Page:Henry Osborn Taylor, A Treatise on the Law of Private Corporations (5th ed, 1905).djvu/324

 § 332.] THE LAW OF PRIVATE CORPORATIONS. [CHAP. VII. by the officers of the municipal corporation transmitted to him must be the indispensable foundation of his jurisdiction, without which he cannot lawfully act; and as to bonds issued as were these now in suit, under previous statutes, the action of the auditor is itself but the preliminary proceeding, of which con- firmation by the subsequent record of the officers issuing them is essential to its efficacy as a registration. If these officers refuse to recognize the registry of the auditor, whether right- fully or wrongfully, the holder loses no rights. He has the bonds as he acquired them, and may test the liability of the corporation by judicial proceedings. If, on the other hand, the statute is construed to allow him, b} T a proceeding before the auditor, conclusively to fix the liability of the municipal corporation, without notice and without a hearing, certainly, in respect to bonds previously issued, it would be open to the gravest objection on constitutional grounds, for, if a law cannot impair the obligation of a contract, neither can it create one, nor, by a mere fiat, take from a party an existing and meri- torious defence." x Fourthly : recitals will not estop the county from showing the invalidity of the bonds on grounds not properly covered by them. Thus, a recital in a municipal bond that it was " authorized by the following styled acts," giving their titles and dates, does not estop the municipality from showing that the issue was not authorized by a two-thirds vote, as required bv the state constitution. 2 In another case 3 the bonds recited that they were " issued by the board of school directors by au- thority of an election of voters of said school district, held on the thirty-first day of July, 1869, in conformity with the pro- 1 Bissell v. Spring Valley Town- ship, 110 U. S. 162, 173. Compare Lewis v. Commissioners, 105 U. S. 730. When the constitution or a statute of a state requires as essential to the validity of municipal bonds that they shall be registered by the secretary and auditor of state, who shall also certify on them the fact that they have been issued according to law, yet does not give any conclusive effect to such registration or certificate, the 304 municipality is not concluded by the certificate from denying the facts certified to. Dixon County v. Field, 111 U. S. 83; see, also, Crow i>. Ox- ford, 119 U. S. 215. Compare Hoff v. Jasper County, 110 U. S. 53; Cairo d. Zane, 149 U. S. 122. 2 Carroll County v. Smith, 111 U. S. 550. Compare § 329 and authori- ties cited in the last note to it. 3 School District v. Stone, 106 U. S. 183. J