-power to construct waterworks.

lights for municipal and domestic purposes may be conferred by the Legislature upon such municipalities. 3 Dill. Mun. Corp. 5th ed. § 1296; and 4 McQuillin, Mun. Corp. §§ 1781-1785.

The general purpose of conferring upon municipal corporations power of the legislative and administrative functions of the state was to enable them to provide for water, light, and other conveniences necessary to the health and comfort of the inhabitants; and, as an incident to the power conferred, the municipalities themselves may carry on the various businesses in which such public utilities are usually engaged.

-loan of credit -contribution

• to cost of water plant.

When the city is authorized to construct waterworks and electric lights, it may necessarily create a debt for that purpose. Such a use of the corporate credit is for a public purpose and is not the loan of the credit of the municipality.

There is nothing in the transaction in question which contravenes article 16, § 1, of the Constitution. The city of McGehee, in effect, expended the amount of money evidenced by the warrants issued by it to help build a system of waterworks and electric lights, which were being constructed under an improvement district legally organized under the statute. The city did not thereby loan its credit or become security, directly or indirectly, for any person or corporation, or for any purpose. It is simply stipulated that it would pay a certain part of the cost of construction of a system of waterworks and electric lights, which were being constructed by a public agency, and not by a private corporation or association of individuals. The issuance of the warrants was for a public pur

pose, and not in aid of any private enterprise. The city did not loan its credit for any purpose within the meaning of the Constitution. It merely contributed a part of its public revenue for a public purpose. It will be noted that the statute in question provides that the system of waterworks and electric lights may ultimately become the absolute property of the city. The statute directs that the revenues derived from supplying water and light to the inhabitants of the city shall first be appropriated to the payment of the cost of constructing and maintaining the system. A sinking fund is provided, and the unexpended revenue derived from the operation of the waterworks and electric lights is then placed in the city treasury, to be expended in the same manner as the general revenue of the city.

In Klamath Falls v. Sachs, 35 Or. 325, 76 Am. St. Rep. 501, 57 Pac. 329, the Supreme Court of Oregon held that, under a statute authorizing a municipal corporation to furnish itself with a water system, it may enter into an executory contract looking to the acquirement of a water system, even though it does not become the present absolute

eral public shares to a greater or

Municipal corporations-contribution to cost of public improvement.

less extent in the benefits, and, when that happens, the city may contribute towards the construction of the improvement. McDonnell v. Improvement Dist. 97 Ark. 334, 133 S. W. 1126; Deane v. Moore, 112 Ark. 254, 165 S. W. 639; and Mullins v. Little Rock, 131 Ark. 59, L.R.A.1918B, 461, 198 S. W. 262. These cases hold that public funds of a city may be contributed by the city in order to complete a public improvement which has been constructed in part by the commissioners of an improvement district. This is practically what was done in the case at bar, and we are of the opinion that the transaction, when considered according to its substance, does not contravene article 16, § 1, of our Constitution.

It is next insisted that the resolution authorizing the issuance of the warrants was not passed in the manner prescribed by the statute because the yeas and nays were not called and recorded. As we have already seen, it was within the power of the municipality to issue the warrants and to receive the benefits of the transaction in the completion of the public improvement. Under

Estoppel-to

of warrants.

these circumstances deny validity it is estopped from asserting that the warrants were not legally issued. Forrest City v. Orgill, 87 Ark. 389, 112 S. W. 891; and Natural Gas & Fuel Corp. v. Norphlet Gas & Water

Interest-on

rants-when allowed.

not

It is next contended that, in any event, the collection of interest on the warrants cannot be had. In this contention we think counsel are municipal warcorrect. Article 16, § 1, of the Constitution, in plain language provides that no county, city, or municipality shall ever issue any interest-bearing evidences of indebtedness, except in certain cases, which do not affect the case at bar. In the consideration of this provision of the Constitution in Forrest City v. Bank of Forrest City, supra, it was held that, where a municipal corporation borrowed. money for a purpose authorized by statute, and gave an interest-bearing note therefor, the provision in the note calling for the payment of interest is in excess of the authority of the city council, and may be regarded as surplusage. See also Gould v. Davis, 133 Ark. 90, 202 S. W. 37, and cases cited.

The result of our views is that the holder of the city warrants in question is not entitled to collect interest on the warrants, but is entitled to the face value of the warrants themselves, which the evidence shows to be $11,020. It follows that the decree will be reversed and the cause will be remanded, with directions to the Chancery Court to enter a decree in accordance with this opinion, and for further proceedings in accordance with the principles of equity.

Municipal corporations have only such powers as are clearly and unmistakably granted by their charters or by other acts of the legislature; and, in the absence of legislative aid, such corporations have no power to subscribe to stock of, or otherwise fur

nish pecuniary aid to, railroads or other private corporations. See 19 R. C. L. 791, 792. (As to constitutionality of a statute or ordinance authorizing the use of public funds, credit, or power of taxation for restoration or repair of privately owned

public utility, see annotation in 13 A.L.R. 313.) In fact, in many of the state constitutions, provisions will be found inhibiting municipal corporations and other political subdivisions from lending aid or credit to, or appropriating money for, any individual association or corporation, with the object, as pointed out in the reported case (BANK OF COMMERCE V. HUDDLESTON, ante, 1202), of preventing these public corporations from engaging in enterprises foreign to the purposes for which they were organized, and assuming- liabilities not within the compass of their usual and necessary powers.

The only case directly within the scope of the present annotation seems to be the reported case (BANK OF COMMERCE V. HUDDLESTON), holding that a municipal corporation may, without violating either a constitutional provision prohibiting it from becoming stockholder in any corporation or association, or appropriating or lending money to corporations or associations, or a provision declaring that municipal corporations shall never lend their credit for any purpose, issue warrants in payment of money advanced to a local improvement district located wholly within the municipal limits, to complete the construction of the improvement.

However, it has been held that the provisions of the Missouri Constitution (art. 4, §§ 46, 47) prohibiting the legislature from granting or authorizing the grant of public money to an individual or municipal or other corporation, and declaring that the legislature should have no power to authorize any political subdivision of the state to lend its credit or grant public money in aid of or to any individual, association, or corporation whatever, does not inhibit the state legislature from authorizing the appropriation to the use of a special road district of funds collected within that district, as county taxes upon property, or as dramshop, pool room, or billiard-table licenses. Elting v. Hickman (1902) 172 Mo. 237, 72 S. W. 700. The court said: "As the law does not grant or authorize the making of any grant of

public money or thing of value to any individual, association of individuals, municipal or other corporation, it is clearly not in conflict with the provisions of § 46, supra. State ex rel Dickason v. County Ct. (1895) 128 Mo. 427, 31 S. W. 23. Nor does the act authorize any county, city, town or township, or other political corporation, or subdivision of the state now existing, or that may be hereafter established, to lend its credit, or grant public money or thing of value in aid of or to any individual, association, or corporation, and is not, therefore, in conflict with § 47, supra."

However, an act of the legislature authorizing the appropriation of funds in the county treasury, collected as county taxes, to be expended upon the streets of incorporated cities in which. the county has no concern or control, is a gift or grant within the meaning of the above constitutional provisions. State ex rel. Kirkwood v. County Ct. (1898) 142 Mo. 575, 44 S. W. 734.

The following cases, though not directly in point, have some bearing on the question under annotation, since the acts of the municipality would have a tendency at least to relieve the district of a burden that would otherwise fall upon it:

The mere fact that the territory of a village has been added to a sanitary district by statute does not deprive the village of power to construct sewers to be paid for by special assessment, at least if the sanitary district trustees have done nothing more than locate a proposed route of a main-drainage. channel, without having acquired a foot of land for a right of way, and have the power to change the route before the channel is dug. Gage v. Wilmette (1907) 230 III. 428, 82 N. E. 656.

But since a city is authorized to ap: propriate money only for corporate purposes, and to provide for the payment of its debts and expenses, it has no power to pay for the construction of sidewalks where the cost of constructing the same has been provided for by special taxation, or special assessment made either under the Sidewalk Act of 1875 or the Local Improve

ment Act, for in such case it is in no wise indebted for the cost of the improvement. Midland Lumber Co. v. Dallas City (1916) 276 Ill. 172, 114 N. E. 580. See also Chicago v. Brede (1905) 218 Ill. 528, 75 N. E. 1044, denying a city the right of using its funds for the purchase of improvement bonds.

In People ex rel. Parmenter v. Fenton & T. R. Co. (1911) 252 III. 372, 96 N. E. 864, in holding that the highway commissioners could not levy a tax for the cost of the construction of a bridge made necessary by the digging of a drainage ditch across a highway, there being no statute imposing upon the drainage district the duty of restoring the highway, the court said that it was not within the power of the legislature to authorize the levy of a road and bridge tax on the taxpayers of the town for the benefit of the drainage district where the ditch is an artificial one. This latter statement is based upon the earlier decision of Morgan v.

Schusselle (1907) 228 III. 106, 81 N. E. 814, wherein a statute (Farm Drainage Act, § 401; Hurd's Rev. Stat. 1905, chap. 42, ¶ 115) authorizing the commissioners of a drainage district to collect the cost of the construction of necessary bridges and culverts over ditches in a drainage district, from the road and bridge tax fund, was held to be violative of the state constitutional provisions Illinois Const. art. 10, §§ 9, 10) placing limitations upon the power of the legislature to delegate the right of corporate or local taxation to any other than the local or corporate authorities, and prohibiting the legislature from compelling a town to incur a debt against its will.

Generally as to the scope and effect of express constitutional provisions prohibiting legislation imposing taxes for county and corporate purposes, or providing that legislature may invest power to levy such taxes in the local authorities, see annotation in 46 A.L.R. 609. G. S. G.

St. Louis County v. Security Bank, 75 Minn. 174, 77 N. W. 815; Benedict v. Olson, 37 Minn. 431, 35 N. W. 10; National Citizens Bank v. Thro, 110 Minn. 169, 124 N. W. 965; Berryhill v.