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by the law as it was judicially construed at the time of issuance of the bond.

9. Counties184-Bonds issued by county of Tennessee for benefit of drainage district not obligations of county.

Bonds issued by a county of Tennessee under Tennessee Drainage Act (Laws 1909, c. · 185 [Shannon's Code Tenn. §8 3871a73871a170]), for the benefit of a drainage district named therein, and which recite that they are issued pursuant to said act and are payable solely out of the proceeds of the special assessment for benefits levied on the lands in said district, are not general obligations of the county, nor did the officials executing the same have any power to make them such by recitals therein or otherwise, and a purchaser of the bonds is chargeable with notice of the provisions of the statute and that the assessments made for their payment are by its terms liens only on the lands against which they are levied. 10. Counties223-Evidence that county records do not show election authorizing issuance of bonds, and that they were issued under special statute for benefit of drainage district, held competent.

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In a suit to hold a county liable on bonds issued by it, testimony of a county official is competent that the records of the county do not show that an election was held authorizing the issuance of the bonds, which under the statute was essential to make them obligations of the county, as also evidence that they were issued by officers of the county under a special statute for the benefit of a drainage district.

In Equity. Suit by the First National Bank of Columbus, Ohio, against Obion County, Tenn., and others. Decree for defendant County, and for complainant against the other defendants.

G. W. L. Smith, of Brewton, Ala., and Anderson, Rothrock & Carroll, of Jackson, Tenn., for plaintiff.

Pierce & Fry, W. M. Miles, and H. H. Lannom, all of Union City, Tenn., and Taylor & Adams, of Trenton, Tenn., for defendants.

ROSS, District Judge. The plaintiff brought this bill in equity to recover on certain bonds called the bonds of Obion River drainage district No. 2, issued by certain officials of Obion county, Tenn. The amount sought to be recovered is the sum of $11,643.74 with interest. The total issue of such bonds held by plaintiff is the sum of $62,229 covering a period of time from 1913 to 1932.

Plaintiff is a duly organized national bank of Columbus, Ohio, and the particular defendants sued are: (1) Obion county, Tenn.; (2) the county court of said county, vested with power to create and govern said drainage district; (3) the county judge of Obion county, as chairman of the county

court or governing body thereof; (4) the trustee of Obion county; (5) the board of directors of Obion River drainage district No. 2 of Obion county; (6) several individuals sued as the delinquent taxpayers as the owners of lands within the drainage district mentioned.

The bill contains the necessary allegations to show jurisdiction in this court and alleges in brief that there was created in Obion county, Tenn., a drainage district under the style of Obion River drainage district No. 2 in the year 1913; that bonds were issued by Obion county, Tenn., to the total amount as stated of $62,229, which went into the hands of plaintiff as a bona fide holder for value; that at the time of the filing of the bill the bonds maturing in the years 1921 and 1922, with interest coupons attached, amounted to the sum sued for. It is further alleged that the assessments on the lands within said drainage district for the years 1919, 1920, and 1921 were delinquent in the total sum of $12,856.56, upon which it is claimed plaintiff has a lien for the payment of the amount sued for; that said drainage district was regularly established under the laws of Tennessee, embraced within its bounds 4,030 acres; that the bonds were issued by Obion county by its proper officials; and that the duty rests upon the designated authorities of Obion county to collect the assessments against said lands and apply the same to the liquidation of the bonds issued for the construction of said drainage district.

By the prayer of the bill it is sought to have a decree against all the defendants, to have the amount of the decree declared a lien upon the lands within said drainage district and certain funds in the hands of the trustee collected as the amounts paid in by the owners of lands within the district, to have the amount held by the trustee applied on the judgment, and to have a decree against Obion county for the amount of the bonds issued with interest thereon and attorney's fees. A decree is further sought against each individual landowner for his pro rata share of the bonds with interest thereon and attorneys' fees and the costs of this proceeding, and against all purchasers of any of said lands, their heirs or assigns, for any and all other assessments which have been made, and for general relief.

Answers were filed by Obion county, the county officials, and certain of the individuals sued as such. In so far as it is necessary to here state, issues were presented denying any liability on the part of the

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county or the individual county officials and certain of the individuals sued. The creation and construction of the district is admitted, and it is further admitted that the district lies wholly within Obion county. The jurisdiction of this court is denied as to the right of the plaintiff to sue the individuals made defendants to the bill, and certain of the other defendants; but it is admitted that certain of the assessments claimed by plaintiff are delinquent and the bonds sued on are unpaid. However, the individuals answering as well as the officials deny the right of any individual recovery as to them respectively.

The matter is presented upon the pleadings and exhibits thereto and a stipulation of counsel filed in the case, wherein it is agreed in substance that the matters to be considered shall be the pleadings of the respective parties, the bonds sued on, the affidavit of G. W. L. Smith, counsel for plaintiff, the letter of the trustee of Obion county showing that he has in his hands $2,595.20, collected as assessments against the lands, which sum should be paid to plaintiff, a list of the delinquent taxpayers in said district, the drainage laws of Tennessee, and the agreement as to what would be the testimony of Geo. R. Kenney, former county judge of Obion county, and F. J. Smith, the attorney acting in the creation and organization of said drainage district with the exceptions of plaintiff to this testimony. There is further presented the draft of an order proposed for entry in the case agreed to in part by counsel representing plaintiff and counsel for Obion county. While this proposed decree is binding upon no one, it may be considered as the respective admissions of the parties agreeing thereto to the extent of such agreements. The respective contentions of the parties have been ably presented by oral arguments made and briefs filed in the case.

[1] The question of the jurisdiction of this court may be disposed of without comment, for it is clear that plaintiff had a right to come into this court to determine the question of its right to recover on the bonds in the first instance, and inasmuch as the court has jurisdiction for that purpose, all matters incident to the proceedings and necessary to a determination of the rights of the parties or to secure such rights follow as a matter of law, as has been often decided.

to have applied thereon the funds collected from assessments against the lands within the drainage district and now in the hands of the trustee. In so far as judgments are sought against the individual owners of lands, plaintiff's right is limited to a judgment to the extent only of the assessments against the lands of that individual within the drainage district, and such judgment can be enforced against no other property of the individual than such land. That is to say, the individual landowner is liable only to the extent of the value of the land within the district, as it is specifically provided by statute that no other or further liability exists. Acts of Legislature of Tennessee of 1909, c. 185, §§ 24, 33, 34.

It seems to be conceded that the drainage district is a failure; that the canal which was dug for the purpose of draining the lands embraced within the district is inadequate and has failed to ac complish the objects sought. It appears that many of the owners of land within the district have abandoned their lands rather than pay the taxes or assessments imposed thereon, and that others agree that the lands may be sold for such assessments. It appears further from the statements of counsel that several of the various tracts are delinquent in the matter of state and county taxes, and that the lands embraced within the district are not worth the amount of the bonds issued. Therefore the principalcontention in this case, and really that upon which plaintiff most earnestly insists, is as to whether there exists a right to a judgment against Obion county. In other words, are the bonds sued on the obligation of Obion county, Tenn., or is the plaintiff limited to the lands embraced within the drainage district as security or as the property out of which collection must be enforced? Whether or not the county of Obion is liable depends upon whether the county had authority to issue such bonds. Plaintiff insists that at the time the bonds were issued ample authority existed under the statutes of Tennessee to warrant the county in placing these bonds upon the market as the obligations of Obion county for the payment of which the entire resources of the county stood pledged. The contention of the county is that it had authority to issue bonds as it did through its proper officers, but that for the payment of such bonds plaintiff must look to the lands embraced within the drainage district, for the con-、 struction of which they were issued.

The right of plaintiff to a judgment on the bonds in question against Obion River drainage district No. 2 is unquestioned and [2-5] The right of a county in Tennessee in fact conceded, as is the right of plaintiff to issue negotiable interest-bearing bonds or

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warrants must be found within the Constitution and statutes of the state. In the absence of such authority, no right whatsoever exists whereby a county can bind itself by time certificates, bonds, or warrants, nor has the county court or any county authority, in the absence of a statute expressly conferring such authority, the power to issue negotiable bonds of the county for any purpose whatsoever. This has been often determined and has been the settled law of Tennessee almost from the time of the adoption of the Constitution of the state in 1870. Colburn v. Railroad, 94 Tenn. 43, 49, 50, 28 S. W. 298; Burnett v. Maloney, 97 Tenn. 715, 37 S. W. 689, 34 L. R. A. 541; Richardson v. Marshall County, 100 Tenn. 349, 45 S. W. 440; Weil v. Newbern, 126 Tenn. 263, 148 S. W. 680, Ann. Cas. 1913E, 25. And the power to issue bonds and incur extraordinary debts can spring from no other source than the Constitution and laws of the state, and in Tennessee such powers are strictly construed. Pulaski v. Gilmore, 3 Shan. Cas. 115; Milan v. Railroad, 79 Tenn. (11 Lea) 334; Johnson City v. Railroad, 100 Tenn. 138, 44 S. W. 670; Burnett v. Maloney, supra; Richardson v. Marshall County, supra. Nor has a county a right to vary the bonds authorized by the statute. Burnett v. Maloney, supra. And bonds issued by a county where no legislative authority for their issuance exists are void and nonenforceable regardless of their recitations. Richardson v. Marshall County, supra. Nor does any authority exist in a county by any act on its part to ratify a void action. Wallace v. Tipton County, 3 Shan. Cas. 542; Marsh v. Fulton County, 77 U. S. 673, 683, 684, 19 L. Ed. 1040; Daviess County v. Dickinson, 117 U. S. 657, 6 S. Ct. 897, 29 L. Ed. 1026; Norton v. Shelby County, 118 U. S. 425, 453, 454, 6 S. Ct. 1121, 30 L. Ed. 178; Railway & Navigation Co. v. Hooper, 160 U. S. 514, 524, 16 S. Ct. 379, 40 L. Ed. 515; Scott Co. v. Thresher Co. (C. C. A.) 288 F. 739, 749.

[6] It seems clear and well settled that if any authority exists for the issuance of a bond on the part of a county or municipality and a bond is in fact issued which by its recitations purports to have been issued by virtue of such authority, such county or municipality is bound by the recitations in the bond and estopped to deny its liability thereon as against a bona fide holder for value. Mercer County v. Hackett, 68 U. S. 83, 17 L. Ed. 548; Kenicott v. Wayne County, 83 U. S. 452, 466, 21 L. Ed. 319; Coloma v. Eaves, 92 U. S. 484, 23 L. Ed. 579; Moultre County v. Bank, 92 U. S. 631, 23

L. Ed. 631; Marcy v. Oswego, 92 U. S. 637, 23 L. Ed. 748; Daviess County v. Huidekoper, 98 U. S. 98, 25 L. Ed. 112; Orleans v. Platt, 99 U. S. 676, 25 L. Ed. 404; Anthony v. Jasper County, 101 U. S. 693, 25 L. Ed. 1005; Buchanan v. Litchfield, 102 U. S. 287, 291, 26 L. Ed. 138; Wells v. Pontotoc County, 102 U. S. 625, 26 L. Ed. 122; Bonham v. Needles, 103 U. S. 648, 651, 26 L. Ed. 451; School Dist. v. Stone, 106 U. S. 183, 1 S. Ct. 84, 27 L. Ed. 90; Bank v. Porter, 110 U. S. 608, 616, 4 S. Ct. 254, 28 L. Ed. 258; Dixon County v. Field, 111 U. S. 83, 4 S. Ct. 315, 28 L. Ed. 360; Grenada County v. Brogden, 112 U. S. 267, 5 S. Ct. 125, 28 L. Ed. 704; Merchants' Bank v. Bergen County, 115 U. S. 392, 6 S. Ct. 88, 29 L. Ed. 430.

It is equally well established that, as above stated, where no authority exists for the issuance of such an obligation, no recitation in the bond or subsequent act of the county or municipality can bind the county or municipality, even though the bonds may go into the hands of a bona fide holder.

It was said in Anthony v. County of Jasper, 101 U. S. at page 697:

"Dealers in municipal bonds are charged with notice of the laws of the state granting power to make the bonds they find on the market. This we have always held. If the power exists in the municipality, the bona fide holder is protected against mere irregularities in the manner of its execution, but if there is a want of power, no legal liability can be created."

If any other authority be needed on this point, the cases above cited are ample, but in addition there are Katzenberger v. Aberdeen, 121 U. S. 172, 7 S. Ct. 947, 30 L. Ed. 911; German Savings Bank v. Franklin County, 128 U. S. 526, 9 S. Ct. 159, 32 L Ed. 519; Lake County v. Graham, 130 U. S. 674, 9 S. Ct. 654, 32 L. Ed. 1065; Doon v. Cummins, 142 U. S. 366, 12 S. Ct. 220, 35 L. Ed. 1044; Barnett v. Dennison, 145 U. S. 135, 14 S. Ct. 1142, 38 L. Ed. 1075; Knox County v. Bank, 147 U. S. 91, 13 S. Ct. 267, 37 L. Ed. 93; Sutliff v. Lake County, 147 U. S. 230, 238, 13 S. Ct. 318, 37 L. Ed. 145; Hedges v. Dixon County, 150 U. S. 182, 187, 14 S. Ct. 71, 37 L. Ed. 1044; Citizens' Saving & Loan Association v. Perry County, 156 U. S. 692, 709, 710, 15 S. Ct. 547, 39 L. Ed. 585.

[7] It is the law that, in the administration of state laws in cases between citizens of different states, the courts of the United States have an independent jurisdiction coordinate with that of the state courts and are bound to exercise their own judgment

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as to the meaning and effect of those laws; but such is not the rule where by the course of the decisions of state courts certain rules are established which become either rules of property or rules of action, nor is such the rule in courts of the United States as to the settled construction of Constitutions and statutes by the state courts.

In Burgess v. Seligman, 107 U. S. at page 33, 2 S. Ct. 21 (27 L. Ed. 359), it is said:

"The federal courts have an independent jurisdiction in the administration of state laws, co-ordinate with, and not subordinate to, that of the state courts, and are bound to exercise their own judgment as to the meaning and effect of those laws. The existence of two co-ordinate jurisdictions in the same territory is peculiar, and the results would be anomalous and inconvenient but for the exercise of mutual respect and deference.

"Since the ordinary administration of the law is carried on by the state courts, it necessarily happens that by the course of their decisions certain rules are established which become rules of property and action in the state, and have all the effect of law, and which it would be wrong to disturb. This is especially true with regard to the law of real estate and the construction of state constitutions and statutes. Such established rules are always regarded by the federal courts, no less than by the state courts them selves, as authoritative declarations of what the law is. But where the law has not been thus settled, it is the right and duty of the federal courts to exercise their own judgment; as they also always do in reference to the doctrines of commercial law and general jurisprudence. So when contracts and transactions have been entered into, and rights have accrued thereon under a particular state of the decisions, or when there has been no decision, of the state tribunals, the federal courts properly claim the right to adopt their own interpretation of the law applicable to the case, although a different interpretation may be adopted by the state courts after such rights have accrued. But even in such cases, for the sake of harmony and to avoid confusion, the federal courts will lean towards an agreement of views with the state courts if the question seems to them balanced with doubt. Acting on these principles, founded as they are on comity and good sense, the courts of the United States, without sacrificing their own dignity as independent tribunals, endeavor to avoid, and in most cases do avoid, any unseemly conflict with the well-considered decisions of the state courts

A long list of authorities is cited in a note on pages 34 and 35.

The Constitution and statutes of Tennessee in similar matters have been construed by our state courts, and by such decisions it is held that municipalities have no im.plied power to issue negotiable bonds merely because they may have power in certain ways to subscribe for stock. Milan v. Railroad, 79 Tenn. (11 Lea) 329; Pulaski v. Gilmore, supra; Norton v. Dyersburg, 127 U. S. 160, 174, 175, 8 S. Ct. 1111, 32 L. Ed. 85; Kelley v. Milan, 127 U. S. 149, 155, 8 S. Ct. 1101, 32 L. Ed. 77; Clark v. R. R., 123 Tenn. 245, 130 S. W. 751; Hotel Co. v. Dyer, 125 Tenn. 306, 142 S. W. 1117; Weil v. Newbern, 126 Tenn. 263, 148 S. W. 680, Ann. Cas. 1913E, 25. And county bonds issued by county officers without authority of the county court are not binding on the county, nor is the county estopped by receipt of the coupons attached to such bonds for taxes. Barnard v. Hawkins County, 2 Shan. Cas. 97; Carriger v. Morriston, 69 Tenn. (1 Lea) 257; Weil v. Newbern, supra. Furthermore, municipal bonds not expressly authorized by statute are void. Pulaski v. Gilmore, supra; Richardson v. Marshall County, supra; Weil v. Newbern, supra.

[8] It is further held that the power to make contracts generally does not confer power to sign municipal interest-bearing bonds, and that they must be expressly empowered so to do. Moreover, in Pulaski v. Gilmore and Richardson v. Marshall County, supra, it is held that where a municipality had no authority to issue bonds in question, such want of authority might be interposed as a defense against such bonds, although the same might be held and sought to be enforced by innocent purchasers for value. Also it is settled that the validity of a county bond must be determined by the law as it was judicially construed at the date of the issuance of such bond. Richardson v. Marshall County, supra; Shaeffer v. Mitchell, 109 Tenn. 211; State ex rel. v. Bristol, 109 Tenn. 315, 70 S. W. 1031; Douglass v. Pike County, 101 U. S. 677, 686, 687, 25 L. Ed. 968; Ralls County v. Douglass, 105 U. S. 728, 732, 26 L. Ed. 957; Taylor v. Ypsilanti, 105 U. S. 72, 73, 26 L. Ed. 1008; La. v. Pilsbury, 105 U. S. 278, 26 L. Ed. 1090; Thompson v. Perrine, 106 U. S. 589, 591, 1 S. Ct. 564, 568, 27 L. Ed. 298; Green County v. Conners, 109 U. S. 104, 3 S. Ct. 69, 27 L. Ed. 872; Anderson v. Santa Anna, 116 U. S. 356, 361, 6 S. Ct. 413, 29 L. Ed. 633; German Savings Bank

v. Franklin County, 128 U. S. 526, 9 S. of such a ditch by the individual landownCt. 159, 32 L. Ed. 519.

With these principles established it remains to determine if there existed under the laws of Tennessee any authority whatsoever to warrant the issuance of the bonds in question. If such authority existed, it was under and by virtue of article 2, § 29, of the Constitution of Tennessee and certain statutes. The constitutional provision is:

"The General Assembly shall have power to authorize the several counties and incorporated towns in this state, to impose taxes for county and corporate purposes respectively, in such manner as shall be prescribed by law; and all property shall be taxed according to its value, upon the principles established in regard to state taxation.

"But the credit of no county, city or town shall be given or loaned to or in aid of any person, company, association or corporation, except upon an election to be first held by the qualified voters of such county, city or town, and the assent of three-fourths of the votes cast at said election. Nor shall any county, city or town become a stockholder with others in any company, association or corporation except upon a like election, and the assent of a like majority

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(The portion of the section omitted relates to certain counties excepted for a limited time from the provisions quoted.)

The statute laws of Tennessee pertaining to drainage matters and kindred subjects may be found in Shannon's Compilation of the Statutes of Tennessee, sections 3849 to 3871a170, inclusive, being the Acts of the Legislature of Tennessee of 1841-42, c. 71, of 1871, c. 131, of 1901, c. 65, and of 1909, c. 185, with the amendments thereto.

Plaintiff seems to recognize the principle that if no authority existed for the issuance of the bonds in question the county is not liable thereon, and insists that such authority is to be found in the statutes to which reference is above made.

The Acts of 1841-42, c. 71, relates alone to the draining of swamp lands belonging to an individual when surrounded by the lands of others who refuse to permit such individual to cut drains through their lands where such drains are necessary to reclaim the lands of the individual in the first instance. These provisions as embraced in sections 3849-3854, inclusive, of Shannon's Code 1917, confer among other things, authority to have a jury of view appointed to assess the damages incident to the cutting

er, which damages are to be paid by him, and they provide for making their findings the order of the court, and have certain conditions which must be complied with as to the location of the ditch. Under this act no authority whatever exists for the insuance of any bonds from any source. The next act is that of 1871, c. 131, embraced within sections 3855-3871, inclusive, of the above compilation, and relates solely to the construction of levees to prevent the overflowing of lands by headwater or in times of high water. This statute provides how such levees may be constructed, and the first section thereof contains this provision:

"The county courts of the several counties in this state within the limits of which are lands rendered unfit for occupation and farming purposes by reason of the overflowing of the same in times of high water in the rivers adjacent thereto, may issue bonds for the purpose of constructing levees to protect the same.”

However, before this could be done it was necessary that an election be held and that the right to issue such bonds should be sanctioned by three-fourths of the votes cast at such election. When such proceedings were had, the county was authorized to issue bonds to defray the expenses of the work of construction. While the Acts of 1901, c. 65, as embraced within sections 3871al3871a6, would seem to be more properly an amendment of the act last referred to, in that this latter act simply provides a means whereby the counties issuing levee bonds may retain the state's increment of taxes to apply on the same. The fact that such latter act makes use of the words that for the purpose of constructing or aiding in the construction of a levee or "levees or drainage to reclaim and improve the low, wet, and overflowed lands" within said county could not be construed to warrant the issuance of bonds for the construction of a drainage district unless authority to construct such district existed. Certainly this latter act could not, by the mere use of the word "drainage," in the way in which it appears in the act, give authority to establish drainage districts and issue bonds or certificates in payment therefor. It was manifestly not the intention of the Act of 1901 to do other than provide for an apportionment of the funds as stated above. Nor could it hardly be said that the authority to construct a levee would warrant the digging of a canal or ditch or the straightening of a stream with a view of draining certain areas. Different riparian rights are

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