deserving the aid of the citizens by forced contributions." Loan Association v. Topeka, 20 Wall. 655, 22 L. Ed. 455. Aid to railroads by school township not a corporate purpose. 88. (III. 1880.) "Congressional townships under the name of the 'trustee of schools' were incorporated for 'school purposes' only. So the act of incorporation in terms declares. Taxation, by the corporate authorities, therefore, on persons and property within the jurisdiction of such a township, to build railroads, is not taxation for a corporate purpose, and the decree below, which followed the decisions of the State court, was consequently right." Weightman v. Clark, 103 U. S. 256, 26 L. Ed. 392. Steam gristmill not a work of in ternal improvement in Nebraska. 89. (Nebr. 1882.) "A steam gristmill is not, in our opinion, a work of internal improvement, within the meaning of the act of Nebraska approved February 15, 1869, which authorizes counties, cities, and precincts of organized counties 'to issue bonds to aid in the construction of any railroad or other work of internal improvement." Township of Burlington v. Beasley, 94 U. S. 310, 24 L. Ed. 161, under the laws of Kansas, distinguished. Osborne v. County of Adams, 106 U. S. 181, 3 Sup. Ct. Rep. 150, 27 L. Ed. 835. 90. (W. Va. 1882.) Bonds were issued by the city of Parkersburg to aid a private manufacturing enterprise. "But we are of opinion, that, within the principles decided by this court in the case of Loan Association v. Topeka, 20 Wall. 655, 22 L. Ed. 455, the bonds in question here are void. The act of 1868 authorizes the bonds to be issued as the bonds of the city. The bonds are to be lent to persons engaged in manufacturing. These persons are to pay the interest on the 'loans' semi-annually to the treas urer of the city, and are also to pay annually to the city 5 per cent. of the principal, to go into the sinking fund of the city, till the 'loans' are paid in full. No fund is provided or designated out of which the city is to pay the principal or interest of the bonds. What the borrower,' as the act calls him, is to so pay to the city is not such a fund. The city is to pay the principal and interest of the bonds, according to their tenor, whether the 'borrower' pays the city or not. No other source of payment being provided for the city, the implication is that the city is to raise the necessary amount by taxation. It has, by section 15 of the act of March 17, 1860, authority to levy and collect an annual tax on the real estate and personal property and tithables in the city, and upon all other subjects of taxation under the revenue laws of the State, which taxes are to be for the use of the city. A legitimate use of the moneys so raised by taxation is to pay the debts of the city. Taxation to pay the bonds in question is not taxation for a public object. It is taxation which takes the private property of one person for the private use of another person. "There was no provision in the Constitution of West Virginia of 1862 authorizing the levying of taxes to be used to aid private persons in conducting a private manufacturing business. This being so, the legislature had no power to enact the act of 1868." Parkersburg v. Brown, 106 U. S. 487, 1 Sup. Ct. Rep. 442, 27 L. Ed. 238. Developing water power as natural resources not a corporate purpose. 91. (III. 1883.) Bonds were issued by the city of Ottawa under an ordinance submitting to the voters the question whether bonds should be issued "to be expended in developing the natural advantages of the city for manufacturing purposes." The vote was favorable. A subsequent ordinance directed the mayor to issue the bonds and deliver them to a designated person "to be used by him in developing the natural resources and surroundings of the city, and authorizing and directing him to expend the same in the Improvement of the water power upon the Illinois and Fox rivers within the city and in the immediate vicinity thereof," etc. The bonds were intended as a donation, to the persons projecting the improvement. Held not to be a corporate purpose. "In Illinois, under the Constitution of the State, the corporate authorities of cities can not be invested with power to levy and collect taxes except for corporate purposes. This has long been settled. Weightman v. Clark, 103 U. S. 256, 26 L. Ed. 392, and numerous Illinois cases there cited. What may be made a corporate purpose is not always easy to decide, but it has never been supposed that if legislative authority had not been granted to a municipal corporation to do a particular thing, that thing could be a purpose of that corporation." Ottawa v. Carey, 108 U. S. 110, 2 Sup. Ct, Rep. 361, 27 L. Ed. 669. Private manufacturing enterprise not a public purpose. 92. (Mo. 1885.) Bonds were issued by the city of La Grange to the La Grange Iron & Steel Company, a private manufacturing company. They were held to be void as not being for a public purpose. "The general grant of legislative power in the Constitution of a State does not enable the legislature, in the exercise either of the right of eminent domain, or of the right of taxation, to take private property, without the owner's consent, for any but a public object. Nor can the legislature authorize counties, cities or towns to contract, for private objects, debts which must be paid by taxes. It cannot, therefore, authorize them to issue bonds to assist merchants or manufacturers, whether natural persons or corporations, in their private business. These limits of the legislative power are now too firmly established by judicial decisions to require extended argument on the subject." Cole v. La Grange, 113 U. S. 1, 5 Sup. Ct. Rep. 416, 28 L. Ed. 896. Law authorizing aid to railroads unconstitutional in Ohio. 93. (Ohio, 1891.) The Constitution of Ohio contains the following provision: "The general assembly shall never authorize any county, city, town, or township, by vote of its citizens or otherwise, to become a stockholder in any joint-stock company, corporation, or association whatever; or to raise money for, or loan its credit to or in aid of, any such company, corporation, or association." "This provision was inserted in the Constitution, and a pted by the people, in view of the fact then and since well known in the history of all States, particularly in the West, that municipal bonds to aid railroads were freely voted in expectation of large resulting benefits, an expectation frequently disappointed. It was a declaration of the deliberate judgment of the people of Ohio that public aid to such quasipublic enterprises was unwise, and should be stopped." Held, that an act of the general assembly of Ohio of April 9, 1880, purporting to authorize certain townships to build and operate or lease railroads and borrow money, and for that purpose to issue their bonds was repugnant to that provision of the Constitution. Some decisions of the Supreme Court of Ohio relating to similar legislation reviewed. Pleasant Township v. Ætna Life Ins. Co., 138 U. S. 67, 11 Sup. Ct. Rep. 215, 34 L. Ed. 864. Railroad aid unconstitutional in Ohio. 94. (Ohio, 1894.) The Constitution of Ohio provides (art. 8, § 6): "The general assembly shall never authorize any county. city, town, or township, by vote of its citizens or otherwise, to become a stockholder in any joint-stock company, corporation, or association whatever; or to raise money for, or loan its credit to or in aid of, any such company, corporation, or association." The legislature passed an act purporting to authorize Pleasant township to issue bonds to construct a railroad across the township. Similar acts authorized other townships to issue bonds for the same purpose, the intention being to form a consecutive line of railroad to be operated and maintained by a railroad company. Held, that such legislation and purpose violated that provision of the Constitution and that the bonds were therefore void. The case of Walker v. Cincinnati, 21 Ohio St. 14, distinguished. Etna Life Ins. Co. v. Pleasant Township, 10 95. (Kan. 1901.) The erection and operation of sugar-mills is a private and not a public purpose, and bonds issued for such purpose, as well as the statute providing for their issuance, are void. Dodge v. Mission Tp., Shawnee County, Kan., 107 Fed. 827, 46 C. C. A. 661. CHAPTER IV. AUTHORITY OR POWER TO ISSUE MUNICIPAL BONDS. A. Legislative authority necessary; conditions and limitations may be imposed by legislature. B. Construction of grants of corporate powers; authority, when implied; incidental powers. 1. Construction of grants of corporate powers; rules of construction; repeal by implication. 2. Authority to issue municipal bonds, when implied; incidental powers. C. Irregular or wrongful exercise of power distinguished from absence of authority; noncompliance with constitutional and statutory conditions and limitations. D. Powers of de facto public corporate bodies and officers. From the general rule that public corporate bodies have only such powers as are conferred upon them by the legislature, subject to constitutional restrictions, it follows that negotiable bonds can be legally issued by such bodies only when legislative authority therefor exists, and that such securities, issued without authority of law, are absolutely void. Generally such authority will not be held to exist by implication, but must be granted in express terms, and when not expressly granted, will be implied only when its exercise is incident and necessary to the exercise and enjoyment of powers that have been expressly granted; and any reasonable doubt as to the intention of the legislature to confer such power should be resolved against its existence. As illustrations of this rule, it has been repeatedly held that express statutory authority, granted to municipal bodies, to construct or carry on, or aid in the construction or promotion, of public improvements or works does not, by implication, authorize the incurring of indebtedness for such purposes, as the purposes and works expressly authorized can be accomplished by the levy and collection of taxes and the appropriation thereto of the same when collected; and the incurring of indebtedness for such purpose, though often convenient or desirable to secure a prompt or speedy accomplishment of the work, is not necessary to its consummation. Express authority, given to such bodies, to enter into contracts for the accomplishment of corporate purposes does not necessarily imply authority to incur indebtedness in the nature of general obligations of the bodies, as in such cases the municipality can generally perform the obligations imposed upon it by such contracts by the exercise of the taxing power in advance of, or contemporaneously with, the performance of the contracts by the other contracting parties. In some instances, however, express authority to enter into contracts necessarily requiring the expenditure of considerable amounts of money has been held to imply authority to incur indebtedness in carrying out the contracts, but it has been held also that upon such implication of power to incur indebtedness could not be based the further implication of power to issue negotiable securities as evidences of such indebtedness. As to whether express authority granted to municipal bodies to borrow money or to otherwise, by contract, incur indebtedness. carries with it impliedly the power to issue negotiable securities as legal evidences of such indebtedness the decisions of the courts. are not entirely in harmony, but in the absence of decisions to the contrary by the courts of a State construing its own enabling statutes, the Federal courts hold that authority to issue negotiable securities cannot be implied merely from an express grant of power to borrow money or otherwise incur indebtedness; that while in such cases written vouchers or acknowledgments of the debt may be given by the proper official, which would be prima facie evidence of the obligation of the corporation, power does not exist in such cases by implication to issue corporate bonds having the properties of negotiable commercial securities unimpeachable in the hands of bona fide holders, on account of equities, defects, or irregularities growing out of their inception and issuance. In no case will such power be held to exist by implication only, unless it may be clearly implied from the language and purpose of the act. Nor will authority to issue bonds for a purpose not named in the grant be held to be included in an express grant of power to borrow money and issue bonds unless it clearly appears to have been the intention to include it. Authority expressly given to a municipality to borrow money and issue bonds for corporate purposes will not be held to authorize the issuance of bonds to aid in the construction of railroads, or for other quasi-public purposes |