Knoxville daily chronicle. [volume] (Knoxville, Tenn.) 1870-1882, 1879-03-04

: 10 say 1uats HI pGA Gf6I4on3 bdSGG upon til
evidence, and the correlation Of all Ii
: legislation ieluins az 10 t,le ioIJeG sal,
, and the connection of its subject wit
, other but similar interest, the conditions c
sale were secured, and the sale made ne
cessity in order that the property might b
. obtained at "heavy sacrifice"
Fourth we are directed to inquire am
report what proportion, if any, q
the bonds of the State were issuet
: ana sold, or either, in violation Of the law
authorizing, or purporting to authorize, tn,
Insurance CT the same.
To re opnd to this command, tits essentia
to refer to act of Feb. II, 1852, entitled
"An act to establish system of interna
improvements in this State," for under
this act, and amendments thereto, Of
various kids, all the bonds of the State, popu-
| larry known as loan bonds to railroads, aside
from certain bridge aid, were without ex,
| ception, so far as the committee have dis
| covered, issued The first, second and
nineteenth sections of the act, prescribe,
when, and upon what conditions, bonds
could and shonld be issued to railroad com
panies. These sections expressly say that
the Governor shall not issue bonds to any
railroads except the following facts be
made to appear, and the following evidence
be filed:
That the company has procured bona
tide subscriptions to its capital stock to an
amount sufficient to grade, bridge and pre-
pare for the iron rails the whole extent of
the main trunk line proposed to be con-
structed by it; 2, that it be shown by the
company to the Governor of the State that
said subscriptions are good and solvent; 3.
that the company has graded, bridged and
has ready to put down the necessary tim
bers, for the reception Of rails, and fully
prepared a specified number of miles at
either terminus, in a good and substantial
manner, with good materials, for putting
the iron rails and equipments; 4, that the
specified number of miles thus prepared
and no part thereof, is subject to any lien
whatever, except those created in favor of
-Ae State 5, that the Governor be notified
c these facts by the written a6idac5ts of
the Chief Engineers and President of the
company, together with the written affidavit
of a competent engineer appointed by the
Governor to examine the specified section
6, an affidavit of the President Of the COM
pany, and a resolution of majority of its
Board of Directors, for the time being, that
the bonds issued to it shall not be used for
any other purpose than fer procuring the |
iron rails, chairs, spikes and equipments.
and for putting down the iron rails on the |
specified section for which they were issued.
That the President first deposit in the office |
of the Secretary OF State, a full, true and |
accurate list Of all the stockholders, with |
the sums subscribed by each and every |
These precedent conditions,
with some few changes as to who were to
make certain examinations and
co-eXist with, and form a
part of every subsequent act authorizing
he issuance of bonds to railroads, except
he omnibus railroad bill of 1867. The
subsequent act Of 1854, which was amend
ltory of the act Of 1852, required impera-
lively that the bonds issued in the aid of
Internal Improvements be sold at not less
han par, and all the bonds issued by the
State in aid Of railroads, except $350,000
ssued to the East Tennessee & Georgia
Dad, under the act Of Jan. 80, 1850, were
5sued after the act Of 1854.
OF these eight conditions upon which
,onds were authorized to be issued, seven
we're, in the opinion of your committee,
OnditiOns precedent, and without com
lance with their requirements, shown to
he Governor in the mode, and by the evi.
ences specified in the statute, he acaS
ssted a0jh no pO3cer to issue bonds to com
anies hereunder.
The act says, before any bonds, under
S provisions shall be issued to any age
f any railroad," and that when theSn
lings shall be made to appear to the Gov
rnor by specified evidences, he shall issue t
specified number Of bonds successfully to {
1cb section as the road may progress in t
s completion. 1t is to be observed further,
lat the act, section 10, expressly provides i
lat the " -4ct shall be deemed and taken to l
2 Pujijc act, as 10 all purposes Of
0iicc, and all the bonds Of the State issued I
aid Of railroads, under the act Of 1852, s
I'd lis amendments, so far as i
our committee have learned or I
scoycred, rccite on their face s
e 1ct under which they were issued. We c
re well sustained in the principle of the t
lsition taken that the conditions above
at least seven of them, were t.
'nditions precedent by previous unassailed r
I'd uncOntroverted executive construction, I
nd by previous unassailed, uncontroverted, t,
i'd approved legislative action with respect 4
bonds issued under this act and its amend D
ents. The principle is also we'll sustained 1
judicial authority. il
The Governor of,the State possesses, under il
e law, no general power to execute and a
sue bonds. His power to do so was con- il
rred by statutes specific in their prOvis-
rs, limiting and restricting him in its eX 81
else. He was not empowered to act eX- 81
pit upon a strict compliance with their a
rms and conditions. These statutes ope- Il
led as notice of the extent and the limita- g
IN of his power. In consequence, the i'm y
ediate purchasers, and all subsequent y
,lders of the bonds, were bound to look to u
e action of the Governor, and ascertain =
neither the law had been so far followed by Il
m as to justify the issuance of the bonds. d
he party dealing with public agent or >,
icer, knowing that he acts only by virtue ~
delegated power, must at his peril see 3.
at the paper on which he relies comes 81
thin the power under which the agent or n
icer acts, and this applies to any person q
10 takes the paper afterwards, for the pro C,
ction which commercial usage throws lc
ound negotiable paper cannot be used to es- h
blish the authority by which it was origi o.
lily issued. Were the rule otherwise, it 6
)uld be in the power Of a dishonest agent ST
officer to bankrupt forever his principal, II
the people whom he assumed to repre- IL
Mt. The committee are of the opinion, in 5
ew of the foregoing position, which is D
IL sustained by reason and authority, and h
view Of the fact that the first purchasers a.
ught the bonds, and all subsequent %
rchaSarS knew that they were hOuUht at Ot