Lewis v. City of Shreveport - 108 U.S. 282 (1883)
U.S. Supreme Court
Lewis v. City of Shreveport, 108 U.S. 282 (1883)
Lewis v. City of Shreveport
Decided April 16, 1883
108 U.S. 282
1. Ottawa v. Cary, ante, 108 U. S. 110, reaffirmed.
2. Unless power has been given by the legislature to a municipal corporation to grant pecuniary aid to railroad corporations, bonds issued for that purpose,
and bearing evidence of the purpose on their face, are void even in the hands of bona fide holders.
3. Corporate ratification, without authority from the legislature, cannot make a municipal bond valid which was void when issued for want of legislative power to make it.
Action to recover interest due on municipal bonds issued in aid of a railway. Defense that the charter of the municipality and the laws affecting it conferred no power to issue such bonds, and that the bonds were issued without authority and are void. The charter of Shreveport contained no express
authority for the issue of such bonds. The parties agreed to the facts on the hearing below. The following are the most material parts of that agreement
"2. That on the 26th of June, 1872, an ordinance was introduced and passed by the City Council of Shreveport authorizing purchase of real estate by the city to be donated to the Texas & Pacific Railway Company upon which depots and machine shops were to be permanently established and maintained by said company, and providing that for purchase of said property 260 forty-year $1,000.00 bonds should be issued and sold on market, said bonds bearing interest at rate of 8% per annum, payable semiannually, with coupons attached; providing further that said ordinance should be submitted to the vote of the people for their ratification and approval, and it is admitted that said ordinance was never considered by said council on any other day prior to said 26th June, 1872, and that it further provided for levying a tax to pay interest and create a sinking fund for redemption of bonds."
"3. That in pursuance of said ordinance, an election was held in said city on July 1st, 1872, and said ordinance was then and there ratified and approved by the voters, 705 votes being cast for said ordinance and 3 against it."
"4. That in pursuance of said ordinance and said vote ratifying same, the said city issued 260 bonds, each for $1,000, payable at 40 years, bearing interest at 8%, payable semiannually, with interest coupons attached, said bonds bearing date July 1st, 1872, a copy of which said bonds is attached to and made part of plaintiff's petition, a copy of coupons attached to said bonds being set out in and made a part of plaintiff's petition."
"17. That plaintiff acquired ninety of said bonds with coupons attached in open market, being bonds to which the interest coupons sued on belong, paying therefore 85 cents on the dollar, and that said plaintiff is bona fide holder of said bonds and of interest coupons sued on for value."
"18. It is admitted that the Texas & Pacific Railway Company has not now and never had any charter from the State of Louisiana, or any right arising from any statute of that state passed in favor of said company, but that said company held a lease from the Vicksburg, Shreveport & Texas R. Co., not yet expired, of the railroad from Shreveport to Texas line."
"19. It is admitted that the ordinance of June 16, 1872, is the only ordinance of said city authorizing the issue of said 260 forty-year bonds."
The court below held that the bonds were issued without lawful authority, and were null and void. The plaintiff below excepted, and brought the case on error here.