Page:Henry Osborn Taylor, A Treatise on the Law of Private Corporations (5th ed, 1905).djvu/312

 § 321.] THE LAW OF PRIVATE CORPORATIONS. [CHAP. VH. To constitute a " subscription " by a county to stock in a railroad company it is not necessary that there be an actual subscribing in the books of the company. If a county passes a resolution declaring a subscription made, which the company accepts, notifying the county : and the county delivers its bonds in payment, accepts shares of stock, votes as a shareholder, and levies a tax to pay the interest on its bonds, it will be estopped, as against 'dbonajide holder of the bonds, from denying its sub- scription ; assuming that it had power to subscribe. And the county will not be released by a subsequent alteration in the organization or purposes of the railroad company, unless the alteration is fundamental, and, in addition, is not provided for or contemplated either by the charter of the company or the gen- eral laws of the state. 1 As Chief Justice Waite said, giving the opinion of the Federal Supreme Court in Bates County v. Win- ters : " An actual manual subscription on the books of a rail- road company is not indispensably necessary to bind a munici- pality as a subscriber to the capital stock. If the body or ageney having authority to make such subscription passes an ordinance or a resolution to the effect that it does thereby, in the name and on the behalf of the municipality, subscribe a specified amount of stock, and presents a copy of that ordinance or resolution to the company for acceptance as a subscription, and the company does in fact accept, and notifies the munici- pality, or its proper agent, to that effect, the contract of sub- scription is complete, and binds the parties according to its terms." 3 § 321. State bonds, as well as municipal bonds, issued in ex- r, .., cess of a constitutional limitation, are void. 3 Accord- Constitu- ' tionai limi- inffly, when a state constitution declares that no city tations. or other municipal corporation shall become indebted confers no rights; it imposes no duties; it affords no protection; it creates no office; it is, in legal con- templation, as inoperative as though it had never been passed." 1 Nugent «. Supervisors, 19 Wall. 241. That the municipality subse- quently returns to the railroad com- pany the stock for which the munic- ipal bonds were issued, will not 292 invalidate the bonds. Cairo v. Zane, 149 U. S. 122. - 112 TJ. S. 325, 327. Compare Atchison Board v. De Kay, 148 U. S. 591. 3 Williams v. Louisiana, 103 U. S. G37. Where a county court issues bonds in excess of the amount au- thorized by the statute, the over- issue is void. The bonds delivered