Page:Federal Reporter, 1st Series, Volume 2.djvu/556

 MEEOHANTS NAT. BANK, LITTLE ROCK, V. PULASKI CQ. 549 �Such an agreement was not beyond the powers of the defend- ant corporation, as insisted by counsel for the defence. It would be an unwarranted enlargement of the doctrine of ultra vires, to hold that a municipal corporation owing an admit- ted, valid debt, and having the power to pay or compromise the same, may not bind itself by the terms of such a compro- mise agreement as that set out in the bill, and shown by the exhibits, in this case. What is that agreement ? It is that the complainant shall remit 25 per cent, of its demand, and take new bonds for the balance, upon the condition that, if the new bonds are not met, interest and principal, as they ma- ture, "their acceptance shall not discharge or release said county from any portion of its original indebtedness," and that the acceptance of the new bonds "is not to be a waiver by the holders thereof of any of the provisions of the act under which the surrendered bonds were issued." In other words, it was plainly a conditional Bettlement, to be void if not com- plied with by the county. By complying with it the county can save 25 per cent, of the amount of the original debt. By default, it clearly becomes liable to pay the whole amount of the original debt, and also to levy ail such taxes as were authorized by law,at the time the original bonds were issued, to raise f unds for their payment. �It is well settled that where bonds of a county or munici- pality are issued under authority of law and payable out of the proceeds of taxation, the law providing for such taxation enters into and becomes part of the contract, and cannot be Bubsequently repealed by the legislature or changed by con- stitutional amendment so as to deprive the bond holder of his remedy. At the time of the contract of compromise, therefore, the complainant had a perfect right to demand the levy for the payment of his bonds of whatever taxes wera authorized by law for that purpose when such bonds were issued, even if the same should exceed the limit prescribed by the constitution of 1874. It is also well settled that a change in the form of the contract, or the substitution of one evidence of debt for another, does not ordinarily change the rights of parties. ����