made transferable only on the books of some officer of the corporation or State. Such securities are known as registered bonds or stocks, and are not negotiable. Of this character are the rentes of France.1

§ 135. Conditions Preceding the Issue, before Delivery.—Where the authority is given expressly, it is often made dependent on the vote of the tax-payers or others of the district, and where it is implied from some other power, as to subscribe to stock of a railroad, or to borrow money, the subscription to the stock or the borrowing of the money is often made dependent on the vote of the district, or upon the action of a grand jury or some other body. In all such cases the authority granted is a conditional one, the conditions of which must be performed, and until they are performed, no authority to issue the bonds exists; for, as we have seen heretofore, there is no inherent power to tax in the subdivisions of the State. Where such power exists it is delegated, and must be exercised as delegated, and if power is given to tax for the payment of bonds which are to be issued on certain conditions, it cannot be exercised for bonds issued before the performance of the conditions. The authority must be strictly pursued.

Questions as to the performance of the conditions of issue arise in applications by the persons entitled to receive the bonds, to compel the local officers to issue them, or in proceedings by tax-payers to restrain their issue by injunction, certiorari, or some statutory proceeding in which the tax-payers have the right to be heard.

The laws of 1869, in New York, allowed a petition of the taxpayers of a county, representing a majority of the property appearing and assessed on the last preceding assessment or tax roll of the county, to be presented to the county judge, asking the issue of bonds of the county to be invested in the stock "of such railroad company of this State as may be named" in the petition. A petition which fails to show that the railroad, in aid of which the bonds are issued, is in the State, is defective. Giving the name of the railroad corporation in the petition, without stating whether it be foreign or domestic, is not a compliance with such provision of the statute; and when the act was amended so as to require the petition to be presented by a majority of the tax-payers of the town, "not including those taxed for dogs or highway tax only," the petition must then show that it is presented by a majority of the tax-payers excluding the class named.3

1 Attorney General v. Dimond, 1 Cromp. & Jer. 356; Attorney General v. Hope, 1 Cromp. M. & R. 530: s. c. 8 Bligh, 44.

2 People ex rel. Rogers v. Spencer, 55 N. Y. 1.

3 People ex rel. Green v. Smith et al. 55 N. Y. 135.

Under this act the county judge takes evidence as to the facts set forth in the petition, and if satisfied that they are established, makes an adjudication that the bonds of the county be issued. If, on a writ of certiorari directed to such judge, he does not return the evidence taken before him to prove the identity of the petitioners, and their signatures to the petition presented to him, but simply returns that it was proven that each name subscribed to the petition was written by or upon the request of the person so named, and that each name appeared upon the list or roll as a tax-payer-without stating how many signed personally, or how many names were affixed by others—such a return is not sufficient. The power conferred upon the tax-payer must be exercised by him in person. It calls for the exercise of discretion, affecting the rights of property of the petitioner and others, and is not a power to be delegated. As the party himself cannot exercise the power orally, but must sign a written petition, so no one can sign for him under a verbal authority. It is true one person may use the hand of another to sign for him, but he must be present, and the signature made in his presence. A written authority to sign may be given, but it should accompany and be annexed to the petition.1 In these proceedings the facts must be established by common-law evidence. The tax-payers must themselves assent. The power conferred on them, like the elective franchise, is personal, and not to be exercised by an agent, nor to be delegated. Not only must the signatures to the petition be proved, but there must be evidence to personally identify the petitioners with those whose names are on the roll or assessment list. If both names are identical, this would be prima facie evidence that the person is the same; but if only initials are given, additional evidence of identity is necessary. The assent of the tax-payers is a jurisdictional fact, and unless that be established by evidence, there is no authority to bind the county or town. Where the statute required the written assent of two-thirds of the tax-payers to be obtained by the supervisor and the railroad commissioners, and to be filed in the clerk's office of the county, with an affidavit of the supervisor or commissioners, that the persons whose written assents were thereto attached comprised two-thirds of all the resident tax-payers of the town on the assessment roll next previous to the date thereof, it was held that this affidavit was only evidence that the persons signing comprised two-thirds of those on the roll, and it was not evidence of the signatures of the tax-payers, which must be established by other evidence.3

1 People ex rel. Allen v. Knowles et al. 47 N. Y. 415.

2 People ex rel. Haines v. Smith, 45 N. Y. 772.

3 Starin v. Town of Genoa, 23 N. Y. 441; People ex rel. Fiedler v. Mead, 24 N. Y. 114.

Under another statute, the affidavit made by the assessors of the town as to the assent of the majority of the tax-payers to the bonding of the town, was declared to be proof of such consent. This affidavit was considered in the nature of a judgment determining the fact. upon which the issue of the bonds was dependent. The assessors would be compelled by mandamus to act and determine the existence of such fact, but their discretion will not be controlled. They must act for themselves, and not in accordance with the views of the court. issuing the mandamus.1 Those who sign such written assents may withdraw at any time before the assessors have made their affidavit, or if it be a case of petition to the county judge, before the final submission of the case. If their names are not stricken off, and it appears that there is not a majority of tax-payers excluding them, the issue of the bonds of the town will be prohibited.2

Where the board of directors of a railroad were authorized to construct branches in certain counties, when, in their judgment, it would promote the interests of the corporation, and towns of counties. through which the branches run were authorized to issue their bonds. in aid of the road, the construction of the road through the county is a condition precedent to the exercise of the power to issue the bonds.8

Fraud in the election which is made a condition of the issue, or in any of the proceedings of the officers to whom is intrusted the duty of issuing the bonds, or of ascertaining when the conditions of issue have been fulfilled, will be ground for preventing the execution or delivery of the bonds; and where the power is vested in a grand jury, or a court is empowered to determine the amount to be subscribed, they must exercise the power and then determine the amount definitely. An order or resolution by such body that the proper officers subscribe an amount not exceeding a certain sum is not an exercise of the power, it is a delegation of it, and void.5

The perversion of the trust will prevent the issue of bonds. If bonds authorized for the purpose of establishing a high school are applied to erecting a building to be leased to a private person, it is such perversion. The purpose of the latter is not a public purpose; and if application is made before the issue of the bonds, such action

1 People ex rel. Yawger v. Allen, 52 N. Y. 538.

People ex rel. Irwin v. Sawyer, 52 N. Y. 296; Ib. 538.

3 People ex rel. Akin v. Morgan et al. 55 N. Y. 587.

People v. Supervisors, 27 Cal. 655; Butler v. Dunham, 27 Ill. 474.

5 State v. Saline Co. 45 Mo. 242; Mercer County v. Railroad, 27 Penn. St. 389.

will be enjoined.' When the subscription in aid of a railroad is conditioned on a certain amount of private subscription, the officers authorized to subscribe and issue bonds of a county will be enjoined from acting until the private subscription is made in accordance with the act.2

Prior to the issue of the bonds and their delivery, those who claim to have such bonds issued must show a strict compliance with all the prerequisites of the statute. Nothing is presumed; the authority is a delegated one, and nothing will be implied; and while the Supreme Court of the United States, when the bonds have passed into the hands of bona fide holders for value, have gone to a great length in protecting such persons, such decisions do not apply to a direct proceeding to inquire into the execution of the power before the rights of third parties have attached.s

§ 136. Bonds in the Hands of a bona fide Holder for Value— Doctrine of the Supreme Court of the United States.-When municipal bonds have been issued, and have passed into the hands of bona fide holders for value, the question as to the validity of such bonds in suits against the corporations issuing them is entirely different from the question as to such validity before their issue, when the rights of third parties are not concerned. While this is conceded, the courts are not harmonious in their decisions on this subject, and even in the same court the views prevailing are received with vigorous dissents, nor is each court always consistent with itself as to the principles on which its decisions are founded. In the Supreme Court of the United States the cases which sustain the validity of these bonds, notwithstanding irregularities in their issue arising from a noncompliance with the conditions of issue, arrange themselves in three classes.

In the first class are those cases in which certain officers are authorized to determine when the conditions are performed, or if not expressly authorized, such authority is inferred from the statute, and they have determined, either in express terms or by their action in issuing the bonds, and reciting on the face of them that they are issued in pursuance of the power given by a statute of a specified date, and that the conditions have been performed. In such cases the holder of the bonds need only look to the statute to see if the power is conferred. If the power be conferred, he has a right to

1 Sherlock v. Winnetka, 68 Ill. 530.

Clay v. County, 4 Bush (Ky.) 154.

3 Com'rs of Knox Co. v. Aspinwall, 21 How. 544, 545; Judge Dillon, in Southern Law Review, Oct. 1876, p. 455.

presume that the officers have determined correctly, and that all the conditions have been performed. The corporation, in a suit to enforce the payment of the bonds, will not be allowed to show as a matter of defense any irregularities in the execution of the power; they are concluded by the determination of their agents. In the earliest case on the subject, the commissioners of a county were authorized to subscribe to the stock of a railroad, and issue county bonds in payment for the stock. The condition on which the power was to be exercised was that a majority of the voters of the county at a special election should approve the subscription. The election was held, the commissioners ordered the subscription and issued the bonds, which recited on their face that they were issued in payment of the subscription ordered by the commissioners in pursuance of the act of assembly of January 15th, 1849. The commissioners were a corporate body possessing large powers as to the public and fiscal concerns of the county. When suit was brought on the coupons, the defense was interposed that the requirements of the statute as to the notice of the election had not been complied with, and the conditions not having been performed on which the grant of the power was made, the power had not vested. The court admitted the principle that when the authority to issue bonds is made contingent upon the result of an election had upon due notice, if the notice is defective, there is no authority to issue. But the question was, who is to determine whether there has been a due election? As the commissioners are only to act after such election, that fact must be determined by some authority, and where none is expressly provided by the statute, the commissioners are fit and competent depositaries of such a trust, and their determination is conclusive in favor of innocent holders of the bonds. The decision was sustained by reference to an English case where the principle was announced as to the directors of a bank, that the power being vested in them to borrow money, upon a resolution, those who dealt with them finding from the deed of settlement that the power existed, would have a right to infer that the resolution had been passed authorizing the borrowing.2

Where the common council of a city are authorized to subscribe for stock in aid of a railroad, and issue bonds, on the petition of threefourths of the legal voters of the city, they are to determine when the three-fourths have petitioned, and their determination is conclusive. In Bissell v. City of Jeffersonville the bonds recited the fact that

1 Com'rs of Knox Co. v. Aspinwall, 21 How. 544.

2 Royal British Bank v. Torquand, 6 Ellis & Bl. 245.