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sued, s'the purchaser of the bonds had e right
to assume that the vote Of the County, which was
made q condition to the grant Of the power, had
been obtained, from the fact of the subscription
by the Board to the stock Of the railroad COM
pany and the issuing Of tic bonds, on their face,
import a compliance with the law under which
they were issued. This bond, we quote, 's is.
600 by the said Knox County to the capital stock,
&c, by order of the Hoard of COMMISSIONER in
pursuance of the third Section Of Act, &c. The
purchaser WAS not bound to look further for
evidence of q compliance with tho conditions to
the grant Of the power" In the comparatively
recent case Of Coloma Vi. Eaves, coz o. =. Rep,
400 tho foregoing case is characterized as o
leading case upon the subject, and is said to
have established two propositions: First, ''Ihat
the issue of the bonds containg a recital that they
we're issued under and in pursuance of the legisla-
tiveAct was a sufficient basis for an assumption by
the purchaser that the conditions on which the
county Gin that case) was authorized to issue
them had been complied with, and that the pur-
chaser was not bound to look further for evil
dence of such compliance, though the recital did
not affirm It," Second, That 'where legislative
authority has been given to O municipality, or to
it officers, to subscribe for the stock of o railroad
company, and to issue municipal bonds i'll pay
ment, but only on some precedent condition,
such as q popular vote favoring the subscription,
ullu WuCTC ~ lilly DO buGuCICo llOil liz lebLSlh@
tive enactment that tho officers of the munich
pality were invested with power to decide wheth-
or the condition precedent has been complied
with, their recital that it has been, made in the
bonds issued by them, and held by o bona fde
purchaser, is conclusive of the fact and binding
upon the municipality" In Coloma VI. Eaves, it
is said that the first proposition has been reaf-
tirmed in the cases of Moran y5. Miami County,
2 Black, 1872; Mercer County VI. Hacket, l Wall,
90. C,,or,;,or, 40 Gohapor < Wall SQd ot1 in
Meyer vs.. Muscatine, / WALL, 2S4, and, though
dobted and dissented from by individual Judges,
has never been overruled. But, so far % the
second proposition is concerned, it Is said that 1t
thas been 30 firmly seated in reason and au-
thority that it cannot be shaken" This case has
been repeatedly recognized and affirmed in a
number Of subsequent cases, amongst which
may DO mentioned Marcy vs.. Oswego, % q. s.
Rep, G37; Humboldt vs.. Long, 90 U. 8. Rep,
642; Commissioners Va. Bolles, 81 U. s, Rep,
1O4; County of Warren Vi. Marcy. 81 U. s. Rep,
96, That the effect of these decisions is to re-
affirm both of the propositions laid down in Knox
County vs.. Aspinwell is made mbnifest by what
is said in tho dissenting opinion Of MIR. Justice
Bradley in Coloma vs.. Eaves, 80 q. s. Rep, at
page 400, and in the dissenting opinion Of Mr..
Justice Miller in Humboldt vs. Long, 80 u. S.
Rep, at page 1859. We think, therefore, that the
result of the Of the cares in the Supreme Court
Of the United States clearly is, that when
an Act Of the Legislature authorizes the issue Of
bonds by q municipal corporation upon certain
conditions therein named, and the bonds arc ~
sued by tho proper officers of such corporation,
containing O recital that they are issued under
authority conferred by such Act, that such reel
tai is conlusive in favor of o bona tide holder-that
all tho necessary conditions named in the Act
have been complied with. as q purchaser is not
bound to lock beyond the Legislative Act and the
~recitals, contained in the bonds. Az was saidin
Marcy VS.. Oswcgo, (92 U. s. Rep, at page 641, }
''thc subscc uent issue Of the bonds contains the
recital above quoted-that they were issued by
virtue of, and in accordance With, the legislative
Act, and in pursuance of, and in accordance
with, the vote of three-ffths of the legal voters
of the township'-was another determination,
not only Of the result of the popular vote, but
that all the facts existed which the Statute re-
ouircd in order to justify the issue of the bonds.
The case of Weith and Arents vs. the City OF
Wilmington. (6S N. C. Rep, 24,) which
seems to be much relied upon by the counsel for
the State, does not seem to us to be in conflict
with the foregoing views; for in that case there
was Nh absolute lack OF power to lssnc the bonds
which were there brought into question, and they
we're, therefore, properly held to be absolutely
void even in the hands OF q bona fde holder.
The Act under which the bonds were issued only
authorized their issue in exchange for outstand-
ing valid debts of the State, and AZ it WIS con-
ceded that the original bond in exchange for
which they were issued was given for money al
yanccd in aid of the rebellion, which class of
debts had been declared by the Constitution of
that State to be absolutely void, there was, OF
course, no authority whatever for the issue Of The
bonds in question. .
It is trre that the cases which establish the
foregoing principles arose upon bonds issued by
municipal corporations; but II, as We have seem
negotiable bonds issued by States are subject to
the same rules which govern that class Of paper
when issued by individuals or corporations, it il
dinicult to conceive how this can make any differ.
ence-and, indeed, it seem to be concealed in the
argument on both sides that there il no distinc'
ton. Tho rule grows out OF the principles which
apply to that class Of paper, and is III no wise de-
pendent upon the character Of the parties who
make or issue such paper.
There il, however, a very strong case in Which
these principles were applied to bonds issued by
q State-California w. Wells, Fargo, & Co., Is
Cal. Rep, 226. In that case certain warrant.
which had been issued by the proper authorities
Of the State were paid and deposited in the Office
of the State Treasurer. The warrants were az
forwards stolen aud presented to the Treasurer
to he funded under the provisions OF an Act en-
titled San Act to provide for paying certain equi
table claims against the State" Bonds were s.
sued in exchange for the stolen warrants, the
Treasurer at the time not knowing that they had
been stolen. Subsequently discovering this fact.
he demanded the surrender OF the bonds, and
upon refusal, brought this suit. There was no
allegation or proof that the defendants knew tho
facts showing the fraud. It was held that, tbe
warrants being negotiable paper, the bonds issue,
in exchange for them were valid deb's III TIE
hands of innocentholders; rs the defendants Wtat
declared to be, in the absence Of any proof to The
contrary.
The practical question, then, in these cases Is
were the bonds in question issued by competcn:
authority? As the bonds pnrport to DO the BONDS
of the State, and az q State cannot, like an lndl-
yidual, directly make and issue q bond, but mus
do so through the fundamentally OF its Officers
or agents, who can only act under special author
it's conferred on them. the inquiry i'll these case'
is narrowed down to the question whether sticl
authority was conferred upon the officers who
issued the bonds in question. This authority I'M
der the Constitution of the State, could only bt
conferred by an Act Of the General Assembly
passed in conformity to the provisions OF that IN
stru,nent. Hence it il not sufficient to show tia,
an Actof the General Assembly has been passed
authorizing the issue of such bonds, but it mus
also appear that such Act il not subject to any
constitutional objcction-Town Of South Ottawa
W.. Perkins. 96 u. S. Rep; Harshman Va. Bates
county. 90 u. s. Rep, $50. Which, though over,
ruled by the case of Cass county vs.. johnson, (9o
U. S. Rep, $50, az to the point that the ACT
there in question was unconstitutional, may yet
be regarded as authority for the proposition that
if the Act comforting the power to issue the bonds
is unconstitutional the issue Of such bonds VIII
be without authority, and the bonds, even III the
hands of q bona fde holder, will be invalid. so,
too, if by q proper construction OF the terms OF
the Act, the authority to issue the bonds Is not
conferred, the bonds will be invalid III the hands
of a bona tidc holder. AZ, for example, i'll thu
case OF Marsh VS. Fulton county, Go Wall, ,676,J
where the Act authorized the issue OF bonds IL
| one railroad corporation and the bonds in qne5'
ton were issued to another corporation, which,
though:a portion of the first named corporatlonj
was held to be O distinct and separate corpora
ton; and in the case Of the Tow OF East Oak'
land VI. Skinner, CO.. U. s. Rep, 1885, where tine
charter of q railroad corporation provided that'lt
shall be lawful for all persons OF lawful age, OF
for the agent of any corporate body, to subscr1oo
any amount to the capital stock Of said company
and it was held that the words ''agent Of any COT
porate body applied only to private corporations,
and did not, therefore, authorize q municipal
corporation to subscribe for stock and issue bonds
in pavment therefor, and such bonds were, there
foro, invalid, even in the hands OF a bona noe
holder. So,
The bonds, the validity of which we are called
upon to inquire into, all purport to be bonds rs
SIZED under the provisions of tho Consolidation
Act in exchange for coupons OF other bonds oail'
ed vouchers, purporting to have been previously
issued under various Acts of the General Assem-
bly,, which will hereinafter be more particularly
mentioned, and it il conceded that III every n ~
stance except onc-that of the case OF q. III.
! Walker, Cashicr-the vouchers were amongst
those mentioned in the Consolidation Act, the
kond in the oeue of Walker. Cashier, being GG-