 164; Perkin v 
 156 Pa. St. 539. 
 
 (N. J.) 31 Atl. 
 Riblot, 66 Pa. 
 Philadelphia,
 
 CH. XVIII.] CONSTITUTIONAL LIMITATIONS. § 288 
 
 Therefore great care is needed in the drafting of the 
 title to a bill in order to make it comprehensive enough 
 to embrace intended provisions, because if it be not broad 
 enough to include them all, though they be necessary 
 and germane to the object of the bill, those not within 
 the title will be deemed void, because courts cannot en- 
 large the scope of the title so as to include all the provi- 
 sions, although such enlargement might have been made 
 by the Legislature, Courts, however, construe the title 
 in as liberal a manner as possible consistent with the 
 words employed, so as to validate the law.^ 
 
 § 287. Title of amended act. — It is a sufficient title 
 to an act amending a former act, if the amended act re- 
 cite that it is an act to amend the former act or a supple- 
 ment to the former act, reciting the title of the former 
 act and date of approval or passage, provided the legisla- 
 tion in the new act is germane to the ol^joct of the former 
 act. The reference to the former act, being treated as 
 expressing the object of the new act.^ 
 
 Where the amended act did not refer to the title of the 
 former act, but merel}^ to a section of the revised code, 
 it was held unconstitutional because it did not state the 
 object of the act.^ 
 
 An error in an amendatory act in stating the day of the 
 month on which the former act was approved does not 
 necessarily render inoperative the amendment made by 
 the act in which such error has occurred, but should be 
 held to be merely a clerical error.^ 
 
 § 288. Act to contain bnt one snbject. — The consti- 
 tutions of most of the States provide tliat no bill shall be 
 passed containing more than onesiil)ject or ol)ject. which 
 must be expressed in the title. This provision was 
 adopted to prevent what is known as " log-rolling," that 
 is, incorporating intoone billalarge nunilu'rof divcrsdis- 
 
 1 In re Ilaynes, 54 N. J. L. 6-24. | » Burnett v. Taylor. 10 S. W. U. 
 
 2 State V. Marion Co. Ct., 31 S. W. , 194 ; Calalian v. Cliipnian. (Mich.) 
 
 R. 23 ; State L. R. R. App., 77 Pa. 
 St. 431 ; Hyman v. State, (Tenn.) 9 
 S. W. R. 372 ; Atty.-Gen. v. Amos, 
 60 Mich. 372. 
 
 26 N. W. R. SOf,. 
 
 * Saunders v. Trovincial >funiri- 
 pality, 4 So. R. 801 : State v. Bab- 
 cock] 36 N. W. R. 34S. 
 
 40.3
 
 § 288 
 
 MUNICIPAL BONDS. 
 
 [CH. XVIIl. 
 
 connected interests relating to various subjects so as to 
 obtain sufficient votes in the houses of the Legislature to 
 pass the bill. 
 
 By this means many laws inimical to the interest of 
 the people were passed, and it became necessary for the 
 people, in order to protect themselves from the passage of 
 such laws, to adopt a provision in their State constitutions 
 which prohibited more than one subject or object to be 
 contained in an act. 
 
 If the object of the act, as indicated by its title, is not 
 the same as that in the body of the act, the act will be 
 void because the title controls the object.-^ 
 
 Whatever is fairly and reasonably connected with the 
 object, or necessary to facilitate its accomplishment, is 
 within the object of the act, and germane to it. 
 
 Cooleysays:^ "The general purpose of these proA'i- 
 sions is accomplished when a law has but one general 
 object, which is fairly indicated by its title. To require 
 every end and means necessary or convenient for the 
 accomplishment of this general object to be provided for 
 by a separate act relating to that alone, would not only 
 be unreasonable, but would actually render legislation 
 impossible." 
 
 The constitutional provision that the subject of an act 
 must be expressed in its title must receive a reasonable 
 interpretation. If the matter is fairly germane to the 
 subject expressed by the title it is enough.^ 
 
 1 N. Y. G. L. R. Co. V. Montclair, 
 (N. J.) 21 Atl. R. 493 ; lure Ilanck, 
 70 Mich. 396; Cooley on Const. 
 Lim. 179. 
 
 2 Cooley on Const. Lim. 175. 
 
 8 Dallas V. Redmond, 10 Cal. 297 ; 
 State V. Olson, (Minn.; 59 N. W. R. 
 634 ; Quinn v. Cumberland Co., 
 162 Pa. St. 55 ; People v. Webster, 
 28 N. Y. S. 646 ; State v. Brown, 
 (Minn.) 57 N. AV. R. 659 ; Travellers' 
 Ins. Co. V. Townsiiip of Oswego, 59 
 Fed. Rep. 58 ; State v. Minos, 38 
 W. Va. 125 ; Maynard v. Marshall, 
 91 Ga. 840 : Van Husenv. Heames, 
 404 
 
 96 Midi. 504 : Gaines v. Williams, 
 146 111. 450. In the following cases 
 the object was held to embrace more 
 than the title of the act, and was 
 therefore unconstitutional as to the 
 matters not germane to the title. 
 
 Adams v. San Angelo Water 
 AVorks Co., 86 Tex. 485; State v. 
 Nomland, (N. D.) 57 N. W. R. 85 ; 
 Wolf V. Taylor, 98 Ala. 254 ; Wil- 
 kerson v. Belknap Sav. Bk., (Kan.) 
 53 Kan. 718 ; Perkins v. City of 
 Philadelphia, 156 Pa. St. 539; 
 Rogers v. Union R. W'. Co., 30 
 N. Y. S. 855 ; Nites v. Schoolcraft,
 
 €H. XVIII.] CONSTITUTIONAL LIMITATIONS. § 288 
 
 "An act to amend the charter of the city of Chicago,*' 
 was held to permit of provisions to extend the Hmits of 
 the city and to estabUsh and provide for the improve- 
 ment and regulation of public parks.^ 
 
 And an act entitled " An act to amend sees. 3, 4, and 5 
 of chapter 1 of an act entitled ' An act to provide a char- 
 ter for the city of Detroit, and to rej^eal all acts in con- 
 flict therewith, being act No. 32G of the Session Laws, 
 1883, and to add three new sections,' " was held to permit 
 of the extension of the boundaries of the city and to 
 modify and enlarge the powers of the city government, 
 the court holding the provisions of the act to-be ger- 
 mane to the general object of the act. 
 
 ' ' An act to amend an act establishing a new charter 
 for the city of Atlanta," was held to embrace a provision 
 that street railroad companies should be required to pave 
 their tracks.^ A local act, entitled " An act in reference 
 to the collection of taxes," may provide for the entire 
 system of collection, including sales and conveyances, 
 without being open to the objection of embracing more 
 than the subject embraced in the title. ^ 
 
 An act to provide a charter for a city is sufficiently 
 broad to include in the act all the necessary provisions 
 relating to the city government.* And an act to amend 
 a city charter is unconstitutional so far as it contains 
 provisions not relating to city government.''' The title, 
 "An act to provide for the drainage and sewerage in 
 cities of this State," is sufficiently broad to permit of a 
 provision authorizing cities to carry their sewers through 
 adjacent townships to tide-water.® 
 
 It was held that " An act to create a new charter for 
 the city of Columbus, and to consolidate and declare tlie 
 rights and powers of the corporation, and for other pur- 
 poses," was unconstitutional in so far as it provided for 
 
 Cir. Judge, (Mich.) 60 N. W. R. I » Ensign v. Barse. 107 N. Y. :{29. 
 771 ; Commonwealth v. Samuels, ! * State v. Wood. 49 N. L. J. 85 ; 
 
 Peoi)le V. Mahoney. l:^ Mich. +'^1. 
 
 6 Wulftang V. McCallom, S;j Ky. 
 361. 
 6 State V. Orange. 26 Atl. R. 799. 
 
 405 
 
 16;3 Pa. St. 283 ; Simon v. Northup, 
 (Or.) 40 P. R. 500. 
 
 1 Prescott V. Chicago, GO 111. 21. 
 
 - Atlanta v. Gate City R. R. Co., 
 4 S. E. R. 269.
 
 § 289 MUNICIPAL BONDS. [CH. XVIII. 
 
 extending and exercising municipal police jurisdiction 
 over territory adjacent to the city, since the title of the 
 act afforded no indication of any extension of power 
 whatever beyond the corporate limits.-' 
 
 The title of an act to incorporate a railroad company 
 is broad enough to cover provisions that counties to be 
 benefited by the proposed improvement may take stock 
 and issue bonds, or donate bonds.^ 
 
 Sometimes the title of the act has added to it the 
 words, "And for other purposes," or words of similar 
 import. They are now held to be meaningless and con- 
 vey no idea of legislative intent, and cannot be regarded 
 as expressing any object.^ 
 
 The constitution of New York State, which prohibits 
 more than one subject to be embraced in the title and 
 bill, applies only to local acts.* 
 
 § 289. When the act embraces more than one object. 
 — If the act embraces more than one object, and the title 
 of the act also does so, the act will be void, because the 
 court cannot say which should stand and which should 
 fall.^ But if the title embraces but one object, and the 
 act itself embraces two or more, then so much of the act 
 as is not germane to the title will be inoperative and 
 void, while the balance of the act, that properly em- 
 braced within the title, will stand ; provided it can be 
 separated from the other object or objects, and is not de- 
 pendent on them ;'^ and provided further, that the con- 
 stitutional provision on this subject does not, in exj^ress 
 words, render void any act which contains two subjects. 
 
 When an act embraces in its body two or more sub- 
 jects, and one of these, not within the title, is a repeal or 
 
 1 Blair v. State, (Ga.) 17 S. E. R. 
 96. 
 
 2 Supervisors v. People, 25 111. 
 181 ; State v. County of Wirt, (W. 
 Ya.) 17 S. E. R. 379. 
 
 estate V. McCracken, 42 Tex. 
 383. 
 
 6 Yerly v. Coclii-an, 14 So. R. 
 355; Sanilac v. Auditor-Gen., 36 
 N. W. 794; Ellis v. Hutchinson, 
 
 3 Pitkin Co. v. Aspin M. & S. Co., 70 Mich. 154 ; Catron v. Commis., 
 
 83 Pac. Rep. 717 ; Cooley on Const. 33 P. R. 513 ; Adams v. San Angelo 
 
 Lim. 177. W. Co., 25 S. W. 605 ; Dempsey v. 
 
 4/u re Malon W. W. Co., 15 State, (Ga.) 22 S. E. R. 57; Cooley 
 
 N. Y. S. 649. on Const. Lim. (6th ed.) § 177. 
 406
 
 CH. XVIII.] CONSTITUTIONAL LIMITATIONS. § 290 
 
 amendment of some former law, tlie former law will 
 remain in force and be unaffected by the repugnant part 
 of the subsequent act.^ 
 
 § 290. Amendments to former acts. — Many of the 
 State constitutions provide that, in order to revise or 
 amend a former act, the sections revised or amended 
 shall be set forth and published in full. The provision 
 sometimes reads as follows : " No act shall be revised or 
 amended by mere reference to its title, but the act re- 
 vised or amended shall be set forth and published at 
 full length " (Oregon Constitution, sec. 22, art. 4) ; or 
 " No law shall be revised or amended by reference to its 
 title only, but the act revised, or the section or sections 
 amended, shall be inserted at length " (New Jersey Const, 
 sec. 7, art. 4) ; or " No act shall be revised or re-enacted 
 by mere reference to the title thereof, nor shall any act 
 be amended by providing that designated words thereof 
 shall be struck out, or that designated words shall be 
 struck out and others inserted in lieu thereof ; but in 
 every such case the act revised or re-enacted, or the act 
 or the part of the act amended, shall be set forth and 
 published at length, as if it were an original act or pro- 
 vision " (Missouri Const, art. 4, sec. 33). 
 
 The provisions of the other State constitutions are to the 
 same effect, although the language may not be all alike. 
 
 The object of these provisions is to compel Legislatures 
 to enact laws which are complete in themselves, so far as 
 they embrace the matter within them, and to avoid the 
 necessity of a comparison of the amended act with the 
 amendatory one, so as to discover what the law is. 
 Under these provisions the legislators have an intelligent 
 knowledge of what they are acting upon, while, if such 
 provisions did not exist, an act could be amended by 
 striking out some words in the former act, or inserting 
 words, which would so change the meaning of the form('r 
 act or state of the law, and that without the knowledge 
 of the legislators, as to lead to fraud as well as confusion, 
 so that in the end no man could say just what the pres- 
 ent state of law was. 
 
 1 Evans v. Willistown. 32 AU. Rep. 87. 
 
 407
 
 §291 
 
 MUNICIPAL BONDS. 
 
 [CH. XVIII. 
 
 Under these provisions it is held that it is not neces- 
 sary to set out the section to be amended, but it is suffi- 
 cient if the section, as amended, be set out in full, and 
 the whole act as amended need not be set out,^ but when 
 the entire act is revised then it must be set out, as re- 
 vised, in full.^ 
 
 § 291. Amendment hy implication. — A statute may 
 be amended or repealed by implication, as where an act 
 not amendatory in character, but original in form and 
 complete in itself, exhibiting on its face wliat the law is to 
 be, its purpose and scope is enacted, such act is valid, 
 notwithstanding it may in effect change or modify some 
 other law upon the same subject.^ 
 
 Where a new statute covers the whole subject-matter 
 of the old, adds new offences, and prescribes new penal- 
 ties, the former is repealed b}^ implication.* Where the 
 whole subject-matter of an earlier statute is revised by a 
 later one, there is a repeal by implication.^ 
 
 When a statute amends a former statute, "so as to 
 read as follows," it operates as a repeal by implication 
 of inconsistent provisions in the former law and of 
 provisions omitted in the amended law. But when the 
 amended act re-enacts provisions in the former law either 
 ipsissimis verbis, or by the use of equivalent though 
 different words, the law will be regarded as having been 
 continuous ; and the new enactments as to such parts 
 will not operate as a repeal so as to affect a duty accrued 
 under the prior law, although as to all new transactions 
 the latter act will be referred to as the ground of the 
 obligation.'' 
 
 1 State V. Thurston, 92 Mo. 325 ; 
 State V. Amr. F. Co., 11 Atl. R. 
 127 ; Denver C. R. v. Nestor, 15 
 Pac. R. 714 ; Purvis v. Ross, 27 Atl. 
 R. 882 ; People v, Upson, 79 Hun 
 87 ; State v. Hancock, 54 N. J. L. 
 393 ; Cooley on Const. Lim. p. 185. 
 
 •^ David V. Portland, 12 Pac. R. 
 174. 
 
 8 Warren v. Crossby, 34 Pac. R. 
 G61 ; People v. Mahonev, 13 Mich. 
 408 
 
 496 ; Evernham v. Hulit, 45 N. J. L. 
 534 ; Lehman v. McBridge, 15 Ohio, 
 C03. 
 
 estate V. Welle, 112 Ind. 237; 
 Mersereau v. Mersereau Co., (N. J.) 
 26 Atl. Rep. 682 ; Koons v. Clug- 
 gish, (Ind.) 34 N. E. R. 651. 
 
 6 Keese v. Denver, 10 Colo. 112. 
 
 6 In re Prime's Estate, 13G N. Y, 
 247 ; People v. Upson, 79 Hun 87.
 
 CH. XVIII.] CONSTITUTIONAL LIMITATIONS. § 292 
 
 The law does not favor a repeal by implication,^ and 
 unless the subsequent act contains provisions which are 
 inconsistent with the former law, so that the former law 
 cannot stand, it will not be held to be repealed. The 
 courts endeavor so to construe each act that it will not 
 repeal, by implication, another, and the subsequent act 
 in order to act as a repeal of a former one must be so ex- 
 tensive and so clearly inconsistent and repugnant to an 
 existing law that they cannot consistently stand together, 
 then the latter becomes by implication an amendment or 
 repeal of the former inconsistent law.^ 
 
 § 292. Repeal of local or special laws. — Some of the 
 State courts hold that a local or special statute is not re- 
 pealed by implication by a subsequent general one on the 
 same subject, and that in order to operate as a repeal the 
 subsequent act must contain such intention in express 
 language.^ 
 
 A case in Pennsylvania* is in jwint, where it was held 
 that while it is the general rule that a later statute niiglit 
 repeal a former one, without express language to that 
 effect, by implication, yet a local statute enjicted for a 
 particular municipality, for reasons satisfactory to the 
 Legislature, is intended to be exceptional for the benefit 
 of such municipality, and that it is not reasonable to sup- 
 pose that the Legislature intended to repeal such a special 
 act, which local circumstances made necessary. 
 
 It, however, is the general rule that while the courts 
 do not favor the rej^eal by implication of a statute, and 
 particularly a local or special one, yet if the subsequent 
 general statute in its terms covers the subject of the 
 special one, showing in strong language it is intended to 
 take ther place of it, the general act will 1)e held tosujier- 
 
 Pcopk' V. Board of Com., 143 N. Y. 
 184; Comrs. v. Dcboe, 43 III. App. 
 
 ^ Snell V. Biidgewator etc., 41 
 Mass. 29G. 
 
 2 State V. Brown, 8 Ohio C. Ct. R. 
 103 ; Com. v. Kempsmitli, 13 Pa. 
 Co. Ct. R. 667 ; Com. v. Melville, 
 160 Mass. 307 : Hunter v. Menipiiis, 
 26 S. W. R. 828 ; State v. Luther. 
 <Minn.) 57 N. W. R. 464 : Hopkins 
 V. Scott, (Neb.) 57 N. W. R. 301 : Pa. St. 25. 
 
 409 
 
 8 City of Reading v. Shepp. 2 Pa. 
 Dist. R. 137 ; President v. Ruslivilic. 
 32 111. Ajjp. 320 ; People v. Canvas- 
 sers. 43 N. Y. 84. 
 
 * Malloy V. Commonwealth, ll.*)
 
 § 293 MUNICIPAL BONDS. [CIT. XVIII. 
 
 sede the special, although it does not contain express 
 words of repeal.^ 
 
 § 293. rroliibitioii against making existing laws a 
 part of new act. — The constitutions of some of the States 
 provide that no act shall be passed making existing laws 
 a part of said act or be applicable under it, except by in- 
 serting it in such act. 
 
 The object of such provision is to inform the members 
 of the Legislature of the nature of the proposed legisla- 
 tion, and to provide that the bill proposed to be passed 
 will disclose on inspection what particular rights or 
 privileges are designed to be conferred by it. 
 
 This constitutional prohibition is to be construed rather 
 as to its sjDirit than its letter, because if construed strictly 
 it would operate so as to prohibit any reference to other 
 laws, and would invalidate untold numbers of legislative 
 enactments. 
 
 It is very common practice to incorporate in laws, 
 especially those relating to public officers, a provision 
 that such officers shall have the powers and capacities 
 vested by existing legislation in other officers or boards, 
 or that they should proceed to perform their duties in the 
 manner indicated by designated existing laws. If this 
 reference to existing laws is prohibited all such legisla- 
 tion is unconstitutional. 
 
 In the well-considered case of People v. Lorillard et al., 
 35 N. y. 285-290, where it was claimed that an act 
 which provided for the appointment of commissioners to 
 condemn lands, and which provided that the commis- 
 sioners, when appointed, should proceed to condemn the 
 lands in the manner pointed out in a certain law, which 
 was named, was unconstitutional because of such refer- 
 ence, the court by O'Brien, J., said : 
 
 "This appeal cannot be sustained without holding in 
 effect that every statute, general or local, must contain 
 within itself every detail necessary to its complete execu- 
 tion, and that when the lawmakers desire to adopt the 
 procedure or some other matter of detail contained in a 
 
 1 Haynes v. Cape May, 53 N. J. L. 1 174 ; Dill, on Mun. Corp. Vol. 1, § 
 180-3 ; Brown v. Lowell, 8 Met. I 87. 
 410
 
 CH. XVIII.] CONSTITUTIONAL LIMITATIONS. § 294 
 
 local statute, that cannot be done by a suitable reference, 
 but the same must be cut out of the other statute and 
 actually inserted in the new one mutatis mutandis. . . . 
 
 "Their purpose (the framers of the constitution) was to 
 require bills introduced in the Legislature to be presented 
 in such form, and their essential provisions expressed in 
 such language, that the effect of the proposed enactment 
 might be understood by legislators of reasonable intelli- 
 gence. . . . 
 
 " When a general statute, in itself and by its own lan- 
 guage, grants some power, confers some rights, imposes 
 some duty or creates some burden or obligation, it is not 
 in conflict with this section of the constitutional provision 
 because it refers to some existing statute, general or 
 local, for the purpose of pointing out tlie procedure, or 
 some administrative detail necessary for the execution of 
 the powers, the enforcement of the right, the proper per- 
 formance of the duty, or the discharge of the burden or 
 obligation." ^ 
 
 In New Jersey, the constitution of which has such a 
 prohibition, the courts hold that the object of the consti- 
 tution was not to curtail or embarrass the Legislature in 
 the enactment of laws, but the purpose was to obtain a 
 fair and intelligent exercise of the lawmaking power. 
 It has therefore been decided that an act of tlie Legisla- 
 ture which is complete and perfect in itself, the purpose, 
 meaning and full scope of which is apparent on its face, 
 is valid, though it may provide for actions or means of 
 carrying its provision into effect by reference to a course 
 of procedure established by other acts of the Legislature.^ 
 
 But where an act gave certain active and expert fire- 
 men the same privileges as allowed to members of the 
 national guard, by an act referred to, the act was hold to 
 be imperfect, incomplete and niiconstitutional, because 
 it referred to another existing law.^ 
 
 § 204. Uniform operation. — Another constitutional 
 
 1 People V. Bank, G7 N. Y. 563 ; 
 InreV. F. Co., 98 lb. 1^9; Union 
 Ferry Co., 98 N. Y. ir)8. 
 
 ^Campbell v. Board of Pliarmacy, 
 16 Vr. 245. 
 
 8 Christie v. Bayonno, 19 Vr. 
 407. 
 
 411
 
 § 294 MUNICirAL BONDS. [CH. XVIII. 
 
 re(|iiirement is that ''All laws of a general nature 
 must have a uniform operation. " This provision is found 
 in many of the State constitutions, and its object is to 
 require the Legislature to enact general laws for an 
 object which is applicable to all localities.^ 
 
 In order to constitute the uniformity of operation re- 
 quired by the constitution, it is not necessary that the 
 law, in order to be general, should operate upon all the 
 subjects or persons to which it applies at one time, but 
 it is sufficient that it operate uniformly on all persons or 
 things standing in the same category and relation.^ 
 
 The law must be general as to the subject to which it 
 relates, and its application must be uniform as to all 
 persons and things embraced within it ; or if the subject 
 of the law is divided into classes, the provisions appli- 
 cable to each class must appl}^ to all matters or things 
 included in such class.^ 
 
 It must not grant to any citizen or class of citizens 
 privileges which, upon the same terms and under like 
 circumstances, shall not equally belong to all citizens.^ 
 
 It is not necessary that the act take effect at the same 
 time so long as it operates uniformly upon the objects 
 embraced when they come within the scope of the act.^ 
 
 An act to prevent the removal from office of soldiers and 
 sailors of the late rebellion, so drawn as to apply only 
 to those in office at the time of the passage of the act, is 
 a special and not a general law having a uniform opera- 
 tion. While the sailors and soldiers of the late rebellion 
 form a class of citizens, and a law applicable to all, as a 
 class, would be general, but if applicable to only a part 
 of that class is special and in contravention with this re- 
 quirement of the constitution,^ 
 
 1 Young V. Board, SG N. E. R. i ^ Smith v. Judge, 17 Cal. 554 ; 
 1118 ; State v. Hoskins, (Minn.) 59 State v. Bargus, (Ohio) 41 N. E. E. 
 
 N. W. R. 545 ; Kitchen v. Magee, 
 (Mo.), 30 S. W. R. 523 ; Root v. 
 Board of Ed., (Ohio) 41 N. E. R. 
 135; Com. v. M. & M. N. Bk., 168 
 Pa. 309 ; Com. v. Brown, (Va.) 21 
 S. E. R. 357 ; State v. Anderson, 
 (Wis.) 63 N. W. R. 746 ; W. U. T. 
 •Co. V. Poe. 64 Fed. Rep. 9 
 412 
 
 245; Minnehaha Co. v. Thorne, (S. 
 D.) 61 N. W. R. 688. 
 
 3 Brooks V. Hyde, 37 Cal. 366. 
 
 * People V. Henshaw, 18 P. R. 
 413. 
 
 s Pierson v. O'Connor, 54 N. J. L. 
 36.
 
 CH. XVIII.] CONSTITUTIONAL LIMITATIONS. § 296 
 
 § 295. Same. — An act is general and has a uniform 
 operation, although so drawn that it is not to go into 
 operation in any one locality until accei3ted by the voters 
 thereof,^ and as said in a case in New Jersey,^ where an 
 act to authorize the mayor of any city, adopting its 
 provisions, to appoint the principal municipal officers, 
 "the fact that some cities are not in a condition to 
 accept the act does not arise out of any special or local 
 character of the act itself, but out of the dissimilarity 
 of the various charters which came into existence be- 
 fore the recent amendments to the constitution. 
 
 " If the test is that every act submitted for acceptance 
 must be equally applicable and beneficial to all localities, 
 it will be impossible to frame statutes to be submitted 
 for adoption which will not be infirm. . . . 
 
 " The necessity for submission to the popular will in 
 every case will stand as a guard against vicious legisla- 
 tion under such a system." 
 
 An act which provided that the county commissioners 
 of any county containing a city of the second class, third 
 grade, should provide a depository for the county funds, 
 and that no warrant payable from such fund should be 
 drawn unless there was sufficient money to meet it, was 
 held to be in contravention of the requirement of the 
 constitution of Ohio, art. 2, sec. 2G, requiring all laws of 
 a general nature to have a uniform operation throughout 
 the State. The object of the act was general, but its 
 operation was by the act confined to certain counties.^ 
 
 The constitution of New York docs not require^ laws 
 to be uniform in their operation throughout the State.* 
 
 § 29G. Local and special laws.— The constitutions of 
 many of the States cont.-iin a ])rovision to prevent the 
 passage of special or local laws relating, among many 
 
 1 Com. V. Reynolds, 1:57 Pa. St. ! " Rider v. Mt. Vernon. 3;} N. Y. 
 389. 7 J.-,. 
 
 2 Bi re Cleveland Mayor, 53 N. J. ! On this subject soo note of Mr. 
 L. 188. Pomeroy. pape r»34 of Sedfrwirk, on 
 
 8 State V. Somers, 26 Wkl. L. Bui. , Construction of Slat.-: &Const.La\v, 
 102. See Hart v. Murray, 48 Ohio, ! Cooley on Const. Lini. §§ 68. 607- 
 605. '615. 
 
 413
 
 § 296 MUNICIPAL BONDS. [CH. XVIII. 
 
 other subjects, to the internal affairs of municipalities, 
 or their government. The prohibition is expressed in 
 different forms, as " The Legislature shall not pass pri- 
 vate, local or special laws . . . regulating the in- 
 ternal affairs of towns and counties " (New Jersey Const, 
 sec. 7, art. 11), or ''The General Assembly shall pass no 
 special act conferring corporate powers" (Ohio Const, 
 sec. 1, art. 13),^ or " Tlie General Assembly shall not pass 
 any local or special law regulating the affairs of counties, 
 cities, townships, wards, boroughs or school districts " 
 (Pennsylvania Const, art. 3, sec. 7). Sometimes it is 
 found in this form : "In all cases where a general law 
 can be made applicable no special law can be made ap- 
 plicable " (Minnesota Const, sec. 33, art. 4). 
 
 The purpose of these prohibitions is to compel the pass- 
 age of laws relating to any subject appHcable to munici- 
 palities to be put in the form of a single act, so as to make 
 legislation on a single subject relating to municipalities 
 uniform and easily found and understood. 
 
 The further purpose is to obtain better legislation on 
 the subjects within the prohibition, because, if the opera- 
 tion of the act is general as to the municipalities it oper- 
 ates upon, all the members of the houses of the Legisla- 
 ture, although coming from all parts of the State, are 
 interested in it, therefore they are all compelled to be- 
 come acquainted with the proposed legislation in order to 
 act intelligently upon it. This is the theory of the pur- 
 pose of the prohibition. In practice it is found quite 
 different, and ever}" ingenious device, all the cunning and 
 knowledge of able lawyers, are resorted to, in order to 
 escape from the operation of the prohibition, and pass 
 laws which, having the semblance of general laws, are 
 yet special in fact and operation. The very purpose of 
 this constitutional requirement often makes it necessary 
 
 1 This provision in most of the 
 States where found is lield to apply 
 to all corporations, whether munic- 
 ipal or private. In New Jersey it 
 is held only to apply lo private cor- 
 porations. State V. Newark, 40 N. 
 J. L.558. So, also. in Massachusetts. 
 414 
 
 Linnehan v. Camhridge, 109 Mass. 
 212. In Nebraska it has been held 
 to include a school district, and 
 bonds issued under a special act 
 were declared invalid. School Dist. 
 V. Insurance Co., 103 U. S. 707.
 
 CH. XVIII.] CONSTITUTIONAL LIMITATIONS. § 297 
 
 SO to do. Some particular locality or a corporation, mu- 
 nicipal or private, or some particular person, want some 
 act passed which the constitution requires shall be done 
 by a general statute. A general bill is introduced, and 
 at once the legislators who do not favor the bill begin to 
 object to it ; it is then amended to suit the various ob- 
 jections, and at last it comes out of the legislative mill a 
 special act, or one so nearly so as to be open to criticism 
 and objection, and it is only after it has been rejected or 
 affirmed by the courts, that the question, whether or not 
 the act is constitutional, is finally determined. Hence 
 the many cases for the construction of these acts in 
 the courts. 
 
 § 297. Classification of municipalities.— As this work 
 is upon the subject of municipal finances, it is proposed 
 to confine the question of the prohibition to municipal 
 corporations. 
 
 The courts of the various States, construing the prohi- 
 bition according to its spirit and not according to its let- 
 ter, have sanctioned a general classification of the munic- 
 ipalities according to their population or needs, so that 
 an act may be passed in relation to a subject which will 
 affect one class or grade and not operate upon any other 
 class or grade. 
 
 Under a general act of May 23, 1874, the Legislature 
 of Pennsylvania divided the cities of the State into three 
 classes : 1st, those cities containing a population exceed- 
 ing 300,000 ; 2d, those cities containing a population of 
 less than 300,000 and more than 100,000 ; 3d, those cities 
 containing less than 100,000 and more than 10,000, 
 
 When the act was passed, there was only one city of 
 
 the first and one of the second class, but many of tlie 
 
 third. The act provided, as all acts usually should do, 
 
 that a city of any of the lower grades would, when it had 
 
 the necessary population, become a city of the grade its 
 
 population then called for, upon doing certain acts. The 
 
 act also provided that as many of the cities of the tliird 
 
 class had private charters, such cities need not siin-ciidor 
 
 their charters and come in under tlie general l.nv. wliich 
 
 provided for full governmental machinerv for ea("h class, 
 
 415
 
 § 297 MUNICIPAL BONDS. [CH. XVIII. 
 
 unless they saw fit, and their intention to do so should be 
 evidenced in the manner marked out in the act. This 
 act has been held to be constitutional in a number of 
 cases. 
 
 In Wheeler v. Philadelphia, 77 Pa. St. R. 33S, it was 
 attacked because it was held that it indirectly legislated 
 for Philadelphia, that being the only city of the first 
 class, and that the act was therefore special and local. 
 
 Mr. Justice Paxson, who delivered the opinion of the 
 court sustaining the act, in part said : "A statute which 
 relates to persons or things as a class is a general law, 
 while a statute which relates to particular persons or 
 things of a class is special and comes within the constitu- 
 tional prohibition. 
 
 " But it is contended that even if the right to classify 
 exists, the exercise of it by the Legislature, in this in- 
 stance, is in violation of the constitution, for the reason 
 that there is but one city in the State with a population 
 exceeding 300,000 ; that to form a class containing but 
 one city is in point of fact legislating for that one city to 
 the exclusion of all otherSj and constitutes the local and 
 special legislation prohibited by the constitution. This 
 argument is plausible, but unsound. It is true the only 
 city in the State at the present time containing a popula- 
 tion of 300,000 is the city of Philadelphia. 
 
 "It is also true that the city of Pittsburgh is rapidly 
 approaching that number, if it has not already reached 
 it, by recent enlargements of its territory. 
 
 "'Legislation is intended, not only to meet the wants of 
 the present but to provide for the future. It deals not 
 with the past, but in theory, at least, anticipates the 
 needs of a State, healthy with a vigorous development. 
 It is intended to be permanent. At no distant day Pitts- 
 burgh will probably become a city of the first class. And 
 Scranton or others of the rapidly growing interior towns 
 will take the place of the city of Pittsburgh as a city of 
 the second class. In the meantime is the classification as 
 to the cities of the first class bad, because Philadelphia is 
 the only one of the class ? We think not. Classification 
 
 does not depend upon numbers. 
 416
 
 CH. XVJII.] CONSTITUTIONAL LIMITATIONS. § 297 
 
 " If the classification of cities is in violation of the con- 
 stitution, it follows of necessity that Philadelphia, as a 
 city of the first class, must be denied the legislation 
 necessary to its present prosperity and future develop- 
 ment, or that the small inland cities must be burdened 
 with legislation wholly unsuited to their needs. For if 
 the constitution means what the complainants aver it 
 does, Philadelphia can have no legislation that is not 
 common to all other cities of the State, and for this there 
 is absolutely no remedy but a change in the organic law 
 itself." 
 
 The same act was also affirmed as constitutional in the 
 later case of Reading v. Savage, 12-iPa. St. 328.^ 
 
 In a late case in Pennsylvania^ the question whether 
 an act entitled "An act providing for the incorporation 
 and government of cities of the third class" (P. L. 18S0, 
 277), which contained provisions for the annexation of 
 territory, was special or not, was submitted to tlie 
 Supreme Court of the State, and it was held that the act, 
 being for the class and applicable to every member of it, 
 was general. 
 
 In Pennsylvania, as we have seen, it is held that an 
 act which applies to every member of the class is con- 
 stitutional, and in the case of Scrantonv. White, 23 Atl. 
 Rep. 1043, where the court held an act which provided 
 a system of government for all cities of the third class, 
 regulating the manner in which the power to pave streets 
 and collect the costs which was contended to be local, to 
 be general, laid down the rule that ''laws limited 
 in their operation to a single class of cities are not 
 therefore within the constitutional prohibition of local 
 legislation, if they relate to matters that are con- 
 nected with the organization or regulation of municipal 
 affairs. 
 
 *' If such laws relate to otlier subjects not within the 
 purposes of classification, tbey fall within the prohibi- 
 tion," citing Snowden's Appeal, KG Pa. 425 ; Davis v. 
 
 ' See also Kilgore v. Magee, 85 I » Appeal of Harris, 28 Atl. 927. 
 
 Pa. 401 , 1 
 
 27 
 
 41'
 
 § 299 MUNICIPAL BONDS. [CH. XVIII. 
 
 Clarke, lOG Pa. 377 ; McCarthy v. Commissioners, 110 
 Pa. 243.1 
 
 In Pennsylvania, it is held that in order that an act 
 legislating for a special class should he constitutional, 
 that class must be distinguished by some peculiarities or 
 necessities, from the others, and that unless there existed 
 a necessity for special legislation, springing from man- 
 ifest peculiarities, clearly distinguishing those of one 
 class from another, such legislation would be special.^ 
 
 § 298. lu New Jersey, counties, cities and boroughs 
 are divided into classes by statute. 
 
 The cities are divided into four classes : 
 
 1. Those having a population exceeding 100,000. 
 
 2. Those having a population between 12,000 and 
 100,000. 
 
 3. Those having less, except the fourth, which are all 
 those cities lying on the Atlantic Ocean, and being a sea- 
 side and summer resort (Act of March 4th, 1SS2). 
 
 It will bo observed that the fourth class is not divided 
 from the others by population, but because of locality. 
 
 Almost all the other States have divided the munici- 
 palities into classes, and some subdivided the class into 
 grades of a class. 
 
 In all these acts there are provisions by which a city 
 of one class, upon reaching the required population of 
 the next higher grade, may enter into the latter grade. 
 These acts have been sustained in their respective State 
 courts.^ 
 
 § 299, Municipalities are usually graded. — In some 
 of the States the courts hold an act to be constitutional 
 if it be so drafted that its provisions apply only to munici- 
 palities of a certain grade, provided it contain a provi- 
 sion that it will operate upon municipalities of a lower 
 
 1 Ayers' Appeal, 122 Pa. St. 266. I State v. Berka, 20 Neb. 375 ; Topeka 
 
 2 Ayers' Appeal, 122 Pa. St. 266 ; v. Gillott, P>6 Kan. 431 ; Laiid Co. v. 
 
 Morrison v. Backert, 112 Pa. 322 ; 
 Scranton School Dist. Appeal. 113 
 Pa. 176 ; Gardiner v. Cliester, 2 Pa. 
 Dist. R. 162. 
 
 3 Kilgore v. Magee, 85 Pa. 401 ; 
 Daniels v. Henshaw, 76 Cal. 436 : 
 418 
 
 Brown, 73 Wis. 294; Ex jmrf eSwan, 
 96 Mo. 44; State v. Hawkins, 44 
 Ohio, 98 ; Bench v. Hardwick, 30 
 Gratt. 34 ; In re Passaic, 54 N, J. 
 L. 156.
 
 CH. XVIII.] CONSTITUTIONAL LIMITATIONS. § 300 
 
 grade when they enter the grade the act is opera- 
 tive upon, and this, although the grade contain no pecu- 
 liar features which call for the particular object of the 
 ^ct, while some of the States require that there be at 
 least a possible reason for the legislation for one grade 
 as distinct from that of another. 
 
 We will now refer to some of the cases holding the 
 former view. 
 
 § 300. In Ohio, in the case of the State ex rel. Attor- 
 ney-General V. Toledo, Ohio, 20, N. E. R. 1061, where the 
 act contended to be unconstitutional because local was 
 "An act to authorize cities of the third grade of the first 
 class, to borrow money and issue bonds therefor, for the 
 purpose of procuring territory and right of way, and 
 sinking wells for natural gas, purchasing wells, etc. . . . 
 and supplying such cities with natural gas for public and 
 private use and consumption," It was claimed that the 
 act was not intended to apply to any other city than 
 Toledo, and was in conflict with art. 1, sec. 13, of the con- 
 stitution, which provides that "the General Assembly 
 shall pass no special act conferring corporate powers." 
 
 The court held the act to be constitutional because 
 any city might enter the grade and class. 
 
 The court said : " It is the possibility that other cities 
 may enter a certain grade of a class, and not the cer- 
 tainty that they will, that gives to a law creating the 
 grade a general character." 
 
 In another case,^ in the same State, the court held an 
 act which applied to municipalities of one grade, or a 
 class of a grade, and permitted others when they en- 
 tered the grade or class, to participate in the act, to he 
 valid. The court in this case said : " Grave doubts may 
 well be entertained as to the constitutionality of this 
 method of classifying cities for the purpose of general 
 legislation. 
 
 "But it has received the sanction of this court in re- 
 peated decisions heretofore made, and in view of this 
 fact, and the rule that forbids a court to declare a law 
 enacted by the Legislature as unconstitutional, unless 
 
 1 State V. Wall. 24 N. E. R. 897. 
 
 419
 
 § 300 MUNICIPAL BONDS. [CH. XVIII. 
 
 clearly convinced that it is so, we do not feel warranted 
 in doing so in this instance." 
 
 When the act cannot apply but to the class named, 
 then the courts of Ohio hold the act local and special. 
 The following cases illustrate the point. 
 
 In the case of State v. Smith, 26 N. E. R. 1069, the 
 court held an act which created a board of city affairs 
 in cities of the first grade, of the first class, to be local, 
 because the act required that the bonds to be given 
 by the members of the board be approved by the Su- 
 perior Court of the city, and as but one city (Cincinnati) 
 had a Superior Court, the act was therefore not applicable 
 to any other, as the special court had been created by a 
 special act before the adoption of the constitution. The 
 court held that an act to be general must apply to all 
 cities of the class, and permit others to partake of it 
 when they enter the class, although it vigorously de- 
 nounced such classification of cities. 
 
 The Supreme Court ^ held an act, whose title was 
 "An act to provide for improvements of streets and 
 avenues in certain cities of the second class," to be un- 
 constitutional, because in conflict with sec. 1, art. 13, of 
 the State constitution, which section is as follows : 
 
 " The General Assembly shall pass no special act con- 
 ferring corporate powers." 
 
 The word corporation was construed to include all cor- 
 porations, municipal as well as private. 
 
 The act only applied to cities of the second class hav- 
 ing a population of over 31,000 at the last Federal census. 
 
 Columbus was the only city having that population. 
 
 The court said: "The effect of the act would have 
 been precisely the same if the city had been designated 
 by name instead of the circumlocution employed." 
 
 An act which authorized a named municipality to issue 
 bonds without submitting the question to a vote of the 
 electors is a special act conferring corporate powers,^ as is 
 
 1 State V. Mitchell, 31 Oiiio, 592. 
 See also. State v. Anderson, 44 Ohio, 
 247 ; Can- v. West Carrol ton, 8 
 Ohio Ct. R. 1. 
 420 
 
 2 Ger. A. In. Co. v. Youngston, 
 08 Fed. Rep. 452. See also. Alter 
 V. Cincinnati, 1 Ohio N. P. 394.
 
 CH. XVIII.] CONSTITUTIONAL LIMITATIONS. 
 
 §301 
 
 also an act giving cities of the first grade of the first class 
 power to issue bonds to meet deficiencies due at a certain 
 period, there being but one city of that grade, though 
 there was another which had the requisite po])ulation, 
 but could not enter the grade until after the time fixed 
 when the deficiencies were due, so that no other city- 
 could take advantage of the act.^ 
 
 The courts of Ohio have held that the prohibition rela- 
 tive to local legislation does not include a police board, ^ 
 or other boards in cities, or school districts, and other 
 similar organizations.^ 
 
 The courts have also held that the charter of a city 
 cannot be amended by a special act.^ 
 
 § 301. In New York, where the prohibition against 
 local laws extends, so far as it relates to municipalities, 
 only to certain subjects,^ the courts hold that if the act 
 
 1 Herman v. Cincinnati, 9 Ohio 
 €ir. Ct. 357 ; State v. Schwab, 34 
 N. E. R. 736. 
 
 2 State V. Covington, 29 Ohio, 
 
 io;5. 
 
 3 State V. Powers, 38 Ohio, 54. 
 
 * State V. Cincinnati, 20 Ohio, 18. 
 
 ^ See art. Ill, § 18, jn-esent con- 
 stitution. 
 
 In New York tlie cities are divided 
 into classes, and the manner of pass- 
 ing special laws applicable there- 
 to regnlated by the new constitu- 
 tion, art. xii. § 2, which reads as 
 follows : 
 
 " Claaaiflcation of cities ; general 
 and special citi/ laivs ; special city 
 laivs ; hoiv passed by Legislature 
 <ind acceptance by cities. § 2. All 
 cities are classified according to the 
 latest State enumeration, as from 
 time to time made, as follows : The 
 first class includes all cities hav- 
 ing a population of two hundred 
 and fifty thousnnd. or more ; the 
 R'^cond class all cities having a pop- 
 ulntion of fifty thousand and less 
 than two hundred and fifty thou- 
 s-'nd; the third class, all other cities. 
 
 Laws relating to the projierty, af- 
 fairs or government of cities, and 
 the several departments thereof, 
 are divided into general and special 
 city laws ; general city laws are 
 tliose which relate to all the cities 
 of one or more classes ; siiecial 
 city laws are those which relate to 
 a single city, or to less tiian all the 
 cities of a class. Special <nty laws 
 shall not be passed except in con- 
 formity with the provisions of this 
 section. After any bill for a spe- 
 cial city law, relating to a city, has 
 been pa.ssed by both branches of 
 tlie Legislature, the house in which 
 it originated sliall immediately 
 transmit a certified copy thereof to 
 the mayor of such city, and within 
 fifteen days tiicicnfter the m:iyor 
 siiall return such bill to tiie house 
 from which it was .sent, or if tlie 
 session of the Legislature at whicli 
 such bill was passed has terminate*!, 
 to the governor, with the mayor's 
 certificate tliereon. stating whether 
 tlie city lias or has not accepted the 
 same. 
 
 " In everv citv of the f rst claFS, 
 421
 
 §301 
 
 MUNICIPAL BONDS. 
 
 [CH. XVIII. 
 
 apply to a class of municipalities it is sufficient, and do 
 not intimate that the act need provide for municipal- 
 ities so that they can enter the class, or that the class 
 legislated for should have some peculiar need for the 
 legislation, as distinct from those outside of the class. 
 
 The leading case in reference to special legislation, 
 although it did not affect a municipal corporation, is that 
 of In the Matter of the Elevated R. R. Co., 70 N. Y. 327, 
 350, where the Court of Appeals, byEarle, J., inter alia, 
 said : " But a law may be general without affecting all 
 the people. 
 
 "A law regulating the rights of married women, or 
 of minors, or of adults, or of aliens, would be general, 
 and it would be general although confined to the persons 
 in being at the time of its passage. So a law conferring 
 new rights upon all existing insurance companies, or 
 railroad companies, or manufacturing companies, would 
 be general." 
 
 The court further said: "Does the validity of a law 
 which is required to be general, and which is general in 
 its terms, depend upon the number of subjects upon 
 which it can operate, or upon the size of a class to which 
 
 tlie mayor, and in every other city, 
 tlie mayor and the legislative body 
 thereof concurrently, shall act for 
 snch city as to such bill ; but the 
 Legislature may provide for the 
 concurrence of the legislative body 
 in cities of the first class. The Leg- 
 islature shall provide for a public 
 notice and opportunity for a public 
 hearing concerning any such bill in 
 every city to which it relates, be- 
 foi'e action thereon. Such a bill, if 
 it relates to more than one city, 
 shall be transmitted to the mayor 
 of each city to which it relates, and 
 shall not be deemed accepted unless 
 accepted as herein provided, by 
 every such city. Whenever any 
 such bill is accepted as herein pro- 
 vided, it shall be subject, as are 
 other bills, to the action of the 
 422 
 
 governor. Whenever, during the 
 session at which it was passed, any 
 such bill is returned witliout accept- 
 ance of the city or cities to which it 
 relates, or within such fifteen days 
 is not returned, it may nevertheless 
 again be passed by both branches 
 of the Legislature, and it shall then 
 be subject, as are other bills, to the 
 action of the governor. In every 
 special city law which has been 
 accepted by the city or cities to 
 which it relates, the title shall be 
 followed by the words. ' accepted 
 by the city,' or ' cities,' as the 
 case may be ; in every such law 
 which is passed without such ac- 
 ceptance, by the words ' passed 
 without the acceptance of the city,' 
 or ' cities ' as the case may be."
 
 CH. XVIII.] CONSTITUTIONAL LIMITATIONS. § 302 
 
 it applies ? These questions must be considered in the 
 negative. ..." 
 
 In the Matter of the Application of Church, 02 N. Y., 
 it was held that an act giving the board of supervisors 
 of counties containing an incorporated city of over 
 100,000 inhabitants power to lay out streets was a gen- 
 eral act. The court, by Finch, J., said : "It is not easy 
 to define with accuracy the difference between the two 
 forms of legislation, and the difficulty is better solved by 
 adding examples to definitions. Of the latter, the most 
 useful and accurate is that in the matter of the N. Y. E. 
 E. R., 70 N. Y. 32S. 
 
 " A law relating to particular persons or things as a 
 class was said to be general, while one relating to par- 
 ticular persons or things of a class was deemed local and 
 private. The act of 1881 (under consideration) relates to 
 a class, and applies to it as such, and not to the selected 
 or particular element of which it is composed. The class 
 consists of every county in the State having within its 
 boundaries a city of 100,000 inhabitants, and territory 
 beyond the city limits mapped into streets and sewers. 
 
 " How many such counties there are now, or may be in 
 future, we do not know, and it is not material that we 
 should. Whether many or few, the law operates upon 
 them all alike, and reaches them, not by selection of one or 
 more, but through the general class of which they are 
 individual elements." ^ 
 
 § 302. In Kansas, the constitution, sec. 1, art. 12. for- 
 bids the Legislature to pass any special act conferring 
 corporate powers. 
 
 In the case of City of Topeka v. Gillett, :]2 Kan. 131 ; 4 
 Pac. R. 800, the court laid down the following rule as to 
 what constitutes general legi.slation : 
 
 "If the act has room, within its terms, to operate upon 
 all of a class of things, present and prospective, and not 
 merely upon one particular class of things existing at 
 the time of its passage, the act is general." And in 
 
 1 For further cases see Matter of 
 ApiiUcation of East River Bridge. 
 143 N. Y. 249 ; Jeremiah Clancy v. 
 
 Board of Sup. West. Co.. !:!!• N. Y. 
 524. 
 
 423
 
 § 803 MUNICIPAL BONDS. [CH. XVIII. 
 
 State V. Hunter, 38 Kan. 500, the court said : " It is 
 not necessary that an act should operate upon all the 
 cities of the State to be constitutional. 
 
 " If it is general and uniform tliroughout the State, 
 operating upon all of a certain class, or upon all who are 
 brought within the relations and circumstances provided 
 in the act, it is not obnoxious to the limitations against 
 special legislation." 
 
 The court, in State v. Kansas City, 31 Pac. Eep. 1100, 
 said, in speaking of class legislation : " Heretofore it has 
 been based upon population only, but it has been gener- 
 ally recognized that other classification might be made 
 without offending the constitution." 
 
 In this State, so long as the municipal corporation of 
 one grade may enter into the other, an act apiDlicable to 
 one is not special.^ 
 
 In this State the courts held an act which applied to 
 but three cities of the second class to be special, and that 
 the court would take judical notice of the fact that the 
 act only applied to the three cities.^ 
 
 And in another case the courts held an act which 
 authorized a single city to issue its bonds was special and 
 unconstitutional.^ 
 
 The courts of this State held that the prohibition does 
 not include school districts, because they are not corpora- 
 tions, but does include cities, towns and villages.^ The 
 courts of this State also held an act which authorized a 
 certain designated township (Oswego) to compromise and 
 fund its indebtedness and to issue its bonds therefor, was 
 special and therefore unconstitutional,^ but on appeal the 
 court held that the prohibition did not include town- 
 ships.^ 
 
 § 303. In Nebraska, where the constitution prohibits 
 the Legislature from passing special acts "conferring 
 
 1 State V. Hunter, 38 Kan. 590 ; 
 17 Pac. R. 179 ; State v. Kansas 
 City, 3 P. R. 1100-1102. 
 
 ^Topeka v. Gillett, 35 Kan. 431. 
 
 8 Cleveland v. City of lola, 2 
 
 424 
 
 Dill. C. C. R. 353 ; State v. Malloy, 
 20 Kan. 619. 
 
 4 Beach v. Leachy, 11 Kan. 23. 
 
 ^ Travellers' Ins. Co. v. Oswego 
 Tp., 53 Fed. Rep. 301. 
 
 6 Same case, 59 Fed. Rep. 58.
 
 CH. XVIIT.] CONSTITUTIONAL LIMITATIONS. § 304 
 
 corporate powers, " it has been held that the prohibition did 
 not extend to a county, as a county is not a corporation 
 under the Kansas constitution/ and the Supreme Court 
 of the United States has adopted this view when constru- 
 ing a Nebraska statute.^ School districts are regarded 
 in this State as municipal corporations, and the prohibi- 
 tion includes them, and therefore a special act authorizing 
 a school district to issue bonds was unconstitutional.^ 
 
 § 304. In Illinois, the Supreme Court, in the case of 
 Devine v. Comrs. of Cook Co.,* held an act which author- 
 ized the board of commissioners of counties containing 
 over 100,000 inhabitants by a two-thirds vote to issue 
 bonds for certain purposes to be unconstitutional, be- 
 cause local and special, as it could only apply to one 
 county — Cook County. The act provided that it would 
 apply to all counties having such a population within 
 six years after its passage. 
 
 The court on this point said : " Its very terms preclude 
 it from having any application to any county, except 
 the county of Cook, for we take judicial notice no other 
 county in the State contains over one hundred thousand 
 inhabitants, nor can it be expected, by any ordinary in- 
 flux or increase of population, that any other county will 
 have that population within the brief period fixed for the 
 duration of this law, viz. , within a period of six years 
 from the time the act should take effect. No express 
 words that could have been used by the General Assem- 
 bly could limit the operation of this law to the county of 
 Cook more absolutely and definitely than those em- 
 ployed." 
 
 The Supreme Court, in a later and much quoted case,* 
 held that an act which enabled the park commissioners 
 of Chicago to make cortain improvements was constitu- 
 tional, although there were no park commissioners except 
 
 1 Jefferson Co. v. People, 5 Neb. 
 127 ; Wood v. Colfax Co., 10 Neb. 
 653. 
 
 2 Slierman Co. v. Simonds, 109 
 U. S. 765. 
 
 8 Clegg V. School Dist. No. 56, 8 
 
 Neb. 178 ; Scliool Dist. v. St. Jo-seph 
 F. M. Ins.. 103 U.S. 707. 
 
 4 84 III. 590. 
 
 6 West Cliicaffo Park Com. v. 
 McMullen. 134 111. 170. 
 
 425
 
 § 306 MUNICIPAL BONDS. [CH. XVIII. 
 
 in Chicago, because under the act the park commissioners 
 of any city could exercise the power conferred by it. 
 
 The court said : " Tlie act applies to all cities of the 
 State having parks under the control of park commis- 
 sioners. ... If it be true, as suggested, that the act is 
 applicable to the conditions existing in a single city in 
 the State, that fact does not necessarily render it local 
 and special legislation. 
 
 "It is general in its terms, and applies to all cities of 
 the State which, at the time of its passage, had parks 
 under the control of park commissioners, or that miijht 
 at any time thereafter so have parks. If, because only 
 a single city had such parks, an act general in its appli- 
 cation to all cities would be local or special legislation, no 
 valid act could be passed affecting such existing parks ; 
 and it would necessarily result from such holding that 
 substantially all of the park legislation enacted since the 
 adoption of the present constitution should for the same 
 reason have been invalid."^ 
 
 § 305. Peculiarities required in some States. — In a 
 number of the States the mere classification of the 
 municipalities and legislating for each class is not suffi- 
 cient, but in addition to the classification, the object of 
 the law must bear some peculiar relationship to the class 
 legislated for, which is not so applicable to the other 
 municipalities. 
 
 § 306. Ill New Jersey the courts have adopted this 
 view, and in deciding an act relating, according .to its 
 terms, to but a portion of the cities or other munic- 
 ipalities, seek to find some peculiar relationship between 
 the object of the act and the municipalities it operates 
 upon, and failing to find AAdiich, the act is held to be spe- 
 cial and therefore unconstitutional. 
 
 Chief Justice Beasley, in the case of The State v. Ham- 
 mers,^ held an act wliich applied only to two cities and 
 could never apply to more, because of the basis of classifi- 
 cation and object, to be unconstitutional, and laid down 
 the rule in the following language : " The true principle 
 
 1 See Gumming v. Chicago, 33 I 2 48 N. J. L. 435. 
 N. E. R. 854. I 
 
 426
 
 CH. XVIII.] CONSTITUTIONAL LIMITATIONS. § 306 
 
 of classification requires something more than a mere 
 designation by such characteristics as will serve to class- 
 ify, for the characteristics which will thus serve as a 
 basis of classification must be of such a nature as will 
 mark the object so designated as peculiarly requiring ex- 
 clusive legislation. There must be substantial distinction, 
 having a reference to the subject-matter of the proposed 
 legislation, between the objects or places embraced in 
 such legislation, and the objects or places excluded. 
 The marks of distinction upon which the classification is 
 founded must be such, in the nature of things, as will, in 
 some reasonable degree at least, account for or justify 
 the restriction of the legislation." 
 
 Consequently, an act which authorized cities on the 
 ocean to lay out streets and drives and walks on the 
 beach or ocean front was held to be constitutional.^ The 
 court said : 
 
 *' The cities of the State have been held to be a class 
 by themselves for legislation (Anderson v. Trenton, 42 
 N. J. L. 486), and they may be subdivided by important 
 characteristics, to which the purpose of the law relates, 
 provided they embrace all those so characterized. Thus 
 it is said in the former case above cited, from which this 
 phrase has been taken by way of illustration, that a 
 statute giving to all cities bordering on tide-water the 
 power to construct docks or estal)lish (juarantine regula- 
 tions would be valid. . . . So in this case these drives and 
 walks are to be laid on lands covered by tides and water, 
 and are peculiar in structure because of their location. 
 
 " If this law were general so as to include all the cities 
 of the State, only those situated on or near the ocean 
 having a beach or ocean front could use it, showing that 
 they are a class distinct from other cities and thus free 
 from constitutional prohibition." 
 
 In the above case the act did not apply to the cities so 
 
 classified by reason of population, but to a class peculiar 
 
 because of their location. But an act whicli provided a 
 
 different mode of levying taxes on boroughs, which wern 
 
 seaside boroughs, from the general mode, was held to be 
 
 1 State V. Wrijrht. 54 N. .1. L. IHO. 
 
 427
 
 § 306 MUNICIPAL BONDS. [CII. XYIII. 
 
 unconstitutional,^ because the levying of a tax in a 
 different mode bore no peculiar relationshij) to such 
 boroughs so as to call for exclusive legislation. 
 
 In another case,^ the court held an act which consti- 
 tuted a board of public works in cities of the second class 
 having a population exceeding 50,000, of which there 
 were but three cities, to be constitutional, because a city 
 with a larger population required different machinery 
 for municipal government than one having a smaller 
 j)opulation. 
 
 The courts have also held that, though the act does not 
 embrace all the cities to which its object would properly 
 apply it is not therefore unconstitutional ; it is sufficient 
 if it bears a reasonable relationship to those selected.^ 
 
 In another case,^ in the same State, where an act to 
 authorize cities having a population exceeding 20,000 
 to fund their floating indebtedness was under judicial 
 scrutiny, the court held the act to be unconstitutional 
 because special, holding that the issue of bonds to pay a 
 floating debt had no natural relation to the basis of class- 
 ification — the population of a city. The author believes 
 this decision to be erroneous, because a large municipal 
 corporation has a greater floating debt than a smaller, 
 and there is greater need to fund such a debt. 
 
 The constitutional prohibition is directed against the . 
 passage of local laws affecting the "internal affairs" of 
 toivns and counties. The word toivn is held to include 
 cities, unless the intent is otherwise shown. ^ 
 
 The courts of this State hold an act which repealed 
 a charter of a municipal corporation was not prohibited, 
 as such an act does not regulate the internal affairs of 
 a town.^ 
 
 In this State, as in many others, although it has by 
 statute classified its cities, counties and boroughs, it is 
 
 1 State V. Philbrick,49 N. J.L. 374. 
 
 2 State V. Gibson, 55 N. J. L. 11. 
 
 3 State V. Mayor etc. Clayton, 24 
 Vr. 277 ; State v. Moore, 42 N. J. 
 L. 208. 
 
 " * Anderson v. Trenton, 42 N. J. 
 428 
 
 L. 486. See, also, Classen v. Tren- 
 ton, 48 N. J. L. 438. 
 
 s "Van Riper v. Parsons. 11 Vr. 1. 
 
 6 Worthley v. Steen, 43 N. J. L. 
 542.
 
 CH. XVIII.] CONSTITUTIONAL LIMITATIONS. 
 
 § 307 
 
 not necessary that such classification be observed in the 
 act, so long as the municipalities operated upon bear some 
 peculiar relationship to the object of the act.^ 
 
 § 307. In California the courts hold that in order to 
 legislate for a part of the municipalities, the object of 
 the act must be peculiar to the municipalities it operates 
 upon. 
 
 In People v. Henshaw, 76 Cal. 442 ; 18 Pac. Rep. 413, 
 the principle was recognized that cities containing a 
 large population require different legislation from those 
 composed of a few hundred inhabitants, and to so classify 
 them that a general law applicable to separate classes 
 will meet the necessities of the case, was a wise provis- 
 ion.^ And a law which applies to one or more, but not 
 to all of these classes, is not for that reason special legis- 
 lation. The court in this case held an act which created 
 a police court in cities having a population of 30,000 and 
 less than 100,000 constitutional. 
 
 The court in another case^ held an act which permitted 
 a county and a city therein, each having a population of 
 100,000, to consolidate, was local and special, as there was 
 but one such county and city. 
 
 In Missouri the courts recognize the rule that the sub- 
 ject may be sub-divided, and that cities and towns may 
 be classified. 
 
 In State, Lionberger v. Tolls,* the court approved the 
 doctrine laid down in Wheeler v. Philadeli)hia, supra, 
 where it was held that " a statute which relates to jier- 
 sons or things as a class is a general law, wliile a statute 
 which relates to particular persons or things of a class is 
 special. 
 
 In this State the court held an act which related to the 
 appointment of notaries in cities having a population of 
 
 1 State V. Gibson, 55 N. J. L. 11 ; 
 Van Riper v. Parson, 110 Vr. 1 ; 
 State V. Borough of Clayton, 24 Vr. 
 277 ; State v. Scott, 21 lb. 585 ; 
 Randolph v. Wood, 20 Ih. 85 ; In re 
 Ass. Passaic, 54 N. J. L. 156. 
 
 2 See Pritchert v. Stanislaus, 73 
 
 Cal. 310. See. also. Const, art. 11, 
 § 6, and case Darcy v. San Jose, .3.S 
 Pac. R. 500, 
 
 8 Desmond v. Dunn. 55 Cal. 242. 
 See, also, Earle v. Board of Educa- 
 tion, 55 Cal. 489. 
 
 * 71 Mo. G45. 
 
 429
 
 § 309 MUNICIPAL BONDS. [CH. XVllI. 
 
 100,000, and ousting certain notaries then in office, un- 
 constitutional, as St. Louis was the only city having the 
 population named, and it might as well have been named 
 in the act.-^ 
 
 § 308. In Wisconsin, in the case of the L. L. Co. v. 
 Brown, 73 Wis. 294, the court said of an act which 
 applied to certain towns : " The act is as general as any 
 other general act. It provides for the exercise of addi- 
 tional powers in all towns in which villages are situate 
 having a given number of inhabitants. It is not subject 
 to the criticism that, though general in form it is special 
 in fact, as it is a matter of public notoriety, that there 
 are, and have been, several towns in the State to which 
 the act can be applied. 
 
 ' ' To hold that this section of the constitution requires 
 the Legislature to make all laws for the government of 
 towns applicable to every town in the State, without any 
 regard to the wealth, population or other pecularities of 
 such town, would be to hold a very large portion of the 
 legislation on the subject of towns in this State uncon- 
 stitutional and void. 
 
 " It is clear that the act in question is not a violation of 
 the S3^stem of town government but part of the system, 
 in order to adapt the system to the peculiar wants of cer- 
 tain towns in the State. " 
 
 A law authorizing cities operating under special 
 charters to issue bonds when needed to perfect their sewer 
 system is not a "special law," within the prohibition of 
 art. 4, sec. 31, of the constitution.^ 
 
 And an act authorizing cities of over 3,000 inhabitants 
 which are operating under special charters to issue bonds 
 for the improvement of streets and parks is held not to 
 be prohibited by the constitution and not a special law.^ 
 
 § 309. In Minnesota, in the case of State v. Cooley, 
 58 N. W. R. 150, it was held : 
 
 1. That the constitutional prohibition against special 
 legislation on a subject does not prevent the Legislature 
 
 1 Harris v. Herman, 75 Mo. 340. I ^ Johnson v. City of Milwaukee, 
 
 I 88 Wis. 383. » lb. 
 
 430
 
 CH. XVIII.] CONSTITUTIONAL LIMITATIONS. § 309 
 
 from dividing it into classes and applying different rules 
 to different classes. 
 
 2, But that the classification must be based upon sub- 
 stantial distinctions, which make one class so different 
 from another, as to suggest the necessity of different 
 legislation with respect to them, and that the character- 
 istics which form the basis of classification must be ger- 
 mane to the purposes of the law ; that is, the legislation 
 must be confined to matter peculiar to the class. 
 
 o. When the basis of classification is valid it is imma- 
 terial how many or how few members there are of the 
 class ; how many or how few objects there are to wliicli 
 the law can apply. 
 
 The classification must be complete so that the law will 
 apply to every member of the class or every object under 
 the same conditions. 
 
 The character of the act, as general or special, depends 
 on its substance and not on its form. 
 
 In this case the court held on re- argument an act of 
 the Legislature entitled "An act to provide additional 
 means for completing and furnishing the court house and 
 city hall building now in process of erection in the city of 
 Minneapolis, and to authorize the issue and sale of bonds 
 therefor," approved April 8th, 189:', to be constitutional. 
 
 The court held that the characteristics forming the 
 basis of the classification were germane to the purpose of 
 the law ; that Minneapolis, although named in the act, 
 was the only city witli the characteristics which formed 
 the basis of the classification ; that it alone had a munici- 
 pal building under course of erection which required the 
 aid extended by the act. 
 
 The court in the first instance held the act local and 
 unconstitutional, but on re-argument held it to be gen- 
 eral as to the class. 
 
 The case is certainly as near the border line ns any 
 reported one ; even the city is named ; yet that city alone 
 had the characteristics whicli formed the basis of tlie 
 classification. 
 
 The Supreme Court of this State, in Nichols v. Walter,^ 
 
 1 37 ^linn. 1. 
 
 4.31
 
 § 312 MUNICIPAL BONDS. [CH. XVIII. 
 
 approved the rule laid down in New Jersey and said : 
 " The principle adopted by the Supreme Court of New 
 Jersey comes more nearly to what we regard the true 
 principle of classification than that stated by any other 
 court," and then quotes with approval the language of 
 the Chief Justice of that State in State v. Hammer, supra. 
 
 § 810. Other provisions proliibitiug special legisla- 
 tion. — Some of the State constitutions contain a prohibi- 
 tion in the following language: "In all cases where a 
 general law can be made applicable no special law shall 
 be enacted." ^ In Minnesota the same provision is found, 
 but in addition it provides that w^hether a general law 
 could have been made applicable in any case is a judicial 
 question to be decided by the courts. 
 
 This provision is one for the Legislature and not for 
 the courts to decide, and is held to be directory and not 
 mandatory. Such seems to be the general rule of most 
 of the state courts where the prohibition is found. ^ 
 
 § 311, In Indiana it is the settled rule that it is for 
 the Legislature, and not for the courts, to determine 
 whether an act is in violation of sec. 23, art. 4, of the 
 constitution of that State, which provides that where a 
 general law can be passed, it shall be general and operate 
 uniformly throughout the State, ^ 
 
 This was so also in Missouri under the late constitu- 
 tion, sec. 27, art 4,* 
 
 § 312. In Iowa, the constitution, sec. 30, art. 3, pro- 
 vides that no special or local law shall be passed where a 
 general law can be made applicable. It is held that the 
 courts will only declare an act unconstitutional for this 
 reason, when it is clearly, palpably and plainly inconsist- 
 ent with this section of the constitution.^ 
 
 1 In constitutions of Alabama, 
 California, Illinois, Indiana, Kan- 
 sas, Missouri, Texas, North Dakota. 
 
 2 Edwards v. Ilerbrandson, (N. 
 D.) 50 N. W. R. 970 ; State v. Boone 
 Co., 50 Mo. 317 ; Wiley v.Blaffton, 
 111 Ind. 152 ; People v. Allen, 43 
 N, Y. 378 ; Edmonds v. Herbrand- 
 son, (N. D.) 50 N. W. R. 970 ; Dill, 
 on Mun. Corp, (4th ed.) § 48 ; con- 
 
 432 
 
 tra, Pritz in re, 9 Iowa, 30 ; Van 
 Phul V. Hammer, 29 Iowa, 222. 
 
 SEvansville v. State, 118 Ind, 
 42G ; Wiley V. Corporation, 111 Ind, 
 152, 
 4 St. Louis T. Sliields, 62 Mo. 247, 
 ^ Morrison v. Springer, 15 Iowa, 
 304 ; Richman v. Board of Super,, 
 77 Iowa, 513 ; Van Phul v. Ham- 
 mer, 29 Iowa, 222,
 
 CH. XVIII.] CONSTITUTIONAL LIMITATIONS. § 314 
 
 § 313. lu Colorado, where the same prohihition is 
 found, the court, in Carpenter v. People, 8 Colo. 42G, 
 said : "While it is not to be presumed that a co-ordinate 
 branch of the State government invested with duties 
 and powers indicated, and acting under oaths binding 
 upon the consciences of the members, would act in bad 
 faith, yet in the event of such wrongful action clearly 
 appearing, it would become the duty of the courts to 
 interfere. Every question of doubt in such an event 
 would be properly resolved in favor of the validity of the 
 act challenged." 
 
 And the courts of this State have, in a number of cases, 
 recognized that the question is a judicial one, and have 
 declared acts special in form and object to be uncon- 
 stitutional because a general act would be applicable.^ 
 
 § 311. Conclusions — What the author believes to 
 he a general act. — It is impossible, in a work of this 
 nature, to refer separately to the prohibitions against 
 special legislation contained in all the State constitu- 
 tions, or to the cases decided in all the States. Those 
 referred to give a general idea of the constitutional pro- 
 hibitions against local and class legislation in reference 
 to municipalities, and will be found to cover such pro- 
 hibitions contained in the constitutions of the different 
 States. 
 
 We think we can safely say that an act will be con- 
 sidered as general in all tlie States, although it ap])hcs, 
 when enacted, but to one or more municipahties, if the 
 object of the act is peculiar to those municipalities, as 
 distinguished from all the other municipal itit^s, and llie 
 act is broad enough in its scope to permit all the excluded 
 municipalities, when they in turn become invested with 
 the peculiar characteristics, to ])artake of the benefits of 
 the act so that the object of the act will then operate 
 on them. 
 
 It must be remembered that the construction placed 
 
 ^ lu rc' Extension of Boundaries I of Denver, 32 Pac. R. 615; In re 
 
 \ Senate Bill, 293; 39 Pac. R. •'522. 
 28 433
 
 §315 
 
 MUNICIPAL BONDS. 
 
 [CH. XVIII. 
 
 upon these prohibitions l)y the courts of hist resort of 
 each State is the law, and as such is followed by the 
 Federal courts. 
 
 Therefore the decisions of each State must be ex- 
 amined to ascertain the position of the courts as to what 
 constitutes a general or a special law in each State ; 
 what is prohibited, what is allowed, what a law must 
 embrace to be general, and what makes it special. 
 
 We refer the reader to a few of the many cases of the 
 State courts on the subject.^ 
 
 § 315. Introtluctiou of bills. — Any member of either 
 house may introduce a bill providing for the issue of 
 municipal bonds or other paper, unless the constitution 
 of the State requires that all bills for revenue, or relat- 
 ing to financial matters, be introduced in the lower house, 
 and this he may do at any time, unless the constitution 
 or some general law, or the rules of the house, require 
 that bills be introduced within a certain number of days 
 after the commencement of the session, or prohibits the 
 introduction of bills within a certain number of days prior 
 to the close of the session.^ It has been the practice, in 
 
 1 In the following cases the acts 
 were declared to be special : Ger. 
 A. Ins. Co. V. Youngbton, 68 Fed, 
 Rep. 453 ; Murane v. St. Louis, 27 
 S. W. R. 711, or 123 Mo. 479 : Parker 
 V. Common Council, (N. J.) 30 Atl. 
 R. 186 ; Copeland v. St. Joseph, 
 (Mo.) 29 S. W. R. 281 ; City of Ken- 
 ton V. State, (Ohio) 38 N. E. R. 885 ; 
 In re Extension of Boundaries of 
 Denver, 32 P. R. 615; Welsh v. 
 Bramlet, (Cal.) 33 P. R. 66 ; Pitts- 
 burgh V. Highes, 13 Pa. Co. Ct. R. 
 535 ; Alexander v. Duluth, (Minn.) 
 58 N. W. R. 866 ; Goldberg v. Dor- 
 land, (N. J.) 29 Atl. R. 599 ; State 
 V. 111. Cent. R. R., 33 Fed. Rep. 730 ; 
 McCarthy v. Com., 110 Pa. 243; 
 State V. Boyd, 19 Nev. 43. 
 
 In tlie following cases the acts 
 were declared to be general : State 
 V. Cincinnati, 8 Ohio Cir. Ct. R. 
 434 
 
 523 ; Wadena v. Wiswell, 63 N. W. 
 R. 1103; Brady v. Moulton, 63 
 N. W. R. 489 ; Spaulding v. Brady, 
 (Mo.) 31 S. W. R. 103; People 
 V, W^arden, 81 Hun, 434; State 
 V. Nelson, (Ohio) 39 N. E. R. 22 ; 
 Revell V. Annapolis, (Md.) 31 Atl. 
 R. 695 ; Jolmson v. Milwaukee, 88 
 Wis. 383 ; Arthur v. Glens Falls, 21 
 N. Y. S. 81 ; Cummings v. Chicago, 
 33 N. E. R. 804 ; Reeves v. Cont. 
 R. W. Co., 152 Pa. St. 153 ; Swike- 
 hard v. Michels, 29 N. Y. S. 777 ; 
 McClay v. City of Lincoln, (Neb.) 
 49 N. W. R. 282 ; Reed v. Maxfield, 
 (Ohio) 32 Mixly Law Bui. 50 ; Owen 
 V. Sioux City, (Iowa) 59 N. W. R. 
 3 ; In re Elizabeth Comrs., (N. J.) 
 49 N. J. L. 488 ; Little Rock Co. v. 
 Hanniford, 49 Ark. 291. 
 
 2 In Michigan no new bill can be 
 introduced after the first fifty days
 
 CH. XVIII.] CONSTITUTIONAL LIMITATIONS. § 316 
 
 order to attempt to evade these limitations, to introduce 
 within the time bills with no intention of passing, so 
 that later, and after the time for introduction of bills 
 has elapsed, a member, if he desires to introduce and pass 
 some act, may amend the bill introduced within the 
 time, by striking out all but its title and enacting clause, 
 and inserting the desired legislation, and afterwards 
 amending the title to correspond with the body of the 
 bill. This mode of attempting to evade the constitution 
 has been denounced by the courts, and they hold all such 
 legislation unconstitutional, unless the new matter is of 
 the same general purpose and subject-matter as the 
 original bill. It must, in fact, be a proper amendment on 
 the same subject-matter indicated by the original title 
 of the act.-^ 
 
 § 316. Readings. — Manyof the State constitutions re- 
 quire that a bill be read a certain number of times, usually 
 three, as in Ohio, where the constitution re(juires that 
 "every bill shall be fully and distinctly read on three 
 different days, unless in case of urgency three- fourths 
 of the house in which it shall be pending shall disi)ense 
 with this rule, or read a certain number of times, as in 
 New Jersey, where the constitution requires that ''all 
 bills and joint resolutions shall be read three times in 
 each house before final passage thereof." 
 
 The manner of reading, whether of the whole bill or 
 only its title, seems to be left to the discretion of the 
 respective houses of the Legislature. 
 
 The courts will not interfere as to the manncn- of the 
 reading,^ but it must be read, and the constitution in 
 this respect must be obeyed, otherwise the act will be 
 declared to be unconstitutional,^ in those States wlu>rein 
 the proceedings of the Legislature relative to thei)assago 
 of laws may be inquired into. (This subject is discussed 
 in the latter part of this chapter.) 
 
 of the session. In Maryland vitliin ] ^ People v. McKlioy. 70 Mich. 440 ; 
 
 the last ten days. In Arkansas "Weill v. Canfield. •■>4 I'al. 111. 
 
 within the last three. ' '' People v. Starne. :r. III. V2\ : 
 
 1 Sackrider v. Board of Sup. Sag- Weill v. Kenfield. 54 Cal. 111. 
 
 inaw Co., 79 Mich. .jO : Pack v. ! 
 
 Barton. 47 :Mich. 520. ■ 
 
 43;>
 
 § 318 MUNICIPAL BONDS. [CH. XVIII. 
 
 Where the constitution excuses the reading of a bill on 
 several days, or a certain number of times before final 
 passage in cases of urgency, it is for the Legislature to 
 determine when the urgency arises, and the courts will 
 not inquire into the question.^ 
 
 § 317. Vote. — The constitutions of the respective 
 States contain provisions respecting the number of votes 
 required in each house to finally pass a bill. 
 
 The number so required differs in the various States. 
 Sometimes the number is a majority of those present 
 and voting, provided they constitute a quorum. 
 
 In other States a majority of all the members of each 
 house is required. In several States a majority of two- 
 thirds or three- fourths is required. 
 
 It is imperative that each bill receive the number of 
 votes required by the constitution of the State, otherwise 
 it will be held to be unconstitutional in those States 
 wherein an act is but prima facie evidence of its consti- 
 tutional enactment.^ A number of the State constitu- 
 tions require that the ayes and nays shall be taken and 
 recorded on the final passage of each bill. 
 
 This provision is intended to require the constitutional 
 number of votes on each bill to be taken and the same 
 recorded, and in addition to this it fixes the responsibility 
 for the passage of the act upon each member voting 
 for it. The usual manner is to call the roll of the house, 
 and the members present then vote either aye or nay, 
 and their vote is then recorded on its passage. This pro- 
 vision of the constitution is mandatory and must be 
 strictly followed, and unless the bill receive the requisite 
 number of votes as shown by the journal it will be 
 declared to be for this reason unconstitutional,^ except in 
 those States where the proceedings of the Legislature 
 cannot be inquired into by the courts. 
 
 § 818. Signing of* bills by presiding officers. — The 
 bills are usually signed by the presiding officers of each 
 
 1 Weyand v. Stoner, 35 Kan. 545 ; 
 Hull V. Miller, 4 Neb. 503. 
 
 2 Amoskeag Nat. Bank v. Ottawa, 
 105 U. S. r,07. 
 
 4?,(i 
 
 3 Ames V. Union P. R. R. Co., 64 
 Fed. Rep. 165 ; Ryan v. Lynch, 68 
 111. 100 ; People v. Com. of High- 
 ways, 54 N. Y. 276.
 
 CH. XVIir.] CONSTITUTIOXAL LIMITATIONS. ' § 319 
 
 of the respective houses after they have passed the house 
 over which they preside. Unless the constitution of the 
 State requires a bill to be so signed it is not invalid if not 
 signed ; ^ but where the constitution requires a bill to be so 
 signed it is invalid, unless signed,^ even in those States 
 where an act is conclusively presumed to be regularly 
 passed.^ 
 
 The cases which hold an act to be conclusive evidence 
 of regularity expressly state that it is declared to be such 
 because regularly signed by the presiding officers.^ 
 
 § 319. Signing by governor. — The constitutions of the 
 different States usually require that the bill after it has 
 passed the Legislature be presented to the governor for 
 his approval, and he must either approve the bill or 
 return it to the house from which it originated with his 
 objections, and the house may then reconsider it and 
 pass it over his objections. As this is a constitutional 
 requirement, the constitution of each State must be 
 resorted to in order to ascertain the mode of procedure. 
 
 When the governor is allowed a certain number of 
 days prior to adjournment for action, Sundays are 
 usually excepted," and the days are to be full days of 
 twenty-four hours. ^ 
 
 Some of the State constitutions provide that if the gov- 
 ernor does not sign the bill, or does not return it with his 
 objections to the house in which it originated within a 
 certain number of days, the bill, as presented to him, 
 shall become a law without his signature, unless the 
 legislative adjournment within that time prevents its 
 return, in which case it shall not be a law. 
 
 It is held under this provision tliat an adjournment 
 does not prevent the bill from becoming a law if it bo 
 signed by the governor, but the only effect of such ad- 
 
 1 Speer v. Plank R. Co. . 22 Pa. 
 St. ;}76; Pelt v. Payne, (Ark.) 30 
 S. W. R. 426. 
 
 2 Cooley on Const. Lim. 183, and 
 cases cited. 
 
 8 McLane v. Paschel, 28 S. W. R. 
 711. 
 
 * Carr v. Coke. (N. C.) 22 S. E. R. 
 16. 
 
 6 Stinson v. Smith. 8 Minn. 306. 
 
 ® III re Senato Resolution, 21 P. R. 
 47.-). 
 
 4.37
 
 §310 
 
 MUNlCirAL BONDS. 
 
 [CH. XVllI. 
 
 jouriiiuent is to prevent it becoming ;i kiw merely by 
 failure of the governor to sign it.-^ 
 
 In New Jersey, where the constitution provides that 
 '' if any bill shall not be returned by the governor within 
 five days (Sundays excepted) after it shall have been pre- 
 sented to him, the same shall be a law in like manner as 
 if he had signed it, unless the Legislature by their ad- 
 journment prevents its return, in which case it shall not 
 be a law," the governor may sign the bill any time after 
 the adjournment of the Legislature, but he cannot file it 
 without his signature, so that it will be operative. 
 
 The governor must approve the bill before the Legisla- 
 ture adjourns,^ unless, as is the case in a number of the 
 States, the constitution gives him further time so to do. 
 
 It has been held in Georgia^ the governor may, as had 
 been the custom for a long time, approve and sign bills 
 after the adjournment of the Legislature, although the 
 constitution did not enlarge the time so to do. 
 
 After a bill has been returned by the governor with 
 his objections, and has been reconsidered and passed over 
 his veto, it is not necessary that it be again signed by the 
 presiding officers, or again presented to the governor un- 
 less so required by the constitution.^ 
 
 In some of the States the constitution provides that in 
 case of an adjournment a bill shall become a law, unless 
 the governor shall, within a certain number of days, file 
 such bill with his objections with the secretary of state. ^ 
 
 Under the constitution of New York, which provides 
 that a bill shall not become a law unless the governor 
 shall sign or return it within ten days, unless the Legis- 
 lature by adjournment prevented its return, it was held 
 the governor could sign tlie bill any time within the ten 
 days after final adjournment.^ 
 
 1 People V. Bowen, 30 Barb. 24 ; 
 Seven Hickory v. Ellery, 103 U. S. 
 423 ; Burn v. Sewell, (Minn.) 51 
 N. W. R. 224. 
 
 2 Cooley on Const. Lim. 185. 
 
 2 Solomon v. Cartersville, 41 Ga. 
 157. 
 
 438 
 
 * Evansville v. The State, 118 Ind. 
 456. 
 
 ^ Const, of Indiana, art. 5, § 14 ; 
 Stalcup V. Dixon, 35 N. E. R. 987. 
 
 '' Hequembourg v. Dunkirk, 56 
 N. Y. 550; People v. Bowen, 30 
 Barb. 24. See, also, Lankford v.
 
 CH. XVlll.] CONSTITUTIONAL LIMITATIONS. § 320 
 
 Under art. 4, sec. 11, of the constitution of Minnesota, 
 authorizing the governor to sign, within three days after 
 the adjournment of the Legishiture, any act passed dur- 
 ing the last three days of the session, bills, though 
 finally voted upon more than three days before the 
 day of adjournment, if enrolled within the last three 
 days, are to ])e deemed passed within that time, and may 
 be signed by the governor,^ and under this same provis- 
 ion it was held that the "last three days" means the 
 days setting for business, and that, therefore, Sunday 
 need not be counted.^ 
 
 The day the bill is presented to the governor is usually 
 excluded in the count. ^ Where a governor by mistake 
 signed a bill at the end of the first page instead of the 
 foot of the bill, and discovering his mistake after the 
 time for signing had elapsed, erased his first signature 
 and again signed it at the bottom of the last page, the 
 court held the original signing to be valid and effectual.^ 
 
 Where the governor approved and filed a bill, and 
 afterwards on the same day withdrew it and erased his 
 signature and returned it with a veto message to the 
 Legislature, it was held the bill never became a law.^ 
 
 Where a Legislature adjourned before omissions in 
 an act were discovered, and the presiding officer signed it 
 free from such omissions and as it should have read, 
 and the governor then approved it, it was held a valid 
 act.^ 
 
 § 320. When statutes take effect.— Statutes take 
 effect from the time the constitutional requirements in 
 relation to their passage have been complied with, unless 
 the act itself or some general law or the constitution 
 provides some other time. 
 
 The usual constitutional requirements are that it bo 
 
 Coims. Somerset Co., 20 Atl. R. [ s Beaiuleans v. Capo Gi rand oan, 
 
 1017 or 73 Md. 105 ; ]\riller v. Hiind- i 71 Mo. 392. 
 
 ford, 11 Neb. 377. | * Nat. Land etc. Co. v. Moa.l. CO 
 
 1 Burns v. Sewell, (Minn.) 51 N. Vt. 257. 
 
 W. R. 224. i ^ Weeks v. Stuith, 18 Atl. R. 325. 
 
 2 J. V. Farwell Co. v. :\Iatheis, 48 I « Dow v. Beidelman, 49 Ark. 325. 
 Fed. Rep. 363. On this subject see Cooley on Const. 
 
 Lim. (Cth cd.) 184, n. 
 
 430
 
 § 320 MUNICIPAL BONDS. [CH. XVITI. 
 
 signed by the presiding officers of the houses of the 
 Legislature, then signed by the governor or filed by him ; 
 when this is done it is a law ; or if returned to the Legis- 
 lature with his objections and it is again passed, it then 
 becomes a law. In some of the States it must be filed 
 with a designated State officer before it becomes a law. 
 And as we have seen most of the State constitutions pro- 
 vide that after a bill shall remain in the governor's hands 
 for a certain number of days and he does not return it, 
 it becomes a law as if he had signed it. The time of its 
 taking effect, it would seem, would be in such a case from 
 the time of its final passage. 
 
 Some of the constitutions contain what is known as an 
 emergency clause, which requires that in order that an 
 act take effect prior to the time acts generally shall take 
 effect, the act shall state the time it shall go into effect 
 and also the emergency.^ Some of the States, by general 
 laws, have provided that unless an act expressly state 
 that it shall go into effect immediately, it shall take 
 effect on a certain subsequent day, as in New Jersey, 
 where the statute ^ provides that, unless an act otherwise 
 provides, it shall take effect on July ttth next after passage. 
 
 Where an act passed May 16th, 1894, declared that it 
 should take effect May 14th, 1894, it was held it went into 
 effect on its passage.^ 
 
 In New York it is held that an act does not take effect 
 until the day after approval, since it cannot relate back to 
 time before its approval.* 
 
 In Wisconsin, where the constitution, art. 7, sec. 21, 
 provided that "no general law shall be in force until 
 published," the court, in Clark v. City of Janesville, 10 
 Wis. 136, held that the term "a general law" meant a 
 public act, and that the charter of the city w^as a general 
 law, and as it had issued bonds before its charter had 
 been published, the bonds were void. The court said : 
 
 ^ Const, of Illinois, art. 3, § 23 ; 
 Const, of Texas, art. 3, § 39 ; Jame- 
 son V. State, 24 S. W. R. 508. 
 
 2 Eev. Statutes, p. 1122. 
 
 440 
 
 3 McLaughlin v. Newark, (N. J.) 
 30 Atl. 543. 
 
 * In re Foley, 28 N. Y. S. 608. 
 See p. 421, n. 5, as to when special 
 eitv acts take effect in New York.
 
 CH. XVIII.] CONSTITUTIONAL LIIVUTATIONS. 
 
 §321 
 
 "The object of the provision was the protection of the 
 people, by preventing their rights and interest from 
 being affected by laws which they had no means of 
 knowing. " 
 
 As before said, the time when an act takes effect is reg- 
 ulated by the State constitution or some general law on 
 the subject. If not found in these, the act takes effect 
 after all the formalities have been complied with, or such 
 subsequent time as may be designated in the act itself,^ 
 
 § 321. May the proceedings of the Legislature he 
 inquired into ? — Even the laws as found upon the statute 
 books of many of the States are open to investigation, and 
 if upon inspection it is found that the Legislature failed 
 to follow the requirements of the State constitution, as 
 the calling and recording of the ayes and nays upon the 
 passage of the act, or where the bill was not read the 
 required number of times, or did not receive the required 
 number of votes, or other constitutional requirements 
 were not followed by the Legislature, or some of its 
 branches, the act will be declared to be void and no law 
 at all,^ and the bonds issued under such an act will 1)6 
 void in all hands, and the doctrine of estoppel does not 
 api)ly.^ 
 
 The question whether, after an act has been passed by 
 the Legislature and filed in the office of the secretary of 
 state or other proper officer, and is to all appearances on 
 its face a lawful act, the proceedings of the Legislature 
 may be inquired into and the act shown to be uncon- 
 stitutional because some constitutional requirement has 
 not been complied with in its passage, is still unsettled. 
 
 Some of the State courts hold that an act of the Legisla- 
 ture is hut prima facie evidence of compliance with the 
 constitutional requirements, while others hold that the 
 act is conclusive upon tlie courts and the proceedings of 
 the Legislature cannot be investigated. 
 
 One of the earliest cases which held that an act of the 
 
 ^ See Coolcy on Constitutional 
 Limitations, page 190 et scq., for a 
 further discussion of tlie subject. 
 
 2 Cooleyon Const. Lim. 141 ; Peo- 
 
 l)lo V. Supervisors of ClicnanKO, 8 
 N. Y. 317. 
 
 8 Town of Soutli Ottawa v. Per- 
 kins, 91 U. S. 260. 
 
 441
 
 §321 
 
 MUNICIPAL BONDS. 
 
 [CH. XVIII. 
 
 Legislature is the presumptive evidence of its legal passage 
 is that of Miller and Paddock v. Goodwin, 7 Chicago Legal 
 News, 204, and was upon an application to restrain the 
 tax-collector from collecting a tax to pay the interest on 
 bonds. 
 
 It was shown that the journal of the Senate did not 
 show that the bill had ever passed the Senate. The court 
 said : '' The bill never became a law and the pretended 
 act conferred no power. It follows that the bonds were 
 not merely voidable, but that they were absolutely void 
 for want of power or authority to issue them, and con- 
 sequently no subsequent act or recognition of their 
 validity could so far give vitality to them as to stop the 
 taxpayers from denying their legality." 
 
 In the same State, in another case, the right to inquire 
 into the proceedings was a^ain asserted.^ In a number 
 of other States the right of a court to inquire into- the pro- 
 ceedings of the Legislature, with the view of ascertaining 
 whether the act, as filed with the secretaiy of state, was 
 passed in the manner required by the State constitution, 
 has been decided in the affirmative.^ 
 
 It must, however, be admitted that the reason, as well 
 as the weight, of the recent decisions of many of the State 
 courts ^ are to the effect that an enrolled bill on file in the 
 office of the secretary of state or other proper officer, in 
 all respects regular on its face and bearing the signa- 
 tures of the officers of the houses of the Legislature, and 
 bearing the signature of the governor, or which becomes 
 a law without his signature,^ is conclusively presumed 
 to have been regularly passed, and the proceedings of 
 
 1 People T. Starne, 35 111. 1:21. 
 
 2 State V. Price, 8 Ohio C. C. R. 
 25 ; Tall v. Jerome, (Mich.) 59 N. 
 W. R. 816 ; Ellis v. Ellis, (Minn.) 
 56 N. W. R. 1056 ; Thomas v. Da- 
 kin, 22 Wend. 9 ; State v. McBride, 
 4 Mo. 303 ; State v. Maffit, 5 Ohio, 
 223 : Debow v. The People, 1 Denio, 
 9 ; Mass. M. L. Ins. Co. v. Colo. L. 
 Co., 36 Pac. Rep. 793; People v. 
 Galena Co., (Cal.) 35 Pac. R. 302. 
 
 442 
 
 3 State V. Jones, 34 P. R. 201 ; 
 Weeks v. Smitli, 81 Me. 538 ; R. R. 
 Co. V. Governor, 23 Mo. 253 ; Ex 
 parte Tipton, 28 Tex. App. 438; 
 Akerman v. Story, 30 Cal. 253; 
 Lottery Co. v. Ricour, 23 La. 743 ; 
 Green v. Weller, 32 Miss. 650; 
 Evans v. Brown, 30 Ind. 514 ; Per- 
 kins V. Pliiladelphia, 256 Pa. 539 ; 
 Lyons v. Wood, 153 U. S. 649. 
 
 * Honey v. State, 119 Ind. 395.
 
 CH. XVIII.] CONSTITUTIONAL LIMITATIONS. § 322 
 
 the branches of the Legislature cannot be offered in evi- 
 dence to show that such act was not regularly passed as 
 required by the constitution. 
 
 Chief Justice Beasley, of New Jersey, in Pangborn 
 V. Joving/ after an exhaustive examination of the sub- 
 ject, said : " My conclusion then is that both upon the 
 ground of public policy and upon the ancient and well set- 
 tled rules of law, the copy of a bill attested in the man- 
 ner mentioned (by the speaker of each house according to 
 legislative practice and signed by the governor) and filed 
 in the office of the secretary of state, is the conclusive 
 proof of the enactment and contents of a statute of this 
 State, and that such attested copy cannot be contradicted 
 by the legislative journals or in any other mode." 
 
 In a case in Pennsylvania,^ M'liere the court held the 
 act to be conclusive upon the courts, the court well said : 
 " If every law could be contested on the ground of in- 
 formality in its enactment, the flood-gates of litigation 
 would be opened so widely, that society would be deluged 
 in the flood." 
 
 § 322. Same — Prior publication. — In some of the 
 States the constitution requires that notice of certain 
 proposed legislation be published for a designated num- 
 ber of days. The courts, even in those States whore an 
 act properly authenticated and filed is held conclusive as 
 to regularity, are not uniform in holding that such pubH- 
 cation will be conclusively presumed by the authentication 
 and filing of the act. In Pennsylvania^ it is held that it 
 will be so presumed, while in New Jersey * it is open to 
 inquiry, while in another State the recital in the act that 
 it was properly i^ublished cannot be contradicted in the 
 absence of fraud. ^ 
 
 The question whether or not the proceedings of tlic 
 Legislature can be iiKjuired into is most exhaustivi-ly 
 treated, both by counsel and court, in tlie case of 
 Fields V. Clark, 14:) U. S.<UO, where, iiianotetobc found 
 
 1 33 N. J. L. 29-44. 
 
 2 Kilgore v. MaRco, 85 Pa. 401. 
 
 8 Pcrkiii V. Pliilaclelplua, 27 Atl. 
 R. 356. 
 
 * Ewin- Tj). V. Tri-nton. :{1 All. 
 R. 228. 
 
 '' Stato V. Murray. (I«a. Ann.) 17 
 So. R. 832. 
 
 443
 
 § 324 
 
 MUNICIPAL BONDS. 
 
 [CH. XVIII. 
 
 on page 661, et seq., the attitude of the State courts on 
 the question is given. 
 § 323. Same — Regularity, where presumed, l)ut uot 
 
 eouclusive. — In the following States the bill is hutpriiiia 
 facie evidence of regularity, viz. : Colorado, Arkan- 
 sas, California, Dakota undecided, Florida, Illinois, 
 Kansas, Kentucky undecided, Maryland, Michigan, 
 Minnesota, Missouri, Nebraska, New Hampshire, New 
 York, Ohio, Oregon, South Carolina, Tennessee, Vir- 
 ginia, West Virginia, Wisconsin, Wyoming. The reader 
 is referred to the note to the case of Field v. Clark, supra, 
 where he will find the position of the respective States on 
 this subject defined, with references to the decided cases. 
 
 The Supreme Court in the latter case held that the 
 signing by the Speaker of the House of Representatives 
 and by the President of Senate, in open session, of an en- 
 rolled bill, is an official attestation by the two houses of 
 such a bill, and that when such a bill receives the .ap- 
 proval of the President and is deposited in the Depart- 
 ment of State according to law, its authentication as a 
 bill that has passed Congress is complete and unimpeach- 
 able. 
 
 The Federal courts will be controlled by the decisions of 
 the highest State courts on this subject, because it is a 
 question relating to the construction of a State constitu- 
 tion.-^ 
 
 § 324. The presumption is that a statute is consti- 
 tutional. — The laws as found upon the statute books are 
 presumed by the courts to be valid, even in those States 
 where the completed act is not regarded as conclusive. 
 And where the house journal did not show that certain 
 amendments made by the Senate to a house bill were 
 printed prior to their adoption by the house, as required 
 by the State constitution, it w^as presumed that they 
 were so printed.^ 
 
 In the absence of positive proof to the contrary, it is 
 
 1 Field V. Clark, 143 U. S. 649- 
 €79 : South Ottawa v. Perkins, 94 
 U. S. 260 ; Post v. Supervisors, 105 
 TJ. S. 667. 
 
 444 . 
 
 2 State V. Field, (Mo.) 24 S. W. R.
 
 CH. XVIII.] CONSTITUTIONAL LIMITATIONS. § 325 
 
 presumed that all the requirements of the constitution 
 have heen complied with by the branches of the Legisla- 
 ture in the passage of bills. ^ In New York it has been 
 held that unless the defect was apparent upon the face 
 of the enabling act, the fact that it was not passed by 
 the Legislature as required by the constitution could not 
 be set up as a defence, unless such failure was set u]) in 
 the pleadings.^ 
 
 § 325. Construction of constitutional provisions. — The 
 courts hold, with reluctance, statutes to be unconstitu- 
 tional. They presume that the Legislature, a co-ordinate 
 branch of the State government, is desirous of obejdng 
 the wishes of the people as expressed in their constitu- 
 tions, and therefore it is a general rule of the courts to 
 seek to sustain, rather than break down, the acts of the 
 Legislature. 
 
 Therefore a statute will not be declared to be unconsti- 
 tutional, unless a clear and substantial conflict exists be- 
 tween it and the constitution.^ And it will he presumed 
 to be valid and constitutional until the contrary is 
 shown ;* but when it is clearly shown that the statute is 
 unconstitutional, that it is repugnant to some provisions 
 of the constitution, the courts will not hestitate to set 
 it aside. 
 
 When an act is susceptible of two constructions, one 
 of which will maintain and the other destroy it, the for- 
 mer will be adopted.^ In construing a statute clainuHl to 
 be in conflict with the constitutional provisions relative 
 to its form and scope, the courts will hold, as constitu- 
 tional, all that part of the statute in harnioin- witli the 
 constitution, and only hold the balance invalid, provided 
 the parts are not so connected together that the valid 
 cannot stand Avithout the invalid. In other words, so 
 anxious are the courts to presume that the Legislaluic 
 intended to pass only constitutional laws, and yet recog- 
 
 1 Ellis V. Ellis. 56 N. W. R. 1056 ; \ - People v. Super, of Clienango 
 Mass. M. L. Ins. Co. v. Colo. L. & Co., 8 N. Y. 317. 
 T. Co., 36 Pac. R. 794 : Peoiile v. » People v. Gillson. 101) N. Y.*.397. 
 Dunn, 80 Cal. 211; Glidewell v. ■» Thompson v. W.'lst<-r.0ON.Y. lift 
 Martin, 51 Ark. 559 ; Hall v. Steele, | ^ Dugger v. M. & T. Ins. Co., 32 
 82 Ala. 562. i S. W. R. 5. 
 
 445
 
 §325 
 
 MUNlCirAL BONDS. 
 
 [CH. XVI II. 
 
 nizing the superior will of the people expressed through 
 their constitution, the courts will, if the good can be 
 separated from the bad, permit the former to stand while 
 rejecting the latter. ^ 
 
 The construction of the United States Supreme Court 
 of the constitution of the United States is binding upon 
 all State courts,^ and where the Supreme Court decides 
 that a statute of the State violates the Federal constitu- 
 tion it must be followed by the State courts.^ 
 
 The remarks of the author relative to the constitutional 
 provisions relating to the enactment of laws having ex- 
 tended already beyond the purpose of the present work, 
 it is dismissed with the remark that every act of a State 
 Legislature in this regard should be carefully scrutinized 
 to ascertain whether or not it conflicts with the constitu- 
 tion of such State in form or substance, and the decisions 
 of the courts of the State on the subject, which are the 
 judicial constructions of such constitutions, should be 
 weighed with care and applied to the law in question, in 
 order to ascertain if the law is constitutional or not. 
 Often, then, it requires fine judgment, a logical mind, to 
 arrive at a proper conclusion. 
 
 The reader is referred to the works devoted exclusively 
 to the subject for further reference.* 
 
 an act which conferred powers to 
 execute bonds and exchange them 
 in aid of a raih-oad was constitu- 
 tional, and tliat another part of an 
 
 1 Payne v. School Dist., 168 Pa. 
 386 ; Ooxe v. State, 144 N. Y. 396 ; 
 City of Beverly v. Wain, (N. J.) 30 
 Atl. R. 543 ; Ritchie v. People, (111.) 
 40 N. E. R. 454 ; Steele v. Backer, 
 (Mo.) 31 S. W. R. 024; Com. v. 
 Wier, 15 Pa. Co. Ct. R. 425 ; People 
 V. Supt., 148 111. 413 ; Cutin v. Bar- 
 tia, 139 N. Y. 505. 
 
 In Mayor etc. v. Dechert, 32 Md. 
 369, the court held a statute which 
 conferred upon the mayor all the 
 powers of a justice of the peace 
 void, so far as it invested liim with 
 judicial functions, but good so far 
 as it conferred upon him police 
 powers, although both powers were 
 conferred by the same section. 
 
 In Railroad Co. v. Schulte, 103 
 TT. S. 118, it was held that a part of 
 446 
 
 act which gave a lien on the jirop- 
 erty of a railroad company to 
 secure such bonds was unconstitu- 
 tional. The courts, when the stat- 
 ute relates to civil matters, seek to 
 sustain all that can be separated 
 from the bad, while if the statute 
 relates to criminal matters, a much 
 more stringent rule is adopted. 
 Wjmehauserv. People, 13N.Y. 398. 
 
 2Larrabee v. Talbott, 46 Am. 
 Dec. G37. 
 
 2 Brigham v. Henderson, 48 Am. 
 Dec. 610. 
 
 * Cooley on Const. Lim. ; Sedg- 
 wick on Const, of State & Constitu-
 
 CH. XVIII.] CONSTITUTIONAL LIMITATIONS. § 326 
 
 § 320. Judicial notice.— It may be proper in this 
 connection to show in a general way of whjit facts rela- 
 tive to municipalities a court will take judicial notice. 
 
 Courts take judicial notice of the population of cities 
 and towns as shown by the last preceding census. ^ 
 
 And where an act by its terms was made applicable 
 to all towns and cities contiguous to any city of 100,000 
 or more inhabitants, the court took judicial notice that 
 there was only one city in the State with such a popula- 
 tion, and that there was no probability that any other 
 city would come within its terms for many years. ^ 
 
 The courts will take judicial notice of the incorporation 
 of a city or town ;^ and in a case where it was averred 
 that the city was incorporated it was held that it need not 
 be proved.* 
 
 But it has been held that a court would not take judi- 
 cial notice of the fact that a county was incorijorated on 
 a certain day, *" or that a township was incorporated under 
 a general act which provided for an election to be held 
 as to whether it should be incorporated or not.''' 
 
 A court will take notice of geographical facts, as that 
 a city is situated in a certain county J or that it is located 
 a certain distance from another city or some designated 
 point. ^ 
 
 The court will also take judicial notice that a city or 
 town belongs to a certain grade or class under some gen- 
 eral act classifying them. 
 
 The United States courts take judicial notice of State 
 statutes and they need not be proved.^ 
 
 tional Law ; Black on Constitu- 
 tional Law. 
 
 1 State V. Braskamp, (Iowa) r)4 
 N. W. R. 532 ; Hawkins v. Thomas. 
 3 Ind. App. 399; State v. JIaiion 
 Co., (Mo.) 31 S. W. R. 33. 
 
 2 In re Senate Bill, :293, (Colo.) 39 
 Pac. R. 523. 
 
 8 Jones V. Lake View, 151 III. 
 663 ; Penn. Co. v. Ilorton, 142 Ind. 
 189 ; Burfenning v. Chicago R. Co., 
 48 N. W. R. 444. 
 
 * Passadena v. Stinson. (Cal.) 27 
 P. R. 604. 
 
 '- TrinbuU v. Edwards. 10 S. W. 
 R. 772 ; coiitrd. Ellsworth v. Nel- 
 son, (Iowa) 46 N. W. \{. 740. 
 
 8 Rousey v. Wood, 47 M<>. Ai)p. 
 465. 
 
 - Lewis V. State. 24 S. W. K. 903. 
 
 8 M. B. L. Ins. Co. v. Robinson, 
 .58 Fed. Rep. 723. 
 
 MIer. Ex. Bk. v. McCiraw. .59 
 
 Fed. Rep. 927. 
 
 4 47
 
 1 
 
 CHAPTER XIX. 
 
 ABSTRACTS FROM THE RESPECTIVE CONSTITUTIONS RELATIVE 
 TO THE INCURRING OF DEBT. 
 
 Section. 
 
 Section. 
 
 327— Alabama. 
 
 349— Nebraska. 
 
 328— Arkansas. 
 
 350— Nevada. 
 
 329— California. 
 
 351 — New Hampshire 
 
 330— Colorado. 
 
 352 — New Jersey. 
 
 331 — Connec ticut. 
 
 353— New York. 
 
 332— Delaware. 
 
 354— North Carolina. 
 
 333— Florida. 
 
 355— North Dakota. 
 
 334— Georgia, 
 
 356— Ohio. 
 
 335— Idaho. 
 
 357— Oregon. 
 
 336— Illinois. 
 
 358 — Pennsylvania. 
 
 337 — Indiana. 
 
 359— Rhode Island. 
 
 338— Iowa. 
 
 360— South Carolina. 
 
 339 — Kentucky. 
 
 361— South Dakota. 
 
 340 — Louisiana . 
 
 362— Tennessee. 
 
 341 — Maine. 
 
 363— Territories. 
 
 342— Maryland. 
 
 364— Texas. 
 
 343 — Massachusetts. 
 
 365— Vermont. 
 
 344— Michigan. 
 
 366— Virginia. 
 
 345 — Minnesota. 
 
 367 — Wasl 1 i ngton . 
 
 346 — Mississippi. 
 
 3G8— West Virginia. 
 
 347 — Missouri. 
 
 369 — Wisconsin, 
 
 348 — Montana. 
 
 370 — Wyoming. 
 
 § 827. ALABAMA. 
 
 Constitution adopted December G, A. D, 1875. See 
 Code of Alabama, Civil, Vol. 1, 188(3, and Session Laws, 
 
 1886, 1888 and 18D0. 
 
 Constitutional Limitation. — Article XL — Taxation. 
 
 Sec. 3. " After the ratification of this constitution, no 
 new debt shall be created against, or incurred by, this 
 State, or by its authority, except to repel invasion or 
 suppress insurrection, and then only by a concurrence of 
 two-thirds of the members of each house of the General 
 Assembly, and the vote shall be taken by yeas and nays 
 and entered on the journals ; and any act creating or 
 448
 
 CH. XIX.] ABSTRACTS FKOM CONSTITUTIONS. § 328 
 
 incurring any new debt against this State, except as 
 herein provided for, shall be absolutely void ; Provided, 
 The Governor may be authorized to negotiate temporary 
 loans, never to exceed one hundred thousand dollars, to 
 meet deficiencies in the treasury ; and until the same is 
 paid, no new loan shall be negotiated ; Provided, further, 
 That this section shall not be so construed as to prevent 
 the issuance of bonds in adjustment of existing State 
 indebtedness." (Civil Code, Vol. 1, p. 43.) 
 
 The constitution also prohibits the State from donating 
 money to any charitable or educational institution not 
 under its absolute control, unless authorized by a two- 
 thirds vote of all the members elected to the Legislature 
 (Sec. 3, Art. IV.) ; it cannot loan money nor credit for, 
 nor engage in, works of internal improvement. (Sec. 54, 
 Art. IV.) The State, counties, cities, etc., shall not 
 grant or loan money nor credit for any private or corpo- 
 rate enterprise ; nor become a stockholder therein. (Sees. 
 54, 55, Art. IV.) There are no other constitutional limita- 
 tions for the State, county, city, town or school district. 
 
 § 328. ARKANSAS. 
 
 Constitution. — Article XII. — Municipal and Private 
 Corporations. 
 
 Sec. 3. ' ' The General Assembly shall provide by general 
 laws for the organization of cities (which may be classi- 
 fied) and incorporated towns, and restrict their power of 
 taxation, assessment, borrowing money and contracting 
 debts so as to prevent the abuse of such i)ower." 
 
 Sec. 4. "No municipal corporation shall be authorized 
 to pass any laws contrary to the general laAvs of tlio 
 State, nor levy any tax on real and personal property to 
 a greater extent in one year than five mills on the dollar 
 of the assessed value of the same ; Provided, That to 
 pay indebtedness existing at the time of the adoption (»f 
 this constitution, an additional tax of not more than five 
 mills on the dollar may be levied. 
 
 Article XVI.— Finance and Taxation. 
 
 Sec. 1. "Neither the State, nor anv citv, county, town 
 29 ' 44U
 
 § 329 MUNICIPAL BONDS. [CH. XIX. 
 
 or other municipality in this State shall ever loan its 
 credit for any purpose whatever ; nor shall any county, 
 city, fown or other municipality ever issue any interest- 
 bearing evidences of indebtedness, except such bonds as 
 may be authorized by law to provide for and secure pay- 
 ment of the present existing indebtedness, and the State 
 shall never issue any interest-bearing treasury warrants 
 or scrip." 
 
 § 329. CALIFORNIA. 
 
 Constitution in operation July 4th, A. D. 18Y9. (See 
 " Deering's Annotated Codes and Statutes," Vols. 1 (1886) 
 and 5 (1889) and Statutes and Amendments to the Code, 
 
 1891.) 
 
 Constitutional Limitations. — Article XI. — Cities, 
 Counties and Towns — Restriction upon County and 
 Municipal Indebtedness. 
 
 Sec. 18. "No county, city, town, township, board of 
 education or school district shall incur any indebtedness 
 or liability in any manner, or for any purpose, exceeding 
 in any year the income and revenue provided for it for 
 such year, without the assent of two-thirds of the 
 qualified electors thereof voting at an election to be held 
 for that purpose, nor unless, before or at the time of 
 incurring such indebtedness, provision shall be made for 
 the collection of an annual tax sufficient to pay the 
 interest on such indebtedness as it falls due, and also pro- 
 vision to constitute a sinking fund for the payment of 
 the principal thereof within twenty years, or before 
 maturity, which shall not exceed forty years from the 
 time of contracting the same. Any indebtedness or 
 liability incurred contrary to this provision shall be 
 void." (As amended Feb. 25, 1891. State of California, 
 1891, p. 524.) 
 
 Article XYI. — State Indebtedness. — Restriction on 
 Legislative Powers. 
 
 Sec. 1. "The Legislature shall not, in any manner, 
 450 

 
 €H. XIX.] ABSTRACTS FROM CONSTITUTIONS. § 330 
 
 create any debt or debts, liability or liabilities, which 
 shall singly, or in the aggregate, with any previous debts 
 or liabilities, exceed the sum of three hundred thousand 
 dollars, except in case of war, to repel invasion or to 
 suppress insurrection, unless the same shall be authorized 
 by law for some single object or work to be distinctly 
 specified therein, which law shall provide ways and 
 means, exclusive of loans, for the payment of the interest 
 of such debt or liability as it falls duo, and also to pay 
 and discharge the princijial of such debt or liability with- 
 in twenty years of the time of the contracting thej-eof, 
 and shall be irrepealable until the principal and interest 
 thereon shall be paid and discharged ; but no such law 
 shall take effect until, at a general election, it shall have 
 been submitted to the peojDle, and shall have received a 
 majority of all the votes cast for and against it at such 
 election ; and all moneys raised by authority of such law 
 shall be applied only to the specific object therein stated, 
 or to the payment of the debt thereby created ; and such 
 law shall be published in at least one newspaper in each 
 county, or city and county, if one be published therein, 
 throughout the State, for three months next preceding 
 the election at which it is submitted to the people. The 
 Legislature may, at any time after the approval of such 
 law l)y the people, if no debt shall have been contracted 
 in pursuance thereof, repeal the same." (Deering, Vol. 
 1, pp. (jQ, 67.) 
 
 § 330. COLORADO. 
 
 Constitution.— Article XI.— Public Indkbtedness. 
 
 Sec. 3. " The State shall not contract any debt by loan 
 
 in any form except to provide for casual deficiencies of 
 
 revenue, erect public buildings for use of the State, sii])- 
 
 press insurrection, defend the State, or, in time of war, 
 
 assist in defending the United States ; and the amount 
 
 of the debt contracted in any one year to provide for 
 
 deficiencies of revenue shall not exceed one-fourth of a 
 
 mill on each dollar of valuation of taxable property 
 
 witliin tlie State, and the aggregate amount of such debt 
 
 451
 
 § 330 MUNICIPAL BONDS. [CH. XIX» 
 
 shall not at any time exceed three-fourths of a mill on 
 each dollar of said valuation, until the valuation shall 
 equal one hundred millions of dollars, and thereafter 
 such debt shall not exceed one hundred thousand dollars, 
 and the debt incurred in any one year for erection of 
 public buildings shall not exceed one-half mill on each 
 dollar of said valuation, and the aggregate amount of 
 such debt shall never at any time exceed the sum of fifty 
 thousand dollars (except as provided in section five of 
 this article), and in all cases the valuation in this section 
 mentioned shall be that of the assessment last preceding 
 the creation of said debt." 
 
 Sec. 4. ''In no case shall any debt above mentioned in 
 this article be created except by a law which shall be 
 irrepealable until the indebtedness therein provided for 
 shall have been fully paid or discharged ; such law shall 
 specify the purposes to which the funds so raised shall 
 be applied, and provide for the levy of a tax sufficient to 
 pay the interest on, and extinguish the principal of such 
 debt within the time limited by such law for the pay- 
 ment thereof, which in the case of debts contracted for 
 the erection of public buildings and supplying deficien- 
 cies of revenue, shall not be less than ten nor more than 
 fifteen years, and the funds arising from the collection 
 of any such tax shall not be applied to any other purpose 
 than that provided in the law levying the same ; and 
 when the debt thereby created shall be paid or dis- 
 charged, such tax shall cease, and the balance, if any, 
 to the credit of the fund shall immediately be placed to 
 the credit of the general fund of the State." 
 
 Sec. 5. "A debt for the purpose of erecting public 
 buildings may be created by law, as provided for in sec- 
 tion four of this article, not exceeding in the aggregate 
 three mills on each dollar of said valuation ; Provided, 
 That before going into effect such law shall be ratified 
 by the vote of a majority of such qualified electors of 
 the State as shall vote thereon at a general election, 
 under such regulations as the General Assembly may 
 prescribe." 
 
 Sec. 6. " No county shall contract any debt by loan in 
 452
 
 €H. XIX.] ABSTRACTS FROM CONSTITUTIONS. § 330 
 
 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 the 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 valua- 
 ation shall be less than five millions of dollars, three 
 dollars on each thousand dollars thereof, and the aggre- 
 gate amount of indebtedness of any county for all pur- 
 poses, exclusive of debts contracted before the adoption 
 of this constitution, shall not' at any time exceed twice 
 the amount above herein limited, unless when in manner 
 provided by law, the question of incurring such debt 
 shall, at a general election, be submitted to such of the 
 qualified electors of such county as in the year last pre- 
 ceding 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 sliall not at any time exceed twice the rate 
 upon the valuation last herein mentioned; providi^l, that 
 any county in this State which has an indebtedness out- 
 standing either in the form of warrants issued for \mr- 
 poses provided by law prior to December 31, A. D. issc, 
 or in the form of funding bonds issued prior to such 
 date for such warrants previously outstanding, ov in the 
 form of public building, road or bridge bonds outstand- 
 ing at such date, may contract a debt by loan, by the 
 issuance of bonds for the purpose of liquidating such in- 
 debtedness, provided the question of issuing said bonds 
 shall, at a general or special election called for that jmr- 
 pose, be submitted to the vote of such of the duly quali- 
 fied electors of such county as in the year last preceding 
 such election shall have paid a tax upon property assessed 
 in such county, and the majority of those voting thereon 
 shall vote in favor of issuing the bonds. Such election 
 
 shall be held in the manner prescribed by the laws of 
 
 453
 
 § 330 MUNICIPAL BONDS. [CH. XIX. 
 
 this State for the issuance of road, bridge and pubHc 
 building bonds, and the bonds authorized at such election 
 shall be issued and provision made for their redemption 
 in the same manner as provided in said law," (As 
 amended November 6, 1888.) 
 
 Sec. 7. ' ' No debt by loan in any form shall be con- 
 tracted by any school district for the purpose of erecting 
 and furnishing school buildings, or purchasing grounds, 
 unless the proposition to create such debt shall first be 
 submitted to such qualified electors of, the district as 
 shall have paid a school tax therein in the year next 
 preceding such election and a majority of those voting 
 thereon shall vote in favor of incurring such debt." 
 
 Sec. 8. " No city or town shall contract any debt by 
 loan in any form, except by means of an ordinance, 
 which shall be irrepealable, until the indebtedness there- 
 in provided for shall have been fully paid or discharged ;, 
 specifying the purposes to which the funds to be raised 
 shall be applied, and providing for the levy of a tax, not 
 exceeding twelve (12) mills on each dollar of valuation 
 of taxable property within such town or city, sufficient 
 to pay the annual interest and extinguish the principal 
 of such debt within fifteen, but not less than ten years 
 from the creation thereof ; and such tax when collected 
 shall be applied only to the jDurposes in such ordinance 
 specified, until the indebtedness shall be paid or dis- 
 charged. But no such debt shall be created unless the 
 question of incurring the same shall, at a regular elec- 
 tion for councilmen, aldermen or officers of such city or 
 town, be submitted to a vote of such qualified electors 
 thereof as shall, in the year next preceding, have paid a 
 property tax therein, and a majority of those voting on 
 the question, by ballot deposited in a separate ballot-box, 
 shall vote in favor of creating such debt ; but the aggre- 
 gate amount of debt so created, together with the debt 
 existing at the time of such election, shall not at any 
 time exceed three per cent of the valuation last afore- 
 said. Debts contracted for supplying water to such city 
 or town are excepted from the operation of this section. 
 
 The valuation in this section mentioned shall be in all 
 454
 
 CH. XIX.] ABSTRACTS FROM CONSTITUTIONS. § 332 
 
 cases that of the assessment next preceding the last as- 
 sessment before the adoption of such ordinance." 
 
 Sec. 9. " Nothing contained in this article shall be so 
 construed as to either impair or add to the obligation of 
 any debt heretofore contracted by any county, city, 
 town, or school district, in accoi'dance with the laws of 
 Colorado territory, or prevent the contracting of any 
 debt, or the issuing of bonds therefor, in accordance 
 with said laws, upon any proposition for that purpose 
 which may have been, according to said laws, submitted 
 to a vote of the qualified electors of any county, city, 
 town or school district, before the day on which this 
 constitution takes effect." 
 
 § 331. CONNECTICUT. 
 
 See general statutes, 1888, and session laws 1887, 1889 
 and 1891. 
 
 Constitutional Limitation. — Article XXV. 
 (Adopted as an amendment October, 1877.) 
 
 "No county, city, town, borough or other municipality 
 shall ever subscribe to the capital stock of any railroad 
 corporation, or become a purchaser of the bonds, or make 
 donation to, or loan its credit, directly or indirectly, in 
 aid of any such corporation ; but nothing herein con- 
 tained shall affect the validity of any bonds or debts 
 incurred under existing laws, nor be construed to pro- 
 hibit the General Assembly from authorizing any town 
 or city to protect by additional appropriations of money 
 or credit any railroad debt contracted prior to tlie 
 adoption of this amendment." ( G. S. p. 01.) 
 
 There are no other constitutional limitations of debt 
 of any kind whatever, exc(^pt the above, and that is a 
 limitation common to almost all of the States. 
 
 §332. DELAWARE. 
 
 Eevised Code of 1871 and session laws since to isOl, 
 
 inclusive. 
 
 455
 
 § 334 municipal bonds. [ch. xix. 
 
 Constitutional Limitation. 
 
 There are no limitations on the debt contracting 
 power of the State of Delaware, or any of the political 
 subdivisions; in fact, there are no references to the matter 
 whatsoever. 
 
 § 333. FLORIDA. 
 
 McClellan's Digest, 1881, and session laws since to 
 1801, inclusive. 
 
 Constitutional Limitation.— Article XII. — Taxation 
 and Finance. 
 
 Sec. Y. ' ' The Legislature shall have power to provide 
 for issuing of State bonds bearing interest, for securing 
 the debt of the State, for the erection of State buildings, 
 and for the support of State institutions, but the credit 
 of the State shall not be pledged or loaned to any individ- 
 ual, comi)any, corporation or association ; nor shall the 
 State become a joint owner or stockholder in any com- 
 pany, association or corporation. The Legislature shall 
 not authorize any county, city, borough, township or 
 incorporated district to become a stockholder in any 
 company, association or corporation, or to obtain or 
 appropriate money for, or to loan its credit to, any cor- 
 poration, association, institution or individual. " ( McClel- 
 lan, p. Gl. Amended.) 
 
 § 334. GEORGIA. 
 
 Constitution. — Article VII. — Finance, Taxation, and 
 Public Debt. 
 
 Sec. III., Par. 5186. "No debt shall be contracted by 
 or on behalf of the State, except to supply casual deficien- 
 cies of revenue, to repel invasion, suppress insurrection 
 and defend the State in time of war, or to pay the exist- 
 ing public debt ; but the debt created to supply deficien- 
 cies in revenue shall not exceed, in the aggregate, two 
 
 hundred thousand dollars." 
 456
 
 CH. XIX.] ABSTRACTS FKOM CONSTITUTIONS. § 334 
 
 Sec. VII., Par. 5191. 1. " The debt hereafter incurred 
 by any county, municipal corporation, or political 
 division of this State, except as in this constitution pro- 
 vided for, shall not exceed seven per centum of the 
 assessed value of all the taxable property therein, and no 
 such county, municipalities or division shall incur any 
 new debt, except for a temporary loan or loans to supply 
 casual deficiencies of revenue, not to exceed one-fiftli of 
 one per centum of the assessed value of the pro])erty 
 therein without the assent of two-thirds of the qualified 
 voters thereof, at an election for that purpose, to be held 
 as may be prescribed by law ; but any city, the debt of 
 which does not exceed seven per centum of the assessed 
 value of the taxable property at the time of the adoption 
 of this constitution, may be authorized by law to increase, 
 at any time, the amount of said debt, three per centum 
 upon such assessed valuation." 
 
 Par. 5192. 2. "Any county, municipal corporation or 
 political division of this State, which shall incur any 
 bonded indebtedness under the provisions of this consti- 
 tution, shall, at or before the time of so doing-, })rovide 
 for the assessment and collection of an annual tax, 
 sufficient in amount to pay the principal and interest of 
 said debt, within thirty years from the date of the incur- 
 ring of said indebtedness," (Code, pp. 1:31 7-S.) 
 
 There are other limitations which forbid the loaning of 
 the credit of the State or of counties, etc., to any com- 
 pany (Art. VII., Sees. V. and VI.) which prohibit the 
 State from assuming any debt of any political division, 
 except the debt was contracted to repel invasion, etc. 
 (Ilml. Sec. VIII.) Sec. X. provides that cities shall not 
 incur any debt unless provision therefor shall have Ix^en 
 made by the government, and Sec. XII. provides that the 
 bonded debt of the State shall never be increased excei)t 
 to repel invasion, put down insurrection, or defend the 
 State in time of war. { P. 1319, Code.) 
 
 457
 
 § 335 MUNICIPAL BONDS. [CH. XIX. 
 
 § 335. IDAHO. 
 
 Constitution. — Article VIII. — Public Indebtedness 
 AND Subsidies. 
 
 Sec, 1. "The Legislature shall not in any manner 
 create any debt or debts, liability or liabilities, wliich 
 shall singly, or in the aggregate, exclusive of the debt of 
 the Territory at the date of its admission as a State, 
 exceed the sum of one and one-half per centu^n upon the 
 assessed value of the taxable property of the State, except 
 in case of war, to repel an invasion or suppress insurrec- 
 tion, unless the same shall be authorized by law for some 
 single object or work to be distinctly specified therein, 
 which law shall provide ways and means, exclusive of 
 loans, for the payment of the interest of such debt or 
 liability as it falls due, and also for the payment and dis- 
 charge of the principal of such debt or liability within 
 twenty years of the time of the contracting thereof, and 
 shall be irrepealable until the principal and interest 
 thereon shall be paid and discharged ; but no such law 
 shall take effect until at the general election it shall have 
 been submitted to the people, and shall have received a 
 majority of all the votes cast for and against it at such 
 election ; and all moneys raised by the authority of such 
 law shall be applied only to the specific object therein 
 stated, or to the payment of the debt thereby created, 
 and such law shall be published in at least one newspaper 
 in each county, or city and county, if one be published 
 therein, throughout the State, for three months next pre- 
 ceding the election at which it is submitted to the peoj^le. 
 The Legislature may, at any time after the approval of 
 such law by the people, if no debt shall have been con- 
 tracted in pursuance thereof, repeal the same." 
 
 Sec. 3. " No county, city, town, township, board of edu- 
 cation or school district, or other subdivision of the State, 
 shall incur any indebtedness or liability in any manner, 
 or for any purpose, exceeding in that j'-ear the income 
 and revenue provided for it for such year, without the 
 assent of two-thirds of the qualified electors thereof, 
 
 voting at an election to be held for that purpose, nor un- 
 ^458
 
 CH. XIX.] ABSTRACTS FROM CONST^'TUTIONS. § 336 
 
 less, before or at the time of incurring such indebtedness, 
 provision shall be made for the collection of an annual 
 tax sufficient to pay the interest on such indebtedness as 
 it falls due, and also to constitute a sinking fund for the 
 payment of the principal thereof within twenty years 
 from the time of contracting the same. Any indebted- 
 ness or liability incurred contrary to this provision shall be 
 void ; Provided, That this section shall not be construed 
 to apply to the ordinary and necessary expenses author- 
 ized hj the general laws of the State." (Pp. 18 and 19, 
 Official (pamphlet) Copy, 1889.) 
 
 § 336. ILLINOIS. 
 
 Constitution. — Article IV. — Public Moneys and Ap- 
 propriations. 
 
 Sec. 18. " Each General Assembly shall provide for all 
 the appropriations necessary for the ordinary and contin- 
 gent expenses of the government until the expiration of 
 the first fiscal quarter after the adjournment of the next 
 regular session, the aggregate amount of which shall 
 not be increased without a vote of two-thirds of the mem- 
 bers elected to each house, nor exceed the amount of 
 revenue authorized by law to be raised in such time ; and 
 all appropriations, general or special, recpiiring money to 
 be paid out of the State Treasury, from funds belonging 
 to the State, shall end with such fiscal quarter ; rrorided, 
 The State may, to meet casual deficits or failures in reve- 
 nues, contract debts, never to exceed in tlie aggregate 
 $250,000 ; and moneys thus borrowed shall be applitxl to 
 the purpose for which they were obtained, or to ])ay the 
 debt thus created, and to no other purpose ; and no other 
 debt, except for the purpose of repelling invasion, sup- 
 pressing insurrection, or defending the State in war (for 
 payment of which the faith of the State shall be ])ledged), 
 shall be contracted unless the law autiiorizing the same 
 shall, at a general election, liave been submitted to the 
 people, and have received a majority of the votes cast for 
 members of the General Assembly at such election. The 
 
 General Assembly shall provide for the publication of 
 
 4.'i9
 
 § 336 MUNICIPAL BONDS. [CH. XIX. 
 
 said law for three months at least before the vote of the 
 people shall be taken upon the same ; and provision shall 
 be made at the time for the payment of the interest 
 annually as it shall accrue, by a tax levied for the pur- 
 pose or from other sources of revenue, which law, provid- 
 ing for the payment of such interest by such tax, shall be 
 irrepealable until such debt be paid ; And provided, fur- 
 ther, That the law levying the tax shall be submitted to 
 the people with the law authorizing the 'debt to be con- 
 tracted." (R. S. p. 8.) 
 
 Article IX. — Revenue. 
 
 Sec. 12. "No county, city, township, school district or 
 other municipal corporation shall be allowed to become 
 indebted in any manner, or for any purpose, to an amount, 
 including existing indebtedness, in the aggregate exceed- 
 ing five per centum on the value of the taxable property 
 therein, to be ascertained by the last assessment for State 
 and county taxes, previous to the incurring of such 
 indebtedness. Any county, city, school district or other 
 municipal corporation, incurring any indebtedness as 
 aforesaid, shall before, or at the time of doing so, pro- 
 vide for the collection of a direct annual tax sufficient 
 to pay the interest on such debt as it falls due, and 
 also to pay and discharge the principal thereof within 
 twenty years from the time of contracting the same. 
 This section shall not be construed to prevent any county, 
 city, township, school district or other municipal corpora- 
 tion from issuing their bonds, in comi:)liance with any 
 vote of the people, which may have been had prior to the 
 adoption of this constitution in pursuance of any law 
 providing therefor." (Passed by Convention, May 13, 
 1875. R. S. pp. 24, 2.5.) 
 
 There are the usual constitutional prohibitions as to 
 loaning money, credit, etc., like those of Alabama. 
 460
 
 CH. XIX.] ABSTRACTS FKOM CONSTITUTIONS. § 338 
 
 § 337. INDIANA. 
 
 Constitution.— Article XIII.— Municipal Debt. 
 
 Sec. 1. " No political or municipal corporation in this 
 State shall ever become indebted, in any manner or for 
 any purpose, to an amount, in the aggregate exceeding 
 two per centum on the value of the taxable property 
 within such corporation, to be ascertained by the last 
 assessment for the State and county taxes, previous to 
 the incurring of such indebtedness ; and all bonds or ob- 
 ligations, in excess- of such amount, given by such cor- 
 poration, shall be void ; Provided, That in time of war, 
 foreign invasion, or other great calamity, or petition 
 of a majority of the property owners, in number and 
 value, within the limits of such corporation, the jniblic 
 authorities, in their discretion, may incur obligations 
 necessary for the public protection and defence to such 
 amount as may be requested in such petition." (Amend- 
 ment, in lieu of four old sections. Adopted March 
 14, 1881.) 
 
 Article X. — Finance. 
 
 Sec. 5. "No law shall authorize any debt to be con- 
 tracted on behalf of the State, except in the following 
 cases, to meet casual deficits in the revenue and ])ay tlie 
 interest of the State debt ; to repel invasion, su])])ross in- 
 surrection, or if hostilities be threatened, provide for the 
 public defence." 
 
 § 338. IOWA. 
 
 Constitution. — Article VII. 
 
 Sec. 2. "The State may contract debts to supply 
 casual deficits or failures in rcvciuies ; or to moot ex- 
 penses not otherwise provided for ; but the aggregate 
 amount of such debts, direct and contingent, wliether 
 contracted by virtue of one or more acts of tlie General 
 Assembly, or at different periods of time, shall never ex- 
 ceed the sum of $250,000 ; and the money arising from 
 
 401
 
 § 339 MUNICIPAL BONDS. [CH. XIX. 
 
 the creation of such debts shall be applied to the jDiirpose 
 for which it was obtained, or to repay the debts so con- 
 tracted, and to no other purpose whatever." 
 
 Sec. 5. "Except the debts hereinbefore specified in 
 this article, no debt shall be hereafter contracted by, or 
 on behalf of, this State, unless such debt shall be author- 
 ized by some law for some single work or object to be 
 distinctly specified therein ; and such law shall impose 
 and provide for the collection of a direct annual tax, suf- 
 ficient to pay the interest on such debt as it falls due, 
 and also to pay and discharge the principal of such debt, 
 within twenty years from the time of the contracting 
 thereof ; but no such law shall take effect until at a 
 general election it shall have been submitted to the 
 people and have received a majority of all the votes cast 
 for and against it at such election ; and all money raised 
 by authority of such law shall be applied only to the 
 specific object therein stated, or to the payment of the 
 debt created thereby ; and such law shall be published 
 in at least one newspaper in each county, if one is pub- 
 lished therein, throughout the State, for three months 
 preceding the election at which it is submitted to the 
 people.'' 
 
 Article XI. 
 
 Sec. 3. " No county or other political or municipal cor- 
 poration shall be allowed to become indebted in any man- 
 ner, or for any purpose, to an amount in the aggregate 
 exceeding five per centum of the value of the taxable 
 property within such county or corporation — to be ascer- 
 tained by the last State and county tax lists previous to 
 the incurring of such indebtedness. " (McClain's Ann'd 
 Code, 1888, p. 1839.) 
 
 § 389. KENTUCKY. 
 Constitution. — Legislative Department. 
 
 Sec. 49. ''The General Assembly may contract debts 
 
 to meet casual deficits or failures in the revenue ; but 
 
 such debts, direct or contingent, singlv or in the aggre- 
 462
 
 CH. XIX.] ABSTRACTS FllOM CONSTITUTIONS. § 339 
 
 gate, shall not at any time exceed $500,000, and the 
 moneys arising from loans creating such debts shall be 
 applied only to the purpose or purposes for which they 
 were obtained, or to repay such debts ; Provided, The 
 General Assembly may contract debts to repel invasion, 
 suppress insurrection, or, if hostilities are threatened, 
 provide for the public defence." (Page 10.) 
 
 Sec. 157. " No county, city, town, taxing district or 
 municipality shall be authorized or permitted to become 
 indebted, in any manner or for any purpose, to an 
 amount exceeding, in any year, the income and revenue 
 provided for such year, without the assent of two-thirds 
 of the voters thereof, voting at an election to be held for 
 that purjDose ; and any indebtedness contracted in viola- 
 tion of this section shall be void. Kor sliall such contract 
 be enforceable by the person with whom made ; nor shall 
 such municipality ever be authorized to assume the 
 same." (Page 54.) 
 
 Sec. 158. "The respective cities, towns, counties, 
 taxing districts and municipalities shall not be author- 
 ized or permitted to incur indebtedness in the aggre- 
 gate exceeding the following named maximum percent- 
 ages on the value of the taxable property therein, to be 
 estimated by the assessment next before the last assess- 
 ment previous to the incurring of the indebtedness, viz. : 
 Cities of the first and second classes, and of the third class 
 having a po]>ulation exceeding 15,0()(), — lo per cent ; 
 cities of the third class, having a population of less than 
 15.000, and cities and towns of tlie fourth class, — 5 ])er 
 cent ; cities and towns of the lifth and sixth classes, — 
 3 per cent ; and counties, taxing districts and other muni- 
 cipalities, — 2 percent : Provided, any city, town, county, 
 taxing district or other municii)ality may contract an in- 
 debtedness in excess of such limitations, when the same 
 has been autliorized under laws in force i)rior to the 
 adoption of this constitutit)n, or when necessary for tlie 
 completion of and payment for a public in)])n)venient 
 undertaken and not completed and paid for at the time 
 of the adoption of this constitution : And provided, 
 
 further, If, at the time of the adoption of this constitution, 
 
 403
 
 § 339 MUNICIPAL BONDS. [CH. XIX. 
 
 the aggregate indebtedness, bonded or floating, of any 
 city, town, county, taxing district or other municipality, 
 inchiding that which it has been or may be autliorized to 
 contract as herein provided, shall exceed the limit herein 
 prescribed, then no city or town shall be authorized or 
 permitted to increase its indebtedness in an amount ex- 
 ceeding two per centum, and no such county, taxing dis- 
 trict or other municipality, in an amount exceeding one 
 per centum, in the aggregate, upon the value of the tax- 
 able property therein, to be ascertained as herein pro- 
 vided, until the aggregate of its indebtedness shall have 
 been reduced below the limit herein fixed, and thereafter 
 it shall not exceed the limit, unless in case of emergency 
 the public health or safety should so require. Nothing 
 herein shall prevent the issue of renewal bonds, or 
 bonds to fund the floating indebtedness of any city, 
 town, county, taxing district or other municipality." 
 (Page 55.) 
 
 Sec. 159. " Whenever any county, city, town, taxing 
 district or other municipalit}" is authorized to contract 
 an indebtedness, it shall be required, at the same time, 
 to provide for the collection of an annual tax sufficient 
 to pay the interest on said indebtedness and to create a 
 sinking fund for the jDayment of the principal thereof, 
 within not more than forty years from the time of con- 
 tracting the same." (Page 56.) 
 
 Sec. 184. "The bond of the Commonwealth issued in 
 favor of the Board of Education for the sum of 
 $1,327,000 shall constitute one bond of the Common- 
 wealth in favor of the Board of Education, and this 
 bond and the $73,500 of the stock in the Bank of Ken- 
 tucky, held l)y the Board of Education, and its proceeds, 
 shall be held inviolate for the purpose of sustaining the 
 system of common schools. The interest and dividends 
 of said fund, together with any sum which may be pro- 
 duced by taxation or otherwise, for purposes of common- 
 school education, shall be appropriated to the common 
 schools and to no other jDurpose. No sum shall be raised 
 or collected for education other than in common schools, 
 until the question of taxation is submitted to the legal 
 464
 
 CH. XIX.] ABSTRACTS FKOM CONSTITUTIONS. § 340 
 
 voters, and the majority of the votes cast at said election 
 shall be in favor of such taxation : Provided, The tax 
 now imposed for educational purposes, and for the en- 
 dowment and maintenance of the Agricultural and 
 Mechanical College, shall remain until changed by law. " 
 (Page 65.) 
 
 §340. LOUISIANA. 
 CONSTITUTION. 
 
 Article 44. "The General Assembly shall have no 
 power to contract or to authorize the contracting of any 
 debt or liability, on behalf of the State, or to issue bonds 
 or other evidences of indebtedness thereof, except for the 
 purpose of repelling invasion or for the suppression of in- 
 surrection." (Yoorhis, p. 175.) 
 
 Article 5G. "The funds, credit, property or things of 
 value of the State, or of any political corporation thereof, 
 shall not be loaned, pledged or granted to or for any 
 person or persons, association or corporation, public or 
 private ; nor shall the State, or any political corporation, 
 purchase or subscribe to the capital or stock of any 
 corporation or association whatever, or for any private 
 enterprise. Nor shall the State, nor any political corpora- 
 tion thereof , assume the liabilities of any political, munic- 
 ipal, parochial, private or other corporation or associa- 
 tion whatever ; nor shall the State undertake to cai-ry 
 on the business of any such corporation or association, 
 or become a part owner therein; Proridcd, 'Y\\o State, 
 through the General Assembly, shall liave jiowcr to grant 
 the right of way through its public lands 1.. any raih-oad 
 or canal." (Voorhis, p. 178.) 
 
 There are the usual limitations like those of Alal)ama ; 
 but the limitations in Louisiana generally refer more to 
 taxation and the taxing power than to limiting the 
 debts and the debt -contracting i)owci-. 
 
 30 ^^^
 
 § 342 MUNICII'AL BONDS. [CH. XIX. 
 
 § 341. MAINE. 
 
 Constitutional Limitations. — Article IX. — General 
 
 Provisions. 
 
 Sec. 14. " The credit of the State shall not be directly 
 or indirectly loaned in any case. The Legislature shall 
 not create any debt or debts, liability or liabilities, on be- 
 half of the State, which shall singly or in aggregate, with 
 previous debts and liabilities hereafter incurred at any 
 one time, exceed $300,000, except to suppress insurrec- 
 tion, to repel invasion, or for jmrposes of war ; but this 
 amendment shall not be construed to refer to any money 
 that has been, or may be, deposited with this State by the 
 government of the United States, or to any fund which 
 the State shall hold in trust for any Indian tribe. E. S. 
 83, J). 51, Sec. 15 following, provides for an issue of bonds, 
 payable within twenty- one years, interest not to exceed G 
 per cent semi-annually, for the reimbursement of the 
 municipal war debts of the various cities, towns, etc., of 
 the State, and the total debt is limited to $3,500,000." 
 (Ibid. p. 52.) 
 
 Article XXIL 
 
 "Limitation of municipal indebtedness. No city or 
 town shall hereafter create any debt or liability, which 
 singly, or in the aggregate with previous debts or liabil- 
 ities, shall exceed five per centum of the last regular 
 valuation of said city or town ; Provided, however, That 
 the adoption of this article shall not be construed as ai> 
 plying to any fund received in trust by said city or town, 
 nor to any loan for the purpose of renewing existing 
 loans or for war, or to temporary loans to be paid out of 
 money raised by taxation, during the year in which they 
 are made." (Amendment of 1877, E. S. 83, p. 53.) 
 
 § 342. 3IARYLAKD. 
 
 Constitution. — Article III. — Legislative Depart- 
 ment. 
 
 Sec. 34. " No debt shall be hereafter contracted by the 
 
 General Assemblv, unless such debt shall be authorized 
 466 
 
 W 
 
 *m
 
 CH. XIX.] ABSTRACTS FROM CONSTITUTIONS. § 342 
 
 by law providing for the collection of an annual tax suf- 
 ficient to pay the interest on such debt as it falls due, and 
 also to discharge tlie principal thereof within lifte(>n years 
 from the time of contracting the same ; and the taxes 
 laid for this purpose shall not be repealed or applied to 
 any other object until the said debt and the interest 
 thereon shall be fully discharged. The credit of the State 
 shall not in any manner be given or loaned to or in aid 
 of any individual, association or corporation ; nor shall 
 the General Assembly have the jjower in any mode to 
 involve the State in the construction of works of internal 
 improvement, nor in granting any aid thereto, which 
 shall involve the faith or credit of the State ; nor make any 
 appropriation therefor, except in the aid of the con- 
 struction of works of internal improvement, in the 
 counties of St. Mary, Charles and Calvert, which have 
 had no direct advantage from such works as have been 
 heretofore aided by the State : And provided. That such 
 aid, advances or appropriations shall not exceed in the 
 aggregate the sum of five hundred thousand dollars. 
 And they shall not use or appropriate the proceeds of the 
 internal improvement companies or of the State tax, 
 now levied, or which may be hereafter levied to i)ay off 
 the public debt, to any other purpose until the interest 
 and debt are fully paid, or the sinking fund shall be 
 equal to the amount of the outstanding debt ; but the 
 General Assembly may, without levying a tax, Ix^riowan 
 amount never to exceed in fifty thousand dollars to 
 meet temporary deficiencies in the Treasury, and may con- 
 tract debts to any amount that may be necessary for the 
 ■defence of the State." 
 
 Sec. 54. "No county of tliis State shall coTitrad any 
 flebt, or obligation, in the construction of any railroad, 
 canal, or other work of internal improvement, nor give 
 or loan, its credit to, or in aid of any association, or cor- 
 poration, unless authorized by an act of the General 
 Assembly whicli shall bei)ublished for two months before 
 the next election for uKMubers of th(^ house of delegates 
 in the newspaper published in such county, and shall also 
 be approved by a majority (^f all the mem])ers of the 
 
 Oeneral Assembly at its next session after said election." 
 
 467
 
 § 344 MUNICIPAL BONDS. [CH. XIX.. 
 
 § 343. MASSACHUSETTS. 
 
 There are no constitutional limitations of debts for 
 State, county or city purposes. 
 
 § 344. MICHIGAN. 
 Constitution. — Article X. — Counties. 
 
 Sec. 9. " The board of supervisors of any county may 
 borrow or raise by tax one thousand dollars, for con- 
 structing or repairing public buildings, highways or 
 bridges ; but no greater sum shall be borrowed or raised 
 by tax for such purpose in any one year, unless author- 
 ized by a majority of the electors of such county voting 
 thereon." 
 
 Article XIV. — Finance and Taxation. 
 
 Sec. 3. " The State may contract debts to meet deficits 
 in revenue. Such debts shall not, in the aggregate, at 
 any one time, exceed fifty thousand dollars. The moneys 
 as raised shall be applied to the purposes for which they 
 were obtained, or to the payment of the debts so con- 
 tracted. " 
 
 Sec. 4. "■ The State may contract debts to repel inva- 
 sion, suppress insurrection, or defend the State in time 
 of war. The money arising from the contracting of such 
 debt shall be applied to the purposes for which it was 
 raised, or to repay such debts." 
 
 Sec. 5. " No money shall be paid out of the treasury 
 except in pursuance of appropriations made by law." 
 
 Sec. 6. " The credit of the State shall not be granted 
 to or in aid of any person, association or corporation." 
 
 Sec. 7. '' No script, certificate or other evidence of 
 State indebtedness shall be issued, except for the redemp- 
 tion of stock previously issued, or for such debts as are 
 expressly authorized in this constitution." 
 
 Article XV. — Corporations. 
 
 Sec. 13. " The Legislature shall provide for the incor- 
 poration and organization of cities and villages, and 
 shall restrict their power of taxation, borrowing money, 
 
 contracting debts and loaning their credit." 
 
 468
 
 CH. XIX.] ABSTRACTS FROM CONSTITUTIONS. § 345 
 
 § 345. MINNESOTA. 
 
 Constitution. — Article IX. — Finances of the State 
 
 AND Banks and Banking. 
 
 Sec. 5. '' Public debt may be contracted. For the pur- 
 pose of defraying extraordinary expenditures, the State 
 may contract public debts, but such debts shall never, in 
 the aggregate, exceed two hundred and fifty thousand 
 dollars ; every such del)t shall be authorized by law, for 
 some single object, to be distinctly specified therein ; 
 and no such law shall take effect until it shall have been 
 passed by the vote of two-thirds of the members of each 
 branch of the Legislature, to be recorded by the yeas and 
 nays on the journal of each house respectively ; and 
 every such law shall levy a tax annually sufficient to pay 
 the annual interest of such debt ; and also t.'ix sufficient 
 to pay the principal of such del)t within ten years from 
 the final jmssage of such law, and shall specially appro- 
 priate the proceeds of such taxes to the payment of such 
 principal and interest ; and such ai)propriation and taxes 
 shall not be repealed, postponed or diminislu'd until the 
 principal and interest of such debt shall have been wholly 
 paid. The State shall never contract any debts for works 
 of internal improvement, or be a party in carr3-ing on 
 such works, except in cases where grants of land or 
 other property shall have been made to the State, csp*^- 
 cially dedicated by the grant to specific purposes ; and in 
 such cases the State shall devote thereto the avails of 
 such grants, and may pledge or ai)propriate tlie revenues 
 derived from such works in aid of their completion." 
 
 Sec. 6. '' Public debt, how contracted. All debts 
 authorized by the preceding section shall be contracted 
 by loan on State bonds of amounts of not less than five 
 hundred dollars each on interest, payable within ten 
 years after the final passage of tlie law autliorizing such 
 debt ; and such bonds shall not be sold by the State 
 under par. A correct registry of all such bonds shall be 
 kept by the treasurer, in numerical order, so as always 
 to exhibit the number and amount unpaid, and to whom 
 severally made payable." 
 
 Sec 7 "The State shall never contract any public 
 
 409
 
 § 346 MUNICIPAL BONDS. [CH. XIX. 
 
 debt, unless in time of war, to repel invasion or suppress 
 insurrection, except in the case and in the manner pro- 
 vided in the fifth and sixth sections of this article." 
 
 Sec. 15. " Municipal debts in aid of railroads. The 
 Legislature shall not authorize any county, township, 
 city or other municipal corporation to issue bonds or to 
 become indebted in any manner to aid in the construction 
 or equipment of any or all railroads to any amount that 
 shall exceed five per centum of the value of the taxable 
 property within such county, township, city or other 
 municipal corporation ; the amount of such taxable 
 property to be ascertained and determined by the last 
 assessment of said property made for the purpose of the 
 State and county taxation previous to the incurring of 
 such indebtedness." 
 
 Sec. 1-4. '' Debts for public buildings. For the i)urpose 
 of erecting and completing buildings for a hospital for 
 the insane, a deaf, dumb, and blind asylum, and State 
 prison, the Legislature may by law increase the public 
 debt of the State to an amount not exceeding two hun- 
 dred and fifty thousand dollars, in addition to the public 
 debt already heretofore authorized by the constitution ; 
 and for that purpose may provide by law for issuing and 
 negotiating the bonds of the State and appropriate the 
 money only for the purpose aforesaid ; which bonds shall 
 be payable in not less than ten and not more than thirty 
 years from the date of the same, at the option of the 
 State." 
 
 § 346. MISSISSIPPI. 
 
 Constitution. — Article IV. — Legislative Depart- 
 ment. 
 
 Sec. 80. "Provision shall be made by general laws to 
 prevent the abuse by cities, towns and other municipal 
 corporations of their powers of assessments, taxation, 
 borrowing money and contracting debts." (A. C. p. 55.) 
 
 Sec. 88. "The Legislature shall pass general laws, 
 
 under which local and private interests shall be provided 
 
 for and protected, and under which cities and towns may 
 
 be chartered and their charters amended, and under 
 470
 
 CH. XIX.] ABSTRACTS FliOM CONSTITUTIONS. § 347 
 
 which corporations may be created, organized, and their 
 acts of incorporation altered ; and all such laws shall be 
 subject to repeal or amendment." (A. C. p. 50.) 
 
 There are also the usual prohibitions as to loaning 
 money or credit by the State, counties, cities, etc., to 
 private corporations (Sees. 66, 183 and 258) and especially 
 to railroads. The statute of limitations in civil causes 
 shall not run against the State or any subdivision or 
 municipal corporation thereof. (A. C. Sec. 104, p. 39.) 
 This constitution is the new one adopted in 1890, and 
 the laws are those which were passed to carry the new 
 constitution into effect. 
 
 § 347. MISSOURI. 
 
 Revised Statutes 1889, and Session Laws 1889, 1891 and 
 
 1892. 
 
 Constitutional Limitations. — Article IV. — Legis- 
 lative Department. 
 
 Sec. 44. " General Assembly not to contract debts 
 except as herein. The General Assembly shall have no 
 power to contract or to authorize the contracting of any 
 debt or liability on behalf of the State, or to issue bonds 
 or other evidence of indebtedness thereof, except in the 
 following cases : 
 
 "First. In renewal of existing bonds, when they can- 
 not be paid at maturity, out of the sinking fund or other 
 resources. 
 
 '" Second. On the occurring of an unforeseen emer- 
 gency, or casual deficiency of the revenue, when the 
 temporary liability incurred, upon the recommendation 
 of the governor first had, shall not exceed the sum of 
 $250,000 for any one year, to be paid in not more than 
 two years from and after its creation. 
 
 " Third. On the occurring of any unforeseen emer- 
 gency, or casual deficiency of the revenue, when the 
 temporary liability incurred, or to be incurred, sliall ex- 
 ceed the sum of !?2r)0,000 for any one year, the (Jeneral 
 Assembly may submit an act i)roviding for the loan, or 
 
 for the contracting of the liability, and containing a 
 
 471
 
 § 347 MUNICIPAL BONDS. [CH. XIX. 
 
 provision for levying a tax sufficient to pay the interest 
 and principal when they become due (the latter in not 
 more than thirteen years from the date of its creation), 
 to the qualified voters of the State, and when the act so 
 submitted shall have been ratified by a two-thirds 
 majority, at an election held for that purpose, due 
 publication having been made of the provisions of the act 
 for at least three months before such election, the act 
 thus ratified shall be irrepealable until the debt thereby 
 incurred shall be paid, principal and interest." (R. S. 
 1889, p. 73.) 
 
 Article IX. — Counties, Cities and Towns. 
 
 Sec. 19. "Municipal indebtedness, payment of. The 
 corporate authorities of any county, city or other muni- 
 cipal subdivision of this State, having more than 200,000 
 inhabitants, which has already exceeded the lunit of 
 indebtedness prescribed in Section twelve of Article X. of 
 this constitution, may, in anticipation of the customary 
 annual revenue thereof, appropriate, during any fiscal 
 year, toward the general governmental expenses thereof, 
 a sum not exceeding seven-eighths of the entire revenue 
 applicable to general governmental purposes (exclusive 
 of the payment of the bonded debt of such county, city 
 or municipality) that was actually raised by taxation 
 alone during the preceding fiscal year ; but until such 
 excess of indebtedness cease, no further bonded debt shall 
 be incurred, except for the renewal of other bonds." (R. 
 S. 1889, p. 9-1.) 
 
 Article X. — Revenue and Taxation. 
 
 Sec. 12. "No county, city, town, township, school 
 district, or other political corporation or subdivision of 
 the State, shall be allowed to become indebted in any 
 manner or for any iHiri)ose to an amount exceeding in 
 any year the income and revenue i)rovided for such year, 
 without the assent of two-thirds of the voters thereof 
 voting at an election to be held for that purpose ; nor in 
 cases requiring such assent shall anv indebtedness be 
 472 
 
 i
 
 CH. XIX.] ABSTRACTS FROM CONSTITUTIONS. § 348 
 
 allowed to be incurred to an amount, including existing 
 indebtedness, in the aggregate exceeding five per centum 
 on the value of the taxable property tlicrein, to be 
 ascertained by the assessment next before the last assess- 
 ment for State and county purposes, previous to' the 
 incurring of such indebtedness ; Provided, That with such 
 assent any county may be allowed to become indebted to 
 a larger amount for the erection of a court-house or jail ; 
 And provided, farther, that any county, cit3'-,town, town- 
 ship, school district, or other political corporation or sub- 
 division of the State, incurring any indebtedness, requir- 
 ing the assent of the voters as aforesaid, shall, Ijefore, or 
 at the time of doing so, provide for the collection of an 
 annual tax sufficient to pay the interest of such indebt- 
 edness as it falls due, and also to constitute a sinking 
 fund for payment of the principal thereof within twenty 
 3''ears from the time of contracting the same." (R. S. 
 pp. 98, 99.) 
 
 § 348. MONTANA. 
 
 Constitution. — Article XIII.— Public Indebtedness 
 OF THE State. 
 
 Sec. 2. "The legislative assembly shall not in any 
 
 manner create any debt except by law whicli shall be 
 
 irrepealable until the indebtedness therein provided for 
 
 shall have been fully paid or discharged ; such law shall 
 
 specify the purpose to which the funds so raised shall bo 
 
 applied, and provide for the levy of a tax sufficient to ])ay 
 
 the interest on, and extinguish the principal of, such debt 
 
 within the time limited by such law, for llic ])aym('nt 
 
 thereof, but no debt or liability shall be creat«Ml, which 
 
 shall singly or in the aggregate, with any existing debt 
 
 or liability, exceed the sum of i?100,000, oxccjjt in case of 
 
 war, to repel invasion or suppress insni-rectioii. unless 
 
 the law authorizing the same shall h;ive been sulnm'tted 
 
 to the people at a general election and shall hav(» n'ceived 
 
 a majority of the votes cast for and against it at such 
 
 election." 
 
 473
 
 § 349 municipal bonds. [ch. xix. 
 
 Of the Counties, 
 
 Sec. 5. "No county shall be allowed to become in- 
 debted in any manner or for any purpose, to an amount, 
 including existing indebtedness, in the aggregate, exceed- 
 ing five (5) per centum of the (value of the) taxable 
 property therein, to be ascertained by the last assessment 
 for State and county taxes previous to the incurring of 
 such indebtedness, and all bonds or obligations in excess 
 of such amount given by, or on behalf of, such county 
 shall be void. No county shall incur any indebtedness or 
 liability for any single purpose to an amount exceeding 
 $10,000 without the approval of the majority of the elec- 
 tors thereof, voting at an election to be provided by law." 
 
 Of Cities, etc. 
 
 Sec. 6. " No city, town, township, or school district 
 shall be allowed to become indebted in any manner, or 
 for any purpose, to an amount, including existing 
 indebtedness, in the aggregate exceeding three (3) per 
 centum of the value of the taxable jn'operty therein, to 
 be ascertained by the last assessment for the State and 
 county taxes previous to the incurring of such indebt- 
 edness, and all bonds and obligations in excess of such 
 amount given by, or on behalf of, such city, town, town- 
 ship or school district sliall be void ; Provided, Jwivever, 
 That the legislative assembly may extend the limit 
 mentioned in this section, by authorizing municipal 
 corporations to submit the question to a vote of the tax- 
 payers affected thereby, when such increase is necessary 
 to construct a sewerage system or to procure a supply of 
 water for such municipality, which shall own or control 
 said water supply, and devote the revenues derived 
 therefrom to the payment of the debt." (Second Session 
 Laws, 1891, pp. 45-47.) 
 
 § 349. NEBRASKA. 
 
 Constitution. — Article XII. — State, County and 
 Municipal Indebtedness. 
 
 Sec. 1. "The State may, to meet casual deficits or 
 474
 
 CH. XIX.] ABSTRACTS FROM CONSTITUTIONS. § 350 
 
 failure in the revenues, contract debts never to exceed in 
 the aggregate one hundred thousand dollars ; and no 
 greater indebtedness shall be incurred except for the 
 purpose of repelling invasion, suppressing insurrection, or 
 defending the State in war ; and provisions shall be made 
 for the payment of the interest annually, as it shall 
 accrue, by a tax levied for the purpose, or from other 
 sources of revenue, which law providing for the payment 
 of such interest by such tax shall be irrepealable until 
 such debt is paid." 
 
 Sec. 2. "No city, county, town, precinct, municipality 
 or other subdivision of the State shall ever make donation 
 to any railroad or other work of internal improvement, 
 unless a proposition so to do shall have been first sub- 
 mitted to the qualified electors thereof at an election by 
 authority of law : Prxwidetl, That such donations of a 
 county with the donations of such subdivisions in the 
 aggregate shall not exceed ten per cent of the assessed 
 valuation of such county : Provided, further, That any 
 city, or county, may, by a two-thirds vote, increase such 
 indebtedness five per cent in addition to such ten per 
 cent, and no bonds or evidences of indebtedness so issued 
 shall be valid unless the same shall have endorsed thereon 
 a certificate signed by the secretary and auditor of the 
 State, showing that the same is issu(Ml pursuant to law." 
 
 Sec. 3. "The credit of the State shall never be given 
 or loaned in aid of any individual, association, or corpo- 
 ration," 
 
 §350. NF.VADA. 
 
 Constitution.— Article VIII.— Municipal and otiikr 
 Corporations. 
 
 • Sec. 8. (101.) "The Legislature shall i>rovide for the 
 organization of cities and towns by general laws, atid 
 restrict their powers of taxation, assessment, borrowing 
 money, contracting debts and loaning their credit, ex- 
 cept for procuring supplies of water." (Cf. S. p. 4i.*.) 
 
 Article IX.— Finance and State Debt. 
 
 Sec. 3. (160.) "For the purpose of enabling the State 
 
 475
 
 § 351 MUNICIPAL BONDS. [CH. XIX. 
 
 to transact its business upon a cash basis, from its 
 organization, tlie State may contract public debts ; but 
 such debts shall never, in the aggregate, exclusive of 
 interest, exceed the sum of $300,000, except for the pur- 
 pose of defraying extraordinary expenses as hereinafter 
 mentioned. Every such debt shall be authorized by law 
 for some purpose or purposes, to be distinctly specified 
 therein ; and every such law shall provide for levying 
 an annual tax sufficient to pay the interest semi-annually, 
 and the principal within twenty years from the passage 
 of such law, and shall specially appropriate the proceeds 
 of such taxes to the payment of said principal and in- 
 terest ; and such appropriation shall not be repealed, nor 
 the taxes be postponed or diminished until the principal 
 and interest of said debts shall have been wholly paid. 
 Every contract of indebtedness entered into or assumed 
 by or on behalf of the State, when all its debts and 
 liabilities amount to said sum before mentioned, shall be 
 void and of no effect, except in cases of money borrowed 
 to repel invasion, suppress insurrection, defend the State 
 in time of war, or, if hostilities be threatened, provide 
 for the public defence." (G. S. pp. 43, 85.) 
 
 § 351. NEW HAMPSHIRE. 
 
 Constitution. — Part Second. — General Court. — 
 
 Art. .5. 
 
 "And further, full power and authority are hereby 
 :given and granted to the said general court, from time 
 to time, to make, ordain, and establish all manner of 
 wholesome and reasonable orders, laws, statutes, ordi- 
 nances, directions and instructions, either with penalties 
 or without, so as the same be not repugnant or contrary 
 to this constitution, as they may judge for the benefit 
 and welfare of this State and for the governing and 
 ordering thereof, and of the subjects of the same, for the 
 necessary support and defence of the government there- 
 of ; . . . and to impose and levy projDortional and reason- 
 able assessments, rates and taxes upon all the inhabit- 
 ants of, and residents within, the said State, and upon 
 47G
 
 CH. XIX.] ABSTRACTS FROM CONSTITUTIONS. § 352 
 
 all estates within the same, to be issued and disposed of 
 by warrant, under the hand of the governor of tliis State 
 for the time being, with the advice and consent of the 
 council, for the public service in the necessary defence 
 and support of the government of this State, and the 
 protection and preservation of the subjects thereof, ac- 
 cording to such acts as are or shall be in force within the 
 same ; Provided, That the general court shall not 
 authorize any town to loan or give its money or credit, 
 directly or indirectly, for the benefit of any corporation 
 having for its object a dividend of profits, or in any way 
 aid the same by taking its stock or bonds." 
 
 § 352. NEW JERSEY. 
 
 Constitution. — Article I. —Rights and PRmLEGES. 
 
 Sec. C). Par. 4. "The Legislature shall not, in any 
 manner, create any debt or debts, liability or liabilities, 
 of the State, which shall singly, or in the aggregate, with 
 any previous debts or liabilities at anytime exceed SKiii,- 
 000, except for purposes of war, or to repel invasion, or 
 suppress insurrection, unless the same shall be author- 
 ized by a law for some single object or work, to be dis- 
 tinctly specified therein ; which law shall provide the 
 ways and means, exclusive of loans, to pay the interest 
 of such debt or liability as it falls due, and also to ]iay 
 and discharge the principal of such debt or liability with- 
 in thirty-five years from the time of the contracting 
 thereof, and shall be irrepealable until sucli debt or 
 liability, and the interest thereon, are fully paid and dis- 
 charged ; and no such law shall take effect until it shall, 
 at a general election, have been submitted to the people 
 and have received the sanction of a majority of all tln^ 
 votes cast for and against it at such election ; and all 
 money to be raiscnl by the authority of such law shall be 
 applied only to the specific object stated therein, an<l to 
 the payment of the debt thereby creab^l. This .section 
 shall not be construed to refer to any money that has 
 been, or may be, deposited with this State by the govern- 
 ment of the United States." (Revision, p. xxxvii.) 
 
 177
 
 -§ 353 MUNICIPAL BONDS. [CH. XIX. 
 
 There are the usual prohibitions about leaning money 
 or credit or making donations in aid of any individual 
 or corporation. (Revision, p. xxxiv.) 
 
 § 353. NEW YORK. 
 
 Constitution, 1895. — Article VII.— Of the State. 
 
 Sec. 2. "The State may, to meet casual deficits, or 
 failures in revenues, or for expenses not provided for, 
 contract debts ; but such debts, direct and contingent, 
 singly or in the aggrega,te, shall not, at any time, exceed 
 one million of dollars ; and the moneys arising from the 
 loans creating such debts shall be applied to the purpose 
 for which they were obtained, or to repay the debt so 
 contracted, and to no other purpose whatever. " 
 
 Sec. 3. "In addition to the above limited power to 
 contract debts, the State may contract debts to repel in- 
 vasion, suppress insurrection, or defend the State in war ; 
 but the money arising from the contracting of such debts 
 shall be applied to the purpose for which it was raised, 
 or to repay such debts, and to no other purpose what- 
 ever." 
 
 Sec. 4. ' ' Except the debts specified in sections two 
 
 and three of this article, no debts shall be hereafter 
 
 contracted by or on behalf of this State, unless such 
 
 debt shall be authorized by a law, for some single work 
 
 or object, to be distinctly specified therein ; and such 
 
 law shall impose and provide for the collection of a direct 
 
 annual tax to pay, and sufficient to pay, the interest on 
 
 such debt as it falls due, and also to pay and discharge 
 
 the principal of such debt within eighteen years from 
 
 the time of the contracting thereof. No such law shall 
 
 take effect until it shall, at a general election, have been 
 
 submitted to the people, and have received a majority of 
 
 all the votes cast for and against it, at such election. 
 
 In the final passage of such bill in either house of the 
 
 Legislature, the question shall be taken by ayes and noes, 
 
 to be duly entered on the journals thereof, and shall be : 
 
 ' Shall this bill pass and ought the same to receive the 
 
 sanction of the people ? ' 
 478
 
 CH. XIX.] ABSTRACTS FROM CONSTITUTIONS. § 353 
 
 " The Legislature may at any time, after the approval 
 of such law by the people, if no debt shall have been 
 contracted in pursuance thereof, repeal the same ; and 
 may at any time, by law, forl)id the contracting of any 
 further debt or liability under such law ; but the tax 
 imposed by such act, in proportion to the debt and liabil- 
 ity which may have been contracted, in i)ursuance of 
 such law, shall remain in force and be irrepealaV)le, and 
 be annually collected, until the proceeds thereof sliall 
 have made the provision hereinbefore specified to pay and 
 discharge the interest and principal of sudi debt and 
 liability. The money arising from any loan or stock 
 creating such debt or liability shall be aj)plied to the 
 work or object specified in the act authorizing such debt 
 or liability ; or for the repayment of such debt or liabil- 
 ity, and for no other purpose whatever. No such law 
 shall be submitted to be voted on within three months 
 after its passage, or at any general election, when any 
 other law, or any bill, or any amendment to the ct)nsti- 
 tution shall be submitted to be voted for or against." 
 
 This section is held to relate only to State finances and 
 taxes, and not to municipal finances or taxes. People v. 
 Havemeyer, 8 Hun, l»7. 
 
 Of Counties, Cities, etc.— Artki,!: \'1I. 
 
 Sec. 9. "Neither liie credit nor the money of the 
 State shall be given or loaned to or in aid of any associa- 
 tion, corporation or private undertaking. This section 
 shall not, however, prevent the Legislature from making 
 such provision for the education and sui»port of thcbhnd. 
 the deaf and dumb, and juvc^nile delinquents, as to it 
 may seem proper. Nor shall it apply to any fund or 
 property now held, or which may ln-rcaftcr be held by 
 the State for educational i)ni-])oses." 
 
 Counties, Cities and Towns not to Give on Loan 
 Money or Credit ; Lbiitation ok Indep.tkdnkss. 
 
 Sec. 10. ''No county, city, town or village shall liere- 
 
 after give any money or property, or loan its in_ouey or 
 
 479
 
 § 353 MUNICIPAL BONDS. [CH. XIX. 
 
 credit to or in aid of any individual, association 'or corpora- 
 tion, or become directly or indirectly the owner of stock in, 
 or bonds of, any association or corporation ; nor shall any 
 such county, city, town or village be allowed to incur 
 any indebtedness except for county, city, town or village 
 purposes. This section shall not ])revent such county, 
 city, town or village from making such provision for the 
 aid or support of its poor as may be authorized by law. 
 No county or city shall be allowed to become indebted 
 for any purpose or in any maimer to an amount which, 
 including existing indebtedness, shall exceed ten per 
 centum of the assessed valuation of the real estate of 
 such county or city subject to taxation, as it appeared 
 by the assessment-rolls of said county or city on the last 
 assessment for State or county taxes prior to the incur- 
 ring of such indebtedness ; and all indebtedness in excess 
 of such limitation, except such as may now exist, shall 
 be absolutely void, except as herein otherwise provided. 
 No county or city whose present indebtedness exceeds 
 ten per centum of the assessed valuation of its real 
 estate subject to taxation, shall be allowed to become 
 indebted in any further amount until such indebtedness 
 shall be reduced within such limit. This section shall 
 not be construed to prevent the issuing of certificates 
 of indebtedness or revenue bonds issued in the antici- 
 pation of the collection of taxes for amounts actually 
 contained in the taxes for the year when such certificates 
 or revenue bonds are issued and payable out of such 
 taxes. 
 
 "Nor shall this section be construed to jDrevent the issue 
 of bonds to provide for the supply of water ; but the 
 term of the bonds issued to provide the supply of the 
 water shall not exceed twenty years, and a sinking fund 
 shall be created on the issuing of the said bonds for their 
 redemption, b}^ raising annually a suin which will pro- 
 duce an amount equal to the sum of the principal and 
 interest of said bonds at their maturity. All certificates 
 of indebtedness or revenue bonds issued in anticipation 
 of the collection of taxes, which are not retired within 
 
 five years after their date of issue, and bonds issued to 
 480
 
 CH. XIX.] ABSTRACTS FROM CONSTITUTIONS. § 354 
 
 provide for the supply of water, and any debt hereafter 
 incurred by any portion or j^art of a city, if there shall 
 be any such debt, shall be included in ascertaining the 
 power of the city to become otherwise indebted. When- 
 ever hereafter the boundaries of any city shall become 
 the same as those of a county, the power of the county 
 to become indebted shall cease, but the debt of the county 
 at that time existing shall not be included as part of the 
 city debt. The amount hereafter to be raised by tax for 
 county or city purposes, in any county containing a city 
 of over one hundred thousand inhabitants, or any such 
 city of this State, in addition to providing for the prin- 
 cipal and interest of existing debt, shall not in the ag- 
 gregate exceed in any one year two per centum of the 
 assessed valuation of the real and personal estate of such 
 county or city to be ascertained as prescribed in this 
 section in respect to county or city debt. 
 
 Article XII. — Organization of Cities and Vn.- 
 
 LAGES. 
 
 Sec. 1. "It shall be the duty of the Legislature to 
 provide for the organization of cities and incorporated 
 villages, and to restrict their power of taxation, assess- 
 ment, borrowing money, contracting debts, and loaning 
 their credit, so as to prevent abuses in assessments, and 
 in contracting debt by such municipal corporations.^ 
 
 § 354. NORTH CAROLINA. 
 
 Constitution.— Article V.— Revenue and Taxation. 
 
 Sec. 4. "Until the bonds of the State shall be at par, 
 the General Assembly shall have no power to contrac-t 
 any new debt or pecuniary obligation in behalf of the 
 State, except to supply a casual deficit, or for sui)pr(\s.s- 
 ing invasion or insurrection, unless it shall in the same 
 biil levy a special tax to pay the interest amnially. And 
 the General Assembly shall have no power to give or 
 lend the credit of the'state in aid of any person, associa- 
 tion or corporation, except to aid in the completion of 
 
 1 See p. 421, note 5. for classifica- 1 tion of cities and pa-ssage of special 
 
 citv laws. 
 
 31 
 
 481
 
 § 355 MUNICirAL BONDS. [CH. XIX. 
 
 such railroads as may be unfinished, at the time of the 
 adoption of the constitution, or in wliich the State has a 
 direct pecuniary interest, unless the subject be submitted 
 to a direct vote of the people of the State, and be ap- 
 proved by a majority of those who shall vote thereon." 
 (Code, pp. TOG, Vol. 3.) 
 
 Article VII.— Municipal Corporations. 
 
 Sec. 7. ' ' No county, city, town or other municipal 
 corporation shall contract any debt, pledge its faith, or 
 loan its credit, nor shall any tax be levied, or collected 
 by any officers of the same, except for the necessary ex- 
 penses thereof, unless by a vote of the majority of the 
 qualified voters therein." (Code, pp. 710, Vol. 2.) 
 
 Article VIII. 
 
 Sec. 4. "It shall be the duty of the Legislature to pro- 
 vide for the organization of cities, towns and incor^Dorated 
 villages, and to restrict their power of taxation, assess- 
 ment, borrowing money, contracting debt and loaning 
 their credit so as to prevent abuses in assessments and 
 in contracting debts by such municipal corporations." 
 (Code, pp. 712-3, Vol. 2.) 
 
 § 355. NORTH DAKOTA. 
 
 Constitution. — Article XII. — Public Debt and Public 
 Works.— Public Debt Limited. 
 
 Sec. 182. " The State may, to meet casual deficits or 
 failure in the revenue, or in case of extraordinary emer- 
 gencies, contract debts, but such debts shall never in the 
 aggregate exceed the sum of two hundred thousand dol- 
 lars, exclusive of what may be the debt of North Dakota 
 at the time of the adoption of this constitution.. Every 
 such debt shall be authorized by law for certain purposes 
 to be definitely mentioned therein, and every such law 
 shall provide for levying an annual tax sufficient to pay 
 the interest semi-annually, and the principal within thirty 
 
 years from the passage of such law, and shall specially 
 
 482
 
 CH. XIX.] ABSTRACTS FROM CONSTITUTIONS. § 355 
 
 appropriate the proceeds of such tax to the payment of 
 said principal and interest, and such appropriation shall 
 not be repealed nor tlie tax discontinued until such debt, 
 both principal and interest, shall have been fully paid. 
 No debt in excess of the limit named shall be incurred 
 except for the purpose of repelling invasion, suppressing 
 insurrection, defending the State in time of war, or to 
 provide for public defence in case of threatened hostiH- 
 ties, but the issuing of new bonds to refund existing 
 indebtedness shall not be construed to be any part or 
 portion of said two hundred thousand dollars.'' (Pp. 
 115-116.) 
 
 County Indebtedness Limited. 
 
 Sec. 183. "The debt of any county, township, city, 
 town, school district or an}^ other political subdivision, 
 shall never exceed five per centum upon the assessed 
 value of the taxable property therein ; Provided, That 
 any incorporated city may, l)y a two-thirds vote, increase 
 such indebtedness three per centum on such assessed 
 value beyond said five per cent limit. In estimating 
 the indebtedness which a city, county, township, school 
 district or any other political subdivision may incur the 
 entire amount of existing indebtness, whether contracted 
 prior or subsequent to the adoption of this constitution, 
 shall be included ; Provided, further, that any incoqM^- 
 rated city may become indebted in any amount not ex- 
 ceeding four per centum on such assessed value without 
 regard to the existing indebtedness of such city, for the 
 purpose of constructing or purchasing water works for 
 furnishing a supply of water to the inhabitants of such 
 city, or for the purpose of constructing sew«>rs. and for 
 no other purpose wliatever. All bonds or obligations in 
 excess of the nniouiit of indebtedness permitted by this 
 constitution, given by any city, county, township, town, 
 school district, or any other i)oliticnl subdivision, shall Ix^ 
 void." (Page 110.) 
 
 Sec. 181 requires a tax to be levied on or before the 
 
 time of incurring the debt. 
 
 "^ 483
 
 § 356 municipal bonds. [ch. xix. 
 
 Bonds of State or County. — When Invalid. 
 
 Sec. 187. " No bond or evidence of indebtedness of the 
 State shall be valid without a debt certificate endorsed 
 upon it signed by the auditor and secretary of state. 
 Ko bond, etc., of any county, city, etc., shall be valid 
 without a similar certificate of debt signed by the county 
 auditor or other officer authorized by law to sign such 
 certificate." (Page. 117.) 
 
 § 35C. OHIO, 
 
 Constitution,— Article VIII.— Public Debt and 
 Public Works. 
 
 Sec. 1. " The State may contract debts to supply 
 casual deficits or failures in revenues, or to meet ex- 
 penses not otherwise provided for ; but the aggregate 
 amount of such debts, direct and contingent, whether 
 contracted by virtue of one or more acts of the General 
 Assembly, or at different periods of time, shall never ex- 
 ceed seven hundred and fifty thousand dollars ; and the 
 money, arising from the creation of such debts, shall be 
 applied to the purpose for which it was obtained, or to 
 repay the debts so contracted, and to no other purpose 
 whatever. 
 
 Sec. 2. "In addition to the above limited power, the 
 State may contract debts to repel invasion, suppress in- 
 surrection, defend the State in war, or to redeem the 
 present outstanding indebtedness of the State ; but the 
 money, arising from the contracting of such debts, shall 
 be applied to the purpose for which it is raised, or to 
 repay such debts, and to no other purpose whatever ; and 
 all debts, incurred to redeem the present outstanding in- 
 debtedness of the State, shall be so contracted as to be 
 payable by the sinking fund hereinafter provided for, as 
 the same shall accumulate." 
 
 Sec. 3. " Except the debts above specified in sections 
 one and two of this article, no debt whatever shall here- 
 after be created by or on behalf of the State." 
 
 Sec. .5. " The State shall never assume the debts of 
 484
 
 CH. XIX.] ABSTRACTS FROM CONSTITUTIONS. § 357 
 
 any county, city, town or township, or of any corpora- 
 tion whatever, unless such debt shall have been created 
 to repel invasion, suppress insurrection, or defend the 
 State in war." 
 
 Sec. 7. "The faith of the State being pledged for the 
 payment of its public debt, in order to provide therefor, 
 there shall be created a sinking fund, which shall be suf- 
 ficient to pay the accruing interest on such debt, and, 
 annually, to reduce the principal thereof, by a sum not 
 less than one hundred thousand dollars, increased yearly, 
 and each and every year, by compounding, at the rate of 
 six per cent per annum. The said sinking fund shall 
 consist of the net annual income of the public works and 
 stocks owned by the State, of any other funds or re- 
 sources that are, or may be, provided by law, and of such 
 further sum, to be raised by taxation, as may be required 
 for the purposes aforesaid." 
 
 Article XII.— Finance and Taxation. 
 
 Sec. 6. " The State shall never contract any del)t for 
 purposes of internal improvement." 
 
 Article XIII. — Corporations. 
 
 Sec. G. "The General Assembly shall provide for the 
 organization of cities and incor|)orat(Ml villages by general 
 laws, and restrict their power of taxation, assi^ssmcnt, 
 borrowing money, contracting debts and loaning their 
 credit, so as to prevent the abuse of such power." 
 
 § 357. OREGON. 
 
 Constitution. — Article XL— Corporations and 
 Internal Improvements. 
 
 Sec. 5. "Acts of legislative assemldy incorporating 
 towns and cities shall restrict tlieir powers of taxation, 
 borrowing money, contracting debts, and brining tlicir 
 credit." 
 
 Sec. 10. " No county shall create any debts or lial»ili- 
 
 ties, which shall singly or in the aggregate exceed the 
 
 sum of five thousand dollars, exceiit to sui^pross insur- 
 
 485
 
 Of Counties, Cities, etc. 
 
 Sec. 8. " The debt of any county, city, borough, town- 
 ship, school district or other municipality or incorporated 
 district, except as herein prov^ided, shall never exceed 
 seven per centum upon the assessed value of the taxable 
 property therein, nor shall any such municipality or 
 district incur any new debt, or increase its indebtedness, 
 to an amount exceeding two per centum ujDon such as- 
 sessed valuation of property, without the assent of the 
 electors thereof, at a public election, in such manner as 
 shall be provided by law ; but any city, the debt of which 
 now exceeds seven jDer centum of such assessed valuation, 
 may be authorized by law to increase the same three per 
 centum, in the aggregate, at any one time, upon such 
 valuation." 
 
 Sec. 10. ''Any county, township, school district or 
 
 other municipality, incurring any indebtedness, shall, at 
 
 or before the time of so doing, provide for the collection 
 
 of an annual tax sufficient to pay the interest, and also 
 
 the principal thereof within thirty years." (Digest, p. 
 
 41-2.) 
 
 486 
 
 § 358 ]vruNicirAL bonds. . [ch. xix. 
 
 rection or repel invasion ; but the debts of any county at 
 the time this constitution takes effect shall be disregarded 
 in estimating the sum to which such county is limited." 
 
 §358. PENNSYLVANIA. 1 
 
 Constitution. — Aeticle IX. — Of Taxation and 
 
 Finance. . 
 
 Of the State. 
 
 Sec. 4, " No debt shall be created by or on behalf of 
 the State, except to supply casual deficiencies of revenue, 
 repel invasion, suppress insurrection, defend the State in 
 war, or to pay existing debt ; and the debt created to 
 supply deficiencies in revenue, shall never exceed, in the 
 aggregate, at any one time, one million of dollars." 
 
 Sec. 11 provides for an annual sinking fund levy, 
 sufficient to pay the yearly interest and not less than 
 ),000 of the present State debt.
 
 CH. XIX.J ABSTllACTS FIIOM CONSTITUTIONS. § 358 
 
 Article XV. 
 
 Sec. 2. "No debt shall be contracted or liability in- 
 curred by any municipal commission, except in pur- 
 suance of an appropriation previously made therefor by 
 the municipal government." (Digest, p. 44.) 
 
 There are the usual constitutional limitations in regard 
 to loaning money or credit to private corporations, etc., 
 such as those of Alabama. 
 
 Supplemental Constitutional Limitations. 
 
 Sec. 5. " All laws authorizing the borrowing of money 
 by and on behalf of the State, shall specify the purposes 
 for which the money is to be used ; and the money so 
 borrowed shall be used for the purpose specified, and no 
 other." 
 
 Sec. 6. ''The credit of the commonwealth shall not 
 be pledged or loaned to any individual, company, corpo- 
 ration or association ; nor shall the commonwealth 
 become a joint owner or stockholder in any company, as- 
 sociation or corporation." 
 
 Sec. 7. "The General Assembly shall not authorize 
 any county, city, borough, township or incorporated dis- 
 trict to become a stockholder in any company, association 
 or corporation, or to obtain or appropriate money for, or 
 to loan its credit to, any corporation, association, institu- 
 tion or individual." 
 
 Sec. 9. "The commonwealth shall not assume^ the 
 debt, or any part thereof, of any city, county, borough 
 or township, unless such debt shall have been contracted 
 to enable the State to repel invasion, supjn'ess domestic 
 insurrection, defend itself in time of war, or to assi.st the 
 State in the discharge of any portion of its present in- 
 debtedness. 
 
 Sec. 11. " To provide for the payment of the present 
 State debt, and any additional debt contracted as afore- 
 said, the General Assembly shall continue an<l maintain 
 the sinking fund, sufficient to pay the accruing interest 
 on such debt, and annually to nxluce th«> principal 
 
 thereof, by a sum not less tiian two hundred and fifty 
 
 ' -^ 487
 
 § 359 MUNICIPAL BONDS. [CH. XIX. 
 
 thousand dollars ; the said sinkmg fund shall consist of 
 the proceeds of the sales of the public works or any part 
 thereof, and of the income or proceeds of the sale of any 
 stocks owned by the commonwealth, together with other 
 funds and resources that may be designated by law, and 
 shall be increased from time to time, by assigning to it 
 any part of the taxes or other revenues of the State not 
 required for the ordinary and current expenses of gov- 
 ernment ; and unless in case of war, invasion or insur- 
 rection, no part of the said sinking fund shall be used 
 or applied otherwise than in the extinguishmeirt of the 
 public debt." (Digest, pp. 41-2.) 
 
 § 359. RHODE ISLAND. 
 CON-STITUTION. — ARTICLE IV. — Op THE LEGISLATIVE 
 
 Power. 
 
 Sec, 13. " The General Assembly shall have no power 
 hereafter, without the express consent of the people, to 
 incur State debts to an amount exceeding $50,000, except 
 in time of war, or in case of insurrection or invasion ; 
 nor shall tliey in any case, without such consent, pledge 
 the faith of the State for the payment of the obligations 
 of others. This section shall not be construed to refer 
 to any money that may be deposited with this State 
 by the government of the United States," (P. S, 1882, 
 p. 25.) 
 
 Article XIV. 
 
 Sec. 2. '^ All debts contracted and engagements en- 
 tered into, before the adoption of this constitution, shall 
 be as valid against the State as if this constitution had 
 not been adopted." (P, S, 1882, p. 32.) 
 
 There is also a provision which requires the two-thirds 
 assent of the members elected to each house of the Gen- 
 eral Assembly to every bill appropriating the public 
 money for local or private purposes. (Art. IV. Sec, 14, 
 
 p. 25.) 
 
 488
 
 CH. XIX.] ABSTRACTS PROM CONSTITUTIONS. § 360 
 
 § 3G0. SOUTH CAROLINA. 
 Constitution. — Article IX.— Finance and Taxation. 
 
 Sec. 7. "For the purpose of defraying extraordinary 
 expenditures, the State may contract public debts ; but 
 such debts shall be authorized by law for some single 
 object, to be distinctly specified therein ; and no such 
 law shall take effect until it shall have been passed by a 
 vote of two-thirds of the members of each branch of the 
 General Assembly, to be recorded by yeas and nays on 
 the journals of each House respectively ; and every such 
 law shall levy a tax annually sufficient to pay the annual 
 interest on such debt." (Page xlii.) 
 
 Sec. 9. " The General Assembly shall provide for the 
 incorporation and organization of cities and towns, and 
 shall restrict their powers of taxation, borrowing money, 
 contracting debts, and loaning their credit." 
 
 Sec. 10. " No scrip, certificate, or other evidence of 
 State indebtedness shall be issued, except for the re- 
 demption of stock, bonds, or other evidences of indebted- 
 ness previously issued, or for such debts as are expressly 
 authorized in this constitution." 
 
 Sec. 14. "Any debt contracted by the State shall be 
 by loan on State bonds of amounts not less than fifty 
 dollars each, on interest, payable within twenty yi^irs 
 after the final passage of the law authorizing sui-h dobt. 
 A correct registry of all bonds shall be kept by the 
 treasurer in numerical order so as always to exhibit the 
 number and amount unpaid, and t<> whom severally 
 made payable." (G. S. p. xliii.) 
 
 Amendment. — Article XVI. 
 
 "To the end that the public debt of South Carolina 
 may not hereafter be increased, without the due con- 
 sideration and free consent of tlie people of the State, 
 the General Assembly is hereby forbidden to create any 
 further debt or obligation, either by the loan of the 
 credit of the State, by guaranty, endorsement or other- 
 wise, except for the ordinary and current businei^s of tlie
 
 § 861 MUNICIPAL BONDS. [CH. XIX. 
 
 State, without first submitting the question as to the 
 creation of any such new debt, guarantee, endorsement 
 or loan of its credit to the people of this State at a gen- 
 eral State election ; and unless two-thirds of the qualified 
 voters of this State, voting on the question, shall be in 
 favor of a further debt, guaranty, endorsement, or loan 
 of its credit, none such shall be created or made." (G. 
 S. p. xlviii.) 
 
 § 361. SOUTH DAKOTA. 
 Constitution. —Article XIII. — Public Indebtedness. 
 
 Sec. 2. " For the purpose of defraying extraordinary 
 expenses and making public improvements, or to meet 
 casual deficits or failure in revenue, the State may con- 
 tract debts never to exceed, with previous debts in the 
 aggregate, $500,000, and no greater indebtedness shall 
 be incurred except for the purpose of repelling invasion, 
 suppressing insurrection, or defending the State or the 
 United States in war, and provisions shall be made by 
 law for the payment of the interest annually, and the 
 principal when due, by tax levied for the purpose, or 
 from other sources of revenue ; which law providing for 
 the payment of such interest and principal by such tax 
 or otherwise shall be irrepealable until such debt is paid ; 
 Provided, however. The State of South Dakota shall 
 have the power to refund the territorial debt assumed 
 by the State of South Dakota, by bonds of the State of 
 South Dakota." (S. L. 91, p. xlii.) 
 
 Sec. 3. ''That the indebtedness of the State of South 
 Dakota, limited by Sec. 2 of this article, shall be in ad- 
 dition to the debt of the Territory of Dakota assumed 
 by and agreed to be paid to South Dakota." 
 
 Sec. 4. "The debt of any county, city, town, school 
 
 district or other subdivision, shall never exceed five per 
 
 centum upon the assessed value of the taxable property 
 
 therein. In estimating the amount of indebtedness 
 
 which a municipality or subdivision may incur, the 
 
 amount of indebtedness contracted prior to the adoption 
 
 of this constitution shall be included." 
 490
 
 CH. XIX.] ABSTRACTS FROM CONSTITUTIONS. § 3C2 
 
 Sec. 5. ''Any city, county, town, school district or 
 any other subdivision incurring indebtedness shall, at or 
 before the time of so doing, provide for tlie collection of 
 an annual tax sufficient to pay the interest and also the 
 principal thereof when due, and all laws or ordinances 
 providing for the payment of the interest or principal of 
 any debt shall be irrepealable until such debt Ix' paid." 
 (S. L. 01, p. xlii.) 
 
 Section 1, Article X., provides that the Legislature 
 shall pass general laws for the organization and classifi- 
 cation of municipal corporations, which classes shall not 
 exceed four in number ; and it shall also restrict the 
 power of such corporations to borrow money and con- 
 tract debts, etc., so as to prevent the abuse of such 
 power. (Ibid. p. xxxix.) 
 
 § 3G2. TENNESSEE. 
 
 Constitution.— Article II.— Distribution of Powp:rs. 
 
 Sec. 20. "The General Assembly shall have power to 
 authorize the several counties and incorporated towns in 
 this State to impose taxes for county and corporation 
 purposes respectively, in such manner as shall be ])re- 
 scribed by law ; and all property shall be taxed according 
 to its value, upon the principles established in regard to 
 State taxation. But the credit of no county, city or 
 town shall be given or loaned to, or in aid of, any i)erson, 
 company, association, or corporation, except upon ;in 
 election to be first held by the qualified voters of such 
 county, city or town, and the assent of three-fourths ()f 
 the votes cast at said election. Nor shall any county, city 
 or town become a stockhold(>r with others in any company, 
 association or corporation, except ui)on a like election 
 and the assent of a like majority. But the countii-s of 
 Grainger, Hawkins, Hancock. Union, Campb<>ll. Scott, 
 Morgan, Grundv, Sumner, Smitii, Fentress, Van Buren, 
 White, Putnam, Overton, Ja<kson. Cumberland. An- 
 derson, Henderson, Wayne, Marshall. Bocke, Coffee, 
 Macon and the new county herein authorized tobe estab-
 
 § 363 MUNICIPAL BONDS. [cil. XIX. 
 
 lished out of fractions of Sumner, Macon and Smith 
 counties and Roane, shall be excepted out of the provi- 
 sions of this section, so far that the assent of a majority 
 of the qualified voters of either of said counties voting 
 on the question shall be sufficient, when the credit of such 
 county is given or loaned to any person, association or 
 corporation; P?'o?;z"c?e(7, That the exception of the counties 
 above named shall not be in force beyond the year 1880, 
 and after that period they shall be subject to the three- 
 fourths majority applicable to the other counties of the 
 State." 
 
 Sec. 33. " No bonds of the State shall be issued to any 
 railroad company which, at the time of its application 
 for the same, shall be in default in paying the interest 
 upon the State bonds previously loaned to it, or that 
 shall hereafter and before such application, sell or abso- 
 lutely dispose of any State bonds loaned to it, for less 
 than par." (Code, p. Ixxxi.) 
 
 There are also the "usual restrictions about loaning the 
 money or credit of the State for private enterprises. 
 (Ibid! Sec. 32.) 
 
 § 3G3. TERRITORIES. 
 
 Limit Prescribed by the Act of Congress. — July 30, 
 A. D. 1886. — Applicable to Alaska, Arizona, New 
 Mexico and Utah Territories. 
 
 Sec. 1888. "No legislative assembly of a territory 
 shall, in any instance or under any pretext, exceed the 
 amount appropriated by Congress for its annual expenses. 
 
 " Be it enacted, etc., that the Legislature of the terri- 
 tories of the United States now or hereafter to be or- 
 ganized shall not pass local or special laws in any of the 
 following enumerated cases, that is to say : 
 
 Granting divorces. 
 
 Changing the name of persons or places. 
 
 Laying out, opening, altering, and working roads or 
 highways. 
 
 Vacating roads, town-plats, streets, alleys and public 
 
 grounds. 
 492
 
 CH. XIX.] ABSTRACTS FROM CONSTITUTIONS. § 3G3 
 
 Locating or changing county seats. 
 Regulating township and county affairs. 
 Regulating the practice in courts of justice. 
 Regulating the jurisdiction and duties of justices of 
 
 the peace, police magistrates, and constahles. 
 Providing for changes in venue in civil and criminal 
 
 cases. 
 Incorporating cities, towns or villages, or changing or 
 
 amending the charter of any town, city or village. 
 The punishment of crimes or misdemeanors. 
 For the assessment and collection of taxes for tc-rri- 
 
 torial, county, township, or road purposes. 
 Summoning and impanelling grand or petit jurors. 
 Providing for the management of common schools. 
 Regulating the rate of interest on money. 
 The opening and conducting of any election or desig- 
 nating the place of voting. 
 The sale or mortgage of real estate belonging to minors 
 
 or others under disability. 
 The protection of game or fish. 
 Chartering or licensing ferries and toll bridges. 
 Remitting fines, penalties or forfeitures. 
 Creating, increasing or decreasing fees, percentage or 
 
 allowances of public officers during tlie term for 
 
 which said officers are elected and appointed. 
 Changing the law of descent. 
 Granting to any c()r})oration, association or individn:il 
 
 the right to lay down raih-oad tracks, or amending 
 
 existing charters for such purpose. 
 Granting to any corporation, association or individual 
 
 any special or exclusive privilege, immunity or 
 
 franchise whatever. 
 In all otlier cases where a general law can Iw made 
 
 applicable, no special shall be enacted in any of the 
 
 territories of the United States by tlie territorial 
 
 Legislature thereof." 
 Sec. 2. " That no territory of the United Stales, now 
 or hereafter to be organized, or any political or munici- 
 pal corporation or subdivision of any such f.-rritory, 
 shall lioreafter make any subscription to the capital stock 
 
 493
 
 § 363 MUNICIPAL BONDS. [Cll. XIX. 
 
 of any incorporated company, or company or association 
 having corporate powers, or in any manner loan its credit 
 to, or use it for benefit of, any such company or asso- 
 ciation, or borrow money for the use of any such com- 
 pany or association." 
 
 Sec. 3. "That no law of any territorial Legislature 
 shall authorize any debt to be contracted by or on behalf 
 of such territory except in the following cases : To meet 
 a casual deficit in the revenue, to pay the interest upon 
 the territorial debt, to suppress insurrection, or to pro- 
 vide for the public defence, except that in addition to any 
 indebtedness created for such jDurposes, the Legislature 
 may authorize a loan for the erection of penal, chari- 
 table or educational institutions for such territory, if the 
 total indebtedness of the territory is not thereby made to 
 exceed one per centum upon the assessed value of the tax- 
 able property in such territory as shown by the last gen- 
 eral assessment for taxation. And nothing in this act 
 shall be construed to prohibit the refunding of any 
 existing indebtedness of such territory or of any political 
 or municipal corporation, county or other subdivision 
 therein." 
 
 Sec. 4. "That no political or municipal corporation, 
 county or other subdivision, in any of the territories of 
 the United States, shall ever become indebted in any 
 manner or for any purpose to any amount in the aggre- 
 gate, including existing indebtedness, exceeding four per 
 centum on the value of the taxable property within such 
 corporation, county or subdivision, to be ascertained by 
 the last assessment for the territorial and county taxes 
 previous to the incurring of such indebtedness, and all 
 bonds or obligations in excess of such amount given by 
 such corporation shall be void : That nothing in this act 
 contained shall be so construed as to affect the validity 
 of any act of any territorial Legislature heretofore en- 
 acted or of any obligations existing or contracted there- 
 under, not to preclude the issuing of bonds already con- 
 tracted for in pursuance of express provisions of law ; 
 nor to prevent any territorial Legislature from legalizing 
 
 the act of any county, municipal corporation, or subdi- 
 494
 
 CH. XIX.] ABSTRACTS FIIOM CONSTITUTION. § 3G4 
 
 vision of any territory as to any bonds heretofore issued 
 or contracted to be issued." 
 
 Sec. 5. "The legislative assemblies of the several 
 territories shall not grant private charters or .special 
 privileges, but they may, by general incorporation acts, 
 permit persons to associate themselves togetlier as Ijodies 
 corporate, for mining, manufacturing, and other indus- 
 trial pursuits, and for conducting the business of insur- 
 ance, banks of discount and deposit (but not to issue), 
 loan, trust and guarantee associations, and for the con- 
 struction or operation "of railroads, wagon roads, irrigat- 
 ing ditches and tlie colonization and improvement of 
 lands in connection herewith, or for colleges, seminaries, 
 churches, libraries, or any other benevolent, charitable 
 or scientific association." 
 
 Sec. 6. "That nothing in this act contained shall be 
 construed to abridge the power of Congress to annul an}' 
 law passed by a territorial Legislature, or to modify any 
 existing law of Congress requiring in any case that the 
 laws of any territory shall be submitted to Congress." 
 
 Sec. 7. "That all acts and parts of acts hereafter 
 passed by any territorial Legislature in conflict with the 
 provisions of this act shall be null and void." 
 
 § .'^(•)4. TEXAS. 
 
 Constitution. — AirncLK XL — Municii'ai, 
 Corporations. 
 
 Sec. 4. " Cities and towns having a population of ten 
 thousand inhabitants or less, may be charttM-«'<l alon(> by 
 general law. They may levy, assess and collect an 
 annual tax to defray the current expenses of their local 
 government, but such tax shall never exceed, for any one 
 year, one-fourth of one per cent, and shall be collected 
 only in current money. And all license and occni)ation 
 tax levied, and all fines, forfeitures, penalties and other 
 dues accruing to cities and towns, shall l)e collect il>lo 
 only in current money." 
 
 Sec. 5.1 "Cities having more liian ten thousand in- 
 
 1 See sec. 64 for the construeti-' " ''"-^ -section. 
 
 40.')
 
 § 366 MUNICIPAL BONDS. [CH. XIX. 
 
 habitants may have their charters granted or amended 
 by special act of Legislature, and may levy, assess and 
 collect such taxes as may be authorized by law, but no 
 tax for any purpose shall ever be lawful, for any one 
 year, which shall exceed two and one-half per cent of 
 the taxable proj^erty of such city ; and no debt shall ever 
 be created by any city unless at the same time provision 
 be made to assess and collect annually a sufficient sum to 
 pay the interest thereon and create a sinking fund of at 
 least two per cent thereon. " 
 
 Sec. 7. "All counties and cities bordering on the 
 coast of the Gulf of Mexico are hereby authorized, upon 
 a vote of two-thirds of the taxpayers therein (to be 
 ascertained as may be provided by law), to levy and 
 collect such tax for construction of sea-walls, break- 
 waters or sanitary purposes, as may be authorized by 
 law, and may create a debt for such works and issue 
 bonds in evidence thereof. But no debt for any purpose 
 shall ever be incurred in any manner by any city or 
 county unless provision is made, at the time of creating 
 the same, for levying and collecting a sufficient tax to 
 pay the interest thereon and provide at least two per 
 cent as a sinking fund ; and the condemnation of the 
 right of way for the erection of such works shall be fully 
 provided for." 
 
 § 365. VERMONT. 
 
 There are no constitutional limitations ; the constitu- 
 tion only provides that the Legislature shall have power 
 to constitute counties, towns, etc. 
 
 § 366. VIRGINIA. 
 
 Constitution. — Article X. — Taxation and Finance, 
 
 Sec. T. •' No debt shall be contracted by this State, 
 except to meet casual deficits in the revenue to redeem 
 previous liability of the State, to suppress insurrection, 
 repel invasion, or defend the State in time of war." 
 
 Sec. 8. " The General Assembly shall provide, by law, 
 a sinking fund, to be applied solely to the payment and 
 496
 
 CH. XIX.] ABSTRACTS FROM CONSTITUTIONS. § 367 
 
 extinguishment of the principal of the State debt, which 
 sinking fund shall be continued until the extinguishment 
 of such State debt ; and every law hereafter enacted by 
 the General Assembly, creating a debt or authorizing a 
 loan, shall provide a sinking fund for the payment of 
 the same." 
 
 Sec. 9. " The unfunded debt shall not be funded or 
 redeemed at a value exceeding that established by law at 
 the time said debt was contracted, nor shall any discrim- 
 ination hereafter be made in paying the interest on State 
 bonds, which shall give a higher actual value to bonds 
 held in foreign counties, over the class of bonds held in 
 this county." (R. C. 1887, pp. 47-8.) 
 
 The State is also forbidden to subscribe to or become 
 interested in the stock of any company, etc., or be inter- 
 ested in any work of internal improvement or assume the 
 indebtedness of any county, borough, etc. (Ibid. p. 48.) 
 
 There are no constitutional limitations on the debt of 
 any county, city, etc. They are to be found in the char- 
 ters of the cities. 
 
 § 367. WASHINGTON. 
 
 Constitution. — Article VIII. — State, County and 
 Municipal Indebtedness. 
 
 Sec. 1. " The State may, to meet casual deficits or 
 failures in revenues, or for expenses not provided for, 
 contract debts, but such debts, direct and contingent, 
 singly or in the aggregate, shall not at any time ex- 
 ceed four hundred tliousand dollars (S400.()no\ and the 
 moneys arising from the loans creating sucli debts shall 
 be applied to the purpose for which they were obtained, 
 or to repay the debts so contracted, and to.no other pur- 
 pose whatever." 
 
 Sec. 2. " In addition to the above limited power to 
 contract debts, the State may contract debts to repel in- 
 vasion, suppress insurrection, or to defend the State in 
 war, but the money arising from the contracting of such 
 debts shall be applied to the purpose for whieh it was 
 raised, and to no other purpose whatever. " 
 
 32 -t^^
 
 § 367 MUNICIPAL BONDS. [CH. XIX. 
 
 Sec. 3. ''Except the debts specified in sections one and 
 two of this article, no debts shall hereafter be contracted 
 by, or on behalf of, this State, unless such debt shall be 
 authorized by law for some single work or object to be 
 distinctly specified therein, which law shall provide ways 
 and means exclusive of loans, for the payment of the in- 
 terest on such debt as it falls due, and also to pay and 
 discharge the principal of such debt within twenty years 
 from the time of the contracting thereof. No such law 
 shall take effect until it shall, at a general election, have 
 been submitted to the people, and have received a 
 majority of all the votes cast in its favor. The State 
 and no subdivision thereof can aid or loan its credit for, 
 or become interested in, a private enterprise. 
 
 No county, city, town, school district or other mu- 
 nicipal corporation shall, for any purjDose, become in- 
 debted in any manner to an amount exceeding 1^ per 
 centum of the taxable property in such county, city, 
 town, school district or other municipal corporation, 
 without the assent of three-fifths of the voters therein, 
 voting at an election to be held for that purpose, nor in 
 any case requiring such assent shall the total indebted- 
 ness at any time exceed five per centum of the value of 
 taxable property therein, to be ascertained by the last 
 assessment for State and county purposes, previous to 
 the incurring of such indebtedness, except that in incor- 
 porated cities the assessment shall be taken from the 
 last assessment for city purposes ; Provided, That no 
 part of the indebtedness allowed in this section shall be 
 incurred for any purpose other than strictly county, city, 
 town, school district or other municipal purjDoses : Pro- 
 vided, further, That any city or town, with such assent, 
 may be allowed to become indebted to a larger amount 
 but not to exceed five per centum additional, for supplying 
 such city or town with water, artificial light, and sewers, 
 when the works for supplying such water, lights and 
 sewers shall be owned and controlled by the munic- 
 ipality. 
 498
 
 CH. XIX.] ABSTRACTS FPwOM CONSTITUTIONS. § 3G8 
 
 § 368. WEST VIRGINIA. 
 
 Constitution.— Article X.— Taxation and Finance. 
 
 Sec. 4. "No debt shall be contracted by this State, 
 except to meet casual deficits in the revenue, to redeem 
 a previous liability of the State, to suppress insurrection, 
 repel invasion or defend the State in time of war ; but 
 the payment of any liability, other than for the ordinary 
 expenses of the State, shall be equally distributed over a 
 period of at least twenty years." 
 
 Sec. 5. "The power of taxation of the Legislature 
 shall extend to provisions for the payment of the State 
 debts, and interest thereon, the support of free schools, 
 and the payment of the annual estimated expenses of 
 the State ; but whenever any deficiency in the revenue 
 shall exist in any year, it shall, at the regular session 
 thereof held next after the deficiency occurs, levy a tax 
 for the ensuing year, sufficient, with the other sources 
 of income, to meet such deficiency, as well as the esti- 
 mated expenses of such year.'' 
 
 Sec. 6. " The credit of the State shall not be granted 
 to, or in aid of, any county, city, township, corporation 
 or person ; nor shall the State ever assume, or become 
 responsible for, the debts or liabilities of any county, city, 
 town, townshij^, corporation or person ; nor shall the State 
 ever hereafter become a joint owner, or stockholder, in 
 any company or association in this State or elsewhere, 
 formed for any purpose whatever." 
 
 Sec. Y. " County authorities shall never assess taxes, 
 in any one year, the aggregate of which shall exceed 
 ninety-five cents per one hundred dollare valuation, ex- 
 cept for the support of free schools ; paymcMit of in- 
 debtedness existing at the time of the adoption of tliLs 
 constitution ; and for the payment of any indebted iic-^s 
 with the interest thereon, created under the suerceding 
 section, unless such assessment, with all questions in- 
 volving the increase of such aggregate, shall liave l)een 
 submitted to a vote of the people of tlKM-ounty, and have 
 received three-fifths of all the votes cast for and 
 
 against it." 
 
 100
 
 § 369 MUNICIPAL BONDS. [CH. XIX. 
 
 Sec. 8. ''No county, city, school district, or municipal 
 corporation, except in cases where such corporations 
 have already authorized their bonds to be issued, shall 
 hereafter be allowed to become indebted, in any manner, 
 or for any purpose, to an amount, including existing in- 
 debtedness, in the aggregate, exceeding five per centum 
 on the value of taxable property therein to be ascertained 
 by the last assessment for State and county taxes, pre- 
 vious to the incurring of such indebtedness ; nor with- 
 out, at the same time, providing for the collection of a 
 direct annual tax, sufficient to pay, annually, the interest 
 on such debt, and the principal thereof, within, and not 
 exceeding thirty- four years ; Provided, That no debt 
 shall be contracted under this section, unless all questions 
 connected with the same, shall have been first submitted 
 to a vote of the people, and have received three-fifths of 
 all the votes cast for and against the same." 
 
 Sec. 'J. "The Legislature may, bylaw, authorize the 
 corporate authorities of cities, towns and villages for cor- 
 porate purposes, to assess and collect taxes ; but such 
 taxes shall be uniform, with respect to persons and 
 property within the jurisdiction of the authority impos- 
 ing: the same." 
 
 'to 
 
 § SGfl. WISCONSIN. 
 Constitution. — Article VIII. — Finance. 
 
 Sec. 1. "The rule of taxation shall be uniform, and 
 taxes shall be levied u]ion such property as the Legis- 
 lature shall iDrescribe." 
 
 Sec. 2. " No mone}^ shall be paid out of the Treasury ; 
 except in pursuance of an appropriation by law." 
 
 Sec. 3. " The credit of State shall never be given or 
 loaned in aid of any individual, association or cor- 
 poration." 
 
 Sec. 4. ' ' The State shall never contract any public 
 debt, except in the cases and manner herein provided." 
 
 Sec. 5. "The Legislature shall provide for an annual 
 
 tax sufficient to defra}^ the estimated expenses of the 
 
 State for each year ; and whenever the expenses of any 
 500
 
 •CH. XIX.] ABSTRACTS FROM CONSTITUTIONS. § 370 
 
 year shall exceed the income, the Legislature shall pro- 
 vide for levying a tax for the ensuing year, sufficient, 
 with other sources of income, to pay the deticiency as 
 well as the estimated expenses of such ensuing year." 
 
 Sec. 7. "The Legislature may also borrow money to 
 repel invasion, suppress insurrection, or defend the State 
 in time of war ; but the money thus raised shall Ije ap- 
 plied exclusively to the object for which the loan was 
 authorized, or to the repayment of the debt thereby 
 created." 
 
 Sec. 8. "On the passage in either house of the Legis- 
 lature of any law which imposes, continues or renews a 
 tax, or creates a debt, or charge, or makes, continues, 
 or renews an appropriation of public, or trust money, or 
 releases, discharges, or commutes a claim, or demand of 
 the State, the question shall be taken by yeas and nays, 
 which shall be duly entered on the journal ; and three- 
 fifths of all the members elected to such house shall, 
 in all such cases, be required to constitute a quorum 
 therein." 
 
 Sec. 9. "No scrip, certificate, or other evidence of 
 State debt, whatsoever, shall be issued, except for such 
 debts as are authorized by the Ctli and Tth sections of 
 this article." 
 
 Sec. 10. " The State shall never contract any (lcl)t for 
 works of internal improvement, or bo a party in carrying 
 on such works, but whenever grants of land or other 
 property shall have been made to the State, especially 
 dedicated by the grant to particular works of internal 
 improvement, the State may carry on such particular 
 works, and shall devote thereto the avails of such grants, 
 and may pledge or appropriate the revenues derived 
 from such works in aid of th<Mr completion." 
 
 § 370. WYOMING. 
 Constitution.— Article XVL— Public Indebtkdness. 
 
 Sec. 1. "The State of Wyoming shall not. in any 
 
 manner, create any indebtedness exceeding one i)cr 
 
 centum on the assessed value of the taxable property in 
 
 501
 
 § 370 MUNICIPAL BONDS. [CH. XIX. 
 
 the State, as shown by the last general assessment for 
 taxation, preceding ; except to suppress insurrection or 
 to provide for the public defence." 
 
 Sec. 2. " No debt in excess of the taxes for the current 
 year shall in any manner be created in the State of 
 Wyoming, unless the proposition to create such debt shall 
 have been submitted to a vote of the people and by them 
 approved ; except to suppress insurrection or to provide 
 for the public defence." 
 
 Sec. 3. "No county in the State of Wyoming shall in 
 any manner create any indebtedness, exceeding two per 
 centum on the assessed value of taxable property in such 
 county, as shown by the last general assessment pre- 
 ceeding ; Provided, however, That any county, city, 
 town, village or other subdivision thereof in the State 
 of Wyoming, may bond its public debt existing at the 
 time of the adoption of this constitution, in any sum not 
 exceeding four per centum on the assessed value of the 
 taxable property in such county, city, town, village or 
 other subdivision, as shown by the last general assess- 
 ment for taxation." 
 
 Sec. 4. "No debt in excess of the taxes for the current 
 year shall, in any manner, be created by any county or 
 subdivision thereof, or any city, town or village, or any 
 subdivision thereof in the State of Wyoming, unless the 
 proposition to create such debt shall have been submitted 
 to a vote of the people thereof and by them approved." 
 
 Sec. 5. "No city, town or village, or any subdivision 
 thereof, or any subdivision of any county of the State 
 of Wyoming, shall, in any manner, create any indebted- 
 ness exceeding two per centum on the assessed value of 
 the taxable property therein ; Provided, however, That 
 any city, town or village may be authorized to create an 
 additional indebtedness, not exceeding four per centum 
 on the assessed value of the taxable property therein as 
 shown by the last preceding general assessment, for the 
 purpose of building sewerage therein. Debts contracted 
 for supplying water to such city or town are excepted 
 from the operation of this section." 
 
 Sec. 8. "No bond or evidence of indebtedness of the 
 502
 
 CH. XIX.] ABSTRACTS FROM CONSTITUTIONS. § 370 
 
 State shall be valid unless the same shall have endorsed 
 
 thereon a certificate signed by the auditor and secretary 
 
 of state that the bond or evidence of debt is issued ])ur- 
 
 suant to law and within the debt limit. No bond or 
 
 evidence of del)t of any county, or bond of any township 
 
 or other political subdivision, shall be valid unless the 
 
 same shall have endorsed thereon a certificate signed by 
 
 the county auditor or other officer authorized by law to 
 
 sign such certificate, stating that said bond or evidence 
 
 of debt is issued pursuant to law and is within the debt 
 
 Hmit." 
 
 503
 
 INDEX. 
 
 Keferences are to Sections. 
 
 A. 
 
 ACQUIESCENCE. See Ratification ; Estoppel. 
 
 municipal corporation estopj^ed by, 71. 
 ACTIONS. See Remedies ; Pleadings ; Void Bonds ; Defences ; 
 
 Injunctions ; Taxpayers. 
 ADJOURNED MEETINGS. See Council. 
 
 who may adjourn, 90. 
 
 what business may be done at, 90. 
 ADMISSION IN MUNICIPAL RECORDS. See Records. 
 ADVERTISEMENTS. See Publication. 
 AFFIDAVITS, 
 
 New York courts did not give same conclusiveness to, 204. 
 
 Federal and other courts more liberal, 205. 
 AGENTS. See Officers ; Recitals. 
 
 distinction between public and private, 44. 
 
 all persons must take notice of actual power of public, 44, 45. 
 
 wliere authority of public, found, 44. 
 
 authority of public, depends on law at the timo lie acts, 44. 
 
 purcliasers take risk of signatures of j)ul>lic. 41. 
 
 unauthorized acts of jmblic, void. 45. 
 
 when their fraud or irregidarity binds tbecoriioration, 49, 50. 
 
 unavithorized recitals of, of no cfToct, 212 (p. 285, n. 1). 
 AID TO RAILROADS. See R. R. Aid Bonds. 
 ALABAMA, 
 
 constitution prohibits aid to j^-ivate corporations, 41. 
 
 usury laws in, rate of interest. 149. 
 
 constitutional provisions relating to incnrring of debt, 327. 
 ALTERNATIVE WRIT OF :\IANDA:\IUS. 170. 
 AMENDilENT OF RECORD. See Records. 
 
 cannot be amended to prejudice of imiocfnt lioldcr. "Jin. 'J II. 
 AMENDMENT OF ORDINANCE, 92. 
 ANNEXATION. EFFECT OF. 17.",. 174. 175. 
 
 APPORTIONMENT OF DEBT ON ANNEXATION. 173. 174, 175. 
 ARKANSAS. 
 
 constitution prohibits aid to private ontorjirises. 11. 
 
 usury laws in, rate of intere.st, 149. 
 
 statute hut j^rima facie evidence of constitutional enactment. K^. 
 
 constitutional prohibitions relating to incurring of debt in. 328. 
 
 505
 
 506 . INDEX. 
 
 Eeferences are to Sections. 
 
 ASSESSMENT. See Special Fund; Special Assessment Bonds. 
 
 last assessment usually basis of ascertaining limit of indebted- 
 ness, 56. 
 
 what assessment is used in cities, 56. 
 
 what " last assessment roll " is, 65. 
 
 bonds payable solely from, 135. 
 
 mandamus cannot enlarge security, 136. 
 AUTHORITY OF OFFICERS. See Officers. 
 AUTHORITY, IMPLIED. See Power to Issue Bonds. 
 
 to issue bonds, 8-32. 
 
 to determine prior performance of conditions, 271. 
 
 when nobody designated to issue bonds the legislative body 
 may, 85. 
 
 to do all acts necessary to carry out express powers, p. 192, n. 2. 
 
 no inherent authority to issue bonds, 125. 
 
 B. 
 
 BIDS. See Sale of Bonds. 
 
 BOARD OF EDUCATION. See School District, 
 BOARDS. See Commissions. 
 
 BONA FIDE HOLDERS. See Recitals ; Estoppel ; Bonds. 
 who are, 116, 153. 
 
 before and after maturity, 116, 117. 
 
 same rule applies to bonds as to other negotiable paper, 117. 
 first holder is not, 116, 118. 
 first holder, right of, 118. 
 
 what may be inquired into between corporation and first holder, 119. 
 irregularities, misconduct or fraud of officers, when such pui'chasers 
 
 not affected by, 49, 50. 192, 193. 
 what they have right to presume, 50. 
 must take notice of debt limitation, 54. 
 must take notice of authority of officers, 45, 
 must take risk of official signatures, 44. 
 when bound to follow proceeds, 59, 122. 
 bonds in excess of debt limit void in liands of, 63 (p. 71, n. 1), 
 
 225, 230. 
 if debt limit statutory and there be no estoppel, bonds void, 221, 222, 
 
 223, 224 232. 
 if debt limit constitutional, bond void, exception, 225-232. 
 bonds containing recitals, good, although insufficient vote cast, 80. 
 bound to know the law under which bonds are issued, 150, 154, 
 
 191, 193. 
 irregularities in elections, relative to issue, effect on, 68 (p. 63, n. 3 
 
 and 4), 72, 74, 209. 210,211. 
 estoppel of some kind necessary to protect bona fide holders, 68, 71, 
 
 72, 124, 193, 194, 195, 199, 221, 222, 248, 282. 
 when there can be no estoppel, 124, 192, 193 (p. 285, n, 1), 225. 
 all enabling acts and constitution must be recited, 197, 198. 
 
 '1 
 
 11
 
 INDEX. 507 
 
 References are to Sections. 
 
 BONA FIDE HOLDERS— Conhnweri. 
 
 bonds void in hands of, if executed by wrong officer, 104 (p. 127, 
 n. 6), 105. 
 
 bonds antedated, when void, 105. 
 
 records of corporation will estop defence of irregularity, 240, 341. 
 
 records cannot be shown to be false against, 240, 241. 
 
 presumptions in favor of, 68, 120, 103. 
 
 what bona fide holder must show, 120, 1G3. 
 
 over-due coupons as notice to, 121. 
 
 not protected if enabling statute not recited in bond, p. 101, n. 1, 
 282. 
 
 statute or constitution sometimes renders bonds void, if condition 
 not fulfilled, 253, 254, 255. 
 
 not protected if ordinance not published, 94 (p. 113, n. 2). 
 
 if time of payment of bond be changed, rights of, 102 (p. 123. n. 5). 
 
 if coupon refer to bond, holder bound by recitals in latter, 109. 
 
 delivery of bonds, if not authorized, no protection, 144. 
 
 ratification of authorized acts protects bona fide holder (see Rati- 
 fication), 248. 
 
 recitals protect renewal bonds, although old bonds void, 127, 128, 
 129 (p. 167, n. 2). 
 
 bona fide holder only protected by recitals, 193. 
 
 par, bonds sold for less, good in hands of. 145, 110. 147. 
 
 power, none, bonds void in all hands, 191, 192 (p. 2^5, n. 1). 
 
 power to issue bonds good if there be an estoppel, 191, 192. 
 
 when bound to examine the records, 151. 
 
 not bound if bonds contain recitals, 241. 
 
 not bound by conditions not of record, 151, 152. 
 
 not bound by hidden or unusual matter not in record of proceed- 
 ings, 241. 
 
 notice, what effect on bona fide holder. 123. 
 
 gross negligence not sufficient, must he mala fideft, 123. 
 
 bound to know all tlic law pursuant to which bonds are is.sucd, 1.50, 
 154. 
 
 chargeable with all he might learn, 150, 151. 
 
 chargeable with what the bond discloses, 153, 154. 
 
 what bonds are void in hands of a bona fide hohler, 124. 
 
 railroad aid bonds, recitals in. and defects (sec R. R. Aid 
 Bonds), 282. 
 
 records need not go behind. 152 (p. 20S. n. 4). 
 
 stolen or lost bonds, title of holder good if purcha-sed 1»ofore ma- 
 turity, 125. 
 
 sinking fund, if not provided, effect on. 13S. 
 
 surrender of illegally issued Iwnds. bona fide holder protecto*!, ir>8. 
 
 lis jyndenfi does not affect negotiable bonds. 119 a. 
 
 judgment does not affect hma fide holder uidess a party. 119fi. 
 
 injunction does not affect bona fide holder unless a ]»arty. 119 a. 
 BONDS, MUNICIPAL. See Rf.gistekkd Bonds: Formal Tarts of 
 Bonds ; Coupons ; Negotiability.
 
 1 
 
 508 LNDEX- 
 
 Beferences are to Sections. 
 
 BONDS, MUNICIPAL— Co«f»wted. 
 
 forms of, 110. 
 
 defined, 4. 
 
 not a modern or American invention, p. 11, n. 2). 
 
 purpose of, 4. 
 
 much sought after as an investment, 4. 
 
 statutes authorize private corporations to invest in, p. 13, n. 1. 
 
 express power to issue (see Power to Make Loans), 5. 
 
 proceedings when power is express, 6. 
 
 express power to borrow, authorizes issue of, 8. 
 
 Federal courts now opposed, 10 (p. 19, n. 1). 
 
 the right depends upon the State court decisions, 11, 13. 
 
 does expi-ess power to perform some object authorize issue of nego- 
 tiable paper? 14. 
 
 weight of authorities in the affirmative, 15-33. 
 
 Federal courts opposed, 29-31. 
 
 author's conclusions, 33. 
 
 municipaUty may be compelled to issue bonds, 42. 
 
 cannot be compelled for a private or a purely local purpose, 43. 
 
 how executed, see sees. 104-108. 
 
 held valid though executed out of the State, 50. ■ 
 
 issued in excess of debt limitation void, 63, 64 (p. 71, n. 1). f 
 
 recitals will estop, when, 63. 
 
 if valid can be separated from invalid, the former will be held 
 good, 63, 98. 
 
 equity will not assist to scale down invalid bonds, 63. 
 
 equity, when it will scale down invalid bonds, 236, 239 (p. 329). 
 
 invalid bonds cannot be made a lien on property, 63, 339. 
 
 issue of, submitted to voters, 66. 
 
 irregularities in issue of, effect on bona fide holders, 68 (p. 83, n. 3 
 and 4), 73, 73, 74. 
 
 amount of, must be filled in before or at delivery, 96. 
 
 denomination of, when material ; when it may be changed, 99. 
 
 what bond must contain to be negotiable, 111, 112. 
 Interest, rate of, 
 
 must be stated in proposition (see Elections). 72. 
 
 cannot be inci-eased above that voted, but may be decreased, issue 
 restrained, 83. 101 (p. 22, n. 1). 
 
 may be that in State where made, or place of payment, 101. 
 
 law in relation to intex-est, 101, 149. 
 
 if rate excessive bonds not void, excess only void, 101. 
 
 number of, when and when not material, 98. 
 
 material if over-issue, 98 (p. 118, n. 3). 
 Payment, time of, 
 
 must be stated in proposition (see Elections) 72. 
 
 cannot be changed from that voted for, bonds void, exceptions, 83, 
 102 (p. 123, n. 1). 
 
 void if time changed, when, 102, 103. 
 
 statute usually fixes the time of payment, 100, 102. 
 
 i
 
 INDEX. 509 
 
 References are to Sections. 
 
 BONDS, MUNICIPAL— C'on^t/mecZ. 
 
 time of payment counted from date of bond, 100. 
 
 to whom made i)ayal)le, 96. 
 
 special authority to issue coupons not necessjiry. 107. 
 
 payable out of general fund, not by special, KM. 
 
 payable out of special fund, 135, 13G. 
 Payment, place of, 97. 
 
 may be out of the State, exception, 97 (p. 117, n. 3). 
 
 payable in gold, contract may be for, 132. 
 Officer's to sign must be authorized ; wliere their autliority found. 104. 
 
 must be officers of the corporation, unless law appoint others, 104. 
 
 signing of, what sufficient, lOo. 
 Date of, designated by resolution or ordinance, 100. 
 
 Sunday, although dated of a Sunday, good if not delivered on, 100. 
 
 signing good, tliough after date, 104 (p. 127, n. C). 
 Delivery of, bonds take effect from, not issued until delivered, 1(»0. 
 
 refer to statute or ordinance, but not always necessiiry, 97. 
 
 proceedings to restrain, 155. 
 
 seal, when and wlien not necessary, lOG. 
 
 purchaser of, not bound to follow proceedings ; when nuist, 59, 123. 
 
 if bond contain no recital, then purchaser may have to do so, 122. 
 
 must contain recitals to make an estoppel, 194, 195, 
 
 or there must be some other estoppel, 199, 240. 
 
 mere execution and delivery do not estop corporation. 194, 195 (p. 
 2C2, n. 1). 
 
 exception to last, 195 (p. 126, n. 1). 
 
 mere execution and deIivery7)r/M(a/«c?V evidence of regularity. 194. 
 
 renewal and refunding, see sees. 125-131. 
 
 registered bonds (see Registration of Bonds), 130. 131. 
 
 special assessment bonds, what are, how paid, 135. 
 
 taxes, bonds are i)aid by, 132. 
 
 taxes, implied authority to levy, to pay bonds 133, 134 (p. 179, n. 8). 
 
 taxes, bonds may be taxed, unless exempted, 139. 
 
 taxes, where bonds should be taxed, 139. 
 
 bonds are regarded as chattels, 112. 145, 14S. 
 
 actions on, 161. 177, 190 (see Remedies; Ple.\dinos). 
 
 limitation of actions on, 177. 
 BORROW. See Power to Make Laws. 
 
 express power to borrow implies right to issue negotiable iK^nda 
 and other i)aper, 8. 
 
 not so now held by tlie Federal courts, 10. 
 
 the right depends upon the decisions of tlie State courts. 11. 13. 
 
 does express power to contract a debt autliorize the i-^^^n.' of nego- 
 tiable bonds? (see Power to Make Loans), 15. 
 
 •weight of decisions in the affirmative. 15. .32. 
 
 summary of the law on the question. 32. 
 
 quasi-corporations have no such authority, 29 and n.. 32. 30. 
 
 general autliority to borrow authorizes refunding and renewal 
 bonds, 125, 126.
 
 i 
 
 510 INDEX. 
 
 References are to Sections. 
 
 BORROW— Co?i tmued. 
 
 no inherent right to borrow, 135. 
 
 money borrowed by olTficer without authoritj' cannot be recovered 
 from corporation, unless loan ratified, 237. 
 
 when money borrowed on void bonds may be recovered, 102, 235, 
 236, 237, 
 
 State cannot, unless expresslj- authorized, 7. 
 BOROUGH, 
 
 included in this work in the term " municipal corporation," 2. 
 
 is often regarded as a municipal corporation, 3. 
 BOUNDARIES. See Municipal Corporations. 
 
 Legislature may change boundaries of muncipalities, 173. 
 BRENHAIM v. GERMAN AMER. BANK (142 U. S. 173), 
 
 form of bond in, 110. 
 
 form of ordinance, 110. 
 BRIDGES AND PUBLIC PURPOSES, 35, 37. 
 
 municipality may be compelled to issue bonds for, 42. 
 BUILDINGS, INIUNICIPAL, 
 
 are public works, 35, 37. 
 BURDEN OF PROOF, 
 
 when shifted on holder of bonds, 120, 163. 
 BY-LAWS. See Ordinances. 
 
 ■c. 
 
 CALIFORNIA, 
 
 constitution of, proliibits aid to private enterprises, 41. 
 
 constitution of, ret]uires vote to incur a debt, 67. 
 
 majority of all electors voting necessary, wJien question sub- 
 mitted, 79. 
 
 proliibition against special legislation, wliat constitutional, 307, 310 
 (p. 432, n. 1). 
 
 interest and usury laws in, 149. 
 
 statutes of, may bo sliown to liave been improperly passed, 323. 
 
 constitutional provisions relative to incurring debt, 329. 
 CANAL, 
 
 is a public purpose, 38. 
 CERTIFICATE, 
 
 wlien made by officers, conclusive, 240. 
 CERTIORARI, 
 
 lies to restrain issue of bonds, 155. 
 
 who may bring, 155. 
 CHAFFEE CO. v. POTTER (142 U. S. 355), 110, 230. 
 
 form of bond in, 1 10. 
 
 authoi-"s comments on the case, 231. 
 CHARTER. See Municipal Corporations. 
 
 how obtained, 3. 
 
 how proved, 3. 
 
 not always voluntary, 3. 
 
 i
 
 INDEX. 611 
 
 Beferences are to Sections. 
 
 CHARTER— Continued. 
 
 corporations with charter are not gttasi-corporations, 3. 
 
 Legislature may amend or repel, 3, ll'S. 
 
 powers of corporation, where found, 3, 5-32. 
 
 powei-s of corporation also found in general laws, 5-32. 
 
 change of corporate name, p. 5, n. 5. 
 
 may be repealed by special act, 306. 
 
 courts take judicial notice of, 326. 
 
 exceptions, 326. 
 CHARTERED POWERS, 
 
 power to incur debt, 5-32. 
 
 power to borrow money, 5-32. 
 
 power to issue bonds, 5-32. 
 
 power to use corporate seal, 5, 89, 
 
 power to aid railroads, 263. 
 CITIES. See Municipal Corporations ; Statutes, Enactment of. 
 
 cities, alwaj^s municipal corporations proper, 3. 
 
 cities incorporated under general laws or by special charter, 2, 3. 
 
 wliat assessment used in ascertaining debt limit, 56. 
 CLASSIFICATION OF CITIES. See Statutes, Enactment of. 
 
 how classified, 3, 
 
 statutory classification need not be followed, 306. 
 COLER V. CLEBURNE (131 U. S. 162), 
 
 form of ordinance in, 110. 
 COLLECTION OF TAXES. See Taxes. 
 COLORADO, 
 
 constitution of, prohibits aid to private enterprises, 41. 
 
 constitutional debt limit, 51, 330. 
 
 constitution requires vote to incur debt, 07. 
 
 interest and usury laws in, 149. 
 
 statutes of, may be shown to have been improperly iia-s-sed, 823. 
 
 proliibition against special laws. 313. 
 
 constitutional prohibitions relative to incurring debt, :W0. 
 
 co:mmissions, 
 
 may be paid to broker for sclHng bonds, wlicn not, 113 (p. 192. n. 2). 
 
 when commissions make sale below ]iar. 1 13, 1 15. 
 
 authority to pay commission implied, p. 192, n. 2. 
 commissions, BOARD, 
 
 their purposes and powers, 48. 
 
 may issue or compel issue of bonds, 48. 
 
 sometimes regarded as a municii)al corjioration. 48. 
 
 acts of commissioners are acts of municipality. 104. 
 
 bonds should be executed by ]iresiiliiig oflicer. 105. 
 
 bonds issued bv school bind niuiiicii>ality. p. 2Sn, n. 1. 
 COMMON COUNCIL. LEGISLATIVE BODY. Sec PuWEEDlNOS TO 
 Issue Bonds. 
 
 acts of de facta, binding, 3. 47. 
 
 judge of sufficiency of petition. 65. 
 
 when nobody named to issue, then legislative Ixxly is intended. 85.
 
 612 INDEX. 
 
 References are to Sections. 
 
 COMMON COUNCIL, LEGISLATIVE BODY— Continued. 
 
 bonds cannot issue without action of, 85. 
 
 exceptions in large cities, 85 (p. 103, n. 1). 
 
 determination to issue bonds a legislative act, 87. 
 
 porforniance of prior conditions need not be recited in ordinance, 89. 
 
 sinking fund, when must be provided, 89. 
 
 discretion or judgment of, need not be set out, 89. 
 
 proceedings of, in issue of bonds, 82-95. 
 
 meetings of council, 90. 
 
 special meetings, what may be done at, 90 (p. 109. n. 5). 
 
 only business noted in call for special meeting can be transacted, 
 90(109, n. 5). 
 
 ayes and nays, when necessarj"^, 90-95, 
 
 number of votes necessary to pass ordinance or resolution, 90, 95. 
 
 if more than one board, both must act, before they go out of exist- 
 ence, 90. 
 
 new council can take up business of old, 92. 
 
 meetings, Avho can adjourn. 90. 
 
 ayes and nays, when to be recorded, 95. 1 
 
 members can do business only at meetings, 90. ' 
 
 authority to borrow money authorizes issue of bonds, 16, 126, 127. ! 
 
 autliority to borrow or issue bonds generally authorizes issue of re- 
 newal and funding bonds, 126, 127. 
 
 before rights acquired council may rescind resolution or ordinance, i 
 
 277. ) 
 
 mandamus cannot compel, to act beyond its powers, 168. 
 COMPULSORY DEBTS. J 
 
 municipality may be compelled to issue bonds, 42. I 
 
 wlien a municipalit}- may be compelled to incur debt, 42. \ 
 
 when a munic-ipahty cannot be compelled to incur debt, 43. ! 
 
 CONDITIONS. See Recitals ; R. R. Aid Bonds. j 
 
 purchaser not bound by conditions not of record, 151, 152. I, 
 
 vote often a condition precedent, 66 (see Vote ; Elections). 5 
 
 if election not held then bonds void, 201 (p. 268, n. 1), 245. • ,j 
 
 statute or constitution or both may impose, 268, 271. ' 
 
 effect of recitals on constitutional, 206. 
 
 statute may impose additional, besides those contained in consti- 
 tution, 268. j 
 
 what officers maj' pass upon performance of, 209. j 
 
 when authority of officers to do so implied, 209, 210, 211, 212, 213, ; 
 
 271. , j 
 
 Avhcn officers not authorized to adjudicate, 212. 
 
 autlior's conclusions as to who may make recitals, 215. 
 
 if not performed renders bonds void, when, 253. 
 
 waiver of conditions. See Railroad Aid Bonds. 
 
 statute or constitution renders such bonds void, 253. 
 
 power to determine performance cannot be delegated to persons 
 not officers, 214 (p. 373, n. 3). 
 
 special officers may determine, 214 (p. 285, n. 3).
 
 INDEX. 618 
 
 Eeferences are to Sections. 
 CONDITIONS— Con^inited. 
 
 only officers of municipality or those designated in act can deter- 
 mine performance, 214, 271. 
 when wrong act recited, conditions imposed by otlier ])ower must 
 
 be performed, 216. 
 if conditions are statutory, they may be waived or cured by subse- 
 quent act, 256, 260. 275. 
 if conditions are constitutional, they cannot be, 257. 
 CONNECTICUT, 
 
 interest and usury laws in, 149. 
 
 constitutional prohibitions relative to incurring di lit, 331. 
 CONSENT, 
 
 municipality may be incorporated witliout, 3. 
 municipality may be compelled to incur debt without, 42, 266. 
 municipality may be compelled to issue bonds witliout, 42. 
 CONSIDERATION. See Void Bonds ; Money Had and Received. 
 CONSOLIDATION, 
 
 of municipal corporations, 173, 174, 175. 
 of railroad companies. See Railroads ; R. R. Aid Bonds. 
 CONSTITUTION. See Limitation of Debt ; Statutes, Enactment of. 
 constitutional limit of debt. See Excessive Issue of Boni« ; In- 
 debtedness, Limitation of. 
 constitutional limit of debt executes itself, cannot bo exceeded. 64. 
 where debt limitation found, 51, 327-370. 
 effect of constitutional limitation, when directed to the Legislature, 
 
 53 (p. 59. n. 1), 70, 262. 
 effect when directed to the municipal corporation, 53, 70. 262. 
 municipal paper in excess of, void, 63 (p. 71, n, 1), 225, 232. 
 a subsequent statute cannot make such a debt valid, 63. 
 municipality may be estopped by recitals to set up the over-i.s.sue as 
 
 a defence, 63, 225-2.32. 
 conditions, if officers have power to perform and recito. tlic muni- 
 cipality will be estopjied to deny, 207. 
 if no recital, then no estoppel. 208. 
 if bonds void by constitution unless condition performed, there can 
 
 be no estoppel, 137-208, 282. 
 statute cannot limit vote required by constitution, NO. 
 if act recited unconstitutional, iKiiid still valid if other autli«)nty. 216. 
 extracts from State, ndative to incurring of del)t, 327-37(1. 
 vote, when required, if none taken, l)onds are void, 67, 200. 
 vote ret^uired by constituti<in, 80, 327-370. 
 CONSTITUTIONAL LBIITATIONS. 
 
 as to incurring of debt, see Indf.x to States. 327-370. 
 CONSTITUTIONAL LBIIT OF DEBT. See Index to States : Lim- 
 itation of Debts. 
 CONSTITUTIONAL LIMITATIONS UPON ENACTMENT OF LAWa 
 
 See Statutes, Enactment of. 
 CONSTRUCTION, 
 
 of statutes, 286, 288, 291, 320. .321, 323. 
 33
 
 51-4 
 
 INDEX. 
 
 Eeferences are to Sections. 
 
 CONSTRUCTION— Conimtied. 
 
 of constitution, 314, 319, 320, 323. 
 
 of powers, 8, 32 (p. 193, n. 2). 
 CONTRACTS. See Power, Wa>-t of ; Ultra Vires : Legislature. 
 
 bond and coupon consti-ued together, 109. 
 
 compulsory, 42, 43. 
 
 imijlied power to contract, 1-1-32. 
 
 for more than a year, what should be included in debt computa- 
 tion, 60, 61. 
 
 made in excess of debt limitation invalid. 03 
 
 only excess void if debt may be separated, 63. 
 
 contracts made without authority may be ratified, 247. 
 
 contracts made without authority, when cannot be ratified, 243, 
 246, 247. 
 
 fund out of which bonds are to be paid, a contract, 134, 136, 107, 
 185, 186, 187, 188, 189. 
 
 such fund cannot be destroyed, 134, 136, 167, 185, 186, 187, 188, 189. 
 
 law as it stood when bonds were issued, is part of, 169, 185, 186, 
 187, 188. 
 
 special tax is part of the contract. 167, 169 (p. 238, n. 4). 
 
 subsequent statute cannot impair, 169 (p. 238, n. 4). 
 
 cannot be unpaired, 185, 186, 187, 188, 189. 
 
 for more than one year, when illegal, when may be made, 60, 61. 
 
 dissolved corporations, conti'acts how enforced, 174. 175. 
 
 what contracts always void, 94 (p. 113. n. 2), 158, 191, 192, 269 
 (p. 285, n. 1). 
 
 inferior security cannot be substituted, 185, 186, 187, 188, 189. 
 
 subscription, when completed a contract, 277-278, 
 
 sale of bonds, when complete, 141 . 
 
 obligation of, what is, 185. 
 
 obligation of, when impaired in constitutional sense, 188. 
 
 obligation of, when impaired. 185, 186. 187, 188, 189. 
 
 obligation of, cannot be impaired. 185. 
 
 sinking fund cannot be diverted, 185. 
 CORPORATE EXISTENCE, 
 
 courts take notice of, 326. 
 
 how proved, 3. 
 
 cannot be attacked collaterally, 3. 
 
 when it may be attacked collaterally, 3. 
 
 Legislature has control over, 3. 
 
 de facto corporation, acts valid, 3. 
 
 cannot be attached collaterally, 3. 
 
 of railroad company, cannot l)e attached, 270. 
 CORPORATIONS. See Municipal Corporations. 
 
 municii)al, defined, 3. 
 
 difference between municipal i)roper and g!<os/-corporations, 3. 
 
 in issue of bonds same principles of law apply to all, 3. 
 COUNTIES, 
 
 are usually regarded as g?«os/-municipal corporations, 2, 3.
 
 ESTDEX. 515 
 
 References are to Sections. 
 
 COUNTIES— Con^inttffZ. 
 
 how created, usually involuntarily, 8. 
 in some States are regarded as municipal corporations, 3. 
 incorporation. cannot be attacked collaterally, 3 (p. 5. n. ."j). 
 recognition of illegally formed county gives validity to its acts, 
 
 p. 5, n. 5. 
 bonds issued by illegally incorporated county, good, p. 5, n. o. 
 how business conducted, 3. 
 have no implied power to issue bonds, unless power to borrow is 
 
 express, 29, 31 (p. 35, n. 2). 
 should they not now have ? 30. 
 Nebraska counties in, not insludod in prohibition against special 
 
 laws, 303. 
 in Iowa and Minnesota are regarded as municipal coriwrations, 
 
 3 (p. 7, n. 2). 
 COUPONS, 
 
 are separate promises to pay the interest, 107. 
 
 may be negotiated separate from the bond, 107. 
 
 need not be presented on day when due, except to liold endorser, 
 
 107. 
 after coupon matures it draws interest, 101. 
 interest cannot be recovered after maturity, when, 101. 
 demand and refusal usually first necessary, 101. 
 special authority to issue tlie coupons is not necessary, 107, 112. 
 when paid out of mortgaged fund, all are to be paidj;ro rata, 107. 
 when bond must be presented in suit on coujion, 107. 
 days of grace, coupons not entitled to. 107. 
 form of, negotiable, what must contain to be. lOS. 110. 
 fac-siviile signature on, sufficient, 108. 
 signature by one officer on, sufficient, 108. 
 coupon and bond construed togetlier, 109. 
 should contain a promise to pay, contra, 108. 
 if coupon refer to bond, iiolder bound by recitals in latter, 109. 
 when not negotiable, 108, 112. 
 overdue coupons as notice, 121. 
 actions on, 161. 177. 190 (see Remedies). 
 statute of limitations, 177. 
 COURTS. See Judicial Notice. 
 
 records of, cannot be shown to be fals<> to jjrejudicc of inno<'ent 
 
 persons, 241 (p. 334, n. 5). 
 proceedings of, to stand until reversed, not open to collater.il at- 
 tack, 241. 
 order of, may make a complete subscription. 278. 
 cannot re-submit proposition with new conditions, p. 384, n. 3. 
 seek to sustain a statute, 324. 32."). 
 of what courts take judicial notice of, 326. 
 CREDITORS, RIGHTS OF. See ]\Iaxdamus ; Remedies : Bona Fidk 
 
 Holders ; Purchasers. 
 entitled to no i)articular form of remedy. 189.
 
 516 INDEX. 
 
 Beferences are to Sections. 
 
 CREDITORS, RIGHTS OF— Continued. 
 
 entitled to a substitute that does not embarrass him, 187 (p. 252), 189. 
 dissolution, division or annexation of corporation, 174, 175. 
 when, powerless to act, no remedy, 176. 190. 
 conditions imposed upon railroads before aid given, 268, 274. 
 CURATIVE STATUTES, 
 
 when such acts may be passed, 256, 257, 258. 
 object of such acts, 256, 257, 258. 
 
 whatever originally might have been dispensed with may after- 
 wards be, 256, 258. 
 all curative acts are valid, unless prohibited by the constitution, 256. 
 Legislature may ratify bonds issued without authority, 257-258. 
 or issued by wrong officer, or when vote taken on wrong dajs 258. 
 a prior unconstitutional act cannot be cured by a subsequent 
 
 one, 257. 
 if the prior act be only unconstitutional in form it may be cured, 
 
 260 (p. 359. n. 1). 
 if object of former act prohibited by constitution, subsequent act 
 
 cannot cure, 259. 
 vote if necessary by constitution, cannot be waived by a subsequent 
 
 act, 259 (p. 358, n. 5). 
 Legislature cannot by a subsequent act cvire a defect if the puri:)ose 
 
 is purely local without consent of municipality, 259 (p. 371, n. 5). 
 statutory defects can be cured, 259. 
 curative act is not a special law, 259. 
 bonds to railroad cannot be cured by, unless voters or municipality 
 
 consent (p. 371, n. 5). 
 how curative act should be drawn, 260. 
 
 D. 
 
 DAKOTA, 
 
 interest and usuary laws in, 149. 
 
 imdecided wliether imconstitutional passage of statute may be 
 shown, 323. 
 DEBTS. See Indebtedness ; Limitation of Indebtedness ; Curative 
 Statutes ; Void Bonds ; Power to Make Laws. 
 
 of dissolved, divided or annexed corporation, 173, 174, 175. 
 
 apportionment of, on division or annexation, 173, 174, 175. 
 DE FACTO IMUNICIPAL CORPORATION, 
 
 cannot question its own incorporation, 3. 
 
 incorporation of, cannot be attacked collaterally, exception, 3. 
 
 the State must do so, 3. 
 
 acts of, valid, 47. 
 
 school districts, acts of, valid, 3. 
 DE FACTO OFFICERS, 
 
 who are, 46. 
 
 there must be a legal office, 47. 
 
 acts of, are valid, 47. 
 
 title of, cannot be questioned collaterally, 47.
 
 INDEX. 
 
 References are to Sections. 
 
 DEFENCES. See Actions ; Bona Fide Holders ; Power, Want of ; 
 Injunction ; Certiorari ; Taxpayers ; Elections ; Void Bonds. 
 
 interest cannot be recovered on matured bond or coupon, wlien not 
 presented, 101. 
 
 signature may be shown that bond was signed by wrong ofticcr, 
 85, 104 (p. 127, n. 6). 
 
 illegality of consideration a, 163. 
 
 illegal purpose, when it may be set up as a, 217. 
 
 payment, time of wrongful, a good defence, 102 (p. 123, n. 5). 
 
 fraudulent issue or delivery, 144 (p. 193, n. 2), 1G3. 
 
 conflict between statute and constitution, 80. 
 
 non-performance of conditions precedent, 94 (p. 113, n. 2), 190, 248. 
 
 estoppel necessary in order to shut out defence of, 199. 
 
 irregularity or non-performance of prior conditions, 68, 71, 72, 123, 
 268, 278, 282. 
 
 what sort of estoppel necessary, 123. 
 
 constitutional condition, non-performance of, as a, 137, 207, 208. 
 
 ordinance, not published, good defence, when, 94 (p. 113, n. 2). 
 
 alteration of bond in material part a, 124 a. 
 
 alteration of number not a defence, 98. 
 
 invalid bond cannot be made a lien on property, 63. 
 
 irregularities of officers, when may be set up as a defence, 49, 50. 
 
 vote, bonds issued without, void, 67-80. 201 (p. 268, n. 1), 245. 
 
 limitation of debt, when it may be a defence, 63 (p. 71, n. 1). 
 
 limitation of debt must be pleaded and shown, 128. 
 
 lost or stolen bond, wlien a (see Stolen Bonds), 125, 163. 
 
 recital necessary to estop corporation. 
 
 no recital, no estoppel, 194, 195 (p. 261, n. 1). 
 
 unless there be other estoppel, 199. 
 
 renewal and funding bonds, recital of puqiose estops defence old 
 debt was invalid, 127 (p. 167, n. 2). 
 
 want of power always a good defence, 94 (p. 113, n. 2), 124, 158, 191 
 (p. 285, n. 1). 
 DEFINITION, 
 
 of municipal corporation, 3. 
 
 of mandamus, 166. 
 
 of de facto officers, 46, 47. 
 
 of de facto corporation, 3. 
 
 of municipal bond, 3. 
 DELAWARE, 
 
 interest and usurj' laws in, 149. 
 
 constitutional provisions relative to incurring of debt, 332. 
 DELAY, WHEN AN ESTOl'l'EL. See EsTorrEi, BY Lache-S. 
 DELEGATION OF LEGISLATIVE POWEKS. 
 
 municipal legislative, cannot bo. 214 (p. 373. n. 3). 
 DELIVERY, 
 
 bonds are not issued until delivered. 100. 
 
 time of, may be shown by parol, 100. 102. 
 
 may be authorized, or coriwration not bouml, 144 (p. 193. n. 2i.
 
 518 INDPLX. 
 
 References are to Sections. 
 
 BFIAYERY— Continued. 
 
 unless authorized, bona fide liokler not protected, 144, 
 
 proceedings to compel, when may and may not be, 160. 
 DEMAND, 
 
 necessary before mandamus will lie, 165. 
 
 must be alleged in petition for mandamus, 165, 
 DENOMINATION, See Bonds ; Formal Parts of Bonds. 
 
 ordinance should designate, 89. 
 DISSOLUTION OF MUNICIPAL CORPORATIONS, 
 
 debts on, 173, 174, 175, j 
 
 debts still due ma}^ be recovered, 174. 
 
 Legislature may dissolve, divide or annex, 173. 
 
 new corporations liable, 174, 175. 
 
 rights of creditors on, 173, 174, 175. 
 DISTRICT OF COLUMBIA, 
 
 interest and usury laws in, 149. 11 
 
 DIVISION, See Debts. | 
 
 of municipalities, Legislature has power to make, 173, 174, 175. ' 
 
 of debt, Legislature has power to make, 173, ; j 
 
 of money between bonds issued in excess of debt limitation, 236, ' 
 
 239 (p. 329). j 
 
 DONATIONS TO RAILROADS. See Railroad Aid Bonds. ■ , 
 
 statute authorizing donation to railroads is valid, 270, i 
 
 bonds donated, wlien power is to take stock, are invalid in hands j 
 
 of company or third person with notice, 280. ] 
 
 such bonds are good if they contain recitals and are in hands of I 
 
 bona fide holders, 281. l 
 
 ■1 
 
 E. :; 
 
 EFFECT, i 
 
 when statutes take, 320 I^ 
 
 when ordinances take, 94 
 EFFECT OF RECITALS, See Recitals, | 
 
 ELECTIONS. See Issue of Bonds ; Vote ; Majority ; Petition ; 
 
 Railroads. , 
 
 petition for, often required before debt incurred, 65, 
 
 constitutions and statutes often require it, 66. | 
 
 bonds issued without, when required, void, 67, 80, 201 (ji. 268, n, 1), 
 
 245, |! 
 
 taxpayers may restrain issue in such cases, 67, 
 
 in what States must be held before bonds issued, 67, 327-370, 
 
 when may be held, 70, 
 
 where may be held, 77, 
 
 how results of, should be declared, 82. 
 
 vote must be taken although a subsequent statute enlarges amount 
 of issue, 64. 
 
 irregularities in, what do not affect vote, 68, 71. 
 
 election held by wrong officers, effect, 68 (p. 83, n, 3, 4), 209, 243. 
 
 irregularities, effect of, before bonds reach a bona fide holder, 68, 71.
 
 INDEX. 519 
 
 References are to Sections. 
 
 ELECTIONS— ConfMMted. 
 
 there must be an estoppel of some kind, 68, 71, 199. 209, 210. 211, 
 
 214. 
 notice of, what sufficient, how given, 77. 
 if iuiin-operly given bonds void, unless in hands of bona fulr liolders 
 
 and there is an estoppel, 76, 77 (p. 92, n. 7), 199, 209. 
 publication of, 78. 
 
 payment of interest will estop defence of improiier notice, 243. 
 payment of interest will estop defence that wrong officers ordered 
 
 election, 243. 
 payment of interest will not estop defence in Illinois that wrong 
 
 officers ordered election, p. 342, n. 4. 
 proposition, how submitted, 74, 75 (see R. R. Aid Bonds). 
 when to name amount of bond issue, effect if not, 72. 
 must be distinct from others, 73. 
 
 mode of submission cannot be raised against bona fide liolder, 72, 74. 
 that submitted, the only one tliat can be acted on, 67, 68, 101. 
 proposition in excess of constitutional limit void, 73. 
 proposition as to interest, when, and when it cannot be change<l, 101, 
 proposition as to time of payment, when may be changc(l, 102, 103 
 
 (p. 123, n. 1, n. 5). 
 resolution may be used to submit unless ordinance required, 74. 
 constitutional directions must be followed, 74. 
 I'esult if amount submitted exceed limitation, 73. 
 " may " construed to mean " shall," 72 (p. 88, n. 7). 
 only matters required by law need be submitted, 74, 101. 
 statute and constitution may impose conditions, 26S, 271. 
 municipal corporation may impose conditions. 26><. 
 amount of tax levy sometimes to be submitteil, 75. 
 votes required to carry, majority of those voting usually sufficient, 
 
 79. 
 different rule sometimes, Avlien constitution re<iuires vote. 80. 
 Federal courts adopt the rule that the majority or other n^piired 
 
 number of votes cast is sufficient, 80 (p. 97. n, 4). 
 l)roposition cannot usually be changed, 83, 102, 103 (p. 123, n. 1). 
 may be as to unnecessary matter submitted or if no injury done, 
 
 83, 101, 102. 
 rights of bond fuJo holders if changed. 83, 102. 
 record of, when sullicient, 75, 82. 
 registration, when new, cannot be ordered, 81. 
 registered voters, wliat is meant by, 81. 
 
 subsequent statute enlarghi- debt limit <loos not waive election, «0. 
 subsequent constitutional amendm.nt, unless direrttnl to the con»*>- 
 
 ration, does not require vote under prior statute's, 70. 
 only future acts of Legislature curtailed. 70. 
 result of election is that which canva-^isers declare it to lx'. 240. 
 result nnist stand until decision reversed. 240. 
 reversal of decision does not affect acts done prior to it. 240. 
 vote affirmative not a contract, 84.
 
 520 INDEX. 
 
 References are to Sections. 
 
 ELECTIONS— Co)ifmMed. 
 
 vote affirmative may be made so by ordinance or resolution or 
 
 statute, 84. 
 vote, if none, bonds void, no estoppel, 201 (p. 268, n. 3). 
 vote. Federal courts may rule otherwise, 200. 
 when election set aside, 71. 
 ENACTMENT OF ORDINANCES. See Ordinances. 
 ENACTMENT OF LAWS. See Statutes, Enactment of. 
 EQUALITY OF TAXATION, p. 96, n. 3. 
 EQUITY, COURT OF. See Injunction. 
 will not scale down invalid bonds, 63. 
 will not aid bondholder to enforce payment, 170. 
 will not make money paid for void bonds a lien, 239. 
 will scale down excessive issue of bonds and divide money pro rata, 
 236, 239 (p. 329). 
 ESTOPPEL. See Recitals ; Record ; Ratification. 
 ESTOPPEL BY FORMER JUDGMENT, 
 
 where constitution requires a precedent election there can be no 
 estoppel, 67 (p. 342), 200. 
 ESTOPPEL BY RECORD. See Records. 
 
 want of power then no estoppel, 94 (p. 113, n. 2), 168, 190. 
 
 over statutory issue must be estoppel of some kind, 221, 222, 223,224. 
 
 no estoppel before issue of the bonds, 192. 
 
 when council estopped to show ordinance untrue, 211. 
 
 bona fide holders only are protected by, 193, 248. 
 
 no estoppel by mere execution and delivery of bonds, 194. 195 (p. 262, 
 
 n.l). 
 exception to last rule, 194 (}>. 261, n. 1). 
 corporation must be estopped by recitals or otherwise, 199. 
 non-negotiablo bonds, doctrine of estoppel applies to, 252. 
 EVIDENCE. See Proof. 
 EXCHANGE, 
 
 diffei'ence between selling bonds and exchanging them for stock 
 
 in railroad, 281. 
 rule in New York, 281 (p. 394, n. 2). 
 EXCESSIVE ISSUE OF BONDS. See Limitation of Debt; Void 
 Bonds. 
 Constitutional, 
 purchaser held to a greater degree of care than when limit of debt is 
 
 statutory, 225. 
 bonds, wliole issue of, are void, unless valid can be separated, 63, 98. 
 recitals or other estoppel do not cure, 225, 229. 
 Chaffee Co. v. Potter, only exception, 230. 
 author's comment on last case, 231. 
 author's conclusions as to recitals in such bonds. 232. 
 equity will not assist holder to enforce, 171. 
 Stattitori/, 
 
 if bonds contain recitals, made by proper officers, they are valid, 
 221, 222. 
 
 f
 
 INDEX. 521 
 
 Beferences are to Sections. 
 
 EXCESSIVE ISSUE OF BO'^Bii— Continued. 
 
 if there be no recital, then record must show determination, 223. 
 
 if no recital or estoppel by record, bonds are void, 234. 
 
 in New Jersey mere execution estops defence, 223. 
 
 in New Jersey records must be more accessible or information 
 peculiar to the municipal officers. 221. 224. 
 
 authority to determine amount may be implied, 221, 222, 223, 224. 
 
 payment of interest estops corpoi-ation to plead, 243. 
 
 purchaser not held to as strict degree of care a.s when limit of debt 
 is constitutional, 221, 301. 
 EX DELICTO, 
 
 damages arrising, not included in debt limitation, 62. 
 
 transferrer liable for, 114. 
 EXECUTION OF BONDS. See Bonds ; Officers. 
 
 what officers may execute bonds, 104 (p. 120, n. 6), 105, 211, 213, 214. 
 
 what officers may execute coupons, 108. 
 EXEMPTIONS. See Taxes. 
 
 bonds usually not taxed, 139. 
 
 not exempted from taxes, 139. 
 EXISTENCE OF CORPORATION, 
 
 not open to collater/il attack, 3. 
 
 only State can question its existence, 3. 
 
 exception to last rule, 3. 
 
 how proved, 3. 
 
 courts take judicial notice of, 326. 
 
 F. 
 
 FEDERAL CONSTITUTION, 
 
 State courts cannot constiiie, 184, 
 construction of, by Federal courts binding. 184. 
 obligation of contract protected by. 139, 184. 
 FEDERAL COURTS, 
 
 they follow the latest decisions of the State courtj^, 12. 179. 180, 
 
 183, 184. 
 
 but not if contrary to former decision, and rendered Jifbr the issue 
 of tlie bonds, 180, 181, 183, 184. 277 (p. 39.1. n.). 
 
 if rendered before issue, and not before decided, will follow. 180, 184. 
 
 the decision must be upon the construction of a Stat« statute or con- 
 stitution, 12, 180-184. 
 
 or one which has determined the power of it.s ijolitical or nunuci- 
 pal organization, 12, 182. 
 
 will not declare bonds invalid for irregularities in election, or follow 
 State courts which do, 68. 
 
 majority vote held sufficient by. 79, 80. 
 
 attitude favorable to innocent holders. 68, 179. 200. 
 
 construction of State statute or constitution binding on. 20. 170. 180. 
 
 184, 314. , . .. 
 decision of State court of proper pa.ssage of a statute binding 
 
 on, 323.
 
 522 INDEX. 
 
 References are to Sections. 
 
 FEDERAL COVUTS— Continued. 
 
 will not follow decisions on commercial law, 182, 183. 
 
 pleadings and writs in, p. 220, n. 3. 
 
 hold that municipal corpoiations cannot issue bonds unless expressly 
 authorized to do so, 10 (p. 19, n. 1). 
 FEMALES, 
 
 may vote at election to issue bonds, if statute permit, 81. 
 FLORIDA, 
 
 constitution of. prohibits aid to private enterprises, 41, 333. 
 
 interest and usury laws in, 149. 
 
 statutes of. may be shown to have been improperly passed, 323. 
 
 constitutional jn-ohibitions against incurring of debt, 333. 
 FORMAL PARTS OF BONDS. See Bonds. 
 FORMS, 
 
 of bonds, 110. 
 
 of coupons, 110. 
 
 of ordinances providing for the issue of bonds, 110. 
 FUNDING BONDS. See Renewal Bonds. 
 FRAUD. See Misconduct. 
 
 when municipal corporation bound by its officers, 49, 50, 68. 
 
 G. 
 
 GENERAL INCORPORATION ACTS, 
 
 municipalities usually now incorporated under, 3. 
 
 manner of proceeding, 3. 
 GENERAL LAWS. See Statutes, Enactment of. 
 GEORGIA, 
 
 constitution prohibits aid to private enterprises, 41. 
 
 constitutional debt limit, 51, 334. 
 
 constitutional provisions I'elating to incurring of debt, 334. 
 
 constitution requires vote to incur debt, 67, 334. 
 
 interest and usury laws in, 149. 
 
 qualified voters under constitution, 80. 
 GIFTS, 
 
 to private enterprises illegal, 45. 
 
 to railroads good, if statute constitutional, 261, 263. 
 
 aid to railroads, summary of State constitutions, 262, 327-370. 
 GOLD, 
 
 bonds may be i)ayable unless statute prohibits, 132. 
 
 if prohibited, proposed issue may be restrained, 132. 
 
 New York city, act permits issue of such bonds, p. 103, n. 3. 
 GOVERNOR, 
 
 powers of, respecting signing or vetoing statutes, 320. 
 GRIST MILL, 
 
 an internal improvement, 35. 
 
 aid to legal, 35, 37. 
 GUARANTEE, 
 
 a municipal corporation cannot guarantee bonds or endorse paper 
 without express authority, 266.
 
 INDEX. 523 
 
 References are to Sections. 
 
 GUARANTEE— Continued. 
 
 purchaser, to protect himself, must take, 114. 
 
 H. 
 
 HIGHEST BIDDER, 
 
 bonds need not be sold to, unless statute reijuires it, 141. 
 HOLDER. See Bona Fide Holders ; Purchasers. 
 HOSPITALS, 
 
 are public purposes, 35-37. 
 
 I. 
 
 IDAHO, 
 
 constitution requires vote to incur debt, 67, 335. 
 
 constitutional provisions of, relating to debt, 335. 
 
 interest and usury laws in, 149. 
 ILLINOIS, 
 
 constitution prohibits aid to private enterprises, 41, 336. 
 
 constitutional debt limitation of, 51, 336. 
 
 constitutional provisions of, relating to debt, 330. 
 
 doctrine of estoppel in, not carried as far as in Ffdcral courts, 
 p. 343, n. 4. 
 
 interest and usury laws in, 149. 
 
 majority vote on question submitted, required in. 70. 
 
 prohibition against special laws, what constitutional, :!()!. 
 
 special laws, 304. 
 
 statutes of, may be shown to have been improperly pa.sseil. 3.23. 
 IMPERATIVE DUTIES. See Mandamus. 
 
 mandamus will enforce performance of, 166, 
 IMPLICATION, REPEAL BY. See Statutes, ExAfTMENT of. 
 IMPLIED AUTHORITY TO ISSUE BONDS, 16. 100. 127. 
 
 if no body designated, legislative body implied, 85. 
 INCORPORATION. See Municipal Corporations ; Charter. 
 INDIANA, 
 
 constitution prohibits aid to private enterprises, 41, 337. 
 
 constitutional deal limit, 51, 337. 
 
 constitutional provisions relating to debt. 337. 
 
 constitutional debt limit construed, ji. 17'J. n. 
 
 interest and usury laws in, 1 19. 
 
 majority of votes cast on ])roposition suflicient, 79. 
 
 prohibition against special legislation. Legislature sole judj;e, 311. 
 
 special fund, rule as to payment of bonds, 134 (p, 183). 
 
 town, nuiy include city, p. 7, n. 3. 
 INDEBTEDNE.SS. See Limitation of Debt. 
 
 authority to incur, implies authority to le\.\ i.ia- -. 133. 131 ip. 179, 
 n. 3). 
 
 defined, 55. 
 
 municipal corporation may be compelled to incur, 42. 
 
 not for private or local purposes, 43.
 
 524 
 
 INDEX. 
 
 References are to Sections. 
 
 INDEBTEDNESS— Confinwed. 
 
 not to aid a railroad, 43, 2CG. 
 
 of dissolved, divided or annexed municipalities, 173, 175. 
 
 void, may be validated and bonds issued, 127. 
 
 void, because of form of statute, may be validated, 128. 
 
 void unconstitutional, cannot be validated, 128, 129. 
 
 void, unconstitutional, cannot be made alien, 128, 129. 
 
 void, unconstitutional, although in jDart valid, cannot be validated 
 unless it can be separated, 129. 
 
 void, unconstitutional, when paid p?'o rata (see Void Bonds). 
 
 void, may be ratified (see Ratification). 
 INDORSEMENT, 
 
 bonds paj^able to named payee must be endorsed, 96. 
 
 municipal corporation cannot become accommodation endorser, 
 imless expressly authorized, 266. 
 INJUNCTION, 
 
 bona fide holder not affected by, unless a party to action, 119 a. 
 
 taxpayer may by, restrain issue of bonds, 63, 67, 68, 155, 156, 157, 
 273, 278. 
 
 levy of tax may be restrained by, 63. 
 
 will lie for irregularities in election, 71-74. 
 
 if time of payment or interest be changed it will lie, 83. 
 
 if change in rate of interest or time of payment, issue may be re- 
 strained by, 101. 
 
 when injvmction necessary, 155. 
 
 upon what grounds will lie, 156. 
 
 position of Federal courts, 157. 
 
 all State courts afford relief by. 158. 
 
 tax will be restrained by, 159. 
 
 if conditions precedent are not performed, issue of bonds re- 
 strained, 271, 274, 278. 
 INSPECTION OF LAWS AND RECORDS. See Purchaser ; Bona 
 Fide Holder. 
 
 purchaser of bonds bound to inspect, 44, 54, 150, 151, 190. 
 
 when bonds contain sufficient recitals purchaser not bound to in- 
 spect, 241. 
 
 must always when constitution points to records, 54, 221, 225. 
 
 exception, 230, 231. 
 
 purchaser not bound to look for unusual matter out of place, 241. 
 INTEREST. See Bonds ; Elections. 
 
 rate of, when it must be submitted to voters, 72. 
 
 if changed from that voted for issue of bonds restrained, 83, 101. 
 
 when such rate may be changed, 101. 
 
 when, may be paid seini-annually although vote annually, 101. 
 
 coupons represent the interest, 101. 
 
 after maturity bonds and coupons draw interest at legal rate, 101. 
 
 when interest may be recovered upon unpaid coupons. 101. 
 
 rate of, that where principal is to be paid, unless otherwise stipu- 
 lated, 101.
 
 INDEX. 525 
 
 Beferences are to Sections. 
 
 INTEREST— Continued. 
 
 rate of, may be that in State where bond made or payable, 101. 
 
 excessive rate of, does not invalidate bond, 101 (p. 122, n. 1). 
 
 when interest is usurious, 148, 149. 
 
 synopsis of interest and usury laws, 149. 
 
 when payment of, restrained, 159. 
 
 payment of interest estops corporation from showing irregularities 
 in issue of bonds, 243 (i>. 342, n. 4). 
 
 one payment not sufficient. 243. 
 
 payment of, will not cure want of power, 243. 
 IOWA, 
 
 constitutional debt limitation, 51 , 338. 
 
 constitutional debt limitation of, construed, p. 01. n. 0. 
 
 constitutional provisions relating to debt, 338. 
 
 interest and usury laws in, 149. 
 
 prohibition against special laws, courts determine. 312. 
 
 a county in, is not regarded as a municipal corporation, p. 7. n. 2. 
 
 school district is regarded as a municipal corporation, p. 9. n. 1. 
 IRREGULARITIES, 
 
 of public officers do not usually affect bona fide lioldcr, -19, 50, 08, 
 74, 158, 246, 282 (p. 342, n. 4). 
 
 issue of bonds may be restrained for, 68, 155, 158. 
 
 taxpayer must act promptly to take advantage of, 245, 246. 
 
 election called by wrong officers, bonds good if there be an estoppel 
 (see Recitals, Ratification), 68, 243 (p. 342, n. 4). 
 
 if election called in Illinois by wrong officer, bonds void, p. .342, n. 4. 
 
 assessment not affected by, 50. 
 
 effect of, before bonds reach innocent holders, 67, 81. 
 
 may be cured, luiless constitutional. 256. 200. 
 ISSUE OF BONDS. See Bonds; Elfx-tions ; Injunction; Over- 
 Issue ; Proceedings to Issue ; Sale of Bonds. 
 
 may be restrained if debt limit exceeded, 03. 
 
 question of, often submitted to voters, 66. 
 
 constitution of some States require submission, 66, 327-370. 
 
 submission of question of, not a delegation of legislative i>ower, 66. 
 
 statutes often require the (picstion of. to be submitted. 66. 
 
 when submission reciuired, bonds cannot issue without it, 67, 201, 
 245 (p. 268, n. 1). 
 
 proceedings to issue must be strictly followed, 85. 
 
 statute usually marks out course, 0. 85. 
 
 when no body or officers doignated to, then legislative iKnly 
 must, 85. 
 
 bonds cannot issue without consent of body named in tli«' enabling 
 statute, 85. 
 
 in some States may, 85 (p. 103, n. 3). 
 
 subsequent act enlarging jiower does not change mode of, 85. 
 
 illegal or excessive is.sue, when restrained. 155, 158. 
 
 illegal or excessive issue, surrender compelled, 158. 
 payment of interest held to estop defence of illegal. 243.
 
 526 INDEX. 
 
 Beferences are to Sections. 
 
 ISSUE OF BONDS— Conf/nued 
 
 special fund for, must "be provided when, 89. 
 
 for unlawful purpose. Avlien void, 45, 46, 123. 
 
 for unlawful purpose, when corporation estopped, 123, 127, 217, 218. 
 
 proceedings to restrain, who may bring, 63, 67, 68, 155, 157, 273, 278. 
 
 general power to borrow authorizes issue of renewal and refunding 
 
 bonds, 126, 127. 
 taxes autliorized, by express power to issue bonds, 183, 134. 
 
 J. 
 
 JUDGMENT. See Mandamus; Federal Courts. 
 
 in State courts, mandamus usually issues without, 165. 
 
 in Federal courts, judgment necessary before mandamus will 
 
 issue, 165. 
 equity will enforce payment of, 170. 
 
 execution will not issue against municipal corporation, 165. 
 mode of enforcing, mandamus the remedy, 166. 
 mandamus will always lie to enforce, 166 (p. 229, n. 2). 
 tax is ordered to be levied to pay, 166. 
 if limitation of debt not pleaded, bonds issued to pay judgment 
 
 good, 239. 
 proof necessary to obtain 2)rima facie, 164. 
 
 Avlien judgment may be incjuired into on petition for mandamus, 167. 
 when payment of, may be compelled out of general fund, 239. 
 estoppel by former judgment, 
 
 when a bar between same parties in second suit, 249. 
 is a bar between privies, 249, 250, 251. 
 defendant may plead former, 249. 
 jilaintiff may plead former, 249. 
 
 doctrine applied to actions on bonds and coupons, 249. 
 judgment on part of issue of bonds or coupons, may be set up in an 
 
 action on balance, 249. 
 doctrine now modified, only defences set up and litigated are res 
 
 adjudicata, 250, 251. 
 holder may on other bonds or coupons show he is bona fide holder, 
 
 250, 251. 
 defendant may also show new matter, 250. 
 
 judgment on coupons is 7'es adjudicata as to the bonds, 251, 2.52. 
 judgment in suit, to which holder of bonds is not a party, does not 
 
 bind him, 119 a. 
 judgment holding bonds void, if not a party to, does not bind bona 
 
 fide holder, 119 a. 
 judgment binds if bonds purchased after maturity, 119 a. 
 JUDICIAL NOTICE, 
 courts take, 
 of population of municipalities, 326, " 
 of incorporation of municipaUties, 326. 
 of geographical facts, 326. 
 
 (
 
 INDEX. 527 
 
 References are to Sections. 
 
 JUDICIAL "NOTICE— Continued. 
 
 that city belongs to certain grade, 326. 
 
 will not take, that county was incorjjorated on certain day, 326. 
 that township was incori)orated under a general law, 326. 
 United States coui'ts take, of State statutes, 326. 
 
 K. 
 
 KANSAS, 
 
 constitutional prohibition against special laws, 302. 
 
 school districts and townships not included in prohibition. 302. 
 
 what statutes relating to but a few municipalities, valid, 302. 
 
 interest and usury laws in, 149. 
 
 statutes of. may be shown to have been improperly pa^jtied, 323. 
 KENTUCKY. 
 
 constitution requires vote to incur debt, 67. 339. 
 
 constitutional provisions relating to debt, 339. 
 
 interest and usury laws, 149. 
 
 statute, whether it can be shown to have been improperly passed, 
 still undecided, 323. 
 
 L. 
 
 LACHES. See Ratification. 
 LANDS, 
 
 bonds may be issued for the purchase of. 35, 37. 
 LAW. See Statutes, Enactment of. 
 
 purchaser of bonds bound to know, 44. I.jO, 191. 
 LEGISLATIVE ACT, 
 
 passage of ordinance or resolution is, 88. 
 LEGISLATURE. See Statutes, Enactment of. 
 
 authority to issue bonds must come from. 5-32. 28<1. 
 
 municipal corporations have no inherent right to is.sue Ixinds. 125. 
 
 has full power over numicipal con>orations unless c<mstitution 
 prohibits, 173, 284. 
 
 may divide, dissolve and annex nmnicipal corporations. 173-175. 
 
 may divide debts of municijjal cori»orations. 173. 
 
 may n>])cal cliarter of municipal corporation. 173. 
 
 may compel them to incur debt and i.ssue IkkkIs, 42, 28^. 
 
 cannot compel debt for local puri>ose, 43. 
 
 cannot compel assistance to raib-oads, 43. 2G6. 
 
 may cure defective execution of bonds. 258. 
 
 may cure all irregularities in issue of Ixinds, 256-258. 
 
 if irregularities constitutional, cannot, 257. 
 
 may waive all conditions, except constitutional. 2.50-2.58. 
 
 may cure all defects in elections unle.ss constutional, 256-259. 
 
 may make voitl bonds valid, if not void for constitutional defeota 
 (see Void Bonds). 127. 259. 
 
 may make a statute unconstitutional in form valid. 260 (p. 379. n. 1). 
 
 may designate the officers to issue bonds. 6. p. 2S7. n. 3. 
 
 remedies, has control over (see RF.MF.nre.';). lf*5-l.'*0.
 
 628 
 
 INDEX. 
 
 References are to Sections. 
 
 LEGISLATURE— Conhnwed. 
 
 may change form of, 185-189. 
 
 must leave some remedy, 185-189. 
 
 cannot pass act to impair contract, 185. 
 
 may authorize municipal corporation to aid raikoad, unless con- 
 stitution prohibit, 261-267. 
 
 may change limitation of debt, when statutory, 53. 
 
 may impose any condition not repugnant to constitution, 268. 
 
 may impose conditions in addition to constitution, 268-271. 
 LEVYING OF SPECIAL TAX. See Mandamus ; Taxes. 
 
 mandamus, when it will lie to compel, 166, 169. 
 LIGHTING OF STREETS, 
 
 bonds may be issued for apparatus for, 35-37. 
 
 contracts for more than a year resiiecting, 60, 61. 
 LIMITATION OF ACTIONS. See Statute of Limitations. 
 LIMITATION OF INDEBTEDNESS, 
 
 why imposed, where to be found, 51, 221. 
 
 decisions of State courts must be consulted, 51, n. 
 
 effect of, when imposed by constitution on Legislature, 52. 
 
 effect of, when imposed by constitution on municipalities, 52. 
 
 when limitation statutory it may be changed, 53. 
 
 svibsequent act may repeal by implication a statutory limitation, 
 
 53, 64. 
 
 all persons must take notice of ,54. 
 
 debt beyond the limit invalid, 54, 128, 225. 
 
 corporation may be estopped to plead (see Void Bonds ; Recitals), 
 
 54, 63, 128, 129, 230, 232. 
 
 burden of j^roof on taxpayer in action to restrain issue, 54. 
 prohibition includes all form of debt, 54. 
 prohibitions relative to, in the various States, 327-370. 
 prohibition in Iowa constitution construed, p. 61, n. 6. 
 pi'ohibition in former New York constitution construed, 64 (p. 
 
 67. n. 1). 
 prohibition in Texas constitution construed, 64. 
 indebtedness defined, 64. 
 
 last assessment is the usual basis of calculation, 56. 
 subsequent lower assessment immaterial, 63. 
 income construed, 56. 
 
 what should be included in calculating debt, 57. 
 uncollected taxes and current levy not to be deducted, 57. 
 current expenses not included, 57. 
 only par value of outstanding bonds included, not the unmatured 
 
 coupons, 58. 
 outstanding certificates to be included, 58. 
 fees of officers are included, 57. 
 what should be excluded in calculating debt, 59. 
 money in hands of treasurer to pay bonds not deducted (doubtful), 58. 
 bonds payable out of si:iecial fund not included, 59. 
 ordinary current expenses not included, 59 (p. 66, n. 5).
 
 INDEX. 529 
 
 References are to Seccious. 
 
 LIMITATION OF INDEBTEDNESS— Co?if/nHrr7. 
 bonds purchased for sinking fund excluded, 59. 
 refunding and renewal bonds, when and wlien not excluded, 59, 
 
 128 (p. 171, n. 4). 
 contracts for more than a year are excluded in some States, 60. 
 contracts for more than a year included, in some States, 60-62. 
 damages ex delicto not included, C2. 
 debt limit must be pleaded, 63 (p. 72. n. 1), 239 (p. 327). 
 effect on debt of corporation if limit exceeded, 63, 128, 129, 221, 
 
 230, 232. 
 if valid can be separated from invalid, former good, 63. 
 taxpayer may enjoin issue of bonds if in excess of, 63. 
 when debt reduced below, new debt up to, may be incurred, 63. 
 how limitation construed, 64 (p. 74, n. 1), 69. 
 
 constitutional limitation cannot be exceeded, may be decreased, 64. 
 vote cannot enlarge, 72. 
 effect of vote on, 73. 
 
 renewal and refunding bonds do not increa.se, 59, 128 (p. 171, n. 4). 
 special assessment bonds do not increa.se, 135. 
 mandamus cannot compel levy of tax beyond, 168. 
 bonds containing recitals in excess of statutoiy limit of, valid, 221, 
 
 223, 224. 
 bonds in excess of, although not containing recitals, liold valid in 
 
 New Jersey, 224. 
 bonds in excess may be valid if record of corporation estops, 223. 
 bonds in excess of constitutional, void. 129. 225. 238. 
 one exception, Chaffee Co. v. Potter, 230. 231. 236. 238. 
 money borrowed within the constitutional limit, divided pm rata 
 
 among bondholders, 236. 
 no relief in equity, 239. 
 exceptions, 236. 
 
 vote necessary, although limitation enlarged. 69. 
 constitutional, purcha.ser bound to inspect all n^cords, 225. 
 usually no recovery on bonds in excess of constitutional limit, 225, 
 
 229, 238-9. 
 exception, all money witliin limit divided, 236, 239 (p. 329). 
 Staiiitonj, 
 purchaser bound to less degree of care. 221. 225. 
 recovery of money paid for such bonds, 102, 235, 2.36. 
 LIMITED POWERS, 
 
 of <7?(«si-corporations, 3, 29. 
 
 municipal corporations have no inliercjii i-"^^''' '"> i-^'««' l»<'nds. 
 
 125. 
 power to issue bonds statutory. 5. 32, 284. 
 
 no iidierent power to issue renewal or refunding bonds, 125, 126. 
 LIS PENDENS, 
 
 has no application to negotiable bonds or pai>er, 1 19 d. 
 LOCAL IMPROVEMENTS, 
 what are, 30, 39, 42. 
 34
 
 630 INDEX. 
 
 References are to Sections. 
 
 LOCAL IMPROVEMENTS— Coj< / inued. 
 
 Legislature cannot compel municipal corporation to issue bonds 
 for, 43. 
 LOCAL LAWS. See Statutes, Enactment of. 
 LOCATION. See Railroad Aid Bonds. 
 
 of bonds for purpose of taxation, 139. 
 LOST BONDS. See Stolen Bonds. 
 LOUISIANA, 
 
 aid to private enterprises prohibited, 41, 340. 
 
 constitutional provisions relating to debt, 340. 
 
 interest and usury laws in, 149. 
 
 M. 
 
 MAINE, 
 
 constitutional debt limit, 51. 
 
 constitutional provisions relating to debt in, 341. 
 
 interest and usury laws in, 149. 
 MAJORITY. See Vote ; Elections ; Council. 
 
 what sufficient to petition, 65. 
 
 rule as to, in elections, 79, 80. 
 
 what vote necessary in municipal bod}'. 90. 
 
 what vote necessary to enact laws, 317. 
 
 when majority of all votes cast sufficient, 3 (p. 9, n. 3), 79 (p. 95). 
 
 when majority of those voting on question sufficient, 79 (p. 96). 
 
 when majority Aote sufficient, 3, 79 (p. 96, n. 3). 
 
 need not be majoritj' of all registered voters, 79. 
 
 must be majority of electors designated by constitution or statute, 80. 
 
 recitals will estop municipality from showing improper vote, 80. 
 
 signing by a majority of a board sufficient, 105. 
 
 when several municipalities vote on single question, majority of aU 
 voters sufficient, p. 96, n. 3. 
 MANDAMUS, 
 
 the writ of, defined, 166. 
 
 alternative writ, nature of, 170. 
 
 only means of enforcing judgment on bonds, 165, 166, 185. 
 
 will always lie to enforce paj'ment, 160 (p. 229, n. 3). 
 
 when, will lie to compel issue of bonds, 160, 278. 
 
 conditions not pei-formed, will not lie, 150, 274-278. 
 
 will lie to compel payment of money out of general fund, 166, 168. 
 
 will compel levy of special tax, though permissive in form, 166. 
 
 Federal courts, State courts cannot interfere with, 266 (p. 230, n. 2). 
 
 to whom writ should be directed, 170. 
 
 does not abate on death of officer, 170. 
 
 taxes cannot compel levj- l>eyond legal rate, 136, 168. 
 
 if no power to levy taxes, mandamus cannot compel levy, 136, 
 168, 190. 
 
 judgment usually not necessary in State courts, 165. 
 
 if bonds disputed, then judgment necessary, 165. 
 
 judgment first necessary in Federal courts. 165.
 
 INDEX. 531 
 
 References are to Sections. 
 
 MA'NDAMTJS— Continued. 
 
 judgment may be inquired into, when, 1G7. 
 
 class of bonds not destroyed by, 167. 
 
 judgment does not destroy riglit to special tax, 167. 
 
 demand, necessary before mandamus will issue. 16"). 
 
 demand and refusal must be alleged in petition for. 165. 
 
 when two or more writs will be granted, 168. 
 
 State officer, when mandamus will lie against, 172. 
 
 State, will never lie against, 168, 173 (j). 237, n. 1). 
 
 if no body to levy tax, mandamus will not lie, 190. 
 MARYLAND, 
 
 constitution relating to debt, 342. 
 
 interest and usury laws in, 149. 
 
 statutes of, may be shown to have been improperly passed, 323. 
 MASSACHUSETTS, 
 
 no constitutional provision relating to debt, 343. 
 
 interest and usury laws in, 149. 
 
 municipal corporation, not a " corporation " in constitutional sense, 
 p. 200, n. 3. 
 
 towns in, p. 3, n. 3. 
 MAXIMUM, 
 
 bonds cannot be issued to exceed amount, 6. 
 
 interest, rate of, cannot be exceeded, 6. 
 
 effect if rate of interest exceeded, 101 (p. 122, n. 1). 
 "MAY," 
 
 when it is consti'ued to mean shall, 72 (p. 88, n. 7). 
 MAYOR, 
 
 when his approval necessary to ordinance. 93. 
 
 how ajiproval or veto should lie made, 93. 
 
 when he may veto, effect of, 93. 
 
 when he may vote, 91. 
 
 cannot delegate othei's to act for liini. 93. 
 
 if absent, acting, may act for him, 93. 
 
 if he do not veto within certain time, ordinance becomes oix^nitive 
 without approval, 93. 
 
 bonds are usually signed by. 10-1. 
 
 recitals, may make, when autliorizeil to execute Iwud-s. 209-214. 
 MEETINGS. See Coun-cil ; Scik »< n. Distukts. 
 
 regular, what may be done at. 90. 
 
 special, what may be doue at. 9<1. 
 
 adjourned, what may be done at, 90. 
 
 who may adjourn, 90. 
 
 clerk may, if authorized by rules, 90. 
 
 manner of proceeding at meetings. 90-92. 
 
 ayes and nays, when to be called. JM), 95. 
 
 record of proceedings of, how ke]it. 95. 
 
 business cannot be done excei)t at, 90. 
 
 when mavor mav and may not vote at. 91.
 
 632 INDEX. 
 
 References are to Sections. 
 
 MEETINGS— Continued. 
 
 bonds, ordinance or resolution providing for their issue, how passed, 
 90, 95. 
 
 bonds directed to be issued at special meeting held invalid, p. 109, 
 n. 5. 
 
 such bonds may be afterwards ratified, p. 109, n. 5. 
 
 if all members notified of purpose of special meeting, or are present 
 and consent, issue of bonds valid, 90 (p. 109, n. 5). 
 
 bonds must be issued at legal meetings, 90. 
 
 manner of proceeding is found in charter or general or special stat- 
 utes, 90. 
 METHOD OF PROCEEDINGS. See Elections ; Proceedings to 
 
 Issue Bonds. 
 MICHIGAN, 
 
 constitutional provisions relating to debt, 344. 
 
 interest and usur>^ laws in, 149. 
 
 railroad not a public purpose in, 207. 
 
 statutes of may be shown to have been improperly passed, 323. 
 MINNESOTA, 
 
 constitutional provisions relating to debt, 345. 
 
 county not a municipal corporation, p. 7, n. 2, 
 
 interest and usury laws in, 149. 
 
 statutes of, may be shown to Imve been improperly passed, 323. 
 
 special laws, proliibition against, 309. 
 
 town, held to include cities, p. 7, n. 3. 
 
 statutes, when governor may sign, after adjournment, 319. 
 MISCONDUCT OF OFFICERS. See Officers. 
 
 if bonds in hands of bona fide holder, corporation estopped to plead 
 49, 59, 08, 74, 158, 240, 282. 
 MISSISSIPPI, 
 
 constitutional provisions relating to incurring of debt, 346, 
 
 interest and usury laws in, 149, 
 MISSOURI, 
 
 constitution proliibits aid to private enterprises, 41, 347. 
 
 constitiitional previsions relating to debt, 347. 
 
 constitution requires vote to incur debt, 67, 347. 
 
 constitutional debt limit, 51, 347. 
 
 interest and usury laws in, 149. 
 
 qualified voters in, 80. 
 
 school district, not a mimicipal corporation, 2 (p. 2, n. 3). 
 
 special laws, what constitutional, 307, 310 (p. 432, n. 1). 
 
 statutes of, may be shown to have been improperly passed, 
 323. . 
 MISTAKE, 
 
 recital of wrong act, effect of, 216. 
 
 bonds valid, if there be other authority, 216. 
 MODE, 
 
 of issue of bonds marked out by statute must be followed, 85. 
 MONEY. See Borrow ; Power to Make Loans ; Gold, 
 
 I
 
 INDEX. 533 
 
 Eeferences are to Sections. 
 
 MONEY HAD AND RECEIVED, 
 
 when action will lie to recover money paid for void Ixnids. 102. 235, 
 
 236, 237. 
 will not lie for money paid for unconstitutional bond.s, 238. 
 when author thinks it should lie in latter case, 238 (p. 326, n. 4). 
 money must have been applied to lawful purpose, 237. 
 MONTANA, 
 
 constitution requires vote to incur debt, 67, 348. 
 constitutional provisions relating to debt, 348. 
 interest and usury laws in, 149. 
 MUNICIPAL (CORPORATIONS. See Legislature. 
 term as used in tliis volume defined, 2. 
 municipal corporation defined. 3. 
 municipal corporation proper distin(iuished from a (/uosj-corpora- 
 
 tion, 3. 
 what are gita-si-corporations, 3. 
 how municipal corporations are organized. 2. 3. 
 organized under general laws, 2, 3. 
 by special charter, 2, 3. 
 
 in wliat States special charter now prohibited, p. 2, n. 4. 
 in what States special charter allowed, jj. 3, n. 2. 
 the ])eople are the municipal corporation, not the legislative body 
 
 or council, 3. 
 corporate existence cannot be attacked collaterally, exception, 8. 
 only State can attack corporation. 3. 
 de facto corporation, acts of, binding, 3. 
 by whom business conducted, 3. 
 where power of, found. 3. 
 name of, fixed by charter, 3. 
 seal of, any adopted seal sufficient, 3. 
 corporate existence, how provetl, 3. 
 bonds of invalid corporation, void. 3. 
 
 decisions of State must be consulted to ascertain what are, 3. 
 express power to issue l>onds. 3. 
 
 when a, may be compelled to is.sue its l>onds. 42. 100, 2M4. 
 when fraud or irregularity of officers bind, 49, 50, 08. 74, 158, 246, 
 
 282. 
 in some States not regarded as a rorix)ration. 200, n. 3. 
 dissolution, annexation. Legislature Jia.s power to, 173. 
 debts of, how apportioned on division. 173-175. 
 cannot escape its debts by reorganization or annpxati«in. 171. 
 riglits of creditors on <lissoIution or ann»'xati<in of. 173-175. 
 Legislature has complete contnjl over unless constitution proliiliits, 
 
 r73. 284. 
 authority of . to issue bonds, nuist como from Ii4';:islaturo. 5. .32, 
 
 284. 
 inherent right to issue. municiiKil corjKirations have no. 125. 
 charter of. may lie rejiealed by Legislature, 173. 
 statute repealing charter of. is not a sprcial art. 300.
 
 634 INDEX. 
 
 References are to Sections. 
 
 MUNICIPAL CORPORATIONS— CoHftnwed. 
 
 only officers of, can execute bonds unless statute designate others,. 
 104. See Officers. 
 MUNICIPAL OFFICERS. See Officers. 
 
 N. 
 
 NAME, 
 
 of corporation fixed by charter. 3. 
 
 misnomer of municipality, estops it to use as a defence, p. 5, 
 n. 5. 
 
 misnomer of payee, effect, 270. 
 NEBRASKA, 
 
 constitution of, requires vote to incur debt. 67, 349. 
 
 constitutional provisions relating to debt, 349. 
 
 county is not included in prohibition, 302. 
 
 school district is included, 302. 
 
 interest and usury laws of, 149. 
 
 special acts, what constitutional, 302. 
 
 statutes of, may be shown to have been imjiroperly passed, 323. 
 NEGOTIABILITY. See Bona Fide Holders. 
 
 what the bond must contain to be negotiable, 96, 102, 111, 112. 
 
 what term negotiable means, 111. 
 
 to whom payable to be negotiable. 111. 
 
 how negotiable instrument transferred. 111. 
 
 bonds payable at option before maturity are negotiable, 103. 
 
 amount must be certain and stated, 112. 
 
 payee's name may be blank, 111. 
 
 time of payment must lie stated, 102, 
 
 time must not depend on uncertainty, 112. 
 
 coupons, w^hen not negotiable, 107, 112. 
 
 authority to issue negotiable bonds, implies authority to issue like 
 coupons, 112. 
 
 registered bonds are not negotiable, 115. 
 
 non-negotiable paper, doctrine of estoppel applies to, 252. 
 NEVADA, 
 
 constitution of, prohibits aid to private enterprise, 41, 350. 
 
 constitutional provisions of, relating to debt, 350. 
 
 interest and usury laws in, 149. 
 NEW HAMPSHIRE, 
 
 constitution of, prohibits aid to private enterprise, 41, 351. . 
 
 constitutional provisions of, relating to debt, 351. 
 
 interest and usury laws of, 149. 
 
 statutes of, may be shown to have been improperly passed, 323. 
 NEW JERSEY, 
 
 constitution of, prohibits aid to private enterprises, 41, 352. 
 
 constitutional provisions of, relating to debt, 352, 
 
 classification of cities in. 298. 
 
 *' corporation '' in constitution does not include municipal, p, 200,
 
 INDEX. 535 
 
 References are to Sections. 
 
 NEW JERSEY— Contiinu'd. 
 
 mere execution and delivery of bonds, held to work an estoppel. 194 
 (p. 261, n. 1). 
 
 females may vote to issue bonds when authorized, 81. 
 
 interest and usury laws in, 149. 
 
 prior publication of proposed act may be inquired into, 32'^. 
 
 special statutes, when valid, 306. 
 
 statutes of, when they take effect, 320. 
 
 statutes, governor may sign after adjournment of Legislature, 319. 
 
 statutes of, conclusive proof of tlieir proper passage. 321. 
 
 town, includes cities, unless excepted, j). 7, n. 3, 306. 
 NEW YORK, 
 
 constitution of. prohibits aid to private enteqjrise, 41, 353. 
 
 constitutional provisions, relating to debt, 353. 
 
 constitutional debt limitation, 51, 64 (p. 74, n. 1), 353. 
 
 constitution of, does not require laws to be uniform. ]>. 2^"). ii. 5. 
 
 classification of cities in, 301 (]). 421, n. 5). 
 
 how special city laws passed and accepted, p. 421, n. 5. 
 
 commission, municipalities inaj^ paj' tolMoker for sale of bonds, 143. 
 
 interest and usury laws in, 149. 
 
 object of act in title, applies only to local statutes, 288. 
 
 statutes of, may be sliown to have been inipro])erly pa.ssed, 323. 
 
 special city laws, when they take effect, j). 421, n. 5. 
 
 when governor may sign bill after adjournment of Legislature, 319. 
 
 when statutes take effect in, 320. 
 
 what is a special law in, 301. 
 
 what is prohibited as a special law in. 301. 
 
 term '* towni " includes cities, when. j). 7, n. 3. 
 NEW YORK CITY, 
 
 comptroller of, may issue bonds without authority of any l)oard, 
 p. 1U3, n. 3. 
 
 name of bonds in, p. 1(K3. n. 3. 
 
 may be issued payable in gold, p. 103. n. 3. 
 
 authority to issue bonds in, p. 103, n. 3. 
 NON-NEGOTIABLE BONDS. See Neootiabii.itv. 
 
 doctrine of estoppel applies to, 252. 
 
 negotiable paper treated as, when issued under implied authority. 
 32. 
 
 subject to all equities, 32. 
 NON-PERFORMANCE. See CONDITIOXS ; Recitai> ; n.\TiFi(.ATi<tN. 
 NORTH CAROLINA, 
 
 constitution requires vote to incur debt. 67. 'M. 
 
 constitutional provisions relating to delit. •M. 
 
 interest and usury laws, 14!). 
 
 qualified voters in, 81. 
 NORTH DAKOTA, 
 
 constitution requires vote to incur debt. 67. 355. 
 
 constitutional provisions relating to. 355. 
 
 interest and usurv laws in. 140.
 
 636 INDEX. 
 
 References are to Sections. 
 
 0. 
 
 OBJECT. See Public Purpose, 
 
 bonds can only be issued for object expressed in the statute, 5. 
 
 OBJECT OF BILL. See Statutes. 
 
 OBLIGATIONS. See Bonds. 
 
 OBLIGATION OF CONTRACTS. See Contracts. 
 
 OFFICERS. See Elections ; Irregularities. 
 
 statute usually designates the officers to execute the bonds, 6. 
 if officers to execute bonds designated, no others can, 6. 
 statute usually designates the officers to issue the bonds, 6. 
 authority of, where must be found, 44, 89, 104. 
 
 authority of, must be matter of record or law, 104. J 
 
 unauthorized acts of, void, unless ratified, 246 (p. 342, n. 4). | 
 
 de facto officers, who are, 46. j 
 
 acts of de facto officers, when valid, 47. \ 
 
 must be legal office, otherwise no de facto, 47. ] 
 
 fraud or miscondvict of, when corporation bound by, 49, 50, 68, 243, i 
 
 246. ' 1 
 
 cannot act when proposition exceeds authority, 73. ^ 
 
 can only act on the proposition carried, G7, 68. \ 
 cannot issue bonds withotit authority of corporation, 85, 104. 
 comptroller may in New York City. p. 103, n. 3. 
 
 act may be so drafted that no further authority for issue necessary, <■] 
 
 85. ] 
 
 only officers of municij)ality can execute bonds. 104 (p. 127. n. 6). - 
 
 statute may designate i)ersons other than officers to execute bonds, ^ 
 
 104. I 
 
 must be in office at tinie of signing, 104 (p. 127, n. 6). •; 
 
 signing for officer, held good, p. 130, n. -. 
 
 effect of ante-dating bonds by, 10."). '. 
 
 signing by a majority of a board sufficient, 105. i 
 
 where board is authorized to issue, signing should be by presiding j 
 
 officer, 105, j 
 officer to sign coupons, /oc-s/»i/7e signature sufficient, 108. 
 
 what officer to register bonds, 130, 131, , 
 
 effect of registration by. 130. 131. j 
 
 implied authoritj' of, to make recitals. 209-215. ] 
 
 mandamus cannot compel, to violate law, 168, >, 
 
 mandamus can compel, to perform their duties, 168, t 
 
 conditions precedent, what officers may pass upon, 209, \ 
 
 only officers of municipality, or those designated in enabling statute, j 
 
 can act, 214, | 
 
 tax, officer compelled to levy, 160-168, j 
 
 what officers may make recitals, 209-215. * 
 
 author's conclusions as to what officers may make recitals, 215. i 
 
 unauthorized recitals not binding, 212 (p. 285, n. 1). j 
 money borrowed by, without authority cannot be recovered, unless 
 
 ratified, 237. J
 
 INDEX. 537 
 
 Beferences are to Sections. 
 
 OFFICERS— Continued. 
 
 authorized acts of, may be ratified, 247. n. 
 
 corporation can only ratify what itself has power t<j do. 247 (p. 
 344, n. 1). 
 
 Legislature may cure, if corporation cannot ratify, 247. 
 
 ratification of, need not be express, 247. 
 OHIO, 
 
 constitution of. prohibits aid to private enterprises. 41. 3.")G. 
 
 constitutional provisions of, relating to debt, ;J.jG. 
 
 interest and usury laws in, 149. 
 
 special statutes relating to municipalities, when constitutional. 300. 
 
 statutes of, may be shown to have been improperly jKussed, 32^}. 
 ORDINANCES. See Council ; Proceedings to Issue ; Public.\tion. 
 
 necessary in preceedings to issue bonds, 86. 
 
 why necessary, 87. 
 
 how drawn, what to provide for. 89. 
 
 need not recite autliority, 89. 
 
 need not recite \nior performance of conditions, 89. 
 
 effect of, if authority niisrecited, 89. 
 
 object of, to be stated, 89. 
 
 title, not necessary unless required, 89. 
 
 judgment of legislative body need not be .set out in ordinance or 
 resolution, 89. 
 
 resolution may be used instead of, unless statute reipiircs ordi- 
 nance, 88, 89. 
 
 when special or sinking fund must be provided at time of, 89. 
 
 enactment of, at what meetings. 90-92. 
 
 number of votes recjuired to i)ass, 90, 9.5. 
 
 when mayor may vote on, 91. 
 
 readings of, 90-92. 
 
 must be read at different meetings. 90-92. 
 
 amendment of, cannot be in material part, 92. 
 
 when void, 92. 94. 
 
 when mayor must approve, 93. 
 
 how mayor sliould ai)prove. 93. 
 
 vote of, mayor may, wlien, effect of, 93. 
 
 how passed over his veto, 93. 
 
 takes effect if mayor does not veto. 93. 
 
 signature of mayor, as i)rosiding officer. 93. 
 
 publication, when necessjiry, 94 (p. 113. n. 3). 
 
 bonds void unless ordinance publishfd. 91 (ji. 113. n. 3). 
 
 effect, when ordinance goes into, 94. 
 
 passage of, how proved, 9.5. 
 
 passage of a legislative act, 88. 
 
 rescission of. niay be before rights accrue. 277. 
 
 date of bond, usually fixed by, 89, 100. 
 
 form of ordinance. 1 10. 
 
 recital of, when in conflict witli statute. 131 (pp. l^J. ISO. 21^-220. 
 
 purchaser of bonds, liound to examine. IV).
 
 538 INDEX. 
 
 References are to Sections. 
 
 ORDINANCES— Co?if/» ued. 
 
 purchaser bound by what ordinance discloses, 150. 
 
 when purchaser need not investigate ordinance, 150, 217-219. 
 
 if ordinance recited apparently not in conflict with recited statute, 
 investigation unnecessary, 217-219. 
 OREGON, 
 
 constitution of, prohibits aid to private enterprises, 41, 357. 
 
 constitutional provisions relating to debt, 51, 357. 
 
 interest and usury laws in, 149. 
 
 statutes of, may be shown to have been improperly passed, 328. 
 OVER-ISSUE. See Excessive Issue; Void Bonds. 
 
 P. 
 
 PAR. See Usury. 
 
 what is meant by, 145. 
 
 commissions, when their allowance renders sale below, 143, 145. 
 
 sale may be for less than, unless prohibited, 145, 147, 148. 
 
 bona fide holder not affected by sale below, 50, 144, 145, 146, 148. 
 
 statute may make bonds sold below, void, 148. 
 PARKS, 
 
 are public purposes, 35, 37. 
 
 commission in Cliicago a municipal corporation, 48. 
 PAYMENT, TIME OF, 
 
 must be stated to make bond negotiable, 102. i 
 
 usually fixed by statute, cannot be changed ; exceptions, 102 (p. 123, ^ 
 
 n. 4, 5), 103 (p. 125, n. 1). 
 
 if changed, bonds held void, 83, 102. 
 
 money may be recovered, although time changed, 102, 235. 
 
 when it must be stated in proposition, 72, 75. 
 
 when it need not be stated, it may be changed, 102 (p. 123, n. 1). 
 
 bonds payable at option of corporation, negotiable, 102, 103. 
 
 bonds payable at option of holder, negotiable, 102. 
 
 option must be in coupons also, 103. 
 
 general laws govern as to time, unless changed, 103, 
 PENNSYLVANIA. 
 
 constitution prohibits aid to private enteritises, 41, 358. 
 
 constitutional debt limit, 51, 358. 
 
 constitutional provisions relating to debt, 358. 
 
 constitution requires vote to incur debt, 67, 358, 
 
 classification of municipalities in, 297. 
 
 interest and usury laws in, 149. 
 
 prior publication of proposed legislation cannot be inquired into, 322. 
 
 repeal of local laws by implication not favored, 292. 
 
 statutes of, cannot be shown to have been improperly passed, 311. 
 PERFORMANCE. See Conditions ; Mandamus. 
 
 of public duties, compelled, 166. 
 PETITION, 
 
 when necessary before bonds issue, 65. 
 
 who mav sign, 65. 
 
 i
 
 INDEX. 639 
 
 Eeferences are to Sections. 
 
 TETITIO^— Continued. 
 
 when signatures to, may be revoked, G3 (p. 77, n. 2). 
 
 several petitions may be used, 65. 
 
 when a proxy may sign, 65. 
 
 how petition sliould be drawn, 65. 
 
 signatures attached on Sunday are void, p. 78, n. 5. 
 
 when the council are the judges of sufficiency, 05. 
 
 school board are not, 65. 
 
 majority of signers, when sufficient, 65. 
 
 council estojiped to show petition false, 211. 
 PHILADELPHIA, 
 
 acts applying to, alone, valid, 297. 
 PLEADINGS. See Defences. 
 
 excess of debt limit mast be pleaded, 63 (p. 72, n. 1), 162. 
 
 Federal courts, form of, in, p. 220, n. 3. 
 
 suit may be on coupons alone, 107, 161. 
 
 when not, 107, 161. 
 
 what pleadings should contain, 101 (p. 233, n. 7). 
 
 defendant may plead irregularities and want ut power. 124, 162, 
 191, 192. 
 
 von est factum, what may be shown under, p. 225, n. 1. 
 POWER OF LEGISLATURE. See Legislature. 
 POWER TO ISSUE BONDS, 
 
 when power express, few questions arise, 5 
 
 object must be a public one and act constitutional, 5. 
 
 bonds can be issued only for object expressed in statute, 5. 
 
 proceedings when power is express, 0. 
 
 State must have express power to issue bonds, 7. 
 
 what statute usually contains, when pow(>r is express, 6. 
 
 power to borrow autliorizes issue of negotiable Ixuids. S. 
 
 negotiable coupons, bonds may be; issued under iM>wer to borrow. 8. 
 
 Federal courts formerly so held. 9. 
 
 Federal courts now require express power to issue bond.s. 10 (p. 19, 
 n. 1), 265. 
 
 Brenham v. German Amer. Bank established l.it. r ,1,,, ulii, lo. 
 
 now followed in Federal courts, p. 19, n. 1. 
 
 the right now depends upon State courts. 11. 1:;. 
 POWER, IMPLIED. TO BOKROW AND ISSUE BONDS, 
 
 the power a dangerous one, It. 
 
 elementary writers opposed lo it. 14. 
 
 authorities are ilivided, 15. 
 
 weight of opinion that negotiable pajK-r may be issued. 10. 125. 
 
 cases in favor of such power. 10. 
 
 Pennsylvania, cases in. 17. 
 
 view of minority safe rule. 17. 
 
 Ohio, in favor of the power, 18. 
 
 Wisconsin, in favor of the power. 19. 
 
 Indiana, in favor of the power. 21. 
 
 New York, apparently in favor of tlie power, 23. 24.
 
 540 INDEX. 
 
 References are to Sections. 
 
 POWER, IMPLIED, TO BORROW AND ISSUE BOTSiDS— Continued. 
 other cases in favor of tlie power, 24. 
 cases adverse to such power, 20, 25, 33. 
 a safe rule to follow, 27. 
 distinction between issuing negotiable and non-negotiable paper 
 
 under the power, 28. 
 negotiable paper often held invalid, 28. 
 
 gitasi-corporations have no implied authority to issue bonds, 29, 30. 
 Federal courts opposed, 31. 
 
 summary of the law on implied power to issue bonds, 32. 
 bonds issued under implied authority depends upon State court 
 
 decisions, 32. 
 if i^ower to issue exceeded, excess only void if issue separable, 63, 
 
 101 (p. 122, n. 1). 
 no inlierent right to issue bonds, 125. 
 purchaser must know tlie law under which bonds are issued, 150, 
 
 154 (p. 212), 191. 
 power, purchaser must ascertain if municipality has, 191. 
 purchaser must examine all tlie law, 150, 151 (p. 212). 
 wlien statute does not designate who shall issue bonds, legislative 
 
 body intended, 85. 
 authority to any corporation authorizes a subsequently incorporated 
 
 one to issue, 263. 
 railroads, power to aid must be express, 263, 266. 
 when act contemplates payment by taxation bonds cannot be issued, 
 
 263. 
 power to borrow for current expense condemned, 14. 
 such expen.ses to be met by taxation, 14. 
 bonds up to limit may be issued, 266. 
 POWER, WANT OF. See Recitals ; Estoppel. 
 wliat the term means, 191. 
 
 irregularities or illegal use of power not properly within the term, 191. 
 always a good defence, 191 (p. 285, n. 1), 246. 
 bonds always void when no authority for their issue, 94 (p. 113, n. 
 
 2), 158, lo'l, 192, 206, 246. 
 what it arises from, 191. 
 no estoppel when there is no power, 192, 
 no ratification when there is no power, 247. 
 election if not held, when necessary, there is want of power, bonds 
 
 void, p. 268, n. 2, 200, 201, 245. 
 one case held different, 244. 
 
 when excess of power does not invalidate issue, 101 (p. 122, n, 1). 
 effect of recitals upon want of power, 192, 246 (p. 285, n. 1). 
 recitals cannot cure, 192, 201 (p. 268, n. 2). 
 Federal courts may hold they will cure, 200. 
 
 non-publication of ordinance, when want of power, 94 (p. 113, n. 2). 
 payment of interest no estoppel, when no power, 243. 
 PRECINCT, 
 
 may issue bonds, p. 1, n. 1.
 
 INDEX. 541 
 
 Eeferences are to Sections. 
 
 FRI^CmCT— Continued. 
 
 manner of issuing, p. 1., n. 1. 
 liow enforced, p. 1, n. 1. 
 PRESUMPTION, 
 
 bona fide holder presumed to have good title, 68, 120, 123, 163. 
 when presumption overcome, 120. lfl;5. 
 overdue coupons as notice, 121. 
 statutes are presumed to be constitutional. :524, .'325. 
 PRIOR JUDGMENT. See Judgment. 
 PROCEEDINGS TO ISSUE BONDS. See Electioxs ; Issue of Bonds ; 
 
 Sale of Bonds. 
 the statute must be strictly followed. 85. 
 
 proceedings of legislative body regulated by charter or .souk- law. IK), 
 ayes and nays, when to be taken and recorded, 90. 95. 
 election if necessary must be held, 63, 67, 201 (p. 268, n. 2). 
 bonds, valid, cannot issue without election, when necessary, 67, 201, 
 
 245 (p. 268, n. 5). 
 issue of bonds, a legislative act, 88. 
 subsequent statute, changing jxnver does not change mode of. H.'i 
 
 (p. 104, n. 1). 
 officers cannot issue bonds without autliority frmn <<.rjMinitii»n, 
 
 85, 104. 
 in some cities may, p. 103, n. 3. 
 officers to issue bonds, must be named, 80. 104. 
 must be officers of corporation, imless statute i)rovide8 <»tlien*'i.'«««, 
 
 104. 
 must be in office at date of .signing. 104 (p. 127. n. Co. 
 ordinance must be passed, wlien required, otlierwisc Inmds void, ^^l. 
 what ordinance should proviile for. 89. 
 need not refer to autliority under whidi enacted, f^O. 
 effect if wrong act referred to in ordinance. 89. 
 resolution may be used, unless ordinance re<]uired, W<. W. 95. 
 when ordinance for, may be passe<l. S9. 90-02. 
 
 prior conditions need not be recited in or<linan«-e <>r resolution, 89. 
 what officers may pa.ss on performance of conditions. 2<i9. 
 effect of failure to sign ordinance, 95. 
 how ordinance providing for. may be prove<l. 95. 
 records of, should contain fidl details, 95. 
 what officers may make recitals, 211. 
 bonds void if no power. 191. 
 formal parts of bon<ls, 96. 109. 
 
 bonds not void if power exceeded, 101 (p. 122. n. 1). 
 estoppel by, proceedings to issue, 211. 
 PRIVATE PURPOSE, 
 
 bonds void, if issued for, 40. 
 
 if apparently for public are good, 40 (p. 47). 217. 220. 
 PROPERTY. See T.vxpayers. 
 
 of citizens cannot be taken, except iipm ju.st conij-'i-'t i,.n. .13. 
 debts are jtaid by taxes from, 33.
 
 542 INDEX. 
 
 References are to Sections. 
 
 PROOF, 
 
 how incorporation proved, 7. 
 
 seal, how proved, 106. 
 
 statutes not conclusive proof of jiroper passage, 321, 322. 
 
 when seal jyri ma facie evidence, lOG. 
 
 bona fide holder presumed to have good title, 68, 120, 164. 
 
 bona fide holder, when put to proof, 120, 163. 
 
 effect of overdue coupons as notice, 121. 
 
 mala fides must be shown to affect innocent holder, 123. 
 PUBLIC WORKS. See Public Purpose. 
 
 what are, 35-37. 
 PUBLIC BUILDINGS, 
 
 bonds may be issued for, 35-37. 
 PUBLICATION, 
 
 of election notices, 78. 
 
 improper, does not affect bona fide holder, 76, 77 (p. 92, n. 7). 
 
 of ordinance, bonds void, if necessary, 94 (p. 113, n. 2). 
 
 of statutes, bonds void, if required, 320. 
 
 not necessary if not required by charter or statute, 94. 
 
 who may publish ordinances, 94. 
 
 in what papers, 94. 
 
 ordinance does not go into effect until published, 94. 
 
 number of times necessar}', 94. 
 
 Sundays excluded in count, 94. 
 PURCHASER. See Bona Fide Holder. 
 
 must take notice of officers' authority, 44. 
 
 must take risk of signatures, 44 (p. 129, n.). 
 
 must take notice of debt limitation, 54. 
 
 when he must see that proceeds are properly applied, 59, 123. 
 
 of coupons, referring to bonds, bound by recitals in latter, 109. 
 
 not bound by judgment, uidess a party to it, 119 a. 
 
 bound by judgment or injunction if he jjurchases after ma- 
 turity, 119 a. 
 
 held to greater degi'ee of care when debt limit constitutional, 
 221. 225. 
 
 held to less degree when limit statutory, 221. 
 
 must know tlie law under which bonds are issued, 150, 191. 
 
 must examine all authoi'ity, 150, 191. 
 
 must examine records, 151, 240. 
 
 if bonds contain proper recitals, need not examine records, 241. 
 
 not bound to look for unusual matter, 241. 
 
 of void bonds, when he may sue to recover on (see Void Bonds), 
 102, 235-237. 
 
 of void unconstitutional bonds, usually no recovery on, 238, 239. 
 
 equity will not assist, 239. 
 
 when relief can be had in etpiity, 236, 238, 239. 
 
 may obtain relief from Legislature (see Curative Acts) , 256-260. 
 PURPOSE FOR WHICH BONDS MAY ISSUE, 
 
 must be for a public purpose, 33.
 
 INDEX. 543 
 
 References are to Sections. 
 
 PURPOSE FOR WHICH BONDS MAY ISfiU E—Cont inued. 
 
 what are public purposes, 35, 30, 37, 38. 
 
 what have been held to be sucli. 37. 
 
 authoi*'s definition of a public ])ur])ose, 3G. 
 
 Chief Justice Black's in Sliarpless v. IMayor. etc.. 35. 
 
 whether public or private, a constitutional (luestion, 34. 
 
 question governed by public policy and political economy. 34. 
 35. 
 
 "internal improvement" inchules toll-brid;,'*'. water-wurks, grist- 
 mill, 35. 
 
 does not include buildings, 35. 
 
 schoolhouse is a " public improvement" p. 42. n. 1. 
 
 railroads and canals are ])ublic purposes, 38, 267. 
 
 private purpose, bonds cannot be issued for. 40. 
 
 bonds issued for private purpose void, 40. 
 
 bonds issued for private purpose, but apparently for a ]iul)lic, are 
 valid, when, 40 (p. 47), 217, 220. 
 
 constitutional prohibitions against aid to railroads and i)riva(e en- 
 terprises, 41, 2G2, 327-370. 
 
 piirposes for which bonds may be compelled to be issued, 42. 
 
 cannot be compelled for local purjwses, 43. 
 
 cannot be compelled to aid railroads, 43, 206. 
 
 subsequent act cannot cure defect if i)uriK)se purely lix-al unless 
 municipality consent, 259. 
 
 unconstitutional purpose, cannot be cured. 257. 
 
 unconstitutional pin])ose cannot be ratified, 247 (j). 344. n. 1). 
 
 unconstitutional purpose can always be shown. 1!)1. 
 
 bonds issued for unlawful jiurijose contaiiiing no recitals arc void, 
 122, 217 (p. 299, n. 1). 
 
 bonds issued to take up invalid indebtedness wlien good, 127-129 
 (p. 167, n. 2). 
 
 illegal purpose, Avhen it cannot be .set up as a defence. L'l 7-220. 
 
 purpose need not be recited in bond. 217. 
 
 must be recited if statute recpiires it, 217. 
 
 in latter case if no recital, then bonds may be .shown to b.- in- 
 valid. 217 (p. 294. n. 1). 
 
 if statute recited purchaser jtrotected. 218, 219. 
 
 if ordinance and statute recited, bonds good, though ordinanro 
 illegal, 218, 219. 
 
 when purchaser need not look at ordinance. 218, 210. 
 
 when purchaser need not look beyond n-cital of puri>(>M\ 21>*, 
 219. 
 
 if ordinance for wrong i)iun)ose. j>urcha.sor need not look at if act 
 also recited, 219. 
 
 doctrine of recital of purpose. 217-220. 
 
 author's comments as to r(>cital of purpo.se. 220. 
 
 doctrine in Hackett v. Ottawa and Kisley v. Vilbg.' oC Howell 
 discussed, 219, 220.
 
 544 
 
 INDEX. 
 Keflereiices are to Sections. 
 
 Q. 
 
 QUALIFICATION OF VOTERS. 80, 81. 
 QUASI-MUNICIPAL CORPORATIONS, 
 
 distinguisliing features of, from municipal corporations, 3. 
 
 counties, school districts and towns are usually regarded as, 2, 3. 
 
 State decisions must be consulted to ascertain what are, 3. 
 
 have no authority except that conferred by statute, 3. 
 
 in issue of bonds, same i)rinciples apply to all corporations, 3. 
 
 have no implied authority to issue bonds, 3, 29, 30 (p. 35, n. 2). 
 QUORUai OF LEGISLATIVE BODY, 
 
 may pass ordinance or resolution, 90. 
 
 usually more than a, made necessary, 90. 
 
 RAILROADS, 
 
 are public purposes, 38, 267. 
 
 not in Michigan, 267. 
 
 municipality cannot be compelled to aid, 43, 266. 
 
 constitutional prohibition against aiding, 262. 
 
 corporate existence of a road cannot be attacked collaterally, 270. 
 
 its illegal incorporation cannot be set up as a defence, 270. 
 
 to work a forfeiture of cliarter. State must act, 270. 
 
 bona fide liolder of bonds need not investigate legality of incorpo- 
 ration, 270. 
 
 when bonds void if issued to consolidated company, 154. 
 RAILROAD AID BONDS. See Railroads ; Election ; Vote. 
 
 their purpose, 261. 
 
 aid to railroads usually now surrounded with conditions, 261. 
 
 vote of people usually now necessary, 261. 
 
 summary of State constitutions respecting aid to railroads, 263. 
 
 when the constitution forbids municipalities to grant aid, it acta 
 on all statutes, and prohibits further aid, except vested rights, 
 262. 
 
 when the prohibition is directed to the Legislature, it can pass no 
 further acts authorizing aid, but municipalities may act under 
 prior laws, 262. 
 
 power to iasue bonds to aid railroads must be express, 263. 
 
 or necessary to carry out the object of the act, 263. 
 
 when statute giving aid authorizes levy of tax, bonds cannot issue, 
 263. 
 
 authority to subscribe for stock " as fully as an individual " author- 
 izes issue of bonds, 263. 
 
 authority to any municipality to issue bonds applies to subse- 
 quently incorporated municipalities, ^63. 
 
 authority to issue bonds must be express, or there must be express 
 power to donate aid, subscribe for stock or to borrow in order to 
 aid, 263.
 
 INDEX. 645 
 
 Beferences are to Sections. 
 
 EAILROAD AID BO'N'Dfi—Contimied. 
 
 early Federal cases held implied authority sufKcient to authorize 
 
 issue of bonds, 264. 
 Federal courts now liold power to issue must be exjiress, 20"). 
 pow'er to aid not exliausted bj' one subscription, 2GG. 
 I)ower to aid includes power to sul)scribe for stock and issue bonds, 
 
 or to denote bonds as act may provide. 266. 
 power to aid does not authorize endorsement or guarantiee of lM)nd.s, 
 
 266. 
 aid cannot be compelled, 266. 
 nor can a curative act be passed unless people or coriwration assent, 
 
 p. 371, n. 5. 
 power to aid a railroad, where found, 268. 
 if no power, bonds are void in all hands, 269. 
 conditions may be imposed by Lej^islature before aid given. 26.S. 
 Legislature may imjxjse additional conditions, besides tlioso im- 
 posed by constitution, 268. 
 road to be aided usually named, need not l)e if routt^ de.scribcd, 
 
 269, 274. 
 road to be aided must be designated with certainty. 269. 
 road need not be named in notice of election if route be descriln^il. 
 
 269. 
 people cannot delegate to commissioners whicli f>ne of two roads 
 
 shall be aided, p. 373, n. 3. 
 when two or more roads may be aided, 270. 
 if maximum amount of aid not given at first. furUu-raid may Ik? 
 
 extended, 270. 
 authority to issue l)onds midertwo acts, bonds may Ix- issued uiidfr 
 
 both, 270. 
 a mistake in name of the company in the bonds immaterial. 269. 
 donation of bonds, statute autliorizing. is vali<I. 270. 
 payment of interest liel<l to estop defence tl\at road was not locati-d, 
 
 243. 
 payment of interest held to estop defence of irregularitii-s. p. ;M2. 
 
 n. 4. 
 Conditions, 
 where to be found. 271. 
 when imposed by constitvition must he strictly follow.'d. l)ond v.iid 
 
 if not, 271. 
 what conditions are usually imposed. 271. 
 power to determine wlietli.r conditions an- pcrfornuHl ran not Iw 
 
 delegated, 271. 
 when tribunal not designated in statute to determine, tlien UmW 
 
 authorized to Issue the l)onds intended. 271. 
 time of completion of roail a condition. 272. 
 unless road completed within time, bonds will not issue. 272. 
 unless road completed within time, deliverj- of bonds restrain«>d. 
 
 272. 
 whether the time of completion is of the essence of contract, 272. 
 35
 
 f>-^C> INDEX. 
 
 Eeferenccs are to Sections. 
 
 RAILROAD AID BONDS— C'o»//»»r,7. 
 
 bonds are void if road not completed, not so if in liand.s of bonajide 
 holder, 273. 
 
 recitals in bonds estop defence, 272. 
 
 between the municipal corporation and the company the condition 
 is strictly enforced, 272. 
 
 if bonds are delivered and road not completed taxpayer may com- 
 pel a return, 272. 
 
 municipality may estop itself as against company to plead non- 
 completion, 272. 
 
 Legislature may extend the time, 272. 
 
 completion of road, a condition, 273. 
 
 when a condition, bonds cannot issue until, 273. 
 
 if before completion constitution prohibit aid, bonds cannot issue, 
 273. 
 
 if they do, such bonds void, though held by bonajide holders, 273. 
 
 bonds may issue as road is built, 273. 
 
 when road is completed, 273. 
 
 location of road and termini, 274. 
 
 if road not located, issue of bonds restrained by any taxpayer, 274. 
 
 if road not located, bonds maybe compelled to be returned, 274. 
 
 what is a sufficient compliance with this condition, 274. 
 
 if termini fixed location need not be described, 274. 
 
 termini, when sufficient, 274. 
 
 a substantial compliance as to location and termini sufficient, 274. 
 
 bonds held valid, although route not complete, 274. 
 
 bonds held valid, although vote necessary be after location, and 
 lield before, 274. 
 
 prior statutes authorizing aid must be reformed to comply A\ith 
 amended constitution, 277 (p. 387, n. 5). 
 
 waiver of conditions, 275. 
 
 condition as to time, location, etc., between company and munici- 
 pality cannot be waived, 27o. 
 
 condition imposed by vote, cannot be waived, 275, 27C. 
 
 if conditions not performed, issue of bonds restrained, 275. 
 
 bonds held void when condition was waived, 275. 
 
 mandamus will not issue to compel delivery of bonds, if conditions 
 not performed, 160, 274, 275. 
 
 people cannot themselves waive conditions by subsequent vote, 
 276. 
 
 court cannot without authoritj' re-submit proposition ^\'aiving con- 
 dition, p. 384, n. 3. 
 
 Legislature may waive, or authorize officers to do so, unless consti- 
 tution prohibits, 276. 
 
 if municipality or officers impose the conditions, they may waive 
 tliem, 276. 
 
 municipality may waive conditions submitted to people, if law did 
 not require them to be submitted, 276. 
 
 courts have held conditions may be waived, 276.
 
 INDEX. ',A7 
 
 References are to Sections. 
 
 EAILROAD AID BO^DS— Continued. 
 
 condition that road bo built tlirough nmnicipal corpoiat ioii issnin.^ 
 the bonds, cannot bo waived, 27G. 
 Subscription, 277. 
 
 affirmation vote not a subscription, 277. 
 
 affirmation vote may be made so by statute, 278. 
 
 until subscription made right to do so is executory and may b<> 
 repealed, 277. 
 
 before actual subscription constitutional amendment may ]>rfv<-iiL 
 subscription, 277. 
 
 Illinois' constitutional amendment excepted subscriptions and 
 donations, 277 (p. 386, n. 2). 
 
 constitutional amendment jnohibiting sul)si-rii)tiun if din-ctcil l<» 
 Legislature does not affect old .statutes, 277. 
 
 if directed to municipality it does, 277. 
 
 if subscription made before adoption of constitutional anicndmint 
 bonds may be injured, 277. 
 
 proposition submitted to voters need not name the ri)a<l if muti; 
 indicated, 274. 
 
 if right to subscription in ciiarter of railroad company it is a ton- 
 tract, and cannot be impaired, 277. 
 
 if right is in general or special law it may, 277. 
 
 before subscription made or rights ac(piire(l inuniciiKility may 
 rescind ordinance or resolution providing for aid, 277. 
 
 when subscription is complete, 278. 
 
 actual manual signing on books of company not nece.s.s{iry, 278. 
 
 a resolution or ordinance may act as a subscrij)tion, 278. 
 
 vote may act as a subscription, 278. 
 
 order of court may act as a subscription. 278. 
 
 subscription wIkmi made becomes a contract, 278. 
 
 mandamus will then issue to compel delivery c»f bonds, 278. 
 
 consolidated road not entitled to aid voted to one <if tlic old com- 
 panies, 279. 
 
 if old company had right to consolidate, tlien new comiKiiiy en- 
 titled to aid, 279. 
 
 bonds void if no jiower to consolidate, 279. 
 
 change of name of company does not afft'ct its right to ai<l. 279. 
 
 if no power to consolidate, issue of l)onds to new comiNiny will Ix' 
 restrained, 279. 
 
 new company must operate on old eompany's lines. 27!t. 
 
 old comiKiny may consolidate with a foreign com|)any, 271». 
 Donation, 
 
 authority to subscribe and issue bonds does not authctrize «l(>iiation 
 of bonds, 280. 
 
 if lx)nds are donated, when act authorizes sul»cription and Kt«»ck. 
 they are void if donated. 280. 
 
 such bonds are valid in hands of Umafulc holders. 281. 
 
 such bonds nuist contain recitals or the municiiwlity 1m- ..tlierwi-e 
 estopped, 281, 282.
 
 648 INDEX. 
 
 References are to Cections. 
 
 RAILROAD AID BOt^DS— Continued 
 
 whether bonds are sold and prcK-eeds paid to railroad company or 
 the bonds exchanged for stoclc immaterial, 281. 
 
 except in New York, where bonds if exchanged lield invalid, 281 
 (p. aai, n. 2). 
 
 railroad cannot agree to favor municiixxlit}^ beyond its other stock- 
 holders, 277. 
 
 rights of bona fide holders of 11. R. Aid Bonds. See Bona Fide 
 Holders. 
 
 if the bonds contain recitals made by authorized officers bonds are 
 valid although conditions are not performed, 193, 216, 282. 
 
 if the condition is imposed by constitution or statute and Is impera- 
 tive, then bonds void, 282. 
 
 if conditions, though imposed by constitution, not performed, bonds 
 may still be valid, 282. 
 
 all acts im}K>sing conditions must be recited or bonds void, 282. 
 
 if bonds do not contain recitals, still valid if record shows prior 
 determination, 240, 282. 
 
 rule as to effect of affidavits in New York, 282. 
 
 in New Jersey recitals not necessary, 282. 
 
 bonds must also be good in hands of, if municipal coiTJOration 
 estopped by ratification, 242, 252, 282 (see Ratification). 
 RATIFICATION, 
 
 bonds issued at illegal meeting may be ratified, p. 109, n. 5. 
 
 when constitution requires public sanction, there can be no ratifi- 
 cation without such sanction, 246. 
 Estoppel by, 
 
 if interest paid, irregularities »n issue of bonds ratified, 243. 
 
 payment of interest estops showing election was ordered by wrong 
 officers, 243 (p. 342, n. 4). 
 
 payment of interest held to estop showing notice of election im- 
 properly given, 243. 
 
 payment of interest assures purchaser that conditions precedent 
 were performed, p. 342, n. 4. 
 
 payment of interest assures purcliaser issue not excessive, 243. 
 
 payment of interest protects jjurchaser though excessive amount 
 stated in election notice, 243. 
 
 payment of interest assures purchaser railroad was located, 243. 
 
 payment of interest pi'otects purchaser though bonds illegally 
 issued, 243 (p. 342, n. 4). 
 
 payment of interest will not protect purchaser if bonds illegally 
 issued, 243 (p. 342, n. 4). 
 
 jiayment of interest will not protect purchaser if there be want of 
 power, 243. 
 
 one payment not sufficient, 243. 
 Laehes, 
 
 if taxpayer permit corporation to issue bonds or pay interest he Is 
 estopped, 246 (p. 340, n. 1), 274. 
 
 taxpayer must act promptly, 243, 246, 274.
 
 INDEX. 
 
 Befarences are to Sections. 
 RATIFICATION— Contin ued. 
 
 municipal corporation estopped tosliow irregularities in election. 71. 
 Metaining Stock, 
 
 no vote, no recitals in bond, retention of stock lield a defence. 
 
 244 (1). 338, n. 1). 
 opposite doctrine, the better law, 245 (p. 309, n. 1 ). 
 voting on and retaining stock estops defence of irregularities, ji. 
 
 343, n. 
 unauthorized acts of officers may be ratified by legi.slative body of 
 
 municipal corporation, 247, n. 
 the i-atification need not be express, recognition niti/ics. 247. 
 municipality can only ratify such acts as il lias jx)\ver iLs<-lf to tin. 
 
 247 (p. 344, n. 1). 
 Legislature may authorize ratificatiou, if inuuici]jaiity cannot, 247. 
 principle upon which these estopjjels rest. 248. 
 only good in favor of bona fide holder, 248. 
 READINGS, 
 
 of ordinances, at different meetings, 90, 92. 
 of bills in Legislature, unless read, iict void, 318. 
 RECORDS, 
 
 of body or officers issuing (he bonds, 
 of election, what to contain, N2. 
 legislative body, wliat should contaiTi. 95. 
 
 court records relating to issue cannot be shown to l)e false to pre- 
 judice of innocent holder of bonds, 241 <p. 334, n. 5). 
 purchaser not bound by hidden nuitter of record, 241. 
 purchaser of bonds containing ]>roj>er recitals is not bound to cmi- 
 
 sult record, 241. 
 municipal corporation n^ay be <*stf)pped by ils, 71. 210. 
 if records show conditions ]»recedent liave been ])asseil njxtn. lor- 
 
 poration is estopjied. 240. 2H2. 
 records cannot be contradicted to ])rejudico of innocent hoMer nf 
 
 bonds, 240. 
 cannot bo shown to be false to i)rejudi(<> <>f innocent lioliler <.f 
 
 bonds, 241. 
 RECITALS, ESTOPPEL BY. See Estoppel; Bona Kidk Holheils. 
 are binding only as to matters of fact, not as to tlK« l;i\v. ISKl. 
 bona fide holders only pr()tecte<l by. 193. 2N2. 
 authority to make, implie.l. 209. 210. 211. 212. 213. 214. 21.V 
 in bonds issued in excess of debt liiuitations. -Vl. ftl. 221 rt itrrj. 
 in bonds issued to take uj. void del.t. 127 (p. 107. n. 2). I2H. luM». 
 if there be power, the recitals will cure irregulariti«*«, 192. 193. 20;]. 
 
 272. 
 an extreme case, 203, 
 bonds must be in liands of Imna fide holders. . itherwi.se nTilab ar« 
 
 of no avail, 193, 282. 
 enabling act, sufficient recital when. 196. 
 all enabling acts and constitution when it controls inn-» !-■ r... n. d, 
 
 197, 198, 282.
 
 550 INDEX. 
 
 References are to Sections. 
 
 RECITALS, ESTOPPEL BY— Coiifinued. 
 
 effect of recital of enaliling act only in last case, 198, 282. 
 
 effect of, when no vote taken, although required, 67, 200, 201 (p. 
 
 268, n. 1). 
 New York docti'ine of recitals is not so liberal, 204. 
 Fcdei'al and State courts opposed to New York position, 205. 
 no recitals, then corporation may be estopped by its records. See 
 
 Records. 
 effect of, when election held by wrong officers, 68 (p. 53, n. 3, 4). 
 effect of an estoppel. 203 ; see 193-210. 
 recitals in raib-oad aid bonds, 282. 
 irregularities in election, effect of recitals, 68 (p. 83, n. 384), 71, 77 
 
 (p. 92. n. 7), 80, 158. 
 illegal or excessive issue, recitals protect, when, 158. 
 Federal courts more liberal than State as to effect of, 68, 179, 200. 
 mis-recital (see Wrong Recital, 216), effect of, p. 289, n. 1. 
 vote, when insufficient, effect of, 80. 
 vote if none, recitals do not cure, 201 (p. 268, n. 2). 
 purchaser bound by what recitals disclose, 150, 153, 154. 
 voters, council estopped to show petition improperly signed bj-, 211. 
 when purchaser may rely on, 150, 158. 194. 
 
 wlien purcliaser cannot rely on, must examine records, 151, 225. 
 statute, recitals must refer to enabling statute, result of if not, p. 
 
 104, n. 1. 
 ordinances, unless publislied, bond void, 94 (p. 113, n. 2). 
 resolution council estopped to show false, 211. 
 Ordinance, Recital of, 
 recital of, cannot curtail right of holder under statute. 134 (pp. 182-3). 
 purpose of issue of bonds, effect of recital of, 122, 127, 217, 218, 219, 
 
 220. 
 if purpose recited, bonds valid, though issued for unlawful purpose, 
 
 217, 220. 
 author's conclusions as to recitals of purpose, 220. 
 principle of, 193. 
 recital must be made by officei*s of municipality or those named in 
 
 act, 214. 
 no recital, no estoppel, 194, 195 (p. 262, n. 1), 240. 
 exception, 194 (p. 261, n. 1). 
 may be made by special officers, p. 287, n. 3. 
 surrender of bonds, recitals cm-e defects, 158. 
 who may make recitals, 209. 210, 211, 213, 214. 
 may be by officers autliorized to execute the bonds, 211, 213, 214. 
 author's conclusions as to who may make recitals, 215. 
 what officers may adjudicate whether conditions were i)erfomied, 
 
 209, 210. 
 when officers not authorized to adjudicate, 212. 
 renewal and funding bonds, effects of recital in, 127 (p. 167, u. 2), 
 
 128, 129. 
 registered bonds, 115, 131.
 
 INDEX. 5'>1 
 
 References are to Sections. 
 
 RECITALS, ESTOPPEL BY— Continued. 
 
 registration of bonds, recitals in, 130, 131. 
 
 unauthorized recitals are no estopj^el, 212 (p, 285, n. 1). 
 
 power to make, cannot be delegated to any but otHcei-s of (•(>r]M)r.i- 
 tion, 214. 
 
 power, if no power, recitals cannot euro. 101. 192 (p. 285, n. 1 ». 
 
 illegal use of power, or invgularitics, recitals cure, 191, 192. 
 
 unconstitutional debt, not cured by recitals, 129. 
 
 exception, when, Chaffee Co. v. Potter oidy ca.se, 230. 231. 
 
 unconstitutional if act recited be, bonds valid if there be otlier 
 authority, 216. 
 
 sinking and .special fund (see these subjects), 136. 137. 13H. 
 
 recitals cure non-provision when and when not, 138. 207. 208. 
 
 Avrong act, recital of, its effect, 216. 
 
 wrong act, bonds valid if there be other jMjwcr. 21<>. 
 
 wTong act, conditions of non-reciteil act must be jierfonued, 216, 
 REGISTERED BONDS. 
 
 are not negotiable, 115. 
 
 object of registering. 115. 
 
 how transferred, 115. 
 
 rights of holders of, 115 (p. 150. n. 1). 
 
 effect of registering negotiable bonds, 115. 
 
 effect of registering negotiable bonds on coujwns. 115. 
 
 same principles apply to the issue of registered Ijomls as to ordinarj' 
 negotiable ones, 115. 
 
 equities cannot be set up against transferree, 131. 
 REGISTRATION OF BONDS, 
 
 when void if not registered, 130. 
 
 object of. 130. 
 
 M-hen registration imperative, bonds vdid \inless regi.stered. 1.30. 
 
 certificate of officer conclu.sive a.s to what he nm.st jki.ss on, 1.30. 
 131, 281, 
 
 to be conclusive statute must so state, 131, 281. 
 
 effect if not registered, 130, 131. 
 
 if not registered, but certified as registered, they an- grxxl. 131, 
 
 as against a transferree. equities cannot Ih> .set up, 131. 
 REGULARITY, 
 
 of enactment of statutes, in what Stjites <.p.-ii to incpiiry. 323, 
 
 not open to iii(|niry in llie others, 323. 
 
 presumed, until contrary shown, 324. 
 REMEDIES. Si:EPLE.\r)i.v<;s; Statitk. ok Limit.vtio.ns. 
 
 action to compel is.sue and <lelivery. 160. 
 
 mandamus proper remedy. 160. 
 
 mandanuis. when it will and will not lie, 160. 
 
 bonds and coujwns. actions on, 161. 177. 
 
 what pleadings should contain. 162. 
 
 forn\ of. in Federal courts, p. 220. n. 3. 
 
 creditor entitle<l to no jjarticular fonn of. 18ft, 
 
 creditor entitled to an efl^cient remedy. 189,
 
 552 INDEX. 
 
 References are to Sections. 
 
 REMEDIES— Continued. 
 
 coupon, action may be on it alone, 107, 161, 177. 
 
 equity will not aid bondholder to enforce i^ayment, 171. 
 
 against dissolved, divided or annexed coriwration, 173, 174, 175, 176. 
 
 legislative control over remedies, 185, 189. 
 
 inferior, cannot be substituted, 186. 
 
 when creditor without a remedy, 190. 
 
 creditor entitled to all security, 134, 13G, 167, 185, 186, 187, 188, 189. 
 
 proof necessary tor prima facie judgment, 164. 
 
 special or sinking fund cannot be diverted or destroyed, 185, 186, 
 187. 
 
 money had and received, when it lies if bonds invalid, 103, 235, 
 236, 237. 
 
 proceedings to restrain issue, 155. 
 
 who may bring, style of action, 63, 67, 155, 156, 157. 
 
 injunction, proceedings by, 155, 156, 157. 
 
 certiorari, proceedings by, 155. 
 
 all State courts afford relief, 158. 
 
 proceedings in Federal courts, 157. 
 
 proceedings to restrain levy and collection of tax, 159. 
 
 presumption, what defendant may show, 163. 
 
 State, remedies against, cannot be sued, 172 (p. 237, n. 1). 
 RENEWAL AND FUNDING BONDS, 
 
 when they may be issued ; what are, 125. 
 
 authority must be either express, or general power to borrow, 125, 
 126. 
 
 no implied authority to renew, suc^li issue void, 125. 
 
 when additional bonds may be issued, p. 165, n. 2, 126. 
 
 do not increase debt, 59, 128 (p. 171, n. 4). 
 
 when purchaser bound to see their proceeds properly applied, 59, 123. 
 
 new bonds valid, old void, 127, 128, 129. 
 
 must contain recitals, 127 (p. 167. n. 2), 128, 129. 
 
 not necessary in New Jersly, (194, p. 261, n. 1). 
 
 should be issued before old ones cancelled, 129. 
 
 time of their issue depends upon the statute, 129. 
 
 debt void by constitution, cannot be funded, 129. 
 
 exception, Chaffee Co. v. Potter, 129, 230. 
 
 purchaser bovind to examine, when, 151. 
 
 purchaser not bound by conditions not of record, 151, 152. 
 
 municipality estopped by its records, 211. 
 REPEAL BY IMPLICATION, 291. 
 
 see Statutes, Exactment of. 
 REPEAL, 
 
 of charter, 306. 
 
 of inunicipal corporation, 173. 
 RES ADJUDICATA. See Judgments. 
 RESOLUTION. See Proceedings to Issue Bonds ; Ordinances. 
 
 resolution or ordinance necessary to provide for issue, 86, 87. 
 
 when, may be used instead of ordinance, 88, 89.
 
 INDKX. 5o3 
 
 References are to Sections. 
 
 RESOLUTION— C'ouftjutcd. 
 
 usually not signed by mayor or published. ()."). 
 
 purchaser bound to examine, bound by wlmt it discloses, 150. 
 
 passage of, a legislative act, 88. 
 
 how enacted, 90. 
 
 what, should contain, 89. 
 
 rescission of, may be before rights ac(iuir(>d, 277. 
 RETROSPECTIVE ACT, 
 
 statute validating bonds, not unconstitutional, 259. 
 RHODE ISLAND, 
 
 interest and usury laws in, 149. 
 
 constitutional provisions relating to incurring of debt in, 359. 
 ROADS AND HIGHWAYS, 
 
 are public purposes, 35, 37. 
 
 municipalities may be compelled to i.s.suc bonds for, 42. 
 
 s. 
 
 SALE OF BONDS, 
 
 may be sold at private sale, unless prohibited, 141. 
 
 commission, municipal coi'poration may pay, M:J (p. 192, ii. 2). 
 
 in New York it must be to a broker, 143. 
 
 commission cannot be paid, if sale at par, exceptions, 143 (p. 193). 
 
 contract of sale, when comi)U'te, 141. 
 
 transferrer, what he warrants, 113. 
 
 that the signatures are genuine, tliat the instrument is what it pur- 
 ports to be, tliat it is his and that it is not usurious, 113, 114. 
 
 in New York, does not wan-ant it is not usurious, 113. 
 
 transferrer does not warrant the validity of the pajn-r. 114. 
 
 agent must di.sclo.se principal, or be himself liable, 1 1:!. 
 
 seller is liable for bad faith, 114. 
 
 vendee must olTer to return bonds before suit, p. 149, n. 2. 
 
 when purchaser bound to follow proceeds, 122. 
 
 delivery, who may make, oflicfr nnist l)e autliorizcd. 141. 
 
 there mu.st be an autliorized delivery. 144 (p. 193. n. 2). 
 
 when corporation estopped l)y course of dealing to <leny authority, 
 144. 
 
 rights of bidders, may recover dejxtsit. or loss, 141. 
 
 corporation not bound until bid accepted, 141. 
 
 mandamus will lie to com])el deliver)*, ICO. 
 
 sale regarded as sale of chattels, 142, 145, 148. 
 
 sale also regarded as a loan, 142. 
 
 par, sale may be below, luiless prohibiti-d. 142, 1 IH, 1 1<. 
 
 par, sale below, does not affect hi>u(i Jhir jiojdcrs. 147. M*<. 
 
 par, sale below, if u.surious. will alTect bonis. 14H (p. 2<h». n. 1). 
 
 see UsuKY. 
 
 usual mode of selling bonds, 141. 
 
 purcliaser bound to know the law. 150. 
 
 purchaser bound to investigate records, 151. 
 
 purchaser not bound by conditions not of rcconl, 151. 152.
 
 554 INDEX. 
 
 References are to Sections. 
 
 SCHOOL DISTRICT. See School Boards: Townships. 
 
 usually regarded as a g»as/-niunicipal corporation, 2, 3. 
 
 regarded as a municipal corporation proper in Iowa, p. 9, n. 1. 
 
 term, when used in this work to be included in term " municipal 
 corporation," 2. 
 
 how incorporated, their purpose, 3. 
 
 territory over which board has jurisdiction, 3 (p. 11; 
 
 power to issue negotiable pajier must be express, 3. 
 
 where power to be found, 3. 
 
 express power to borrow authorizes the issue of bonds, 3. 
 
 incorporation cannot be attacked collaterally, 3. 
 
 how business usually conducted, 3. 
 
 majority of those voting suiiicient, 3 (p. 9, n. 3). 
 
 what number necessary in Nebraska, 3. 
 
 what number sufficient in New York, p. 9, n. 3. 
 
 females may vote if statute permit, 3. 
 
 meetings, what business may be transacted at, 3. 
 
 "who may call meetings, 3. 
 
 notice of meetings, how to be given, what to contain, 3. 
 
 meeting must be held at place stated, 3. 
 
 meeting must be held at time stated, 3. 
 
 same principles of law apply to school districts as apply to other 
 municipal corporations, 
 
 how mone}' is obtained, 3. 
 
 boards of, not judge of sufficiency of petition, 65. 
 
 election relative to bond issue, proposition, what to contain, 73. 
 
 authority to issue bonds for '• any municipal improvement " in- 
 cludes school-houses, j). 42, n. 1. 
 
 bonds issued by school board binds municipality, p. 289, n. 1. 
 
 money paid for void school bonds may be recovered, p. 324, n. 2. 
 
 special laws, school districts not within prohibition in Kansas, 302. 
 
 in Nebraska, school district is included, 302. 
 SEAL, 
 
 any seal affixed by authority is good, 5. 
 
 seal may be affixed without special authority, 89. 
 
 how seal proved, lOG. 
 
 absence of seal has been held to render bonds void, 105 (23. 132, n. 4). 
 
 seal not always necessary, 105. 
 
 Avhen seal not necessary, 105 (p. 132, n. 3, 4). 
 
 equity will alTord relief when no seal, 105 (p. 133, n. 3). 
 SEWERS, 
 
 are public purposes, 35-37. 
 
 municipality inay be Compelled to issue bonds for, 42. 
 SIGNATURE, SIGNING, 
 
 all persons must take risk of genuineness of signature of public 
 officials, 44. 
 
 failure of officers to sign proceedings of legislative body will not 
 invalidate ordinance, 95. 
 
 what officers may sign bonds, 104.
 
 INDEX. 5o.J 
 
 References are to Sections. 
 
 SIGNATURE, SIGNING— ('o« ?/»»,,/. 
 
 must be officers of the coriwration at the timo of cxccutioii, 1"t ••. 
 127, n. 6). 
 
 what is a sufficient signing, 105. 
 
 facsimile signature held sufficient. 10."). 
 
 signing in blank does not invalidate bonds in hamls of humt J'.tlc 
 holders, lO.l. 
 
 signing by a majority' of board sufficient. 10."). 
 
 signing of name of oilicer by anotlier, wlien sufficient, 10."». 
 
 presiding officer of board should sign. lOo. 
 
 countersigning, but a ministerial act, immaterial. 101. 
 
 countersigning may be compelled, no discretion but to sign, 10 }. 
 
 facsimile on coupon sufficient, 107. 
 SINKING FUND, 
 
 bonds purcliased for a. not a debt, 59. 
 
 must be provided in several States, 137. 
 
 if not, then bonds void, 137. 
 
 constitution or statute must make them void if no fund, 137, 
 
 recitals in such case will not cure defect. 137, 13S. l.")0, 
 
 if bonds not void in ca.se of failure, the recitals cure defect. VV*. 
 
 Avhen creditor entitled to. cannot be diverted or destroyed, 185. 180, 
 187, 
 SOUTH CAROLINA, 
 
 constitutional debt limitations, 51. 3G0. 
 
 females may vote to issue bonds. 81. 
 
 interest and usury laws in, 11.9. 
 
 statute may be shown to have been improperly pas.sed, 823. 
 SOUTH DAKOTA, 
 
 interest and usury laws in, 119. 
 
 constitutional provisions relating to incurring dcbl. :W\. 
 SPECIAL FUND. Sec Sinking Find, 
 
 must be provided before or at time of issu«' of bonds. h9. 137. 13S. 
 
 bonds void if not provided, wiien reciuired. 137. 'J(W. 
 
 if bonds contain recitals they may be valid, wlun. Wt. 1:J8, 2()7. 208. 
 
 bonds payable out of, 135, 13G. 
 
 bonds should recite the fact of sucli payment. 131 (p, is:{), 
 
 if mode of payment insufficient mandannis c.-ninot enlarp-. WW. 
 
 payment out of, becomes jiart of contract. 130. 
 
 holder of bonds may look to general fund fur i.ayment, 13-J. 
 
 exception in Indiana. 134. 
 
 special assessment bonds. 135. 
 
 not included in delit limitation. 135. 
 
 mandamus will not lie to cmix'l In.nds to l)o imi.l out of j^enrral 
 
 fund. 1G8, 
 
 when creditor entitled to. cannot Im' divcrte<l. 1H5. IHfi. 1S7. 
 SPECIAL AND LOCAL LAWS. s.-.. statitk^. Enactment of. 
 STATES, 
 
 interest and usury laws in. 149. 
 
 aid to railroads prohibited in, 262, 327-370.
 
 556 INDEX. 
 
 References are to Sections. 
 
 STATES— Continued. 
 
 roiLstitutionul jjioliibitions relating to incurring debt in, 327-370. 
 
 liave no implied power to issue bonds, 7. 
 
 cannot borrow mono}' unless expressly authorized, 7. 
 
 cannot be sued, 17C (p. 237, n. 1). 
 
 redress against, 172. 
 
 wlion mandamus may issue against officer of, 172. 
 STATUTES. See Curative Acts ; Void Bonds ; Indebtedness. 
 
 subsequent, may render vote unnecessary, 64, 67. 
 
 subsequent, may extend limit of indebtedness, 64. 
 
 subsequent, may be founded upon prior consent of votes, 67. 
 
 subsequent, enlarging debt limit, does not waive vote, 69. 
 
 subsequent, does not change mode of issuing bonds unless, 85 
 (p. 104, n. 1). 
 
 subsequent, may make valid, ultra vires act, 127, 128. 
 
 subsequent, cannot cure unconstitutional ijuri^ose, 128. 
 
 subsequent, may cure unconstitutional form of earlier statute, 128. 
 
 subsequent, repeals by iinplication former inconsistent provisions, 
 p. 172, n. 1. 
 
 unconstitutional statvite in form, may be cured by a subsequent 
 one, 260 (p. 359, n. 1). 
 STATUTES, ENACTMENT OF, 
 
 where provisions relating to enactment found, 284. 
 Title, 
 
 nuist express object of the act, 285, 288, 289. 
 
 what title sufficient, 286, 288, 289. 
 
 object of tliis constitutional requirement, 285. 
 
 in New York, provision only applies to local laws, 285. 
 
 title of statute is part of it, limits its scope, 286. 
 
 matters not fairly within the title void, 286, 288, 289. 
 
 courts endeavor to validate statutes, 286. 
 
 cases illustrating interpi-etation, 288. 
 
 title of amended act, 287. 
 
 wliat is a sufficient title of amended act, 287. 
 
 error in amended act not material, 287. 
 Sid)ject, 
 
 statute to contain but one object, 288. 
 
 reason for this prohibition. 288. 
 
 when object not same as title act void, 288. 
 
 so much of the object as is expressed by title may stand, 288. 
 
 tins provision to be liberally interpreted, so as to sustain the act, 
 288. 
 
 cases illustrating interpretation, 288. 
 
 in New York the provision f)nly applies to local laws, 288. 
 
 if act embx'aces more than one object, and title also does, act is 
 void, 289. 
 
 if title embraces but one object, and act embraces more, all within 
 the title will stand, 289. 
 
 if two objects, and one a repealer, the latter void, 289. 
 
 I
 
 INDKX. 557 
 
 References are to Sections. 
 
 STATUTES, ENACTMENT OF— Continued. 
 Amendments, 
 
 to former statutes, 290. 
 
 act cannot be amended bj' reference to its title, 290. 
 
 object of this provision, 290. 
 
 the old act need not be set out, but only tiie section as amended, 290. 
 
 unless whole old act is revised, 290. 
 
 amendment by implication, 291. 
 Repeal b)j Implieation. 
 
 a subsequent statute repeals inconsistent provisions in prior ones. 
 291. 
 
 a later statute covering the whole matter repeals former oik', 201. 
 
 law does not regard with favor repeal by implication, 291. 
 
 local special laws are also repealed by later inconsistent ones. 292. 
 
 few cases hold intention to repeal local law must be express. 292. 
 Existing Laws, 
 
 cannot be made part of new statute, 29;?. 
 
 t)bject of this proliiljition, 293. 
 
 construed rather as to its spirit than letter, 293. 
 
 common practice to incorporate, in laws, rules of eonduct or modo 
 of i)roceedings marked out in other acts. 293. 
 
 cases illustrating the practice. 293. 
 Uniform Operation, 294, 29.1. 
 
 all laws of general name must havi" uniform t>i)eratii>n. 291. 29.".. 
 
 object of this provision, 294. 
 
 law is uniform if it apply to all of a class. 294. 
 
 but not if it apply but to a i)art of a chi-ss. 294. 
 
 cases illustrating uniformity. 294. 205. 
 
 in New York, constitution does notrecjuin' laws to be. 29.'!. 
 Local and Special Lairs. 29(». 
 
 constitutions of most States prohibit. 2;i(). 
 
 extracts from some to show form. 29(5. 
 
 object of this provision. 29(i. 
 
 practice leads to opposite end intended. 29fl. 
 
 prohibition against conferring '• cor[>orato iM.wers" by siMfiai a.(. 
 
 206. 
 
 term '-corporate powers" refei-s usually to all cor|H.rali""- muni- 
 cipal and private, p. 414. n. 1. 
 
 not in New Jersey or :Massa<husptts. p. 414. n. 1. 
 
 includes school district in Nebraska, j). 414. n. 1. 
 
 the provision is c-oiistrunl rather as to its spirit. 207. 
 Classification of Mnnicipnlitirs. 
 
 general classification of nuuiii-ipalities iM'nuitte*!. 297. 
 Pennsijlrania, 
 
 classification in. 297. 
 Ne:;' Jcrsci/, 
 
 classification, 20S. 
 
 almost all the other States have classified tl- .n.n.i.io.d .-..riiom- 
 
 tions, 298.
 
 658 INDEX. 
 
 Beferences are to Sections. 
 
 STATUTES, ENACTMENT OF— Continued. 
 
 usually citif.s are graded so that lower may enter higher. 298. 
 
 in many of the States act constitutional if municipality of lower 
 grade can enter higher, 299. 
 Ohio, 
 
 act constitutional if so di-awn, 300. 
 
 Ohio cases illustrating jiosition of court in, 300. 
 New YorJc, 
 
 prohibition relates only to certain subjects, 301. 
 
 act legal so long as it applies to a class, 301. 
 
 cases in New York illustrating rule, 301. 
 
 classification of cities in New York tinder constitution, p. 421. n. 5. 
 
 special city laws in New York under constitution, p. 421, n. 5. 
 
 liow passed by Legislature, accepted by cities in New York, p. 421, 
 n. 5. 
 Kansas, 
 
 if city of lower grade can enter higher, act constitutional, 302. 
 
 prohibition does not include school districts or townships, but does 
 cities, towns, villages, 302. 
 
 cases illustrating rule in, 302. 
 Nebraska, 
 
 prohibition is against passing acts confemng " corporate powers,"' 
 303. 
 
 school district is included in the prohibition but iwt a county, 303. 
 
 if municipality of lower grade can enter higher, act constitutional, 
 299-303. 
 Illinois, 
 
 statute valid if municipality of lower grade can enter higher, 304. 
 
 cases illustrating rule, 304. 
 
 in a number of States object of act must bear a peculiar relation- 
 ship to the cities embraced, 305. 
 New Jersey, 
 
 object miist be peculiar to municipalities selected, 300. 
 
 cases illusti-.ating nilo, 300. 
 
 constitutional prohibition is directed against towns and counties, 
 former held to embrace cities, 300. 
 
 charter may be repealed by special act, 306. 
 
 statute classification need not be followed, 306. 
 California, 
 
 object must be peculiar to the municipalities .selected, 307. 
 
 cases illustrating rule, 307. 
 Missouri, 
 
 same rule as in New Jt-rsej-, 307. 
 
 cases illustrating rule, 307. 
 Wisconsin , 
 
 same rule as in New Jersey, but less stringent, 308. 
 
 cases illustrating rule, 308. 
 Minnesota, 
 
 same rule as in New Jei'sey, 309.
 
 INDEX. -ir.ii 
 
 References are to Sections. 
 
 STATUTES, ENACTMENT OF— Continued. 
 
 an act, although applyingto but one named citv. liclil CDnstituiioiial 
 309. 
 
 prohibition against special law, when general can be inatle appli- 
 cable, a judicial question in, 310. 
 Prohibition, 
 
 " in all case.s where a general law can be made applicable, no sptH-ial 
 law shall be enacted," 310. 
 
 this provision found in constitutions of Alabama. Califdrnia. Col- 
 orado, Illinois, Indiana, Iowa, Kansa.s, Missouri, Texa.s. North 
 Dakota, p. 34'2, n. 1, 311. 312, 313. 
 
 Indiana, the Legislature alone is tlie judge. 311. 
 
 low^a, the courts may determine tlie cjuestion, 312. 
 
 Colorado, the courts may determine, 313. 
 
 in many States the Legislature is the sole judge, 310. n. 2. 
 
 in some States the question a judicial one, 
 
 author's conclusions, as to what he believes to be a general ail in 
 all States. 314. 
 
 impossible to refer to all the States, 314. 
 
 con.struction of constitution of 'lighest State courts final. 311. 
 Introduction of Biils, 
 
 bill maybe introduced any time during si'ssioii unless proliibited, 
 315. 
 
 practice of introducing bill within lime, and then amemiing. 31."i. 
 
 such bills now held void unless .same subject-matter. 31.'). 
 Readings, 
 
 constitutions require certain numl)er of readings, .316. 
 
 manner of reading not reviewed by courts. 310. 
 
 if bill not read, act declared unconstitution.il. 31(!. 
 
 when urgency may dispense with rea<lings, Legislature the 
 judge, 310. 
 Fote, 
 
 the number of. fixed by constitution. 317. 
 
 bill must receive constitutional number of. or is v(ii<l. 317. 
 
 ayes and nays must be taken and recorded, 317. 
 
 manner of taking the vote, 317. 
 
 journal must show proper number, 317. 
 
 signing of bills by presiding officers. 318. 
 
 they are usually so si,'^ned. 318. 
 
 not necessjuy unless re<iuired by {he constitution, 318. 
 
 when so required, act invalid unless .signe«l. 318. 
 Signing by the Governor, 
 
 constitution usually requires such signing. 3U». 
 
 unless he .sign or veto it. it bpconu\s a law, 310. 
 
 usually allowed a certain mnnlxr of days. 319. 
 
 governor must approve bill before Legisljitun- adjourn.'*. 319. 
 
 constitution may extend time after adjoiirnment, 319. 
 
 in some States bill becomes law after adjournment if governor iloea 
 not object, 319.
 
 560 INDEX. 
 
 References are to Sections. 
 
 STATUTES, ENACTMENT OF— Continued. 
 
 veto by governor, if passed over, bill need not be again signed by 
 presiding olncers or governor, 319. 
 
 in New Jersey, governor may sign any time after adjournment, 
 319. 
 
 rule in New York, 319. 
 
 rule in Minnesota, 319. 
 
 Sunday and day bill is presented to governor excluded, 319. 
 
 signing by mistake can be rectified, 319. 
 
 approval, bill not filed may be withdrawn, 319. 
 
 bill may be signed, with omission rectified, 319. 
 
 State constitutions must be consulted, 319. 
 WlLcn Statutes Take Effect, 
 
 usually from the time all constitutional requirements have been 
 comiilied with, 320. 
 
 constitution or some general law or the act itself may otherwise 
 provide, 320. 
 
 usual prior requirements before, 320. 
 
 must be signed by presiding officers, 318, 320. 
 
 by governor, 320. 
 
 may be filed witliout liis signature, 320. 
 
 filed with officer of State, 320. 
 
 becomes a law if remains in governor's hands, 320. 
 
 takes effect in latter case from time of passage, 320. 
 
 emergency, acts to state emergency, 320. 
 
 some States have general law when all statutes take effect, 320. 
 
 constitution of some States require publication before act takes 
 effect, if not done bonds void, 320. 
 
 State constitutions and laws must be consulted to ascertain Avhen 
 statute takes effect, 320. 
 
 statutes in many States hut prima facie evidence of regularity of 
 passage, 321, 322, 323. 
 
 they are unconstitutional if constitutional requirements not com- 
 plied with, 316, 318, 321. 
 
 in what States statutes may be shown to have been unconstitu- 
 tionally enacted, 323. 
 
 bonds may be void because statute for this reason vmconstitu- 
 tional, 321. 
 
 tax restrained because statute irregularly passed, 321. 
 
 weiglit of reason and decisions against sucli inquiry, 321. 
 
 if bill enrolled on file and properly signed, held in most States to be 
 conclusive, 321, 322. 
 
 States not mentioned, statute conclusive, 323. 
 
 Federal courts hold statute conclusive, 322, 323. 
 
 Federal conrts follow decisions of State courts on this question, 333. 
 
 prior publications open to inquiry. 322. 
 
 recital tliat publication made conclusive, 322. 
 
 presumption is that law is constitutional, 324. 
 
 it must be overcome by positive proof, 324, 325.
 
 INDEX. 561 
 
 References are to Sections. 
 
 STATUTES, ENACTMENT OF— Contimte< I. 
 
 presumption is that all constitutioruil requirements have been com- 
 plied with, 324, 325. 
 
 in New York, unconstitutional passage must be pleaded, 324. 
 
 courts endeavor to sustain statutes, 325. 
 
 if clearly unconstitutiorial will set them aside. 325. 
 
 if statute can be separated, the good will be retained. 3':5. n. 
 
 a more stringent rule is adopted as to criminal statutes. \^. 440. n. 1. 
 
 decisions of State courts must be consulted to ascertain wliether 
 act is constitutional, 325. 
 STATUTE OF LIMITATIONS, 
 
 bond and coupon each due at maturity respectively. 177. 
 
 coupons, same time as bond, 177. 
 
 coupon time runs from maturity of each, 177. 
 
 bond payable at option of holder, when time runs, 177. 
 
 what will take case out of, 177. 
 
 new promise, 178. 
 
 w^hen bond a specialty, then coupon is. 177. 
 
 when special fund created, .statute only runs from time money is 
 received, 177. 
 STOLEN AND LOST BONDS AND COUPONS, 
 
 purchaser before maturity obtains a good title, 125. 
 
 bonds must be complete before lost or stolen, 125. 
 
 material amendment after it is lost or stolen avoids it, 125. 
 
 whether alteration is material is (piestion for jury. 125. 
 
 if city pays lost or stolen overdue coupon, will luive to return 
 money to owner, 125. 
 
 coupons lost after due, subsequent purcha.ser obtains no tith\ 125. 
 
 whether bankers ami brokers have notice Is question for jury, 125. 
 STREETS, 
 
 are public purposes, 35, 37. 
 
 municipalities may be comi^elled to incur debt for, 42. 
 SUBSCRIPTION. See Railroad Aid Bonds. 
 SUNDAY, 
 
 bonds, dated of a. not invalid, unless flclivered on, 100. 
 
 delivery of such bonds may Im- shown by jiarol. 10(1. 
 
 if bonds delivered on. purcliascr may recover money jwiid. 100. 
 
 Sunday excluded in counting <Iay. bill to be signed by gov«Tnor. HIO. 
 
 ordinances, Sundays not excluded in count for jiublication of, 94. 
 
 T. 
 
 TAXATION. See Taxe.s. 
 
 all public debts are paid by. 33. 
 can be used only for a public jnirpose. 33. 35. 
 objects for which it may be used, 35. 30. 37. 
 
 is uniform when of .same rate tliroughout taxing district, p. Wj. n. ?.. 
 municipal debts are paid by. 33. 133. 
 
 authority to issue bonds, authorizes taxation to pay them, 133 (p. 
 179. n.'s). lo4, 1G8. 
 36
 
 662 INDEX. 
 
 References are to Sections. 
 
 TAXES, 
 
 debt limit, uncollected and current levy not to be deducted to de- 
 termine, 57 (p. 64, n. 2). 
 
 how taxes may be appropriated after debt limit reached. 58. 
 
 couix)ns receivable for, a contract, 109. 
 
 statute must avithorize such a stipulation, 109. 
 
 authority to levy, need not be express, 133, 134 (p. 179, n. 8). 
 
 bonds may be taxed, unless exempt, 139. 
 
 may be exempt in New York city, p. 103, n. 3. 
 
 bonds must be taxed where they are, 139. 
 
 tax cannot be deducted from interest, 139. 
 
 tax to pay bonds, when it may be restrained, 159. 
 
 when tax collector may refuse to apply taxes to payment of 
 bonds, 159. 
 
 stronger case required to restrain le^■y than to restrain issue of 
 bonds, li"i9. 
 
 recitals will estop taxpayer to enjoin levy, 159. 
 
 niandauuis does not enlarge power to tax, 136, 168. 
 
 mandamus may com])el permissive levy, 166. 
 
 mandamus does not destroy special tax, 167. 
 
 mandamus cannot authorize levy if no law for, 168. 
 
 when no body to levy, mandamus cannot comijel levy of, 190. 
 TAXPAYER, 
 
 may restrain issue of bonds, 63, 67, 155-157, 373, 278. 
 
 may restrain levy of a tax, 63. 
 
 may act if cf)r[X)ration does not. 63. 
 
 may petition for election, or issue of bonds. 65. 
 
 when he may ^^^thdl•aw his consent, 65 {[). 77, n. 2). 
 
 all State courts grant relief to, 158. 
 
 recitals will estop taxpayer, 159. 
 
 he will be estoppe<l unless he acts promptly, 246 (p. 340, n. 1), 
 p. 343, n. 4. 
 
 his property cannot be taken for pviblic use A\illiout (rompensa- 
 tion, 33. 
 
 his property pays the municipal debts, 33, 35, 133. 
 TENNESSEE, 
 
 constitution of. prohibits aid to private enterprises, 41, 363. 
 
 constitutional debt limit, 362. 
 
 constitutional i)rovisions of, relating to debt, 362. 
 
 interest and usuiy laws of, 149. 
 TERRITORIES, 
 
 debt limitation of, 51, 363. 
 TEXAS, 
 
 constitution prohibits aid to private enterprises, 41. 364, 
 
 constitutional provisions relating to debt, 364. 
 
 constitutional debt limitation construed, 64. 
 TIME OF PAYMENT. See Boxds. 
 TITLE. See Statxttes, Enactment of. 
 TORTS. See Bona Fide Holder.
 
 INDEX. 5C3 
 
 References are to Sections. 
 
 TOUTS— Continued. 
 
 bona fide holders not affected by torts of officers, 49, 50, 19'2, 19:). 
 TOWN, 
 
 included in this work in " municipal corix)ration," 2. 
 
 not held to be a municipal coijxjration in some States, held to U' in 
 others, 2, 3. 
 
 if cliartered, then a numicipal corporation, 3. 
 
 towns, originally as in Massachusetts, j). 3, n. 3. 
 
 includes cities in New Jersey, unless excejitcd, p, 7. n. 3. 
 
 includes cities in New York, Wisconsin, Minnesota and Indiana, 
 p. 7, n. 3. 
 
 decisions of State courts to be consulted to ascertain what is meant 
 
 by term " town," 3. 
 TOWNSHIPS. See Quasi-Cokporations. 
 
 how created and business conducted, 3. 
 
 in Kansas not included in prohibition against special acts, 302. 
 
 are quasi-corporations, 3. 
 TRANSFER OF BONDS. See Negotiability. 
 
 by indorsement, 111, 
 
 in blank. 111. 
 
 of registered bonds, how made, 115. 
 TRANSFERRER, 
 
 by delivery warrants bonds are his, 113, 114. 
 
 by delivery warrants that signatui'es are genuine, 113. 
 
 by delivery warrants tliat bond is what it appesirs to l>o. 113. 
 
 by delivery warrants that it is not tainted by usm-y, but not so in 
 New York, 113. 
 
 agent bound unless he discloses agency, 113. 
 
 transferrer by delivery does not warrant \-alidity of bonds, 114. 
 
 purchaser must take guarantee of validity, 114- 
 
 I. 
 
 ULTRA VIRES. See Power. Want or. 
 
 acts of officers void, 49, 191, 21(5. 
 
 only in part balance held good, 101 (i>. 122, n. 1). 
 
 acts, may be cured, when, 127, 12S. 
 
 if object unconstilutidiial, cannot bo cured, 12S. 
 
 if object unconstitutional. c:uinot Ins ratitic*!, 247, n. 
 
 if act unconstitutional, cannot be cured, 247. 257. 
 UNIFORM OI'1:i;AT1()N OF LAWS. See Statutes, E-NAfTMENT «1F. 
 UNIFORM TAXATION, 
 
 rate is uniform when sajne llirougliout taxing district, p. W. n. .3. 
 USURY, 
 
 synopsis of the usury laws of the St.ites, 149. 
 
 when usury may render l)ond void, 148 (p. 200, n. 1^. 
 
 when a bond is usurious, 148 (p. 200. n. 1). 
 
 penalty in most States does not afTect principal. 148 (p. 201). 
 
 States, where no usury laws. p. 2(X>, n. 4.
 
 664 INDEX. 
 
 Eeferences are to Sections, 
 
 VSURY— Continued. 
 
 in what States usurious contract void, 148. 
 UTAH, 
 
 interest and usury laws in, 149. 
 
 V. 
 
 VALUATION, 
 
 laat assessment roll, the usual, 56, 65. 
 VERMONT, 
 
 interest and usury laws in, 149, 
 
 constitutional provisions relating to debt in, 365. 
 VILLAGE, 
 
 is included in this work in term " municiijal corporation," 3. 
 
 is, if chartered, regarded as a municipal coiporation, 3, 
 VIRGINIA, 
 
 constitution in respect to private enterprises, 41. 
 
 constitutional provisions relating to incuriing of debt in, 366. 
 
 interest and usury laws in, 149. 
 
 statutes of, may be shown to have been improperly passed, 323. 
 VOID BONDS. See Money Had and Received ; Over-Issue. 
 
 if issued without vote, when required, 67. 
 
 if issued without vote, when required by constitution, 80. 
 
 not void if election held, although improper vote, 80. 
 
 must contain recitals to be valid, 80. 
 
 bonds void if statute authorizing them unconstitutional, 80. 
 
 void, if ordinance not published when required. 94 (p. 113, n. 2). 
 
 number of bond, when material to separate valid from void, 98. 
 
 payment, when void because time changed, 1G2, 103, 235. 
 
 action to recover money paid for latter bonds, 102, 235-237. 
 
 money must have been applied to lawful purpose by corporation, 
 237. 
 
 bonds issued for an illegal purpose void, 45, 46, 122. 
 
 such bonds may be legal if tliey contain recitals, 122, 217, 218. 
 
 old bonds invalid, new valid, when, 127-129 (p. 167, n. 2). 
 
 if old debt void. Legislature may direct issue of valid bonds to pay 
 it, 127. 
 
 if no authority to issue bonds, they are void, 191. 
 
 void unconstitutional debt cannot be validated, 128. 
 
 void unconstitutional debt, makes subsequent bonds to pay it In- 
 valid, 129, 225-232. 
 
 exception to last, 129, 230, 232. 
 
 surrender of void bonds compelled, 156. 158, 251. 
 
 if no election, when required, bonds void, p. 268, n. 2, 200, 201. 
 
 non-performance of prior conditions renders bonds void, vrhen, 253, 
 254. 
 
 the statute or constitution makes them void, 254, 255. 
 
 recitals will not cure in latter case, 255. 
 
 non-publication of passage of act renders bonds void, wlien, 320.
 
 IXDKX. 5t.O 
 
 References are to Sections. 
 
 VOID BONDS— Conh'nwed. 
 
 Sunday, bonds delivered on. void, imrcliascr may recover money 
 
 paid, 100. 
 purchaser, to jirotect himself against, must take pnarantee, 114. 
 excessive use of power, wlien bonds not invaliil, 101 (p. 122, n. 1). 
 VOTE, VOTERS, 
 
 constitutions of what States revjuire, before bonds can iN-n-- i.c, 
 
 327-370. 
 statute often requires vote, 66, 271. 
 bonds issued without, when required, arc void. 67, ('.!». 2(tl. 24'i (p. 
 
 268, n. 1). 
 one case has held otherwise, 244. 
 
 Federal courts may hold recitals, will estop defence. 2(M). 
 ratification, if no vote, there can be none. 246. 
 subsecjuent statute may waive vote. 67. 
 unauthorized vote does not enlarj^o power. 67. 
 proposition, ^vhen it must be submitted to voters. 67. 
 prior vote may authorize a subsecpient statute. 67. 
 inducements to voters do not affect bona JbJc liolders, 68. 
 fraud or irregularity does not affect bona fide holders, 6H. 71. 
 l)roposition must be separate and distinct, 73. 
 
 qualification of voters, required by const it^ut ion. camiot In- 
 changed, 74. 
 majority of tlie votes usually sufficient. 379 (p. Jl6. n. 3). 
 majority of all votes cast .sometimes necessary, p. S». n. 3, 711, N). 
 different rule sometimes, when constitution requires vote. H). 
 bonds invalid if constitutional recpiirementsas to vote unfidlilled. H<». 
 bonds invalid if statute change constitutional nspiirements. SO. 
 " inhabitants," " voters," "electors." " (pialitii'l vottis." coiistnuii. 
 
 81 (p. 93, n. 4). 
 females may vote to issue bonds. 3. si. 
 registered voters, what is meant by. sj. 
 when ayes and nays must bo calli-d. 90. 9."i. 
 when vote required by statute, it may Ix' disiM«n.s4'd with .t \v;iiv.-<l 
 
 by sub.se(|uent one, 2.16. 2(iO. 
 when, required by constitution c.-iniiot U' waiv.-il or dis|N>ns4-<l 
 
 with, 2.19 (p. S-W, n. 5.) 
 legislative body, vote of a majority of quorum .sutllrient. 90. 
 railroads, vote now usually necessjiry Iwfon' .-lid given to. 201. 
 
 w. 
 
 WAIVER. See Conditions: Raimmvd Aim II<>ni>s. 
 WANT OF POWER. S.>e Powkk. Want <>k. 
 WARRANTY. See Transfkukf.k. 
 
 what seller of l)onds warrants. 1 1-'. 
 
 what seller does not warrant. 114. 
 WASHINGTON. 
 
 constitution of, requires vote to incur debt, 67, 367.
 
 566 INDEX. 
 
 References are to Sections. 
 
 WASni'SGTO'S— Continued. 
 
 constitutional provisions of, relating to debt, 367. 
 
 interest and usury laws in, 149. 
 WATER SUPPLY, 
 
 a public purpose, 35, 37. 
 
 bonds may be issued for a, S5, 37. 
 
 contracts for more than a year for a, 61. 
 
 contracts for more than a year, in some States prohibited, 60. 
 WEST VIRGINIA, 
 
 constitutional debt limit of, 51. 368. 
 
 constitutional provisions of, relating to debt, 368. 
 
 interest and usury laws of, 149. 
 
 statutes of, may be shown to have been improperh' passed, 323. 
 WISCONSIN, 
 
 constitution of, prohibits aid to private enterprises, 41. 369. 
 
 constitutional debt limit, 51, 369. 
 
 constitutional provisions relating to debt in, 369. 
 
 interest and usury laws of, 149. 
 
 majority of all votes necessary to carry proiiosition, 79. 
 
 lirohibition against special laws, 308. 
 
 school district not a municipal corporation, 2 (p. 2, n. 3). 
 
 statutes of, may be shown to have been improperly jiassed. 323. 
 
 " town" held to include cities, p. 7, n. 3. 
 
 town, not regarded as a municipal corporation in, 2 (p. 2, n. 2). 
 WOMEN, 
 
 may vote to issue bonds if statute permit, 3, 81. 
 WYOMING, 
 
 constitution of, requires vote to incur debt, 67, 370. 
 
 constitutional provisions relating to debt. 370. 
 
 interest and usury laws of. 149. 
 
 statutes of, may be shown to have been improperly passed, 323. 
 
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