State of Arkansas vs. Little Rock, Mississippi River and Texas R'y Co.
issued without such sanction (either in fact or according to the decision of some authorized body or tribunal), or when voted to one corporation, and issued to another, are void, into whosesoever hands they may come. This is a sound and true rule of law on this subject, and the one which has had the almost uniform approval of the State courts in this country, and has recently received the high sanction of the Supreme Court of the United States." The author, keeping in mind all the while, the distinction between the want of power to issue the bonds, and irregularities in the exercise of the power.
Mr. Justice Field, in Marsh v. Fulton County, 10 Wallace, 676, most clearly and forcibly draws the distinction between the want of special power to contract, and the general power to contract. He says: "But it is earnestly contended that the plaintiff was an innocent purchaser of the bonds, without notice of their invalidity. If such were the fact, we do not perceive how it could affect the liability of the county of Fulton. This is not a case where the party executing the instrument possessed a general capacity to contract, and where the instruments might, for such reason, be taken without special inquiry into their validity. It is a case where the power to contract never existed—where the instruments might, with equal authority, have been issued by any other citizen of the county. It is a case, too, where the holder was bound to look to the action of the officers of the county, and ascertain whether the law had been so far followed by them as to justify the issue of the bonds. The authority to contract must exist before any protection as an innocent purchaser can be claimed by the holder."
The bonds were held void in the hands of a bona fide purchaser for want of authority in the county to issue them. And so in this case, we must hold that the bonds of the State of Arkansas, issued by the Governor of the State, her agent, are void
