Case ID: ky_116/html/0108-01.html
Source: Caselaw Access Project
Author: {"author": "JUDGE HOBSiON", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Case 10 — 'Action by J. D. Shortell against Green County to Recover on Past Due Coupons on Green County Bonds Subscribed to the C. & O. R. R. Co.
    June 17.
    Green County v. Shortell.
    APPEAL FROM GREEN CIRCUIT COURT.
    Judgment for Plaintiff and Defendant Appeals.
    Reversed.
    Counties — Bond Issue — Subscription to Railroad — Conditions of Issuance — -Notice to Purchasers’ — Duty to Search — Noncompliance — 'Estoppel—Payment of Interest.
    Held: 1. Where bonds issued by a county in subscription to railroad stock contained no. recitals as to the authority of 'the officers issuing them, or as to the performance of preliminaries requisite to their issuance, there was no estoppel on the county to plead a noncompliamee with such conditions, and that then; Were issued without 'authority of law.
    2. .Where the charter of'a railroad (1 Sess. Acts 1869, p. 463, chap. 1578) vested in the company power to oomstnuet a road through certain counties, and, in exception to the general law of the State, empowered any of such counties to subscribe to stock, issuing bonds therefor, on. such conditions as it might deem fit, and a county did issue bonds on specified conditions to be perSortmed by the railroad, which were not printed on the bonds, but appeared on the orders of record in the county court, a purchaser of such bonds was. charged with notice of the conditions upon which they were to be issued, a nonoomplian.ce with which would, be available as a defense to a suit by him' on the bonds.
    3. In pursuance of legislative authority, a railroad company filed in the county court a request that, there be submitted to the qualified voters the question as to whether' the county should subscribe for capital stock of the company, issuing its bands therefor, upon the condition 'that the company should construct its road through the counity, and within onel mile of a certain town, anid also upon the further condition that the bonds should not be issued, or the county pay any part of either principal or interest, until it should be exonerated from payment of a subscription to the stock of a certain other road. The issue was ordered .at an election held for that purpose, and all the orders ■made in pursuance thereof were conditioned as stated. Held, .that properly construed, the exoneration was a condition precedant, after which the bonds could be issued, but would mot ba binding in tihe event of a failure on the part of .the ralilroad to comply with the other condition.
    4. An order of the county court directing the clerk to make a subseription to certain railroad stock on behalf of .the county, and on the terms .specified in the order submitting the question to a vote, w.as a direction to the clerk to do a merely ministerial act, vested in him no discretion, and was not an invalid delegation of the po-wer vetted 'in the co.unty court to ¡make the) subscription,
    5. Where by its charter a railroad company was to be built entirely across the State, and, by the terms of the subscription to stock of the road by a certain county through which it passed, bonds were issued, conditioned on the road’s being constructed. through the county, a subsequent construction by a successor of such road of four and a half miles of railroad iia the county was not a substantial compliance with the. conditions of .the bond issue.
    6. Payment of interest on bonds by a county for some years does not estop it to show their invalidity.
    ERNEST MAOPHERSON, JOHN W. LEWIS and D. T. TOWLE'S, ATTORNEYS EOR ARVELLANT, GREEN COUNTY.
    CLASSIFICATION OF POINTS..
    1. Conditional subscriptions to stock in the Cumberland' & Ohio Railroad 'Company were expressly authorized by its charter. Shelby County Court v. Cumberland & Ohio R. R. Co., 8 Rush, 217. Such’ also is the general law in (tlhe- absence, from ’the charter or law authorizing the subscription, of a prohibition of conditional subscriptions tío stock,, the subscriber may impose such conditions as he .may ohoose. Jack v. (City of Helena, 41 Ark., ,218; Atchison;, &c., R. R. Co. v. Jefferson Co-., 21 Kan., 809; Portland, &c., R. R. Co. v. Hartford, 58 Me., 23; 2 Elliott R. R., sec. 852; Brown v. Gibsion Co., 73 In.d., 543'; People v. Holden, 91 111., 466; Coe v. Caledonia, &c., R. R. Co., 27 Minn., 197; Penobscot, &e., R. R. v. Dunn, 39 Me., 5S7; Milwaukee, &c., R. R. v. Field, 12 Wis.', 340; Hanover Junction-, &o., ¡R. R. v. Halde>man, 82 Pa. St., 36; Connecticut, &c., R. R. v. Baxter, 39 Vt.; Missouri P. R. R. v. Tygard, 84 No. 264.
    2. Where the .location and» construction of a railway i.s hot made as required by the conditions, bonds issued in payment are' invalid even in the hands of a Ixfna fide holder. Chicago, &e., R. R. r. Marseilles, 84 111., 145; .Mellen, v. Lansing, 19 Blatchfo-rd, 512; Buckspo-rt, &c,, R. R. v. Brewer, 67 Me.. 2"3a.
    3. The purchaser .of municipal bonds is bound Ito take notice of the law under which the bonds are issued. Barnett v. .Denison, 145 U. S., 139.
    4. The federal courts have established the ruiei that in the absence of a recital in a municipal bond that the conditions precedent to its validity have been performed, it is open to the municipality _ to show th.e( nonperformance of the conditions. County of Chambers v. Clews, SS TJ. S., 321; Citizens’ Savings Association v. Berry County, 156_U. S., 701; Buchanan v. Litchfield, 102 U. S., 292; Town of Coloma v. Eaves, 92 IT. S., 431, remarks of Justice Bradley; Provident Life and Trust Co. v. County of Mercer, 170 IT. S., 601; ICarroll County v. Smith, 111 U. S.. 556; S’chool District v. iStone, 106 U. S., 183-187; Hopper v. Town of Covington, 118 IT. S., 148.
    '5. "Where bonds purporting to have been issued by a municipality contain no recitals, but are mere naked promises to pay, every purchaser and holder of the securities is chargeable with notice of whatever appears upon the face of the records1. Lewis v. Commissioners of Bourbon Co., 12 Kan., 186; Marsh v. Fultom Co., 10 Wall., 676; Pendleton v. Amy, 13 Wall., 297; Commis■sioners of Knox .Co. v. Aspinwall, 21 How., 539; .Bissell v. City of Jeffersonville, 24 How., 2S7; Hopp v. Trustees of Brown Tp., 13 Ohio St., 311; State v. Trustees of Union Tp., 15 Ohio St., 437; Clark v. City of D'e^ Moinea, 19 Iowa, 199; Veeder v. Town of Lymion, 19 Wis., 298; Starin v. Town of Genoa, 23 N. Y., 439; Gould v. Town of Sterling, 23 N. Y., 456; The People v. Mead, 24 N. Y., 114; 36 N. Y., 2.24. '
    6. No municipal or political body can be' estopped by the acts or declarations of its officers from denying their authority to bind it. Justice-Bradley, in Chisholm, v. Montgomery, 2 Woods, 584. A person dealing with an agent must look [to hife authority. Snow v. Warner, 10 Met. (Mass.), 136; Reese v. Medloclc,. 27 Tex., 120. The rule is strictly applied to the powers of public officers. Mayor and City Co.uncil of Baltimore v. Reynolds, 20 Maryland, 1; Marsh v. Pulton Co., 10 Wall., 683; .State v. Daviess Co,, 64 Mo.. 30; People v. Supervisors, Town of Waynesville, 88 111., 469; Town of Plattsville v. Galena, &c., R.. R. Co., 43 Wis., 493; • Board, &c., of Douglass v. Walbridge, 38 Wis., 179.
    7. The validity and effect of .municipal bonds are determined .always by the law of -the place where the obligation isi made. .Dixon Co, v. Field, 111 IT. S., 83. This proposition seems to he 'assumed as a matter of course in the federal courts.
    8. The county judge could not delegate to the railroad the' duties confided to him by the people. “This is an official trust which neither a county court nor its successor, the board of supervisors, could delegate to strangers owing no obligation to the county.” Board of Jackson Co. v. Brush, 77 111., 59. He had mo right to issue bonds in a form, other than that voted, by the people.
    9. The word “through,” as used in the order submitting the vote to the people, meant from end to end amid from side to sida “Act to incorporate the Cumberland and Ohio Railroad Ciosnpany,” Acts of 1S69, vol. 1, pages 463-474, thie opening words- of .section 15; the language of section 18, showing a road was contemplated from “the Ohio River” through many maimed counties, including Green, “to a point on the bound,ary line between the .States of Kentucky and Tennessee” “with a view of 'connecting wi'tn the Southern system of railways converging at Nashville, Tennessee; ” .the condition read that the roadi shall “run tlir-ough Green oo-un'ty and within one mile of the town of Greenshurg.”' The whole conditional contract “is to be taken together, and to have a Reasonable construction according do tbei intent of the parties.” Peoples’ Perry Co. v. Baleh, 74 Mass., 303-312. All the -circumstances prove -that the people understood! thaft they were contracting ifor a complete line to run through the county from side -to side. The language elf the condition must ba construed according to its ordinary meaning;» that is, as it would, he understood by the voters. People v. Town of Clayton, SS. 111., 45.
    10. The payment of interest on the bonds flor a few years .doeia not estop the county from contesting the validity of 'the, bonds. Mercer Qoiu-nty v. Provident Life and Trust Co., 19' Circuit Court of Appeals, 58; Ashuelnt National Bank v. School' District, 41 Ped., 514; State v. School District, 16 Nebraska, 182; Graves v. Saline County, 161 XT. S., 373.
    11. The county judge without associating with hlimself the justices of the peace had no p-awer to act on the ipatitiomi. for subscription (or otherwise. 3d Proviso .to section 15 of the charter; Bowling Green and .Madisonville Railroad Co. v. Warren County,' 19 Bush, 711; “herein” in the proviso referred only to the powers therein given to the - county court. .Spring v. Cfollector, 78 111., 101; Exp. Partington, 6 Q. B., 649-653; McGill v. Municipal Council,' 12 U. ,C. Q. B., 44.
    12. If these bonds and coupons are to be treated as put up-on the footing of bills of exchange the five-year limitation should apply under our statutes.
    13. If the court should reverse th-e judgfmemit, which wasi given on the pleadings, and the amended -amswérlioif appellant contained! any defense, -the court below should be .«Unacted to enter judgment for Green- county, Civil Code, sec. 383; Eaves v. Stone, 80 Ky., 78; En-c. of Pleading and Prac., vo.l. 11, p. 914.
    
      GEORGE W. JOLLY, attorney rob appellee.
    A bond payable to the order oí the‘president of the railroad company and endorsed in blank is equivalent to making it payable to the bearer and renders it transferable by mere' delivery and thus converts it into, commercial papar. Daniel on Neg. Inste., sec. 693.
    
      The charter expressly required the Green county bonds io be issued in negotiable form. The language is: "'All said bonds shall be payable to bearer, with coupons attached, bearing any rate of interest not to exceed six per cent, p.er annum payable semi-annually in the city of 2few York, and payable at -such -tima as they may designate, not exceeding thirty years from date: . , .” No more appropriate world could have been selected than 'the word “bearer” to make the bonds negotiable. 'The Legislatura could have intended nothing else by the use of that word. A great number of the decisions of the Supreme Count of the United States, and all, or practically all, of the decisions of the State courts .had thqn declared that the .use of that word ■in municipal bonds enabled ¡them to be transferred by mera manual delivery like an ordinary greenback bill or national bank note, and clothed such instruments with all the qualities and incidents of commercial paper. Anid this court had more -than ten years before these bonds were issued decided the law to’ ba so in this State. And the law thus decflarad was re-affirmed by Judge Cofer ten years later.
    The statute (Ky. ,S'tats., sec. 474) relative to the assignment of bonds, notes, etc., has been in force more than fifty years, hut it has nev.er been supposed by .the bar or courts of this State that it had any application to municipal bonds. If so, it surely could not have escaped the attention of this court in considering the cases in 2d Metcalf and 78 Ky., ¿hove cited. In Virginia, a similar statute was held ‘to have no application ¡to county ponds payable to holders, such bonds being held to be negotiable, Arents v. 'Gommonwealth, 18 G,nation, 750.
    The decisions of this court; in the German-American Title ‘Company casesl do mot, as ¡counsel for appellant seem to .suppose, apply. It is sufficient to say of those bands that they were not municipal bonds. They were made by private persons and were not made negotiable at a bank, and were not negotiated.
    ■What matters it, therefore, that the word “negotiable” was not used in the charter, when it prescribed in express, terms that ¡the bonds “shall be made payable to bearerf”
    
    The Green county bonds were issued and! delivered! to the railroad company and the railroad company placed them on the market and they were sold to the public, the plaintiff "buying some of them. The purchaser before parting with his money was bound ho ascertain whether there was legislative authority to issue the bonds. Having found the act it was next his duty to ascertain, whether the required election bad been held and whether '.a majority of the votes cast at that election were east in favor of the subscription. He would 'have ascertained that the election had been duly held according ta law and that a majority had voted for the subscription. That the fact was as-certained by the county court and so. defteottnined .and entered upon the order book of that court. .Having ascertained these facts, it was not necessary for him to look farther. These facts demonstrate conclusively and beyond controversy (that the power to issue the bonds had vested in the county judge. Whether a purchaser in fact went to the trouble of ascertaining these facts ■or not, he is chargeable with knowledge loif ithem, hurt chargeable with nothing .more. That thisi is the law in, this State,' amd this country is susceptible of absolute demonstration, if any proposition of law is so. Section 1537 iof Daniel on Negotiable Instruments, together with the authoritieisi eited¡ by the author, is sufficient.
    The law relative to recitals in municipal bonds has no place in this case. No court has ever held that any sort of recitals added any force or effect to the negotiability of a municipal bond. If municipal bonds are .payable -to bearer they are not .less negotiable because they contain no recitals. Recitals ‘ in municipal bonds are never of the slightest consequence except for the purpose of creating an estoppel against the municipality where the municipality undertakes to defend against such bonds by alleging the nonperformance of some precedent condition necessary to the vesting of the power to issue the bonds in the officer who executed them. It ha's been held in a number of cases that the municipalities we!ré estopped to show that the precedent fact or .act did not in fact exist ior had not] in fact been performed, where, according to the statute under which the bond was issued, the officer who executed the bond was also authorized to determine whether the fact or act existed, or had been performed.
    In this case power to issue the bonds, vesteid in the' county • judge of tbe Green county court and the bonds Issued were . within the scope of his delegated' authority. And the bonds issued being payable to bearer in conformity with the express provisions of the statute, and appellee, a third party, haying bought the bonds before maturity, for a valuable consideration, is a bona fide holder and entitled to recover.
    There is an attempt made in the answer at this late day, after a lapse of thirty years, and; in the face of the decisions of this court reported in eighth .and tenth of Bush, above cited, to show that the. Green county court had no power to subscriba for stock or issue bonds because, as defendant 'construes-the language of section 15 of the charter, .power to subscribe was confined to .counties through which Ithei “proposed roa® shall pass;” thalt is to say, the. contention Sis, that the railroad must first pass through the county, before1 the icoiunlty court of such county had jurisdiction .to submit the question, of malting a subscription to a vote or of subscribing for .stock or issuing bonds in discharge of the subscription.
    The proposed road according to) the charter, passed, through the counties of Henry, Shelby, Spencer, Nelson, Washington, Marion,, Taylor, Green, Barren, Allen, Metcalf and Larue. When the language of section 15 is read in connection with -other provisions of the charter, especially sections 1 an® 12 an® the whole scheme as disclosed ini the act is considered, it is manifest that the object of the Legislature was to authorize all oif -said counties -to subscribe for stock in, -the railroad- -company and issue their bonds respectively for the amount of stock subscribed. It was certainly not contemplated that the road should be built through a county before the county court had junis'diction under the act to submit the question of subscribing stock to a popular vote anld making a subscription if the vote was favorable- thereto and issuing the bonds of the county. In the eases before this court, heretofore 'referred to, no such construction, was) ever contended for. If remained alone far the learned counlsel who are representing the appellant in thiiis case to -originate -a theory which the learned and astute lawyers who practiced the case reported in 8 Bush, and 'the trwo cases in 10 Bush1 entirely overlooked. '
    ■When this case was here before ion. -appeal, after the decision was rendered, the county file® a petition for a rehearing in which much stress was laid on the fact that the bond contained no recital of the various steps necessary to the vesting of the power to isslue the bonds in the county court. That i®, that the bonds do not recite that an election had been held under the act at which a majority of the votesl caalt were in favor of the subscription, that a subscription for stock bad been made and* that the bonds were issued in 'discharge or payment of the subscription, etc.
    The recital of the -existence of those facts or the due performance of those acts, -in the face- of t'he bonJds, is not at ,afll necessary to their validity.
    It is essential to the validity of the) bond® 'that an- election, should have been held and that a majority of the votes -cast should be in favor of making a subscription; otherwise, the power conferred by the act could not vest in the county court. It is sufficient if the facts 'appear upon the{ records: rof the county court. And the existence of all the precedent 'conditions necessary to the vesting of the power in the .oo>ututy count appears by express averments of the answer and the copies of the orders of the county court filad with it and made part of it. The county court ascertained and determined that the election was duly held at the several voting places) in Gnaen county aoeording • to law, on July 3, 1869; that a majority of -the qualified voters ■decided at that election chat the counity should subscribe for $250,000 of the capital stock of thei railr'oad company and the ¡subscription was made on the order book of the county court •as were also the orders for the issual of the bonds.
    There were no recitals in the Davietas county bonds, but they were all held valid, except the over-issue. The order of ike county court in that case submitted the question of subscribing for $250,000 of stock in the railroad company and the 'order! of the county court directed the issual of $250,000 of bond? in discharge of that subscription. But the aoiumty judge issued bonds to the amount of $320,000, being $70,450 in excess of the •amount authorized. This excess was held void by ¡this, court ■and by the Supreme Court of the United States ion ¡the ground that no power vested under the act and vote to issue more than $250,000 of bonds. (Daviess County Court v. Howard, 13 Bush, Id, a¿nd Daviess County v. Dickinson, 117 U. S., 657.)
    •There is a line of cases in the supreme court and. those .oases have been generally followed, holding that in a contest between •a bona fide holder of municipal bonds payable to bearer and the municipality, .if the bond contains a recital that a precedent- condition has been performed or exists, and the officer who 'executes ■the bond is authorized by law to ascertain ianid decide, whether the condition has been performed, or the fact exists and he •certifies in the face of the bonds that it does exist or has been performed, then the municipality will he estopped!, as against such holder, to deny or dispute the recital, though the recital may be in fact untrue. See Lydne v. Counity, 16 Wallace, 13, and the other oases collected in the opinion in the National Life Ins. Co. v. Board of Education, 62 Fed. Rep., 792.
    Learned 'counsel for the county seem to snippo-se that in the absence of recitals in the bonds which 'Create an estoppel that then in such case, notwithstanding the fact that the bonds are ■negotiable in form and are conclusively shown to harve been issued by authority of law, are nevertheless no more than mere ■promissory notes, and are now open to lall the defenses which might be made against such contracts. ■ But this la no;t law. If there was power to issue the bonds they are perfect obligations and being negotiable in for,m the holder is entitled to recover except as 'there was lack of power to issue Itihei bond© and “bad •faith,” and no want of power is .shown or bad faith alleged. Daniel so states the law and supports his statement, by thei highest English and American authorities.
    It- is only in those cases where in fact 'the power' to) issue .the bonds did not vest in 'the municipal agency, hut where, that agency wais authorized -to determine and delclare whether or not the act ior condition upon which the vesting of itihe power wa© made to depend, had been performed or existed, and did determine that the act or fact existed, and sio- certified in the. face of the bonds and being the agency authorized to execute and .deliver the bonds, that the municipality has been held 'to be estopped toi dispute the fact certified in the bonds as against a bona fide holder.
    The only .defense open ito a municipality when sued onj its bonds, payable to hearer, is that of want of power to issue them. If power to issue 'the bonds is shown to have vested in thei .agency of the .municipality, and that agency executes the power ■conferred, and does not exceed it, thalt 4s the end (of the controversy, and the contracts are perfect obligations of the municipality.
    The county, as the court sees, is here presenting ¡two- inconsistent defenses: First, it coatelnds that the county court -did not make any subscription or issue .any -bonds of the county; then, it .turns about and in the next breath says the- county made a subscription and issued the- bonds, but it did so upon conditions, which conditions have never been performed and the bonds for that reason are void.
    It does not even take the trouble to ©ay that .either .one of these .supposed defenses is true, or that it does not know which of .them i's true.
    They are utterly inconsistent. It can not be (that there was no power and at the same time Ibhat there was power.
    If the county judge sitting alone as the county court .had- ho power to receive and -entertain the request o,f the railroad commissioners to submit the question to- a vote of the people of subscribing the stock, no power to order an election to be held, no power to make the subscription, and no power to issue: (the bonds, he -certainly had no power to impose the conditions. If he had power as contended by 'the county, to imptose the conditions, he must have had power to have done .all the other acts which are now assailed as ultra vires and void.
    
      Counsel for appellant in the oral argument expressly admitted and conceded it to be .a fact that Green county for .several years immediately after the issual of .these bonds had levied and collected taxes for the payment of the interest and had regularly paid the interest on them. And in the brief, signed by .all the counsel for appellant, it is conceded as .a fact ‘ithat the .coupons for interest were for a few years paid.”
    ■It is true that if there was no power in thie Green cotmity court to issue the bonds, 'the levy of taxes .to pay the interest en the bonds and the payment of the taxes by the people and the disbursement of the .taxes .collected in the payment of the coupons “for a few years,” or .any ifim®, would not 'amount to cur constitute a ratification, or. create an estoppel, that would -preclude the county frolm .afterwards showing that there was no power to issue the bonds. To hold -otherwise would bel equivalent to saying .that the county might by such indirect acts' malice a contract which it had not the power to make directly. Marsh v. Fulton 'Co., 10 Wallace, 696.
    But the levy and collection of taxes far Itjhe1 purpose -of paying interest o>n the bonds arud the payment of the taxes 'by’ ithel people and the disbursement of the tax so collected in -payment of the interest coupons “for a few years,” does amount to an effectual ratification, and does create an estoppel in pais, if' power to issue the bonds vested in the county court and judge and that .delegated authority was .executed in an 'irregular or imperfect manner.
    As there was undoubtedly power, under the charter .and vote ■to issue -the bonds, vested in .the Greeln county court and Judge Barnett,, if the power was in any respect -irregularly executed or performed, the levy of taxes by the 'county court to pay interest on them, and the collection and disbursement o-f it in payment of the interest on the bonds “'for a few years” after their issue, ratifies -such irregular execution of the power, and effectually estops the county .to set up or rely upon such irregularities, no matter what they Imay be. Marshal County v. SctLanek, 5 Wallace, 772; Campbell- v. 'City of Kenosha, 5 Wallace, 195; Burr v. Chariton County, 12 Fed. Rep., 604; Mills v. Gleason, 11 Wis., 470, 78 Am. Decs., 721; Brown v. Bon Hotoime County, 46 N. W. Rep., 173; Beach on Pub. Corps., sec. 904.
    It seems to us that public polioy, tbe highest considerations for the public welfare and the commercial credit of the State,, all dictatei that there should be no modification »f ithe law relative to the integrity of municipal bonds as it has existed in the. ■State since 'the decision of this court in Maddox v. Graham and Knox, supra. If it were now held ithat bonds payable to> bearer,. bought by a third person, before maturity, for a valuable- consideration, where there was legislative authority and a ivoite ol the people- authorising their issue, and not ultra vires, were, in effect nonnegotiable, were open to defenses, it would' impair the credit of every municipality in the State. It would render difficult if not impracticable the sale of any such securities in the commercial markets of the- country. Certainly no such paper could ever hereafter be negotiated at all except, as there had been prior ta the issue of suck. bonds a 'litigation, either by proceedings for a mandamus to compel their issue, tor by a suit in equity to enjoin their issue, whereby every question touching ■the validity of their issue could be rendered res adjudicata. No doubt the excellent credit noiw enjoyed by the municipalities of Kentucky lis due mainly, if not entirely, bo- the fact that ever since the -decision -of this court in Maddox v. Graham and Knox, the principles of that -case have been steadily .adhered toi and the law of Kentucky relating to municipal1 bonds considered to be substantially the same as the law relating to such securities as declared by the Supreme Court of the United States.
    Many (of the cities and counties of this State have within the past five years negotiated their bonds for very large amounlts, bearing four per cent, interest at a price from one to five per -cent, above par.; The city nf Louisville during the present month (April, 1903) has negotiated a large amount of its bonds bearing three and one-half per cent, interest at a price above par. These facts are so notorious that, it is presumed, ■though (¡hey do not appear in the record, a statement of them is not inappropriate.
    Therefore, nob only does the law, but public policy, - also, as Iwe most respectfully .submit, require an affirmance of the judgment .of the Green 'Circuit Court in this ease.
    ■CITATIONS.
    An act to incorporate the Cumberland and Ohio Railroad Company, approved February 24, 1869. Acts 1869, vol. 1, pp. 463, 474; Shorten v. Green County, 22 Ky. Law Rep., 1010, 23 Ky. Law Rep., 144; Mercer County Court and Canrard County Court v. Ky. River Navigation -Co., 8 Bush, 300; Slack v. Maysville, &c., R. R. Co., 13 B. Mon., 1; Shelby County Corirt v. C. & O. R. R. Co., 8 Bush, 209; C. & O. R. R. ¡Co. v. Washington Gounty •Court, 10 Bush, 564; C. & O. R. R. Co. v. Barren County Court, 10 Bush, 604: Bowling Green, &c., R. R. Co. v. Warren ¡County Court, 10 Bush, 711; Provident Trust Co. v. Mercer County, 170 U. S., 302; Daviess County Court v. Hdward, 13 Bush, 101; Daviess County Court v. Dickinson, 117 U. S’., 657; Gill v. ICubi'tt,3’ Barn. & Ores., 466; Goodman v. Harvey, 4 Aid. & El., 870; Swift v. Tyson, iff Peters, 1; Goodman v. Simotnds, 22 How., 96; Murray v. Gardner, 2 Wall, 110; Lynde v. County, 16 Wallace, 13; National Life Insurance Co. v. Board lof' Education, 62 Fed. Rep.; 792, court of appeals case, and the au'tlhioriitliies cited; Mercer County v. Hackett, 1 Wallace, 83; .Thompson v. Lee County, 3 Wallace, 331; Lexington v. Butler, 14 Wallace,. .295; Daniel on Negotiable Instruments, sees. 1500, 1501, 1508» 1537; Maddox v. Graham and Knox, 2 Met., 56; Greenwell v. Hayden, 78 Ky., 333; Arente v. Commonwealth IS Graitton, 750; Marsh v. Fulton Co., 10 Wallace, 676; Marshall Co. v. Schenck,. 5 Wallace, 772; Campbell v. City of Kenoisiha, 5 Wallace; 196; Burr v. .Chariton Co., 12 B’ed. Rep., 604; Mills v. Gleason, 11 Wi's., 470, 78 Am. Dec., 721; Brown v. Bon HommeS Co., 46. N. W. Rep., 173; Beach on Pub. Corp., eec. 904.
   Opinion op the court by

JUDGE HOBSiON

Reversing.

The Cumberland & Ohio Railroad Company was incorporated by an act approved February 24, 1869 (1 Sess. Acts, 1869, p. 463, c. 1578). It was vested with power to construct and operate a railroad from the Ohio river, through the counties of Henry, Shelby, Washington, Nelson, Marion, Taylor, Green, Barren and Allen, to a point on the-boundary line between the States of Kentucky and Tennessee, “to be selected by the president and directors, about due north from the town of Murfreesboro, Tennessee, with a view of comnecrting with the southern systems of railways-converging at Nashville, Tennessee.” See Charter, section 12 J1 Sess. Acts, 1869, p. 468, c. 1578). Any city, town or county through which the proposed road should pass was-authorized to subscribe stock in the railroad company in any amount it desired, and to issue bonds therefor, payable to bearer, with coupons' attached, bearing interest not exceeding 6 per cent., payable in the city of New York at not more than thirty years from date; but, before any such subscription should be valid, the question of making it should be submitted to the qualified voters of the municipality, and a majority of the qualified voters voting at the election should be in favor of the subscription. Id., p. 471, c. 1578, section 15. The charter authorized subscriptions to be made upon such conditions- as might be deemed fit. In construing it in Shelby County Court v. Cumberland & Ohio Railroad Co., 71 Ky., 209, this court said: “.The president and directors of the railroad' company are not only expressly vested by the, twelfth section of the act of 1869, supra, ‘with all the powers and rights necessary to the construction’ of the road, but the sixteenth section provides that the company ‘shall have all the powers and privileges conferred’ on the ‘Louisville & Nashville Railroad Company by the laws of Kentucky for constructing and operating their said road not herein specified and granted, and not in conflict with the term of this chanter;’ .and, by section 22-of the charter of the Louisville & Nashville Railroad Company, the county courts of counties through which that road passes are expressly authorized to submit to the voters of their counties propositions for subscribing for stock in that corporation, ‘if by them deemed expedient, in such manner as they may direct and prescribe.’ And by the sixth section of an act to amend the same charter, approved January 17, 1856 (1 Acts 1855-56, p. 184, c. 20), counties, towns, cities and other corporations are authorized, in express terms, to subscribe for stock in that road, ‘with such terms and time of payment, conditions annexed, and kind of payment that may be set forth in the subscription.’ ”

At its June term, 1869, the following request was filed in the Green county court: “We, the undersigned commissioners of the Cumberland & Ohio Railroad Company, hereby request that the county court of Green county submit to a vote of the -qualified voters of said county the question whether said county shall subscribe, for and on behalf of said county, and in pursuance of the provisions of the charter of said railroad company, two hundred and fifty thousand dollars to the capital stock of said company, payable in the bonds of said county, having twenty years to run, and bearing six per cent, interest from date, upon the conditions that said company shall locate and construct said railroad through Green county, and within one mile of the town of Greensburg, in the said county, and shall expend the amount so subscribed within the limits of Green county, and also upon the further condition that said bonds shall not be issued, or said county pay.any part of either principal or interest on said amount subscribed as aforesaid, until said county of Green shall be fully and completely exonerated from the payment of the capital stock subscribed by thq county court of said county, for and-on behalf of said county, to the Elizabethtown and Tennessee Railroad Company.” The county court thereupon made the following order: “Whereas, the commissioners of the Cumberland & Ohio Railroad Company, by virtue of the authority delegated to them by the charter of said company, have requested the county court of Green county to order an election in said county of Green, and submit to the qualified voters of said county the question whether said county court shall subscribe, for and on behalf of said county, two hundred and fifty thousand dollars to the capital stock of the Cumberland & Ohio Railroad Company, having twenty years to run, and bearing six per cent, interest from date, and payable in the bonds of said county, upon conditions that said company shall locate and construct said railroad through the county of Green, and within one mile of the town of Greensburg, in said county, and shall expend the amount so subscribed within the limits of Green county, and also upon the further condition that said bonds shall not be issued, or said county pay any part of the principal or interest on said amount subscribed to said •Cumberland & Ohio Railroad Company, until said county of Green is fully and completely exonerated from the payment of the capital stock voted by said county, and authorized to be subscribed by said Green county court to the Elizabethtown & Tennessee Railroad, or any part of the interest thereon. It is therefore ordered by the court that an election by the qualified voters of Green county, at the several voting places in said county, be held and conducted by the several officers, as prescribed by law, holding elections, on thé 3d day of July 1869, to vote on the question as to whether or not the said county court of Green county, shall, for and on behalf of said county, subscribe two hundred and fifty thousand dollars to the capital stock of the said Cumberland & Ohio Railroad, conditioned and to be paid as above stated.” The election was held, resulting in a vote in favor of the subscription, and at its June term, 1870, the county court entered the following order: ‘GVhereas, in pursuance of an order of this court made on the 17th day of June, 1869, an election was held in said county of Green on the 3d day of July, 1869, at the several precincts in said county, and it appearing that a majority of the qualified voters at said election decided that the county of Green should subscribe for two hundred and fifty thousand dollars of the capital stock of the Cumberland & Ohio Railroad Company: Now, it further appearing that said 'election was held in conformity with the law, and in accordance with the provisions of the charter of. the company, now, therefore, I, Thomas R. Barnett, the presiding judge of the Green county court, by virtue of the authority in me vested by law, and to carry out the wishes of said voters, do hereby subscribe for two hundred and fifty thousand dollars of the capital stock of the Cumberland & Ohio Railroad Company, for and on behalf of the said county of Green, which subscription is to be paid in the bonds of said county as prescribed in said order of submission, and this subscription is made with the condition set out in the order df this court ordering said election, and now on record in the office of this county.” At its October term, 1871, this further order was made: “On motion of E. H. Hobson, director of the Cumberland & Ohio Railroad, it is ordered that Z. F. Smith, president of the Cumberland & Ohio Railroad, be, and he is hereby, authorized to have printed for the county of Green the bonds, to the amount of two hundred and fifty thousand dollars, the amount of subscription of Green county to said railroad, in the following denominations, to-wit (the same to be conditioned as specified in the order submitting the vote of the said county): 125 bonds at $1,000, $.125,000; 20*0 bonds at $500, $100,000; 250 bonds at $100, $25,000.” At the January term, 1872, bonds to the amount of $1,300 were ordered to be issued, and at the February term, $5,000 more. _ At the April term, 1872, the following order was entered: “Application was this day made to the presiding judge of the county court of Green county by the president and board of directors of the Cumberland & Ohio Railroad Company to issue the balance of the bonds of said county, to the amount of the subscription of said county of Green, to the said Cumberland & Ohio Railroad Company; and, the court being sufficiently advised, it is ordered by the court that the balance of said bonds be, and they are hereby, ordered to be issued, to be signed by the judge of said county court of Green county, and countersigned by the clerk of said court, as required by the charter of said company.” Under this order the bonds here In controversy were issued. They read as follows: “United States of America. County of Green, State of Kentucky. For the Cumberland and Ohio Railroad. Twenty years' after date, the county of Green, in the State of Kentucky, will pay to the holder of this bond the sum of-with interest thereon at the rate of six per cent, per annum, payable semi-annually upon presentation of the proper coupons hereto 'attached, principal and interest, being payable at the Bank of America, in the city of New York; In testimony whereof, the judge of the said county of Green has hereunto set his hand and affixed the seal of said county, on the 1st day of April, A. D. 1871, and caused the same to be attested by the county clerk, who has also signed the coupons hereto attached.”

Appellee, James D. Shorten, is the holder -of six of these bonds, each for ttoei sum of $1,000, and of one bond for $500., He filed this suit against the county of Green to recoVer on the past-due coupons. The county pleaded in defense of the suit the conditions above set out. On the former appeal a demurrer was sustained to the answer on the ground that it did no:t state the facts relied on sufficiently to raise the question aimed to -be presented. See Shortell v. Green County, 22 R., 1010, 59 S. W., 522, 23 R., 144, 63 S. W., 979. On the return of the case to the circuit court, the answer was amended so as to set out all the facts above '-stated, and it was pleaded that the -conditions upon which the subscription was madia had not been complied with; that the Cumberland & Ohio- Railroad failed to erect or construct a line of railroad through Green county, or within one mile of the town of Greensburg; that there is no railroad now, -and never was any railroad, running through Green .county; that no part of the amount subscribed was ever spent in Green county in the construction of any railroad therein, and that the county was not exonerated from the payment of the capital stock voted by it to the Elizabeth-town & Tennessee, Eadlroad; that the conditions prescribed • in the" 'Subscription were all disregarded and never fulfilled ; and that the bonds' were issued without authority of law, in violation of the rights 'of the taxpayers of Green county. The court sustained a demurrer to the answer, and the defendant appeals.

0It is conceded that the appellee is a bona fide purchaser of the bonds, without notice of the defense now set up by the county, and the question to be determined is whether, notwithstanding this, the defense relied on is good against him. In determining this question, an important distinction is made by the authorities between those bonds which contain recitals certifying that the preliminary requisites for the issue of municipal bonds have all been complied with, and bonds containing m> such recitals. Thus in Citizens’ Savings Association v. Perry County, 156 U. S., 701, 15 Sup. Ct., 550, 39 L. Ed., 585, the United States Supreme Court said: “But it is urged that, the bonds having been executed and issued by those whose duty it was to execute and issue them whenever that could be rightfully done, tba county is estopped to plead their invalidity as between it and the bona fide purchaser for value. This argument would have force if the material circumstances bringing the bonds within the authority given by law were recited in them. In such a case, according to the settled doctrine of this court, the county would be estopped to deny the truth of the recital as against bona fide holders for value. But this court in Buchanan v. Litchfield, 102 U. S., 278 (26 L. Ed., 138), upon full consideration, held that the mere fact that the bonds were issued without any Tecital of the circumstances bringing them within the power granted was not of itself conclusive proof, in favor of a bona fide bolder, that the circumstances' existed which authorized them to be issued.” See, to same effect, Town of Coloma v. Eaves, 92 U. S., 484, 23 L. Ed., 579; School District v. Stone, 106 U. S., 183, 1 Sup. Ct., 84, 27 L. Ed., 90; Carroll County v. Smith, 111 U. S., 556, 4 Sup. Ct., 539, 28 L. Ed., 517; Hopper v. Town of Covington, 118 U. S., 148, 6 Sup. Ct., 1025, 30 L. Ed., 190. This doctrine was recently reaffirmed in the case of Provident Life & Trust Co. v. Mercer County, 170 U. S., 593, 18 Sup. Ct., 788, 42 L. Ed., 1156. The bonds in question containing no- recitals as to. the authority of the officers issuing -them, or as to the performance' of the preliminaries requisite to' their issuance, there is no estoppel on the county ix> plead the truth of these matters. Municipal corporations are simply agents of' the State for local purposes, and possess merely such powers as are expressly given, or may be properly implied because essential to effectuate what is expressly granted. 1 Dillon on Municipal Corporations, section 189; Ottawa v. Carey, 108 U. S., 110, 2 Sup. Ct., 361, 27 L. Ed., 669. The officers of a municipality have only such powers as are conferred upon them by law, and all persons dealing with them are required to take notice of the extent of their authority, because all persons are required to take notice of the laws of the land. Mayor of Baltimore v. Reynolds (Md.) 83 Am. Dec., 535; Marsh v. Fulton County, 10 Wall., 683, 19 L. Ed., 1040. When the bonds of Green county were, offered upon the market, every person buying them was put upon notice that the counties of this State had no authority to issue bonds of this character by the general laws of the State, and that the bonds in question were not binding on ■the county unless issued by special legislative authority. It was therefore incumbent upon all before buying these bonds to learn by what authority they were issued. It was shown by the bond® that they were issued “for the Cumberland and Ohio Railroad.” They were made payable to the holder. When the purchaser looked to the charter of the Cumberland & Ohio Railroad, he was informed by it that the county court could only issue the bonds of the county after the ■question of • making the subscription had bqen submitted to the qualified voters, and a majority of them had voted in favor of the subscription. He wa® also informed that the .county might make a subscription on such conditions as it saw fit. There being nothing on the face of the bonds to advise Mm on these matters, it was incumbent on him, before buying paper which was invalid in the absence of express authority in the officials, to look to the record, and see under what circumstances these bonds bad coma into existence. When be looked to the record of the Green county ■court, which, under the act, he was bound to know would set forth the facts, be was apprised that the subscription ■was made upon the conditions that the company would locate and construct its railroad through Green county, and within one mile of the town of Greensburg, and would expend the amount so subscribed within the limits Green county, and also upon the further condition that the bond® ■should not he issued, or the co’unty pay any part of either ■principal or interest, until it wia§ fully exonerated from the .subscription to the Elizabethtown & Tennessee Railroad •Company. He wa® also notified that, in the, order of the court under which the vote was taken, it was expressly submitted whether the county would subscribe $250,000 to the capital stock of the Cumberland & Ohm Railroad, “conditioned and to he paid as above stated,” and that in the order making the subscription it was ‘Stipulated, “This subscription. is made with the condition set out in the order of this court ordering said election and now on record in thie office of this county.” He was further notified that, in the order directing the bonds to- be printed, it was provided, “the same t-p- be conditioned as specified in the order submitting the vote, of the said county.” These orders of the county court were the authority under which the bonds were issued, and the only authority which the officers issuing .them had. They plainly disclosed the fact not only that the subscription was conditional, but that it was “to be paid as above stated,” and that the bonds were “to be conditioned as specified in the order submitting the vote.” The county officials had no- authority to issue a bond not conditioned as -specified in the order .submitting the vote,, for the subscription was expressly conditioned, and only to be paid on condition. If the county officials had followed the -order of the county court,-and issued bonds condition-ed as specified in the order submitting the vote, the bonds, on -their face, would have informed every purchaser of the conditions on which they were voted. But when the county officials neglected to- do- tMs, and issued instead a naked promise to -pay, without any recital of the authority under which it was issued, the purchaser was put upon inquiry as to their authority, and their want of authority is as available against him as the facts pleaded would have been, had they followed their authority, and conditioned the bonds as specified in the order .submitting the vote/ In executing the bond® in their present form, the county officials < may have supposed that the rights of -the county were sufficiently protected by .the orders entered in the county court. The rule on the .subject is thus .stated in Hainer -on Municipal Securities, section 413: “Where bonds purporting to have been issued by a municipality contain no- recitals of an election, or of 'proceedings and orders of the municipality, but are mere naked promises to pay, every purchaser and holder of the securities is’ chargeable with notice of whatever appears upon the face of the records. If in such case it appears upon the face of the records that the commissioners had no authority to issue the bonds, the municipality could avail itself of that want of authority as a defense to an action even by ,a boma fide holder. When the laws or constitutional provisions relating to the issuance of county bonds point to the county records as evidence of facts required to authorize their issuance, such records, and not the recitals in the bonds, must be. looked to by all persons proposing to deal in them.” In Lewis v. Bourbon County Com’rs., 12 Kan., 216, the court, by Judge Brewer* said: “Every one dealing with the commissioners or purchasing sraeh securities must take .notice of the law under which they act. . . . That these bonds are negotiable paper does not alter the case. The law merchant does not make the act of an agent proof of his authority.” In Veeder v. Town of Lima, 19 Wis., 287, the court, by Chief Justice Dixon, said, after referring to similar statutory provisions as in the act referred to: “These provisions mark very clearly to my mind the intention of the Legislature that all persons negotiating for the bonds, whether directly with the supervisor or with third parties, must look to the records, and govern themselves accordingly. They are public records, open at all times to inspection; or, if in any cases it is inconvenient or-impracticable, transcripts can be had at a trifling expense.” In Cooley on Constitutional Limitations, in a note to side page 217, after collecting many .authorities as to the effect of recitals in such bonds, and quoting at length from Gould v. Town of Sterling, 23 N. Y., 464, which is to th© effect that the municipality is not bound by recitals in bonds, if unauthorized, the distinguished author says: “It is, of course, impossible to reconcile these authorities, but the doctrine in the case of Gould v. Town of Sterling appears to us to be sound, and that, wherever a want of power exists, a purchaser of the security is chargeable with notice Of it, if the defect is disclosed by the corporate records, or, 'as in that case, by other records, where the power is required to be shown.”

It is insisted, however, for appellee, that, by the terms of the subscription, it was made upon the condition that the bonds should not be issued, or the, county pay any part of either the principal or interest of the amount subscribed, until the county was exonerated from the payment of its subscription to the Elizabethtown & Tennessee Railroad. It is urged that this part of the condition was made- precedent to the issuing of the bonds, but that the rest of the condition, to the effect that the company should locate and construct its road through Green county, or within one mile of Greansburg, and expend the amount subscribed in' Green county,' was not made a condition precedent to the issue of the bonds, aind therefore only an obligation was imposed upon the railroad company, for the performance of which the county only looked to if. It is also insisted that it is shown by the record that the subscription to the Elizabethtown & Tennessee Railroad was void. We .can not concur in either of these conclusions. The meaning of the contract, taken as a whole, is that the subscription is upon the condition that the company shall .locate and construct its railroad through Green county, and within one mile of Greensburg, and expend the amount subscribed in the limits of Green county; and the further condition is added that the bonds are not to be issued, or anything paid on account of the subscription, until the county is exonerated from its former subscription to the Elizabethtown & Tennessee Railroad. In other words, the bonds are not to be issued until this release is made, and after the release is made the bonds' may be issued, but they are to be subject to the condition that the company should locate and construct its road as above set out. The railroad authorities, in applying to the county court for a vote on this subject, intended by their petition for the people of the county to understand that, before any liability was created, the old subscription to the Elizabethtown & Tennessee Railroad was to be out of the way entirely, and that after this was done the promise of the county to pay was to be conditioned on the location and construction of the road through Green county, and within one mile of the town of Greenstourg. In construing the contract, the court must bear in mind that it was a proposition submitted by the railroad company to be voted on by the people of Green county, and that construction must be adopted which was clearly contemplated by the parties .at the time. The railroad company intended the people to understand, and the people understood, from the paper when they voted on‘the subscription ,that they were to get a railroad through the county, and that, if they did not. get it, their subscriptions, being “conditioned and to be paid as above stated,” would not'be binding upon the county. That this was the understanding of the parties is conclusively .shown by the order of the county court, made on the motion of the railroad company, directing the bonds to be printed, “the same to be conditioned as specified in the order .submitting the vote of the said county.” As to the matter of .the subscription to the Elizabethtown & Tennessee Railroad, the record shows the following, order of the -county court, made on May 20, 1868: “This day T. R. Barnett, presiding judge, and D. T. Towles, clerk, of the Green county court, produced their certificate in words and figures as follows, viz.: ‘We, T. R. Barnett, presiding judge, and D. T. Towles, clerk, of the Green county court, duly authorized to compare the pollbooks of Green county, certify that at an election held in said county at the various voting places in said county on the 16th day of May, 1868, on the question whether the county court of Green county shall, for and on behalf of said county, subscribe, for 3,000 shares of the capital stock of the Elizabethtown & Tennessee. Railroad Company, to be paid for in the bonds of said county, payable in twenty years, and bearing sis .per cent, interest, payable semiannually in the city of New York, with interest coupons attached thereto, and that 586 votes were cast for said subscription, and 204 against said subscription. May 20th, 1868. T. R. Barnett. B. T. Towles.’ It is therefore ordered by the court that the said vote be and is now entered of record as follows, to-wit: 586 votes were cast for said subscription, and 204 votes were cast against said subscription, showing that there is a majority for said subscription of 382 votes. It is now, therefore, ordered ■ that the clerk of this court, for and on behalf of the county of Green, make said subscription on the terms specified in the order submitting the question to a vote as aforesaid.”

It is insisted that the order is void because the county court, instead of making the - subscription, delegated this duty to its clerk; and Mercer County Count v. Kentucky River Navigation Company, 71 Ky., 300, is relied on. But in that case the order of the county court appointing the commissioner to make the subscription contained these words: “But said commissioner is directed not to subscribe said stock, or any part thereof, until said company shall, by proper orders entered on the books, agree that no part of .their subscription shall be mortgaged under the provisions of the tenth section of the act of the Kentucky Legislature incorporating said .company, nor shall the county of Mercer be in any manner bound for the subscription herein decreed to be made until said company has accepted it upon the conditions herein set forth.” It was held that the power of the county court to make, the subscription, being conferred by law, must be exercised by it, and that it could not confer upon a commissioner the power to determine important questions submitted for its determination: The ground of the decision was that there was no subscription unless certain things were done, and the commissioner was to determine whether these things were done, and thus, by the exercise of his discretion, determine whether the subscription should be made, whereas the law had vested this discretion alone in the county court. But the. case before us is wholly different. No discretion is conferred upon the dounty clerk. He is simply directed absolutely to do a clerical act. County courts can not conveniently sign subscription papers or documents of this kind, and for convenience such bodies usually act by a commissioner or agent in the discharge of the mere clerical *duty of signing the papers. Such a course of doing the business has been often sustained. 23 Am. & Eng. Ency. of Law (2d Ed.) 365; Miller v. New York, 109 U. S., 385, 3 Sup. Ct., 228, 27 L. Ed., 971; Birdsall v. Clark (N. Y.) 29 Am. Rep., 105; Bur-rill v. Nahant Bank (Mass.) 35 Am. Dec., 395; Dillon on Mun. Corp., section 60. As the. case is here only on demurrer, the - question is not presented on whether the subscription was in fact made.

Again it is urged that four and one-half miles of railroad have been built in Green county by .a successor of the Cumberland & Ohio Railroad Company, and this is relied on as a compliance with the condition of the contract, under the case of Providence Trust Co. v. Mercer County, 170 U. S., 602, 18 Sup. Ct., 788, 42 L. Ed., 1156; but that case rests on 'the peculiar facts there shown, it being held, in effect, that the contract was substantially complied, with. This is not the case here. There has been' no substantial compliance with the contract. The road was to be built from the Ohio river to the Tennessee line, and the subscription was made on the condition that it was to be paid when the road was constructed through Green county. It has never been constructed through Green county, nor does its construction in any manner approximate a fulfillment of the conditions'. To hold that there has been a compliance with the terms of the contract would be to give no effect to 'the natural meaning of the language used. Peoples' Ferry Co. v. Balch, 74 Mass., 303; Memphis, &c., Ry. Co. v. Thompson, 24 Kan., 170.

The fact that the county paid the interest on the bonds for a few years does not estop it to show their invalidity. Norton v. Shelby County, 118 U. S., 425, 6 Sup. Ct., 1121, 30 L. Ed., 178; District Tp. of Doon v. Cummins, 142 U. S., 366, 12 Sup. Ct., 220, 35 L. Ed., 1044; Mercer County v. Providence Life & Trust Co., 72 Fed., 623, 19 C. C. A.,. 58; Graves v. Saline Co., 161 U. S., 373, 16 Sup. Ct., 526,. 40 L. Ed., 732.

We, therefore, conclude that, upon the facts shown, the county of Green is not liable upon the bonds sued on, and that the court should have overruled the demurrer to the answer. As the case was submitted both on a demurrer and a motion for judgment, notwithstanding the answer, we will not now direct a judgment to be entered for the defendant. As the bonds in contest contain no recitals, no opinion is intimated on the conflict of authority referred to by Judge Cooley as to whether municipal officers issuing bonds without authority can estop 'the municipality by reciting in the bonds that they have such authority.

Judgment reversed and cause remanded for further proceedings not inconsistent herewith.

Whole court sitting, except Judge Settle, who declined to sit in the case.

Petition for -rehearing by appellee overruled.