pressed admirably expound the law of the subject, and have been quoted with deserved approval in other cases."

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§ 1553. When certificate of public officer is deemed conclusive.— But if the certificate of the municipal officers or agents were made by statute conclusive evidence of the facts stated therein, and were required by statute to be filed, as a matter of public record, it seems that it would then operate as conclusive evidence, in any suit upon a bond or other security issued in conformity with it, as to the facts which it verifies. In such a case the municipality and all its citizens are given notice by the statute that such certificates when filed will be taken as conclusive evidence against them. And it becomes accordingly their duty to watch for its appearance, and to take steps to prevent the issue of the securities based upon it. If they remain quiescent they are estopped, after the securities have been issued, and the rights of bona fide holders have accrued, from making objection.'

75

§ 1554. Various cases as to the validity of bonds. In Ohio, where it was provided that the county commissioners should not deliver the bonds subscribed "until a sufficient sum shall be prodepend upon the existence of facts, of which the agent may naturally be supposed to be in an especial manner cognizant, the bona fide holder is protected, because he is presumed to have taken the paper upon the faith of the representation of the agent as to those facts. The mere act of executing the note or bill amounts, of itself, in such a case, to a representation by the agent to every person who may take the paper that the requisite facts exist. But the holder has no such protection in regard to the existence of the power itself. In that respect the subsequent bona fide holder is in no better situation than the payee, except in so far as the latter would appear of necessity to have had cognizance of facts which the other cannot be presumed to have known." The Supreme Court of the United States dissents from the views taken in New York. See Town of Venice v. Murdock, 92 U. S. (2 Otto) 496; Town of Genoa v. Woodruff, 92 U. S. (2 Otto) 502, and ante, § 1537, and note. But the United States Supreme Court recognizes the New York decisions as settling the law of that State. Scipio v. Wright, 101 U. S. (11 Otto) 665; Thompson v. Perrine, 103 U. S. (13 Otto) 806; Broadway Sav. Inst. v. Town of Pelham, 83 Hun, 96, 31 N. Y. Supp. 402.

74. Veeder v. Lima, 19 Wis. 280; Duanesburg v. Jenkins, 40 Barb. 579; The People v. Mead, 24 N. Y. 115, 36 N. Y. 229; Lewis v. Commissioners of Bourbon County (Kan.), Cent. L. J., Jan. 8, 1874.

75. Bank of Rome v. Village of Rome, 19 N. Y. 23 (1859); Veeder v. Lima, 19 Wis. 299. See Commissioners of Knox County v. Aspinwall, 21 How. 539; Huedekoper v. Buchanan County (U. S. C. C.), Cent. L. J., April 9, 1874; Bank v. Board of Commissioners, 116 N. C. 339, 21 S. E. 410; Claybrook v. Board of Commissioners, 117 N. C. 456, 23 S. E. 360.

vided by other subscriptions or otherwise, to insure a continuous railroad connection from Mt. Vernon to Pittsburg," it was held that whether or not such sum was provided, was a matter left entirely to the judgment of the commissioners to determine; and that having issued the bonds it was absurd to suppose that their legality could turn upon a subsequent inquiry into that question.

§ 1555. In Wisconsin it appeared that the supervisors of a town were authorized to subscribe to a railroad company, but the question was first to be submitted to popular vote upon written application of ten or more electors, and after certain prescribed notice. The affidavit of the supervisors of the posting of notice was to be deposited and recorded, with the application aforesaid, in the office of the town clerk, and they or certified copies were to be received in courts of the State as conclusive evidence of the facts stated. In an action on bonds issued, which recited upon their face that the voters of the town had authorized the subscription, it further appeared that notice was not given, nor the election held in conformity with law, nor was the application and the affidavit above mentioned on record as provided. It was held that the absence from the office of the town clerk of these evidences of the validity of the bonds, put all holders upon quiry; and that the town was not bound upon the bonds. And the principle was declared that "when the appointment and limitation of the agent's authority is duly recorded, a party dealing with him must be deemed to have constructive notice of such limitation."

in

In Louisiana, where suit was brought against the city of New Orleans upon its indorsement of a negotiable bond, it was held that the words, "in conformity with resolutions of the council of said municipality, bearing date the 29th July and 5th August last," written in the body of the bond, charged all parties with notice of the authority granted by such resolutions; and as the bond was indorsed in excess of such authority, it was void.78 In New York a case arose in which it appeared that a railroad company issued bonds designated as "consolidated first mortgage gold bonds," referring to the mortgage which showed that they were intended for certain purposes, and it was held that the quoted

76. Commissioners of Knox County v. Nichols, 14 Ohio St. 271. 77. Veeder v. Town of Lima, 19 Wis. 291; Backman v. Charlestown, 42

N. H. 125.

78. Louisiana State Bank v. Orleans Nav. Co., 3 La. Ann. 297.

79

words put a purchaser on inquiry as to the statements of the mortgage. An overissue of bonds has been held void as to the excess, but valid up to and within the prescribed amount; those first delivered being held the valid ones.80

§ 1555a. Statutory course must be pursued. Where a statute points out a particular course to be pursued, it must be followed; and if the statute authorize levy of a special tax to liquidate a debt, it will not be construed to authorize issue of interest-bearing obligations.81 But substantial compliance with the statute is all that is needful.82 If the Legislature authorize a municipal corporation to borrow money and pay it over to a railroad company in subscription to its stock, it has been held, and, as we think, correctly, that this will not authorize the municipality to exchange its bonds with the railroad company for its stock,83 although such bonds would be valid in the hands of a bona fide holder without notice.84

Where no demand for interest on a bond has been made for fifteen years, or any claim preferred respecting it, and in addition the obligee's name did not appear on the books of the county alleged to have issued it, and the holder did not prove how he got it, the right to recover was denied.85

1555b. An interesting case arose in Illinois, where a municipal corporation, without express authority to do so, issued bonds simply as a donation to the Douglas Linen Company. They were sued on by a bona fide holder for value. The Supreme Court of that State held that the city of Kankakee, the defendant municipality, was not bound, Scott, J., saying: "The authority of a municipal corporation to issue bonds is derived from public laws, and the avenues to information in regard to the law and ordinances of such corporation being open to public inspection, the

79. Cuylas v. N. Y. & S. R. Co., 10 Hun, 295.

80. Daviess County v. Dickinson, 117 U. S. 657; Sutro v. Pettit, 74 Cal. 332; Sutro v. Rhodes, 92 Cal. 117, 28 Pac. 98.

81. County of Hardin v. McFarlan, 82 Ill. 138.

82. People v. Holden, 82 Ill. 93; Town of Darlington v. Atlantic Trust Co., 16 C. C. A. 28, 68 Fed. 849.

83. Starin v. Town of Genoa, 23 N. Y. 439; Gould v. Town of Sterling, 23 N. Y. 456; People v. Mead, 24 N. Y. 114. See Scipio v. Wright, 101 U. S. (11 Otto) 665, and ante, § 1552, and note.

84. People v. Mead, 24 N. Y. 114.

85. Bunch v. Fluvanna County, 86 Va. 452, 10 S. E. 532.

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holder of such securities will be presumed to have examined them, and to have known whether the corporation had the requisite power to issue the bonds. He has no such opportunity in regard to private corporations. Their by-laws are not open to inspection by those who deal in securities issued by them, and hence the reason for the distinction that has been taken. The holder of the bonds involved in this action had every opportunity to know whether the city had any lawful right to issue them, for the reason that its authority, if any existed, was to be found in public statutes, and if they did not in fact examine, as it was their privilege to do before buying, they will be presumed to have done so, and to have known that they were issued without authority of law, and, therefore, void in the hands of any holder, either with or without notice." 86

Where a county has issued bonds in excess of authority, the holder cannot by tendering them to be canceled invest a court of equity with jurisdiction to ascertain the amount of such excess and to declare the residue of such bonds valid and enforce payment thereof.87

SECTION VI.

LEGISLATIVE CONTROL OVER MUNICIPAL OBLIGATIONS.

§ 1556. In the first place: may the Legislature compel a municipal corporation to discharge an indebtedness which it did not contract?

The affirmative of this proposition is sustained by numerous cases which assert the legislative authority to exist in its right to apportion, assess, and levy taxes for the purposes of government. Their theory is this: taxation exacts money or services from individuals as and for their respective shares of contribution to any public burden. Private property taken for public use under the right of eminent domain, is not taken as the owner's contributive share of a public burden, but as so much beyond and above that share, and, therefore, cannot be taken without just compensation. It belongs to the Legislature to apportion the taxes necessary to defray a public expenditure, amongst those who derive benefit from it; and if a public improvement benefit a particular locality, that locality, whether incorporated or not, may

86. Bissell v. City of Kankakee, 64 Ill. 249.

87. Hedges v. Dixon County, 150 U. S. 182, 14 S. Ct. 71; Sutro v. Rhodes, 92 Cal. 117, 28 Pac. 98.

be made to bear the burden of paying for it.88 Thus, in Illinois, it has been held that the Legislature may appoint a board of commissioners and authorize them to levy a tax upon all taxable property in a certain precinct," for the purpose of maintaining the bridge across Rock river, at Rockford, and to defray the debt incurred in its erection and repair." 80 Caton, J., said: "It will hardly be denied that the Legislature has a right to impose a local tax upon a city or town, a precinct or county, for some local improvement, as the erection of a bridge or the repair of a road. In doing this, to be sure, it cannot say that one man shall pay all and the others none, or that one shall pay one dollar and another ten, for the tax must still be uniform, and upon the value of the property which each one has, so that the burden presses alike upon the whole community. But the Legislature must necessarily have the right to say how large that community thus subject to the tax shall be, whether a city or one of its wards, or a precinct, a county, or the whole State. If the Legislature had the right to impose this tax to build a bridge, it would be equally lawful to purchase one, or to pay for one already constructed for the public accommodation." So it has been held in New York, that where certain citizens of Utica had executed a bond to the State for $38,615, to defray the extra expenses of terminating the Chenango canal at that place, the Legislature might impose a tax on the city of Utica to pay it.90 So in Pennsylvania, that the Legislature may compel a municipal corporation to build a bridge over a stream, or may itself appoint agents of its own to build it, and to borrw money for that purpose, payable by the corporation. (But in a previous case, the right of the Legislature to require a township to refund money voluntarily paid by a bounty association was denied.)92 There are numerous other cases holding that the Legislature may, under its taxing power, require municipalities to pay debts which in its judgment are morally charge

91

88. Langhorne v. Robinson, 20 Gratt. 661; People v. Lawrence, 41 N. Y. 137, 36 Barb. 177; Blanding v. Burr, 13 Cal. 343. See County Judge v. Shelby R. Co., 5 Bush, 225.

89. Shaw v. Dennis, 5 Gilm. 416.

90. Thomas v. Leland, 24 Wend. 65 (1840). (Judge Cooley thinks this case extreme. Cooley on Constitutional Limitations, 380, note). Approved in Philadelphia v. Field, 58 Pa. St. 320.

91. Philadelphia v. Field, 58 Pa. St. 320 (1868), Thompson, C. J., and Sharswood, J., dissenting.

92. Tyson v. School Directors, 51 Pa. St. 21 (1865), Thompson, C. J.