Court Opinion

ID: 8256515
Source: CourtListenerOpinion
Date Created: 2022-10-16 15:32:13.756945+00
Date Added: 2024-06-11T16:43:00.677722
License: Public Domain

Chief Justice Smith
delivered the opinion of the court in this case.
This was a bill filed in the superior court of chancery, against the State of Mississippi, by the appellee, under the provisions of the statute, enacted in compliance with the 10th section, 7th article of the constitution, directing the method and designating the court in which suits against the State should be brought.
*725The foundation of the suit was an instrument under the seal of the State, signed by the governor and countersigned by the treasurer of the State, dated 5th of June, 1838.
It was alleged in the bill, that this instrument was executed and delivered by the person then filling the executive office, under authority duly conferred by law.
It purports on its face to be the bond of the State of Mississippi, for two thousand dollars, payable in the current money of the United States. ' It was made payable to the order of the president and directors of the Mississippi Union Bank; and was by them transferred by indorsement to the bearer.
The defence made by the State is based upon the alleged invalidity of the bond, it having been, as averred in the answer, made, delivered, and sold without authority, and in violation of law.
This cause was tried in the court below on facts admitted and established by an agreement of counsel; and the chancel- ( lor, holding the said bond to be a valid obligation against the State, rendered a decree in favor of the complainant for the amount of the principal and interest thereon. Hence the cause is brought into this court.
Other claims, to the amount of many millions of dollars, exist against the State of Mississippi, of similar character, the validity of which depends upon precisely the same conditions with that which is the present subject of adjudication. So far, therefore, as the action of the judicial department is concerned, the decision which it is now our duty to pronounce, will, probably, be decisive of their fate. For that reason alone, the present contest is one of deep interest.
But, leaving out of view the magnitude of the sum, necessarily, though indirectly involved in the present controversy, the importance of the principles which must be discussed and decided, and the very delicate relation in which this court must always stand in regard to controversies in which the State is an interested party, admonish us of the necessity of a thorough and earnest, but calm and impartial investigation of the subject.
The questions presented by the record, in the case before us, *726are entirely of a legal character, arising upon facts which, as above remarked, are established by the agreement of counsel. These facts are substantially as follow, to wit :■—
An act entitled “ An Act to incorporate the subscribers to the Mississippi Union Bank,” was passed by the legislature of this State, and approved by the governor, on the 5th February, 1838. The bank, thus incorporated, was to possess a capital of fifteen millions five hundred thousand dollars, “to be raised by means of a loan to be obtained by the directors of the institution.”
By the 5th section of that act, it was provided, “ that in order to facilitate the said Union Bank for the said loan of fifteen millions five hundred thousand dollars, the faith of the State be, and is hereby pledged, both for the security of the capital and interest, and that seven thousand five hundred bonds, of two thousand dollars each, to wit: eighteen hundred and seventy-five payable in twelve years; eighteen hundred and seventy-five payable in fifteen years; eighteen hundred and seventy-five payable in eighteen years; and eighteen hundred and seventy-five payable in twenty years; bearing interest at the rate of five per cent, per annum, shall be signed by the governor of the State, to the order of the Mississippi Union Bank, countersigned by the State treasurer, and under the seal of the State.”
The said act was passed in strict conformity with the directions contained in the ninth section of the fourth article of the constitution of this State, which is in the following words, to wit: “ No law shall ever be passed to raise a loan of money on the credit of the State, or to pledge the faith of the State for the payment or redemption of any loan or debt, unless such law be proposed in the senate or house of representatives, and be agreed to by a majority of the members of each house, and entered on their journals, with the yeas and nays taken thereon, and be referred to the next succeeding legislature, and published for three months previous to the next regular election, in three newspapers of the State; and unless a majority of each branch of the legislature, so elected, after such election, shall agree to and pass such law; and, in such case, the yeas *727and' nays shall be taken and entered on the journals of each house,” &c.
• An act, supplementary to the said act incorporating the Mississippi Union Bank, was passed by the legislature and approved by the governor, on the 15th of February, 1838.
This act was passed in the ordinary method of enacting laws, and was not referred, published, and reenacted, according to the provision of the constitution above quoted. By the first section of that act it was provided, that “ so soon as the books of subscription for stock in the said Mississippi Union Bank are opened, the governor of this State is hereby authorized and required to subscribe for, in behalf of this State, fifty thousand shares of the stock of the original capital of said bank, the same to be paid for out of the proceeds of the State bonds to be executed to the said bank as already provided for in the said charter;. and that the dividends and profits which may accrue and be declared by the bank on the said stock subscribed for in behalf of the State, shall be held by the said bank, subject to the control of the State legislature, for the purposes of internal improvement, and for the promotion of education.”
The managers for the bank, whose election was provided for in the original act, were elected by the legislature during the same session, and were organized subsequently as a board of directors for the bank, pursuant to the directions of the supplementary act.
When the books of subscription for the stock of said bank were opened, the governor subscribed, in behalf of the State, for fifty thousand shares, or for five millions of the stock, pursuant to the directions of the supplementary act as above quoted. On the 5th day of June thereafter, he issued the bond in suit, with other bonds of the same character, and for equal sums, amounting in the aggregate to five millions of dollars.
At the time when these bonds were delivered by the governor to the directors of the bank, the mortgages, which were required to be given by the 8th and 30th sections of the original charter, had not been executed or delivered to the bank.
*728The bonds which had thus been issued by the governor, and delivered to the bank, were sold by her agents, in the city of Philadelphia, on the 18th of August, 1838. The agents or commissioners for the sale of these bonds, acted under a power of attorney, duly executed by the bank, which, with the original and supplemental acts, was made part of the contract between the commissioners and the purchasers of the bonds. The commissioners were expressly restricted by the charter of the bank, and their letter of attorney, from selling the bonds for less than their par value.
The sale was made for five millions of dollars, payable in five equal instalments; the first four of which were to be made at the city of New Orleans, on the first days of November, January, March, and May, respectively, thereafter. The last instalment was to be paid on the 1st of July, 1839, at Natchez. The several instalments of the loan were paid to and received by the bank, at the times and places designated in the contract. At the respective dates, when the payments were made, exchange on New Orleans, at the city of Jackson, ranged from five to eight per cent, premium.
The exceptions taken to the decree of the chancellor, are based in the first place, and chiefly, on the ground that the bond in controversy was issued without legal authority and in violation of law.
In support of this position it is contended: 1. That the bonds which were executed and delivered by the governor to the Mississippi Union Bank, of which the bond in suit was one, were not issued in execution of or under the provisions of the original act chartering the bank. 2. That the sole authority for the issuance of the said bonds, if in fact any such power existed, was derived from the supplemental act; and 3. That the latter act was a mere nullity, not having been enacted by the legislature in conformity with the directions of the provision of the constitution above quoted.
If these propositions are maintainable, the conclusion is inevitable that the bond in suit, by the mere act of sealing and delivery, did not become a valid obligation binding on the State.
*729The original act, as we have seen, was approved on the 5th of February, 1838. Hence, but four months had elapsed from that date, before the bond in suit, which bears date on the 5th of June following, was delivered by the governor to the bank.
It becomes important, therefore, to inquire, whether, according to the just construction of the act, the State bonds, for any portion of the contemplated loan, could have been legally issued by the governor at that date. Several provisions of the said act are referred to as indicating the negative of this proposition. We will quote such as we think bear upon the question: —
The second section provides for the opening of the books for the subscription of the stock of the bank, at the city of Jackson, under the inspection of the ten managers. The books were required to be kept open for the period of six months; at the end of which time, the directors were required to make an estimate of the whole amount of the subscriptions; and in case a greater amount of stock should be subscribed than was authorized by the charter, to reduce the amount of stock taken by individuals, reducing first the largest amounts.
The third section provides for the opening of the books in the several counties of the State, under the inspection of three managers, to be elected for each county. The books were to remain open in the counties for three months; when they were to be transmitted to the managers at the seat of government, together with all title deeds and other documents which may have been deposited with them by the subscribers, “ in order that the directors of the mother bank might finally decide on the validity and sufficiency of the same, before the subscribers should be declared stockholders.”
By the first clause of the eighth section, it was declared, “that to secure the interest and capital of the bonds, the subscribers should be bound to give mortgage, to the satisfaction of the directors, on property, to be in all cases e'qual to the amount of their respective stock, which may bear on cultivated land, plantations,” &c. And by the twenty-ninth section, it was provided, “ that the bonds, with the privileged mortgages, for the sum of fifteen millions five hundred thousand dollars, *730subscribed by the stockholders of said bank, according to their shares, for the purpose of securing the loan of fifteen millions five hundred thousand dollars, shall be deposited in the office of said institution, as security for the reimbursement of the interest as well as the capital of the said bonds granted by the State.”
These several provisions of the act leave no room to doubt as to what was the intention of the legislature in regard to the time when the mortgages, which were required to be given by the 8th section, were to be executed. It is clear that those mortgages were not to be given, that is, formally drawn, sealed, and delivered to the directors by the stockholders, until after the books of subscription for the stock were closed, at the city of Jackson, and after the stock subscribed had been graduated under the direction of the second section.
This, it is manifest, could not be done until after the expiration of six months from the date of opening the books.
If, therefore, upon no assumed condition of things, would the directors of the bank have a legal right to demand of the governor a delivery of bonds for any amount, or the governor possess the authority to issue them unless mortgages had been previously sealed and delivered by the subscribers to the directors, or, in other words, if the formal execution of mortgages by the subscribers for stock was a condition precedent upon which the right of the directors to apply to the governor for a delivery of bonds, or the authority of the governor to issue them depended, it must be admitted that the bond in suit was issued in violation of the act incorporating the bank, and of which fact the purchaser was presumed to have notice.
We will proceed, therefore, to inquire whether such is the construction which should be put upon the act. And in order to ascertain the proper construction, we must first determine the character and extent of the obligations incurred by the subscribers to the stock and the stockholders.
As we have seen, the capital of the bank was not to be raised by the contribution of the subscribers or stockholders. The charter provided, expressly, that the capital should be procured by means of a loan, which the directors were authorized to *731obtain. To aid them in the accomplishment of that purpose, State bonds were to be issued, by the governor, to the full amount of the capital, for the payment of which, the faith of the State was pledged. The bonds were to be issued as a loan or grant to the bank, which was to be bound to the holders for their' punctual payment. When the stock was graduated, and the stockholders ascertained, they were bound to give mortgage to the satisfaction of the directors, to be in all cases equal to their respective stock. Those who should be declared stockholders, were also required to pay in cash ten per cent, upon the amount of their stock, at such time as the directors should require. — Sec. 11. This amount, however, was to be refunded by the bank, with interest, after the bonds were sold and the proceeds realized. — Sec. 44. In the event of the inability of the bank to pay the State bonds, which could only arise from the loss or destruction of the capital procured by the loan, the stockholders were bound by their mortgages to contribute in proportion to their respective stock. This, then, was the extent of the obligation arising from the contract of the stockholder.
By the contract of subscription which necessarily preceded and was entirely distinct from the contract of the stockholders, the subscriber to the stock was bound to execute to the directors of the bank a valid mortgage, on a satisfactory amount of property conditioned for the payment of a sum corresponding to the amount of stock, of which he might be declared the holder. But before or at the time of entering into such contract,. the subscriber was required by the 8th section of the charter, “to deliver to the commissioners a valid act of sale, or patents or certificates of confirmation from the land commissioners of the United States, or partition sales and adjudication by a decree of court, verified according to law, or such other evidence of title to the property proposed as a guarantee to the bank as may be deemed satisfactory to said commissioners or directors.” The plain meaning of which was that a person who should desire to become a subscriber to the stock of the bank, before he should be permitted to do so, was required to pledge a satisfactory amount of property to which he had a *732valid title, to the bank, as a security for the performance of his contract of subscription.
We have seen that, by the third section, it was made the duty of the directors of the mother bank to decide, finally, on the “ sufficiency and validity of the title deeds and other documents deposited with the commissioners.” By the 26th section, the directors were declared to be “judges of the sufficiency of mortgages offered for stock and loans, and were vested with authority to reject the same if not sufficient.” In such cases they might “ require other security, or in default thereof, reduce the shares of such defaulters to the amount sufficiently secured.” Hence, although the directors possessed a discretionary authority in regard to the validity of the title and the sufficiency of the pledge, and might, in the exercise of that discretion, entirely reject the subscription or reduce it in amount, on - the part of the subscriber the contract of subscription was unconditional.
We do not doubt, therefore, that under the operation of the act, a delivery of title deeds by a subscriber to the commissioners, would create a lien on the property in favor of the bank. And we deem it unimportant for the purposes of our inquiry to determine whether the transaction should be held to constitute, in a strict sense, an equitable mortgage, or as creating only a special statutory lien; as in either case, it could be nothing more nor less than a security, which the corporation would hold for the due performance of the contract of subscription.
The 14th section declared, “ That so soon as five thousand shares shall have been subscribed, in the manner herein provided for, the governor of the State shall provisionally appoint thirteen directors, who shall serve for twelve months, and it shall be the duty of the said directors to choose a president of the Mississippi Union Bank, and who shall be chosen from among themselves ; and the president thus chosen, shall remain in office twelve months following their appointment; and that so soon as the directors are appointed and the president chosen, the power of the commissioners appointed to receive the sub*733scriptions and the papers relating thereto, and in the possession of the commissioners, shall be delivered over to the board of directors.”
It is evident from the last clause of this section, that it was within the contemplation of the legislature, that five thousand shares of the stock would be subscribed before the closing of the books, and of consequence before any subscriber could be declared to be a stockholder. It is equally clear, that the governor might be required to appoint the provisional directory before that event could take place. Indeed, it is clear that the condition might have arisen, on which it would become the duty of the governor to appoint the directory within the first week after the books were opened for subscription to the stock. But upon the supposition, that the legislature did not intend that any bond should issue until after the books were closed, and the stockholders declared, that provision would seem to be useless and unmeaning. For upon that assumption, although a directory might be appointed within very few days after the opening of the books, their duties as such could not attach until after they were closed.
Then, for what purpose was it declared, that so soon as five-thousand shares should be subscribed, in the manner provided-for, the governor of the State should provisionally appoint a-t directory, whose duty it was made at once to organize by the-election of a president of the bank, and to apply to and receive-from the governor the bonds directed in the charter to be issued;, by him ?
The answer to this inquiry we think is an obvious one,, and will aid us materially in solving the question under examination.
By the 12th section it was declared: “ That after the closing-of the books, and when it shall appear that at least five hundred thousand dollars shall have been subscribed, and paid in on the original stock of the capital of said bank, the said institution shall go into immediate operation, under the provisions hereinafter mentioned.”
According t6 the direction contained in this section, the-corporation could not commence its banking operations with a *734cash capital paid in, of less than a half million of dollars. That was an indispensable condition, and there was but one method prescribed by the act in which it could be realized. The entire capital of the bank was to be raised by the means of a loan which the directors were authorized to obtain, and to aid in the attainment of that object, the State had pledged her faith, and directed the issuance of her bonds.
Under the most favorable circumstances, the process adopted for the purpose of raising the capital of the bank, would be a slow one. A considerable length of time would, of necessity, elapse from the issuance of the bonds, before they could be disposed of, and the proceeds received by the bank. We presume that the legislature were desirous, at as early a date as practicable, consistent with the security of the State, to put the bank into successful operation. The journals of the legislature contain abundant evidence, that this event was awaited with great and general anxiety. The provisions of the 14th section appear to have been framed with the view of preventing unnecessary delay, of hastening the negotiation of the bonds, the only means whereby the capital of the bank could be raised; in fine, of shortening the process by which the benefits expected to be derived from the establishment of the Union Bank would be secured.
We -can perceive no other purpose which the provisions of the 14th section were calculated to subserve, qjid we can conceive of no other motive which could have suggested their adoption. If it were intended by the legislature, that the State bonds might be issued as soon after five thousand shares had been subscribed, and a provisional directory organized, a delay of many months would be prevented. The direction in regard to the provisional directory, upon such a supposition, would be intelligible and necessary; but upon the supposition that no step was to be taken towards a negotiation of the bonds until after the books were closed, that particular action of the legislature would seem to us not to be directed to any practical object whatever.
We come, then, directly to the point, whether it was within the legislative intention that the bonds should, upon any condi*735tion of things, be issued by the governor before the mortgages were executed, as directed in the first clause of the 8th section of the charter.
A permanent board of directors, for the government of the affairs of the corporation, to be elected in part by the stock? holders, was provided by the 15th section. The provisional directory were not to be charged with the control and management of the banking operations of the institution. They were to raise the capital by negotiating the State bonds; to organize the company, and to put the bank into operation. Before banking operations could be commenced, the charter required capital to be paid in, to the amount of at least a half a million of dollars. The capital could be raised in one method only. That method was a sale of the bonds to be executed to the bank by the governor. Plence the necessity of the provisions of the 30th section, by which it was declared: “ That so soon as directors are appointed, as hereinbefore provided for, they shall proceed to the election of a president, and the same shall be notified to the governor of the State, who will thereupon execute to the said bank, from time to time, bonds in amount proportioned to the sums subscribed, and secure to the satisfaction of the directors, as required by the charter, until the whole amount of fifteen millions five hundred thousand dollars shall be furnished in bonds, as herein provided for.”
This language is too plain to permit us to doubt. By the 14th section, as we have seen, directors were to be appointed so soon as five thousand shares of the stock had been subscribed. By the section last above quoted, the directors thus appointed, immediately upon their appointment, were to elect a president, and to give notice to the governor of that fact. Upon' being informed of the organization of the board, the governor was authorized to execute bonds to the bank in the amount corresponding to the sums subscribed, and which, in the estimation of the directors, were sufficiently secured agreeably to directions of the pharter.
It appears to us impossible to doubt in regard to the time when, in legislative contemplation, the bonds were to be executed. The language is explicit.; the intention is express. *736Upon being informed that the directors had elected a president, the governor thereupon was authorized to deliver to -them bonds in amount equal to the sums subscribed for stock and satisfactorily secured.
But it has been argued, that when the legislature required in the section above quoted, that the stock subscribed should be secured to the satisfaction of the directors, before the bonds should be issued, they meant the security designated in the first clause of the 8th se'ction, that is, that mortgages should be : given conditioned for the payment of the bonds. Hence, it is ■contended, that as those mortgages could not be executed until after the stockholders were declared, the legislature did not intend, although the language of the 14th and 30th sections may bear a different interpretation, that the bonds should issue until after the closing of the books and the graduation of the stock.
That no doubt may be left upon the mind in reference to this branch of the subject, we will proceed to answer the argument.
The 30th section does not require, in express terms, the execution of mortgages or any other form of security. The bonds are to be issued in amount proportioned to the sums subscribed, and secure to the satisfaction of the directors, as required by the charter.
Now it will not be questioned, that security might have been .given by the subscribers at the time of the subscription, either by the execution of mortgages, such as were contemplated by the first clause of the 8th section, or many other modes which would have been satisfactory to the directors, unless the words, “ as required by the Charter,” have reference to some provisions of the act, which designated the character of the security which should be taken.
We infer from the language employed in the 30th section, that the legislature had reference to the time of subscribing, or to some point anterior to this time, when the stock should be graduated, and the stockholders declared. For until that was done, it could not be said with strict propriety that the subscribers were stockholders, or that stock was owned by any *737one. Upon that supposition, it was proper to speak of the “sums subscribed,” instead of “the stock” which was owned by the subscribers, which would not have been the case if it had been intended to designate the security, which the subscribers were required to give for the payment of the bonds, in proportion to the amount of stock which had been allotted to them. It is conceded, that the mortgages referred to in the first clause of the 8th section, were designed to be executed after the stock had been graduated, and the stockholders were declared. Upon that hypothesis, the language employed we think sustains the view which we have taken of the subject. It is not there said, that the mortgages are to be in all cases equal to the amount of the “ sums subscribed.” But it is declared, that the mortgages then to be given are to be in all cases equal to amount of the respective “ stock ” of the subscribers.
The “ sums subscribed ” are different from the “ stock declared.” This is evident, because the directors were vested with full authority to reduce the amount of subscription of any subscriber, or to reject it altogether. The largest subscriber to the stock, by the decision of the directors, from which there was no appeal, might turn out to be the smallest stockholder, or no stockholder at all. Hence the phrases “sums subscribed” and “ the amount of their respective stock ” were not equivalent terms ; they conveyed distinct and different meaning.
Upon the principles of common sense, as well as the plainest rules of construction, it is to be inferred that the legislature in the same act, and in treating of different parts of the same subject, did not intend to convey the same idea by the use of these terms. Hence, that they had no reference to the “ stock,” which was graduated and allotted to the stockholders, and which could not be done until after the books were closed, when they declared that bonds should be .delivered by the governor “ in amount proportioned to the sums subscribed, and secure to the satisfaction of the directors.”
If the security required in the 30th section, before the bonds were to be executed' and delivered to the bank, was not, as we infer, the mortgages designated in the first clause of the 8th *738section, the question naturally arises in regard to the security which was in reality contemplated.
To that question we answer, that the security, which in our opinion the charter required, as the condition upon which the bonds might be legally delivered by the governor to the bank, was the pledge of real property to be made by the subscribers to the stock. The pledge thus to be made was by a delivery to the commissioners of the title deeds, patents, certificates of confirmation by the board of land commissioners of the United States, or other evidences of title which should be deemed a satisfactory security by the said commissioners or the directors, in compliance with the second clause of the said 8th section, which is in the following words, to wit: “ No one shall be permitted to subscribe until he shall deliver to the commissioners a valid act of sale, or patents, certificates' of confirmation from the board of land commissioners of the United States, or partition sales and adjudication by a decree of court verified according to law, or such other evidence of title to the property proposed as a guarantee to the bank, as may be deemed satisfactory to said commissioners or directors.”
We have above considered the effect of the deposit of title deeds with the commissioners, by the subscribers to the stock of the bank. In our opinion, by whatever name the security should be designated, the delivery of his .title deeds by the subscriber to the commissioners, created a special statutory lien •upon the property, which was designed by the charter to stand as a security to the bank for the due performance of the • contract of subscription.
That such is the operation of the act, we think is too evident to admit of debate, and we feel well assured that the lien, or mortgage which would be thus created, was the security for (< the sums subscribed,” required by the 30th section. For if not designed for that purpose, we are unable to perceive what object the legislature had in view, in requiring security to be given by the subscriber to the stock for the performance of his contract of subscription.
If it were not intended to base some future action of the corporation upon the security given by the subscribers, that *739they would perform their contract, why require them to encumber their estates? If it was not intended, that the bonds should be issued before the stockholders were • declared, and mortgages formally sealed and delivered, this provision of the charter would be worse than useless. But on the other hand, if the subscriptions to the stock secured by a pledge of real estate, were designed to be the basis upon which the bonds of the State were to be issued, we perceive very clearly the object and utility of the provision, and the reason why a provisional directory was to be appointed so soon as five thousand shares were subscribed, with authority to apply to the governor for a delivery of bonds, equal in amount to the sums subscribed.
After a careful review of this branch of the subject, we have come to the conclusion,’that the bonds might have been legally issued to the bank by thegovernor, on the 5th June, 1838, pursuant to the provisions of the original act by which the bank was incorporated, and the faith of the State pledged for the purpose of raising the capital.
In the next place, it is contended that the said bonds, including the one in suit, were executed and delivered to the bank, under the authority conferred, if in fact such authority existed at all, by the supplemental act. We will not at this stage of our examination discuss this proposition, as it is obvious that no valid objection against the legality of the bonds could be based upon it, if its correctness were conceded, unless it could also be shown that the supplemental act was null and void.
The supplement, as we have seen, was not adopted agreeably to the directions contained in the 9th'section of the 7th article of the constitution of this State, which we have above quoted; it was passed as an ordinary act of legislation, by one legislature, and approved by the governor. Having been passed in the manner stated, the supplemental act is alleged to be inoperative and void :
1st. Because it attempts to pledge the faith of the State for the payment of a debt.
2d. Because, by the passage of that act, the legislature have attempted to repeal several important provisions of the original act, and have attempted to repeal or dispense with the condi*740tions upon which the State in the original act agreed to be bound for the payment of the bonds, the execution and delivery of which are provided for in said act.
It is certain, that by no provision of the supplement has the legislature directly or in express terms attempted to bind the faith of the State for the payment or redemption of any loan or debt.
By the first section of the supplemental act, as we have above seen, the governor was required, upon the opening of the books of subscription for stock, to subscribe for, in behalf of the State, fifty thousand shares of the capital stock of said bank, to be paid for out of the proceeds of the State bonds, to be executed to the bank in the manner prescribed in the original charter. This portion of the supplement contains the only provisions, which, upon any rational construction of the act, can furnish the slightest foundation for the assumption, that the supplemental act pledged the faith of the State for the payment of a debt of five millions of dollars due to the Union Bank.
We will be enabled to judge of the correctness of this position, when we clearly understand the character of the transaction.
The first section of the supplement did not authorize the issuance of bonds for any purpose whatever. It directs that the stock subscribed for the State should be paid for out of the proceeds of the.bonds, the execution of which was authorized by the original act. The faith of the State for the payment of the bonds had been formally and constitutionally pledged by that act. There was certainly no .attempt to renew that pledge; and it is equally evident that there was no attempt to increase the liability of the State. For under no possible contingency, could she be made liable for more than fifteen millions five hundred thousand dollars.
Nor do we think it can be said with truth, that the State, by the subscription to the stock, became a debtor to the bank, or that any additional obligation was thereby imposed upon her. There would be some ground for the assertion, if the first section of the supplement had directed that bonds should be *741executed to the bank in payment of the State stock, or had it even provided for the payment of the stock out of the proceeds of any particular portion of the bonds, the execution and delivery of which were provided for in the original act. But such was not the fact. The general direction was given, that the stock subscribed for the State should “ be paid for but of the proceeds of the bonds, to be executed to said bank as already provided for in the said charter.”
The effect of this provision was to place the State, in regard to the payment of the stock, precisely on the same footing with the private stockholders. Such, it is manifest, is the necessary result, as the stock of the bank was to be for, or, which is the same thing, the entire capital of the bank was to be raised by means of the loan, provided for in the original act. The private stockholders, in case of a failure of the bank to pay the bonds, would, under their contract as stockholders, be required to contribute for that purpose, in proportion to their stock. Hence, in that respect, it might be said that they stood in the relation of debtors to the corporation. But such was not the condition of the State. She bore no such relation to it. Under no view of the subject can it be maintained, that the State became her debtor. She would in such case become directly responsible to the holders, to the full extent of her bonds outstanding. But in no event could she be required to contribute to the bank, and, therefore, in no sense could be the debtor of the bank.
But were it conceded, that the State, in a strict legal sense, became the debtor of the bank to the amount of her subscription to the stock, we are of opinion that the provision of the supplementary act, authorizing the subscription, would not, for that reason, conflict with the constitution, and be consequently void.
Undoubtedly the authority to pass a law for the purpose of authorizing a subscription to the stock of a banking company, in behalf of the State, is embraced by the general grant of legislative power in the constitution. And it appears to us a question which scarcely admits of debate, that the provisions of the 9th section of the 7th article of the constitution, do not *742apply fhe class of legislative enactments to which the one ■under consideration belongs. It will certainly not be contended, that an act passed by the legislature for the purpose of authorizing contracts to be made in behalf of the State, for the purchase of property, for the erection of public buildings, or for the construction of works of internal improvement, or for many other purposes, by the terms of which the State would be bound for the payment of money, can be considered a law passed to pledge the faith of the State “ for the payment or redemption of a debt,” and, therefore, within the operation of the constitutional provision; and if not within its operation, it appears to us certain, that an act passed for the purpose of authorizing, in behalf of the State, a subscription to the stock of an incorporated company, would not be more so.
2. We pass, then, to the consideration of the next position taken in reference to the supplement.
By the counsel for the State it is contended, that the legislature does not possess the power to repeal or materially change the provisions of a law passed according to the forms prescribed by the 9th section of the 7th article of the constitution; at least, without observing the same process in the passage of the repealing act which was required in the adoption of the original law. This is denied by the counsel for the appellee, who further insist, that the supplemental act has not repealed or materially modified the essential conditions on which the faith of the State was pledged in the original act of incorporation.
By section first of the second article of the constitution, the powers of the government of the State of Mississippi were divided into three distinct departments, and each of them confided to a separate body of magistracy, to wit: “those which are legislative to one, those which are judicial to another, and those which are executive to another.” The 4-th section of the third article vests “ the legislative power of the State ” in the senate and house of representatives, which, together, are styled “ the legislature of the State of Mississippi.”
The legislature, therefore, possesses the entire legislative authority of the State, and may, consequently, perform any act of a legislative character, which is not repugnant to the consti*743tution of the United States, nor expressly prohibited by that of the State of Mississippi.
The right to enact laws for the purpose of effecting loans in the name and upon the credit of the State, is unquestionably a part of the legislative power which was granted in the constitution. This is conclusively shown, if any doubt could otherwise exist, by the 9th section of the 7th article, which contains a distinct recognition of this power by the precise directions there given, as to the mode in which it is to be exercised. Hence, if no limitation or restriction had been put upon the exercise of the right, by the constitution, it would have been competent for the legislature to pledge the faith of the State, for the purpose of raising a loan of money, or for the payment or redemption of a loan or debt in the ordinary form of enacting laws. But the constitution, in the section referred to, has prescribed the method in which a law intended for that purpose must be passed. The provisions of that section, however, are no more, or in any other way, a limitation upon that particular branch of the legislative power, than the 23d section of the 3d article, which prescribes the general mode of enacting laws, is a limitation on the legislative authority of the two houses. Hence, the power itself is not limited, although it cannot rightfully be exercised unless the form of procedure be strictly observed. (
But did it follow, that because the power to borrow money on the credit of the State, or to pledge the faith of the State for the payment of the loan or debt, must be exercised, if at all, in the specific mode prescribed in the constitution, a law which .has been regularly passed for those purposes, is for that reason of higher import, of greater sanctity, and less the subject of the repealing power, than any law for ordinary purposes, passed in the fisual mode of enacting laws ?
This is a very interesting question, and one of importance, as all questions are which involve a construction of the organic law of the State. It has been examined with the diligence and ability which its interest and importance demand by my colleague, Judge Yerger, who has arrived at a conclusion in which I fully concur. I will, however, in as brief a manner as pos-*744sibie, state the grounds upon which I base my opinion on the subject.
In doing this, it will be necessary to notice certain positions assumed in the argument at bar, by counsel who assume the affirmative of this question.
It is broadly asserted, indeed it seems to have been taken for granted in the argument, that the constitution requires a law which proposes to create or impose a debt upon the State, to be submitted to the people; and that the validity of such a law depends upon their assent. It is further insisted, that the people of the State, or the State itself, are a party to such a law in a different sense; or that they stand in a relation to it different from that in which they stand to any act of legislation passed according to usual forms.
We are very far from yielding our approbation to either of these propositions.
A bill or law by which it is proposed to borrow money on the credit of the State, before it can be valid, must, as we have seen, be passed by a majority of each house at one session, and then referred to the next succeeding legislature. In the mean time, before the next general election, it must be published for three months in three newspapers of the State; and, finally, it must be reenacted by the next succeeding legislature, to which it had been referred. These are the ceremonies to be observed in the passage of a law of that character; and hence, it is not true that such a bill or law, in the progress to its final adoption, is either to be referred or submitted to the people. But why, it is asked, refer and publish such a law, if it is not intended to ascertain the will of the people in regard to its final adoption or rejection? And if so, why evoke an expression of the will of the people, if it were not intended that their will should, in such cases, authoritatively control the subsequent action of the legislature in regard to the passage of the law ?
To these questions it may be replied, that the constitution does not, in express terms, require a formal expression of the will of the people. And if any argument could be based upon the assumed implications of the 9th section of the 7th article, it is fully rebutted by the fact, that no provision has been made *745or authorized, by which the popular will could be ascertained. A provision by which the people would be made direct participants in the exercise of legislative power, would not be in keeping with the frame, and structure of the government, and directly repugnant to the theory of a representative republic. It would, moreover, be in opposition to the provisions of the 4th section of the 3d article of the constitution, which declares that the legislative power of a State shall be vested in a senate and house of representatives.
In legislative proceedings, the object of which is to procure money on the credit of the State, private interests may easily arise, which are in opposition to the public welfare. In such cases, improper and improvident legislation may be apprehended. Errors committed in the legislation on these subjects, are not always remediable by ordinary means. For, where money obtained for these purposes has been wasted, or injudicious contracts have been entered into, the injury cannot be repaired by the repeal of the objectionable law.
Hence, to guard the legislature as well against sinister influences, arising from interests in opposition to the public welfare,, as to protect the public against the evils of hasty, ill-advised,, or corrupt legislation in regard to such projects, the provisions of the ninth and seventh article were incorporated into the constitution.
Precisely of the same character, and designed to secure similar purposes, are the provisions of the 23d section of the 3d article of the constitution, by which it is declared, that “ no bill shall have the force of a law, until on three several days it be read in each house, and free discussion be allowed thereon, unless four fifths of the house in which the bill shall be pending may deem it expedient to dispense with this rule.”
Such, it is believed, were the sole objects of the framers of the constitution. By the reference and publication of a law intended to borrow money on the credit of the State, or to pledge the faith of the State for the redemption of a loan or debt, they intended to direct the attention of the people to the. proposed measure. The expediency or impolicy of such a *746measure, would, therefore, be discussed in connection with the intervening election; the attention of the public would be drawn to the subject, and the dangers of hasty and improvident legislation prevented; for, by that means, the legislature would be enabled to act under the direct counsel and advice of the whole of their constituents.
That this is the proper construction of the provision under consideration, and that it never was intended by the convention who made the constitution, to give the people, in their primary assemblies, or through the ballot-box, the right of approval or veto upon the acts of the legislature, passed in reference to the subjects of loans, will appear more evident, when we inquire whether the final action of the legislature upon a law of the character which we have been considering, would be constitutionally void if done in opposition to the known wishes of the people.
Let us take as an illustration the act under consideration. If that law had not been reenacted, but finally rejected, in opposition, as it will not be denied it would have been, to an immense majority of the people, whose will was ascertained, would the action of the legislature, in rejecting it, have been a violation of its constitutional obligations? In other words, had they, or had they not, in the case supposed, a clear constitutional right to reject the law in opposition to the known wishes of the people? We presume that there is no one who will maintain that, apart from any question of propriety or expediency, the legislature in such a case would not have the undoubted constitutional power to refuse to pass the law.
On the other hand, if it be supposed that the act had been finally passed, in opposition to the known wishes of a majority of the people, we presume that no one would deny to the law validity on that account, or insist that the courts, for that reason, would be bound not to enforce it.
In each of these supposed cases, the conduct of'the legislature might be a gross violation of the confidence reposed in the members by their constituents; their conduct may have been unwise and inexpedient in the last degree. But the question *747in each case was a question of constitutional power, and not, whether the legislator is bound by the principles of political morality to conform to the wishes of his constituents.
Another position assumed by counsel, in connection with this question, is, that the people stand in a different relation to a law passed for the purpose of borrowing money for the State, than they do to an ordinary act of legislation. If we understand counsel, they in effect contend, that a law of this character is in the nature of a contract to which the State is a party; and that, before it has been carried into effect, or rights have vested under it, it cannot be repealed or modified by the legislature. Doubtless, such a law, when carried into execution, or when the terms proposed in it are accepted, becomes a contract. Rights acquired under it cannot be impaired by subsequent legislation; but until such is the case, there is no pretence for saying that the law was a contract of the State, and, for that reason, is incapable of being repealed or modified, because the repealing act would be an act impairing the obligation of contracts.
If a law passed to borrow money cannot, before it has been carried into effect, be repealed, or modified, it is certainly not because it is to be regarded as either an executory or executed contract, but because the power to repeal a law of that character has been expressly excepted out of the grant of legislative power in the constitution, or because the peculiar ceremonies to be observed in the passage of such a law, necessarily imply a negation upon the right of appeal.
A municipal law, according to the American theory of governments, is the expression of the legislative will of the State, according to the forms of the constitution. .
In this State, the legislative power is vested in the senate and house of representatives; they are the constituted organs through which, in the enactment of laws, the sovereign will of the State is declared.
For the purpose of ascertaining that will, several methods, having respect to different subjects of legislation, have been prescribed in the constitution.
As in the passage of a law intended to appropriate money *748from the treasury to works of internal improvement, the legislative will must be declared by a majority of two thirds of each house. The same method is observed when it is proposed to pass a bill in opposition to the executive veto. A different method is observed when it is proposed to borrow money on the credit of the State. The legislative will, for that purpose, cannot be declared by one legislature, but the majority in each house of two concurring legislatures, can alone proclaim it.
But where no specific method has been prescribed in the constitution for ascertaining that will, it must be declared, necessarily, by a simple majority of each house. For, as the members of either house are precisely equal, the will of the majority must be taken as the united will of the whole. And such, of necessity, is the method of ascertaining the legislative will in regard to all subjects of legislation, where no specific method has been, prescribed.
A law passed in any of these methods is obligatory, because it is the constitutional expression of the legislative will of the State. Hence, of necessity, a law which has been adopted in • any one of these methods, cannot be more or less valid than a ‘law which has been enacted in conformity with any other of the prescribed forms.
A law, therefore, which has been adopted under the forms prescribed in the 9th section of 7th article, is not of higher dignity, or of greater sanctity, than any law passed according to the ordinary method; for, in either case, the law is but the declaration of the sovereign will of the State.
The power to repeal is as fully and completely embraced in the general grant of legislative authority, as the power to enact laws. This power is vested in the legislative department, unrestricted by any express provision of the constitution. Certainly, it is restricted in some respects by the spirit, or by the general provisions of that instrument. For example, a law could not be repealed if the repeal would work a divestiture of vested rights, or impair the obligation of a contract. But, subject to such limitations, the repealing power must of necessity be as broad and as comprehensive as the power of enactment. This is evident; for a repealing statute is as much an *749expression of the legislative will of the State, as the act was which is repealed.
No specific method has been prescribed in the constitution, according to which a repealing statute should be passed. An act which proposes to repeal a previous law, must, therefore, be adopted, according to the form in which the legislative power is ordinarily exercised. That is, it must be agreed to by a majority in each house of the legislature. It cannot be doubted, that the power to repeal a law passed to pledge the faith of the State, for the purpose of raising a loan of money, before rights have become vested under it, exists in the legislature. And we think it equally certain, that the power to '•repeal such a law must be exercised in the ordinary mode of enacting laws; for if it cannot be exercised in that method, it cannot be exercised in any other, for the plain reason that the constitution has not so declared. The same result would follow in relation to laws passed over the veto of the governor, or to laws passed to appropriate money to works of internal improvements. Laws passed in either of these methods, as well as all laws passed to borrow money on the credit of the State, would remain on the statute book as permanent and unalterable as the constitution itself.
The power to repeal may be greater or more extensive than the power to modify, because a modification may be only a partial repeal; generally, therefore, it is true, that the power to repeal embraces the power to change or modify. But it does not follow, that in cases in which the legislature would unquestionably have the right to unconditionally repeal a law of that character, they would, therefore, posséss the right to modify the law in every particular, and to any extent they might deem expedient. For the power to alter or modify, like the power to repeal, must be limited in the extent to which it may be exercised, by the true intent and spirit of the general provisions of the constitution. Hence, although the legislature possesses the unrestricted power to repeal a law of that character before it is carried into effect, a right cannot be claimed for it so to alter or modify the law as to make the amendatory act a distinct and substantive act of legislation, by which another and a distinct *750pledge of the faith of the State would be effected. This is evident; for by the general intent and spirit of the constitution, it was never designed that the faith of the State for the purpose of raising a loan of money, should be pledged, unless her will, to that effect, should be indicated by the assent of two concurring legislatures.
Having ascertained that it is competent for the legislature to repeal, in toto, an act of the legislature, constitutionally adopted, for the purpose of raising a loan of money on the credit of the State, or for the purpose of pledging the faith of the State for the payment or redemption of a loan or debt, and the extent to which the power °to alter, change, or modify, may be exercised in reference thereto, let us test the unconstitutionality of the supplemental act by the conclusions at which we have arrived.
We have already considered some of the grounds on which it is alleged that the supplement was void, and consequently that the bond in suit was illegal and invalid, having been executed and delivered under the authority thence derived. We have seen that the supplement did not authorize the issuance of State bonds, by which a debt would be imposed upon the State, and that no attempt was made in that act to pledge the faith of the State for the payment of any loan or debt, and that it did not attempt a renewal of the pledge contained in the original act.
By the 1st section of the original act, it was provided, that an institution should be established, under the title of “ the Mississippi Union Bank,” with a capital of fifteen millions five 'hundred thousand dollars, to be raised by means of a loan to be obtained by the Directors of the institution. To aid the bank in the procurement of the capital, the faith of the State was pledged. The pledge is contained in the 5th section, and ’f disconnected or independent of the other provisions of the act, it is absolute and unconditional. In that section it is declared “that in order to facilitate the said Union Bank for the said loan of fifteen millions five hundred thousand dollars, the faith of this State be and is hereby pledged both for the security of the capital and interest,” &c.
It is not contended that the 5th section, which contains this *751pledge, has been repealed, or attempted to be repealed, or altered, or in anywise modified by the enactment of the supplemental act. It is however insisted that provisions of the original act, which prescribed the conditions on which the State pledged her faith, have been repealed or materially modified, whereby the contract, by which the State guaranteed the payment of the bonds, has been materially altered.
The provisions of the act referred to as having been repealed or essentially modified, are contained in the 8th, 11th, 19th, and 31st sections of the original act.
By the 31st section the State was to be entitled to a standing accommodation in the bank of two hundred thousand dollars, on paying the usual rate of interest; under the 19th section the State was entitled to one tenth of the net dividends or profits of the Bank as a bonus; by the 11th section the stockholders were required to pay in cash, ten dollars per share, for each share of their stock, at such time as the directors should require; and by the 8th section, the subscribers were bound to secure the payment “of the capital and interest of said bonds,” by the execution of mortgages satisfactory to the directors, on property to be in all cases equal to their respective stock. These stipulations, it is contended, were the terms on which the State agreed to pledge her faith and issue her bonds to procure the capital of the bank.
It is not only contended that they were the conditions of the pledge, but were in truth and fact intended to be conditions precedent to any liability of the State.
It is unnecessary to comment upon the position, that the provisions of the 11th, 19fch, and 31st sections, were intended to direct the performance of acts, previous to the doings of which the bonds of the State could not legally be issued. For unless such were the intention of the charter, it is manifest that they cannot be regarded as conditions at all, on which the liability of the State would attach, as her obligation would commence so soon as the bonds were legally issued, and it is scarcely necessary to remark that it was contemplated by the legislature, that the bonds should be issued before she could be entitled to receive one tenth of the dividends of the bank, or enjoy her *752standing accommodation, or before the directors might require of the stockholders a payment of ten dollars on each share of their stock.
If the execution of the mortgages by the stockholders, intended to secure the payment of the principal and interest of the bonds, as provided in the 8th section, was a condition upon which alone the bonds could be legally executed and delivered to the bank, then it is evident, that the liability of the State could not attach until that was done. In that case, the execution of the stock mortgages, in the strictest sense, would be a condition precedent.
It is conceded, as contended for, that- upon a just construction of the charter, the stock mortgages were not to be executed until the subscription books were closed, the stock graduated, and the stockholders ascertained. But we have shown that, upon the true construction of the charter, it was intended by the legislature, that bonds might issue so soon as fifty thousand shares were subscribed, and a provisional directory appointed by the governor, and that it was within the intention of the act, that the directors would be appointed before the books for the subscription of the stock to the bank were closed, and, consequently, before it could be ascertained who were the stockholders, and, of necessity, before the stock mortgages could be executed.
The bonds, then, to be issued, were to be in amount equal to the sums subscribed and secured to the satisfaction of the directors by a pledge of real property. That was the condition on which the right of the directors to apply to the governor for a delivery of the bonds, as well as his authority to issue them, depended; hence, it is impossible that the execution of the stock mortgages was the condition, on the performance of which the bonds were to be delivered to the bank; and as the pledge of the faith of the. State would attach, and her obligation be fixed, by a legal delivery of the bonds by the governor to the bank, it follows, as a necessary consequence, that t'he execution of the mortgages required by the 8th section, was not a condition on which the State, by the pledge of her faith, would become bound.
*753The execution of the stock mortgages, then, not being a condition precedent on which the liability of the State depended, it results that they are to be regarded as a security, and in no other light, provided in the charter, by which the State was to be indemnified against her liability on the bonds.
Regarding the mortgages as a security to the State, and not as the condition of her contract, the question arises, whether it was competent for the legislature, in the ordinary method of enacting laws, to repeal the provision of the charter, by which it was provided, or, in other words, to dispense with the security altogether?
If the repeal or discharge of that indemnity would not constitute a distinct and substantive act of the legislature, by which another and distinct pledge of the faith of the State would be made, there is no pretence for saying that the legislature did not possess the unconditional authority, however unwise or inexpedient the exercise of it might have been, to pass an act for that purpose. The simple statement of the proposition is sufficient to show that it is correct; for, undeniably, the right to release any debt, obligation, or liability assumed by any person to the State, or any penalty incurred, is included in the general grant of legislative power in the constitution.
The same principle applies with full force to the alterations made in the 11th section, and the alleged repeal of the provisions of the 19th and 30th sections, which secured to the State one tenth of the net profits of the bank, and a right to a standing loan of two hundred thousand dollars. The repeal of those provisions may have been unwise; it may have been a flagrant abuse of their powers, by the legislature; but with questions of that character it is not our province to deal; our province is to determine whether the authority does or does not exist, and for that purpose alone we look to the constitution.
• It is further contended, that the 1st section of the supplement, which authorizes the State to become a stockholder, has produced a radical change in the character and organization of the corporation. This proposition is based upon the'4th section of the original act, by which it' is declared, “that the *754owners of real estate, situated in the State of Mississippi, and who are citizens thereof, shall be the only persons entitled to subscribe to the stock of the bank.”
In support of this position, it is seriously urged, and gravely maintained, that by the introduction of the State as a stockholder, a new and distinct corporation was established: hence, as the State, by her contract, agreed to deliver a specified number of bonds, for a stated amount, to the Mississippi Union Bank, as constituted by the charter of incorporation, the supplemental act which created a new corporation and required the bonds to be delivered to it, thereby materially and essentially changed the terms of the contract; and in effect created a new pledge for different purposes.
Respect for the learned and ingenious counsel who urge the argument, requires us to notice it.
The 1st section of the supplement has not, it is evident, changed the general structure of the corporation; it has not changed the method in which the capital of the bank was to be procured; it has in no respect altered the purpose to which it was to be applied; nor has it changed the principles upon which its operations were to be conducted.
The contract of the State was with the corporation, as a person created by law, and not with the individual corporators. The pledge was given in order to facilitate the bank, as a corporate body, not the subscribers to the stock, in procuring its capital. The bonds were to be delivered to the bank, in its corporate character, and the bank, in that character, and not the stockholders, were authorized to negotiate them. The distinguishing peculiarity of a1 corporation is, that it is an artificial being or person endowed with perpetual vitality; although the ^individuals who compose it may be constantly changed; although they may be rapidly and entirely changed, yet the corporation in its entire end, maintains its identity and continues its existence. Hence, we cannot conceive how a corporate body, whose identity is in nowise dependent upon the identity of the individuals who compose it, but which consists in the purposes for which it was created; its privileges and capacities as defined by its organic law; a corporation which *755might consist of one hundred and fifty-five thousand corpora-tors, could be changed by the introduction of a single corpo-rator, who, though not a resident citizen of the State, was nevertheless composed of the whole of the citizens of the State. Hence, we are also unable to understand why a delivery of the bonds to the bank, of which the State was a stockholder, for that reason and that reason alone, would not, in a strict technical sense, be a delivery to the bank as established by the original charter.
The argument would doubtless be sound and entirely applicable, if the guarantee of the State had been given to a copart-nership or to any voluntary association of, unincorporated individuals. For example, if the State were to guarantee the payment of a debt, to be incurred, or the performance of a contract to be made by two persons, she would not, by the terms of her agreement, be bound for the separate debt of either, or for a joint contract or debt of either, or both of them, with a third party. But if they constituted a corporate body, and the guarantee had been given them in their corporate character, the rule would be different, for the plain reason, that the introduction of a new corporator, or the change of a former one, would not constitute a change in the parties to the contract.
From the view we take of the questions connected with this branch of the subject, we are compelled to hold, that the supplemental act was not void in consequence of not having been passed in conformity with the directions contained in the 9th section of the 7th article of the constitution.
In the argument at bar, it was contended that the first section repealed or dispensed with the execution of the mortgages provided for in the 1st clause of the 8th section of the' original act, for the amount of the stock subscribed in behalf of the State.
That the security required to be given, constituted an essential condition upon which the faith of the State was pledged. Hence, that it could not be repealed or dispensed with by an act of the legislature passed in the ordinary method of enacting laws.
*756Let it be admitted that the supplement would be unconstitutional if it were intended to effect a partial repeal of the 8th section.
The question arises, whether such in fact was its intent and operation.
The original act and the supplement, it is true, are separate legislative enactments.
But, when they are to be construed for the purpose of enforcing their respective provisions, they must be examined in reference to each other. Being strictly in pari mateo'id, they should be construed as one statute. Plence, upon a familiar rule of construction, we are bound to give to each of the provisions of these two acts their full operation and effect, if they can by any just interpretion be made to harmonizé. For otherwise, the full and entire intentions of the legislature might not be carried into effect.
Applying this principle, the first remark to be made upon the two acts, is, that it was the manifest intention of the legislature to supply ample indemnity to the State against her liability on the bonds, which were to be issued under the provisions of the charter. This careful consideration for the safety of the State, is apparent from many provisions of the charter. By the 7th section it is made the duty of the bank to pay both the interest and the principal of the bonds as they shall severally fall due. By the 8th section, as we have seen, mortgages were to be given by the stockholders to secure the payment of the principal and interest of the same. Hence, the entire assets of the bank, including the mortgaged property of the stockholders, were subjected to the payment of the bonds.
It is, then, evident that, under the provisions of the original charter, the State never contemplated the payment of a dollar, unless the mortgaged property and the entire assets of the bank should prove insufficient to discharge the bonds.
If the supplement has released any part'of that security, and the State has thereby been subjected to loss or danger of loss, we may expect to find that a sufficient inducement, which constituted the motive of the legislature, was offered. Otherwise, *757the action of the legislature, in that respect, would not only be unmeaning but exceedingly unwise.
What, then, was the motive which operated upon the legislature, and which induced them, as it is alleged, to release the security provided in the original act, to the extent of five millions of dollars ? It was certainly not released, in order to obtain the privilege of becoming a stockholder; as it was perfectly competent for the legislature, at the passage of the supplement, no rights then having vested under the charter, to have altered it in any respect which would not have interfered with the essential conditions of the State’s pledged faith. The State might have stipulated in the supplement for a greater proportion of the profits of the bank than the tenth of the dividends reserved in the 19th section, or a sum in specie 'might have been demanded. Hence, the authority to subscribe to the stock, in behalf of the State, was not a privilege conceded by the bank, but a right reserved by the State. Indeed, we may look in vain for an adequate motive on which to base the action of the legislature, unless it should be conceded, that the provision of the first section, by which the State was made a stockholder, is essentially and necessarily repugnant to the provisions by which the stockholders were bound to secure the payment of the whole of the bonds. In other words, that the State could not subscribe to the stock, without thereby releasing the-individual subscribers from the obligation to secure the payment of the whole of the bonds. In that event, it might be supposed that the State would prefer to forego the advantages-she held under the original charter, that is, complete security against her liability, and a right to one tenth of the profits of the bank, with the right to a standing accommodation, in- order to become a stockholder with all the risks and liabilities attaching to her as such. *
A marked feature in the original act is the care manifested to guard the State against the consequences of the possible-failure of the bank. The entire security of the State was- a paramount consideration with the legislature.
The provisions, therefore, which were intended to effect that object, are important and material. We are hence bound to *758hold them unrepealed or substantially altered by the adoption of the supplement, unless its directions are manifestly inconsistent with and repugnant to those provisions.
In what respect, then, does the first section of the supplement’ conflict with the provisions of the 8th section of the original act ? The supplement directs that five millions of the stock shall be subscribed in behalf of the State, and paid for out of the proceeds of the bonds which were to be issued under the original act.
Could not that be done without impairing to the smallest extent, the security held against her liability ? Surely this will not be denied.
If the legislature had directed that one third of the net profits of the bank should be paid to the State, in consideration of the loan of her credit to the corporation, instead of the one tenth, as provided in the original act, there would have been no doubt on the subject, that the security of the State had not been repealed to any extent whatever; and this was substantially the object and effect of the supplement.
The capital was not to be contributed by the stockholders. It was to be procured by means of a loan to be effected on the credit of the State.
The State, in fact, was to furnish the whole of the capital. The bank was bound to pay the bonds, both principal and interest, as they should fall due. The money borrowed by the State, or the capital of the bank, was therefore pledged for that purpose. The bank could only pay the bonds by means of the profits of its banking operations, or by an application of the capital itself. The stockholder, by virtue of his subscription and the execution of the required mortgage, acquired a right to his proportion of the dividends, which were to be paid oufiunder the provisions of the charter, before the bonds were paid off and discharged. He was also to be entitled to this proportion of the surplus, if any should remain, after that was done and the affairs of the bank closed. The State, as a stockholder, in these respects, was entitled to the same rights, and nothing more. Hence, the effect of the- first section of the supplement was to secure to the State the dividends or profits *759which might be made upon the proportion of the capital of the bank which her stock represented; which would be a little less than one third of the whole.
It seems, therefore, scarcely to be doubted, that the adoption of the first section of the supplement was not a constructive repeal of any of the provisions of the 8th section.
The question, then, like all questions which arise in the interpretation of the statutes, is one purely of legislative intention.
The presumption is never entertained, that the legislature, in the enactment of any law, intentionally transcended its constitutional authority. Hence the rule, in construing statutes, that an interpretation will never be adopted, which will make an act conflict with the constitution, if it can be made to-bear a different one, which is in harmony with its provisions.
The objection to the provisions of the first section is based exclusively upon the supposition that it is unconstitutional; and it is alleged to be unconstitutional because it repeals in part the 3d section of the original act.
Applying the rule above laid down, there is no escape from the conclusion, that the legislature did not intend to repeal or modify the provisions of that section, as it has not expressly declared its intention to do so; and as we can put a construction upon the two acts which will make their respective provisions in reference to this subject harmonize with each other and with the constitution.
The act as it was passed on the 5th of February, 1838, was deemed by the legislature to be imperfect in several of its minor details and some of its important provisions.
The objection mainly urged'was, that the law was inexpedient and unjust as it regarded the State. The law proposed to lend the credit of the State to a banking corporation, to the extent of fifteen and a half millions of dollars, by which means it was expected the stockholders in the bank would be enabled to realize great profits. Of necessity, comparatively but few of the citizens would or could become participants in the enterprise. The entire consideration to be received by the State, *760was one tenth of the net profits of the bank, and a right to a credit of two hundred thousand dollars in the bank, upon the payment of the usual rate of interest. The consideration secured by the act was deemed inadequate. It was thought to be greatly disproportioned to the very extraordinary grant of privileges made to the corporation, by which it would be enabled to wield a capital, which in fact belonged to the whole State, of fifteen and a half millions of dollars. This was the evil which mainly engaged the consideration of the legislature, .and which it was intended to be remedied by the passage of ■the supplemental act. The legislature designed to secure a just and adequate consideration for the grant of her credit by ■the State.
In adjusting the provisions of the supplemental act, the security of the State was not overlooked. This is shown by the journals of the house of representatives, in which the bill was introduced. A resolution was passed instructing a committee of the house to inquire and report whether the bill for the incorporation of the bank could be constitutionally amended; if so, how far, and whether it would not be expedient so to amend the same, as to convert the said bank into .an institution owned and entirely controlled by the State of Mississippi. House Journal, 1838, 59.
The said committee, whose report was received and agreed to, reported, that, in their opinion, it was competent for the legislature to amend the details of the Union Bank charter, but as to that portion of the said charter which related to the .subscribers or stockholders “ being, in their opinion, the primary condition on which the faith of the State was to be pledged, they had no power to change the same, unless it should be again submitted to the people.” Ib. 117.
Taking it, then, as certain, that it was the opinion of one branch of the legislature, that they had not the power to alter the provision in relation to the subscribers and stockholders, because they considered it the condition upon which the faith of the State was to be pledged, the inference is a very strong one, that they did not, by an act passed at the same session at which the report of the committee was made and agreed to, *761intend, not having expressly so declared, -to repeal or alter that very condition.
Assuming, then, that it was not the intention of the legislature to part with any security which had been provided, we are bound to put such an interpretation upon the supplemental act, if it can be done consistent with the recognized rales of con; struction, which will most fully carry into effect the intentions of the legislature.
It will not be doubted, that in the adoption of the supplement, the principal object was to secure a more just and adequate compensation for the grant of the State’s credit, than was provided in the original act. But this object, the main purpose of the act, would be entirely defeated if it should be held, that the provisions of the 8th section were repealed to the extent contended for in the argument.
That such a result would follow, is not to be doubted, unless it can be shown that the privilege of becoming a stockholder, to the amount of five millions of dollars, was the price or consideration for the loan of the State’s credit, which the legislature designed to effect by the adoption of the supplement. But this right to subscribe to the stock can in nowise be considered any part of the consideration which the legislature intended to secure, for the plain and obvious reason, that it was not a concession by the corporation, or the private stockholders to the State, but a simple reservation of an unquestionable right.
Taking it, then, as certain, that the right to take stock in the bank, in behalf of the State, was no part of the consideration upon which the State had agreed to lend her credit to the corporation, upon the supposition that the stockholders were released from the obligation to secure more than ten millions and a half of the bonds, leaving the State unprotected to the full amount of her stock, or five millions of dollars, what would the State gain by the supplemental act? We answer, nothing not one cent.
On the contraiy, she would be greatly the loser by the operation. For, having parted with the whole of the privileges and emoluments secured in the 19th and 31st sections of the *762original charter, if the provisions of the 8th section were repealed so as to leave five millions of the bonds unprotected, by the mortgages therein provided, the State would stand in no other attitude than a private stockholder, being subject to all loss or risk of loss, which might occur by the loss or ■destruction of the capital.
We do not believe that such was the intention of the legislature, or that such a construction can legitimately be put upon the supplemental act; which would bring it in conflict with the 8th section of the original act. We hold, therefore, that the provisions of the latter section have in no respect been changed.
Plaving examined the several grounds on which it was alleged, that the supplemental act was void, we have come to the conclusion that it was not void, but hold it to be a valid legislative enactment.
In the case of Campbell et al. v. The Union Bank, 6 How. (Miss.) R. 625, the question of the constitutionality of the ¡supplemental act was a subject of adjudication. The court in 'that case adopted the same conclusion to which we have been ■led by a careful examination of the subject. The decision in that case has been attacked, and its authority questioned, on the ground, that the question decided was not properly in the -case or before the court; but, we think, without sufficient reason. The question was raised, and elaborately discussed by ■counsel, and although the decision was not made to turn upon the question of the validity of the supplement, it was in the <case and was directly decided by the court.
The language employed in delivering the opinion, was “direct and explicit in regard to the question we have considered.
It leaves no doubt, that it was the well defined opinion of ■this court, at that time, that the supplement was constitutional.
The opinion of the court was delivered by the learned chief justice, who said: “It appears that the original charter, in which this provision (the 5th section) is contained, was passed in accordance with the provision of the constitution. The *763supplemental act makes no alteration whatever in regard to this section. It changes in some respects the mere details of the original charter, in the mode of carrying the corporation into successful operation, and authorizes the governor to subscribe for the stock on the part of the State. Tbe object of the pledge is not changed; on the contrary, the supplemental act was passed in aid of the original design.”
Concurring with the opinion of the court in that case, we might have been justified in resting our decision on the validity of the supplemental act upon the authority of that case.
We might thus have avoided the labored investigation we have gone into; but the respect which we felt to be due to the learned and ingenious arguments of counsel, and the peculiar prominence which has been given the question, made it proper that we should, with diligence, examine the various grounds taken in regard to the unconstitutionality of the supplemental act.
The conclusion to which we have come, in regard to the validity of that act, dispenses with the necessity of deciding whether the bond in suit was issued under it, or under the ■original act, as in either case, so far as the mere fact of the execution or delivery was concerned, it would not be void.
The next question presented for our examination is, whether the bond is not void, as to the State, because it was executed and delivered to the bank before the mortgages were given as required by the 8th section of the original act.
The facts in reference to this question, as we have seen, are admitted by the respective counsel. It is agreed, that the bonds which were issued by the governor, including the bond in suit, and amounting in the aggregate to five millions of dollars, •were executed and delivered to the bank, before “the mortgages required to be given in the 8th and 30th sections of the original charter had been executed or delivered to said bank.”
The 30th section does not provide for the execution of mortgages. In the argument it was insisted, that the security alluded to in that section was the security which was provided in the 8th section. The latter section, as we have seen, pro*764vided, that, to secure the payment of the principal and interest of the bonds, the subscribers should be bound to give mortgage, to the satisfaction of the directors, on property, to be in all cases equal to the amount of their respective stock.
The argument on this question, proceeded on the supposition that the execution of these mortgages was a condition precedent to the execution and delivery of the bonds. Upon that ground it was contended, .that the State could not be made liable on any bond, although issued by the governor in the discharge of authority derived from the act, unless, in fact, the mortgages had been previously executed.
We have above decided, that the liability of the'State, under the operation of the act, would attach, so soon or whenever the bonds were legally executed to the bank, and that the execution of the mortgages was neither a condition precedent to the pledge of the faith of the State, nor the condition' on which the State bonds were to be executed and delivered.
According to the facts agreed upon, the bond in suit was issued by the governor, under the seal of the State, for and on account of the Mississippi Union Bank, and it was transferred by the bank, and passed into the hand of the complainant, as assignee, for a valuable consideration.
These facts are sufficient to establish a right, primd facie, on the part of the complainant to recover. And applying the principles which we have settled in the cause, there is nothing in the record which could warrant this court in holding that the bond in suit was either irregularly issued under a valid authority, or issued without any authority and in violation of law.
But were it conceded, that upon a just construction of the charter, it was not the intention of the legislature that the bonds should be issued unless the mortgages were previously executed, the same conclusion would follow.
The same principles which govern in matters of contract between private individuals, apply to all contracts to which a State has become a party. This rule is founded on the presumption, that sovereign States, who are supposed to be always ready to perform their undertakings, and to discharge their just *765obligations, could desire no better rules by which to ascertain their own obligation and rights, than those according to which they dispense justice to their citizens.
We have above quoted the provisions of the charter, which prescribed the duties and defined the authority of the governor and the directors, in regard to the execution and sale of the bonds.
Upon the supposition that the execution of the mortgages was the condition on which the bonds were to be delivered to the bank, there would be no room to doubt that the directors were vested with a discretionary authority, in regard to the execution and sufficiency of the mortgages required to be given by the stockholders. The 26th section declares, that the board of directors shall be the judges of the sufficiency.of the mortgages offered for stock and loans, and shall have power to reject the same, if not sufficient; they may also require other security, and in default thereof, reduce the shares of such defaulters to the amount sufficiently secured.
Further directions are given in the 30th section. The direct- _ ors were authorized to apply to the governor for the bonds, who was thereupon to issue them from time to time, in amount proportioned to the sums subscribed and secured to their satisfaction.
These provisions vested the directors with ample discretionary authority, in regard to the execution of the mortgages. They might reduce the shares of the subscribers, and might even reject the subscription altogether, if in their opinion the property offered was insufficient or the title insecure. In the express language of the act, they were made the judges of the sufficiency of the mortgages. The powers conferred upon them in respect to the mortgages, were intended to be used expressly for the benefit of the State. Their authority extended to the determination of the important facts involving the rights of the subscribers to the stock, as well as the interest of the State, and their determination was irreversible. Hence, on the hypothesis that the execution of the mortgages was the condition on which the execution of the bonds and the liability of the State depended, the directors were doubtless officers, or special *766agents of the State, vested with ample discretionary authority to determine whether that condition was performed agreeably to the directions of the charter. And if such was their character and authority upon well recognized principles, their determination in regard to the matters committed to them, was binding on the State.
That the directors exercised the authority vested in them by the law, and that they did determine that the condition on which the bonds were to issue had been performed, was established in the estimation of the law, by the facts, that application was made to the governor for the bonds, and upon such application, that they were issued by him. The facts necessarily embraced in the determination of the directors, that is, the legal execution of the bonds required by the 8 th section, are held, in law and equity, as conclusively proved, so far as the rights of third parties arising from that action of the directors are concerned. The only question which can arise in reference to the determination of the directors is, whether, under the act, they had the power to decide that the stock subscribed was properly secured; and, having determined that fact, whether they had a right to apply to the governor for the bonds, and whether the holders of the bonds came fraudulently into possession of them. In other words, the questions are, power in the directors, and fraud in the holders of the bonds. Hence, the admission that the mortgages were not executed previous to the issuance of the bonds, can have no effect upon the right of the complainant to relief against the State.
The principles which govern the case under consideration are distinctly laid down by the supreme court of the United States, in the case of The United States v. Arrondo et al., 6 Peters, 691. The court in that case say, that “it is a universal principle, that where power or jurisdiction is delegated to any public officer or tribunal over a subject-matter, and its exercise is confided to his or their discretion, the- acts so done are binding and valid, as to the subject-matter, and individuals will not be disturbed collaterally, for any thing done in the exercise of that discretion, within the power and authority conferred. The only questions which can arise between an individual claiming a right under *767the acts done, and the public or any other person denying their validity, are power in the officer and fraud in the party. All other questions are settled by the decision made, or the act done by the tribunal or officer, judicial, legislative, executive, or special, unless an appeal is provided for; or otherwise, revision by some supervisory tribunal is provided by law.”
According to the doctrines here recognized, whether we regard the directors as occupying an official relation, or as special legislative agents, vested with authority to decide whether the stock was sufficiently secured agreeably to the terms of the charter, it is clear that their decision made upon the subject committed to them, is obligatory upon the State. And it matters not how erroneous that decision may be, or how fraudulent, unless the party claiming a right under it is affected with a knowledge of the fraud, it is not the less conclusive of the fact that the security was given.
Conceding, then, that it was the expressed intention of the legislature, that the bonds should not issue unless the mortgages were previously executed, a bond fide transferree of the bonds would be perfectly shielded by the action of the directors, and the admission on the part of the State that the decision of the directors was correct, implied by the delivery of the bonds to the bank.
We will here close our remarks upon this question, which have already been extended too far, as the point we have been discussing is not necessarily involved in the decision of the cause.
The bonds bear date the 5th June, 1838. They were sold on the 18th August for five millions of dollars, the aggregate amount, in the city of Philadelphia. The proceeds were to be paid in five instalments; the four first in New Orleans, and the last at Natchez. The bonds bore interest from date, at the rate of five per cent, per annum.
Including the interest which would accrue up to the time at which the respective instalments would become due, the bonds were sold for less than their nominal value. As they were sold for less than their nominal value, it is said they were sold in violation of the 9th section of the supplementary act, which *768provided that the bonds should not be sold under their par value.
Hence, it is alleged that the contract by which they were transferred to the purchasers was illegal and void, and, consequently, conveyed no title to the assignee.
This objection was not urged in the argument by the attorney-general; and I allude to it now, more for the purpose of referring to the opinion of my colleague, Judge Yerger, and to express my concurrence in the conclusion at which he has arrived, than for the purpose of a particular examination myself.
The claim in controversy is entirely legal in its character; but as it is a demand against the State, it could only be enforced in the court of chancery.
That court, in some cases, under certain circumstances, may adjudicate upon the legal rights of parties before it. But in such cases there must exist incidents of an equitable character, which in the first instance gave to that court jurisdiction ; and having obtained jurisdiction, a court of chancery will, upon a fixed principle, decide all the questions in the case, whether they are legal or equitable. But in all cases, that court administers justice according to the peculiar forms and principles of a court of equity. In cases like the one at bar, in which the State is a party, its jurisdiction depends upon the statute alone. But we presume in designating the court of chancery as the court in which suits against the State, whether for the assertion of equitable or legal demands, must be brought, it was not intended by the legislature fo alter the principles upon which the law is administered in a court of equity. Hence, all of the rights of the parties to the present suit, whether equitable or legal, will be protected and enforced.
It is a maxim of a court of equity, that he who seeks equity must do equity.
If we shall determine, that for aught that appears upon the record, the bond in suit was not void, but, on the contrary, was a valid and binding obligation, when delivered into the hands of the bank, against the State, it will follow, that although the latter might not be bound in law or equity to pay more upon *769the bond than was received by the bank, under no circumstances would an innocent assignee for a valuable consideration, be entitled to receive less than the amount actually received by the bank.
Hence, if it were conceded, that in consequence of an illegality in the sale, an action at law could not be maintained upon the bond, the question before the chancellor was not whether the complainant had a right to relief, but simply as to the amount of the decree.
We are of opinion, that it does not appear from the facts of the case that the bonds were sold for less than their par value; consequently, that the sale was neither illegal nor void.
I deem it unnecessary to comment upon the grounds upon which I base my opinion on this point, as the question will be fully examined in the concurring opinion of my colleague-, Judge Yerger.
Plaving examined the questions which we believe to be material to the decision of the case before us, with the care and diligence which their importance demand, and being satisfied that the decree of the chancellor was correct, it becomes omr duty to affirm it.