CHAPTER II.

THE STATUS OF THE PAYOR TO MUNICIPAL BONDS.

IN examining the status of the payor to Municipal Bonds issued in the United States, there are two questions to be considered:

1st. The age in which we live.

2d. The origin of municipalities - their power and liabilities.

The result of scientific research, improvement in mechanical arts, the rapid growth of commerce, and the effect of rapid transit, over the globe, are apparent and felt by all. The world is grasped in the hand of progress, and with that progress new duties are imposed upon the people, and the government, and new demands are made to meet the wants of society.

The government of the patriarchs, in the primitive pastoral state, with a few families depending on each other for society, would be of but little force in the nineteenth century.

The wants and fears of the people in every age have tended to produce the governments, for that period, and the governments have been required to conform to those wants and fears.

Taxation in the early formation of society could be arranged by tithes and mites, while the right of eminent domain or questions thereunder were of but little force to occupy the attention or serious thought of mankind. These questions are the growth of the age, in which the people, of the nineteenth century must act, and there is

probably, no subject that has commanded the talent of the bar, and the erudition of the jurist, to a greater extent, or fills more space in the reports of the courts, than that now under consideration.

Precedents in law have had force in all ages, but that force has been changed, with the new demands of society, and gradually have these demands, yielded, to the lawmaking power, or been incorporated in the common law, as the religion of nations and society, thus, regulating their relative positions and duties towards each other.

Usage and custom are readily adopted because of their advantage and necessity. They spring from the people, and are demanded and acquiesced in, for the benefit of society.

The rule seems to be, that custom and usage, which have been universally and notoriously prevalent, with the progress of the age, have been adopted or embodied so as to become the law of the land.

The principle of taxation, we may say, is coexistent with society; but the application, and the mode, and purpose, have been adapted with the demands growing out of the wants of the people keeping pace with the growth of commerce, and the increase of population.

Were the population to remain the same, human transactions the same, the wants of the people the same, the laws would soon become universal and fixed; legislatures need not convene, no new laws need be passed, nor need any one further consider the wants and fears of society. We would, in a legal sense, have arrived at the millennium in individual responsibility to society and of government.

This position will never be attained by the human race. We can readily conceive, however, that there is but one true government, and that, the government which brings to the people, the real enjoyment, by their united efforts,

all that nature, science, and art, have produced to satisfy the wants and quiet the fears, of the citizen or subject, so far as the governmental powers may be exercised, - and that must be reflective from the people. We are to bear in mind, also, that there is as much progress in the science of law, as in any other branch of science; that it keeps pace with the growth of commercial and other interests of society.

The demands of each age are apparent from the history of its laws. Each age furnishes features as distinct and different as are the countenances of individuals. The river Nile is the river Nile forever, yet never the same water. A constant change is going on; and it requires a constant study and exercise of the mind to determine the legal phenomena.

Governments of the people are like the camera, reflecting different shades, by means of the rays of light. Utility and adaptation, become the power, giving new questions for the law-making power, the lawyer, and the jurist.

It is in this view, that we must consider the law of Municipal Bonds. Their demand and use have grown with the improvement of the age, and they have become in America fixed securities, equalling in amount the securities of the nation and all the States combined.

And it may be remarked that the period, wherein Municipal Bonds have been before the courts, will date with the early progress, in the history, of internal improvement throughout the United States, and that the adjudications have kept pace, with the successful development, of the real wealth of the nation.

No age has ever been marked, with an identity so beneficial to education, the improvement in scientific discovery, the growth of commerce, the development of agricultural and mineral resources, as that in which the law of Municipal Bonds has taken place in the legal

adjudications; and no age has furnished, more equal, advantages, to all in acquiring the means for the support and enjoyment of life. It has been one gradual step in developing mind and matter.

The rapid strides made by the decisions of the highest judicial tribunals of the United States, upon the question of Municipal Bonds, will rank with any age in the progress of a true government for the benefit of the people.

This progress will date from the division of the power of the government, where it reflects directly from the people. It was this spirit and necessity that organized society into boroughs and towns and then to cities.

Municipalities had their origin in the formation of society from the necessity of the division of power; and in all governments except the United States they are dependencies, or receive grants and franchises when they partake of the character of a private corporation. In England, municipal corporations are broadly distinguished from towns and counties in the United States. There is no uniformity in the powers and duties of English municipal corporations. They are not created and established under any general public law, but the powers and duties of each municipality depend on its own individual grant or prescription. Their corporate franchises are held by the Crown, by the tenure of performing the conditions upon which they have been granted, and are liable to forfeiture for breach of the conditions. They answer certain public purposes, as private corporations do, which have public duties to perform, and in some instances exercise political rights; but they bear much less resemblance to towns and counties in the United States than to private corporations, which are charged with the performance of public duties; and for this reason the English authorities are but remotely applicable to our law on Municipal Bonds.

Towns and counties do not hold their powers under any grant, from the government, or upon any condition express or implied. In fact, they give no assent in their corporate capacity, to the laws which impose their public duties or fix their territorial limits. They are created by the legislative authority, with uniform powers and duties, defined and varied from time to time, as the wisdom of the law-making power may deem best. They are part of the legislative power itself, with agents to perform the functions of government; and in the performance of their duties prescribed by law, they have no civil liability. They are in every State of the Union declared to be corporations, and consequently may sue and be sued in reference to all their legal rights and liabilities. But declaring them to be corporations does not confer upon them other powers, or subject them to other duties than those which are conferred and imposed either by express provision of some statute, or are implied from the general character and design of such public corporations.

They are agencies, to perfect more readily and directly the power that the government should exercise over the territorial limits for which the agencies are created; and we may attribute the division of such powers to the dif.ficulty in adjusting questions arising under an organization where the sovereign power is omnipotent, where "the king cannot be sued" and can commit no

error.

Our Government is a constitutional government, springing from the people, and the power resting with the people, they having rights which permit them to be heard in court on every question.

What is properly termed the English Constitution is certain principles, in the light of which, the government has been organized, and which, according to the most