railroad facilities, and the object of the subscription was to aid the building of the proposed line near the town. The railroad has been built, but no part of the subscription has been paid except the first installment of interest, which was paid. The bill of exceptions states as follows: "The court found

of the town of Dyersburg (payable in ten years from date of issuance, and bearing seven per cent. interest, payable semi-annually from date of issuance) to the capital stock of the Paducah & Memphis Railroad Company; and whereas, it is not convenient for me to go to Memphis now and attend to said business in person: I have therefore nominated, and do hereby appoint and constitute, Isaac F. Child, of Dyersburg, Tenn., my true and lawful agent, proxy, and attorney in fact to do and perform whatever acts and things it may be proper and necessary for me to do to effect and perfect said subscription, on the terms contained in my proclamation dated June 5, 1872, hereby ratifying and confirming whatever my said attorney shall lawfully do in the premises as if I did the same myself. C. P. CLARK, Mayor of Dyersburg, Tennessee.

"July 8, 1872.

"State of Tennessee, Dyer County: Personally appeared before me, W. M. Watkins, clerk of the county court of said county, C. P. Clark, mayor of the town of Dyersburg, Tenn., who acknowledged the execution of the within instrument for the purposes therein contained. I further certify that I am personally acquainted with said C. P. Clark.

1872.

"Witness my hand and seal of the Dyer county court, affixed at Dyersburg, July 10, W. M. WATKINS, Clerk. "By ZACK. WATKINS, D. C."

[Seal.] On motion of D. M. Henning, a resolution in words and figures as follows was adopted: "Resolved, that the president of this company be authorized and instructed to call upon the town of Dyersburg for the bonds subscribed to the capital stock of the Paducah & Memphis Railroad Company, amounting to $50,000, as soon as the conditions of said subscription upon the part of the county are complied with. "

John Overton, Jr., offered the following resolution, viz. :

"Whereas, an obligation in the words and figures following has been executed and delivered to this company, to-wit:

"We, the undersigned, citizens of the county of Dyer and state of Tennessee, for and in consideration that the president and directors of the Paducah & Memphis Railroad Company have and do agree to build and locate their said road to and by the town of Dyersburg, Dyer county, Tenn., and to locate and build a depot thereon within onehalf mile of the court-house in said town, hereby guaranty a subscription to the capital stock of said company of one hundred thousand dollars in the following manner, that is to say: We guaranty that there will be voted, by the citizens of the corporation of Dyersburg, the sum of fifty thousand dollars as a subscription to the capital stock of said company, and that said subscription will be paid in ten-year coupon bonds of said corporation, bearing interest at the rate of 7 per centum per annum, payable semi-annually, and that said bonds will be issued in accordance with the terms of a proclamation made by the mayor of said town, dated June 5, 1872, and published in the Dyer County Progress and Neal's State Gazette, newspapers published in the town of Dyersburg, and that said bonds will be prepared as soon as practicable after being voted, and will be delivered to said company in accordance with the terms of said proclamation. We further agree that there will be subscribed to the capital stock of said Paducah & Memphis Railroad Company the sum of fifty thousand dollars of private individual subscription, by good and solvent subscribers, upon condition that said road is built and has a depot located within one-half mile of the court-house at Dyersburg, and payable as follows: Twenty-five per cent. of the amounts of said private subscription payable when the said road is constructed to the northern or southern line of said county, and work thereon is commenced in Dyer county, the balance subject to calls of ten per cent. every thirty days. This latter amount of fifty thousand dollars we guaranty will be subscribed and delivered to said company on or before the 10th day of July, 1872. "Witness our hands this June 20, 1872.

"T. E. Richardson, Tom W. Neal, Jno. S. Kiffington, H. L. Fowlky, F. G. Sampson, C. I. Coker, W. M. Watkins, W. E. De Berry, P. E. Wilson, B. C. Burgis, W. C. Doyle, Wat. Sampson, S. R. Latta, I. F. Child, A. M. Stevens, C. P. Clark, W. P. Sugg, E. G. Sugg, J. E. Roberts, E. S. Thurmond, R. R. Watson, John L. Webb, Alf. Stevens, Jno. Sawyer.'

"Therefore resolved, that this company accepts the said obligation and its stipulations as the consideration for building and locating the road to and by the town of Dyersburg, and for building a depot thereon within half a mile of the court-house in Dyersburg; and, in reliance of said obligation, the board agrees to so build and locate the road and so to locate the depot.

"2. That the $52,525 of private subscriptions this day tendered and received in pursuance of that portion of the above obligation which provides for the same is accepted upon the guaranty of its solvency by the above-named obligees."

Which said resolution, having been seconded, was upon motion, adopted.

as facts (1) that an ordinance was regularly and legally adopted June 5, 1872, by the board of mayor and aldermen of the town of Dyersburg, ordering an election to be held by the qualified voters of said town, to determine whether the said town should subscribe for $50,000 of the capital stock of the Paducah & Memphis Railroad Company, to be paid for by said town by issuing to said railroad company its negotiable bonds to that amount, bearing interest at 7 per cent., and payable at 10 years from date; that on July 6, 1872, said proposition was voted on by the qualified voters of said town, after 30 days' notice of such election had been duly published in the newspapers of said town, when said proposition was carried by a vote of 126 for the subscription to two against it; that, at a meeting of the board of mayor and aldermen of said town held on July 6, 1872, the returns of said election were duly and properly canvassed by said board, which, by ordinance then duly passed, declared the subscription on the terms of the ordinance of June 5, 1872, was properly and legally carried, in said election, by the vote as before stated, and instructed the mayor to subscribe said sum of $50,000 to the stock of the said railroad company, upon the terms and conditions of said ordinance; that, acting pursuant to that authority, the mayor of said town, on May 10, 1873, subscribed for and in the name of said town said sum to the capital stock of said company, received certificate of stock therefor, issued and delivered the coupon bonds of said town for said amount to said railroad company, including those here in this suit; that, when said coupon bonds were so executed, issued, and delivered by said mayor to said railroad company, the said company had laid the track of said road to the northern and southern line of Dyer county, and commenced work on said railway within the limits of said county of Dyer; that plaintiff bought the bonds and coupons sued on herein in due course of trade, for full value, before maturity, and without any knowledge or notice of any defect, infirmity, equity, or condition against the liability of said town, except so far as appears on the face of said bonds; that, before the bringing of this suit, the said railroad had been constructed and was being operated its entire length from Paducah, Ky., to Memphis, Tenn., and was constructed to said town of Dyersburg, Tenn., and had a depot located within half a mile of the court-house in said town,-the same having been done by the Chesapeake, Ohio & Southwestern R. R. Co. on or about the day of as set forth in the agreed statement of facts filed herein. The court ruled that no legislative authority whatever existed for the issuance by said defendant of the bonds and coupons sued on in this case; to which finding and ruling plaintiff then and there duly excepted. The plaintiff requested the court to rule that, under the facts found, the defendant was authorized to execute, issue, and deliver to said railroad company the said bonds, which request was refused by the court, to which plaintiff then and there duly excepted. The court thereupon rendered judgment in favor of defendant, supporting its judgment by reading the same opinion filed in the case of Green v. Town of Dyersburg, 2 Flip. 477, and directing, by consent of counsel, that the said opinion be filed as its opinion in this case, and sent up with the transcript of the record, as required by the rules of the supreme court."

It is insisted by the plaintiff in error that there was express legislative authority for the issue of these bonds. The first statute relied on is the act of the legislature of Tennessee approved January 23, 1871, (chapter 50, Acts 1870-71,) entitled "An act to enforce article 2, § 29, of the constitution, to authorize the several counties and incorporated towns in this state to impose taxes for county and corporation purposes." This statute has been fully considered by us in the case of Kelley v. Town of Milan, ante, 1101, (just dedecided,) and shown to have conferred no such authority. The act approved December 16, 1871, (chapter 122, Acts 1871,) entitled "An act to legalize and authorize subscription by incorporated cities and towns for the benefit of railroad companies created by law," applies only to cases where an incorporated

town or city had subscribed to the capital stock of a railroad company prior to the passage of that act. The subscription in the present case was not made until May 10, 1873, the election having been held on July 6, 1872; and the entire act relates only to the validity and the legality of the subscription to stock, and in no manner touches the question of the issue of bonds.

It is also contended that express authority to issue the bonds in question was granted by section 20 of an act passed February 26, 1869, (chapter 59, Acts 1868-69,) which section is as follows: "Sec. 20. Be it further enacted, that it shall be lawful for the town of Dyersburg to make a corporate subscription to the capital stock of the Mississippi River Railroad Company, not to exceed fifty thousand dollars in amount, payable, in not exceeding four years, by annual assessments levied by the board of trustees of said town, and collected as other moneys are, and bonds of the town may be issued in anticipation of such collections, collected for town purposes: provided, however, that, before the board of trustees or aldermen of said town shall make any such subscription, the question shall have been first submitted to the qualified voters of said town, and shall have received a majority of the votes cast therefor after twenty days' notice of the time and place of holding said election, and of the amount proposed to be subscribed." Reliance is also placed upon section 18 of an act passed February 8, 1870, (chapter 55, Acts 1869-70,) which section is as follows: "Sec. 18. Be it further enacted, that stock which has been subscribed, or may hereafter be subscribed, by any county, city, or incorporation, to said railroad companies may be payable in six annual payments; and it shall be lawful for county courts, and the corporate authorities of any city or town making such subscription, to issue short bonds, bearing interest at the rate of six per cent. per annum, to said railroad companies, in anticipation of the collection of annual levies, if thereby the construction of the roads can be facilitated." As to the act of 1869, the subscription to the stock, not to exceed $50,000, was made payable, by section 20, in not exceeding four years, by annual assessments of taxes. The express limitation was to the four years, but authority was given to issue the bonds of the town in anticipation of the collection of taxes. Of course, under this provision the bonds were to be paid by the four annual collections of the taxes levied by the four annual assessments. That was the fund provided for their payment. No authority was given for the issue of bonds other than such as were to be paid, one-fourth in one year, one-fourth in two years, one-fourth in three years, and one-fourth in four years; and no authority was given for the issue of any bond payable in ten years. As to section 18 of the act of 1870, it gave no power to the town of Dyersburg, beyond that conferred by the act of 1869, to subscribe for stock or to issue bonds. The only possible effect it could have as to that town was to modify section 20 of the act of 1869 so as to make the subscription to stock payable in six annual payments, instead of four annual payments, and to authorize the issue of bonds in anticipation of the collection of the annual tax levies, the bonds to be payable in not exceeding six annual installments, instead of four; but each set of bonds to be still payable by an annual tax levy, and to fall due annually for six years, at the time of the maturity of the levy for each year. That these statutory provisions did not authorize the issue of bonds payable in 10 years is entirely clear. Pulaski v. Gilmore, decided by the supreme court of Tennessee, and published in 21 Fed. Rep. 870; Milan v. Railroad Co., 11 Lea, 329. The cases of Railroad Co. v. County Court, 1 Sneed, 683, and State v. Anderson Co., 8 Baxt. 249, do not sustain the position of the plaintiff in error. While, in each of those cases, the statute provided that not more than one-third of the amount of the subscription should be collected in any one year, it did not prohibit its distribution into more numerous installments, each of less amount. Here the acts. in question prohibited any extension of time beyond four or six years, and the vote of the town distinctly varied the terms fixed by the statute.

It is also contended by the plaintiff in error that the grant of power to subscribe for the stock carried with it the implied authority to issue negotiable bonds therefor. None of the cases cited by the plaintiff in error, decided outside of the state of Tennessee, establish such doctrine. The cases cited in Tennessee, Bank v. Jacobs, 6 Humph. 515; Nichol v. Mayor, 9 Humph. 252; Adams v. Railroad Co., 2 Cold. 645; Moss v. Academy, 7 Heisk. 283; State v. Anderson Co., 8 Baxt. 249; and Williams v. Railroad Co., 9 Baxt. 488,do not maintain the doctrine contended for. In the case in 6 Humph. it was held that a railroad company, a private corporation, could contract a debt for a corporate purpose, and give a negotiable promissory note therefor. In the case in 9 Humph. there was express legislative authority to subscribe for stock and issue bonds; and the point decided was that a subscription by a municipality to railroad stock was a county or corporation purpose, within the provision of the constitution empowering the legislature to authorize counties and towns to impose taxes for county and corporation purposes. The case in 2 Cold. was considered by this court in Nashville v. Ray, 19 Wall. 468, 479, and it was there said that the doctrines propounded in the opinion in 2 Cold., with reference to the implied powers of municipal corporations, were not necessary to the decision of that case. In the case in 7 Heisk. the question was as to the power of a private corporation to borrow money. In the case in 8 Baxt. there was express authority to issue the bonds, and the question of implied power did not arise, as was said by this court in Claiborne Co. v. Brooks, 111 U S. 400, 411, 4 Sup. Ct. Rep. 489. In the case in 9 Baxt. the question now under consideration does not appear to have been raised or discussed; the only question involved being whether the original subscription to the stock of the railroad company was valid. On the contrary the decision of the supreme court of Tennessee, in the cases of Pulaski v. Gilmore, and Milan v. Railroad Co., above cited, was distinctly that express legislative authority to issue bonds like those involved in the present suit was necessary. In harmony with this view is the fact of the numerous instances in which the legislature of Tennessee, after granting authority to municipalities to subscribe for stock in railroad companies, has also expressly granted the power to issue bonds therefor. The views of this court on the subject of the implied power to issue municipal bonds were fully expressed in the cases of Wells v. Supervisors, 102 U. S. 625, and Claiborne Co. v. Brooks, 111 U. S. 400, 4 Sup. Ct. Rep. 489. In the first of those cases it was held that the mere authority given to a municipality to subscribe for stock in a railroad company did not carry with it the implied power to issue bonds therefor, especially where, as in the present case, special provisions were made for paying the subscription by taxation. Our views as to the proper construction of the general laws of Tennessee (Code Tenn. §§ 1142-1161) have been fully expressed in the case of Kelley v. Town of Milan, ante, 1101, (just decided.)

It is further contended, for the plaintiff in error, that this court should, in any event, hold the town liable as upon non-negotiable bonds or notes, treating the issue of the negotiable bonds as an excess of authority only, and not invalidating the loan, with interest, as agreed upon. It is a sufficient answer to this proposition to say that this suit is brought solely for a recovery upon the bonds and coupons, and no question growing out of the liability of the town for the subscription to the stock can be inquired into in this suit. The judgment of the circuit court is affirmed.

GLEASON v. DISTRICT OF COLUMBIA.
(April 23, 1888.)

DISTRICT OF COLUMBIA CERTIFICATES OF BOARD OF PUBLIC WORKS-ERRONEOUS PAY

MENT.

Plaintiff indorsed in blank certificates of the board of public works of the Dis trict of Columbia, and delivered them to another to secure a debt. Subsequently,

hearing that such other had absconded, and knowing that the certificates were negotiable, he gave oral notice to the president and treasurer of the board, and protested against their payment. The board being afterwards abolished, a commission which succeeded it, after giving public notice, examined all such claims, including these certificates, which were presented by other persons, and allowed; plaintiff making no appearance. Held, that he is guilty of such negligence in indorsing over in blank the certificates merely as security, and in giving imperfect notice on discovering the fraud, that he cannot recover from the District.

Appeal from the Court of Claims.

V. B. Edwards and Eppa Hunton, for appellant. Atty. Gen. Garland, Asst. Atty. Gen. Howard, and F. P. Dewees, for appellee.

MILLER, J. This is an appeal from the court of claims by the claimant, Andrew Gleason, who brought suit in that court against the District of Columbia, founding his demand upon certain certificates of the board of public works which were delivered to him, showing an indebtedness due on account of work done for the defendant, the District of Columbia. It appears that Gleason borrowed money from one Rudolph Blumenburgh, to whom he gave his note for $30,000, due in 60 days, on the 13th of January, 1874, depositing as collateral security the certificates already mentioned, which he indorsed in blank. Before the maturity of that note Blumenburgh absconded. These certificates afterwards turned up, were presented to the board of audit for adjudication, and were allowed by it to the full amount expressed on their face; certificates of the board of audit being issued for them to the parties presenting them, while the original certificates of the board of public works were canceled. The holders of these certificates of the board of audit afterwards received bonds of the District of Columbia, called "3.65 Bonds," in exchange therefor. The court of claims finds that, when Gleason discovered that Blumenburgh had absconded with his certificates of the board of public works, he saw Magruder, treasurer of that board, and notified him that Blumenburgh had these certificates, protested against the payment of them, and also notified Mr. Shepherd, who was president of the board of public works. It is a fair inference from this finding that this notification was given in a conversation, and was not in writing. The opinion of the court of claims speaks of it as a verbal notification. On the 20th of June, 1874, congress passed an act (18 U. S. St. at Large, 116) abolishing the board of public works, and creating a commission to exercise all the power and authority theretofore lawfully vested in the governor or board of public works of the District, with certain limitations. By the sixth section of that act the first and second comptrollers of the treasury of the United States were constituted a board of audit "to examine and audit for settlement," among other things, "the debt purporting to be evidenced and ascertained by certificates of the auditor of the board of public works." In this class of debts were, of course, included the certificates issued to Gleason, and by him indorsed to Blumenburgh. The character of this board and its functions are commented on in the case of Laughlin v. District of Columbia, 116 U. S. 485, 6 Sup. Ct. Rep. 472. On the 13th day of October, 1874, four months after the passage of this bill, after the creation of the board of audit, and after the powers of government in the District of Columbia had been transferred to the commissioners, Gleason filed his bill in equity in the supreme court of the District against the commissioners, the board of audit, the comptroller of the District of Columbia, and the sinking fund commissioners of the District, alleging that he was the owner of the certificates now the subject of controversy. A restraining order was made enjoining the issuing of certificates, and Blumenburgh from receiving them, but on the 5th day of November afterwards this restraining order was, at the instance of the members of the board of audit, and on general demurrer, dissolved so far as it affected the members of that board. There is no finding, nor any evidence in the record, as to what became of that suit, so far as it related to the com