the United States has repeatedly adjudged that the grant of power to a municipal corporation to appropriate moneys in aid of the construction of a railroad, where the power is accompanied with a provision directing the levy and collection of taxes to meet such appropriation, and prescribing no other mode of payment, gives no power, but excludes it, to issue negotiable bonds in payment of such appropriation.1

§ 508. Taxation limited to Public Purposes; What are Such; Aid to Railways; Bonds to be paid by Taxation, for What Purposes authorized. - After the numerous judgments of courts of the highest authority to that effect, it may be regarded as a settled doctrine of American law that no tax can be authorized by the legislature for any purpose which is essentially private, or, to state the proposition in other words, for any but a public purpose. What is a public purpose may not always be easy to determine; but when determined, it constitutes the boundary of the power of taxation. Whether taxation to aid in the building of railways owned by private corporations is taxation for a public purpose is a question which has been decided by the courts of last resort in almost every State in the Union, and by the Supreme Court of the United States.3 Although the doctrine of the constitutionality of such taxation has been vigorously combated, still it must be admitted that the great preponderance of the judicial judgments has been on the side of the

870 (a special law relating to New Orleans). Alabama: Winters v. Montgomery, 65 Ala. 403 (special law relating to Montgomery).

1 Claiborne County ». Brooks, 111 U. S. 400, 406; Wells v. Pontotoc Co. Sup., 102 U. S. 631, 632; Ogden v. Daviess County, Ib., 634, 639; Concord v. Robinson, 121 U. S. 165 (1886).

2 Loan Assoc. v. Topeka, 20 Wall. 655; Curtis v. Whipple, 24 Wis. 350; Whiting v. S. & F. R. Co., 25 Wis. 167; Allen v. Inhab. of Jay, 60 Me. 124; Jenkins v. Andover, 103 Mass. 94; Lowell v. Boston, 111 Mass. 454; Pray v. Northern Liberties, 31 Pa. St. 69; Mayor of New York, In re, 11 Johns. (N. Y.) 77; Camden v. Allen, 2 Dutch. (N. J.) 398; Sharpless v. Mayor of Phila., 21 Pa. St. 147; Hanson v. Vernon, 27 Iowa, 47; Cooley Const. Lim., 129, 175, 214; Parkersburg v. Brown, 106 U. S. 487 (manufactories); City of Eufaula v. McNab, 67 Ala. 588. Infra, sec. 510. Bonds issued under a statute to

Blair v. Cuming Aliter as to steam County of Adams,

aid a company in improving the water-
power of the river for the purpose of pro-
pelling public grist-mills, held to be issued
to aid in constructing a "work of internal
improvement," within the meaning of the
statute in question.
County, 111 U. S. 363.
grist-mills, Osborne v.
106 U. S. 181; s. c. 109 U. S. 1; see and
compare Township of Burlington v. Beas
ley, 94 U. S. 310; post, sec. 736, and cases
cited; Cooley on Taxation, chap. iv.,
"where the purposes for which taxes may
be laid" are enumerated, and illustrated
by the adjudicated cases.

3 Ante, secs. 153, 157; Rogers v. Burlington, 3 Wall. 654; Marshall Co. Sup. v. Schenck, 5 Wall. 772, 779; Olcott v. Fond du Lac Sup., 16 Wall. 678; Burlington & Mo. River R. Co. v. Otoe Co., 16 Wall. 667; Citizens' Sav. & Loan Assoc. v. Topeka, 20 Wall. 655; Pine Grove Tp. v. Talcott, 19 Wall. 666 (1873).

competency of such legislation, in the absence of special constitutional restraint. And therefore the legislature may authorize subscriptions by municipalities to the stock of railway corporations, or donations to them, and provide for the payment of such subscriptions or donations 2 by the issue and sale of the negotiable bonds of the municipality. But a statute which authorizes the issue of bonds to be paid by taxation to aid certain individuals or classes, or in aid of the manufacturing enterprise of individuals or private corporations, is void, this being, within the meaning of the rule, a private, as distinguished from a public purpose, although in a remote or collateral way the local public might be benefited thereby. The execution of the powers of local government and administration ordinarily conferred upon municipal corporations, such as improving highways and streets, constructing water-works, gas-works, markets, preserving the public health, and the like, are of course public purposes; and upon legislative authority being given, negotiable bonds may be issued therefor. What will constitute sufficient authority for the issue of such bonds will be considered further on.

§ 509. Different Classes of Bonds; Implied and Express Power to issue; Recitals; Mode of Pleading. Negotiable securities of the kind here referred to have been issued by municipal corporations proper (generally under an express power to aid railways, or for gasworks, water-works, or specified local improvements, but sometimes under an implied power); and by counties, usually under express power (generally to aid railways, or for public buildings, bridges, or improvements 1); and by organized townships which are parts of

1 In Pine Grove Township v. Talcott, 19 Wall. 666, 677, Mr. Justice Swayne says that such legislation has been sustained in nineteen out of twenty-one States. As respects legislative power, donations and subscriptions for stock stand on the same ground. Town of Queensbury v. Culver, 19 Wall. 83 (1873).

If it be allowable to judge of a legal principle by its fruits, the dissenting and minority judges on this question will find much to confirm the conviction that their views were sound. But it is useless to fight that battle over again; it has been fought and lost. All that is left is the contemplation and contrast of what might have been and what is.

2 Wood v. Oxford, 97 N. C. 227. The Constitution of Texas prohibits municipal corporations from making appropriations

or donations, or loans of credit to private corporations. Cleburne v. Gulf, Colorado, & S. F. Ry., 66 Tex. 457; ante, sec. 157.

8 Authority to borrow money "to be expended in developing the natural advantages of a city for manufacturing purposes,” does not warrant the issue of bonds as a donation to an individual to aid in developing the water power of the city. One who holds such bonds with notice of the facts cannot recover upon them. Ottawa v. Carey, 108 U. S. 110; ante, sec. 161.

4 In several of the States power is given to municipalities or counties to issue bonds to aid works of "internal improvement." And under this generic term, the question has arisen, What are works of internal improvement? The Supreme Court of Alabama, in defining the phrase "internal improvements," says: "Where

counties, under express authority, and usually as a means of aiding the construction of railways; and by school districts, under express power, to raise money to erect school-houses. In some of the Western States, counties have been legislatively made the agents for the inhabitants of non-incorporated townships, and in Missouri for "strips of territory" to issue bonds in the name of the county, but to be paid out of the property within the specified township or designated territorial limits or strip of country. Reference is made to this subject here in order to observe that where the bonds or securities are issued under an express power, the legislative act, being the only source of the authority, measures and limits the power it confers, and the same principle applies to the instruments issued under

statutory authority by any of these classes of corporations, or quasi corporations. But in respect to all these corporations and quasi corporations, except, possibly, municipal or chartered corporations proper, there is, we suppose, no solid ground to contend that they have any inherent or general power to issue commercial securities, and the true doctrine is that they can only do so by virtue of express legislative authority, which must exist in fact and which ought regularly to be recited in the bond. And in respect to municipal or chartered corporations, our opinion, as shown in a preceding section, is that they also have no such inherent power, and no power whatever except so far as conferred expressly or by fair implication. This is an important principle; and it results therefrom that there is no presumption in favor of the power to issue such securities, especially on the part of quasi corporations; and it would seem to follow that if the bonds of municipal or public corporations contain no recital as to the authority for their issue or their purpose, there is no presumption in favor of their validity, and it devolves on the holder to aver and show by evidence aliunde that the bonds were issued for some purpose authorized by statute. And hence, also, as a matter of pleading, the authority or power to issue the bonds in suit ought to appear on the face of the declaration, or by some recital in the bonds made part thereof; that is, it should thus appear that they were issued for some purpose authorized by statute.1

answer to this proposition to say that this suit is brought solely for a recovery upon the bonds and coupons, and no question growing out of the liability of the town for the subscription to the stock can be inquired into in this suit."

1 Thayer v. Montgomery Co., 3 Dillon C. C. R. 389, and note; Kennard v. Cass County, Ib. 147; Nashville v. Ray, 19 Wall. 468.

A

Mode of declaring on bonds and coupons. Kennard v. Cass County, 3 Dillon C. C. R. 147, and cases cited in note on p. 150; Thayer v. Montgomery County, supra. declaration on bonds against a municipal corporation having no general authority to issue commercial paper, to be sufficient on demurrer, must show, either by aver ment or in the copies of the bonds annexed, that the defendant had power to issue them. It is not sufficient to allege generally that it had full power and authority to execute the bonds. Hopper v. Covington, 118 U. S. 148.

Mode of pleading defences. The plea of the general issue in assumpsit in States where that mode of pleading is yet allowed, puts in issue the question of the authority of the officers to issue the bonds and the bona fides of the plaintiff, but presumptively the plaintiff is a holder for value before maturity, without notice; the contrary must be shown by the defendant. Chambers County v. Clews, 21 Wall. 317 (1874); Pendleton County v. Amy, 13 Wall. 297. Special plea erroneously held bad considered as amounting to the general issue; and as the erroneous ruling was harmless, the judgment was not reversed. Ib. Answer denying that plaintiff is the owner, holder, or bearer of the coupons in suit good on general demurrer. Pendleton County v. Amy, 13 Wall. 297. Proof of execution of bond when denied under oath. Under the legislation of Alabama, non assumpsit does not involve the factum of the bonds. Chambers County v. Clews, 21 Wall. 317 (1874). Corpora

Bonds issued therefor.

§ 510. Bridges as Works of Internal Improvement; Validity of -In many States negotiable securities have been issued under statute provisions authorizing the making of internal improvements. In a case in the Supreme Court of the United States the question arose as to whether a toll-bridge was a work of

tion may plead nil debet and non est
factum. Grand Chute v. Winegar, 15
Wall. 355 (1872). Defence of non est
factum sustained. Coler v. Cleburne, 131
U. S. 162 (1889). Here the statute pro-
vided for the issue of bonds by cities, and
directed that such bonds should be signed
by the mayor, and by him forwarded to the
Comptroller of the State for registration,
and a city, by proper ordinance, authorized
the issue of bonds for water-works. The
bonds were dated Janurary 1, 1884. The
term of the mayor then in office expired
in April following, and he was succeeded
by a new officer. In July, 1884, the com-
mon council, by resolution, requested the
ex-mayor, whose name had been engraved
on the coupons, to sign the bonds.
did so, adding the word " 'Mayor" after
his signature, and forwarded the bonds to
the Comptroller, who duly registered them.
In an action upon coupons brought by a
bona fide holder for value, the Supreme
Court of the United States held that as the
statute provided for the signing and for-
warding of the bonds by the mayor, the
mayor at the time of signing was the only
officer having power to sign and forward
them, and that the city could not designate
any other person to act in his stead.
"Bona fide purchasers of municipal bonds
must," said the court, "take the risk of
the official character of those who execute
them." The city is not estopped from
defending upon the facts, and these facts
established its plea of non est factum. This
case is controlled by the principle of An-
thony v. County of Jasper, 101 U. S. 693,
and is to be distinguished from Weyauwega
v. Ayling, 99 U. S. 112, and is held to be
analogous to Amy v. Watertown, No. 1,
130 U. S. 301.

1 Dodge Co. Comm'rs v. Chandler, 96 U. S. 205 (1877). Works of internal improvement defined. Fremont Building Assoc. v. Sherwin, 6 Neb. 48 (1877); Burlington Tp. v. Beasley, 94 U. S. 310; Guernsey v. Burlington Tp., 4 Dillon, 372 (1877); Lewis v. Sherman Co. Comm'rs, 5 Fed. Rep. 269; ante, sec. 509, note. In the opinion of the court in The County Comm'rs v. Chandler, supra, it is said: "In approaching the solution of these questions, the first inquiry that naturally presents itself is, whether a toll-bridge, like that referred to, is a public bridge, and hence a work of internal improvement. And we can hardly refrain from expressing surprise that there should be any He doubt on the subject. What was the bridge built for, if not fit for public use? Certainly not for the mere purpose of spanning the Platte River as an architectural ornament, however beuutiful it may be as a work of art; nor for the pri vate use of the common council and their families; nor even for the exclusive use of the citizens of Fremont. All persons, of whatever place, condition, or quality, are entitled to use it as a public thoroughfare for crossing the river. The fact that they are required to pay toll for its use does not affect the question in the slightest degree. Turnpikes are public highways, notwithstanding the exaction of toll for passing on them. Railroads are public highways, and are the only works of internal improvement specially named in the Act; yet no one can travel on them without paying toll. Railroads, turnpikes, bridges, ferries, are all things of public concern, and the right to erect them is a public right. I it be conceded to a private individual or corporation, it is conceded as a public franchise; and the right to take toll is granted as a compensation for erecting the work, and relieving the public treasury from the burden thereof. Those who have such franchises are agents of the public. They have, it is true, a private interest in

Remedy at law. A corporation cannot be relieved against its bond in equity if the ground for relief shows a complete defence or an adequate remedy at law. Grand Chute v. Winegar (case in equity), 15 Wall. 373.