ERROR TO THE DISTRICT COURT OF THE UNITED STATES FOR THE NORTHERN DISTRICT OF MISSISSIPPI.
MR. JUSTICE SHIRAS delivered the opinion of the court.
The act of March 25, 1871, of the State of Mississippi authorized certain counties, cities, and towns to aid in the construction of the Grenada, Houston and Eastern Railroad, by subscribing for capital stock of the company organized to build and maintain that railroad.
The 4th and 5th sections of said act were as follows:
"SEC. 4. Be it further enacted, That it shall and may be lawful for the boards of supervisors of any county which
shall have voted a tax as provided by this act, or of the act to which this act is amendatory, to issue bonds due and payable at such time or times as said boards of supervisors may deem best for the taxpayers of their respective counties, not to extend beyond ten years from the date of issuance, for such sums as said boards of supervisors may deem necessary to meet, pay off, and discharge the subscriptions of said counties respectively for capital stock in the Grenada, Houston and Eastern Railroad Company, which have been or which may hereafter be subscribed for by said boards of supervisors, or by the boards of police (as the case may be) respectively, not to exceed the total sum of such stock subscriptions, which said bonds shall be signed by the president of the board of supervisors issuing the same, and be made payable to the president and directors of the Grenada, Houston and Eastern Railroad Company and their successors and assigns, and may be assigned, sold and conveyed, with or without guarantee of payment, by the said president and directors, or may be mortgaged in like manner at their discretion as they may deem best for the company.
"SEC. 5. Be it further enacted, That it shall be lawful for the mayor and selectmen of any incorporated city or town who may have subscribed, or shall hereafter subscribe, for capital stock in the Grenada, Houston and Eastern Railroad Company, as authorized by this act, or the act of which this act is amendatory, to issue bonds of their respective corporations in the same manner and with the like effect sufficient in amount to meet the total sum of their respective subscriptions for stock, as the boards of supervisors of the different counties are by this act authorized to do, and all bonds and coupons of interest issued by said mayor and selectmen shall be alike binding upon said towns respectively, in their corporate capacity, as the said bonds so issued by the said boards of supervisors shall be binding upon said counties respectively."
In pursuance of the powers so conferred the town of Okolona subscribed for stock in the said company, and paid for the same by executing and delivering to the railroad company its bonds, bearing date September 1, 1871, with coupons attached,
payable in New York city to bearer, and maturing at from eleven to seventeen years after their date. The bonds recite that they are "issued and delivered to the Grenada, Houston and Eastern Railroad Company by the town of Okolona to meet and pay off the amount subscribed by said town to the capital stock of the railroad company aforesaid."
Frank D. Barnum, a citizen of Tennessee, brought an action of debt against the town of Okolona at the April term, 1889, of the District Court of the United States for the Northern District of Mississippi, and averred in his declaration that he was the holder and owner for value, and before the maturity thereof, of sixteen bonds of said town with their coupons attached, which were due and unpaid, and the amount whereof he was entitled to recover. The declaration likewise averred that said bonds recited that they had been issued in pursuance of the said act of March 25, 1871.
To this declaration the defendant demurred, and assigned for cause, among other things, that it appeared, in and by said declaration, that the bonds sued on were payable more than ten years ...