QJnrn^U IGaui ^rljnnl ICibrary Cornell University Library KF 6775.B86 The law of recitals in municipal bonds / 3 1924 020 005 330 Cornell University Library The original of tliis book is in tine Cornell University Library. There are no known copyright restrictions in the United States on the use of the text. http://www.archive.org/details/cu31924020005330 THE LAW OF RECITALS IN MUNICIPAL BONDS BY HARRISON A. ^ONSON, M. A., Of the St. Paul Bar ST. PAUL, MINN., KEEFE-DAVIDSON LAW BOOK CO. 1901, "rOFVRTOH'l' IflOl BY HARRISON A. liltO.NSON \Vebb Ptjblihhino Co. Prebs. St. I'aui,. Patri caro meo, cui maximam gratiam debere con- fiteor, hunc librum dedico, INTRODUCTION. The growth of the law relative to municipal bonds has kept pace with the rapid increase of municipal indebtedness. Only in comparative recent times has the sub- ject been treated by the text writers exclusively; the older text writers having considered the sub- ject under the head of "Public Corporations" or "Municipal Corporations." At the present time, the text writers upon muni- cipal bonds and the pertinent articles in the en- cyclopaedias treat of the general requisites and characteristics of municipal bonds, including the general doctrine of estoppel, as applicable to re- citals in the bonds. It is the purpose of this treatise to still further specialize beyond the setting forth of the general requirements of a valid bond issue, in an attempt to establish rules of law applicable to recitals in bonds that are in the hands of a bona fide pur- chaser, and to deduce therefrom general proposi- tions upon the effect of different kinds of recitals. It is interesting to note that the doctrine of estoppel as applied to recitals in municipal bonds has received its development within the last fifty years. In the earlier cases the doctrine was based rather upon the equitable rules applicable to all negotiable securities. vi INTRODUCTION. The other branch of the doctrine — that of muni- cipal decisions — was practically established in the leading case of Knox Co. v. Aspinwall. Its scope was probably intended to embrace mere irregu- larities and informalities in the issuance of bonds, and its application was purposed to extend to all recitals alike importing compliance with matters involving mere irregularities. But since that leading case the doctrine has greatly expanded. The federal courts have zealously protected the rights of bona fide purchasers, and in a few ex- treme cases have so extended the doctrine as to afford protection to the holder of bonds where there was an absolute want of power in the is- suance. In the expansion of this doctrine, there .have sprung up many distinguishments in its ap- plication in accordance with the nature and char- acter of the recitals contained in the bonds. The bona fide purchaser may receive full protection from one class of recitals, even where the irregu- larity in the issuance approaches that of a want of power; while, in another class of recitals, he may be subjected to the defense of a mere irregu- larity in the issuance. It is here attempted to classify and collate the principles of estoppel applying to the various forms of recitals in accordance with the interpre- tation placed thereon by our federal courts. No attempt is made to incorporate into the formulae of the doctrines the particular exceptions made by the state courts. This can be ascertained by reference to Appendix B, where the state cases are separately summarized. In inducing these propositions the author has investigated all the pertinent cases in the su- INTRODUCTION. vii preme court of the United States, the circuit court of appeals, and in the supreme courts of the vari- ous states, and he acknowledges the aid received in his investigations from Dillon on Municipal Corporations, Simonton on Municipal Bonds, Bur- roughs on Public Securities, Burhans on the Law of Municipal Bonds, Elliot on the Elements of Municipal Corporations, and Beach on Puhlic Cor- porations. TABLE OF CONTENTS. CHAPTER I. Municipal Bonds. (a) Defined 1 (b) Their necessity 2 CHAPTER II. Power to Issue. (a) Variant views of the court 4 (b) Powers of municipal corporations gen- erally 4 (c) Express power to issue 7 (d) Implied power to issue as incident to express power 9 (e) Implied power to issue 12 CHAPTER III, Purpose for which Municipal Bonds may be Is- sued. (a) Purpose must be public 15 (b) By whom determined 17 (c) What purposes are public 17 (d) Examples of purposes held to 'oe public. 19 (e) Railroads are public purposes 22 (f) Private purpose defined 25 (g) Purposes held to be private 26 (h) Distinguishing characteristics of public and private purposes 27 X TABLE OF CONTENTS. CHAPTER IV. Who is a Bona Fide Purcfiaser. (a) What constitutes 29 (b) Instances 30 (c) What he is required to know 32 CHAPTER V. Rights of Parties. (a) When determined 34 (b) What law governs 35 (c) Statute of limitations 37 CHAPTER VI. The Recitals. (a) What constitutes 39 (b) Meaning to the bona fide purchaser.... 40 (c) The doctrine of estoppel 43 (d) Authority to issue 46 (e) Effects of no recitals iS (f) Effect of recitals contrary to statutory provisions 49 (g) Express recitals 50 (h) Express recitals and general recitals dis- tinguished 51 (i) How far the bona fide purchaser must look beyond recitals 54 CHAPTER VII. Recitals on Matters of Law. (a) Constitutional authority 56 (b) Legislative authority 58 (c) Legislative authority through ordinance of city 59 (d) Legislative authority through order of county court 60 TABLE OF CONTENTS. xi (e) Where the legislature has applied cura- tive legislation 60 (f) Lis pendens 61 (g) General recitals 62 (h) Where bonds are issued for an illegal purpose 64 CHAPTER VIM. Recitals on Matters of Fact. (a) On elections 66 (b) On the legal limitation of indebtedness. 72 (c) On provisions as to tax levy 75 (d) Where matters involved are of public record 75 (e) Where bonds are not issued by the prop- er officers 78 (f) Where subscription and issuance have been made upon the contingency of the railroad being built 78 (g) Where registration is required by statute 79 (h) Where the railroad company is not or- ganized at the issue 79 (i) Where bonds have been issued to an un- authorized corporation 80 (i) Where the proceedings of the board of commissioners have been irregular. . 80 (k) Where bonds are refunding bonds 80 (1) Where bonds are donated SI (m) Where bonds have been antedated 81 (n) Where bonds have been placed in es- crow 82 (o) Recitals for municipal purposes 82 (p) Recitals made by those not intrusted with the duty of ascertaining the facts recited 83 xii TABLE OF CONTENTS. (q) Recitals made by those who are the ap- pointed tribunal to determine upon the truth or falsity of the facts re- cited 83 (r) Where precedent conditions to the is- suance of bonds are established by the electors themselves 85 (s) Where the issuance of the bonds is in excess of the amount prescribed by the vote of electors 85 (t) Where there is a want of power 86 (u) Recitals under a void legislative enact- ment 87 CHAPTER IX. Resume of the Cases on the Doctrine of Recitals in the United States Supreme Court. CHAPTER X. The Doctrine in the State Courts. APPENDIX A. Syllabi of Cases on Recitals in the United States Circuit Court of Appeals. APPENDIX B. The State Cases. LAW OF RECITALS. CHAPTER I. MUNICIPAL BONDS, (a) Defined. Municipal bonds are negotiable instruments issued by cities, towns, counties and otber public corporations in pu.rsuance of a power delegated to them by the state, for the pur- pose of raising money to assist them in car- rying out their governmental functions, or for the purpose of aiding some public enter- prise. These bonds generally run for a long pe- riod of time, bear interest, and are purchased in the money markets of the world for in- vestment. They usually have coupons at- tached for the payment of interest, which coupons are in themselves negotiable instru- ments when detached. The bonds are exectited under the seal of the municipality, signed by designated offi- cers, and are usually payable to a certain person or his order. They are in form ne- gotiable promissory notes, and generally 2 MUNICIPAL, BONDS. specify the act of the legislature authorizing their issue. (b) Their necessity. In the settlement of our vast extent of country, the mushroom rise of muuicipali- ties, the numerous and extra demands made upon them on account of modern inventions and conveniences have compelled municipali- ties to resort to some other method of ob- taining money than liy the system of taxation. The burden was too strong for the present generation, so a means was devised to shift it upon posterity. This has been accomplished by the issu- ance of obligations denominated "municipal bonds," running periods of twenty to forty years, or thereabouts, thus deferring the pay- ment by taxation to a later date. This means, being found so adequate, so efficient, and so easily obtained, soon came into vogue in the creation of all public utili- ties and improvements. Municipalities found it so easy to thus sad- dle an indebtedness upon future generations, that in numerous instances posterity has had left to it a bankrupt municipality, bonded far beyond the valuation of its property. MUNICIPAL BONDS. 3 Municipal indebtedness, evidenced in the form of municipal bonds, has reached colossal proportions ; it far exceeds any other form of indebtedness, public or private. The United States debts are pigmies be- side it. It well behooves the citizen, the leg- islator, the political economist to ponder and reflect over the ultimate outcome as evinced from present tendencies. These municipal bonds are largely held by banks, trust and insurance companies, as well as by individuals, at home and abroad, and have been generally recognized as good secu- rities for investment; the particular quality of each and every security, however, being determined by the financial standing of the respective municipality. 4 POWER TO ISSUE. CHAPTER II. POWER TO ISSUE. (a) Variant views of the courts. Whetker a municipal corporation can issue negotiable securities only upon an express granted power, or upon an implied power consequent upon an express power, or even upon a power implied from the purpose of its organization, has been a ques- tion upon which the courts of this country have expressed a multitude of views, and the lines of demarcation at this day are by no means clear. The confusion that has arisen has prob- ably been occasioned in part by applying anal- ogously the implied powers of private cor- porations to municipal corporations, private corporations having all the implied powers necessary to effect the purpose of their exist- ence. (b) Powers of municipal corporations generally. Municipal corporations (and by that term is included cities, counties, townships, towns, although a distinction will hereafter be made POWER TO ISSUE. S between chartered cities and quasi public corporations) are mere agencies of the state, and possess only those powers delegated to them for a specific purpose ; their function is governmental ; they, are given the power to create a system of local government, to build public buildings, highways and bridges, and to make improvements. To effect all this, the means placed in their hands is that of taxation. Thus being equipped, the argument is made, when nego- tiable securities are issued by them for the carrying out of some of the purposes afore- mentioned, vipon implied authority, that they can possess no such implied authority, for the reason that a means is otherwise expressly provided for effecting the purpose intended, namely, by taxation. The distinction is here brought to bear be- tween municipal corporations and quasi pub- lic corporations, such as counties, towns, townships, it being claimed, inasmuch as the former possess charters with numerous and complex powers and duties appendant,, where- as the latter are more simple divisions of the state, with certain definite fixed powers and duties, that the implied power to issue nego- 6 POWER TO ISSUE. tiable securities must of necessity often arise in the former, but that the power to issue must always be expressed for the latter.-' Justice Bradley^ says: "Our opinion is, that mere political bodies, constituted as counties, are for the purpose of local police and administration, and having the power of levying taxes to defray all public charges cre- ated, whether they ai-c or are not formally invested Avitli corporate capacity, have no power or authority to make and utter com- mercial pa])er of any kind, unless such power is expressly conferred upon them by law, or clearly implied from some other power, ex- pressly giA'en, which cannot be fairly exer- cised without it." Thence follows the argument that munici- pal corporations have such great and various duties, and their operations are of necessity on such a large scale, that the use of credit 1 Goodnow V. Ramsey Co., 11 Minn. 31; Han- cock V. Chicot Co., 32 Ark. 575; Dent v. Cook, 45 Ga. 323; Knapp v. Hoboken, 39 N. J. Law, 394; Kelly v. Town of Milan, 127 U. S. 139; Young V. Clarendon Township, 132 TJ. S. 340; Hall v. Memphis, 134 XJ. S. 198; Nashville v. Ray, 19 Wall. 468. - Claiborne Co. v. Brooks, 111 U. S. 400, P0WE3R TO ISSUE. 7 and the creation of debts is a necessary con- comitant. This being so, the implied right to borrow money and to give their negotiable bonds therefor, naturally follows as in the case of other borrowers, — exempli gratia, pri- vate corporations.' We think that the distinction above made is quite artificial. ISTo greater implied power is given one than the other. The municipal corporation has greater expressed function's delegated to it by the state, and, in the exer- cise thereof, greater implied powers as inci- dent to the express powers may seem to spring up than in the so-called "quasi public corporation." As illustrative of this, Judge Dillon thus expresses the true doctrine: "Merely as incidental to the discharge of its ordinary corporate functions, no municipal or public corporation has the right to invest any instrument it may issue, whatever its form, with that supreme and dangerous at- tribute of commercial paper which insulates the holder for value from all defenses and equities which attach to its inception." (c) Express power to issue. When there is a legislative or constitutional act expressly authorizing the municipality 8 POWER TO ISSUE. to issue, there is little question about the power to issue, providing the act in question is constitutional, and the conditions thereto appended complied with. The state itself cannot issue bonds except through express legislative authority.^ Qiiasi public corporations, such as counties, towns, to^vnsllips, must have express power to issue granted to them l)y the state.* The present attitude of the United States courts is against the granting of any implied powers to municipal corporations to issue ne- gotiable bonds, and requiring an express pow- er tc> be in existence authorizing the same.'"' However, the doctrine is undisputed that both ]niblie and municipal corporations must pos- sess express legislative power in order to be able ti3 subscribe to the stock of a railroad company and to issue bonds therefor.'^ 3 Burroughs, Pub. Securities, p. 172. i See ante, note 1. 5 Brentiam v. German American Bank, 144 U. S. 173; Ashmelot Nat. Bank v. Scliool Dist. No. 7, 56 Fed. 514. 6 Wells V. Supervisors, 102 U. S. 625; Concord V. Robinson, 121 V. S. 16,5; Kelly v. Milan, 127 U. S. 139; Norton v. D'yersburg, 127 U. S. 160; Kat- zenberger v. Aberdeen, 16 Fed. 745; W«tumpka v. POWER TO ISSUE. 9 Even the power to subscribe stock does not carry with it the power to issue negotiable bonds unless hj reasonable implication it may be inferred from the statute.'^ (d) Implied power to Issue as incident to express power. Whether a municipal corporation that had given to it the express power to borrow money has the right to issue negotiable bonds there- for is a question upon which there has been much conflict of opinion, both in the state and federal courts. The state courts^ generally have adopted the ground that where an express power to borrow was given, the right to issue negotiable Wetumpka Wharf Co., 63 Ala. 611; Welsh v. Post, 99 111. 471. T BlatcMord, J., in Kelly v. Milan, 127 U. S. 139; Pulaski V. Gilmore, 21 Fed. 870; Milan v. Ten- nessee Cent. R. Co., 11 Lea, 330; Marsh v. Pul- ton Co., 10 Wall. 676; Wells v. Supervisors, 102 U.S. 625; Ottawa V. Carey, 108 U. S. 110; Daviess Co. V. Dickinson, 117 U. S. 657. sPolsom V. School Directors, 91 III. 401; Wil- liamsport v. Commissioners, 84 Pa. St. 487; Com. V. Pittsburgh, 41 Pa. St. 278; Middleton v. Alle- ghany Co., 37 Pa. St. 241; Railroad Co. v. Evans- ville, 13 Md. 395; Shermerhorn v. Talman, 14 N. Y. 93; Warfield's Adm'r v. Boswell, 2 Dana, 224. iO POWER TO ISSUE. bonds followed by necessary implication, and as a consequence incident to such grant.* Likewise the earlier United States deci- sions have held that authority was given to issue negotiable bonds where power was dele- gated by the state to a city to subscribe stock ;^*' to a city to borrow money for any object, in its discretion ;^^ to borrow money for any public purpose;^" to a county to sub- mit to the people the question whether the money may be borrowed to aid in the erection of public buildings.^ ^ But by the case of Brenham v. German American Bank,-'^ the supreme court of the » When the power to borrow money is clear, it necessarily involves in its exercise the execution ot a security for its repayment; and negotiable coupon bonds, being the common and most ac- ceptable form of municipal securities, when given for money legitimately borrowed, would undoubt- edly be valid, as has been stated; and it is gen- erally considered that, when the municipality has authority to contract a debt, it has the power to evidence the same by a bill, note, bond or other instrument. Daniel, Neg. Inst. § 1531. 10 Seybert v. City of Pittsburgh, 1 Wall. 372. 11 Moyer v. Muscatine, 1 Wall. 384. 12 Rogers v. Burlington, 3 Wall. 654. 13 Lynde v. Winnebago Co., 16 Wall. 6. 1*144 TJ. S. 173. POWER TO ISSUE. 11 United States seems to take a radically differ- ent view of this question. In this case, the city of Brenham had authority "to borrow for general purposes, not exceeding $15,000." The court says : "That in exercising its power to borrow not exceeding $15,000 on its credit for general purposes, the city could give to the lender, as a voucher for the pay- ment of the money, evidence of indebtedness in the shape of nonnegotiable paper, is quite clear, but that does not cover the right to is- sue negotiable paper or bonds unimpeachable in the hands of a bona fide holder. It is easy for the legislature to confer upon a munici- pality, when it is constitutional to do so, the powei' to issue negotiable bonds, and under the settled rule, that any doubt as to the ex- istence of such power ought to be determined against its existence, it ought not to be held to exist in the present case." The present rule may be thus stated, as given by D. J. Thayer in Ashmelot ITat. Bank v. School Dist. ISTo. 7,^^ as follows: First, that an express power conferred upon a municipal corporation to borrow 15 56 Fed. 514. 12 POWER TO ISSUE. raoney for corporate purposes does not in it- self carry with it an anthority to issue nego- tiable securities. Second, that the latter power will never be implied in favor of a municipal corporation unless such implication is necessary to prevent some express corporate power from becoming utterly nugatory. Third, that in every case where a doubt arises as to the right of a municipal corpora- tion to execute negotiable securities, the doubt should be resolved against the existence of any such right. (e) Implied power to issue. Whether a municipality, in the absence of any express legislative act, has the implied power to issue negotiable bonds in order to carry out its fimctions, has been a question much discussed, and resulting in a great vari- ance of opinion. Private corporations have this power, and by analogy it was early ap- plied to municipal corporations as a necessary ingredient of their corporate capacity. The danger of giving such free rein to municipalities, however, has led the courts to operate most strongly against this doctrine, POWER TO ISSUE. 13 and at the present day it may be stated that the federal courts recognize no such power. In the exercise of this power, a distinguish- ment was early made between municipal cor- porations, such as cities, and the quasi public corporations ; the latter having no implied power to issue, -"^ the former rather being al- . 16 lowed this privilege, on account of their greatly increased functions. This implica- tion of power arises where cities are given the power to make public improvements, pur- chase lands, pave streets, and other munici- pal powers of a similar character. The state courts-'^ have pertinaciously foi- ls Claiborne Co. v. Bonds, 111 U. S. 400. 17 Williamsport v. Com., 84 Pa. St. 487; Bond V. CWllicotlie, 7 Ohio St. 31; Miles v. Gleason, 11 Wis. 470; Law v. People, 87 111. 385; Hewitt v. Normal School Dist., 94 111. 528; Folsom v. School Directors, 91 111. 404; Richmond v. McGowan, 78 Ind. 198; Smith v. Madison, 7 Ind. 81; New England Co. v. Robinson, 25 Ind. 536; Daily v. Columbus, 49 Ind. 169; Miller v. Commissioners, 66 Ind. 162; Hackettstown v. Swackhamer, 37 N. J. Law, 191; Ketchum v. Buffalo, 14 N. Y. 356; Hubbard v. Sadler. 104 N. Y. 223; In re Application of Church, 92 N. Y. 1; Dent v. Cook, 45 Ga. 323; Beaman v. Lake Co., 42 Miss. 327; Parsons v. Monmouth, 70 Me. 262; Newgass v. New Orleans, 42 La. Ann. 163. Contra, Knapp v. 14 POWER TO ISSUE. lowed the doctrine that there existed the im- plied power to issue bonds ; the ground of their argument generally being that it is a power necessary to fulfill the express power granted to the mimieipality. This power was early recognized among the federal courts,-'^ but it is since not recognized. On this doctrine, Judge Dillon, in Guan v. City of Clarksville, 5 Dill. 165, says: "Al- though it has taken as yet no deep root in our jurisprudence, it has nevertheless obtained a sufficient development to show its noxious character. We are required in this case only to determine the inherent or incidental pow- ers of the city to raise loans by a sale of its negotiable securities, payable at a distant day. We deny such power. What we decide on this point is that the power to erect wharves and improve streets, conferred by the de- fendant's charter, does not carry with it the power to raise funds for that purpose by the issue and sale of negotiable securities like those here in this suit." Mayor of Hobokeii,39 N.J. Law, 394; Waxahochie v. Brown, 67 Tex. 519; State v. Babcock, 22 Neb. 614. 18 Mitchell V. Burlington, 4 Wall. 270 ; Lamed V. Burlington, 4 Wall. 275; Rogers v. Burlington, 3 Wall. 654. PURPOSES OF MUNICIPAL BONDS. IS CHAPTER III. PURPOSE FOR WHICH MUNICIPAL BONDS MAY BE ISSUED. (a) Purpose must be public. It may be regarded as the settled law that municipal bonds can be issued only for a pub- lic purpose.^ 1 Loan Ass'n v. Topeka, 20 Wall. 655; Brenham V. German Sav. Bank, 144 U. S. 173 ; Cole v. City of La Grange, 113 U. S. 1; Parkersburg v. Brown, 106 U. S. 487; Eufaula v. McNab, 67 Ala. 588; Peo- ple V. Parker, 58 Cal. 624; Bissell v. Kankakee, 64 111. 249; Hanson v. Vernon. 27 Iowa, 472; Mather v. Ottawa, 114 111. 659; McConnell v. Hammond, 16 Kan. 228; State v. Osawkee, 14 Kan. 418; People's Bank v. Pomona, 48 Kan. 351; Allen V. Jay, 60 Me. 124; Lowell v. Boston, 111 Mass. 463; Jenkins v. Andover, 111 Mass. 354; Coates v. Campbell, 39 Minn. 498; Weismer v. Douglas, 64 N. Y. 61; Comstock V. Syracuse, 5 N. Y. 874; In re Eureka Basin, 96 N. Y. 42; In re Mayer, 11 Johns. 472; Feldman v. Charleston, 23 S. C. 57; Ohio Valley Works V. Moundsville, 11 W. Va. 1; Curtis v, Whipple, 24 Wis. 350, 16 PURPOSES OF MUNICIPAL BONDS. The reason for this is contained in the fact that when a nmnicipality issues its bonds, it incurs an indebtedness which must be event- ually absolved by taxation, and, in accordance with the constitutional provisions of all the states, money raised by taxation must be de- voted to a public purpose. ~ Chief Justice Black, in the case of Sharp- less V. Mayor, etc., 21 Pa. St. 417, has aptly expressed this doctrine: "The legislature has no constitutional right to ei'eate a public debt or to levy a tax or to authorize any munic- ipal corporations to do it in order to raise money for a mere private purpose. 'No such avithority passed to the general assembly by the general grant of legislative power. This would not be legislation. Taxation is a mode of raising money for public purposes. When it is prostituted to objects in no way connect- ed with the general interests or welfare, it ceases to become taxation, and becomes plun- der. Transferring money from the owner of it into the possession of those who have no title to it, though it be done under the name 2 On the classification of state constitutions pro- hibiting aid to private enterprises, see Simonton, Municipal Bonds, § 41. PURPOSES OF MUNICIPAL BONDS. 1? and form of a tax, is unconstitutional for all the reasons which forbid to usurp any other power not granted to them." (b) By whom determined. Whether a purpose is public or private is a constitutional question, and therefore one for the courts to decide. In some of the ear- lier cases, intimations were given that the legislature was the exclusive judge of this question.^ Granting this power to the legis- lature, the very object of the constitutional provision is thwarted, and its protection to the citizen rendered of no avail ; for the very essence of the right is the protection offered against encroachment upon the rights of citi- zens by the legislative branch. (c) What purposes are public. In determining this question, — that is, whether an issuance of bonds is for a purpose for which taxes may be properly levied, — no rule of law is involved so miich as general considerations of public policy and political economy.* A public purpose is one that is 3 Perry v. Keene, 56 N. H. 514; In re Townsend, 39 N. Y. 171. * Perry v. Keene, 56 N. H. 514. 18 PURPOSES OP MUNICIPAL BONDS. of a public character, necessary for the con- ducting of the affairs of the municipality, for the general welfare of the inhabitants, or even for their enjoyment and recreation.^ On this subject, Mr. Justice jMiller, in the case of Loan Association v. Topeka, 20 AVall. 65."), says: "In deciding whether, in the given case, the object for which the taxes are assessed falls on the one side or the other of this line, — that is, between a public and a pri- vate jDurpose, — they must be governed main- ly by tlie CMJurse anfl usage of the government, the object for which taxes have been custom- arily and by long course of legislation levied, what objects or purposes have been considered necessary to the support and for the proper use of the government, whether state or mu- nicipal. Whatever lawfully pertains to this, and is sanctioned by time and the acquies- cence of the people, may be held to belong to the public use, and proper for the mainte- nance of good government, though this may not be the only criterion of rightful taxation." Likewise, Chief Justice Black, in the case of Sharpless v. Mayor of Philadelphia, 21 Pa. St. 417, says of public purposes: "Taxes 5 Simonton, Municipal Bonds, § 35. PURPOSES OF MUNICIPAL BONDS. 10 may be imposed for roads of all kinds, canals and bridges, that there may be facilities for transportation of freight and travel ; for pub- lic schools and colleges, that the public may be educated; for piiblic libraries, that their means of improvement may be increased ; for the poor, the dumb, the blind, the insane, lest they suffer from want; for the police of the state, in regulations for the preservation of health or the detection of crime; for courts of law, that individual rights may be protect- ed and enforced, and that crime, when de- tected, may receive its fitting jDunishment ; for the preservation of peace and the protection of the countries from foreign enemies ; to aid, encourage and stimulate commerce, domestic and foreign, by the establishment of mints, postage systems, and maintaining navies to keep open the highways of nations; to en- courage citizens in the defense of their coun- try by suitable rewards and mementoes for past services in times of war, or by bounties for enlistment for future services, and for the promotion of arts and sciences." (d) Examptles of purposes held to be public. It has been held that the power of taxation may be invoked for the following purposes: 20 PURPOSES OF MUNICIPAL BONDS. Tke construction of streets," cities,^ schools and colleges,* Tjridges,^ water- works/" fire engines,-'^ pnblic buildings,-'" oWetumpka v. Winter, 29 Ala. 660; Rogers v. Burlington, 3 Wall. 654; Hammell v. Philadelphia, 65 Pa. St. 146; People v. Mayor of Brooklyn, 4 N. Y. 419. 'Boston V. Shaw, 1 Mete. (Mass.) 130; Tide- water V. Coster, 2 C. E. Greene (N. J.) 518; Wil- liams V. Brace, 5 Conn. 190; Stroud v. Philadel- phia, 61 Pa. St. 255; State v. Jersey City, 30 N. J. Law, 148; Hildreth v. Lowell, 11 Gray, 345; St. Louis V. Peters, 36 Mo. 456. s Merrick v. Amherst, 12 Allen (Mass.) 500; Hensley Tp. v. People, 84 111. 544; Marks v. Par- due University, 37 Ind. 155; Gordon v. Cornes, 47 N. Y. 608; Board of Education v. State, 26 Kan. 44; Bank of Sonoma Co. v. Fairbanks, 52 Cal. 196. 9 Stevis y. Sherman Co., 5 Fed. 269; County Commissioners v. Chandler, 96 U. S. 205; Burling- ton Tp. V. Beasley, 94 U. S. 314; Bradley v. Franklin Co., 65 Mo. 638; Getchell v. Benton. 47 N. W. 468; Dodge v. Chandler, 94 U. S. 205; Union County V. Colfax County, 4 Neb. 450; Wilcox v. Deer Lodge County, 2 Mont. T. 574; Guernsey V. Burlington, 4 Dill. 372. 10 Sala V. New Orleans, 2 Woods, 188; Stein v. Mobile, 24 Ala. 591; Rome v. Cabot, 28 Ga. 50; Hall V. Houghton, 8 Mich. 458. 11 People V. Breshire, 80 111. 423; Mills v. Glea- son, 11 Wis. 470; Robinson v. St. Louis, 28 Mo. 488. PURPOSES OP MUNICIPAL BONDS. 21 cemeteries and parks/^ docks and wharves/* gas works,^® charitable institutions of a quasi public character/^ grist mills," forts/^ mar- kets/^ drainage,^" and bounty to encourage enlistment."^ 12 Greely v. People, 60 111. 19. Contra, when building is to be used partly by a Grand Army Post, Kingman v. Brockton, 26 N. E. 998. 13 County Court v. Griswold, 58 Mo. 175; Park Com'rs V. Detroit, 28 Mich. 228; Edwards v. Ston- ington Cemetery Ass'n, 20 Conn. 466; In re Central Park, 63 Barb. 282. "Eaton R. Co. v. Central R. Co., 52 N. J. Law, 267. 15 Bloomfleld County v. Richardson, 63 Barb. 447. 16 Shepherd's Fold v. New York, 7 Am. & Eng. Corp. Cas. 387. " Blair v. Gumming County, 111 U. S. 363. 18 Gilmer v. Lime Point, 18 Cal. 229. 10 State V. Madison, 7 Wis. 688. 20 Dingley v. Boston, 100 Mass. 544; Egyptian Levee Co. v. Hardin. 27 Mo. 495; People v. Rear- ing, 6 Vroom (N. J.) 497; Sessions v. Crunkelton, 20 Ohio (N. S.) 349; In re Drainage, etc., 6 Vroom (N. J.) 497; Hartwell v. Armstrong, 19 Barb. 166; People V. Nearing, 27 N. Y. 306; Cypress v. Hooper, 2 Mete. (Ky.) 350; Daly v. Swope, 47 Miss. 367; McGhee v. Matthias, 21 Ark. 40; Rich- ardson v. Marks, 16 La. Ann. 429; Hagar v. Supervisors of Yale, 47 Cal. 222. Draining lands for purposes of public health, not for making them more valuable, a public purpose. Anderson v. 22 PURPOSES OP MUNICIPAL BONDS. (e) Railroads are public purposes. Xo question, perhaps, has been the subject of more controversies in this branch of law than the proposition whether a railroad is a public purpose. The Federal Eeports up to 1880 teem with cases in which municipalities have sought to avoid this class of bonds, known as "railroad aid bonds." However, that a railroad is a pul)lic purpose is now firmly settled both by the federal courts and all of the state courts except ilichigan,-^ which has persistently re- fused to admit the proposition, although its decisions have been set aside by the supreme court of the United States, when properly brought before it on this question.^^ Iowa, also, was in the negative on this Kerns Drainage Co., 14 Ind. 199. But laying out drains at request of individual owners, and where public good does not require it, held to he a private use. Reeves v. Wood Co., 8 Ohio (N. S.) 333. =1 State v. Richland Tp., 20 Ohio (N. S.) 362; Booth V. Woodbury, 32 Conn. 128; Moulton v. Raymond, 60 Me. 121; Broadhead v. Milwaukee, 19 Wis. 624. 22 People V. Salem, 20 Mich. 425. 23 Pine Grove v. Talcott, 19 Wall. 666. PURPOSES OP MUNICIPAL BONDS. 23 question in its earlier holdings, but later it has adopted the federal holdings.^* It may be noted, in distinction from the public piirposes above cited, that a railroad is a private corporation operated for private gain, and therefore some indirect benefit con- ducive and necessary to the public good and welfare must be deduced in order to consti- ttite it a public purpose. Chief Justice Black, ;n his able and learned opinion on the case of Sharpless v. Mayor of Philadelphia,*^ has well stated the doctrine: "I have conceded that a law authorizing taxa- tion for any other than public purposes is void, and it cannot be denied that a railroad company is a private corporation. But the right to tax depends on the ultimate use, pur- pose and object for which the fund is raised, and not on the nature or character of the per- son or corporation whose intermediate agency is to be used in applying it. A tax for a pri- vate purpose is unconstitutional, though it pass through the hands of public officers ; and the people may be taxed for a public work, al- 2* Steward v. Polk Co., 30 Iowa, 9; Renwick v. Davenport, 47 Iowa, 511. 25 21 Pa. St. 147. 24 PURPOSES OF MUNICIPAL BONDS. though, it be under the direction of an indi- vidual or private corporation. The question, then, is whether the building of a railroad is a public or private aifair. If it be piiblic, it makes no difference that the corporation which has it in charge is private. "A railroad is a public highway for the public benefit, and the right of a corporation to exact a uniform, reasonable, stipulated toll from those who pass over it does not make its main use a private one. "The public has an interest in such a road, when it belongs to a corporation, as clearly as they would have if it were free, or as it the tolls were payable to the state, because travel and transportation are cheapened by it to a degree far exceeding all the tolls and charges of every kind, and this advantage the public has over and above those of rapidity, comfort, convenience, increase of trade, open- ing of markets, and other means of rewarding labor and promoting wealth. The company may be private, but the work they are to do is a public duty, and along with the public duty there is delegated a sufficient share of the sovereign power to perform it. The right of eminent domain is always given to such PURPOSES OP MUNICIPAL BONDS. 25 corporations. But the right of eminent do- main cannot be used for private purposes, and therefore, if a railroad, canal or turnpike, when made by a corporation, is a mere private enterprise, like the building of a tavern, store, mill or blacksmith's shop, there never vi'as a constitutional charter given to an im- provement company, and every taking of lands and materials under any of them was a flagrant trespass. "If the making of a railroad is a public duty which the state may either do entirely at the public expense, or cause to be done en- tirely by a private corporation, it follows that such a work may be made partly by the state and jiartly by a corporation, and tlie people may be taxed for a share of it as rightfully as for the whole." (f) Private purpose defined. It being determined that a legislature has no authority to authorize the issiTance of bonds for a private purpose, it becomes use- ful to define a private purpose in contradis- tinction to a public purpose. A private purpose is constituted where a mere private enterprise, conducted and owiied by a private individual or individuals, is 26 PURPOSES OF MUNICIPAL BONDS. operated solely for private gain. It matters not how commendable, charitable or beneficial the enterprise may appear, it must be ncce-s- sary to the public good and ^velfare, and therefore, as it were, a public duty, in order to make the purpose public. It must constantly be borne in mind that an issuance of bonds involves a taking of pri- vate property, and, if there be no manifest public purpose to which the funds may be ap- plied, the taking is simjaly an appropriation of one individual's property to the use and for the enjoyment of another, — a procedure that is nothing short of legalized plunder. (g) Purposes held to be private. Bonds issued to aid manufacturing enter- j^rises have been held to be for a private pur- pose;"'' likewise bonds issued to aid sufferers 26 Allen V. Jay, 60 Me. 124; National Bank v. lola, 9 Kan. 689; Savings & Loan Ass'n v. Topeka, 20 Wall. 655; Weismer v. Village of Douglas, G4 N. Y. 91. Machine and foundry shops: Parkers- burg v. Brown, 106 U. S. 487. Linen works: Bissell v. City of Kankakee, 64 111. 249. Rolling mills: English v. People, 96 111. 566; Osborne v. Adams, 106 U. S. 181; Cole v. City of LaGrange, 113 U. S. 1; Tyler v. Beecher, 44 Vt. 656. Woolen mills: McConnell v. Hammond, 16 Kan. 228. PURPOSES OF MUNICIPAL BONDS. 27 in a fire;^'' so in loans to destitute citizens;^* also in grants of land to a freight company.^* (h) Distinguishing cliaracteristics of public and private purposes. It is very difficult to give a comprehensive and accurate text by vsrhich to classify a pur- pose as either public or private; for that which is a public purpose in one locality may be the opposite in another ; that which was a public purpose in the past may be a private purpose in the present, et vice versa. Justice Folger, in Weismer v. Village of Douglas,"" gives a very lucid distinguish- ment as follows : "When we come to ask, in any case, what is a public purpose, the an- swer is not always ready nor easily to be Manufacturing plant: Railroad Co. v. Smitli, 23 Kan. 745; Coates v. Campbell, 37 Minn. 498. But see steam grist mill cases: Burlington Tp. v. Beasley, 94- U. S. 310; Guernsey v. Burlington Tp., 4 Dill. 372; Blair v. County of Cuming, 111 U. S. 363. 27 Lowell v. Boston, 111 Mass. 454 ; Jenkins v. Andover, 111 Mass. 354. 28 Memphis Freight Co. v. Memphis, 4 Coldw. (Tenn.) 419; State v. Osawkee, 14 Kan. 418. 29 Fieldman v. Charleston, 15 Am. & Eng. Corp. Cas. 343; Lowell v. Massachusetts, 11 Mass. 463. 30 64 N. Y. 99. 28 PURPOSES OF MUNICIPAL BONDS. found. It is to lie conceded that no pinched or meager sense may be put npon the words, and that if the purpose designated by the legislature lies so near the border line as that it may be donbtfnl on \\'hich side it is domi- ciled, the courts may not set their judgment against that of the law makers. It may also be conceded that that is a public purpose from the attainment of which will flow some benefit or convenience to the public, whether of the whole commonwealth or of a circumscribed community. In this latter case, however, the benefit or convenience must ho direct and im- mediate from tlie purpose, and not collateral, remote or consequential. It must be a benefit or convenience which each citizen of the com- munity affected may lay his own hand to in his own ri'plit, and take unto his own use at his own option, upon the same reasonable terms and conditions as any other citizen thereof. He may not be made to depend for it on the spontaneous action of others, or to receive it in uncertain degree or manner or roundabout ^vay, or hampered with discrimi- nating distinctions and conditions," WHO IS BONA FIDE PURCHASER. 29 CHAPTEE IV. WHO IS A BONA FIDE PURCHASER. (a) What constitutes. This is an important question, and one that naturally arises first in the application of the law of recitals, for, without the existence of a bona fide purchaser, the law has no applica- tion. To constitute a holder of bonds a bona fide purchaser, there must be present the follow- ing qualifications : ( 1 ) He must have purchased the bonds be- fore maturity. -"^ (2) He must have given value.^ (3) He must have purchased in good faith without any notice, either actual or construct- ive, of irregTilarities in their issuance.^ iSac Co. V. Cromwell, 96 U. S. 51. 2 Orleans v. Pratt, 99 U. S. 676; Allen v. Dallas, 3 Woods, 316. 3 City of Lexington v. Butler, 14 Wall. 283 ; 30 WHO IS BONA FIDE PURCHASER. Such a pureliaser obtains a clear title to the bond, even though, as between the original parties, there may have existed such defects in its issuance as to have rendered it invalid.* A bona fide purchaser is affected only by a want of power in the municipality to issue the bond; but this statement is modified by the fact that the legal principles of constructive notice are so broad iu their application that the least lack of sufficiency in a bond may be enough to put a purchaser upon inquiry, and thereby preclude the doctrine of estoppel. (b) Instances. A purchaser who takes bonds ia payment of an antecedent debt, or who gives a note for them, is entitled to all the privileges of a bona fide holder, and may recover the face value of the bonds, although he paid less than par value for them.^ Johnson Co. v. Thayer, 94 U. S. 631; Warren Co. v. Marcy, 97 U. S. 96; Suffolk Sav. Bank v. Bos- ton, 149 Mass. 364; Madison Co. v. Paxton, 57 Miss. 701. * Burroughs, Public Securities, p. 365. sMcClure v. Township, 94 U. S. 429; Scotland Co. V. Hill, 132 U. S. 107; Tied. Municipal Se- curities, p. 195; Suffolk Sav. Bank v. Boston, 149 WHO IS BONA FIDE PURCHASER. 31 And likewise persons who hold negotiable railroad bonds as collateral security for the payment of debts due theim by the railroad company." But one who purchases bonds from a rail- road company is not subrogated to the rights of the railroad against the municipality, if the bonds are declared void/ The hona fide holding of a company is not destroyed by notice to one of its trustees who have instituted action upon county bonds.* jSTor is a hona fide holder affected by the pendency of a chancery suit, as notice of the invalidity of bonds.® Even a person having notice may be a hona fide holder of bonds if he be the successive grantee of a hona fide holder without notice.-^'' But the presi- Mass. 364; Allen v. Dallas Co., 3 Woods, 316; Foote V. Hancock, 15 Blatchf, 343; Mobile Sav. Bank v. Oklibblcha Co., 24 Fed. 110; Orleans v. Pratt, 99 U. S. 51; CMcopee v. Sac Co., 8 Mete. (Mass.) 40; Fowler V. Strickland, 107 Mass. 552; National Bank of Michigan v. Greene, 33 Iowa, 140. o Allen v. Dallas Co., 3 Woods, 316. 'Aetna Life Ins. Co. v. Middleport, 124 U. S. 534; Tied. Mun. Corp. p. 195. 8 Johnson Co. v. Thayer, 94 U. S. 631. 9 Warren Co. v. Marcy, 97 U. S. 96. 10 Suffolk Sav. Bank v. Boston, 149 Mass. 364. 32 WHO IS BONA FIDE PURCHASER. dent of a railroad company is not such a bona fide holder, who, as president, sold bonds to a creditor and subsequently bought them back as a pri"i'ate individual. ■^■' This privilege of a hona fide holder, as abo^e delineated, is a rule of law and not of equity. If a municipal bond should be se- cured by a mortgage (a rai-e procedure), and a foreclosure of the mortgage be attempted, the bond would be treated as a mere incident to determine the amount of the mortgage, and every defense available against the mortgagee could be enforced against the holder.^ ^ (c) What he is required to know. The bona fide purchaser ought to ascertain, and, with few exceptions, is required to know : (1) That the municipality has express power to issue.-' ^ ( 2 ) That the statute granting the power to issue is not contrary to the constitution of the state or of the United States." 11 Madison Co. v. Paxton, 57 Miss. 701. 12 Burroughs, Public Securities, p. 365; Suf- folk Sav. Bank v. Boston. 149 Mass. 364. 13 Chapter 2. — on power to issue. i*Lake Co. v. Graham, 130 U. S. 674; National Bank v. School Dist., 5 C. C. A. 468; Board of WHO IS BONA FIDE PURCHASER. 33 (3) That the purpose for which the issu- ance was made is a public one.-'^ (4) That the bonds on their face be regu- lar, and the recitals therein import full com- pliance with the precedent conditions impos- ed by the statute. ^"^ (5) That the officers issuing and signing the bonds are the proper designated authori- ties, with sufficient power to so issue.-''' Com'rs V. Union Bank, 37 C. C. A. 492. 15 Ante, c. 3, — purpose for which municipal bonds may be issued. 16 Ante, c. 3, — purpose for which municipal bonds may be issued. 17 Marsh v. Fulton Co., 77 U. S. 676. 34 RIGHTS OF PARTIES. CHAPTER V. RIGHTS OF PARTIES, (a) When determined. The rights of parties who hold municipal bonds is determined according to the law at the time when the bonds were placed upon the market.-' This includes the interjareta- tions of the laws made by the courts. A con- struction, whether constitutional or otherwise, placed upon a certain statute by the supreme court of a state, and in existence at the time of an issuance of bonds, cannot be so changed by a subsequent decision of the same tribunal as to thereby defeat the validity of the bonds." The reason for this doctrine lies in the provi- 1 Douglass V. Pike Co., 101 U. S. 677; Darling- ton V. Jackson, 101 U. S. 832; Foote v. Pike Co., 101 U. S. 688; Taylor v. Ypsilanti, 105 U. S. 265; Ralls Co. V. Douglass, 105 TJ. S. 728; Green v. Conners, 109 U. S. 104. 2 Gelpecke v. Dubuque, 1 Wall. 175. RIGHTS OF PARTIES. 35 sion of the federal constitution prohibiting states from impairing the obligations of their contracts. Chief Justice Taney^ says: "The sound and true rule is that, if the contract, when made, was valid by the laws of the state, as then expounded by all the departments of its government, and administered in its courts of justice, its validity and obligation cannot be impaired by any subsequent act of the legis- lature of the state or decisions of its courts, altering the construction of the law." So, in Grelpecke v. Dubuque,* where railroad aid bonds were held valid under the decisions of the state court at the time of their issuance, the supreme court of the United States would not permit a subsequent ruling of the state court which held that the power to issue rail- road aid bonds was unconstitutional, to ren- der the issue invalid. (b) What Jaw governs. It will be noted that the federal and state courts have shown much conflict of opinion in 3 Ohio Life Ins. & Trust Co. v. Debolt, 16 How. 432. 4 1 Wall. 175. 36 RIGHTS OF PARTIES. relation to the subject of municipal bonds. There are, however, certain spheres of influ- ence delegated to each, whereof certain rules may be propounded. It is the settled rule that the federal courts follow the state courts in the interpretation and construction placed by the latter upon a certain statute; vet the federal courts do not follow every change that a state court may make, but only its settled policy. If the fed- eral courts have adopted a construction of a statute before a state passes upon it, they are not thereby bound to change their views, un- less afterwards the state court adopts that construction as its settled policy.^ The idea involved is that construction of statutes must be given a prospective, not a retroactive, effect. Justice Swayne® says : "The construction given to a statute by the highest tribunal of such state is regarded as a part of such statute, and is as binding upon the coiirts of the United States as the text. If the highest judicial body of a state adopt new views as to the proper construction of a stat- ic Grover v. Slaughter, 15 Pet. 449. 6 Lefflngwell v. Warren, 2 Black, 599. RIGHTS OF PARTIES. 37 ute, and reverses its former decisions, this court will follow the latest settled adjudica- tions." It will be seen that the constructions above involved were ones local in their nature, and, as such, peculiar and proper for the state courts. Where, however, in the construction of a statute, questions involving the federal constitution or matters of general law are raised, then the federal courts are not bound by the adjudications of the state courts, as the proposition whether a railroad is a pub- lic or a private purpose.'' Like^vise, the fed- eral cotirts have refused to be bound by the decisions of the state courts upon questions of general commercial law, as applied to mu- nicipal bonds.* (c) Statute of limitations. The statute of limitation applies to munici- pal bonds, and, generally, runs at their ma- turity.* Bonds and coupons, being of the 7 Olcott V. Supervisors, 16 Wall. 678; Piije Grove Tp. v. Talcott, 86 U. S. 666. 8 Pine Grove Tp. v. Talcott, 86 U. S. 666; Crom- well V. Sac County, 96 V. S. 51; Oats v. National Bank, 100 U. S. 239. oFt. Scott V. Hickman, 112 U. S. 150; Kenosha 38 RIGHTS OF PARTIES. same legal nature and character, are governed by the same rules and limitations. Coupons, Tvhen detached, are treated as separate nego- tiable securities, and hence the statute may run on bonds and coupons at different periods, — on the coupons at the time of their respec- tive maturities : on the bond at the time of its own maturity.^" So, an action on a coupon may be barred before an action on a bond accrues ; and when an action on a coupon is thus barred by stat- ute, recovery cannot be made by suing for in- terest on the bond.^^ The running of the statute may be suspend- ed by a legislative recognition of the debt.'- V. Samson, 9 Wall. 477; Lexington v. Butler, 14 Wall. 282; Clark v. Iowa City, 20 Wall. 583; Underhill v. Sonora, 17 Cal. 172; Grafton Bond V. Doe, 19 Vt. 463. 10 Clark V. Iowa City, 20 Wall. 583. 11 Griffin v. Macon, 36 Fed. 885; Underbill v. Sonora, 17 Cal. 172. 12 Ft. Scott V. Hickman, 112 U. S. 150. THE RECITALS. 39 CHAPTER VI. THE RECITALS. (a) What constitutes. The right to issue municipar bonds is in- herent in the state, b\it it may be delegated to the municipality through the constitution of the state, enactments of the legislature, or in special acts granting charters. This power to issxie is -usually accompa- nied with certain precedent conditions which are necessary to be fulfilled before a lawful issue can be made ; these conditions may be prescribed by the constitution, the state stat- utes, or by the municipality itself, and usu- ally consist in the requirements of a majority vote of the electors, at a duly-held election, to avithorize the issue, in the necessity of making provision for a tax levy to meet the interest and provide for a sinking fund to pay off the bonds, in the prohibition of an issuance in excess of a certain limita- 40 THE RECITALS. tion of indebtedness, and often upon the con- tingent performance of a certain act by the payee named in the bonds. The rehearsal of the constitutional or legis- lative act delegating the power to issue, and of the compliance with the precedent condi- tions attached to that act, is that which con- stitutes the recitals of the bond. (b) Meaning to the bona fide purcliaser. It is to the bona fide holder for value be- fore maturity, without notice, that recitals are of importance, for to the original pur- chaser, or a subsequent purchaser non bona fide} no recitals in bonds act as an estoppel to set up irregularity in compliance with precedent conditions necessary for a lawful issue. It is the doctrine of estoppel that gives re- citals in bonds their great strength, aside from the fact that bonds are in form nego- tiable securities," and entitled to the privi- leges of negotiability. The doctrine of estoppel applies in two ways : First, it acts equitably. Where .'i 1 Callaway Co v. Foster, 93 U. S. 567. 2 Gelpecke v. Dubuque, 68 V. S. 175. THE RECITALS. 41 municipality has received full benefit from a bond issue, and with full knowledge of de- fects in the manner of issue, they cannot be heard to set up irregularities as a defense without placing the holder in statu quo. Second, it acts in the form styled "municipal decision," — that is, where certain officers have authority to issiie bonds of their munic- ipality on the performance of certain condi- tions named in the statute, and the power is vested in them to determine whether the conditions have been complied with, and they do so determine, their decision that the con- ditions have been complied with is final and conclusive upon the municipality. The mu- nicipal corporation is said to be estopped by the acts of its officers, and they will not be heard to controvert the decision, although it may be true, in point of fact, that the con- ditions have not been complied with.* The doctrine is applied under the first head where municipalities have acquiesced in, and recognized an issuance of bonds for a number 3 Burroughs, Public Securities, p. 299; Knox Co. V. Aspinwall, 21 How. 589; Bissell v. City of Jeffersonville, 24 How. 287; Buclianan v. Litch- field, 102 U. S. 278. 42 THE RECITALS. of years, either by the payment of interest or other similar acts of recognition. Under the second head the doctrine is strictly applicable to recitals. For, in the hands of a bona fide holder, recitals such as the above are in legal effect a warranty or certificate that the pre- cedent conditions necessary to make an issue lawful have in fact been performed, and are so certified by those to whom the law refers the public for authentic and final informa- tion on such facts. The distinction has often been made, both by text writers* and courts, between recitals on matters in pais and recitals on matters of law; the rule being that the doctrine of estoppel applies to the former, but not to the latter. However, this rule is subject to mod- ifications, and does not in all cases prove true.^ But it is true that all purchasers are required to know the law pertaining to the authority to issue bonds, and any defense * Elliot, Mun. Corp. p. 164 ; Dillon, Mun. Corp. § 523; Burlians, Municipal Bonds, p. 53; Bur- roughs. Public Securities, p. 318 et seq.; Beach, Pub. Corp. § 930; Hainer, Municipal Securities, 283. 5 See Lynde v. Winnebago Co., 83 XI. S. 6. THE RECITALS. 43 is available to a municipality that shows a want of power to issue, no matter what the recitals may state. For a recital cannot create a power. ^ It is in statements anent the mode of exercise of a power that the principle of estoppel starts to work. (c) The doctrine of estoppel. Bonds were early declared to be negotiable instruments, and subject to the rules of the law merchant. They are transferable by de- livery, and, when issued under competent au- thority, they pass into a bona fide purchaser's hands free from all the infirmities of their origin.'^ The officers of a corporation are its agents, and all the ordinary rules and principles of agency are applicable to their acts. A recital 6 Daviess Co. v. Huidekoper, 98 U. S. 98; Anthony V. Jasper Co., 101 U. S. 693; Wells v. Supervisors, 102 U. S. 625. TAckley School Dist. v. Hall, 113 U. S. 135; 2 Beach, Pub. Corp. p. 956; Cromwell v. Sac Co., 96 U. S. 51; New Providence v. Halsey, 117 TJ. S. 336; Ottawa v. First Nat. Bank, 103 U. S. 770; Block V. Bourbon County Com'rs, 99 TJ. S. 686; Calhoun Co. v. Galbraith, 99 U. S. 214; Macon Co. V. Shores, 97 U. S. 272; Humboldt Tp. v. Long, 92 U. S. 642. 44 THE RECITALS. by one of these officers, if acting colore officii, that certain precedent conditions of law or fact have been complied with, estops the cor- poration to set up the contrary where it may be inferred that the official had the power to determine upon the truth or falsity of these representations.* Such recitals or rep- resentations are equivalent to a warranty or certificate on the part of the officers that everything necessary to make the issuance legal as far as their capacity is involved has been performed, and the ground of the estop- pel is that it is inequitable to allow a munic- ipality to deny the truth of the affidavits of its officers to whom it has referred the public for authority.^ To quote the language of Judge Sanborn in Xational Life Ins. Co. v. s Knox Co. V. Aspinwall, 21 How. 539. 9 Burhans, Municipal Bonds, p. 55 ; 2 Dillon, Mun. Corp. p. 615; Independent School Dist. v. Stone, 106 U. S. 183; Pana v. Bowler, 107 U. S. 529; Anderson v. Beal, 113 U. S. 227; Oregon v. Jennings, 119 U. S. 74; Marcy v. Oswego, 92 U. S. 637; Humboldt Tp. v. Long, 92 V. S. 642; Wil- son V. Salamanca, 99 XT. S. 499; Dallas Co. v. McKenzie, 110 U. S. 686; New Providence v. Halsey, 117 "U. S. 336; Dixon Co. v. Field, 111 U. S. 83; Northern Bank of Toledo v. Porter Town- ship Trustees, 110 U. S. 608. THE RECITALS. 4S Board of Education, 10 C. C. A. 637 : "Cor- porations are as strongly bound to an adher- ence to truth in their dealings with mankind as are individuals, and they cannot, by their representations or silence, induce others to part with their money or property, and then repudiate the obligations for which the money was cxpencl,ed, and Avhich their state- ment represented to be valid. "It is a general and salutary principle of law that one who, by acts or representations or by his silence when he ought to speak out, intentionally or through culpable negligence induces another to believe certain facts to exist, and the latter rightfully acts on such a belief, so that he will be prejudiced if the former is permitted to deny their existence, is conclusively estopped to interpose such denial, j^o reason occurs to us why a munic- ipal body that has induced others to act to their prejudice by its certificate that it has performed an act that the la\vs intrusted to it to perform should be excepted from this rule and permitted to deny its certificate, to the prejudice of those it has deceived, simply because the performance of the act was re- 46 THE RECITALS. quired by the constitntion or a portion of the legislature." (d) Authority to issue. Either statutory or constitutional authority must be granted to municiiDalities in order that they may have any power to issue bonds. A recital cannot create a legal power to issue bonds.-"' A legislative act granting power to is- sue that is contraconstitutional is void, and no recital or an issue under such a grant can vali- date it.-'-'^ However, a recital in a bond refer- rino- to a legislative act which is void does not necessarily make the bonds void if there be another legislative act in existence granting tlie power to issue; but no recitals in such a case create any estoppel to set up as a de- fense lack of compliance with precedent con- ditions of the issuance.-'^ A recital of an 10 Daviess Co. v. Huidekoper, 98 U. S. 98; An- thony V. Jasper Co., 101 XJ. S. 693; Wells v. Su- pervisors, 102 U. S. 625. "Lake County v. Graham, 130 U. S. 674; Na- tional Bank V. School Dist. No. 7, 5 C. C. A. 468; Board of Com'rs v. Union Bank, 37 C. C. A. 492. 12 McClure v. Oxford Tp., 94 TJ. S. 429; Crow V. Oxford Tp., 119 V. S. 215; Town of Gilson V. Dayton, 123 U. S. 59; Aurora v. West, 22 Ind. THE RECITALS. 47 authority to issue simply refers the purchaser to the source of the power of the municipal- ity. The validity of this power the pur- chaser m.ust ascertain at his own risk; for this is a matter of law with which all are chargeable who deal in municipal bonds. ■'^ Recitals in bonds that they are issued by virtue of a legislative act, the provisions, re- quirements, and conditions precedent neces- sary to the subscription aforesaid having been in all respects fully complied with, etc., estop a county from setting up the fact that the legislative act gave them power only to issue bonds in construction of a narrow gauge road, whereas the bond called for a standard gauge road. A mere ultra vires act which has been fully executed cannot be set up as a defense.^* 89; Fisk v. Kenosha, 26 Wis. 29; George v. Oxford Tp., 16 Kan. 72. isMcClure v. Oxford Tp., 94 U. S. 429; Wells V. Pontotoc Co., 102 U. S. 625; Ogden v. Daviess, 102 TJ. S. 634; School Dist. v. Insurance Co., 103 TJ. S. 707; Hayes v. Hot Springs, 114 U. S. 120; Merrill v. Town of Monticello, 138 U. S. 673; Concord v. Robinson, 121 V. S. 165: City of Bowham v. German American Bank, 144 U. S. 173; Young v. Clarendon, 132 TJ. S. 340. 1* Kingman Co. v. Cornell University, 6 C. C. A. ,'?96. 48 THE RECITALS. A recital may constitute an estoppel in favor of a bona fide purchaser, even where the body that issued the bonds has no power to issue them, and could not, by any act of its own or its constituent body, make a lawful issue of bonds if that fact does not appear from the bonds the purchaser Imiys, the constitution and statutes under A\'liich they arc issued or the public records referred to therein.-'^ (e) Effects of no recitals. The effect of no recitals is to put the bona fide purchaser iipon inquiry as to all the precedent conditions of the legislative or con- stitutional authority, and, at his peril, he must ascertain whether or not these condi- tions have been fulfilled. In County C'onamissioners v. Block, 99 U. S. 686, the court says: "The bonds, it is true, contain no recitals. If they did con- tain a recital that an election had been held, and that a majority had voted for the issue of the bonds, the recital would have been con- clusive upon the county, and a purchaser would have needed to look no further than 15 National Life Ins. Co. v. Board of Education, 10 C. C. A. 651. THE RECITALS. 49 to the act of the legislature. This is accord- iag to all our decisions, but in the absence of any recital, it may be conceded he was bound to inquire whether a majority vote had been returned for the issue of the bonds." And so in Hopper v. Covington, 118 U. S. 148, where the special authority to issue and matters in pais are not recited upon in the bonds, the court holds that no estoppel of any kind arises, and that the special author- ity to issue must be both alleged and proved. (f) Effect of recitals contrary to statutory pro- visions. Where recitals in a bond show in them- selves that the statutory provisions are not complied with, not only is no estoppel raised to protect the bona fide purchaser, but they in themselves act as conclusive evidence of the invalidity of the bond, and thus render it void. This rests on the doctrine that all purchasers of bonds are bound to take notice of the provisions of the statutes under which bonds purport to be issued.-'^ Hence bonds are void where a recital is made of a duly- leMcClure v. Oxford Tp., 94 U. S. 429; Anthony V. Jasper Co., 101 U. S. 693; Lake Co. v. Graham, so THE RECITALS. held election on April 8, 1872, when the statute itself showed that no election could have been legally held before April 21, 18Y2.^'^ Likewise where the recital was that the bond was given "for value received in stock, etc.," contrary to the provisions of the statute that bonds should be disposed of for not less than par.'** (g) Express recitals. An express recital is the express state- ment in the bond itself of the performance of the particular precedent condition or con- ditions imposed by statute. It has been the doctrine of the United States courts of late years to give full effect to express recitals, 130 U. S. 674; German Sav. Bank v. Franklin Co., 128 U. S. 526; Dixon Co. v. Field, 111 U. S. 83. 17 McClure v. Oxford Tp., 94 U. S. 429. "These bonds carried upon their face unmistakable evi- dence that the forms of the law under which they purported to have been issued had not been complied with, because thirty days had not elapsed between the time the law took effect and the date of the election. If a purchaser may be, as he sometimes is, protected by false recitals in bonds, the municipality ought to have the benefit of those that are true." So in Manhattan Co. v. City of Ironwood, 20 C. C. A. 642. IS Horton v. Town of Thompson, 71 N. Y. 513. THE RECITALS. 51 and to treat as conclusive the facts so ex- pressly recited ; so that at the present day, the difference between an express recital and a general recital has an important bearing on the application of the doctrine of estoppel- This is particularly important in bond issues where conditions precedent as to the limita- tion of indebtedness have been imposed by the state constitution,^" or wliere the electors in authorizing the issuance have been given the power to impose precedent conditions.^" An express recital importing compliance in these cases is conclusive, whereas a general recital would have raised no estoppel. (h) Express recitals and general recitals dis- tinguished. In the early eases, a recital that bonds were issued "in conformity with" or "pursu- ant to a specified statute" was held to raise the doctrine of estoppel as to all precedent conditions of the statute, and to import com- pliance therewith.^^ 18 Chaffee Co. v. Potter, 142 U. S. 355; Gunni- son Co. y. Rollins, 173 U. S. 256; National Life Ins. Co. V. Board of Education, 10 C. C. A. 637; Dudley v. Board of Commissioners, 26 C. C. A. 82. 20 Citizens' Sav. & Loan Ass'n v. Perry Co., 156 U. S. 689; Groves v. Saline Co., 161 U. S. 370. 21 Knox Co. v. Aspinwall, 21 How. 539. See Mer- 52 THE RECITALS. This doctrine of estoppel applied to all irregularities in the exercise of a granted power, but not to cases where there was a total lack of power or the exercise of it.^- Later, recitals anent a duly-held election ap- ]ieared in connection with the general re- citals ; and such a recital, being expi'css, has been held to raise the doctrine of estoppel, even though, as a matter of fact, no vote had ('V(>i' l)een taken. "^ This general recital then caiuc to be more and inuve treated as a formality — a conclu- sion of law — as the express recitals on dif- ferent precedent conditions became more numerous. At the present day, a general recital does not estop the municipality from setting up an issuance in excess of the legal limitation of indebtedness, if tliat limitation be prescribed by the constitution,-^ but if by the statute, cer V. Hackett, 68 U. S. 83 ; Myer v. Muscatine, 68 U. S. 384. 22 Dallas Co. v. McKenzie, 94 U. S. 660; Police Jury V. Britton, 82 U. S. 566; March v. Fulton Co., 77 U. S. 676; Hayes v. Holly Springs, 114 U. S. 120. -^■2 Dillon, Mun. Corp. p. 599. =■1 Buchanan v. Litchfield, 102 TJ. S. 278; Lake THE RECITALS. S3 the estoppel acts.^^ An express recital, how- ever, in either case, is conclusive of the facts recited, and every contrary defense is es- topped.^'^ A general recital cannot be relied upon at the jDresent time. If any of the legal re- quirements of the issue put the purchaser the least bit upon inquiry as to the records of the facts, the doctrine of estoppel is inap- plicable ; whereas the tendency of the deci- sions is to give to express recitals a conclu- sive effect. Recitals are, in general, conclusive upon the facts recited ; but, to be given a conckisive effect, they must be clear and unambiguous Co. V. Graham, 130 U. S. 674; Hedges v. Dixon Co., 150 U. S. 187; Francis v. Howard Co., 4 C. C. A. 460; Shaw v. Independent School Dlst., 23 C. C. A. 169; Geer v. School Dlst. No. 11, 38 C. C. A. 392. 25Marcy v. Oswego, 92 U. S. 637; Humboldt V. Long, 92 XJ. S. 642; Wilson v. Salamanca, 99 U. S. 499; Sherman Co. v. Slmonds, 109 TJ. S. 735; Dallas Co. v. McKenzle, 110 U. S. 686; New Providence v. Halsey, 117 U. S. 282; Oregon v. Jennings, 119 U. S. 74; Sutliff v. Board of Com'rs, 147 U. S. 235; Board of Com'rs v. Sutliff, 38 C. C. A. 167. 26 Chaffee Co. v. Potter, 142 U. S. 355; Gunni- 54 THE RECITALS. in their meaning and tliev must im.port full compliance with the statutory or constitu- tional requirements.-' Eecitals so made can be relied upon. The want of a recital, how- ever, charges the holder of bonds with notice of any irregularities in compliance -with the statutory requirements of the issuance.-^ (i) How far the Bona fide purchaser must look beyond recitals. The ioiia fide purchaser is chargeable with notice of the law and of all its requirements.^® Proper recitals upon the performance of pre- cedent conditions will protect him against the defense of noncompliance therewith ;^° but no recital in bonds will so protect him where the statute granting the power to issue bonds is unconstitutional, contrary to public policy or son Co. V. Rollins, 173 XJ. S. 256; National Life Ins. Co. V. Board of Education, 10 C. C. A. 637; Dudley v. Board of Com'rs, 26 C. C. A. 82. 2' Lake Co. v. Graham, 130 U. S. 674; Evans- ville V. Dennett, 161 U. S. 434; Nesbitt v. Inde- pendent School Dist., 144 U. S. 610; Com. v. Na- tional Life Ins. Co., 32 C. C. A. 593. 28 See p. 48, Effect of no Recitals. 29 German Savings Bank v. Franklin Co., 128 U. S. 526; Com. v. Union Bank, 37 C. C. A. 492. 30 Chapter 8. Recitals on Matters of Pact, p. 66. THE RECITALS. SS otherwise illegal.^^ At his peril the bona fide purchaser must ascertain 'that the grant of power to issue is legal. ^^ The hoiia fide purchaser is chargeable with knowledge of the requirements of other stat- utes and laws and of the contents of public records referred to in the statute granting the power to issue.^^ Yet, an express recital may cover this requirement.^* Furthermore, the bona fide purchaser must know the official character and capacity of the agents of the municipality who issue and sign the bonds. ^^ An issuance of bonds by a mu- nicipal official without authority under the statute, or by one who, in fact, was not an agent of the nuinicipality, is void.^'^ 31 Lake Co. v. Graham, 130 U. S. 674; National Bank v. School Dist., 5 C. C. A. 468; Com. v. Union Bank, 37 C. C. A. 492. 32 Daviess Co. v. Huidekoper, 98 U. S. 98; An- thony V. Jasper Co., 101 U. S. 693; Mills v. Su- pervisors, 102 V. S. 625. 33 Dixon Co. V. Field, 111 U. S. 83; Sutliff v. Com., 147 U. S. 230; NesWtt v. Indep. School D'ist., 144 U. S. 610; National Bank v. Granada, 4 C. C. A. 212; Coffin v. Com., 6 C. C. A. 288; Hinkley v. Arkansas City, 16 C. C. A. 395. 3* See p. 75, — on public record. 35 See p. 78, — note 19. 36 See p. 78, -note 19. 56 RECITALS ON MATTERS OF LAW. CHAPTER VII. RECITALS ON MATTERS OF LAW. (a) Constitutional authority. A recital that bonds arc issiied "in con- formity with," "by virtue of, or nnder aii- thority of," a constitutional provision, pnts the purchaser upon inquiry as to the mean- ing of all those provision.s, and at his pe'ril he must ascertain whether they have been fulfilled. The earlier cases tried to make a distinction bet^^•eon a statutory and a con- stitutional provision, taking the ground that constitutional provisions were absolute in their nature, and that no recital could work an estoppel.-' Dillon, in his work on Munic- ipal Corporations (volume 1, page 607), makes the statement that there is "no estop- pel by recital to set up defense of an over- 1 Marsh v. Fulton Co., 10 Wall. 676; Bucbanan V. Litchfield, 102 U. S. 278; Carroll Co. v. Smith, 111 TJ. S. 556; Merchants' Exch. Nat. Bank v. Bergen Co., 115 U. S. 384; Hopper v. Covington, 118 U. S. 148; Lake Co. v. Graham, 130 U. S. 674. RECITALS ON MATTERS OF LAW. 57 issue contrary to a constitutional limita- tion." And he cites Buchanan v. Litch- field, 102 U. S. 278, and Dixon Co. v. Field, 111 U. S. 83. The first case has no recital on the con- stitution. The second case contained the recital that the bonds were issued "under and by virtue of the constitution." But here the face of the bonds showed that they did not comply with the constitution. However, nearly all the cases involving- constitutional authority have arisen on an issuance of bonds beyond the limit of indebt- edness prescribed by the constitution. In all these cases, a general recital has worked no estoppel.^ But in later cases, where the bonds have expressly recited that the limita- tion of indebtedness prescribed by the con- stitution has not been exceeded, this recital 2 Buchanan v. Litchfield, 102 u'. S. 218; Harsh- man V. Bates, 92 U. S. 569; Lake Co. v. Graham, 130 U. S. 674; SutlifC v. Board of County Com'rs, 147 U. S. 135; Hedges v. Dixon Co., 150 TJ. S. 187; Francis v. Howard Co., 4 C. C. A. 460; Shaw V. Independent School Dist., 23 C. C. A. 169; Geer v. School Dist. No. 11, 38 C. C. A. 392; Wesson v. Town of Mt. Vernon, 39 C. C. A. 301. 58 RECITALS ON MATTERS OF LAW. has been held to work an estoppel to prove the contrary.^ (b) Legislative authority. Recitals on legislative authority refer the purchaser to the statute, and put him ujDon inquiry as to all the terms and conditions of the same.* He is chargeable with and bound to kn(:i\\- whether the legislative grant is valid or not.° Where the legislative act refers the purchaser to certain records to ascertain the fulfillment of certain pre- scribed conditions, the purchaser is put upon inquiry as to the coutents thereof,^ and in such cases no recitals will estop the defense of the facts shdwn by the public record. 3 Chaffee Co. v. Potter, 142 TJ. S. 355'; Gunni- son Co. V. Rollins, 173 TJ. S. HBO; National Life Ins. Co. V. Board of Education, 10 C. C. A. 637. lOgden V. County of D'aviess, 102 U. S. 634; Anthony v. Jasper County, 101 TJ. S. 693; North- ern Bank of Toledo v. Porter Tp., 110 U. S. 608. 5 German Sav. Bank v. Franklin Co., 128 TJ. S. 526; Board of Com'rs v. Union Bank, 37 C. C. A. 492. 6 Dixon Co. V. Field, 111 U. S. 83; SutlifC v. Commissioners, 147 TJ. S. 230; National Bank of Commerce v. Granada, 4 C. C. A. 212; Nesbit v. In- dependent Dist., 144 TJ. S. 610; Coffin v. Board RECITALS ON MATTERS OF LAW. 59 (c) Legislative authority through ordinance of city. Recitals in bonds that they are issued Tinder legislative authority, and in compli- ance with an ordinance of the city, would, in accordance with the earlier cases, put the purchaser upon inquiry as to the terms of that ordinance, and would not estop any de- fense of lack of compliance with the sameJ But the later decisions are to the effect that recitals in a bond that they are issued in pur- suance of an act of the legislature and an or- dinance of the city council passed in pur- suance thereof does not put the purchaser upon inquiry as to the terras of the ordi- nances under which the bonds are issued.^ of Com'rs, 6 C. C. A. 288; Hinkley v. Arkansas City, 16 C. C. A. 395. 7 Dixon Co. V. Field, 111 XJ. S. 83; Bank of Commerce v. Granada, 4 C. C. A. 212; Hinkley V. Arkansas City, 16 C. C. A. 395; Coffin v. Board of Com'rs, 6 C. C. A. 288. sBvansville v. Dennett, 161 TJ. S. 434; City of South St. Paul V. Lamprecht Bros., 31 C. C. A. 585; City of Lamprosos v. Talcott, 36 C. C. A. 318; Board of Com'rs v. National Life Ins. Co., 32 C. C. A. 591; Hackett v. Ottawa, 99 tJ. S. 86; Ot- tawa V. National Bank, 105 U. S. 342; Van Hostrup V. Madison City, 68 U. S. 291. 60 RECITALS ON MATTERS OF LAW. (d) L'egislative authority through order of the county court. In Post V. Pulaski Co. it is held that a recital in county bonds that they are issued pursuant to an order of the county court puts all persons dealing in the bonds upon inquiry as to the terms of the order.* This case was one where the defense was that bonds had been given as donation, and the records showed that fact, and it was held that the recital did not estop the facts of the record. This case, and the doctrine there laid down, will appear to be much modified by later cases, if in fact it is not over- ruled.io (e) Where the legislature has applied curative legislation. The curative power of the legislature has been exercised in many cases. It has been held that a legislature has the power to subsequently ratify and give validity to an Post V. Pulaski Co., 1 C. C. A. 405. 10 Board of Com'rs v. National Life Ins. Co., 32 C. C. A. 591; Provident Life v. Trust Co., 170 tr. S. 590; Wesson v. Saline Co., 20 C. C. A. 227; Evansville v. Dennett, 161 U. S. 613; Orleans v, Pratt, 99 XJ. S. 676. RECITALS ON MATTERS OP LAW. 61 illegal bond issue, or to cure all irregulari- ties in any issuance of bonds.-'^ (f) Lis pendens. Bonds being negotiable paper, the lib pendens does not act as constructive notice to the hona fide purchaser.-'^ 11 Warren Co. v. Marcy, 97 U. S. 96; Carroll Co. V. Smith, 111 U. S. 556; Scotland Co. v. Hill, 132 U. S. 457; Lytle v. Town of Lansing, 147 V. S. 59; State v. Wichita County Com'rs, 59 Kan. 512. 12 Ritchie V. Franklin Co., 89 U. S. 67; Lee Co. V. Rogers, 74 U. S. 181; Campbell v. City of Kenosha, 72 U. S. 194; Gelpecke v. Dubuque, 68 U. S. 175; Otoe Co. v. Baldwin, 111 U. S. 1; Quincy v. Cook, 107 U. S. 549; Thompson v. Perrine, 103 XJ. S. 806; Jonesboro v. Cairo, 110 U. S. 192; Rogers v. Keokuk, 70 U. S. 74; Thompson v. Lee, 70 U. S. 327. State cases under curative legislation: Bass v. Columbus, 30 Ga. 845; Black v. Cohen, 52 Ga. 621; Keiths- burg V. Frick, 34 111. 405; Gage v. Nichols, 135 111. 128; Williams v. People, 132 111. 574; Schneck V. City of Jeffersonville, 152 Ind. 204; State v. Osawkee, 14 Kan. 418; People's Bank v. Pomona, 48 Kan. 351; McConnel v. Hammond, 16 Kan. 228; Central Branch U. P. R. Co. v. Smith, 23 Kan. 745; Smith v. Stephen, 66 Md. 381; Brad- ley V. Franklin Co., 65 Mo. 638; Stiens v. Franklin Co., 48 Mo. 166; Rogers v. Rail- way Co., 21 Hun, 44; In re Byrnes, 11 62 RECITALS ON MATTERS OF LAW. (g) General recitals. Recitals that a bond was issued "by virtue of," "under the authority of," "in compli- ance with," or "in conformity with," a spe- cific legislative act were held in the earlier cases to import a full compliance with the precedent conditions of the legislative act; the only question tlien being, "What author- ity did those issuing the bonds have in mak- ing the recitals?"-'^ This question being answered that they possessed full authority to determine upon the precedent conditions, then the recitals acted as an estoppel to set up want of compliance with the conditions prescribed, but afterwards, when certain precedent conditions came to be recognized as absolute or nearly absolute, such as the N. Y. Supp. 113; Alexander v. Commissioners of McDowell, 70 N. C. 208; Duke v. Williamsburg Co., 21 S. C. 419; State v. Whitesides, 30 S. C. 579; State v. Harper, 30 S. C. 586; State v. Neely, 30 S. C. 587; Knapp v. Grant, 27 Wis. 147; Kimball v. Rosendale, 42 Wis. 407; Baker v. Seattle, 2 Wash. St. 576; State v. Winter, 15 Wash. St. 407. 13 Knox Co. V. Aspinwall, 21 How. 539; Mercer Co. V. Hackett, 68 U. S. 83; Humboldt Tp. v. Long, 92 "U. S. 642; Marcy v. Oswego Tp., 92 V. S. 638; Town of Coloma v. Eaves, 92 U. S. 484. RECITALS ON MATTERS OP LAW. 63 constitutional limitations or statutory limita- tions in the creation of indebtedness, and when records became more and more of a public nature, the necessity arose of having express recitals on these quasi absolute conditions in order to raise an estoppel, so that a general recital at the present day covers only mere irregularities, and is often treated as a con- clusion of law.-'* This has been most appar- ent in the cases where the issuance exceeded the legal indebtedness. The late cases hold that a general recital does not create an estoppel, to prove by the assessment rolls a contrary fact,^^ but that an express recital does create an estoppel to prove the contrary of the fact recited.-'^ But a general recital that bonds are issued "under and pursuant to the laws and con- stitution" of a state, and referring to no specific authoritative legislative enactment, raises no estoppel whatsoever, and is treated as a mere conclusion of law.-'^''^ 14 Francis v. Howard Co., 4 C. C. A. 460. 15 Dixon Co. V. Field, til U. S. 83; Sutliff v. Board of Com'rs, 147 V. S. 230; Geer, v. School Dist. No. 11, 38 C. C. A. 392. IS Board of Com'rs v. Sutliff, 38 C. C. A. 167; Gunnison Co. v. Rollins, 173 TJ. S. 256. 64 RECITALS ON MATTERS, OP LAW. (h) Where bonds are issued for an illegal pur- pose. It is clear, where bonds are issued for an illegal purpose, and there is no recital upon the purpose of the issuance, that the defense of a nonpublic piirpose is available, and that the bonds are invalid.^* But where the statute granting the power to issue states the purpose for which bonds may be issued, and there is a recital in the bonds issued of due compliance with the precedent condi- tions of the statute, this recital acts as an estoppel to set up an issuance for an illegal purpose. ^^ Likewise, where there is an ex- press recital in the bonds of the purpose for 17 Hopper V. Covington, 118 V. S. 148; Katzen- berger v. Aberdeen, 121 U. S. 177. 18 Barnet v. Denison, 145 U. S. 135. It is certainly a reasonable requirement that the bonds issued shall express upon their face the purpose for which they were issued. In any event it was a requirement of which the purchaser was bound to take notice, and if it appeared upon their face that they were issued for an illegal purpose, they would be void. If they were issued without any purpose appearing at all upon their face, the purchaser took the risk of their being issued for an illegal purpose, and, if that proved to be the case, they are as void in his hands RECITALS ON MATTERS OF LAW. 65 which they are issued, this acts as an estop- pel to set up the contrary.^^ as if he had received them with express notice of their illegality. loHackett v. Ottawa, 99 U. S. 86; Village of Kent V. Dana, 40 C. C. A. 281; Ottawa v. Na- tional Bank, 105 U. S. 342; Evansville v. Den- nett, 161 XJ. S. 434. 2oHackett v. Ottawa, 99 U. S. 86; Ottawa v. National Bank, 105 U. S. 342; City of Cadillac V. Woonsocket Inst, for Savings, 7 C. C. A. 574, 58 Fed. 935; Risley v. Village of Howell, 12' C. C. A. 218, 64 Fed. 453. 66 RECITALS ON MATTERS OP FACT. CHAPTER VIII. RECITALS ON MATTERS OF FACT. (a) On elections. ^Yithollt doubt, all the supreme court de- cisions show that recitals that bonds were is- sued "iu conformity with" or ''by virtue of" a legislative act, or "at an election duly held," estop the defense of any irregular- ities in the holding of the election, or the preliminary steps leading up to it. The de- fense of an insuihcient petition of voters for calling an election has been frequently es- topped by the recital of conformity with the legislative act granting the power to issue.' Likewise, where the recitals imported com- i Roberts Town v. BoUes, 101 V. S. 119; Bissel V. Jeffiersonville City, 24 How. 287; Van Hostrup v. City of Madison, 68 TJ. S. 538; Venice v. Mur- dock, 92 U. S. 494; Town of Geno v. Woodruff, 92 U. S. 502; Livingston Co. v. Bank of Ports- mouth, 128 tJ. S. 102; Bernard Tp. v. Morrison, 133 TJ. S. 523; Andes v. Ely, 158 TJ. S. 313; Town- ship of 96, Abbetville Co. v. Polsom, 30 C. C. A. 657. RECITALS ON MATTERS OP PACT. 67 plianee with precedent conditions of the legislative grant, estoppel arises to prevent the defense of improper notice of elec- tion, either as to manner of posting or length of puhlication.^ Humboldt Tp. v. Long and Marcy v. Os- Vfego state this as a reason : ''It is plain that the bonds are not invalid because all the notice of the popular election was not given which the legislative act directed. ''The election was a steji in the process of execution of the power granted to issue bonds, in payment of a municipal subscrip- tion, to the stock of a railroad company. Whether that step had been taken or not, and whether the election had been regularly conducted, with sufficient notice, and whether the requisite majority of votes had been cast in favor of subscription, and consequently bonds issued, were questions 2 Knox Co. v. Aspinwall, 21 How. 539 ; Knox Co. V. Wallace, 21 How. 546; Marshall Co. v. Shenck, 72 U. S. 772; Humboldt Tp. v. Long, 92 U. S. 642; McClure v. Oxford Tp., 94 U. S. 429; Warren Co. v. Marcy, 97 U. S. 96; Roberts Town V. Holies, 101 U. /S. 119; Clay Co. v. Society, 104 V. S. 579; Anderson Co. v. Beal, 113 U. S. 227; Andes v. Ely, 158 U. S. 313. 138 RECITALS ON MATTERS OF FACT. which the law submitted to the board of county commissioners, and which it was nec- essary for them to answer before they could act. In the present case, the board passed upon them, and issued the bonds, asserting, by the recitals, that they were issued in pur- suance of, and in accordance with, the act of' the legislature. Thus the iDlaintiff below took them without knowledge of an}- irreg- ularities in the process through which the legislative authority was exercised, and rely- ing ujjou the assurance given by the board that the bonds had been issued in accordance \\dth the law. In his hands, therefore, they arc valid instruments."^ Where the statute giving the power to is- sue bonds requires, as a precedent condition to the issuance, that a majority vote, or a two-tliirds vote, of the legal electors at a dulydield election should assent, a recital that such (dection whs duly held, or that the lionils \vere issued in compliance with the sElmwood Town v. Marcy, 92 U. S. 289; St. Joseph Tp. V. Rogers, 16 Wall, 644'; Lincoln v. Cambria Iron Co., 103 U. S. 412; American Life Ins. Co. V. Bruce, 105 U. S. 328; 2 Dillon, Mun. Corp. p. 599; Elliot, Elements of Corporation, p. 165; Beach, Pub. Corp. § 909 et seq. RECITALS ON MATTERS OF PACT. 69 statute, estop the defense of the lack of the requisite number of voters assenting.* As to a recital of due compliance with the statute, or of an election duly held au- thorizing an issuance, where, as a matter of fact, there was no election held at all, and the issue was made fraudulently and with- out authority on the part of the officers so issuing, the supreme court has never passed upon a case involving that direct point. On this, Dillon, in his Municipal Corporations (volume 2, page 599), says: "The prin- ciple adopted, and the reasoning of the court ■iHarshman v. Bates Co., 92 TJ. S. 567; Bates Co. V. Winter, 97 U. S. 83; Clay Co. v. Society, 104 U. S. 579; i.ioultrie Co. v. Fairfield, 105 U. S. 370; Pana v. Bowler, 107 U. S. 529; Northern Nat. Bank v. Porter Tp., 110 U. S. 60S; Town of Ore- gon V. Jennings, 119 U. S. 74; Meyer v. Musca- tine, 6S U. S. 384; Pendleton Co. v. Amey, 80 U. S. 297; City of Lexington v. Butler, 81 TJ. S. 282; Grand Chute v. Winegar, 82 U. S. 355; Lynde v. Winnebago Co., 83 U. S. 6; St. Joseph Tp. v. Rogers, 83 TJ. S. 644; Town of Coloma v. Eaves, 92 TJ. S. 484; Town of Gilson v. Dayton, 123 U. S. 59; National Life Ins. Co. v. Board of Education, 10 C. C. A. 637; Livingston Co. v. Bank of Ports- mouth, 128 U. S. 102; Kennicott v. Wayne Co., 83 U. S. 452; Citizens' Sav. & Loan Ass'n v. Perry Co., 156 TJ. S. 709. 70 RECITALS ON MATTERS OF PACT. by which it is sustained, lead, it would seem, to the conclusion (although there is, per- haps, no case in the supreme court where the facts require a direct decision of the point) that where the power to issue bonds is given upon the condition of a previous vote in favor of the proposition, the public or municipal officers can, where no vote whatever has been taken, or where the proposi- tion has been voted down, bind the county or municipality by false recitals in such un- authorized bonds, provided they are issued by the citficers intrusted by the statute with the power." He cites Humboldt v. Long, 92 U. S. 642, as practically establishing this proposition. This case, however, involved ir- rea,idarities in the election proceedings. It is quite probable that the proof of a total want of an election would be regarded as a jurisdictional question, and one that created such a want of power in the munic- ipal officers as to render the bonds abso- lutely void. If so, no recital could create an estoppel. The supreme court has made a distinction between an inadequate exercise of a power given, and a total want or lack of exercise thereof. In the former case the RECITALS ON MATTERS OP PACT. 71 principle of estoppel applies; in the latter, not.^ It would create the same want of power as issues of bonds by unauthorized officials.^ A recital that an election has been duly held, or of compliance with the statute, estops the defense of an issue in excess of the amount prescribed by the voters at the election,^ if those who made the recitals had the power to determine that fact. Likewise, a recital that bonds are issued under or by authority of a statute at a legal election, duly held, estops the defense of a precedent condition attached by the vot- ers themselves to the issuance/ when the recitals import full compliance therewith. 5 Rondit V. Rogers Tp., 39 C. C. A. 462. 6 Chisholm v. Montgomery, 11 Woods (U. S.) 584; Brown v. Bonthane Co.. 115 U. S. 384; White- side V. U. S., 93 U. S. 247; Daviess Co. v. D'icli- inson, 117 "U. S. 657. 7 Town of Walnut v. Wade, 103 U. S. 683; Daviess Co. v. Dickinson, 117 U. S. 687. s Citizens' Sav. & Loan Ass'n v. Perry Co., 156 U. S. 692; Grover v. Saline Co., 161 XJ. S. 370. Alabama: State v. City Council of Montgom- ery, 74 Ala. 226. Arkansas: State v. Little Rock M. R. & T. R. Co., 31 Ark. 701; Hancock v. Chicot Co., 32 Ark. 583. 72 RECITALS ON MATTERS OF FACT. (b) On the legal limitation of indebtedness. From the earliest cases do'\vn to the pres- ent time, a uniform line of decisions has main- tained that a recital in a hond that it is issued "in pu.rsnancc of, and in accordance Connecticut: Society for Savings v. New Lon- don, 29 Conn. 174. Florida: Sullivan v. Walton, 20 Fla. 552; Gree- ley V. Jacksonville, 17 Fla. 174. Georgia: Mayor v. Inman, Swan & Co., 57 Ga. 370. Illinois: Marshall v. Silliman, 61 111. 218; Wiley V. Silliman, 62 111. 170; People v. Town of Harp, C7 111. C2; Town o£ Midd! port v. Aetna Life Ins. Co., 82 111. 562; Lemont v. Senger & Taloott Stone Co., 98 111. 96; Lippincott v. Pana Town, 92 111. 24; Town of Prairie v. Lloyd, 97 111. 179; Hutchin- son v. Selb, 153 111. 542. Indiana: Irwin v. Lowe, 89 Ind. 540. Iowa: Clapp v. Cedar Co., 5 Iowa, 15. Kansas: State v. Commissioners Kiowa Co., 39 Kan. 657. Minnesota: Fulton v. Town of Riverton, 42 Minn. 397. Mississippi: Vicksburg v. Lombard, 51 Miss. Ill; Cutter v. Madison Co., 56 Miss. 115; Madi- son Co. V. Paxton, 57 Miss. 701; Madison Co. v. Brown, 67 Miss. 684. Missouri: Steines v. Franklin Co., 48 Mo. 167 Leavenworth R. Co. v. Platte Co., 42 Mo. 171 Barrett v. Schuyler County Court, 44 Mo. 197 Ranney v. Baeder, 50 Mo. 600. Nebraska: State v. Babcock, 21 Neb. 187; PeO' RECITALS ON MATTERS OF FACT. 73 with," a statiitory act, or equivalent words of compliance, act as an estoppel to the defense that the bond was issued in excess of the legal limitation of indebtedness, when that limitation was prescribed by the stat- ute ; ^ but the same recitals have been held, pie V. Hamilton, 3 Neb.' 244; Fullerton v. School Dist, 41 Neb. 593; Willenwater v. Dunnigan, 30 Neb. 877; State v. School Dist., 10 Neb. 544; Hoxie V. Scott, 45 Neb. 199. New York: People v. Smith, 45 N. Y. 772; Bank of Rome v. Rome, 19 N. Y. 20; Wilson v. Cunea- dea, 15 Hun, 218; Angel v. Hume, 17 Hun, 374: Wellsborough v. New York Cent. R. Co., 76 N. Y. 182; Essex v. Rogers. 76 N. Y. 599; Caguin v. Hancock, 84 N. Y. 532; Gould v. Town of Ster- ling, 23 N. Y. 456; People v. Hutton, 18 N. Y. 116; Craig V. Andes, 93 N. Y. 405; People v. Spencer, 55 N. Y. 1; People v. Smith, 55 N. Y. 135; Metzger V. Attica R. Co., 79 N. Y. 171; Town of Solon v. Williamsburg Bank, 135 Hun, 1. North Carolina: Robinson v. Goldsboro, 122 N. C. 211. West Virginia: Knight v. Town of West Union, 45 W. Va. 194. Washington: Baker v. Seattle, 2 Wash. St. 576. Wisconsin: Rochester v. Alfred Bank, 13 Wis. 432; Veeder v. Lima, 19 Wis. 298; Lawson v. Schnellen, 33 Wis. 288. ?Marcy v. Oswego, 92 V. S. 637; Humboldt v. Long, 92 XJ. S. 642; Wilson v. Salamanca, 99 U. S. 499; Sherman Co. v. Simonds, 109 U. S. 735; 74 RECITALS ON MATTERS OF PACT. in an equally long line of decisions, to -work no estoppel when the limitation of indebted- ness was imposed by the constitntion.^" The addition of the express recital to the above recitals, "that the total amount of this issue does not exceed the limit prescribed by the constitution," has been hold in sev- eral cases to estop the defense of an excessive issue, even if conlraeonstitutional.^-' Dallas Co. v. McKenzle, 110 XT. S. 686; New Provi- dence V. Halsey, 117 U. S. 282; Oregon v. Jen- nings, 119 tr. S. 74; Siitliff v. Board of Com'rs, 147 U. S. 235; Board of Com'rs v. Sutliff, 38 C. C. A. 167. 10 Buchanan v. Litchfield, 102 U. S. 278; Lake Co. V. Graham, 130 U. S. 674; Hedges v. Dixon Co., 150 U. S. 187; Francis v. Howard Co., 4 C. C A. 460; Shaw v. Independent School Dist., 23 C, C. A. 169; Geer v. School Dist. No. 11, 38 C. C, A. 392. 11 Chaffee Co. v. Potter, 142 U. S. 355; Gunni son Co. V. Rollins, 173 U. S. 256; National Life Ins. Co. v. Board of Education, 10 C. C. A. 637 Dudley v. Board of Com'rs, 26 C. C. A. 82. State cases: Sutro v. Rhodes, 92 Cal. 117 Sutro V. Pettit, 74 Cal. 332; Lake Co. v. Standley 24 Colo. 1; McPherson v. Foster, 43 Iowa, 48 Mosher v. Independent School Dist, 44 Iowa, 122j Carter v. Dubugue, 35 Iowa, 416; Halliday v. Hilderbrandt, 97 Iowa, 177; Kane v. Independent School D'ist., 82 Iowa, 5; Spetzer v. Blanchard, RECITALS ON MATTERS OP FACT. 75 (c) On provisions as to tax levy. Provisions in the statnte or constitution requiring the levying of a tax to pay the interest, and to furnish a sinking fund to pay oif the principal, is, in favor of a bona fide holder, held to mean such fixed and definite arrangements for the levying and collecting of such taxes as woidd become a legal right in favor of that bond holder.^^ (d) Where the matters involved are of public record. Whether or not a matter of public record could be so recited upon in a bond as to raise the doctrine of estoppel, and thus pre- 82 Mich. 234; State v. Shortridge, 56 Mo. 126; Catron v. Lafayette Co., 106 Mo. 659; Hoffman v. Gallatin Co., 18 Mont. 224; State v. Babcock, 18 Neb. 141, 20 Neb. 522, 24 Neb. 640; Thompson v. Mamakating, 106 N. Y. 674; Robinson v. Bishop, 39 Hun, 370; Millerston Borough v. Frederick, 114 Pa. St. 435; Nolan Co. v. State, 83 Tex. 183; Pritsch V. Board County Com'rs, 15 Utah, 83. 12 Wade y. Travis Co., 174 U. S. 499; Marion Co. V. Coler, 14 C. C. A. 301; Moultrie Co. v. Fairfield, 105 U. S. 370; Howard v. Smith, 91 Tex. 8; Mitchell Co. v. Bank, 91 Tex. 361; Basset v. El Paso, 88 Tex. 168. As to power to compel tax levy, see U. S. v. Macon Co., 99 U. S. 582. 76 RECITALS ON MATTERS OP PACT. elude the defense of the facts as shown by the record, is a proposition that the courts have touched upon only tentatively. Hov?- ever, we think the cases clearly lay down as the law, that no recital can raise an estop- pel where the matter recited upon is one (if jDuhlic record, and where this public record is expressly referred to in the statute grant- ing the povrer to issue,-' ^ for, in that case, the purchaser i? put upon inquiry as to the facts recited in the record, and must ascer- tain them at his peril. The same is true when the bonds on their face put the pur- chaser upon inquiry.^* But where the re- citals in tlicmselves show full compliance ■with the provisions of the legislative grant (and recitals, to be such, must be clear and unambiguous, and not merely stated as a conclusion of the law), we think the deci- sions show that then the recitals are con- clusive over any public record.^^ 13 Sutliff V. Beard of County Com'rs, 147 U. S 235. 1-1 Dixon Co. V. Pield, 111 U. S. 83. State cases on public record: To-wn of Eagle V. Kohn, 84 111. 292; State v. Commissioners, 37 Ohio St. 526; Veeder v. Lima, 19 Wis. 298; Lewis V. Bourbon County Com'rs, 12 Kan. 186; George v, Oxford, 16 Kan. 72. 1- Evansville v. Dennett, 161 U. S. 434; Nugent RECITALS ON MATTERS OF PACT. 77 The broad statements^" made in Dixon Co. V. Eield, that an assessment roll, being a mat- ter of record, takes precedence of any re- cital, and in National Bank of Commerce V. Granada, C'ofBn v. Board of Com'rs, and Post V. Pulaski Co., that municipalities are not estopjDed by recitals in their bonds ex- cept as to matters of fact, and not even then, if the facts recited are matters of pub- lic record, open to the inspection of every inquirer, have either been stated in the way of obiter dicta, and hence only to be taken in connection with the specific case,-''^ or have since been overruled by subsequ.ent cases.-'* V. Putnam County Sup'rs, 86 U. S. 241; Nesbitt v. Independent Dist., 144 U. S. 610; Grand Chute V. Winegar, 82 U. S. 355; Board of Commission- ers v. National Life Ins. Co., 32 C. C. A. 593; Hum- boldt Tp. V. Long, 92 U. S. 642; Lake Co. v. Gra- ham, 130 U. S. 674. leD'ixon Co. v. Field, 111 U. S. 83; National Bank of Commerce v. Granada, 4 C. C. A. 212; Coffin V. Board of Com'rs, 6 C. C. A. 288; Hink- ley V. Arkansas City, 16 C. C. A. 395; Post v. Pulaski Co., 1 C. C. A. 405. 17 "General expressions in every opinion are to be taken in connection with the case in which these expressions are used." Northern Nat. Bank v. Porter Tp., 110 U. S. 608. isSutliff V. Commissioners, 147 U. S. 230; 78 RECITALS ON MATTERS OF PACT. (e) Where bonds are not issued by the proper officers. Purchasers of bonds must, at tlieir peril, know the character and powers of the offi- cials issuing and signing the bonds. The statute or other legal authority there- under designates the officers of the munic- ipality who shall issue the bonds, and the identity of these officers is an absolute re- quirement. It has been held that an issuance of bonds by improper authorities, acting non colore officii, are in legal effect forged.^''' (f) Where subscription and issuance of bonds have been made upon the contingency of the railroad being built. The failure to comply with a condition in the subscription of stock to a railway com- Evansville v. Dennett, 161 U. S. 434; Board of Com'rs V. National Life Ins. Co., 32 C. C. A. 593. 10 Anthony v. Jasper Co., 101 U. S. 693; Bisseil V. Spring Valley Tp., 110 U. S. 162; Weyanwego v. Ayling, 99 U. S. 112; Coler v. City of Cleburne, 131 U. S. 162; Lawson v. Schnellen, 33 Wis. 288; Rochester v. Alfred Bank, 13 Wis. 432; Coates v. Campbell, 37 Minn. 498; Harper County Com'rs V. Rose, 140 U. S. 71. RECITALS ON MATTERS OP FACT. 79 pany,that the bonds shall not be valid until the railway shall be completed in a certain man- ner or time, does not invalidate the bonds in a hona fide holder's hands. ^'^ (g) Where registration is required by statute. Where registration of bonds is required by statute, the recitals in a certificate on the bonds by the state auditor or other appointed officials, for the purpose of compliance with conditions precedent to the issuance, work no estoppel unless the statute expressly dele- gates to that official the power to ascertain whether precedent conditions have been com- plied with or not."^ (h) Where the railroad company is not organ- ized at the issue. The fact that the railroad company to whom the bonds are issued was not organ- ized at the time of the issue does not invali- date the bonds in the hands of a hona fide holder.^^ 20 Nugent v. Putnam Co., 86 U. S. 241; Provi- dent Life & Trust Co. v. Mercer Co., 170 U. S. 590. 21 Lewis v. Barbour Co., 105 XJ. S. 739; Crow v. Oxford, 119 U. S. 215; Dixon Co. v. Field, 111 U. S. 83; German Sav. Bank v. Franklin Co., 128 U. S. 526. :i2 Daviess Co. v. Huidekoper, 98 U. S. 98. 80 RECITALS ON MATTERS OP PACT. (i) Where bonds have been issued to an unau- thorized corporation. ^^Tiere bonds are voted to be issued to a specific corporation, and the issuance is in fact made to another corporation, recitals raise the doctrine of estoppel, if the officers so issuing the bonds were the legal authori- ties of the municipality, and not the mere agents. ^^ (j) Where the proceedings of the board of com- missioners have been irregular. Recitals of issuance of bonds pursuant to a statutory act estop the defense of irregu- larity in the proceedings of the board of com- (k) Where bonds are refunding bonds. Ilecitals in bonds that they are refunding bonds, issued to take up old bonds falling due, estop the defense from showing that the old bonds were invalid.^^ ^sHarshman v. Bates, 92 U. S. 569; Scotland Co. V. Thomas, 94 U. S. 682 ; Ray Co. v. Vansycle, 96 "U. S. 675; Wilson v. Salamanca Tp., 99 U. S. 499. But see Marsh v. Fulton, 77 U. S. 676. 21 Moran v. Miami Co., 67 U. S. 722. 25 City of Cadillac v. Woonsocket Inst., 7 C. C. A. 574; Myers v. City of Jeffersonville, 145 Ind. RECITALS ON MATTERS OF FACT. 81 (I) Where bonds are donated. Recitals where bonds are donated to a rail- ■\vaY company, even -where the statute directs that they shall be issued for a subscription to the stock of the company, estop the munic- ipality from setting vip the fact that they were so donated.^^ (m) Where bonds have been antedated. The true date of the issuance of a bond is the time when it actually is transferred by the municipality to the purchaser. A re- cital in bonds showing a date that would render them valid does not prevent the mu- nicipality from showing that they were in fact issued on another date, so as to render them invalid, either on account of a repeal of the statutory grant, or lack of power resi- dent in the issuing officials at the actual time of issuance.-^ But where the date recited 431; Heins v. Lincoln, 102 Iowa, 69; Cook Co. V. Rollins Inv. Co., 3 Wyo. 470. 26Hackett v. Ottawa, 99 U. S. 86; Evansville V. Dennett, 161 U. S. 435; Wesson v. Saline Co., 20 C. C. A. 227; Lund v. Chippewa Co., 93 Wis. 640. 27 Anthony v. Jasper Co., 101 IT. S. 693; Town of Weyanwego v. Ayling, 99 U. S. 112; Color v. 82 RECITALS ON MATTERS OF FACT. upon d(jes not go to the question of authority or power, then the recitals estop the defense of issuance at a different date.^* (n) Where bonds have been placed in escrow. Where bonds have been placed in escrow to be delivered imly upon condition of the rail- road being completed ( this provision being statutory), recitals that the bonds have been issTied 'pursuant to legislative authority do not estop a municipality from setting up lack of completion of the railroad.-'' (o) Recitals for municipal purposes. \ rerital in a bond that it is issued for a loan for nmnicipal purposes estops the de- fense of issuance for some contrary and ille- i^al purpose.^" Cleburne, 131 U. S. 162; Lehman v. City of San Diego, 27 C. C. A. 669; Beach, Pub. Corp. § 919. --Moultrie Co. v. Savings Bank, P2 TJ. S. 631; Marion Co. v. Clark, 94 U. S. 278; Village ol Kent v. Dana, 40 C. C. A. 281. ^"Hoffman v. Moore, 46 Nel). 590; Mercer Co. V. Provident Life & Trust Co., 19 C. C. A. 44. -■"Hackett v. Ottaw^, 99 U. S. 86; Burroughs, Public Securities, p. 316; particularly Northern Nat. Bank v. Porter Tp., 110 U. S. 608. RECITAT.S ON MATTERS OP PACT. 83 (p) Recitals made by those not intrusted with the duty of ascertaining the facts re- cited. Whero it is clearly ascertainable that the duty of (letciinining upon the compliance Avith certain precedent conditions of the stat- ute or constitution is not resident with those officials making the recitals, but that the truth or falsity of the recitals importing compliance with these conditions is a jurisdictional ques- tion, then a recital anent the same does not raise the doctrine of estoppel. ^'^ (q) Recitals made by those who are the appoint- ed tribunal to determine upon the truth or falsity of the facts recited. A long line of decisions hold that where a statute or a constitution authorizes a munic- ipality to issue bonds, and, in the provision granting the power, certain officials are ap- pointed as persons to so issue the bonds upon the happening or performance of certain pre- cedent conditions, and where it can be clearly 31 Dixon Co. V. Field, 111 TJ. S. 83; Crow v. Ox- ford Townsliip, 119 U. S. 215; Germania Sav. Bank v. Franklin Co., 128 U. S. 526; Barnett v. Dennison, 145 U. S. 139; Citizens' Savings & Loan Ass'n V. Perry Co., 156 U. S. 701. For state cases, see next topic and cases there cited. 84 RECITALS ON MATTERS OF FACT. gathered from the act that these officers have the power to determine upon compliance with these precedent conditions, then a recital that these conditions have been complied with raises the doctrine of estoppel. ^^ •12 Knox Co. V. Aspinwall, 21 How. 539; Coloma V. Eaves. 92 U. S. 484; Dixon Co. v. Field, 111 V. S. 83; Germania Sav. Banlt v. Franlilin Co., 128 U. S. 526; Citizens' Sav. & Loan Ass'n v. Perry Co., 156 U. S. 701. Illinois: Bolton v. Board of Education, 1 111. App. 193. Kansas: Faulkenstein Tp. v. Fitch, 2 Kan. App. 193. Maine: Lane v. Embden, 72 Me. 354; Shurtliff V. Wiscasset, 74 Me. 130. Minnesota: Harrington v. Town of Plalnview, 27 Minn. 224. Mississippi: Vicksburg v. Lombard, 51 Miss. Ill; Culver v. Madison Co., 56 Miss. 115; Madison Co. V. Paxton, 57 Miss. 701; Madison Co. v. Brown, 67 Miss. 684. New York: Cherry Creek v. Becker, 123 N. Y. 161. New Jersey: Mutual Ben. Life Ins. Co. v. Eliza- beth, 13 Vroom, 235. North Carolina: Belo v. Commissioners of For- sythe, 76 N. C. 489. North Dakota: Flagg v. School Dist., 4 N. D. 30. Wisconsin: Rochester v. Alfred Bank, 13 Wis. 432; Lawson v. Schnellen, 33 Wis. 288. RECITALS ON MATTERS OF FACT. 8S (r) Where precedent conditions to the issuance of bonds are established by the electors themselves. Though a statute granting a municipality power to issiie bonds provides that the elect- ors may prescribe certain precedent condi- tions to the issuance, and that the bond issue shall not be valid until these conditions are complied with, yet an express recital import- ing full compliance with these conditions precludes the defense of a noncompliance.^^ (s) Where the issuance of the bonds is in ex- cess of the amount prescribed by the vote of electors. Recitals where the issuance of bonds is in excess of the amount prescribed by the vote of electors does not raise the doctrine of estop- pel, if the officers so making the recitals are the mere agents of the municipality, and not vested with the discretionary power to de- termine upon the performance of conditions precedent.^* But where the recitals are 33 Citizens' Sav. & Loan Ass'n v. County of Perry, 156 U. S. 689; Graves v. Saline Co., 161 U. S. 370; German Sav. Bank v. Franklin Co., 128 U. S. 526. 3-1 Daviess Co. v. Dickinson, 117 U. S. 657. 86 RECITALS ON MATTERS OP FACT. made Ijy the officers of the municipality, and, as such officers, are vested with the power to determine upon the performance of condi- tions precedent, then the defense of an over- issuance is estopped.^^ (t) Where there is a want of power in the municipality. Where there is an utter want of power to issue bonds in the municipality, no recital can esto]) the defense of lack of power."''' The power to issue must be iiranted expressly by the state ; it cannot be implied.^' Xo recital raises the doctrine of estoppel when there is an absence of authority on the part of the one who jirofcssos to act as the agent of the municipality.^^ Likewise, where the purjxise of the issTiance is not a public oue.^^ 35 Town of Walnut v. Wade, 103 U. S. 683. 38 Police Jury v. Britton, 82 U. S. 6; Travelers' Ins. Co. V. Jolinson City, 40 C. C. A. 58. 37 Hayes v. Holly Springs, 114 U. S. 120. See chapter 2. "Power to Issue." See Marshall Coun- ty Sup'rs V. Cook, "S VA. 44- J^--?rV_ v. Kanka- kee, 64 111. 249; Ryan v. Lynch, 68 111. 160; Schaef- fer V. Burham, 95 111. 119. 38 Dallas Co. V. McKenzie, 94 U. S. 660; Marsh V. Fulton Co., 77 U. S. 676. 3^' Ante, chapter 3. RECITALS ON MATTERS OP PACT. 87 (u) Recitals under a void legislative enactment. Eecitals in a bond of compliance with con- ditions precedent in accordance witli a legis- lative act which is, in fact, void on account of its nnconstitutionality, or of its repeal, raise no estoppel for the bona fide purchas- er.^" So, bonds reciting on their face a void legislative act and compliance therewith, even though there were in existence another valid act giving the municipality the power to issue, ^-"^ are void. But where the recitals refer to an invalid statute, yet in themselves they show compliance with a valid statutory grant, then reliance may be placed by the bona fide holder upon the facts so recited.*^ 40 Post V. Supervisors, 105 U. S. 667; Gilson v. Town of Dayton, 123 U. S. 59. ti Crow V. Oxford Tp., 119 U. S. 215; Anderson Co. V. Beal, 113 TJ. S. 227. 12 Commissioners v. .January, 94 U. S. 202. 88 DOCTRINE OF RECITALS IN THE CHAPTER IX. RESUME OP THE CASES ON THE DOCTRINE OP RECITALS IN THE UNITED STATES SUPREME COURT. The leading case of Knox Co. v. Aspinwall. The first and leading case involving the principles of estoppel as applied to recitals in municipal bonds is that of Board of (_!oni'rs of Knox Co. v. Aspinwall, decided in 1859, and reported in 21 How. 539. This is a case especially noteworthy for the reason that the doctrine there enunciated has in the main been followed by all the subsequent de- cisions of the United States courts, and it is in consequence herewith given rather fully. The action was brought by a bona fide holder for value of certain negotiable cou- pons attached to bonds issued by Knox coun- ty, Indiana, in payment of a subscription to railroad stock. The recitals in the bond were that "this bond is issued in part pay- ment of a subscription of $200,000 by said UNITED STATES SUPREME COURT. 89 Knox county to the capital stock, etc., by or- der of the board of commissioners, in pursu- ance of the third section of act, etc., passed by the general assembly of the state of Indiana, and approved the 15th of January, 1849." The substance of this act was that the board of county commissioners should have the power to issue the bonds, provided a major- ity of the qualified voters of the said county should vote for the same, and it was further- more made the duty of the sheriff to give notice of said election. The ground of de- fense is that the irregularity or omission to give the notice of election, as aforemen- tioned, furnished evidence that the board was never invested with any authority to act, and that therefore the issue was invalid against all purchasers for the reason that they must be chargeable with notices of defects or ir- regularities in the performance of the statu- tory conditions. The court said that all per- sons dealing in these bonds must be charge- able with knowledge of the public statute therein, and, as this board was acting under delegated authority, to show that it was prop- erly conferred. 'Now the statute gave the board authority, \ipon condition that a ma- 90 DOCTRINE OP RECITALS IN THE jority of voters, after notice of election duly given, so authorized them. But due notice of election was not given. Without question, there was a want of power here, if the facts were jurisdictional ; but the question under- lying the facts recited is, who had the power to determine whether the precedent condi- tions had been complied with ^ "Is it," the court inquires, "to be determined by the court in this collateral way, in every suit upon the bond, or by the board of commis- sii_)ners as a duty imposed upon it before making the subscription ? The right of the board to act was dependent upon the fact that a majority of legal voters had so elected, and that due notice had been given. To have acted without so ascer- taining the facts would have been a clear violation of duty. The ascertainment of the fact was necessarily left to the inquiry and judgment of the board itself, as no other tri- bunal was provided for that purpose." The court further says : "We do not say that the decision of the board would be con- clusive in a direct proceeding to inquire into the facts previous to the execution of the power, and before the rights and interests of UNITED STATES SUPREME COURT. 91 third parties had attached ; but after the au- thority has been executed, the stock sub- scribed, and the bonds issued, and in the hands of innocent liolders, it would be too late, even in a direct proceeding, to call it in question; much less can it be called in question to the prejudice of bona fide hold- ers of the bonds in this collateral way." "The board were the proper jiidges, and the purchaser was not bound to look further for evidence of a compliance with the con- ditions ,to the grant of the power than that given in the recitals." The court takes, as authority, the Eng- lish cases of Eoyal British Bank of Tur- quand, 6 El. & Bl. 327, and Maclae v. Suth- erland, 25 Eng. Law & Eq. 114. From this case we may glean the early doctrine that all purchasers are chargeable with notice of the law pertaining to the right to issue, and that the precedent conditions necessary thereto have been complied with. If the recitals affirm compliance with these conditions, and they are such conditions as are within the powers of the authorities is- suing the bonds to determine upon, then the purchaser may place absolute reliance upon these facts as recited. 92 DOCTRINE OF RECITALS IN THE It may be readily seen that the case in it- self was not as strong as the general proposi- tions applied to it by the ctmrt. In fact, the statiite merely enumerated that it was the duty of the sheriff to give notice of the elec- tion, and it was not expressly a condition. The inadequate exercise of this duty fur- nished a mere irregularity, the remoteness of which, in equity, ought not to have affected the issue of the bonds, or, in fact, the vote at the election, unless it had been called into question by a direct proceeding; but had there been no vote, in fact, taken, and a re- cital had been made that there was (the ne- cessity of a legal vote being an express pre- cedent condition), we are inclined to think that the doctrines of estoppel as applied to recitals would have received a far different interpretation. The distinction must at once be made be- tween a precedent condition determined as absolute requiring compliance therewith in order to create any power, and the precedent condition nonabsolute, — that is, one that will permit the doctrine of estoppel to work, whether or not it has in fact been fulfilled. The line of demarcation between these classes UNITED STATES SUPREME COURT. 93 of conditions is by no means clear, and it has been difficult at times to determine just where the courts wished to draw the line, it ap- pearing jnany times that the equities of the case were strong factors in making certain precedent conditions absolute or nonabsolute. With these premises in mind, we take up a resume of subsequent cases. This case was followed by Knox Co. v. Wallace, 21 How. 546, under a similar state of facts and law. In Amey v. Allegheny City, 24 How. 364, the recital was that the bonds were issued in pursuance of an act of the legislature, which act authorized the- city to make the issue. It did so by an ordinance that was not published or recorded in accordance with the city's charter. The defense asserted that the bonds were null and void, and that the city, in consequence, had no power to make the is- sue. It was held that the doctrine of estop- pel applied, the city having received railroad stock and benefits accrued thereunder. Purchaser need not look further than the law, the recitals, and the records. In the case of Bissell v. City of Jefferson- ville, 24 How. 287, bonds recited that they were "issued by authority of common council 7 94 DOCTRINE OF RECITALS IN THE of the city of Jeffersonville, three-fourths of the legal voters of said city having petitioned for the same, as required by the charter." The legislature gave the commoil council of the city power to make the issue upon the petition of three-fourths of the legal voters of said town. A petition so purporting was a part of the record of common council pro- ceedings. The defense is attempted of prov- ing by parol that in fact three-fourths of the legal voters did not petition for the bonds, as shown by the records and recitals in the bonds. The court adopted the reasoning of Knox Co. V. Aspinwall, and asserted the doc- trine of estoppel. It is seen here again that this is not a strong case, inasmuch as the court intimated that it was necessary to go to the records to ascertain certain facts by stat- ing that purchasers of such paper look at the form of the paper, the law which authorized it to be issued, and the recorded proceedings on which it is based. Signature of two out of three county commission- ers renders issue not Invalid. The case of Curtis v. Butler Co., 24 How. 435, was simply one where the legislature UNITED STATES SUPREME COURT. 9S gave county commissioners power to issue bonds upon certain precedent conditions, and it was adjudged that the signature of two out of the three county commissioners created a valid issue. The next bond case (that of Wood v. Law- rence Co., 66 U. S. 386) involves a consti- tutional question, and is not pertinent. Irregular proceedings of board of commissioners estopped by recitals. In the case of Moran v. Miami Co., 6Y U. S. 722, bonds recited that they were issued for a loan of the amount to the county, as authorized by an act of the state of Indiana, permitting the commissioners of Hamilton, Miami, and Ipton counties to borrow money, and the court held that the county was es- topped from, setting up irregularities in the proceedings and negotiations of the board of commissioners. Justice Wayne laying down the proposition that the recitals in the bond are conclusive, and constitute an estoppel in pais. Bonds are commercial paper^ The case of Gelpecke v. Dubuque, 68 U. S. 175, is to the effect that bonds have all the 96 DOCTRINE OF RECITALS IN THE qualities of cominercial paper, and that any irregularity in taking the votes of the elect- ors may be remedied by legislation, and that the United States supreme court was not bound to follow the latest adjudicated deci- sion of the state court on a constitutional question affecting the validity of the bonds. Defective petition estopped by recitals. In the case of Von liostrup v. CUty of Madison, 68 U. S. o'.^6, recitals stated that the bonds weve issued by virtue of an ordi- nance of the common council, passed Septem- ber 2, 1852. The charter granted power to issue bonds, provided that no stock shall be subscrilied on the part of the city unless it be on petition of two-thirds of the citizens of said city. A defense was made that the pro- viso in regard to the petition was not com- plied with, but it ^vas held that the recitals estopped the city from setting up any irreg- ularities in connection with the issuance. Bonds sold at less than par value. In the case of Richardson v. Lawrence Co., 68 U. S. 66, bonds sold at less than par by a railroad company, even though contrary to UNITED STATES SUPREME COURT. 97 the statute authorizing the same, were held valid iu a hona fide holder's hands. Purchasers only bound to look to legal authority. In Meyer v. ]\Iuscatine, 68 IT. S. 384, where the defense against bonds is attempted on the ground that the vote held to authorize them was illegally taken, the broad proposi- tion is laid down that a party taking the bonds was bound to look to the legal author- ity under which the public agents acted. If that were sufficiently comprehensive, he had a right to presume that those empowered to act complied with its requirements. The authority on the voting was prescribed by or- dinance, and the records showed a compli- ance, so the proposition appears rather broad for the case. Curative legislation legalizes. Rogers v. Keokuk, 70 U. S. 74, was to the effect that an act of the legislature legalizing an issuance of bonds gave validity to the bonds, notwithstanding any informality or illegality in their issue. To the same effect is Thompson v. Lee Co., 70 U. S. 327. 98 DOCTRINE OP RECITALS IN THE Railroad a public purpose. The case of Larned v. Burlington, 71 U. S. 275, lays down the proposition as set forth in Knox Co. v. Aspinwall, 62 U. S. 208, al- though the case was settled on the point that a railroad is a public instrumentality, and that bonds issued therefor are for a public purpose. Ratification estops defense of illegality. The case of ]\Iarshall Co. v. Schenck, 72 U. S. 772, is important, in that the bonds here recited that they were issued "pursuant to" a legislative act which gave counties power to issue bonds to a sum not exceeding $100,000, upon certain precedent conditions. Among tliem were these: That the boards of supervisors should oi'der the election; that proper notice be given of time and place of meeting; and that a majority vote of legal voters be had. The defense set up is that the county court, instead of the board of su- pervisors, as required by law, ordered the election, although admitted that all the subse- quent proceedings were regular and duly per- formed, and that the county board, in conse- quence thereof, had issued the bonds, UNITED STATES SUPREME COURT. 99 The court applied the doctrine of estoppel here through ratification, holding that power existed in the county to make the issue, if the proceedings were regular, and that the proper officers of the corporation, the board of supervisors, had attested to the legality of the issuance upon the face of the instrument. Curative legislation legalizes. The case of Campbell v. City of Kenosha, 72 U. S. 194, is another one of those cases where a subsequent legislative enactment le- galized precedent issues of municipal bonds, and cured all irregularities of issue. Like- wise, Lee Co. v. Eogers, 74 U. S. 181. Unauthorized act of issuing officials not estopped by recitals. The case of Marsh v. Fulton Co., 77 U. S. 676, shows clearly that an unauthorized act of an official of a corporation would not cre- ate an estoppel or forbid the corporation from going behind recitals to show the true facts. It tends to show that recitals in early bond cases were intended simply to govern on mere irregularities, and not to rule, where there was a total lack of compliance with a specified condition. In this case, bonds 100 DOCTRINE OF RECITALS IN THE were issued in pursuance of a statutory law granting power to counties to issue bonds to any railroad in the sum of $100,000; pro- vided that no bond shall be issued by any county unless a majority of the qualified voters of such county shall vote for the same, and that notice of election shall specify the company in which stock is proposed to be subscribed. The election was duly held, and a majority \'ote given for the issuance of bonds to the ^Mississippi & Wabash Railroad. Soon thereafter, the legislature made three divisions of the above road, creating three distinct corporations. The board of supervisors, through the county clerk, issued the bonds to the Central Division of the Mississippi & Wabash Rail- road. It was here held that the Central Di- vision was a different corporation than the Mississippi & Wabash Railroad, and that the board, in consequence, never possessed the authority to contract for the issuance of bonds to the Central Division. It was a case where the power to contract never existed, as the electors voted for a bond issue to the Missis- sippi & Wabash Railroad. The coiirt further says that it is a case where the holder was UNITED STATES SUPREME COURT. 101 bound to look to the county and ascertain whether the law had been so far followed by them as to justify the issue of the bonds, thus clearly indicating that the bona fide holders had to look further than statutory authority and recitals therein. Defense of no majority vote for issuance estopped. In Pendleton Co. v. Amey, 80 U. S. 279, where the defense is atterapted that no ma- jority vote was ever taken for issuance of bonds, and to levy tax for the same, the court says: "A purchaser is not always bound to look farther than to discover that the power has been conferred, even though it be coupled with conditions precedent. If the right to subscribe be made dependent upon the res^^lt of a popular vote, the officers of the county must first determine whether the vote has been taken as directed by law, and what the vote was. When, therefore, they make a subscription and issue county bonds in pay- ment, it may fairly be presumed, in favor of an innocent purchaser of the bonds, that the conditions which the law attached to the exer- cise of the power have been fulfilled." This is a strong proposition, and the case shows it 102 DOCTRINE OF RECITALS IN THE more strongly, for the jileadings did not show that there were any recitals in the bonds, but the doctrine of estoppel was applied on ac- count of the defendants having held the stock of the railroad corporation seventeen years. Recitals estop defense of no vote. In the case of City of Lexington v. Butler, 81 U. S. ^.^"2, where bonds recited that they were "authorized by a vote of the people, taken in pursuance of an act of the general assembly of the state," it was ad- judged that the defense that the vote was not so taken could not be maintained, and the statement was made by the court that when a corporation has power, under any circum- stances, to issue negotiable securities, the bona fide holders have a right to presume that they were issued under the circum- stances which gave the requisite authority. Even fraud on part of officers no defense against recitals. In the case of Grand Chute v. Winegar, 82 U. S. 355, the defense was attempted that no vote was ever taken, and the record showed that no election had been held as re- quired by the statiite which gave the town UNITED STATES SUPREME COURT. 103 power to issue the bonds. Eurtliermore, it was contended that the agents of the town, the board of supervisors, had acted fraudu- lently. The statute prescribed that "no bonds shall be issued unless a majority of the votes cast at the election shall be in favor of the same." The recitals in the bonds stated that they were issued "in pursuance of the aforementioned legislative act," and these were held conclusive of the fact. We here see a case which goes to the extreme side of saying that recitals are conclusive, if legisla- tive authority existed. It will be noted that the precedent conditions were about as abso- lute as the legislature could make them, and the record of the town would have shown a noncompliance with the conditions ; yet it was held that the recitals involved the doc- trine of estoppel even though there was lack- ing power to issue in the town's agents. No implied power to issue bonds. Police Jury v. Britten , 82 U. S. 566, holds that there is no implied power in municipal corporations to issue bonds. Recitals estop defense of lack of authority in county judge to issue. The case of Lynde v. Winnebago Co., 83 104 DOCTRINE OF RECITALS IN THE U. S. 6, is a strong one, and Justice Field strongfy dissented to the decision. The stat- ute of Iowa gave the county judge of a county power to borrow money, or to levy taxes to aid in the erection of public build- ings, after submitting the proposition to a majority vote of legal electors, and with the further condition that no vote will be of effect unless provision be made for the levy- ing of a tax. An election was held, not for the purpose of borrowing money, but to levy a tax to erect a court house. This proposi- tion was reported favorably. The county clerk afterwards, in the capacity of the ab- sent county judge, issued bonds for the erec- tion of the court house. The defense in this case is that there never existed any authority in the county judge to issue the bonds, that there never was any vote upon the question, and that therefore there was a lack of power which no recital could cure. The court held, citing Knox Co. v. Aspinwall, and fol- lowing cases, that the county judge here was the appointed power to determine whether the proper vote had been taken, and a recital to that effect estopped the municipality from setting up the contrary. We think that this UNITED STATBS SUPREME COURT. 105 is the furthest that the supreme court has gone in the exercise of the doctrine of estop- pel. Invalid election estopped by recitals. The case of Kenicott v. Wayne Co., 83 U. S. 452, is another one where the recitals es- topped the defense of an invalid election ; the court layiag down this proposition as settled law: "If an election or other fact is re- quired to authorize the issue of the bonds of a municipal corporation, and if the result of that election, or the existence of that fact, is by law to be ascertained and declared by any judge, officer, or tribunal, and that judge, of- ficer, or tribunal, on behalf of the corpora- tion, executes or issues the bonds with a re- cital that the election has been held, or that the fact exists or has taken place, this will be sufficient evidence of the fact to all bona fide holders of the bonds." invalid election no defense against recitals contra. In St. Joseph Tp. v. Eogers, 83 U. S. 644, the recitals stated that bonds were issued un- der and by virtue of state, law, and in accord- ance with the vote of the electors of said township, and the defense of no valid elec- 106 DOCTRINE OF RECITALS IN THE tion in accordance with the statutory condi- tions ^vas not allowed. Legislature has right to grant unconditional power to county. The case of Burlington Eailroad v. Otoe Co., S3 U. S. 667, holds that a state leg- islature has the right and power to grant un; conditionally power to county officials to is- sue bonds, there being no provision of the constitiition to the contrary. Contingency of railroad being built no defense. The case of Isugent v. Supervisors of Put- nam Co., 86 U. S. 241, is to the effect that the defense of a lack of subscription to railroad stock appearing of record, and of the contin- gent condition of the railroad being built, was not valid against a bona fide holder. Curative power of legislature. The case of Ritchie v. Franklin Co., 89 U. S. 67, refers to the curative power of a state legislature in respect to irregularities in the issuance of bonds. Where county officials vested with discretionary powers. The case of Town of Coloma v. Eaves, 92 UNITED STATES SUPREME COURT. lOT U. S. 484, is really the next strong case fol- lowing that of Knox Co. v. Aspinwall. Here there were recitals in the bonds that they were issued ''under and by virtue of the act incorporating the railroad company, and in accordance with the vote of the electors of said township of Coloma, at a regular elec- tion held July 28, 1869, in accordance with said law." By the state, power was given to issue bonds, provided a majority vote of the electors of the town should so authorize after due notice of election ; and when it appeared that a majority of the electors so author- ized, the supervisor was empowered to make the issuance. The defense was attempted that a legal vote had never been taken. The court applied the doctrine of estoppel as to recitals in the following strong words : "Where legislative authority has been given to a municipality or to its officers to subscribe for the stock of a railroad company, and to issue raunicipal bonds in payment, but only on som.e precedent condition, such as a popu- lar vote favoring the subscription, and when it may be gathered from the legislative en- actment that the officers of the municipality were invested with power to decide whether 108 DOCTRINE OF RECITALS IN THE the precedent condition had been complied with, their recital that it has been made in the bonds issued by them and held by a bona fide purchaser is conclusive of the fact, and binding upon the municipality." General and specific recitals. The opinion of Justice Bradley is worthy of note, as it opens the way to a distinction that has subsequently become patent. He concurs in the decision, but lays down the principle that a mere execution and issue by proper officers should not be conclusive of precedent conditions ; that is to say, a gen- eral recital of "issuance under the statute" or "by notice of" should not be conclusive of the fact, but to speciiic recitals he avers that full credence should be given. This opinion opens the doors to the later distinc- tion between general recitals as conclusions of law and express recitals of fact or law. Recitals estop invalid petition of electors. To the same effect is Venice v. Murdock, 92 U. S. 494, where recitals estopped the town from setting up an invalid petition of electors. Likewise, Town of Geno v. Wood- ruff, 92 U. S. 502. UNITED STATES SUPREME COURT. 109 Where recitals put upon inquiry no estoppel arises. In the case of Harshman v. Bates Co., 93 U. S. 569, the state constitution forbade any municipality from loaning its credit, unless two-thirds of the qualified electors of said county assented thereto. The defense was introduced that only two-thirds of those pres- ent at the election assented. This was in ac- cordance with the statute granting power to issue bonds. It was held that the recitals in the bonds were sufficient to put a purchaser upon inquiry, and that the defense was there- fore available. Recitals estop defense of issuance at a different date. The case of Moultrie Co. v. Savings Bank, Q2 U. S. 631, is to the effect that a recital stating that bonds "were issued in pursuance of the subscription of the sum of $80,000 to the capital stock of the Decatur, Sullivan & Mattoon Railroad Company, made by the board of supervisors of said coimty of Moul- trie in December, A. D. 1869, in conformity to the provision of an act of the general as- sembly of the state of Illinois," estopped the town from setting up the fact that the is- 110 DOCTRINE OP RECITALS IN THE suance was made in July, 1870, when the new constitution forbade such issuance; but here records showed that the board of super- visors had in fact made the subscription in December, 1869, and so a valid contract was in existence between the town and the rail- road corporation. Purchaser only bound to look to legal act and the recitals. In the case of Marcy v. Oswego Tp., 92 TJ. S. 637, the principle is clearly stated that a bona fide holder is not bound to look beyond the legislative act and the recitals, where the precedent conditions are of a nature that re- quired examination and decision by aiithor- ity before issuance of bonds; and so recitals tliat bonds were issued "by virtue of and in accordance with" the legislative act, and "in pursuance of, and in accordance with, the vote of three-fifths of the legal voters of the township," estopped the town from the de- fense that the limitation of indebtedness, as prescribed by the statute, was in fact exceed- ed by the bond issue. Recitals preclude public record. In the case of Humboldt Tp.v. Long, 92 U. UNITED STATES SUPREME COURT. Ill S. 642, bonds contained recitals that they were issued "in pursuance of, and in accordance with, an act of the legislature." The statute prescribed that notice of election should be given for thirty days, and that no bonds should be issued on which the interest requir- ed an annual levy beyond one per cent, of the value of the taxable property of the munic- ipality which issued them. Defense was made that notice was not given the required length of time, and that the limitation of the indebtedness had been exceeded in the issue. This was a matter that could have been as- certained by reference to the assessment rolls, both in the town and the county, yet it was held that the recitals were conclusive. Jus- tice Miller strongly dissented to the conclu- sive presumptions given to the recitals, and to the degree to which the doctrine asserted in Knox Co. v. Aspinwall had been carried. Purchaser bound to look only to legislative act and recitals. In the case of Douglas Co. v. BoUes, 94 U. S. 104, the recitals were that bonds were is- sued "by virtue of, • and in accordance with, an act of the legislature," in regard to which 112 DOCTRINE OF RECITALS IN THE the court said: ''Behind such a recital, a ho?ia fide holder for value paid is hound to look for nothing except legislative authority given for the issue of municipal bonds to railroad companies. He is not required to examine whether the conditions upon which such authority may be exercised have been fulfilled. He may rely upon the decision made by the tribunals elected by the legisla- ture;" and so the defense of an illegal vote was unavailing, even though the statute pro- vided expressly for a vote before issuance. Date recited controls. In ]\[arion ( 'o. v. C^ark, !)4 IT. S. -278, the date of issuance, September ;5, 1S72, as re- cited in the bonds, was held to control over the actual date of issuance, November 4th following. Recital of wrong statute does no harm. The case of Johnson Co. v. January, 94 U. S. 202, is noteworthy in that the recitals stated that the bonds were issued "by virtue of, and in accordance Avitli, an act of the legis- lature of Kansas entitled, 'An act,' " etc., and "in pursuance of, and in accordance with, the vote of a majority of the qualified UNITED STATES SUPREME COURT. 113 electors of the county of Johnson," and that the act referred to was, in fact, the wrong statute. The court held that a falsa demon- stratio non nocet, and that the recital of the acts by the board appointed as a tribunal to pass upon them as facts concluded the county from setting up the contrary if, as a matter of fact, there was a law justifying the same. Legislative authority must exist to issue. East Oakland Tp. v. Skinner, 94 IT. S. 255, says that legislative authority must ex- ist to issue bonds. Recitals cannot act as estoppel to deny the legis- lative act. South Ottawa v. Perkins, 94 U. S. 260, is to the effect that no recitals in bonds can act as an estoppel to deny the validity of the law under which they were issued. No recital can cure want of authority. In Dallas Co. v. McKenzie, 94 U. S. 660, there was a recital that bonds were issued pursuant to an order of the county court by authority granted in charter of said company by an act approved January 11, 1860. De- fense was made that no order was ever made 114 DOCTRINE OP RECITALS IN THE by county court, but only by two justices act- ing not as a court. Here tliere was an entire' want of authority in those who proposed to actj and no recital can cure an absolute lack of power. Bona fide holder chargeable with invalidity of bonds appearing on their face. The case of McClure v. Oxford, 94: U. S. 429, brings out strongly the effect of statu- tory requirements upon hona fide holders. The statute here granting power to issue was not to go into effect until after being publish- ed in the Kansas Commonwealth. This could have been foimd to be March 21, IS 72. Bonds were issued and bore date April 15, 1872, and recited that they were "issued pursuant to the above statutory act, and by reason of a vote of election taken April 8th.'' By statute, a notice of election had to be given for thirty days. The bonds, therefore, on their face, were notice of their invalidity, with which a bona fide holder was chargeable. The court said: "Every man is charge- able with notice of that which the law re- quires him to know, and of that which, after being put upon inquiry, he might have as- UNITED STATES SUPREME COURT. lis certained by the exercise of reasonable dili- gence. Every dealer in municipal bonds which, upon their face, refer to the statute under which they were issued, is bound to take notice of the statute and of all its re- quirements." Consolidated corporation may receive issuance of bonds authorized by vote previously to one of its members. Scotland Co. v. Thomas, 94 U. S. 682, presents a case where certain counties were empowered to make subscription of stock and issue bonds to the Alexandria & Bloom- field Railroad. This company afterwards consolidated with the Missouri, Iowa & Nebraska Railroad Company, granting to it all its rights and privileges. Scotland coun- ty, after this consolidation, made its sub- scription of stock, and the defense is now made that the bonds are invalid, being issued to a different corporation than the statute prescribed. The court held that the rail- road here had given it the privilege of re- ceiving county subscriptions to stock; that this privilege survived after the consolida- tion. This case is distinguished from Harshman v. Bates Co., 92 U. S. 569, where 116 DOCTRINE OP RECITALS IN THE the electors thereof authorized an issuance to a certain railroad, and the officers issued the bonds to another. In the latter case, the county officers possessed only the authority to issue to the company specified. In the former case, the officers themselves possessed the discretionary power necessary under al- tered circumstances. Recitals estop defense of illegal election. The case of Rock Creek v. Strong, 96 U. S. 271, is another one where the recitals were that they were ''issued in pursuance of" leg- islative act, and the doctrine of estoppel was applied to the defense of an illegal election. stock subscriptions to one railroad transferred to another. Ray Co. v. Vansycle, 96 U. S. 675, is a case where stock was legally subscribed to the ^lissouri Railroad Company in accordance with a statutory act so authorizing. The above railroad company afterwards assigned and transferred its rights and privileges to the ^orth Missouri Railroad Company, and an agreement was entered into with the county by which they were to transfer their sub- scription to the new company. It was held UNITED STATES SUPREME COURT. 11? that the county court, in making this trans- fer, was in the exercise of its discretionary power, and was not like a case of an entirely new subscription of stock. It was rather a case of a transfer by exchange of stock. Subscription to one corporation and issuance to another render bonds invalid. The case of Bates Co. v. Winters, 97 U. S. 83, follows that of Harshnian v. Bates Co., 92 U. S. 569, and is strong in that it seenas to say that a vote of electors to authorize a subscription to one railroad, and the issue of the bonds by the county court to another rail- road, creates such a want of authority in the county court that there can be no bona fide holder of them. In the ease of Harshman V. Bates Co., the recitals put the purchaser on inquiry ; but not so here. This case seems contrary to prior decisions of the court, and there was a strong dissent by three justices of the court. It may be explained on the ground that the county court was the mere agent of the municipality. Lis pendens not constructive notice to a bona fide holder of bonds. The case of Warren Co. v. Marey, 97 U. S. 118 DOCTRINE OF RECITALS IN THE 9 6, is important in two respects : First, in deciding that an irregularity in notice of election is no defense; and, second, that a lis pendens has no effect as constructive no- tice to a hona fide holder of bonds. In this case, the state prescribed that no bonds should be issued unless upon a majority vote of electors after thirty days' notice of an elec- tion. The election was held within the thir- ty days, and authority to issue was given by electors. A citizen of the county filed a bill to enjoin the issuance pending the proceed- ings. The issuance was made, the bonds re- citing that they ''were issued in conformity with" the statutoi'v act, and "the vote of the electors cast at an election held on the 23d day (if September, 1869." Held, that the recital was indisputable evidence of the fact. Followed by Xauvoo v. Retter, 97 U. S. 389. Where railroad company not organized at vote of electors. The case of Daviess Co. v. Huidekoper, 98 IT. S. 98, involves the proposition whether a hona fide holder of bonds can recover, when, as a matter of fact, at the time the vote UNITED STATES SUPREME COURT. 119 of electors was taken to authorize the sub- scription, the railroad corporation had as yet not organized. The court applied the doc- trine of estoppel as in the case of Knox Go. v. Aspinwall. Bond issue to corporation otiier than autliorized invalid. In the case of Wilson v. Salamanca Tp., 99 U. S. 499, the defense of an issuance of bonds in excess of the legal limitation of in- debtedness allowed by statute, and of a sub- scription to stock to another corporation than that voted upon, is not permitted. Recitals estop defense of donation bonds. In Hackett v. Ottawa, 99 U. S. 86, where recitals stated that the bonds were "issued to the city of Ottawa by virtue of the charter of said city," and also in accordance with a certain ordinance, entitled "An ordinance to provide for a loan for municipal purposes," the defense that bonds were issued as a dona- tion, and not for municipal purposes, was unavailing in the face of these recitals. Like- wise, Orleans v. Pratt, 99 U. S. 6Y6. Recitals estop special conditions between parties. In the case of Calhoun Co. v. Galbraith, 120 DOCTRINE OF RECITALS IN THE 98 U. S. 214, recitals that bonds were issued •'in pursuance of" a legislative act were lield to estop the coimty from setting up irregular- ity in conforming with the statute, — that is, in issuing the bonds to corporation or bearer instead of to corporation and its successors and assigns, as required bv statute ; and like- wise, special conditions between a railroad and a mimicipality are no defense against a bona fide holder. Bniiiklyii v. Aetna Life Ins. Co., '.)t> V. S. :;(;2. Recitals must import compliance with conditions. In County Crumuissioiiers v. Black, 99 U. S. 680, where bonds simply recited that they were "issued by order of the board of county commissioners," etc., the proposition is laid down by the court that if the "Ijond contained a recital that an election had been held, and that a majoi-ity had voted for the issue of the bonds, the recital would have been con- clusive upon the county, and a purchaser would have needed to look no farther than to the act of the legislature ; but in the ab- sence of any recital, it may be conceded that he was bound to inqiiire whether a majority vote had been returned for the issue of the bonds." UNITED STATES SUPREME COURT. 121 Recitals estop defense of insufficient petition. In the case of Roberts Town v. Bolles, 101 U. S. 119, where bonds recited that they are "issued in accordance with laws of the state of Illinois," and "by virtue of a vote of a ma- jority of the voters of said town, held in pur- suance of provisions of the laws of the state," the defense that the notice of election was insufficient and the petition deficient was precluded. In Menasha v. Hazard, 102 U. S. 81, a re- cital in bonds stated that they should be valid only when a certificate should be indorsed on them that the conditions on which they were issued had been performed. A certificate so indorsed, which is a substantial compli- ance with the condition, binds the town. Want of autiiority always a defense. The case of Wells v. Pontotoc Co., 102 U. S. 625, and Ogden v. Daviess, 102 U. S. 634, are to the effect that, where there exists no authority to issiie, there can be no recov- ery on the bonds, no matter in whose hands they may be. The case of Buchanan v. Litchfield, 102 TJ. S. 2Y8, brings out well the difference in 122 DOCTRINE OP RECITALS IN THE effect between bonds with recitals and those without, and it clearly shows the effect of a constitutional limitation upon indebtedness. Effect of no recital is to raise no estoppel. In this case, the bonds recited that they were "issued in accordance Avith a statute of the state and a eitv ordinance." The con- stitution forbade municipalities becoming in- debted to a greater amount than five per cent, of the valuation. These bonds increased that debt above the constitutional limitation, and the defense was that they were void for that reason. The court says : "ITad the bonds made the additional recital that they were issued in accordance with the constitu- tion, or had the ordinance stated in any form that the proposed indebtedness was within the constitutional limit, or had the statute re- stricted the exercise of the authority therein conferred to those municipal corporations whose indebtedness did not at the time exceed the constitutional limit, then it would have been ground for holding that the city could not, as against the plaintiff, dispel the fair inference to be drawn from siich recital or statement as to the extent of its existing in- UNITED STATES SUPREME COURT. 123 debtedness." The constitution referred to the assessment rolls, but a purchaser, owing to the irregularities in the way they were kept, would not have been able to ascertain the exact amount of indebtedness. ISTever- theless, the lack of recital anent that in the bond gave full rein to a full defense, no mat- ter what hardship was involved therein. Recital controls as to amount of issuance. Where bonds recited that they were "is- sued by authority of an act of the 25th of March, 1869, and, in pursuance of a vote of the people of said town, held and taken June 25th, 1870," it was held, in Town of AValmit V. Wade, 103 U. S. 683, that the defense that the people only voted for $30,000 issuance of stock, whereas the issuance in fact was $40,- 000, was estopped by the recitals in the bonds. Recitals estop illegal election. Recitals that bonds were "issued under and pursuant to the orders of the board of supervisors of Clay county, as authorized by virtue of the law of the state of Illinois, "estopped a defense of an invalid notice of 124 DOCTRINE OF RECITALS IN THE election, and an illegal election, as required by said statute, in Clay Co. v. Society for Savings, 104 U. S. 579. Recitals estop defense of non tax levy. Moultrie Co. v. Fairfield, 105 U. S. 370, is to the effect that recitals control over the defense of an illegal election, and that bonds arc not invalid because the levying of a tax to pay for the same has not been provided. Recital, unless explicit, does not estop defense of overissue. It is laid down in Independent School Dist. V. Stone, 106 U. S. 76, that recitals must be clear and unambiguous in order to give protection to the bona fide holder. So, where bonds recited that they were "issued by the board of school directors by an author- ity of an election of the voters of said school district held and in conformity with the pro- visions of chapter 98 of the Acts of the Twelfth General Assembly of the state of Iowa," it was adjudged that this did not estop the defense of an issuance in excess of the constitutional limitation of indebtedness, the lack of a recital, as in Buchanan v. Litch- field, 102 U, S. 278, giving the defense no UNITED STATES SUPREME COURT. 125 estoppel. Had the recital been "in pursu- ance of" or "by virtue of" or "in conformity with" the statute, the court intimated that such might have been held to import a full compliance with precedent conditions. Defense of irregular election. Where bonds recited that they were issued in compliance with the vote of the legal voters at an election held on the 30th day of April, A. D. 18Y0, under and by virtue of the au- thority conferred by an act of the general assembly of the state of Illinois, estoppel arose in defense of an irregular election in Pana v. Bowler, 107 U. S. 529. Where power is given to officers to issue. Where bonds recite that they were "issued in pursuance of" statute, which statute gave power to the commissioners to issue bonds, bona fide holders must show only the law, the recitals, and due appointment and execution of bonds by the officials in fact, in Montclair V. Eamsdell, 107 U. S. 14:7. Overissue estopped by recitals. Tn Sherman Co. v. Simonds, 109 U. S. 735, where recitals were that the bonds were 9 126 DOCTRINE OP RECITALS IN THE "issued by authority of an act of the legisla- ture," it was held that the bona fide holder was not bound to go behind the law and the recitals to inquire into the amount of the county indebtedness. The case of Northern Nat. Bank v. Porter Tp., 110 U. S. 608, distinguishes between re- citals and their effect, as asserted in Knox Co. V. Aspinwall, and the train of cases fol- lowing, and itself. Knox Co. V. Aspinwall distinguished. Where of- ficers issuing are not the judicial officers on facts recited. In this case, the bonds recited that they were issued "in pursuance of the provisions of the statute and of a vote of the qualified electors of the township of Porter, taken in pursuance thereof." It appears that the leg- islature granted power to the township to is- sue bonds, if the commissioners of the county were not authorized by voters to so issue. It was held that the recitals were not such as to preclude the defense that the commission- ers were authorized, for a recital on this point was a matter beyond the judicial in- vestigation or discretionary power of town- ship officers to certify, and thus this could be UNITED STATES SUPREME COURT. 127 distinguished from Knox Co. v. Aspinwall, and the following cases, where the decision of facts were so certified by the appointed tri- bunal; but here the law put the purchaser upon inquiry as to whether the commission- ers had been authorized, and a nonauthoriza- tion of the commissioners could not be im- plied from the issuance and recitals of the township. Celebrated Dixon Co. v. Field case. The case of Dixon Co. v. Field, in 111 TJ. S. 83, ftirnishes a severe case against the con- clusiveness of recitals, and apparently, from subsequent decisions, the supreme court has had hard work in keeping itself from revers- ing that decision. In this case, an assess- ment roll, being a matter of record, takes precedence over any recital as to the same. Briefly, the facts are that the bonds recited that they "were issued under and in pursu- ance of an order of the county commissioners of the county of Dixon, and authorized by an election held in the said county on the 2Yth day of December, 1875, and under and by the virtue of chapter 35 of the General Statutes of ISTebraska, and amendments there- to, and the constitution of the said state." 128 DOCTRINE OF RECITALS IN THE The legislative act gave the county power to issue bonds in a sum not exceeding ten per cent, of the assessed valuation. The con- stitution provided that donations of any county shall never exceed ten per cent, of the assessed valuation of said county; provided, further, that any city or county may, by a two-thirds vote, increase such an indebted- ness five per cent, in addition to such ten per cent. The bonds on their face showed that they were issued for $87,000, and that the valua- tion of taxable property in said county at the last previous assessment was $587, •'^)31, and of -^^'hich the amoxmt of the bonds issued in pursuance of said election was more than ten per cent., but less than fifteen per cent. It was held that the constitutional pro- vision intended to enable a county to issue to a fifteen per cent, indebtedness only when legislative authority was so granted ; not to grant an enlargement of a legislative act. Hence the bonds issued under the legislative act showed on their face that they were im- constitutional, and therefore void. Inasmuch as the bonds show in themselves UNITED STATES SUPREME COURT. 129 that they are not within the law, it appears that the general remarks made thereafter are merely obiter dicta, and that this case should not be relied upon as a strong case against conclusiveness of recitals, for it is the recitals themselves that defeat the bona fide pur- chaser, as much as anything else. Had the bonds recited expressly that they were for the sum of $87,000, which sum was within the ten per cent, limit of indebtedness, there would have been little doubt but that, under the adjudications of this court, they would have been held to be conclusive over the as- sessment roll on record, even if it showed a different state of facts. Recitals estop lack of due notice of election. In Anderson Co. v. Beal, 113 U. S. 22Y, bonds reciting that they were "issued under the provisions of, and in conformity to," an act of legislature, and, "in pursuance of a vote of the electors," estop the defense of a want of due notice of election, even if the wrong statute was therein referred to. Hayes v. Holly Springs, 114 U. S. 120, holds that no recitals are of avail when there is a lack of power to issue. 130 DOCTRINE OF RECITALS IN THE No recitals, no estoppel. In Merchants' Excli. Nat. Bank v. Bergen Co., 115 U. S. 381, no estoppel arises where there are no recitals. Overissue beyond amount authorized by voters not estopped by recitals. See later cases. In Daviess Co. v. Dickenson, 117 IT. S. 657, where bonds were issued by the county commissioners in the snm of $320,000, and over, and, by the vote of the electors, the sum authorized was only $250,000, and where it is recited by the connty judge on the back of the bonds that the}' "are issued as authorized by legislative act, and in pur- suance of an order of the county court," it was held that the county commissioners had no power to issre in excess of the amount •^'Oted, and that the certificate of the coimty judge was not a recital such as would estop the defense of the overissue, because, being not the appointed tribunal to determine upon that fact, he therefore could not bind by re- cital the municipality. Special authority to issue must be recited. Hopper V. Covington, 118 U. S. 148, holds that where bonds do not recite the special authority to issue or any recital of matters UNITED STATES SUPREME COURT. 13] in pais, special authority to issue must be alleged and proved, and no estoppel of any kind arises. Recitals estop defense of irregular election. In Town of Oregon v. Jennings, 119 U. S. 74, where bonds recited that they were issued "under and by virtue of an act of legisla- ture," which act authorized the town clerk and supervisor to issue bonds after an elec- tion was duly held so directing, it was held that the recitals estopped the town from set- ting up the defense of an irregular election, or of an issuance in excess of the legal limit of indebtedness. Recitals in certificate of registration not binding. In Crow V. Oxford Tp., 119 U. S. 215, the bonds recited that they were "issued in pur- suance of an election held in the township, in conformity with an act of the legislature of Kansas, March 1, 1872." The bonds on their face showed that they did not conform to the statute referred to, because of their issuance before the statute went into effect. The plaintiff, however, claimed that a special act, passed March 2, 1872, gave the town the requisite power. The records of the town- ship, however, showed that a full compliance 132 DOCTRINE OP RECITALS IN THE was Ts'anting with this special act, and the defense of want of such compliance was al- lowed on the ground that no recitals pro- tected the plaintiif, the recital anent the elec- tion referring only to the precedent act. The plaintiff further contended that the certifi- cate of registration of the state auditor that they were legally issued precluded the de- fense of irregularities ; to which the court answered that the state auditor was not act- ing as a tribunal to determine upon the facts as true or false, his function being merely to register the bonds. Hence he was not the ofKcer whose recitals would be binding upon the township. General recital mere conclusion of law and raises no estoppel. In Katzenberger v. Aberdeen, 121 U. S. 172, a recital "that this bond is issued under and pursuant to the constitution and laws of the state of Mississippi, the charter of the city of Aberdeen, and ordinances passed by the mayor and selectmen of the city of Aber- deen on the 26th of April, 1870," which re- fers to no specific legislative authority, is held merely to be a recital of law, and does UNITED STATES SUPREME COURT. 133 not estop the defense of want of a vote to is- sue the bonds. Recitals under a void act raise no estoppel. In Town of Gilson v. Dayton, 123 U. S. 59, where the recitals in the bonds are to the effect that they are "issued under and by virtue of the act of February 18, 1857, and that the vote of the town was taken at a spe- cial town meeting called upon the application in writing of fifty legal voters of said town," the contention that the defense of an illegal election is estopped by the recitals is not sus- tained ; there the act in question was void, even though there ^vas other legal authority to issue. Recitals estop defense of no legal petition. In the case of Livingston Co. v. Bank of Portsmouth, 128 U. S. 102, the bonds re- cited that they were "issued under and pur- suant to an order of the county court of Liv- ingston county, authorized by a two-thirds vote of the people of Chillicothe municipal township." The defense was that no peti- tion of election was presented in accordance with the legislative act granting the power to issue. The recitals were held to estop this defense. 134 DOCTRINE OP RECITALS IN THE Recitals no estoppel where conditions prescribed by voters. In the case of German Sav. Bank v. Franklin Co., 128 U. S. 526, the bonds re- cited that they were "issued Tinder the pro- visions of a legislative act, and authorized by a majority of the qualified voters of said county of Franklin at an election held in said county on the 11th day of September, 1869, in accordance with the provisions of said act." The vote above mentioned pre- scribed that no bonds should be issued unless a certain railroad should be commenced in Franklin county within nine months from the date of the election. A statute after- wards passed by the legislature asserted that a county had a right, in making subscrip- tions, to impose conditions, and that such sub- scriptions should not be valid until precedent conditions had been fulfilled. The facts were that the railroad was not commenced in said county until a number of years after- wards. The bonds were then issued. It was held that the condition was here abso- lute ; that the bona fide purehasor was charge- able with notice of the statute, and that the Illinois supreme court decisions, as shown UNITED STATES SUPREME COURT. 135 in 115 111. 450, made the conditions absolute. Therefore the recitals did not protect the bona fide purchaser in this case. Recitals do not estop constitutional limitation on indebtedness. The case of Lake Co. v. Graham, 130 U. S. 674, is one where the bonds recited that they were "issued under and by virtue of and in fiill compliance with an act of the general assembly of Colorado, and it is fur- ther certified that all the provisions and re- quirements of such act have been fully com- plied with by the proper officials in the is- suing of this bond, and that this bond has been authorized by a vote of a majority of the duly-qualified electors of said county." The constitution of the state prescribes that under no conditions can counties exceed a certain specific limitation of indebtedness. The recitals in no way alluded to the con- stitution, and it is held that no estoppel arises from an indirect inference to be drawn from recitals. The court, here followiiag closely Dixon v. Field, 111 U. S. 83, seems to intimate that no recital would have estopped the defense of an issuance in excess of the legal 136 DOCTRINE OF RECITALS IN THE limit of indebtedness on the ground that this provision is a constitutional one, and that no legislature could dispense with these exactions by appointing a ministerial comniission whose decision might be taken instead of the facts. It will be seen that this statement is broader than the necessities of the case, and does not hold good under later decisions. Bona fide holders chargeable with agent's au- thority. The case of Coler v. City of Cleburne, 131 U. S. Kii*, liolds that a bona fide purchase!' is chargeable with the official character of a municipality's agent. In this case, bonds were signed by an ex-mayor, whose term of office expired in April, on July 1st, but were antedated January 1st. There was no au- thority in the ex-mayor at the time he signed them, hence they were void. Detailed recitals not necessary to show compli- ance. In Comanche Co. v. Lewis, 13.3 U. S. 198, the point is made that a recital "in pursu- ance of, and in accordance with," a legisla- tive act, is sufficient to show compliance with UNITED STATES SUPREME COURT. 137 the statute, and it is unnecessary that a full and minute detail of all proceedings be given. Recitals estop insufficient petition. In Bernard Tp. v. Morrison, 133 U. S. 523, the defense of an insufficient petition to subscribe was unavailing against a recital that bonds were issued "in pursuance of" an act specified. Contra where insufficient petition creates want of power. The case of Rich v. Mentz Tp., 134 U. S. 632, presents a case where an insiiflicient petition to the county judge to issue bonds under a legislative act gives snch a want of power in the coiinty judge as to render all re- citals of facts unavailing, the statute in itself requiring the purchaser to know the petition. Express recital estops defense of overissue contra constitution. The case of Chaffee Co. v. Potter, 142 U. S. 355, takes another advance in the way in- dicated in Buchanan v. Litchfield, 102 U. S. 278, by giving a peculiar distinctiveness to express recitals. The bonds in this case re- cited that they were issued under and by vir- tue of, and in full conformity with, the pro- 138 DOCTRINE OF RECITALS IN THE visions of an act, and "it is hereby certi- iied that all the requirements of law have been fully complied with by the proper offi- cers in issuing this bond. It is further certi- fied that the total amount of this issue does not exceed the limit prescribed by the con- stitution of the state of Colorado, and that this issue of bonds has been authorized by a vote of the majority of the duly-qualified electors of the said county of Chaffee." The defense was attempted that an illegal vote was given, and the constitutional limita- tion of indebtedness had been exceeded, and reliance was placed upon Dixon Co. v. Field, 111 U. S. S3, and Lake Co. v. Graham,, 130 U. S. 674. The court says, in distin- guishing this case from the two cases men- tioned : "If the face of one of the bonds had disclosed that, as a matter of fact, the recital in it with respect to the constitutional limita- tion was false, of course the county would not be bound by that recital, and would not be estopped from pleading the invalidity of the bonds in this particular. Of course the purchaser of bonds in open market was bound to take notice of the constitutional limitation with respect to indebtedness which it might UNITED STATES SUPREME COURT. 139 incur, but when, upon the face of the bonds, there was an express recital that that limita- tion had not been passed, and the bonds them- selves did not show that it had, the bona fide purchaser was bound to look no further." Recital does not estop illegal purpose. In Barnet v. City of Denison, 145 U. S. 135, where bonds recited that they were "is- sued by virtue of an ordinance passed by the board of aldermen of said city," and where the city charter required that bonds should express on their face the purpose for which they were issued, it was held that the recital created no estoppel to set up as a defense an issuance for an illegal purpose. Public record required by statute not precluded by recitals. In Sutliff V. Board of County Commission- ers, 1-47 U. S. 235, the bonds recited that they were "issued under and by virtue of and in compliance with an act of the general as- sembly of the state of Colorado, and it is hereby certified that all the provisions of said act have been fully complied with by the proper officers in the issuing of this bond." The constitution prescribed that counties 140 DOCTRINE OF RECITALS IN THE should not exceed a' certain rate of indebted- ness to their assessed valuation. The statute of the state prescribed the method of making an issuance of bonds, and expressly provided that a record should be kept in each county showing the debt and receipts of each county respectively, which record should be open to the inspection of the public at all times. It was held that a recital could not pre- clude this record, which was made an open requirement by statute, and which put cvei-y purchaser upon inquiry as to the true facts by its reference thereto. In Barnum v. Okalona Tp., l-ts U. S. '.VM, it is held that an issue of bonds for more than ten years is void where the legislature restricts that issue to ten years. Misrecitals non nocet. In Board of Education of Atchison w Dekay, 148 U. S. 51)1, the judgment is that a mere misrecital of a statute does not vitiate the lioiids, falsa deinonslratio non novel. In tiedges v. Dixon Co., 150 U. S. 1ST, a suit in equity is brought \(t declare certain bonds valid after reducing them within the constitutional limit of indebtedness. It ap- UNITED STATES SUPREME COURT. 141 pears from the case that the holders "were no7i bona fide, and the extent of the recitals in the bond is not mentioned. The decision made was that the whole is- sue was void as being contraconstitutional in regard to the amount of the issuance, and that equity could not make a part of the is- suance validj and thus bring the issuance pro tanto within the constitution. Recitals no estoppel where constitutional provi- sion. In regard to this, this broad statement is made by the court: "Recitals in bonds is- sued under legislative authority may estop the municipality from disputing their au- thority as against the bona fide holder for value; but when the municipal bonds are is- sued in violation of a constitutional provision, no such estoppel can arise by reason of any recitals contained in the bonds. Citing Lake Co. V. EoUins, 130 U. S. 662 ; Lake Co. v. Graham, 130 U. S. 674; Sutliff v. Lake Co., 147 U. S. 230. It will be seen that this statement is in its nature obiter dicta, and its application to some of the preceding cases would seem con- tradictory. If it were not for the statement 10 142 DOCTRINE OP RECITALS IN THE of the justice in 110 U. S. 608, wherein he said that general expressions in every opinion are to be taken in connection with the case in which those expressions are used, the cases cited by the justice in this case do not bear out the proposition in its generality. Necessity of express recitals shown. In Citizens' Sav. & Loan Ass'n v. Perry Co., 15() U. S. 689, the bonds contained the recital that they were "issued under the au- thority and in accordance with the require- ments of an act," etc., and under the certifi- cate of registration on the bonds was a state- ment referring to the statute prescribed for the regulation of bonds, which provided that any to^vn might, at its election, prescribe cer- tain precedent conditions, and that bonds voted under these circumstances shall not be valid until such conditions precedent have been complied with. The vote given for the issuance of these bonds had the condition that no bonds should be issued until the rail- road company should locate their machine shops at Duquoin. There was no recital anent this matter, and so it was held that the defense of a lack of compliance with the con- DOCTRINE IN THE STATE COURTS. 143 dition was not estopped; but in the same case, in connection with bonds issued to the Chester & Tamaroa Coal & Railroad Com- pany, where the bonds recited that they were issued in pursuance of an election held by the legal voters of Perry county, and by vir- tue of the provisions of an act of the general assembly of the state of Illinois, the defense of a lack of a majority of the qualified voters authorizing the issue, and the defense that the conditions precedent mentioned in the vote were not complied with, was not allowed, because there was an express recital on that point. Recitals estop illegal notice and defective petition. In Andes Tp. v. Ely, 158 U. S. 313, where the bonds recited that they were "issued by virtue of an act of the legislature," and "all necessary and legal proceedings have been taken and had under said acts," the defense of an inadequate petition and an illegal no- tice of election was estopped. In Graves v. Saline Co., 161 U. S. 3Y0, the bonds recited that they were issued un- der authority of certain acts of the general assembly of the state of Illinois, and in pur- 144 DOCTRINE OP RECITALS IN THE suance of an election duly ordered and held according to law. Express recitals act as estoppel. This case differs from Citizens' Sav. & Loan Ass'n v. Perry Co., 156 U. S. 689, in that the recital gives express reference and imports full compliance with the statute of April, 1S69, which gave the town the right to impose absolute conditions by vote. The recital was furthermore complete by stating that the election was duly held and ordered. The defense of a want of compliance with the precedent condition to the subscription of stock was accordingly estopped. Purchaser not bound to go to ordinances and public records. \^Tiere bonds in Evansville v. Dernett, 161 U. S. 435, recited that they were "issued by virtue of an act of the general assembly of the state of Indiana, granting to Evans- ville a city charter," and ''by virtue of the resolution of said city council, passed Octo- ber 4, 1869, ordering an election of the quali- fied voters of said city," the defense that no petition of two-thirds of the resident free- holders, as required by the charter, was in UNITED STATES SUPREME COURT. 145 fact present, is estopped, and on tliis the court says: "As therefore the recitals in the bonds import compliance with the city's char- ter, purchasers for value having no notice of the nonperformance of the conditions pre- cedent were not bound to go behind the stat- ute conferring the po'\\-er to subscribe, and to ascertain, by an examination of the ordi- nances and records of the city council, wheth- er these conditions had in fact been per- formed." Noncompletion of railroad estopped by recitals. In Provident Life & Trust Co. v. Mercer, 170 U. S. 590, where bonds recited that they were issued "pursuant to authority conferred by an act of legislature," and "pursuant to an order entered by the county judge in con- formity with said act," the defense that the railroads were not completed as required by statute was estopped. Constitutional limitation of indebtedness as de- fense estopped by recitals. Recitals in bonds in Gunnison Co. v. Rol- lins, 173 U. S. 256, that they were "issued imder and by virtue of and in full conformity with the provisions of an act of the general 146 DOCTRINE OF RECITALS IN THE assembly of, the state of Colorado, and that it is hereby certified that all the requirements of law have been fully complied with by the proper officers in the issuing of this bond," and that "it is further certified that the total amount of this issue does not exceed the limit prescribed by the constitution of the state of Colorado, and that this issue of bonds has been authorized by a vote of a majority of the duly-qualified electors," estop the coun- ty to set up an indebtedness in excess of the constitutional limit. Constitutional provision requiring a tax levy be- fore issuance. In Wade v. Travis Co., 174 U. S. 499, where the bonds were issued by a county, and there was a provision in the constitution that no debt for certain works shall be creat- ed until provision be made for the levying of a tax to pay the interest and furnish a sink- ing fund to pay off the principal, it was held that this provision in connection with a bona fide holder of the county's bond simply meant such fixed and definite arrangements for the levying and collecting of such taxes as would become a legal right in favor of the bond holder. UNITED STATES SUPEEME COURT. 147 This concludes a brief resume of all the United States supreme court cases upon the subject of recitals as herein treated. From these cases, a general idea of the application of the doctrine of estoppel can now be readily gleaned. The tendency of the court has al- ways been to protect bona fide holders of bonds, and the doctrine of estoppel has been extended, in this effort, even to cases where a want of power practically existed. We consider the cases of Lynde v. Winnebago Co., 83 U. S. 6, where a county judge borrows money and issues bonds for a purpose unau- thorized by statute, and Humboldt Tp. v. Long, 92 U. S. 642, where so strong a conclu- sive effect is given to recitals in the judge's opinion, as the extreme points to which the courts have advanced in showing favor to a hona fide holder. Justice Field in the for- mer case, and Justice Miller in the latter, both strongly dissented to the extent to which the doctrine in Knox Co. v. Aspinwall had been carried. On the other hand, the cases of Bates v. Winters, !)7 U. S. 83, and Dixon Co. V. Field, 111 U. S. 83, and the proposi- tions there stated, show the extreme steps that the supreme court has taken in an opposite 148 RECITALS ON MATTERS OF LAW. direction by strictly applying the doctrine of estoppel. The propositions stated in Bates V. Winter require a strict and literal compli- ance with a vote of the electors. Those in Dixon Co. V. Field give to public records a conclusive presumption. Many of these propositions, in the opinions of the court, when stated .generally, appear contradictory, and, in point of fact, they would produce much confusion if eliminated from the case with which they are connected. But bearing in mind the statement of the court in 110 TJ. S. 608, that general expressions in every case are to be taken in connection with the case in which those expressions are used, we may rationally explain the extreme cases cit- ed, and deduce a general rule applicable to recitals in bonds. McClure v. Oxford, 94 U. S. 429, well states what every bond purchaser is required to know : "Every man is chargeable with no- tice of that which the law requires him to know, and of that which, after being put upon inquiry, he might have ascertained by the exercise of reasonable diligence. Every dealer in municipal bonds, which upon their face refer to the statute under which they UNITED STATES SUPREME COURT. 149 were issued, is bound to take notice of the statute and of all its requirements." Hav- ing proceeded thus far, however, the pur- chaser may place reliance xipon recitals made by the proper executing officers anent the statutory requirements. These recitals, to give a conclusive presumption, must be clear and unambiguous, and not place the bona fide purchaser the least bit upon inquiry. ISTo indirect inference can be drawn from recitals. ISO DOCTRINE IN STATE COURTS. CHAPTER X. THE BOCTRINB IN THE STATE COURTS. Although the majority of the state courts have generally followed the doctrines enun- ciated in the United States courts, yet, in many of the states, the doctrine of munic- ipal decision has never been conceded the full effect as noted in the federal courts. The state courts admit the doctrine that recitals in bonds may preclude the municipality from setting up irregularities in the issue, but they are at variance with the United States courts -when the question arises as to what consti- tutes an irregularity. The differences existing have arisen mostly through the construction of conditions as ab- solute or nonabsolute ; the former rendering recitals of no avail, the defense of the latter being estopped by recitals. The state courts ha^'e given man}- precedent conditions im- posed by statute an absolute force where the nonfulfillment of the same would be treated by the federal courts as mere irregularities. DOCTRINE IN STATE COURITS. ISl This is illustrated in Wisconsin, where a lack of a proper notice of election was con- sidered not as a mere irregularity, but such a deiicient compliance with the statute as to create a want of power, which even a recital of a legally-held election could not cure.-' So, in Missouri and Illinois, no recital on a legally -held election, requiring a majority vote or a two-thirds vote, can be substituted for an election in fact; henee the defense of no election is always available.^ In ISTe- braska, a defective petition for or notice of an election renders bonds invalid.^ JSTew York requires that all the precedent steps leading up to an election be strictly complied with.* In Iowa, and formerly in Michigan, bonds issued to and in the construction of a railroad are not for a public purpose.^ iVeeder v. Lima, 19 Wis. 280: Bishop v. Mil- waukee, 21 Wis. 257. 2 Steines v. Franklin Co., 48 Mo. 167; Carpenter V. Lathirop, 51 Mo. 483. See cases under Illinois and Missouri, chapter 12. 3 See cases under Nebraska, chapter 12. * See cases under New York, chapter 12. 5 Contra, Steward v. Polk Co., 30 Iowa, 94; Ren- wick v. Davenport, 47 Iowa, 511; State v, 152 DOCTRINE IN STATE COUIOTS. Many of the state courts hold that the con- dition imposing a legal limitation of indebt- edness is an absolute provision, and there- fore that no recital will preclude the defense of an overissue.^ A few of the states require the bona fide purchaser to know all the public records per- taining to an issuance, and they give to these public records precedence over any recitals.'^ Wapello, 13 Iowa, 388; Chamberlain v. City of Burlington, 19 Iowa, 395; Hanson v. Vernon, 27 Iowa, 28; People v. Board of Salem, 20 Mich. 452; People V. State Treasurer, 23 Mich. 499; Dodge v. Van Buren Circuit Judge, 118 Mich. 189. 6 See state cases on bonds issued in excess of legal limitation of indebtedness. 7 Lewis V. Bronston Co., 12 Kan. 186; State v. Commissioners, 37 Ohio St. 526; Town of Eagle V. Kohn, 84 111. 292; Veeder v. Lima, 19 Wis. 298. APPENDIX "A > ? Appendix a. iss , APPENDIX A. SYLLABI OF CASES ON RECITALS IN THE UNITED' STATES CIRCUIT COURT OP APPEALS. Order of county court. Kecitals in county bonds that they are issued "pursuant to an order of the county court" puts all persons dealing in the bonds upon inquiry as to the terms of the order. This was an attempt to issue $100,000 bonds for $5,000 worth of railroad stock. Post v. Pulaski Co., 1 C. V. A. 405, overruled by Wesson v. Saline Co., 20 C. C. A. 227. Express recitals operate as an estoppel, except as against constitutional or statutory re- quirements. Recitals in bonds that they were issued according to law, and specifically enumerat- ing each step taken in compliance therewith, estop a city from setting up grounds of de- fense against hona fide holders except for violation of some constitutional or statutory requirement. Washington Tp. v. Coler, 2 C. C. A. 274. 1S6 APrENDIX A. City not estopped by recitals "under an ordi- nance." Eecitals in municipal bonds that they are issued under an ordinance does not estop the town from showing that the ordinance was never published, as required by Laws Colo. 1887, p. 445, and is therefore void, since neither the mayor nor clerk who signed the bonds had any duty in relation to publishing ordinances. These bonds recited that they were issued in pursuance of an ordinance of city council, and inasmuch as it was never published or recorded as required by law, it never went into effect, and hence the author- ity was void. Bank of Commerce v. Gran- ada, 4 C. C. A. 212. General recital raises no estoppel. Recitals in bonds that they are issued in accordance with the provisions of an act of the legislature does not estop the city from setting up the issue as in excess of the con- stitutional limitation, for the recital is not an express recital of fact, but one, rather, of conclusion of law. Francis v. Howard Co., 4 C. C. A. 460. Express power to issue must be granted. Recitals in school bonds that they are is- APPENDIX A. 157 sued in pursuance of an act of the legislature of the state of Nebraska, entitled, "An act to establish a system of public instruction for the state of !N"ebraska," which gave school districts power to borrow money, does not estop the city to set up lack of power to issue negotiable securities under said act. Held, that express power through statute must be given to issue bonds. Ashmelot Nat. Bank V. School Dist. No. 7, 5 C. C. A. 468. Recitals do not estop lack of county organization. Recitals in bonds that they are issued in conformity to, and in full compliance with, the provisions of chapter 50, Laws Kan. 1879, and that it is hereby certified and re- cited that all the acts, conditions, and things required to be done precedent to and in the issuing of this bond have been properly done, happened, and performed in regular and due form, as required by law, and that the total indebtedness of said county, inclusive, is within the statutory limits, held not to estop a county from setting up the fact that the county was not organized the required length of time prescribed by the statute. Public record. Municipalities are not estopped by recitals 1S8 APPENDIX A. in their bonds except as to matters of fact, and not even then, if the facts recited are matters of public record, open to the inspec- tion of every inquirer. Coffin v. Board of Com'rs, Kearney Co., 6 C. C. A. 228. Mere ultra vires act no defense. Recitals in bonds that they are issued "by virtue of a legislative act, the provisions, re- quirements, and conditions precedent neces- sary to the subscription aforesaid having been in all respects fully complied with," estop a county from setting up the fact that the legislative act gave them power only to issue bonds in construction of a narrow gauge road, whereas the bonds called for the erec- tion of a standard gauge road. A mere ultra vires act, which has been fully executed, can- not be set up as a defense. Commissioners of Kingman Co. v. Cornell University, 6 C. C. A. 296. Refunding bonds not subject to defenses of old bonds. Recitals in bonds issued by a city council uuder statutory authority, that they are re- funding bonds, issued to take up old bonds falling due, estop the city from showing. APPENDIX A. 1S9 against a bona fide holder, that the old bonds were invalid. City of Cadillac v. Woon- socket Institution, 7 C. C. A. 574. Submission of bond issuance to people by reso- lution, rather than by ordinance, held valid. Municipal bonds held valid when submit- ted to people by resolution, rather than by ordinance, where the statute declares that cities may borrow money and issue bonds therefor whenever the city council shall be instructed so to do. Alma v. Guaranty Sav. Bank, 8 C. C. A. 564. "To borrow money for the use of the city" in Indiana gives power to issue. A municipal corporation, authorized by legislature "to borrow money for the use of the city," has power to issue bonds in accord- ance with the interpretation placed upon the legislative act by the supreme court of In- diana. City of Evansville v. Woodbury, 9 C. C. A. 244. Following Kailroad Co. v. Evansville, 15 Ind. 395. Recitals estop irregularities in election. Recitals in bonds "that all acts, things and conditions required to be done precedent to and in the issuing of said bonds have duly 160 APPENDIX A. happened, and been performed in regular and due form, as required by law and that the total amount of the issue, together with all the outstanding indebtedness of said board of education, does not exceed the statutory or constitutional provision, and that the bond has -been duly registered, estops the city to set up irrcg\ilarities in election, as provided by the city charter. ISTational Life Ins. Co. V. Board of Education, 10 C. C. A. 637. Recitals estop notice of ordinance and its provi- sions. Recitals in a bond that it is issued "under and by authority of a special act of the state of Michigan, entitled 'An act to authorize the village of Howell to raise money to make public improvements,' and also under the or- dinance of the village of Howell, do not charge a bona fide purchaser for value with notice of the ordinance, and they estop the city from setting up, as a defense, that the bonds were appropriated to an unlawful use." Eisley v. Village of Howell, 12 C. C. A. 218. Failure to levy tax no defense. The fact that no tax was levied to pay in- terest and create a sinking fund before the APPENDIX A. 161 issuance of the bonds, as required by the legislative grant, is no defense against the validity of the bonds. Marion Co. v. Coler, 14 C. C. A. 301. Recitals estop wrongful conduct of officers as defense. Recitals in bonds showing that they were issued in compliance with conditions upon which the subscription was made estop the city from alleging that its authorities acted wrongfully in issuing the bonds. Columbus V. Dennison, 16 C. C. A. 125. Recitals in bonds placed in escrow on contingency do not estop nonhappening of contingency. Recitals that bonds are "issued pursuant to authority conferred upon said county by act of the legislature of Kentucky, wherein it was provided that bonds should be placed in escrow, and that they should not be valid until the railroad was completed, do not estop the county from setting up that fact." Mercer Co. v. Providence Life & Trust Co., 19.C. C. A. 44. Recitals contrary to provisions of act create no estoppel. Recitals that bonds are issued in accord- ance with the provisions of a particular act 162 APPENDIX A. of the legislature, and that certain steps, re- quired by such act to be taken as a condition precedent to their issue, were performed at a time when the act itself shows that they could not be legally taken, such recitals do not estop the defense of noncompliance with precedent conditions. j\ranl"'ard Co. (4 C. C. A. 460) 52, 57, 62, 74, 154 Geer v. School Dist. (38 C. C. A. 392) 53, 57, 63, 74,166 Gelpecke v. Dubuque (68 U. S. 175) 34, 35, 40, 61, 95 German Sav. Bank v. Franklin Co. (128 U. S. 526) -. 84, 85,134 Gilsen Town v. D'ayton (123 TJ. S. 59) 46, 69, 87, 133 Grand Chute v. Winegar (82 U. S. 355) 69, 102 214 TABLE OF CASES. Graves v. Saline Co. (161 XT. S. 370) 51, 71, 85, 143 Green v. Conners (109 U. S. 704) 34 Griffin V. Macon Co. (36 Fed. 885) 32 Grover v. Slaughter (15 Pet. 449) 36 Guernsey v. Burlington (4 Dill. 372) 27 Gunnison Co. v. Rollins (174 U. S. 256) 51, 54, 57, 63, 74,145 Hackett v. Ottawa (99 V. S. 86) 59, 65, 81, 82, 119 Hall V. Memphis City (134 U. S. 198) 16 Harper Co. v. Rose (140 U. S. 71) 78 Harshman v. Bates Co. (92 XJ. S. 569) 57, 67, 69, 80, 109 Hayes v. Holly Springs (114 U. S. 120) 47, 52, 86,129 Hedges v. Dixon Co. (150 U. S. 187) 52, 57, 74,140 Hinckley v. Arkansas City (16 C. C. A. 395) 55, 59, 77,164 Hopper V. Covington (118 XI. S. 148)... 57, 64,130 Humboldt Tp. v. Long (92 U. S. 642) 13, 53, 62, 67, 73, 77, 111,147 Huron City v. Second Ward Sav. Bank (30 C. C. A. 41) 163 Independent School Dist. v. Stone (106 XJ. S. 76) 42,124 Johnson Co. v. January (94 XI. S. 202) 87,112 V. Thayer (94 XI. S. 631) 30, 31 Jonesboro v. Cairo (110 XI. S. 192) 61 Katzenberger v. Aberdeen (121 XI. S. 172) 8, 47, 64,132 Kelly V. Town of Milan (127 U. S. 139) . . .6, 8, 9 Kenicott v. Wayne, Co. (83 U. S. 552) 69, 105 Kenosha v. Sampson (9 Wall. 477) 37 TABLE OF CASES. 215 Knox Co. V. Aspinwall (21 How. 539) 41, 44, 51, 62, 67, 84, 88 V. Wallace (21 How. 546) 67, 93 Lake Co. v. Graham (130 V. S. 674) 32, 46, 49, 52, 54, 57, 74, 135, ,138 Lamed v. Burlington (71 U. S. 275) 19, 98 Lee Co. v. Rogers (74 V. S. 181) 61, 99 Leffingwell v. Warren (2 Black, 599) 36 Lehman v. City of San Diego (27 C. C. A. 669) 82, 162 Lewis V. Commissioners (105 U. S. 739) 79 Lexington v. Butler (14 Wall. 283).. 29, 37, 69,102 Lincoln v. Cambria Iron Co. (103 U. S. 412) . . 68 Livingston Co. v. Bank of Portsmouth (128 V. S. 102) 69,133 Loan Ass'n v. Topeka (20 Wall. 655) 15, 26 Lynde v. Winnebago Co. (83 U. S. 6) 10, 42, 69, 103, 147 Lyon Co. v. Savings Bank (40 C. C. A. 391) ... 168 Lytle V. Town of Lansing (147 U. S. 59) 61 McClure v. Oxford (94 U. S. 429) 30, 46, 47, 49, 50, 67, 114,148 Macon Co. v. Shores (97 TJ. S. 272) 43 Manhattan v. Ironwood (20 C. C. A. 642).. 50, 160 Marcy v. Oswego (92 XT. S. 638) . .49, 53, 62, 73, 110 Marion Co. v. Clark (94 U. S. 278) 82,112 Marion v. Coler (14 C. C. A. 301) 75,159 Marsh v. Pulton Co. (77 V. S. 676) 9, 33, 52, 56, 80, 86, 99 Marshall Co. v. Schenck (72 U. S. 772) 67, 98 Menasha v. Howard (102 U. S. 81) 121 Mercer Co. v. Hackett (68 TJ. S. 83) 57, 62 v. Provident Life & Trust Co. (19 C. C. A. 44) ' 82,159 216 TABLE OF CASES. Merchants' Nat. Bank v. Bergen Co. (115 XJ. S. 384) .' 57, 71, 130 Merrill v. Monticello (138 U. S. 673) 47 Meyer v. Muscatine (68 U. S. 384).. 10, 51, 69, 97 Mitchell V. Burlington (4 Wall. 270) 14 Mobile Sav. Bank v. Oklibbicha Co. (24 Fed. 110) 31 Montclair v. Ramsdell (107 U. S. 147) 125 Moran v. Miami Co. (67 U. S. 722) 80, 95 Moultrie Co. v. Fairfield (105 XT. S. 467) 69, 75 Nashville v. Ray (19 "Wall. 468) 6 National Life Ins. Co. v. Board of Education (10 C. C. A. 637) 48, 51, 57, 58, 69, 74,158 Nauvoo V. Ritter (97 U. S. 389) 118 Nesbitt V. Independent School Dist. (144 U. S. 610) 54, 55, 58, 77 New Buffalo v. Cambria Iron Co. (105 U. S. 265) 34 New Providence v. Halsey (117 TJ. S. 288) . . 43, 53, 74 Northern Nat. Bank v. Porter (110 U. S. 608) 44, 58, 69, 77, 82 Norton v. Dyersburg (127 U. S. 160) 8 Nugent V. Putnam Co. (86 V. S. 241) . . .77, 79, 106 Oats V. Nat. Bank (100 U. S. 239) 37 Ogden V. Daviess Co. (102 U. S. 634) . . .41, 58, 121 Olcott V. Supervisors (16 Wall. 678) 39 Oregon v. Jennings (119 TJ. S. 215).. 46, 83, 87,131 Orleans v. Pratt (99 U. S. 676) 29, 32, 60, 119 Osborne v. Adams (106 TJ. S. 118) 2 Otoe V. Baldwin (111 U. S. 1) 61 Ottawa V. Carey (108 U. S. 110) 9 V. National Bank (103 U. S. 770) 43 V. National Bank (105 U. S. 342) 59, 65 TABLE OP CASES. 217 Pana v. Bowler (107 U. S. 527) 44,69,125 Pendleton Co. v. Amey (80 U. S. 297) 69,101 Pine Grove v. Talcott (19 Wall. 666) 22, 37 Police Jury v. Britton (82 V. S. 566)... 52, 86,103 Post V. Pulaski Co. (1 C. C. A. 405) 60, 77, 153 V. Supervisors (105 U. S. 667) 87 Provident Life & Trust Co. v. Mercer Co. (170 U. S. 390) 60, 79, 145 Ralls Co. V. Douglass (105 U. S. 278) 34 Ratbbone v. Commissioners (27 C. C. A. 477). . 161 Ray Co. v. Vansycle (96 V. S. 675) 80, 116 Ricli V. Mentz Town (134 U. S. 632) 137 Richardson v. Lawrence Co. (68 U. S. 66) 96 Risley V. Village of Howell (12 C. C. A. 218).. 65, 158 RitcWe V. Franklin Co. (98 U. S. 67) 61,106 Roberts Town v. Holies (101 U. S. 119) . .66, 87, 121 Rock Creek v. Strong (96 U. S. 271) 116 Rogers v. Burlington (3 Wall. 654) 10, 14, 20 V. Keokuk (70 TJ. S. 74) 61, 97 Rondit V. Rogers Tp. (39 C. C. A. 462) 71,162 St. Joseph Tp. V. Rogers (83 U. S. 644) 68, 69, 105 Sac Co. V. Cornwell (96 U. S. 51) 29, 37, 41 Sala V. New Orleans (2 Woods, 188) 27 School Dist. V. Insurance Co. (103 U. S. 704) . . 47 Scotland Co. v. Hill (132 U. S. 107) 30, 61 V.Thomas (94 U. S. 682) 80,115 Seybert v. Pittsburg City (1 Wall. 372) 10 Shaw V. Independent School D'ist. (23 C. C. A. 169) 53, 57, 74,161 Sherman Co. v. Simonds (109 U. S. 735) 53, 73, 126 South Ottawa v. Perkins (94 TJ. S. 260) 113 Stevis v. Sherman Co. (5 Fed. 269) 20 Sutliff V. Commissioners (147 TJ. S. 235) 53, 55, 57, 58, 63, 74, 76, 78,138 218 TABLE OP CASES. Thomas v. Lee Co. (70 U. S. 327) 61, 97 Thompson v. Perrine (103 V. S. 806) 61 Town of Andes v. Ely (158 U. S. 313).. 66, 67,143 Town of Geno v. Woodruff (92 U. S. 502) . .66, 108 Town of Greenburg v. National Trust Co. (36 C. C. A. 471) 165 Township of 96 v. Polsom (30 C. C. A. 657) 66, 163 Travelers' Ins. Co. v. Johnson City (40 C. C. A. 58) 86 United States v. Macon (99 U. S. 582) 75 Van Hostrup v. Madison City (68 U. S. 291). . 61 Venice v. Murdock (92 U. S. 494) 66,108 Village of Kent v. Dana (40 C. C. A. 281) 65, 82, 168 Wade V. Travis Co. (174 U. S. 499) 75, 146 walnut Town v. Wade (103 U. S. 683) 86,123 Warren Co. v. Marcy (97 U. S. 96) 30, 51, 66, 67, 117 Washington Tp. v. Coler (2 C. C. A. 274) 153 Wells V. Pontotoc Co. (102 U. S. 625) 8, 9, 43, 46, 47, 55, 121 Wesson v. Mt. Vernon (39 C. C. A. 301) 57, 167 V. Saline Co. (20 C. C. A. 227) 60, 81,160 Weyanwego v. Ayling Co. (99 tJ. S. 112) 78, 81 Whitesides v. U. S. (93 U. S. 347) 71 Wilson V. Salamanca Tp. (99 U. S. 499) 44, 53, 73, 80,119 Young V. Clarendon Tp. (132 U. S. 640) 6, 47 Alabama. Bufaula v. McNab (67 Ala. 538) 15,169 Mayor of Wetumpka v. Wetumpka Wharf Co. (63 Ala. 611) 9, 169 State V. Montgomery (74 Ala. 226) 71, 169 TABLE OP CASES. 5l9 Alabama — Cont'd. Town of Brenton v. Spira (106 Ala. 229) 169 Wetumpka v. Winters (29 Ala. 660) 20 Arkansas. Hancock v. Chicot Co. (32 Ark. 582) 6, 71, 170 McGhee v. Matthias (21 Ark. 40) 21 State V. S. R. M. R. & T. R. Co. (31 Ark.. 70) . . 71 Ca'lifornia. Bank of Sonoma v. Fairbanks (52 Cal. 196) . . 20 Gilmer v. Sime Point (18 Cal. 229) 21 Hagar v. Supervisors (47 Cal. 222) 21 In re Derby (104 Cal. 515) 171 Los Angeles v. Teed (117 Cal. 321) 171 Myers v. Brown (65 Cal. 583) 170 People V. Parks (58 Cal. 24) 15 Sutro V. Pettit (74 Cal. 332) 74, 170 V.Rhodes (92 Cal. 117) 74,170 Underbill v. Sonera (17 Cal. 172) 38,170 Colorado. Board of County Commissioners v. Standley (24 Colo. 1) 74, 171 Connecticut. Booth V. Woodbury (32 Conn. 128) 22 Edwards v. Stonington Cemetery (20 Conn. 466) 21 Society for Savings v. New London (29 Conn. 174) 72, 171 Williams v. Bran (5 Conn. 190) 20 Florida. Greely v. Jacksonville (17 Pla. 174) 72, 171 Sullivan v. Walton (20 Pla. 552) 72 220 TABLE OP CASES. Georgia. Bass V. Columbus (30 Ga. 845) 61, 172 Black V. Cohen (52 Ga. 621) 61 Commissioners of Floyd Co. v. Shorter (50 Ga. 489) 172 Dent V. Cook (45 Ga. 323) 6, 13 Donnelly v. Cabaniss (52 Ga. 212) 172 Mayor v. Inman, Swan & Co. (57 Ga. 370) . .72, 172 Rome V. Cabot (28 Ga. 50) 20 Illinois. Barnes v. Town of Lacon (84 111. 461) 173 Bissell V. Kankakee (64 111. 249) 15,26,86,173 Bolton V. Board of Education (1 111. App. 193) 175 Burn V. City of Carbondale (76 111. 455) 173 Chicago, B. & Q. R. Co. v. Aurora (99 111. 205) 173 Clark V. Supervisors (27 111. 305) 174 English V. People (96 111. 566) 26 Polsom V. School Directors (91 111. 401) 9, 13 Pulton Co. V. Railroad Co. (27 111. 305) 174 Gaddis v. Richland Tp. (92 111. 119) 174,175 Gage V. Nichols (135 111. 128) 61 Gettysburg v. Prick (34 111. 405) 61, 175 Greely v. People (60 111. 19) 21 Hensley Tp. v. People (84 111. 544) 20 Hewitt V. Normal School Dist. (94 111. 528) . . 13 Hutchinson v. Selb (153 111. 542) 72, 174 Law V. People (87 111. 385) 13 Lemont v. Singer & Talcott Stone Co. (98 111. 96) 72,174 Lippincott v. Pana Town (92 111. 24) . .72, 173, 174 Livingston Co. v. Welder (64 111. 427) 173 Marshall v. Silliman (61 111. 218) 72,173 Marshall Co. v. Cook (38 111. 52) 86, 174,175 Mather v. Ottawa (144 111. 659) 15, 176 TABLE OF CASES. 221 Illinois — Cont'd. Maxey v. Williams Co. (72 111. 208) 172,173 People V. Breshire (80 111. 423) 20 V. Tazewell Co. (22 111. 147) 174 V. Town of Harp (67 111. 62) 72, 173 Prettymau v. Supervisors (19 111. 406) 172 Richardson v. Jones (115 111. 450) 135 Ryan v. Lynch (68 111. 160) 86, 173,175 Schuyler Co. v. People (25 III. 181) -.174 Shaeffe v. Burham (95 111. 119) 86, 174, 175 S. & I. S. B. R. Co. V. Cold Springs Tp. (72 111. 603) 173 Town of Big Grove v. Wells (65 111. 263) 173 Town of Douglas v. Niantic Sav. Bank (97 111. 228) 173 Town of Eagle v. Kohn (84 111. 292) . .151, 175, 176 Town of Middleport v. Aetna Life Ins. Co. (82 111. 562) 72, 173, 174 Town of Prairie v. Lloyd (97 111. 179) 72, 174 Welsh V. Post (99 111. 471) 9 Wiley V. Silliman (62 111. 170) 72, 172 Williams v. People (132 111. 574) 61,174 Indiana. Anderson v. Kerns Drainage Co. (14 Ind. 199) 22 Aurora v. West (22 Ind. 89) 46, 176 Bloomington v. Smith (123 Ind. 41) 176 Daily v. Columbus '(49 Ind. 169) 13 B., I. & C. S. L. R. Co. V. Bvansville (15 Ind. 395) 157, 176 Gardner v. Haney (86 Ind. 17) 176 Irwin V. Lowe (99 Ind. 540) 72 Mt. Vernon v. Hovey (52 Ind. 563) 176 Marks v. Purdue University (37 Ind. 155) 20 Miller v. Commissioners (66 Ind. 162) 13 222 TABLE OP CASES. Indiana — Cont'd. Myers v. Jeffersonvllle City (145 Ind. 431) . .80, 176 New England Co. v. Robinson (25 Ind. 536).. 13 Richmond v. McGowan (78 Ind. 198) 13 Sclineck v. Jeffersonville City (152 Ind. 204) 61,176 Smitli V. Madison (7 Ind. 81) 13 Iowa. Allen V. City (107 Iowa, 90) 177 Carter v. Dubuque (35 Iowa, 416) 74, 177 Casady v. Woodbury Co. (13 Iowa, 113) 177 Chamberlain v. Burlington City (19 Iowa, 393) 157 Clapp V. Cedar Co. (5 Iowa, 15) 72,177 Halliday v. Hilderbrandt (97 Iowa, 5) 74,177 Hanson v. Vernon (37 Iowa, 472) 15, 152 Heins v. Lincoln (102 Iowa, 69) 81,177 Hull V. Marshall Co. (12 Iowa, 142) 177 Kane v. Independent School Dist. (82 Iowa, 5) 74, 177 McPherson v. Foster (43 Iowa, 74) 177 Mosher v. Independent School Dist. (44 Iowa, 122) 74, 177 National State Bank v. Independent School Dist. (39 Iowa, 490) 177 Renwicke v. Davenport (47 Iowa, 411) 22, 151 State V. Wapello (13 Iowa, 388) 151 Steward v. Polk Co. (30 Iowa, 94) 22,151 Kansas. Board of Education v. State (26 Kan. 44) 20 Central Branch U. P. R. Co. v. Smith (23 Kan. 745) 61,179 Commercial Nat. Bank v. lola (9 Kan. 689) .26, 179 Faulkenstein Tp. v. Pitch (2 Kan. App. 193) . . 178 George v. Oxford Tp. (16 Kan. 72) 46, 178 TABLE OF CASES. 223 Kansas — Cont'd. X.ewis V. Commissioners (12 Kan. 186). 76, 151,178 McConnell v. Hammond (16 Kan. 228) 179 People's Bank v. Pomona (48 Kan. 351) 15, 61 State V. Kiowa Co. (39 Kan. 657) 72,178 V. Osawkee Co. (14 Kan. 418).. 15, 27, 61,178 V. Wichita (59 Kan. 512) 61, 178 Kentucky. ■Commissioners v. Zimmerman (19 Ky. Law Rep. 689) 180 Cook V. Lyon (6 Ky. Law Rep. 360) 180 Cypress v. Hooper (2 Mete. 350) 21 Taylor v. Davis Co. (17 Ky. Law Rep. 711) 179 Louisiana. Nelson v. Shreveport (29 La. Ann. 673) 180 Newgass v. Orleans ( 42 La. Ann. 163) 14 Richardson v. Marks (16 La. Ann. 429) 21 IVIaine. Allen V. Jay (60 Me. 124) 15, 26, 181 Lane v. Embden (72 Me. 354) 84, 180 Moulton V. Raymond (60 Me. 121) 22 Parsons v. Monmouth (70 Me. 262) 13 Shurtliff V. Wiscassett (74 Me. 130) 84,180 IVIaryland. Railroad Co. v. Evansville (13 Md. 395) 9 Smith V. Steven (66 Md. 381) 61, 181 iVIassachusetts. Boston V. Shaw (1 Mete. 130) 20 Commonwealth v. Williamstown (156 Mass. 70) 181 Dingley v. Boston (100 Mass. 544) 21 224 TABLE OP CASES. Massachusetts — Cont'd. Hildretli v. Lowell (11 Gray, 345) 20 Jenkins v. Andover (111 Mass. 354) 15, 27 Kingman v. Brockton (26 N. B. 998) 21 Lowell V. Boston (111 Mass. 463) 15, 27,182 Merrick v. Amherst (12 Allen, 500) 20 Suffolk Sav. Bank v. Boston (149 Mass. 364) 31, 32,181 Michigan. Cedar Springs v. Sehech (81 Mich. 405) 182 Dodge V. Van Buren Circuit Judge (118 Mich. 189) 152,182 Park Comm'rs v. Detroit (28 Mich. 228) 21 People V. Board of Salem (20 Mich. 452) 22, 152, 182 V. State Treasurer (23 Mich. 499) 152,182 Minnesota. Coates V. Campbell (37 Minn. 498) 15, 78,183 Pulton V. Town of Riverton (42 Minn. 397). 72, 183 Goodnow V. Ramsey Co. (11 Minn. 31) 6 Harrington v. Town of Plain ville (27 Minn. 224) 84,183 St. Paul Gas Light Co. v. Sandstone (73 Minn. 225) 183 Mississippi. Aberdeen v. Sykes (59 Miss. 236) 185 Beaman v. Lake Co. (42 Miss. 327) 13 Cutler V. Madison Co. (56 Miss. 115) 84,184 Daily v. Swope (47 Miss. 367) 21 Madison Co. v. Brown (67 Miss. 684) 72, 84 V. Paxton (57 Miss. 701) 31, 72,184 Sykes v. Columbus (55 Miss. 115) 184 Vicksburg v. Lombard (51 Miss. Ill) .. .72, 84, 184 Woodruff V. Okalona (57 Miss. 806) 185 TABLE OF CASES. 225 Missouri. Barrett v. Schuyler County Court (44 Mo. 171) 72, 186 Bradley v. Franklin Co. (65 Mo. 638) 20, 61 Carpenter v. Lathrop (51 Mo. 483) 151 Catron v. Lafayette Co. (106 Mo. 659) 75,188 County V. Griswold (58 Mo. 175) 21 Egyptian Levee Co. v. Hardin (27 Mo. 495) ... 21 Flagg V. Palmyra (33 Mo. 440) 185 Leavenworth R. Co. v. Platte Co. (42 Mo. 171) 72 Ranney v. Balder (50 Mo. 600) 72, 187 Robinson v. St. Louis (28 Mo. 458) 20 St. Joe R. Co. V. Marion Co. (36 Mo. 294) 185 St. Louis V. Peters (36 Mo. 456) 20 Smith V. Clark Co. (54 Mo. 58) 187 State V. Garroute (67 Mo. 445) 188 V. Saline Co. (48 Mo. 390) 186 V. Shortridge (56 Mo. 126) 187 Steines v. Franklin Co. (48 Mo. 167) 61, 72, 151, 186 Webb V. Lafayette Co. (67 Mo. 353) 187 Montana. Hoffmann v. Gallatin Co. (18 Mont. 224).. 75, 188 Wilcox V. Deer Lodge Co. (21 Mont. Ter. 574) 20 Nebraska. Dawson Co. v. McNamara (10 Neb. 276) 189 Dundy v. Richardson Co. (8 Neb. 508) 189 Fullerton v. School D'ist. (41 Neb. 593) 73,190 Grady v. Lincoln Co. (18 Neb. 283) 75, 189 Hamlin v. Meadville (6 Neb. 227) 189 Hoffman v. Moore (46 Neb. 590) 82, 189 Hoxie V. Scott (45 Neb. 199) 73, 190 People V. Hamilton (3 Neb. 244) 73,190 Reineman v. Railroad Co. (7 Neb. 314) 189 226 TABLE OF CASES. N eb raska — Cont'd. State V. Babcock (18 Neb. 141) 189 V. Babcock (20 Neb. 522) 75, 189 V. Babcock (21 Neb. 187) 72, 75, 190 V. School Dist (10 Neb. 544) 73,190 V. School Dist. (16 Neb. 182) 190 Sutton City v. Babcock (24 Neb. 640) 189 Turkey v. City of Omaha (54 Neb. 371) 190 Union Co. v. Colfax Co. (4 Neb. 450) 20 Willenwater v. Dunnigan (30 Neb. 877) 190 Nevada. Gibson v. Mason (5 Nev. 283) 193 State V. Babcock (22 Nev. 614) 14 Virginia v. Lyon Co. (6 Nev. 68) 193 New Hampshire. Perry v. Keene (56 N. H. 514) 17 New Jersey. Cooper V. Jersey (15 Vroom, 634) 194 Eaton R. Co. v. Central R. Co. (52 N. J. Law, 267) 21 Fifth Ward Sav. Bank v. First Nat. Bank (19 Vroom, 513) 194 Hackettstown v. Swackenhamer (39 N. J. Law, 191) 13 Knapp V. Hoboken (39 N. J. Law, 394) 6, 13 Mutual Ben. Life Ins. Co. v. Elizabeth (13 Vroom, 235) 84, 193 People V. Kansas (6 Vroom, 497) 21 State V. Jersey City (30 N. J. Law, 148) 20 New Mexico. Laughlin v. Commissioners (3 N. M. 420) 196 TABLE OF CASES. 22T New York. Angell V. Hume (17 Hun, 374) 73, 191 Bank of Rome v. Rome (19 N. Y. 20) 73, 191 Bloomfield Co. v. Richardson (63 Barb. 447) . . 21 Caguin v. Hancock (84 N. Y. 532) 73, 191,192 Calhoun v. Millard (21 N. Y. 69) 192 Cherry Creek v. Beeker (123 N. Y. 161) .. .84, 192 Comstock V. Syracuse (5 N. Y. 874) 1& Craig V. Andes (93 N. Y. 405) 73, 192 Culver V. Port Edward (8 Hun, 340) 191 Duanesberg v. Jenkins (40 Barb. 574) 191 Essex V. Rogers (76 N. Y. 599) 73, 191 Gordon v. Conners (47 N. Y. 608) 20^ Gould V. Town of Sterling (23 N. Y. 456).. 73, 191 Hartwell v. Armstrong (19 Barb. 166) 21, 50 Hubbard v. Sadler (104 N. Y. 223) 13 In re Application of Church (92 N. Y. 1) 13 Central Park (63 Barb. 282) 21 Byrnes (11 N. Y. Supp. 113) 61 Eureka Basin (96 N. Y. 42) 15 Mayer (11 Johns. 472) 15 Townsend (30 N. Y. 171) 15 Ketchum v. Buffalo (14 N. Y. 356) 13 Metzger v. Attica R. Co. (79 N. Y. 171) 73 People V. Button (18 Hun, 116) 173, 191 V. Mayor of Brooklyn (4 N. Y. 419) 20 V. Nearing (27 N. Y. 306) 21 V. Peck (62 Barb. 545) 192 V. Smith (45 N. Y. 772) 73,191 V. Smith (55 N. Y. 135) 191 V. Spencer (55 N. Y. 1) 73, 191 Rogers v. Railway Co. (21 Hun, 44) 61, 191 Robinson v. Bishop (39 Hun, 370) 75 Starin v. Town of Genoa (23 N. Y. 439) 190 228 TABLE OF CASES. New York — Cont'd. Thompson v. Mamakating (106 N. Y. 674) 75 Town of Mentz v. Cook (108 N. Y. 504) 191 Town of Solon v. Williamsburg Bank (135 N. Y. 1) 73 Weismer v. Douglas (64 N. Y. 61) 15, 26 Wells V. Salina (119 N. Y. 280) 190 Wellsborough v. New York & C. R. Co. (76 N. Y. 182) 73, 191 Wilson V. Cuneadea (15 Hun, 218) 191 North Carolina. Alexander v. Commissioners (70 N. C. 208) 62, 191 Bank v. Commissioners (119 N. C. 214) 195 Belo V. Commissioners (76 N. C. 489) 84, 194 Charlotte v. Shepherd (120 N. C. 411) 195 Claybrook v. Commissioners (114 N. C. 453).. 195 V. Commissioners (117 N. C. 456) 195 Commissioners v. Snuggs (121 N. C. 394) 195 Robinson v. Goldsboro (122 N. C. 211) 73 Rodman v. Washington (121 N. C. 39) 195 Wilkes Co. v. Call (123 N. C. 308) 195 North Dakota. Coler V. Dwlght School (3 N. D. 249) 196 Flagg V. School Dist. (4 N. D. 30) 84, 196 People's Bank v. School D'ist. (3 N. D. 496) . . 195 Ohio. Anthony v. Goshen (14 Ohio St. 588) 198 Bond V. Chillicothe (7 Ohio St. 31) 13 Gas & Water Co. v. Elyria (57 Ohio St. 374) . . 19S Goshen Tp. v. Schumaker (12 Ohio St. 624) ... 197 Reeves v. Wood Co. (8 Ohio [N. S.] 333) 22 Session v. Crunkelton (20 Ohio [N. S.] 349) . . 21 TABLE OF CASES. 229 Ohio — Cont'd. State V. Commissioners (37 Ohio St. 526).... 76, 151, 198 V. Goshen Tp. (14 Ohio St. 569) 198 V. Hancoclj; Co. (12 Ohio St. 596) 197 V. Perrysburg Tp. (27 Ohio St. 97) 198 V. Union Tp. (8 Ohio St. 394) 197 V. Van Horn (7 Ohio St. 327) 197 Oregon. Klamath Palls v. Sacho (35 Or. 325) 199 Pennsylvania. Commissioners v. Pittsburgh (41 Pa. St. 278) . . 9 Hammell v. Philadelphia (65 Pa. St. 146) ... 20 Middleton v. Allegheny Co. (37 Pa. St. 41).. 9, 199 Millerston Borough v. Frederick (114 Pa. St. 435) , 75,199 Rainsburgh Borough v. Fyan (127 Pa. St. 74) . . 199 Strout V. Philadelphia (61 Pa. St. 255) 20 Williamsport v. Commissioners (84 Pa. St. 487) 9, 13, 199 South Carolina. Bond Debt Cases (12 S. C. 273) 200 Duke V. County of Williamsburg (21 S. C. 419) 62 reldman v. Charleston (23 S. C. 57) 15 Jones V. Cambden (44 S. C. 319) 15, 200 State V. Harper (30 S. C. 586) 62, 200 V. Neely (30 S. C. 587) 62, 200 V. Whitesides (30 S. C. 579) 62, 200 Tennessee. Colburn v. Railroad Co. (94 Tenn. 43) 201 Johnson City v. Railroad Co. (100 Tenn. 138) . . 201 230 TABLE OF CASES. Tennessee — Cont'd. Memphis Freight Co. v. Memphis (4 Coldw. 419) 2T Milan v. Railroad Co. (79 Tenn. 329) 9,200 Ruchs V. Athens (91 Tenn. 20) 200 Texas. Bassett V. El Paso (88 Tex. 168) 75,202 Howard v. Smith (91 Tex. 8) 75, 202 Mitchell Co. v. Bank (91 Tex. 36) 75,202 Nolan Co. v. State (83 Tex. 183) 75,202 Waxahochie v. Brown (67 Tex. 519) 14 Utah. Fritsch v. Board County Com'rs (15 Utah, 83) 75,202 Vermont. First Nat. Bank v. Concord (50 Vt. 257) 203 Grafton Bond v. Doe (19 Vt. 463) 38 Virginia. Beal V. Farmville R. Co. (91 Va. 96) 203 Lynchburg v. Slaughter (75 Va. 57) 203 Washington. Baker v. Seattle (2 Wash. 576) 62, 73, 203 State V. Winter (15 Wash. 407) 62 Yesler v. Seattle (1 Wash. 308) 203 West Virginia. Knight V. Town of West "Union (45 W. Va. 194) 73,204 Ohio Valley Works v. Moundsville (11 W. Va. 1) 15,204 TABLE OP CASES. 231 Wisconsin. Bishop V. Milwaukee (21 Wis. 257) 151 Berliner v. Waterloo (14 Wis. 809) 204 Broadhead v. Milwaukee (19 Wis. 624) 22 Clark V. Janesville (13 Wis. 463) 204 Curtis V. Whipple (24 Wis. 350) 15 Ellenwood v. Reedsburg (91 Wis. 131) 205 Pisk V. Kenosha (26 Wis. 29) 46, 205 Kimball v. Rosendale (42 Wis. 407) 62,205 Knapp V. Grant (27 Wis. 147) 62 Lawson v. Schnellen (33 Wis. 288) . . .73, 78, 84, 204 Lund V. Chippewa Co. (93 Wis. 640) 81, 206 Miles V. Gleason (11 Wis. 470) 13, 20 Rochester v. Alfred Bank (13 Wis. 432) 73, 78, 84, 204 State V. Madison (7 Wis. 688) 21 Veeder v. Lima (19 Wis. 298) . .73, 76, 151, 204, 205 Wyoming. Cook Co. V. Rollins Investment Co. (3 Wyo. 270) 81, 206 Miller v. School Dist. (5 Wyo. 217) 206 INDEX. ALABAMA, state cases, 169. ARKANSAS, state cases, 169. B. BONA FIDE PURCHASER OF MUNICIPAL BONDS, what constitutes, 29. instances, 30. wtiat he is required to know, 32, 148. meaning of recitals to the bona fide purchaser, 40. how far he must look beyond recitals, 54, 93, 97, 110, 111, 120, 125, 136, 144. lis pendens as notice, 61. chargeable with invalidity appearing on the face, 114. 0. CALIFORNIA, state eases, 170. COLORADO, state cases, 171. CONNECTICUT, state cases, 171. 234 INDEX. E. ESTOPPEL, the doctrine of, anent recitals, 43. as shown by the doctrine of municipal decision, 41. through ratification, 98. effect of no recital, 48, 122, 130. the extreme cases under the doctrine of, 147. the doctrine in the state courts, 150. F. FLORIDA, state cases. 171. FRAUD, recitals in ( jases of, 102, 159. G. GEORGIA, state cases. 171. I. ILLINOIS, state cases. 172. INDIANA, state cases. 176. IOWA, state cases, 176. K. KANSAS, state cases. 177. KENTUCKY, state oases, 179. L. MS PENDENS, as constructive notice to bona fide holder of bonds, 61, 117. INDEX. 235 LOUISIANA, state cases, 180. M. MAINE, state cases, 180. MARYLAND, state cases, 181. MASSACHUSETTS, state cases, 181. MICHIGAN, state cases, 182. MINNESOTA, state cases, 183. MISSISSIPPI, state cases, 184. MISSOURI, state cases, 185. MONTANA, state cases, 188. MUNICIPAL BONDS, defined, 1. their necessity, 2. power to issue, 4. purpose for which they may be issued, 15. who is bona fide purchaser of, 29. rights of parties holding, when determined, 34. what law governs, 35. the statute of limitations, 37. recitals in, what constitutes, 39. the doctrine of municipal decision, 41. recitals on matters of law, 56. recitals on matters of fact, 66. sold at less than par, 96. 236 INDEX. MUNICIPAL DECISION, the doctrine of, 41. N. NEBRASKA. state cases, 188. NEVADA, state cases, 193. NEW JERSEY, state cases, 193. NEW MEXICO. state cases, 196. NEW YORK. state cases, 190. NORTH CAROLINA, state cases, 194. NORTH DAKOTA, state cases, 196. 0. OHIO. state cases, 196. OREGON, state cases, 198. P. PENNSYLVANIA, state cases, 199. POWER, to issue municipal bonds, 4. of municipal corporations generally, 4. express power to issue, 7, 155. of quasi public corporations, 8, 13. implied power to issue as incident to express power, 9. implied power to issue, 12, 103. INDEX. 237 POWER— Cont'd. recitals where there is a want of power, 86, 113, 121, 162, 165, 167. to issue to consolidated corporation, 115. to triansfer stock subscription from one rail- road to another, 116. PUBLIC RECORD. recitals involving matters of, 75, 111, 139, 156, 158. PURPOSE FOR WHICH MUNICIPAL BONDS MAY BE ISSUED, purpose must be public, 15. by whom determined, 17. wihat purposes are public, 17. examples of purposes held to be public, 19. railroads are public purposes, 22, 98. private purpose defined, 25. purposes held to be private, 26. distinguishing characteristics of public and private purposes, 27. recitals, where issued for an illegal purpose, 61, 139. R. RECITALS IN MUNICIPAL BONDS, what constitutes, 39. meaning to the bona fide purchaser, 40. the doctrine of estoppel, 43. of authority to issue, 46. effects of no recitals, 48, 122, 130. effect of recitals contrary to statutory provi- sions, 49. express recitals, 50, 136, 142, 144, 153, 161, 164. express recitals and general recitals distin- guished, 51, 108. 238 INDEX. RECITALS IN MUNICIPAL BONDS— Cont'd. how far the bona fide purchaser must look be- yond, 54, 93, 97, 110, 111, 120, 136, 144, 148. on matters of law, 56. on constitutional authority, 56. on legislative authority, 58. on legislative authority through ordinance of city, 59. on legislative authority through order of the county court, 60. where the legislature has applied curative legislation, 61, 97. ■effect of lis pendens on, 61, 117. general recitals, 62, 132, 154. where bonds are issued for an illegal purpose, 64, 139. on matters of fact, 66. on elections, 66, 96, 101, 102, 105, 108, 116, 121, 123, 125, 129, 131, 133, 137, 143, 157, 163, 167. on the legal limitation of indebtedness, 72, 124, 125, 128, 135, 137, 145, 160, 161, 165, 166. on provisions as to tax levy, 75, 124, 146, 159. where the matters involved are of public rec- ord, 75, 111, 139, 156, 158. •where bonds are not issued by the proper offi- cers, 78. 99. ■where subscription and issuance of the bonds have been made upon the contingency of the railroad being built, 78, 106, 145, 159. "Where registration is required by statute, 79, 131. where the railroad company is not organized at the issue, 79, 118. "Where bonds have been issued to an unauthor- ized corporation, 80, 115, 116, 117, 119. INDEX. 239 RECITALS IN MUNICIPAL BONDS— Cont'd. where the proceedings of the board of com- missioners have been irregular, 80, 94, 95. where bonds are refunding bonds, 80, 156, 166. where bonds are donated, 81, 119, 160. where bonds have been antedated, 81. where bonds have been placed in escrow. 82, 169. for municipal purposes, 82. when made by those not intrusted with the duty of ascertaining the facts recited, 83, 126. when made by those who are the appointed tribunal to decide uiwn the truth or falsity of the facts recited, 83, 106. where precedent conditions to the issuance of bonds are established by the electors them- selves, 85, 134. where the issuance of the bonds is in excess of the amount prescribed by the vote of electors, 85, 130. where there is a want of power in the munic- ipality, 86, 113, 121, 162, 165, 167. under a void legislative act, 87, 133. resume of cases on the doctrine of, 88. fraud as a defense, 102. where bonds issued by county judge, 103. which put purchaser upon inquiry, 109. of date of issuance, 109, 112. of wrong statute, 112. where special conditions between parties, 119. on the amount of the issuance, 123. misrecital, 140. where constitutional provisions, 141. when contrary to legislative provisions, 159. as against a de facto municipality, 164. 240 INDEX. RIGHTS OF PARTIES, when determined, 34. what law governs, 35. affected how, by statute of limitations, 37. SOUTH CAROLINA, state cases, 200. ■TENNESSEE, state cases, 201. TEXAS, state cases, 201. UTAH, state cases, 202. VERMONT, state cases, 203. VIRGINIA, state cases, 203. WASHINGTON, state cases, 203. WEST VIRGINIA, state cases, 204. WISCONSIN, state cases, 204. WYOMING, state cases, 206. S. u. V. w.