3 Shan. Cas. 115 | Tenn. | 1880
delivered tbe opinion of tbe court:
In 1814, tbe directors and commissioners of tbe Memphis & Knoxville Railroad Company petitioned tbe board of mayor and aldermen of tbe town of Pulaski, for a subscription of forty thousand dollars to their capital stock, on such terms and limitations as tbe board might see proper. Tbe question was submitted to a vote of tbe people, and approved by tbe requisite majority. Tbe proposition involved tbe idea of issuing bonds having twenty years to run, each of tbe denomination of five hundred dollars, bearing eight per cent, interest, stock to be issued to tbe corporation equivalent in amount to tbe bonds thus proposed to be issued. As part of tbe proposition, it was agreed that these bonds of five hundred dollars each were to' be issued to pay for tbe expenses incident to a survey of tbe line of the road through Giles county. These bonds were issued, and came into tbe bands of tbe parties plaintiffs in this case before due, and are tbe basis of the present suit.
'We may assume, for tbe purposes of this opinion, that the proceedings, if not perfectly regular, have nothing in them that can fix any right to urge it against the present holders. They stand as innocent purchasers for value. Tbe only defense that can be made available against the liability sought to be enforced, is a want of authority in tbe corporation to issue tbe bonds in question. This is a defense at all times available in such a case, unless it may be tbe doctrine of estoppel in pais may be an exception allowed in certain cases.
The question then, is, did tbe corporaton, under the constitution and laws of tbe state, have tbe power to issue these bonds? If so>, plaintiff was entitled to bis recovery on tbe coupons; if not, defendant should have bad a verdict. It is the case of a subscription to tbe stock of a contemplated railroad. Tbe fact that these particular bonds
We need not examine, discuss, or decide the question whether the addenda gives any additional or different power to the legislature from that conferred in the first clause of the section quoted — that it, to levy taxes for county and corporation purposes, respectively. It suffices that it was decided many years since that a railroad was a county and corporation purpose, and taxes might be levied under authority from the legislature, to be used in aid of such enterprises. It is not improper to say that while this is all now' settled in our state as an original question, the writer of this opinion did not [then] and does not now concur in its correctness. The question, however, is whether, under
Taxation and payment of all liabilities directly from this means is the normal work of action by such bodies. Bonds on time are not incident to this, and can only be issued' when authority is conferred by lave The old act of 1852, Code, sec. 1142 [Shannon’s Code, sec. 1542a], and- othér provisions of that article, is the basis in our general law of such action as may be taken by counties and corporations in subscribing for stock in railroads running to or contiguous to such towns. It is too clear for argument that'no such authority is found in these sections. The act of January, 1871 [Acts 1870-71, ch. 50], intended to regulate elections, under the constitution, in the first section, simply embodies the authority contained in the constitution as to counties and towns levying taxes.for county and corporation purposes, prescribing in the subsections the conditions and regulations by which the power shall be executed. But there is nothing in this act that can possibly be construed, on any fair principle of construction, to authorize the issuance of these bonds in payment of a subscription of stock in a railroad company. ."What was in
