On Dec. 16, 1867, the legislature of the State of Tennessee passed 'An Act to incorporate the Lebanon and Gallatin Railway, and for other purposes.'
Sect. 3 of the act provided that the twenty-six persons named in sect. 1 should select by ballot five of their number to open books for subscription to the stock of the Lebanon and Gallatin Railway Company, and to apply to counties and municipalities for subscriptions thereto. Sect. 4 declared that such subscriptions might be payable in county and municipal bonds.
Sect. 19 declared as follows:--
'The five commissioner provided for in the third section may apply to the county courts of Sumner and Wilson Counties, and to the corporate authorities of the towns of Lebanon and Gallatin for subscription to the capital stock of the company, payable in the bonds of said counties and towns, running not less than ten nor more than thirty years, bearing six per cent interest payable semiannually, and upon said application being made in writing the county courts and corporate authorities shall cause an election to be held under the laws now in force regulating elections for county and corporate officers, first causing thirty days' notice of the day of such election, the amount of stock to be subscribed, for what purpose and how and wen payable, to be given as required in county and corporate elections.'
Sect. 35 declared 'that the provisions of chapter 3, article 3, of the code [of Tennessee] shall be in force, and said company shall have the benefit of the same except so far as modified or changed by this act.' These provisions were by sect. 40 extended to the Tennessee and Pacific Railroad Company.
Chap. 3, art. 3, of the Code of Tennessee provides as follows:--
'SECT. 1142. Any county . . . may subscribe to stock to an amount not exceeding in the aggregate one-fifteenth of its taxable property nor more than one million dollars in railroads running to or contiguous, thereto, upon the following terms and conditions.
'SECT. 1143. The approbation of the legal voters of the county . . . to the proposed subscription must be first obtained by election held by the sheriff in the usual way in which popular elections are held.
'SECT. 1144. The election may be ordered by the county court upon the application in writing of the commissioners appointed to open subscription books for the stock of such road, or of the board of directors if the company is organized.
'SECT. 1145. Before such application can be made, the entire line of the road in which the stock is proposed to be taken, shall be surveyed by a competent engineer, and substantially located by designating the termini and approximating the general direction of the road, and an estimate of the grading, embankment, and masonry made by the engineer under oath, and filed with the application.'
'SECT. 1149. The money raised under the provisions of this article shall be expended within the county in which such stock is taken, or as near thereto as practicable.
'SECT. 1150. As soon as the stock is subscribed it is the duty of the county court to levy a tax upon the taxable property, privileges, and persons liable by law to taxation within the county, sufficient to meet the instalments of subscription as made and the cost and expenses of cllection, which tax shall be levied and collected like other taxes.
'SECT. 1151. The revenue-collector or any other person may be appointed by the county authorities to collect the railroad tax, who shall first give bond with good security in double the amount of the instalment proposed to be received, payable to the State and conditioned to discharge the duties of the office and faithfully collect and pay over to the railroad company such railroad tax.'
The suit was brought by the Third National Bank of Nashville, Tennessee, upon two hundred and ninety-four bonds for $50 each, issued, as the plaintiff claimed, by the county of Wilson under authority of the laws above cited. The bonds were all of the same tenor and effect. The following is a copy of one of them:--
'UNITED STATES OF AMERICA.
'State of Tennessee. County of Wilson.
'Six-per-cent Bond.
'Subscription to the Tennessee and Pacific Railroad Company.