Limitation upon power of municipal corporations; necessity for legislative authority to aid railroads, etc. 15. (Mo. 1890.) "Municipal corporations are established for purposes of local government, and, in the absence of specific delegation of power, cannot engage in any undertakings not directed immediately to the accomplishment of those purposes. Private corporations created for private purposes may contract debts in connection with their business, and issue evidences of them in such form as may best suit their convenience." Hill v. Memphis, 134 U. S. 198, 10 Sup. Ct. Rep. 502, 33 L. Ed. 887. C. Counties, Townships, School Districts, etc.; Corporate Character and Powers. Township in Missouri is but a geographical subdivision of a county. 16. (Mo. 1875.) "It has no power by itself to make independent contracts or to become bound in its separate capacity. The law has not invested it with that power. It forms an integral part of the county, and the county, to a certain extent, controls and acts for it." Harshman v. Bates County, 92 U. S. 569, 23 L. ed. 747. 17. (III. 1880.) Congressional townships in Illinois, under the name of trustees of schools, were incorporated for school purposes only, and have no authority to aid in the construction of railroads. Weightman v. Clark, 103 U. S. 256, 26 L. Ed. 392. Precincts in Nebraska. 18. (Nebr. 1881.) "Precincts in Nebraska are but political subdivisions of a county. They have no corporate existence, and cannot contract or be contracted with. They have no corporate officers, and can neither sue or be sued. Certain officers are elected by the voters of precincts for political, administrative, and judicial purposes, but they are in no sense the representatives of the people of the territory as a municipality. State v. Dodge County, 10 Nebr. 20. Precincts are governed by the county commissioners, the governing board of the county, and by the appropriate officers of the State. Their relation to a county is like that of a ward to a city. Having no corporate exist ence, no separate municipal authority, they cannot, says again the Supreme Court of the State, in the last case cited, 'enter into contracts directly or indirectly, nor assume obligations which a court might be called on to enforce.'" Davenport v. County of Dodge, 105 U. S. 237, 26 L. Ed. 1018. Counties in Nebraska not corporations. 19. (Nebr. 1884.) A county is not a corporation, within the meaning of the Constitution of Nebraska that "The legislature shall not pass any local or special laws granting to any corporation, association, or individual any exclusive privileges, immunity, or franchises whatever." Sherman County v. Simons, 109 U. S. 735, 3 Sup. Ct. Rep. 502, 27 L. Ed. 1093. No inherent power to issue commercial paper. 20. (Tenn. 1884.) The issuing of paper obligations of a commercial character by political subdivisions, such as counties and townships, is the exercise of a power entirely foreign to the purposes of their creation, and is never to be conceded except by express legislation or by necessary, or at least very strong, implication from such legislation. Claiborne County V. Brooks, 111 U. S. 400, 4 Sup. Ct. Rep. 489, 28 L. Ed. 470. (Ill. 1887.) Concord v. Robinson, 121 U. S. 165, 7 Sup. Ct. Rep. 937, 30 L. Ed. 885. Legislative control of the powers and districts, constable districts, or carve officers of townships. out a special district, and confer au21. (N. J. 1890.) "The organization thority upon such territory by vote of townships, the number, character, to charge such district with a suband duties of their various officers, scription. So it may empower the are matters of legislative control; county, of which such district is a and it is not doubtful that officers part, to issue such bonds in behalf appointed represent the municipality of the territory empowered to charge as fully as officers elected. When the itself, the bonds to be payable only legislature has declared how an offi- out of taxes levied and collected from cer is to be selected, and the officer the taxables of that tax district. The is selected in accordance with that Kentucky decisions clearly settle declaration, his acts, within the these propositions. The power exscope of the powers given him by isted in the legislature to arbitrarily the legislature, bind the municipal- carve out a geographical district, and ity." Bernards Township v. Morri- authorize its inhabitants to exercise son, 133 U. S. 523, 10 Sup. Ct. Rep. the functions of a corporation, either 333, 33 L. Ed. 766. through agencies created by themselves or through the agencies of the county. While the district subscribing is the debtor, yet in form the county is the obligor. Through the county the indebted district is to act, debted district is to be coerced by and through the same agency the inthe assessment of the tax essential to meet its obligations. Such a district becomes, for the purposes of the subscription, a corporation quoad hoc." Breckinbridge County v. McCracken et al., 9 C. C. A. 442, 61 Fed. 191. Board of education a distinct corpo ration. 22. (Kan, 1893.) The board of education of the city of Atchison, in the State of Kansas, is a distinct corporation, separate from the city of Atchison, and the proper one to be sued upon bonds issued by such board. Atchison Board of Education V. De Kay, 148 U. S. 591, 13 Sup. Ct. Irrigation districts public corporations. 23. (Cal. 1896.) The formation of one of these irrigation districts amounts to the creation of a public corporation, and their officers are public officers." Fallbrook Irrigation District v. Bradley, 164 U. S. 112, 17 Sup. Ct. Rep. 56, 41 L. Ed. 369. Legislative control over counties and county officers; may authorize designated officers to contract on behalf of districts within county. 24. (Ky. 1894.) "There can be no serious question, under the decisions of the Supreme Court of Kentucky, that the legislature of that State has the constitutional power to authorize any subdivision of a county to subscribe for the stock of a railway company, and to issue bonds in payment of such subscription. So it may authorize a county to impose a special tax on the district making such subscription, and issuing such bonds, to pay the interest and principal thereof. To this end the legislature may create a political district with corporate powers, or it may authorize magisterial City school district independent of civil city government; application of statutory tax limit. 25. (S. Dak. 1899.) Under the laws of South Dakota, a city school district, under the name of "The Board of Education of the City of Huron," is a body corporate for school purposes, and distinct from and independent of the city of Huron, and is capable of contracting and being contracted with, and holding and conveying real and personal property for such purposes, and debts incurred by it are not subject to the limitation of indebtedness prescribed for the city of Huron. Board of Education of City of Huron, S. Dak., v. National Life Ins. Co. of Montpelier, Vt.; Same v. Peaslee: Same V. Monadnock Sav. Bank of East Jaffrey, N. H., 36 C. C. A. 278, 94 Fed. 324. Precincts in Nebraska not corporations. 26. (Nebr. 1900.) A precinct, under the statutes of Nebraska, is a mere political subdivision of a county. It is not a municipal or quasi-municipal corporation or entity. It does not govern itself. It does not choose its governing officers, and it can neither act nor contract for itself, sue nor be sued. It is the mere creation of the board of county commissioners of the county in which it is situated, and that board is vested with plenary power to bring it into existence, to act and contract for it while it is in being, and to enlarge, to diminish, and to destroy it." Clapp v. Otoe County, Nebr., C. C. A. 104 Fed. 473. , Townships in Ohio are not corporations. 26a. (Ohio, 1901.) Neither townships nor boards of trustees of townships in Ohio are corporations within the meaning of the provisions of section 1 of article 13 of the Constitution of that State, which prohibits the general assembly from passing any special act conferring corporate power. Board of Trustees v. Brattleboro Savings Bank, 106 Fed. 986, 46 C. C. A. 66. CHAPTER II. DEFINITION, NATURE, AND INCIDENTS OF MUNICIPAL BONDS, INTEREST COUPONS, WARRANTS, ETC. A. Legal and commercial character of municipal bonds. B. Interest coupons; negotiability and other incidents. 1. Interest coupons are negotiable and are independent causes of action. 2. Interest coupons bear interest after due, generally at legal rate where payable. C. Municipal warrants and other nonnegotiable evidences of indebtedness. By the term "municipal bonds" is meant evidences of indebtedness, issued by cities, incorporated towns, counties, townships, school districts, and other public corporate bodies, negotiable in form, payable at a designated future time, bearing interest payable annually or semi-annually, and usually having coupons attached evidencing the several installments of interest. Municipal bonds issued in the usual negotiable form, when authorized by law, have all the attributes of negotiable commercial paper of individuals or private corporations; they are usually made payable to bearer; they pass by delivery, and, like other negotiable instruments, are not subject to equities between prior holders, in the hands of bona fidé purchaser for value, before due, without notice of such equities. Municipal bonds, when authorized by law, may be issued to raise money for the purpose of constructing or carrying on authorized public improvements or works. They represent a large portion of the wealth of the country, and their commercial value in the market depends very largely upon their negotiable character. By the issue of its bonds or other evidences of indebtedness, when legally authorized, a municipality acknowledges an obligation for, and promises to pay the sum named, and impliedly, if not expressly, agrees to provide the means of payment in the manner and from the source provided by law, but subject to all constitutional and statutory restrictions and limitations upon the power to make such provision. The necessary means, for the payment of any such obligations must be derived from some form of taxation. In some cases such provision is required to be made by a general tax on all the taxable property within the entire municipality, and in other cases by a special tax upon the taxable property of a special district less than the entire corporate body, or by a special assessment upon real estate within a limited district. Of this latter class are obligations issued by county boards in some States on behalf of precincts, townships, school districts, drainage districts and road districts, or by city boards, on account of sewer districts, street improvement districts, etc. In some cases such special tax or assessment is the sole security and source of means for the payment of the obligations so issued by the officers of the corporate body, but in other cases the levy and collection of a general tax is expressly or impliedly authorized to meet such obligations when, for any reason, such special tax or assessment should not be collected or should prove inadequate. From these considerations it follows that some bonds in form purporting to be the obligations of a municipal body are such corporate obligations in only a qualified sense, and are not such general obligations as may be discharged by the levy and collection of a general tax upon all the taxable property of the body at large. These matters are all subjects of legislative control and discre tion by the legislative bodies of the several States, subject only to controlling constitutional provisions. The interest coupons are likewise negotiable and bear interest from their maturity at the legal rate of interest where payable; and, when detached from the bonds, they constitute separate causes of action distinct from the bonds, and the holder thereof may sue thereon in his own name without producing, or being interested in, the bonds to which they were originally attached; but they are not independent of, or different from, the bonds from which they were taken in legal quality. In that respect they are but incidents of the bonds, the holder thereof being charged with notice of the contents of the bonds, and affected by their legal quality. If the bonds from which coupons are taken are void for want of authority to issue them, or are invalid for any reason, the coupons will be held likewise void or invalid, and when the bonds are valid the coupons will be held valid also. Another form of municipal securities or obligations is ordinary vouchers, orders, or warrants executed by officers authorized to execute them in conducting the financial affairs of the municipality. They are usually transferable by delivery, with or with |