And the purchaser must also notice the provisions and extent of the legislative enactment on the subject. Thus where authority was given to certain counties lying north of the Missouri river, a subscription made and bonds issued under such authority by a county south of the river are void in the hands of everybody.47

3 Dillon, C. C. R. 7; Nicolay v. St. Clair County, Ib. 163; Hindekoper v. Dallas County, Ib. 171; Jordan v. Cass County, Ib. 185; Foster v. Callaway County, Ib. 201.

46 Infra, sec. 20.

47 Sherrard v. Lafayette County, 3 Dillon, C. C. R. 236, 1875; s. c. 2 Cent. Law Jour. 347. The case was briefly this: By an act of the legislature of Missouri, a company was incorporated with power to construct a railroad from the town of Louisiana, which is situated on the Mississippi river, north of the Missouri river, to a point on the Missouri river, and the county court of any county in which any part of the route of said road should lie was authorized to subscribe stock to the company, without a vote of the people. Afterwards the new constitution of Missouri went into effect, prohibiting the general assembly (1) from creating corporations by special act, except for municipal purposes; (2) from authorizing any county, etc., to become a stock-holder in, or loaning its credit to, any company, association or corporation, unless two-thirds of the qualified voters should assent thereto. Subsequently to this, the legislature passed an act purporting to amend the charter of the said railroad company, which provided that the county court of any county in which any part of the line of said railroad might be located might subscribe to the stock of said company and issue bonds, etc. Under this act, the county court of Lafayette county, a county lying wholly south of the Missouri river, issued, without a vote of the people, the bonds from which the coupons here sued on were detached, and several installments of interest had been paid on them: Held, 1. That the amendatory act from which authority to issue these bonds is claimed is a special act, in effect creating a new corporation, and is hence inhibited by the state constitution. 2. That it was not competent for the legislature, by extending the route of the proposed road beyond the point designated in the original charter, to authorize a county south of the Missouri river to incur indebtedness in aid of the road, without a two-thirds vote as required by the constitution. 3. That, since there was an entire want of power to issue the bonds, they were void even in the hands of innocent purchasers. 4. That the fact that the county court had paid interest on these bonds did not estop it from afterwards setting up their invalidity.

Construction of special power. The act which authorized the issuing of the bonds to pay the county subscriptions to a railway company directed that the bonds so issued should be made payable to "the presi

SEC. 20. Registration of bonds-Effect of fraudulent antedating.—The history of the issue of municipal bonds in this country shows that conditions imposed by law requiring a popular vote, or conditions in the propositions submitted to the voters, intended to prevent fraud and to secure the actual building and completion of the roads, have been often evaded, and the bonds issued without compliance therewith. Such bonds, when negotiated for value, the courts, as we have seen, have held to be binding. To prevent such improper or improvident issue of bonds in the future, the legislatures of some of the states have passed acts requiring all bonds to be registered with some of the executive departments of the state before they are issued or negotiated. Thus in 1872 the legislature of Missouri, a state in which many fraudulent dent and directors of the railroad company, and their successors and assigns." The bonds issued were made payable to "the railroad company or bearer." Held, that the power granted was sufficiently pursued, and that the bonds so issued were valid. Woodward v. Calhoun County, (U. S. Dist, Court for Mississippi, Hill, J.,) 2 Cent. Law Jour. 396, 1874. Special act held to control general act. R. R. Co. v. Otoe County, 16 Wall. 667, 1872.

Power to donate bonds in lieu of lands and right of way. By various provisions of a city charter, the mayor and city council were authorized to make donations of land for the right of way and other privileges to a railroad company, and to expend money for the purpose of acquiring land to be given, and were authorized to borrow money to an unlimited extent, when instructed so to do by a popular vote, and, further, to issue bonds to fund any indebtedness of the city, existing or to be created. Under this authority, a railroad company, by reason of complying with certain conditions, became entitled to demand from the city the right of way and depot grounds. The company agreed with the city to accept the bonds voted to procure the right of way and grounds in lieu of the right of way and grounds, and it was held that the city had the power thus to agree, and that the bonds were valid. Converse v. Fort Scott, U. S. Sup. Court, Oct. Term, 1875, 3 Cent. Law Jour. 449.

A proposition once voted down may be subsequently re-submitted and adopted, unless the act evinces a contrary intention. Society etc. v. New London, 29 Conn. 174; Smith v. Clark County, 54 Mo. 58; Woodward v. Calhoun County, 2 Cent. Law Jour. 396.

Issue of bonds before law authorizing it took effect. Phelps v.

Bank,

48

13 Wis. 432; Berliner v. Waterloo, 14 Wis. 378.

48 Act of March 30, 1872, (Laws of Missouri, 1872, p. 56).

*

bonds had been issued, passed an act which provided that, * * 'before any bond, hereafter issued by any county shall obtain validity or be negotiated," it must be first registered by the state auditor, who shall certify thereon that all conditions precedent required by law, and by the contract under which the bonds were ordered to be issued, have been complied with. In the case of Anthony v. Jasper County,49

49 Anthony v. Jasper County, U. S. Circuit Court, West. Dist. Mo. April Term, 1876, 3 Cent. Law Jour. 321. In delivering its judgment, the court said: 'If the bonds bore date after the act of March 30, 1872, and had not been registered, it is plain, we think, that they would have no 'validity,' and hence could not support an action in the hands of any person. But they are antedated, and the question is, whether they have validity in the hands of the innocent purchaser. Upon the best consideration we have been able to give, our conclusion is that the bonds can not be enforced. The case comes within the doctrine, which is well settled, that where a statute declares absolutely and without exception that a contract or bond or note is void, it is void into whosesoever hands it may come. This statute declares that no unregistered bond shall be valid or be negotiated. Bonds must first be registered. Without registration they obtain no validity.' Such is the statute. A declaration that bonds shall have no validity is equivalent to declaring them to be void. Is the county estopped to set up this defence? We think not. The case is to be distinguished, we think, from those decided by the Supreme Court of the United States, in which it is held that the frauds of the officers cannot be visited upon the innocent bond-holder, and falls within the principle of Bayley v. Taber, 5 Mass. 286. In that case it was held, where a statute enacted that promissory notes of a certain description, 'made or issued' after a specified day, should be utterly void, and no action should be sustained thereon,' that it was competent to the makers of such notes, when sued upon notes bearing date before the day fixed by the statute, to prove that they were, in fact, made and issued after such day. The principle of that case is the same as in the case at the bar, and if that is a sound principle when applied to the individual maker of prohibited paper, it should apply with at least equal force in favor of public bodies, where one or two officers, without the consent of the others, may, as in this case, combine to evade the law-the other officers being innocent of wrongful participation. The principle involved is one of great consequence. For illustration: Loose and general powers have been heretofore given in this state to municipalities and counties to issue such bonds. This power has been taken away by the new constitution. Can the protective provisions of that instrument be evaded and rendered useless by the mere fraudulent act of the officers of the county in ante

་

it appeared that bonds were signed, sealed and issued in the manner above appearing, after this statute went into effect, and were antedated to a date prior to the passage of that enactment. In point of fact, the conditions on which the bonds had been voted had not been fully complied with; and hence they could not have been, and were not, certified by the auditor as registered bonds. The bonds found their way into the hands of an innocent holder for value, who did not know that the bonds bore a false date. The circuit court held that the bonds could not be enforced, and that the county was not estopped to set up the defence,-a decision which necessarily implied a distinction between such a case and those in which the Supreme Court of the United States had held that the county or municipality could not visit the frauds of their officers upcn the innocent holders of the bonds. The case has gone to the Supreme Court of the United States, and it remains to be seen whether the distinction taken below will be adjudged sound.

SEC. 21. Retrospective statutes validating irregular subscriptions and bonds.-In the absence of special constitutional restrictions, the competency of the legislature to enact retrospective statutes to validate an irregular or defective execution of a power by a municipal or public corporation is undoubted, 5o And the power to cure defective subscriptions to the stock of railway companies and validate bonds issued therefor has been frequently exercised and judicially sustained.51

dating the bonds? If so, the power to defraud is endowed with a fearful vitality, which survives the prohibitions of the constitution, and threatens to become immortal."

Construction of Kansas Bond Registration Act. January v. County, 3 Dillon, C. C. R. 392.

Johnson

50 Cooley on Const. Lim. 371, and cases there cited; Dillon on Munic. Corp. secs. 46, 352, 424; Ritchie v. Franklin County, 22 Wall. 67, 1874; Cooley on Taxation, 223–232.

51 Dillon on Munic. Corp. (2d Ed.) sec. 424, and cases there cited. In St. Joseph Township v. Rogers, 16 Wall. 666, where it appeared that the election at which the subscription was approved was held before the passage of the law authorizing the subscription, the court said: "Argument to show that defective subscriptions of the kind may, in all cases, be ratified where the legislature could have originally conferred the power, is

SEC. 22. General summary of doctrine of the Supreme Court as to estoppel by recitals.—In passing from this portion of our subject, we may observe that if we have not mistaken the meaning and effect of the leading judgments of the Supreme Court which we have passed in review, they establish the folcertainly unnecessary, as the question is authoritatively settled by the decisions of the supreme court of the state (Illinois), and of this court in repeated instances." And again: "Mistakes and irregularities are of frequent occurrence in municipal elections, and the state legislatures have often had occasion to pass laws to obviate such difficulties. Such laws, when they do not impair any contract, or injuriously affect the rights of third persons, are never regarded as objectionable, and certainly are within the competency of legislative authority."

The constitution of Illinois of 1848, Art. IX, sec. 5, declared "that the corporate authorities of counties, townships, school districts, cities, towns and villages may be vested with power to assess and collect taxes for corporate purposes, such taxes to be uniform in respect to persons and property within the jurisdiction of the body imposing the same." The supreme court of the state (Marshall v. Siliman, 61 Ill. 218; Wiley v Siliman, 62 I 170-see Dillon on Munic. Corp. secs. 46, 352, 424) decided that, this section having been intended as a limitation upon the law-making power, the legislature could not grant the right of corporate taxation to any but the corporate authorities, nor coerce a municipal corporation to incur a debt by the issue of its bonds for corporate purposes. And the court held that an act validating an election, irregularly called and notified, to vote upon the question of township subscription, and declaring the same legal and binding, was void. In the opinion of the court, the act was an effort to confer the power of municipal taxation upon persons who were not, by themselves, the corporate authorities in the sense of the constitution, and to compel the town to issue its bonds for railroad stock, by declaring a void proceeding to be a valid subscription. The liability of the township on the same bonds afterwards came before the Supreme Court of the United States in The Town of Elmwood v. Marcy, Oct. Term, 1875, and a majority of the court not vindicating, nor, it, would seem, approving, the decision of the supreme court of Illinois, nevertheless, as there had been, in their view, no conflicting decisions of that tribunal on the point, and as it involved the construction of a "peculiar provision of the constitution of Illinois," they felt bound to follow it, although it was made after the bonds in question had been issued. Clifford, Swayne and Strong, JJ., dissented, on grounds which would seem to be strongly supported in the previous decisions of the court. Supervisors of Marshall County v. Schenck, 5 Wall. 772; Township of Pine Grove v. Talcott, 19 Wall. 666, 677; Railroad Co. v. County of Otoe, 16 Wall, 667; Olcott v. Supervisors, Ib. 678; infra sec. 22, note.