to, or loan its credit in aid of, such walks and crossways, and to regulate corporation: Provided, however, that the construction and use of the same," the adoption of this article shall not and provided for special assessments be construed as affecting the right of to be made upon abutting property any such municipality to make such to pay the cost of construction of sidesubscriptions, where the same have walks. The charter further provided been authorized under existing laws, that the council should not borrow by a vote of the people of such for general purposes more than municipalities prior to such adoption." $50,000. The bonds provided for in Bonds were issued in pursuance of said contract exceeded this limit. The such vote October 9, 1871. Held, that action was upon the contract and not the bonds were void for want of legal upon the bonds. Held, that this limipower on October 9, 1871, to issue tation was upon the power to borrow them, as the Constitution, when it money for general purposes only and took effect, withdrew the power there is in no sense a limitation on the debt tofore existing to make such donation. of the city. Held further, that the "This article, in our opinion, makes purpose indicated in the contract was a clear distinction between subscrip- not a general purpose. Held also, that tions to the capital stock of a rail- though there was no authority for road company, or a private corpora- issuing bonds for the purpose protion, and donations or loans of credit vided in the contract, the city council to such corporations. The latter are was authorized to incur an indebtedprohibited under all circumstances. ness for such purpose. Held also, that The former may still be made, if they said contract was not entirely void have been authorized by a vote of the and that the contractor was entitled people prior to the adoption of the to recover upon the contract. HitchConstitution." This case is distin- cock v. Galveston, 96 U. S. 341, 24 L. guished in County of Moultrie v. Sav- Ed. 659. ings Bank, 92 U. S. 631. Town of Concord v. Portsmouth Savings Bank, 92 U. S. 625, 23 L. Ed. 628.

Officers cannot bind municipality

without legislative authority. 101. (Kan. 1876.) "A municipality must have legislative authority to subscribe to the capital stock of a bridge company before its officers can bind the body politic to the payment of bonds purporting to be issued on that account." McClure v. Township of Oxford, 94 U. S. 429, 24 L. Ed. 129.

Unauthorized bonds in payment of
valid contract to construct side-
walks; application of debt limita-
tion; general purpose."
102. (Tex. 1877.) The mayor and the
chairman of the committee on streets
and alleys of the city of Galveston,
Tex., had been authorized by ordi-
nance to enter into a contract or con-
tracts with responsible parties to fill
up, grade, curb, and pave sidewalks,
and entered into a contract for such
work, agreeing to pay therefor in
bonds of the city. This contract was
ratified by the council. The city
charter conferred upon the council of
the city power "to establish, erect,
construct, regulate, and keep in repair,
bridges, culverts and sewers, side-

Bonds to pay for real estate for court

house; void for want of provision at time of issue to pay them. 103. (N. J. 1879.) By a law of New Jersey, the expenditures of a county board were restricted to the amount raised by taxation for the fiscal year. The fiscal year commenced December 1st each year, and the amount to be raised in each fiscal year by taxation was to be determined by the county board on July 15th of each year. On December 18, 1876, the county board purchased of one Crampton real estate in Jersey City, upon which to erect a courthouse and other buildings for the county, and paid for the same by issuing to him bonds of the county in the sum of $150,720, but no provision was made by the board for the payment of the bonds beyond the general declaration that they should be paid out of the amount appropriated and limited for the next fiscal year. The present suit was brought by taxpayers of the county to compel the board to reconvey the land to Crampton and to compel Crampton to return the bonds for cancellation. Held, that the court below very properly rendered a decree for the complainants.

"The object of the statute of New Jersey defining and limiting its (the

board's) powers would be defeated if ital stock of the company and the a debt could be contracted without levying of a tax upon themselves to present provision for its payment in pay the same, the County Court advance of a tax levy, upon a simple should levy and collect such tax and declaration that out of the amount cause the same to be paid, as colto be raised in a future fiscal year lected, to the treasurer of the comit should be paid." Crampton v. Za- pany. Another act, passed March 23, briskie, 101 U. S. 601, 25 L. Ed. 1070. 1868, authorized municipal townships to subscribe to stock of the company on the assent of two-thirds of the qualified voters of the township, and to pay their subscriptions with bonds in the name of the county, payable out of a special tax to be levied on the real estate of the township. March 24, 1870, the act of 1868 was amended, with the evident purpose of permitting bonds to be issued by the County Court to pay for subscriptions to stock made under the act of 1860.

The inhabitants were not even organ- further authorized Moultrie county to ized by themselves, much less made a issue its bonds as a donation to the body politic for any purpose. They company, when approved by a vote of could vote the tax, if called upon to do so by the County Court, but that was all."

"We have always held that every holder of a municipal bond is chargeable with notice of the provisions of law by which the issue of his bond was authorized. If there was no law for the issue there can be no valid bond." Ogden v. County of Daviess, 102 U. S. 634, 26 L. Ed. 263.

Constitution prohibiting legislative authorization of municipal aid except upon two-thirds vote; legislative authority necessary; provision not self-executing; election unavailing in absence of legisla

tion.

the people of the county, but provided "that the same shall not be issued until the said road shall be opened for traffic between the city of Decatur and the town of Sullivan, aforesaid." At an election duly held, a majority of votes cast were in favor of a donation by Moultrie county. The county board, December 19, 1869, ordered that the bonds be issued and delivered to the company when the road should be completed through the county. November 1, 1871, the chairman of the board and the clerk of the county issued and delivered the bonds to the company.

The bonds recite on their face that they are issued by said county by authority of a vote of a majority of the legal voters of the 106. (Mo. 1880.) The Constitution county, which election was authorized of Missouri contained the following by the act mentioned. The plaintiff provision: "The general assembly in this suit was a bona fide holder of shall not authorize any county, city, the bonds. Held, in an action on couor town to become a stockholder in, or pons from such bonds, that it was no to loan its credit to, any company, defense that the county board had association, or corporation, unless two- issued other bonds to the company on thirds of the qualified voters of such a subscription to its stock, which, with county, city, or town, at a regular or the donation, exceeded $80,000; that special election to be held therein, that limitation applied only to subshall assent thereto." Held, that this scriptions to capital stock of the raildid not authorize a city to extend aid road company, and not to donations. to a railroad company, but that legis- Held also, that 66 as there was lative authority was necessary. thority for the issue of the donation bonds, which is recited on their face by reference to the law from which it was derived, the purchaser before maturity was not bound to look further. The county having authority to issue bonds like those purchased by him, he was under no obligation to inquire whether the county had issued more bonds than the law authorized." County of Moultrie v. Fairfield, 105 U. S. 370, 26 L. Ed. 945.

"It is of no importance that twothirds of the qualified voters of the city gave their assent to the subscription at the election which was called. It has been uniformly held that until the legislature authorizes an election, a vote of the people cannot be taken which will bind the municipality or confer upon the municipal authorities the power to make such a subscription. The legislative authority to obtain the popular assent is as essential to the validity of the election as it is to the subscription." Allen v. Louisiana, 103 U. S. 80, 26 L. Ed. 318.

Railroad aid; authority to subscribe stock; authority to donate bonds; construction of statute; excessive issue of bonds.

107. (III. 1881.) A statute of Illinois authorized counties along the line of the D., S. & M. Railroad Company, which included Moultrie county, to subscribe to the stock of that company and issue bonds to an amount not exceeding $80,000 therefor, and

au

Statutory limit of time for performing official acts.

108. (Mich. 1882.) A statute of Michigan provided that if any town. ship voted aid to railroads, etc., it "Shall, within sixty days after the question of aid is determined by a vote of the electors, issue its coupon bonds for the amount so determined to be granted." "The word 'shall,' as used in 'the statute, undoubtedly gives the township officers the whole of the sixty days to get the bonds out, but it certainly does not imply that if they fail to do

it voluntarily within the time they porting to have been issued in aid cannot be compelled to do so afterward. And if they can be compelled to do so, it necessarily follows that they should do it voluntarily." Chickaming v. Carpenter, 106 U. S. 663, 1 Sup. Ct. Rep. 620, 27 L. Ed. 307.

Bonds to aid in developing water

power, etc., void.

109. (Ill. 1883.) The city of Ottawa, Ill., was given by its charter the ordinary powers of municipal corporations of its class for local government and was specially authorized to provide the city with water, to erect hydrants and pumps in the streets for the convenience of its inhabitants," and upon a vote of the people "to borrow money on the credit of the city and to issue bonds therefor and pledge the revenue of the city for the payment thereof." Held, that this did not authorize the issuance of bonds by the city for the purpose of developing or aiding in the development of the nat ural advantages of its rivers for manufacturing purposes.

"Other bonds of the same issue were involved in Hackett v. Ottawa, 99 U. S. 86 (25 L. Ed. 363), and Ottawa v. First Nat. Bank of Portsmouth, 105 U. S. 342 (26 L. Ed. 1204), where it was held, in substance, that, as there was legislative authority to issue bonds for municipal purposes, and it was recited in the bonds then sued on that they were issued for such purposes, the city was estopped from proving, as against bona fide holders, that the recitals were untrue." "It is not claimed that express authority was given the city of Ottawa to develop, or aid in developing, the natural advantages of its rivers for manufacturing purposes, and what we are now called on to decide is, not whether, if such a power had been given, it would be within the general scope of the purposes of a city government, and thus a corporate purpose, within the meaning of that term as used in the Constitution, but whether it has been granted by the legislature." Ottawa v. Carey, 108 U. S. 110, 2 Sup. Ct. Rep. 361, 27 L. Ed. 669.

Bonds to buy depot site to be donated
to railroad company; void for
want of authority.
110. (La. 1883.) Bonds were issued
by the city of Shreveport, La., pur-

of the T. & P. Railroad Company, but were in fact issued to buy land to be donated to the railroad company as a site for depots, machine shops, etc. There was no power expressly granted to the city for any such purpose, and no such power can be implied from the usual charter authority to purchase and hold, property for municipal purposes. Held, that the bonds were void even in the hands of a bona fide holder, whether the people voted for their issuance or not. Ottawa Carey, 108 U. S. 110, 2 Sup. Ct. Rep. 361, 27 L. Ed. 669, reaffirmed. Lewis v. City of Shreveport, 108 U. S. 282, 2 Sup. Ct. Rep. 634, 27 L. Ed. 728.

V.

Authority in townships to aid railroad dependent upon action by county; issue of bonds by township, prior to action by county, held unauthorized; recitals in bonds do not aid; doctrine of estoppel discussed.

111. (Ohio, 1884.) The general laws of Ohio authorized county commissioners of counties to subscribe to the capital stock of railroad companies and issue county bonds therefor when sanctioned by popular vote of the electors. The charter of a railroad company provided that, "if the commissioners of any of the counties aforesaid shall not be authorized by the vote as aforesaid to subscribe to the capital stock of said company on behalf of their respective counties, then, and in that case, the question of subscription by township trustees provided for in the same act incorpo rating said railroad company, shall be submitted to the people of the respective townships, at a special election, to be called as provided for in the first section of this act," and if the proposition be approved by a majority vote a subscription not to exceed $50,000 might be made by such township. Held, that under these laws a township was without power to make such subscription until the time arrived when it could be properly said that the county as such had not been authorized by a vote of its electors to make a subscription; that such power would come into existence on the failure of the voters of the county to approve a county subscription on submission of the proposition or by a direct refusal of the commissioners to

submit the question of subscription to popular vote, or upon their failure, within a reasonable time, to call an election for that purpose.

cising the power granted. But in this case, as we have seen, power in townships to subscribe did not come into existence that is, did not exist except where the county commissioners had not been authorized to make a subscription."

Porter township, in Delaware county, issued such bonds to a railroad company, purporting upon their face to have been issued in pursu"Porter township is estopped by the ance of the provisions of the several recitals in the bonds from saying that acts of the general assembly of the no township election was held, or that State of Ohio, and of a vote of the it was not called and conducted in the qualified electors of said township of particular mode required by law. But Porter, taken in pursuance thereof." it is not estopped to show that it was Held, that such recitals in municipal without legislative authority to order bonds did not preclude an inquiry, the election of August 30, 1851, and even when the rights of bona fide to issue the bonds in suit. The quesholders were involved, as to the ex- tion of legislative authority in a muistence of legislative authority to nicipal corporation to issue bonds in issue them. aid of a railroad company cannot be concluded by mere recitals; but the power existing, the municipality may be estopped by recitals to prove irregu larities in the exercise of that power; or, when the law prescribes conditions upon the exercise of the power granted, and commits to the officers of such municipality the determination of the question whether those conditions have been performed, the corporation will also be estopped by recitals which import such performarce." Northern Bank of Toledo v. Porter Township Trustees, 110 U. S. 608, 4 Sup. Ct. Rep. 254, 28 L. Ed. 258.

66

'We are of opinion that the rule thus stated does not support the position which counsel for plaintiff in error take in the present case. The adjudged cases, examined in the light of their special circumstances, show that the facts which a municipal corporation, issuing bonds in aid of the construction of a railroad, was not permitted, against a bona fide holder, to question, in face of a recital in the bonds of their existence, were those connected with or growing out of the discharge of the ordinary duties of such of its officers as were invested with authority to execute them, and which the statute conferring the power made it their duty to ascertain and determine before the bonds were issued; not merely for themselves, as the ground of their own action, in issuing the bonds, brt, equally, as authentic and final evidence of their existence, for the information and action of all others dealing with them in reference to it. Such is not the case before us. Had the statutes of Ohio conferred upon a township in Delaware county authority to make a subscription to the stock of this 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 no election was in fact held, or that the election was not called and conducted in the mode prescribed by law; for in such case it would be clear that the law had referred to the officers of the township not only the ascertainment, but the decision of the facts involved in the mode of exer

Bonds in excess of amount authorized, held void; effect of constitutional provision; necessity for express legislative authorization; certificates by state officers.

112. (Nebr. 1884.) Bonds were issued by Dixon county, Nebr., payable to the C., C. & B. H. Railroad Company or bearer in New York, on January 1, 1896, with interest from January 1, 1876, until paid, as a donation to the railroad company in aid of the construction of its road. The amount of the issue was $87,000. The assessed value of the taxable property of the county was $587,331, the bonds being in amount more than 10 per cent, and less than 15 per cent. of such assessed value. The authority relied upon for the issuance of the bonds was an act which took effect February 15, 1869, which was amended February 17, 1875, and which, as amended, required the approval of two-thirds of the votes cast at an election on submission by the county commissioners, and limited the amount to 10 per cent. of the