Opinion of the Court.

v. Raymond, 42 California, 643; Hillsborough v. Nichols, 46 N. H. 379; Miller v. Sherry, 2 Wall. 237; Lee v. Kingbury, 13 Texas, 68; S. C. 62 Am. Dec. 546; Larson v. Reynolds, 13 Iowa, 579; S. C. 81 Am. Dec. 444; Wilson v. Stripe, 4 Greene (Iowa), 551; S. C. 61 Am. Dec. 138; Luckett v. White, 10 G. & J. 480; Atkins v. Faulkner, 11 Iowa, 326; Platt v. Judson, 3 Blackford, 235; Brown v. Mayor, 66 N. Y. 385; Jarvis v. Driggs, 69 N. Y. 143; Newton v. Hook, 48 N. Y. 676; Gates v. Preston, 41 N. Y. 113; White v. Merritt, 3 Selden, 352; S. C. 57 Am. Dec. 527; Cromwell v. Sac Co., 94 U. S. 351, 356, 357; Tadlock v. Eccles, 20 Texas, 782; S. C. 73 Am. Dec. 213; Dillard v. Harris, 2 Tenn. Ch. 193; Mayo v. Harding, 3 Tenn. Ch. 237; Greenlaw v. Kernahan, 4 Sneed, 371; Winchester v. Winchester, 1 Head, 500; Hoffer v. Fisher, 2 Head, 253; McGovach v. Bell, 3 Coldwell, 512; Kindell v. Titus, 9 Heiskell, 727; Jones v. Williamson, 5 Coldwell, 371; Williams v. Neil. 4 Heiskell, 279.

Mr. Sparrel Hill for defendants in error cited: Milan v. Tennessee Central Railroad Co., 11 Lea, 330; Green v. Dyersburg, 2 Flippin, 477; Albany & Susquehanna Railroad v. Mitchell, 45 Barbour, 208; Marsh v. Fulton County, 10 Wall. 676; Wells v. Supervisors, 102 U. S. 625; Claiborne County v. Brooks, 111 U. S. 400; Mayor v. Ray, 19 Wall. 468; Floyd's Acceptances, 7 Wall. 666; Northern Bank v. Porter, 110 U. S. 608; Buchanan v. Litchfield, 102 U. S. 278; Manhattan Ins. Co. v. Broughton, 109 U. S. 121; Russell v. Place, 94 U. S. 606; Allen v. Richardson, 9 Rich. Eq. 53; Dillard v. Harris, 2 Tenn. Ch. 193; Hartfield v. Simmons, 12 Heiskell, 255; Gay v. Parpart, 106 U. S. 679; Parkhurst v. Sumner, 23 Vermont, 538; S. C. 56 Am. Dec. 94; Mitchell v. Kintzer, 5 Penn. St. 217; S. C. 47 Am. Dec. 408.

MR. JUSTICE BLATCHFORD, after stating the case, delivered the opinion of the court.

Two questions arise for consideration in this case, (1) as to the statutory authority for the issue of the bonds; (2) as to the effect of the decree of January 9, 1875, in the suit in the state court of Chancery.

Opinion of the Court.

The bonds in question were issued in payment of a subscription made by the town to the stock of the Mississippi Central Railroad Company. On their face, they do not recite any such subscription to stock, but recite, as the consideration for the bonds, the "location of the Mississippi Central railroad by said town." It is well settled, that a municipal corporation, in order to exercise the power of becoming a stockholder in a railroad corporation, must have such power expressly conferred upon it by a grant from the legislature; and that even the power to subscribe for such stock does not carry with it the power to issue negotiable bonds in payment of the subscription, unless the power to issue such bonds is expressly or by reasonable implication conferred by statute. Such is the law as recognized by the Supreme Court of Tennessee, in the case of Pulaski v. Gilmore, decided in 1880, and published in 21 Fed. Rep. 870, and in Taxpayers of Milan v. Tennessee Central Railroad, 11 Lea, 330, decided in 1883. Such is also the law as established by this court. Marsh v. Fulton County, 10 Wall. 676; Wells v. Supervisors, 102 U. S. 625; Ottawa v. Carey, 108 U. S. 110, 123; Daviess County v. Dickinson, 117 U. S. 657, 663.

The grant of authority to a municipal corporation to subscribe for the stock of a railroad company does not carry with it the power to issue negotiable bonds to pay for the subscription, or anything more than the power to raise money by taxation to pay the amount of the subscription. If, in the statute granting the power to subscribe for the stock, no manner of paying the subscription is provided for, it cannot be paid by issuing negotiable bonds. The practice in Tennessee, as shown by its statute books, has been to authorize expressly the issuing of negotiable bonds by municipal corporations to pay for subscriptions to stock, in all cases where it was desired to confer upon such corporations the power to issue such bonds.

By a statute passed in 1852, and carried into the Code of Tennessee of 1857-8, (sections 1142 to 1161,) in force when the bonds in this case were issued, any county, incorporated town, or city was authorized (section 1142) to subscribe for

Opinion of the Court.

stock to a specified amount of its taxable property "in railroads running to or contiguous thereto," upon certain specified terms and conditions. An election was to be held (section 1143) when ordered (section 1144) in a specified manner, after the entire line of the road (section 1145) had been surveyed, and a certain estimate of the grading, embankment, and masonry had been made, and after a specified notice of the election (section 1146) had been given. The statute (section 1147) prescribed the form of the vote, and provided (section 1148) that the subscription should be made if a majority of the votes cast should be in favor of it. Sections 1150, 1154, 1155, 1156, 1157, 1160, 1161, provided as follows:

"1150. As soon as the stock is subscribed, it is the duty of the county court, or corporate authorities, to levy a tax upon the taxable property, privileges and persons, liable by law to taxation within the county or corporation limits, sufficient to meet the instalments of subscription as made, and the cost and expenses of collection, which tax shall be levied and collected like other taxes."

"1154. Not more than thirty-three and one-third per cent of the stock subscribed as above can be collected in any one year. "1155. The tax-collector, as fast as he makes collections, shall pay the amounts over to the company.

"1156. He shall also, as he receives the tax, give to each taxpayer a certificate in such form as the railroad company may prescribe, showing the amount of such tax paid by him, of which he shall retain a duplicate to be delivered to the president of the railroad company, and such certificate is negotiable by delivery or assignment, and, with a deduction of its proportion of the cost of collection, is receivable in payment of either freight or passage on the railroad in which the subscription is taken, after the expiration of one year from the completion of such road.

"1157. The holder of such certificates to the amount of one share or more of the stock of such railroad company, is entitled to demand and receive from the company in lieu thereof, a certificate of stock in the capital stock of such company, which will give him all the privileges of any other stockholder."

Opinion of the Court.

"1160. For the purpose of meeting unexpected contingencies, the county or corporation authorities may anticipate the collection of the railroad tax by the issuance of warrants, bearing six per cent interest, and payable at such times as may be desired by the railroad company, the warrants to be received as payment of so much stock.

“1161. In such a case a sufficiency of the railroad tax shall be paid into the county treasury to meet the warrants as they fall due."

These provisions of the statute do not contemplate or authorize the issue of negotiable bonds. They provide distinctly for the levying of a tax to meet the instalments of the subscription. Section 1160, in authorizing the issuing of warrants made payable at such times as may be desired by the railroad company, and to be received by it in payment for the stock, only contemplates that the warrants shall be issued in anticipation of the collection of the tax, which, under the provisions of section 1154, may be entirely collected in three years, but cannot be collected more rapidly than one-third in each year; and there is no implication that any warrants are to be issued except to anticipate the collection of a tax, after such tax is levied under the provisions of section 1150, and such levy is to be made as soon as the stock is subscribed for, and is to be the levy of a tax sufficient to meet the instalments of subscription as made, and the costs and expenses of collection, subject to the provision of section 1154, that, although the levy of the tax is made, not more than one-third of the stock subscription can be collected in any one year. It is solely to anticipate the collection of the tax, when it is collectible by virtue of the terms of the levy, that the warrants are authorized, by section 1160, to be issued; and there is nothing in the statute which contemplates that the warrants shall be made payable at any time later than the time fixed for the collection of the instalments of the tax. These provisions exclude the power of issuing such negotiable bonds as were issued in this case.

It is contended by the plaintiffs that express authority for issuing the bonds in question is to be found in an act of the legislature of Tennessee, approved January 23, 1871, being

Opinion of the Court.

chapter 50 of the Acts of 1870-71. In 1870, a new constitution was adopted in Tennessee, section 29 of Article II. of which reads as follows:

"SEC. 29. The general assembly shall have power to authorize the several counties and incorporated towns in this State to impose taxes for county and corporation purposes respectively, in such manner as shall be prescribed by law; and all property shall be taxed according to its value, upon the principles established in regard to state taxation. But the credit of no county, city, or town shall be given or loaned to or in aid of any person, company, association, or corporation, except upon an election to be first held by the qualified voters of such county, city, or town, and the assent of three-fourths of the votes cast at said election. Nor shall any county, city, or town become a stockholder with others in any company, association, or corporation, except upon a like election and the assent of a like majority. But the counties of Grainger, Hawkins, Hancock, Union, Campbell, Scott, Morgan, Grundy, Sumner, Smith, Fentress, Van Buren, White, Putnam, Overton, Jackson, Cumberland, Anderson, Henderson, Wayne, Marshall, Cocke, Coffee, Macon, and the new county herein authorized to be established out of fractions of Sumner, Macon, and Smith counties, and Roane, shall be excepted out of the provisions of this section, so far that the assent of a majority of the qualified voters of either of said counties voting on the question shall be sufficient, when the credit of such county is given or loaned to any person, association, or corporation: Provided, That the exception of the counties above named shall not be in force beyond the year one thousand eight hundred and eighty, and after that period they shall be subject to the three-fourths majority applicable to the other counties of the State."

The act approved January 23, 1871, was entitled "An act to enforce article 2, § 29, of the Constitution, to Authorize the Several Counties and Incorporated Towns in this State to impose Taxes for County and Corporation Purposes." It read as follows:

"SECTION 1. Be it enacted by the General Assembly of the