GOODE, J., (dissenting.)

This case is presented for decision on a motion of Clark County, the relator, that the court award its peremptory writ of mandamus, commanding respondent to register the bonds in question, notwithstanding the return made by respondent to the alternative writ. It is, therefore, a motion for judgment on the pleadings, and the pertinent facts are to be gathered from the pleadings.

The averments of the petition and return agree that default judgments to the amount of more than one hundred thousand dollars were recovered against Clark County in April, 1916, on warrants issued in prior years to pay the ordinary expenses of the county. The return of respondent alleges these warrants were issued in excess of the income and revenue provided for the respective years, and without the assent of two-thirds of the qualified voters of the county voting at an election held for the purpose of authorizing their issue. After the warrants had passed into judgments, of the county court called a special election at the usual voting places, to authorize the incurring of an indebtedness in the sum of the judgments ($103,944.04) and to evidence the indebtedness by the issue and sale of bonds, of which the proceeds should be used to pay the judgments; also to provide an annual tax to pay the interest on the proposed debt as it fell due, and create a sinking fund to pay the principal in twenty years. The forms of the ballots are shown in the majority opinion, and from them, as well as from the call for the election, it is clear the proceeds of the bonds could not be used by the county officials without a breach of official duty, except to pay the judgments. Pursuant to the supposed authority therein obtained from the voters, the county court entered an order for the levy and collection of an annual tax sufficient to pay the interest on them for the years 1917 to 1935, inclusive, and create a sinking fund to pay the principal at the end of twenty years. The amounts of the special taxes levied for said years on account of the principal and interest, fluctuate from something over five thousand dollars to more than eleven thousand dollars, and it is agreed in the pleadings of the parties that said levies for each of the years from 1917 to 1919 inclusive are in addition to the maximum levy of forty cents on the hundred dollars, which the county may make under Section 11, Article X, of the State Constitution, and that for the years to come, until 1935, said levy for the principal and interest on the proposed bonds must be in addition to said maximum levy, because the county will require the revenue to be obtained by the maximum levy for its ordinary expenses. The court in ordering the special election expressly found as follows:

"That the county needs and must have to meet its ordinary current expenses, all of its revenue and income produced by a levy of forty cents on the one hundred dollars valuation of taxable property in the county and therefore cannot spare any part thereof to apply to the payment of any part of any of said judgments."

Respondent, as Auditor of the State, refused to register the bonds, assigning, among other reasons for his refusal, the following: That the warrants on which the judgments were based, were issued, as heretofore stated, in excess of the income and revenue provided for the respective years when they were issued; that the debts evidenced by said warrants so issued in excess of the income and revenue of the respective years and now represented by the several judgments aforesaid, were not incurred with the assent of two-thirds of the voters of the county at an election held for the purpose of authorizing such debts; that the judgments were obtained by default, and did not represent any indebtedness incurred with the assent of two thirds of the voters; that the levy of taxes for each of the years to pay the principal and interest on the proposed bonds is in excess of the maximum levy permitted by said Section 11, unconstitutional, void and uncollectible; therefore respondent should not be made to register the bonds and certify on them that all the conditions of the law have been complied with.

The gist of this defense is that the issue of bonds is not a "becoming indebted" by the county within the meaning of Section 12, Article 10, of the Constitution, which restricts public and quasi-public corporations from becoming indebted in any year to an amount in excess of the income and revenue provided for such year, without the assent of two-thirds of the voters thereof, voting at an election to be held for that purpose. In other words, that this bond issue is, in effect, the old debts evidenced by the warrants and then by the judgments, and not a new indebtedness; that even granting the proposed issue of bonds is a new debt and falls within the contemplation of said Section 12, it is invalid for the reason that said section, in so far as relates to the incurring of an indebtedness with the assent of two-thirds of the voters of a public corporation, is not self-enforcing, but looks to the granting of statutory authority to incur a particular debt, and no statute has been enacted to authorize an indebtedness of the kind in question or to provide for an election to take the sense of the voters.

The averments in the return of the Auditor that the warrants were originally issued in excess of the income and revenue provided for the respective years, were stricken out on motion and have no bearing in the consideration of the case.

Among the questions raised by the defenses set up by respondent, are these: First, can a county which has fallen into debt by issuing warrants on its treasury up to the full amount of the income and revenue anticipated and, in a sense, provided for the year, which warrants have passed into judgment, issue bonds to pay the judgments, if two-thirds of the voters of the county, voting at an election held for the purpose, assent to the bond issue? Second, can it do so in the absence of an empowering statute? The portion of Section 12 which is pertinent is the first clause of the first paragraph and reads as follows:

"No county, city, town, township, school district or other political corporation or subdivision of the State shall be allowed to become indebted in any manner or for any purpose to an amount exceeding in any year the income and revenue provided for such year, without the assent of two-thirds of the voters thereof voting at an election to be held for that purpose." [Sec. 12, Art. 10, Const.]

I. The proposed bonds would be invalid in my judgment for want of power in the county to issue them, even if it be conceded they would be such an indebtedness as is contemplated by Section 12, Article 10, of the Constitution. No authority Limited Powers existed by legislative grant, nor had any method of Counties. been provided to ascertain the will of the voters of the county on the matter. Said section of the Constitution is not self-enforcing in the sense of being a direct grant of power to counties to incur debts, but leaves to the Legislature the right to do that when deemed advisable and to provide a method for taking the sense of the voters. The constitutional provision is negative in form, and a restriction on the power of public corporations to incur debts and on the authority of the Legislature to authorize such corporations to become indebted. Constitutional limitations of this character are not construed as grants of authority to political subdivisions of a state. [Federal Ry. Co. v. Pittsburg, 75 Atl. (Pa.) 662; Abbott on Pub. Secur. sec. 143.] In every instance that I know of, where debts created under Section 12 have been upheld, a statute authorized the debt and provided for an election. We have a statute to empower counties, etc., to refund their bonds and fund judgments against them at lower interest; but this statute is not in enforcement of said Section 12, nor applicable to the bonds in question, for the authority given is to fund or refund without a vote of the people, except in the case of bonds issued in aid of a railroad, when a majority vote is required. [R.S. 1909, sec. 1249.] Besides, the indebtedness authorized to be refunded, would look to the same resources of the county for payment as the original debt, and not to additional taxation as in the case of a debt created under Section 12. Section 1250 relates at most, to refunding bonds only, and by a majority vote. If counties possess inherent power to borrow money, which is what the proposed bond issue contemplates, the quoted clause of Section 12 operates as a constitutional limitation of the power; if they have no such inherent power and can only borrow pursuant to a grant of power by the Legislature, the clause is a constitutional limitation of the authority of the Legislature to make the grant — a statement of the extent to which the Legislature may authorize the county to go. The rule is that counties are quasi-public corporations and, to use the language of an opinion of this court, have "just such powers and only such as the State, by its lawmaking power, confers upon them." [Jefferson Co. v. St. Louis Co., 113 Mo. 619, 625.] That a county has no implied power to borrow money has been often held in other jurisdictions and is the accepted doctrine. [Abbott, Pub. Secur., sec. 57, p. 103.] The question is discussed at length and the adjudications listed in the notes of the cited and following sections of that treatise, which says, concerning public corporations in general, that "some of the earlier cases held that an implied power existed to incur indebtedness through the borrowing of money, but the later authorities deny almost universally this doctrine." Another treatise, in speaking of counties, says: "It is very generally held that, in the absence of a statute, a county has no power to borrow money, and this though the purpose may be to apply the money to a public use." [7 Am. Eng. Ency. Law (2 Ed.), p. 932.] And again we find the rule thus stated, supported by a long array of decisions: "The weight of authority from the adjudged cases is that counties, being the creatures of statute, have no powers except those granted by statute, and that the power to borrow money will not be implied but must be expressly granted to authorize its exercise." [15 Corp. Jur. sec. 277, p. 573.] The reason for this doctrine is that public corporations are invested with the power to raise by taxation the money needed to enable them to perform their functions, and the express grant of the right to raise money in that mode excludes the implication of the right to raise it by borrowing. [Ketchum v. Buffalo, 14 N.Y. 356; The Mayor v. Ray, 19 Wall. (86 U.S.) 468, 475.] In the present case, not only is money to be borrowed, but the negotiable securities of the county are to be issued as evidences of the debt, and the power to do this does not belong to a county unless expressly granted by the legislative authority of the State. A text-writer already quoted says, in discussing the power in this matter of bodies politic in general: "The rule now established by an overwhelming weight of authority is that the power of a public corporation to issue negotiable securities must be expressly given and can never be implied. There are some modifications of the doctrine which will be noted later." [Abbott, Pub. Secur. sec. 84, p. 167.] The subject was dealt with by the Supreme Court of the United States in Police Jury v. Britton, 15 Wall. (U.S.) 566. See, too, cases cited in Abbott, Public Securities, pp. 173, et seq., including Merrill v. Monticello, 138 U.S. 673; C.B. Q. Ry. Co. v. Otoe County, 83 U.S. 667; City of Brenham v. Bank, 144 U.S. 173; Ashuelot Nat. Bank v. School Dist., 56 F. 197; Claiborne Co. v. Brooks, 111 U.S. 400; Watson v. City of Huron, 97 F. 449.] The same doctrine was plainly implied, although not expressly declared, by this court in Evans v. McFarland, 186 Mo. 703, 724. The modifications of the general rule, regarding the right of a public corporation to issue negotiable securities, referred to by Abbott in the quoted excerpt, are commented on by him later, at page 180, as follows:

"The implied power to issue negotiable securities has been claimed under the following circumstances: (1) Where there has been the grant of an express power to borrow money or to contract indebtedness, and: (2) where the power has been claimed to arise under the grant of express authority to subscribe for the stock of a railroad company; to construct public buildings, to improve highways or make some necessary improvements or in general to execute some necessary and proper power directly given or impliedly existing.

"The early cases in the Supreme Court of the United States held almost without exception that where authority was given to borrow money or to contract indebtedness for any public purpose, such a grant conferred the power to issue negotiable securities as the usual and ordinary way of accomplishing the objects of the grant. Corporate bonds bearing interest and negotiable by delivery being the usual and appropriate securities for engaging municipal credit.

"These decisions have all been expressly or substantially overruled by later cases in the Supreme Court of the United States, notably those of Merrill v. Monticello, 138 U.S. 678, and City of Brenham v. German-American Bank, 144 U.S. 173."

In the case in hand we are called on to imply not only a power in the relator county, to borrow money, but, having made that implication, to imply further a power to issue negotiable bonds for the loan, a ruling for which, so far as I know, no precedent exists. In National Life Ins. Co., v. Mead, 13 S.D. 37, and Stone v. Chicago, 207 Ill. 492, cited by relator, and wherein municipal bonds to pay the floating indebtedness of the city were upheld, there was express statutory authority for the issue of bonds. Such authority was given, or attempted to be, by our Legislature in 1919, but that was prior to the election for the issue of the bonds in controversy. [Laws 1919, p. 179.] And I will observe here in reference to those cases what might be said more properly under the second paragraph of this opinion, that neither of them involved the effect of constitutional limitations like ours, upon the right of a county to borrow money to pay warrants issued for past expenditures, but involved only the meaning of a statute authorizing the borrowing of money. The same is true of the cases cited in the foregoing cases. [Morris v. Taylor, 31 Or. 62; Huron v. Second Ward Sav. Bank, 86 F. 272; Portland Sav. Bank v. Evansville, 25 F. 389.]

II. Will the county, by the proposed issue of bonds, become indebted within the meaning of Section 12 of Article 10 of the Constitution? We will be helped in the attempt to answer this inquiry by looking into the prior decisions of the court upon the section. Section 11 is a limitation on the rates Indebtedness. of taxation that may be levied for county, city, town or school purposes; whereas Section 12 is a limitation on the power of a county, city, town, school district or other public corporation, to incur debts. If a public corporation becomes indebted under Section 12, the debt must be paid by taxation of one kind or another, and mainly by direct levies, and inasmuch as Section 11 declares its restrictions as to rates of taxation shall "apply to taxes of every kind and description, whether general or special, except taxes to pay valid indebtedness now existing, or bonds which may be issued in renewal of such indebtedness," it was first held that any public debt created in the mode provided in Section 12 was subject to the limitations on rates imposed by Section 11; that is to say, the debt would be unconstitutional notwithstanding it was authorized by the requisite vote of the people, if the annual tax levied to pay the interest and create a sinking fund, when added to the tax levied to pay the current expenses of the county or other public or quasi-public corporation for the year, exceeded the maximum rate which might be levied by the particular public corporation under Section 11. [State ex rel. Robinson v. Town of Columbia, 111 Mo. 365.] This construction made it impossible for any such corporation to exceed the maximum rates provided in Section 11, either to pay ordinary expenses, like the salaries of officers, cost of caring for paupers, etc., or extraordinary expenses, such as the interest and principal of a debt created to provide for a water or light supply, public sewers, etc., or to pay both classes of expense. This construction was later overruled in favor of the view that the rate of taxation needed to pay the interest on and create a sinking fund to discharge the principal of a debt incurred as provided in Section 12, might be levied in addition to the maximum rate prescribed in Section 11; a construction which has since prevailed. [Lamar Co. v. Lamar, 128 Mo. 188; Id. 140 Mo. 145; Water Co. v. City of Aurora, 129 Mo. 540; State ex rel. Miller v. Ry. Co., 164 Mo. 208; City of Lexington ex rel. v. Bank, 165 Mo. 671; State ex rel. v. Neosho, 203 Mo. 40.] The point arises whether the court, in that departure from the first construction, meant to say Section 12 should operate independently of Section 11, not only as regards incurring debts for unusual expenditures, but for those of the annual routine as well; that is whether under Section 12 the people of a county might reject altogether the cash system of Section 11 and vote debts for routine expenses up to five per cent. of the value of the taxable property of the county. While the court in none of these cases had occasion to determine generally the purpose for which an indebtedness might be incurred under Section 12, in all of them the debts were created to provide for some kind of public service. The decisions in which this court sanctioned a tax levy in excess of the maximum prescribed in Section 11, when the tax was to pay a debt incurred under Section 12, assumed that the ordinary annual expenditures of the municipality are to be taken care of by taxes raised within the limits of Section 11, and the excess levy was permitted when voted according to Section 12, on the theory that expenditures for other than ordinary purposes might become necessary, and the revenue raised within the rates prescribed in Section 11 be insufficient to meet them without entrenching on the funds required to defray the usual running expenses of the municipality. As stated, in every case so far decided, the unusual expenditure was for a public utility, and the court declared that the makers of the Constitution could not have intended, either that municipalities should be denied the benefits of public utilities, or that they must be paid for out of the rates provided in Section 11 to the deprivation of means to pay the ordinary expenses of the particular public corporation. The minority opinion in the Lamar case held that a municipality had two alternatives; i.e., to do without a desired public service or pay for it out of taxes raised within the limits of Section 11. The majority opinion held there was a third possible construction, "that is to say, may it not have been intended that the 'annual tax' authorized to be imposed, upon a vote, under Section 12, should be levied and collected (within the limitations of that section), in addition to the annual rates for local purposes permitted (without any vote) by Section 11?" And again, treating of the two sections, the opinion said:

"One object was to limit the rates of taxation for raising the annual revenue required for local purposes; the other to limit the power to incur indebtedness beyond the annual income and revenue provided for any one year.

"Section 11 deals with rates of taxation for annual revenue which may be applied by the local authorities to meet 'the ordinary and current expenses' of the local government. [Book v. Earl, 87 Mo. 252; Compare Const. 1875, art. 9, sec. 19.]"

And again:

"It seems first of all necessary that the funds permitted by Section 11 to be raised for the legitimate ordinary purposes of the government, should be preserved from invasion or diminution by any tax levied under Section 12. Experience demonstrates that the limitations of Section 11 are narrow enough even as applied to the general needs of the municipalities which that section governs. The provisions of Section 12 were not designed to cut down the annual revenue intended for the ordinary wants of the local governments. But such a cutting down would be imperative, if the first alternative ruling, already discussed, were adopted." [128 Mo. l.c. 216, 220.] (All italics mine).

These expressions of this court when it abandoned the view that a tax levied to pay an indebtedness incurred under Section 12, must not transcend the rate limit provided in Section 11, plainly imply, and, in effect, say, that the ordinary or local expenses of a county or municipality must be taken care of within the limits of Section 11; and that Section 12 authorizes an indebtedness to be incurred, not to take care of those expenses, but of new debts created for other purposes than to carry along the ordinary affairs of the county or municipality. That Section 11 was intended to limit the power of a public corporation to tax for usual and current purposes, was declared in Brooks v. Schultz, 178 Mo. 222, 226, and in Evans v. McFarland, 186 Mo. 703, 725, et seq., where the court, in adverting to the decision in Lamar Co. v. Lamar, supra, said that in the latter case "this court, brushing away all contrary expositions, held, in effect, that Section 11, Article 10, of the Constitution contemplated an annual rate of taxation for municipal purposes to be levied without a vote, of 50 cents on $100 of valuation, to be devoted under the cash system of the Constitution, to affording the municipality a means of subsistence, and that the tax contemplated by Section 12 of Article 10 of the Constitution is not a fixed charge on the revenues derived by said fifty-cent levy, but is in addition thereto." The opinions on this subject show the thought has never occurred to this court heretofore, that a debt might be created under Section 12, in order to discharge a debt previously incurred for the ordinary expenses of a city or county; and that, on the contrary, it was always in the minds of the judges, both those who agreed to the later construction of the Constitution and those who adhered to the earlier one, that such a debt could be contracted only for some other purpose than taking care of delinquent warrants issued for current expenses of prior years, or judgments on them. And, as said before, so far no such indebtedness has been sanctioned except for some public service. I do not say cases cannot arise in which it properly might be created for another purpose; but only say that in my opinion it cannot, under the Constitution, be contracted to discharge warrants issued for the usual annual expenses, or judgments on them, when the warrants are not paid because of a deficiency of the expected income from taxes and other sources of revenue.

It is true this court has held a county may anticipate the revenues provided for a year, that warrants may be drawn within the amount of the provided revenue, and, if warrants are not paid because of disappointment in the amount of taxes received, they are not void, but may be paid out of any surplus remaining in the treasury in a succeeding year after the ordinary expenses of such year have been defrayed; but the latter must be paid first; a clear indication that every year must bear its own burdens before it can take on those of a prior year, thereby preventing debts from accumulating. [Book v. Earl, 87 Mo. 246; Trask v. Livingston Co., 210 Mo. 582, 594.] This power of anticipation of the current revenues appears to have been confined by the Supreme Court of Iowa, in construing a constitutional provision like ours, to such revenues as were "absolutely certain to be received by the collection of taxes." [French v. City of Burlington, 42 Iowa 614.] And in Book v. Earl, 87 Mo. 252, the court indicated the extent of the power to anticipate and what was meant by the "revenues provided," by saying the purpose of the Constitution was to limit the "expenditures in any given year to the amount of revenue which such tax would bring into the treasury for that year; . . . that the county court might anticipate the revenue collected and to be collected for any given year, and contract debts for ordinary current expenses, which would be binding on the county to the extent of the revenues provided for that year, but not in excess of it." It is doubtful whether a sound construction of the Constitution will allow a county court to issue warrants up to the full amount of the income the county will collect if all the taxes levied are paid, in view of the well-known fact that receipt in full of levies rarely is realized. Be that as it may, there is an essential difference in principle between holding that a warrant drawn against the revenues provided for a year may be paid out of the surplus revenues of a succeeding year, and holding that an indebtedness may be created and bonds issued to take up an aggregate of debts incurred for ordinary expenses. The principal purpose of the sections of the Constitution with which we are dealing, as has been declared repeatedly, is to prevent the accumulation of public debts — to establish the cash system and abolish the credit system in public affairs, and to restrain improvident management. It may be argued with some consistency that if a county has issued warrants which it is unable to pay because it was disappointed in its collection of taxes and other anticipated income, nevertheless it may discharge those warrants out of the surplus revenues of a later year; for this policy does not tend to pile up public debts, but tends, rather, to induce economy of administration and thereby the discharge of debts which arise through failure to collect provided revenues in full. The contrary result will happen if you say a county need not be confined to a surplus yielded by economical methods of business, higher assessments, or, perchance, a growth of the taxable wealth of a county in paying off delinquent current expenses, but may vote and issue bonds for the purpose. This doctrine tends to frustrate the policy of the Constitution to put public affairs on a cash basis and prevent the accumulation of debt. The admitted fact in the present case that the counties of the State owe nearly two million dollars for delinquent current expenses, together with the suggestion that if Clark County succeeds in the present attempt to fund its said debt, other counties likely will follow, shows what will be the result if Section 12 is construed to permit the funding. With two million dollars of county debts incurred for ordinary expenses, to say nothing of those of cities, towns, etc., put into the form of interest-bearing securities, what will be left of the "cash system" in public business, so often asserted to have been the object of the Constitution? To permit a debt to be voted in advance to pay current expenditures, because a deficiency of revenue is certain to occur in consequence of uncollected taxes (though such debt would be a new one and therefore more within the letter of Section 12) would enable a county to abolish totally the cash system of public business, intended to be put into effect by the Constitution; and the same mischief must follow, if a debt may be voted to make good a deficiency which has accrued from anticipating the revenues of previous years. In either event the maximum rates prescribed in Section 11 could be nullified. The foregoing considerations make it patent to my mind that heretofore the discharge of warrants issued or judgments rendered on account of current expenditures, was not regarded by this court as a purpose for which a county may become indebted under Section 12, and that to so hold would be an unsound construction of the Constitution.

The weight of authority supports the proposition that the proposed bonds, issued to fund prior contractual obligations, would not constitute becoming indebted within the meaning of Section 12; in other words, would not be the creation of a new indebtedness, when, the transaction is regarded from the standpoint of what are the elements of a new debt. In one sense the bonds may be regarded as a new debt, but not in the constitutional sense. Said section has reference to becoming indebted in a substantial sense and so as to increase the financial obligations of the county or city. That bonds issued by a public corporation to fund a floating obligation or to refund old bonds, do not constitute a new indebtedness in the meaning of such constitutional limitations, is the doctrine accepted by the standard textwriters upon the reasoning and decisions of the courts. [Abbott, Public Securities, sec. 209, p. 431; 5 McQuillin, Mun. Corp. sec. 2270, p. 4798.] The author first cited said:

"The objection that through the issue of renewal or refunding bonds a new debt is created, has been repeatedly decided by the courts as not well taken, for the reason that the proceeds of such bonds are used, not for the purpose of adding to the indebtedness or the obligations of the corporation, but of paying outstanding ones, which, immediately upon the exchange or payment, become cancelled and extinguished and incapable of enforcement as corporate obligations, the only legal indebtedness existing against the public corporation as a result of the process being the new refunding or renewal bonds. Bonds issued to fund a valid indebtedness neither create any debt nor increase the debt, but merely change the form of the indebtedness." [Abbott, l.c. 431, 432.]

It is true the Supreme Court of the United States, in an opinion dissented from by three of the judges and decided the other way on the circuit (Cummins v. Township of Doon, 42 F. 644), took a distinction between refunding bonds issued to be exchanged for outstanding bonds, and those issued to be sold and the proceeds devoted to paying the prior bonds, holding that in the former case an indebtedness was not created within the meaning of such a constitutional provision as Section 12; whereas, in the latter case it was; because, in the interval between the issue of new bonds and the application of the proceeds to pay the old ones, there was an increase of the indebtedness of the public corporation; a doctrine that hinders needlessly the power of a municipality to refund its debts. It is said in a treatise cited above, that the decision has been so distinguished and criticised in respect of the point in question, that its authority has been much modified, if not entirely destroyed. [Abbott, Pub. Secur., p. 435.] The case has not been approved generally, one court remarking that the distinction taken "seems to be more nice than real, and in view of the vigorous dissent that was accorded the opinion, we may be permitted to doubt whether it ever will be made again." [City of Huron v. Sav. Bank, 86 F. 278.] In another case the decision was declared to be the source of all the trouble in dealing with the question in hand, and the opinion declared the courts of the states had almost uniformly refused to follow it and instead had accepted the minority opinion. [Veatch v. City of Moscow, 18 Idaho, 313.]

In the New York Court of Appeals the point was presented of whether or not bonds, issued under a refunding act, which might either be used to discharge a prior issue or sold and the proceeds used to cancel the prior ones, were valid, in view of a statutory provision against the city borrowing money. The new bonds were held not to amount to a borrowing and increasing of the debt of the city within the statute, the court saying that if sold for the purpose of raising money to pay old bonds, the effect was not different from what it would have been if they had been exchanged. The suit was one for specific performance to compel the purchaser of the new bonds to take them, he defending on the ground that they were invalid. [City of Poughkeepsie v. Quintard, 136 N.Y. 275.]

The Supreme Court of Oklahoma, in passing upon the legality of bonds issued to take up warrants and other forms of floating debts of that State and of the Territory of Oklahoma, had occasion to decide whether the new bonds created a new debt, for if they did, they were void, as the question had not been submitted to a popular vote. The opinion said: "It has been frequently held that where bonds have been issued for the express purpose of liquidating an outstanding indebtedness, such bonds neither created nor increased the public debt, but simply changed its form." [In re Mennefee, State Treas., 22 Okla. 365, 374.]

The point arose for decision in Indiana, as to the validity of a proposed bond issue, and that, too, under a constitutional provision which prohibited public corporations to "become indebted in any manner or for any purpose to an amount in the aggregate exceeding two per cent on the value of the taxable property within such corporation, to be ascertained by the last assessment for state and county taxes previous to the incurring of such indebtedness." The opinion said the "issuing of new bonds to provide, at their par value, for the payment of an old debt, or the substitution of new evidence of a pre-existing debt, is not in any legal or proper sense the creation of a new indebtedness." [Powell v. City of Madison, 107 Ind. 106.]

In dealing with the proposition, the Supreme Court of California said that "merely to fund or refund an existing debt is not to 'incur an indebtedness or liability.' A bond is not an indebtedness or liability, it is only evidence or representative of an indebtedness, and a mere change in the form of the evidence of indebtedness is not to create a new indebtedness within the meaning of the Constitution." The court then proceeded to examine and reject the case of Doon Twp. v. Cummins, 142 U.S. 366, saying the correct rule was stated in the dissenting opinion. [Los Angeles v. Teed, 112 Cal. 319, 327.]

There are other authorities of like tenor, including 5 McQuillin, Mun. Corp., sec. 2270; 1 Dillon, Mun. Corp. 379; Hirt v. City of Erie, 200 Pa. 223; Hotchkiss v. Marion, 12 Mont. 218, followed in Palmer v. City of Helena, 19 Mont. 61; Ewert v. Mallery, 16 S.D. 151; Hamilton Co. v. Sav. Bank, 157 F. 19; Morris v. Taylor, 31 Or. 62.

It seems to me this is the doctrine of both the majority and the minority opinions in State ex rel. v. Neosho, 203 Mo. 40; of the majority opinion by implication and of the minority one by express statement (p. 95).

It will be observed the question has been presented to the courts in this phase: That bonds intended to be issued to fund a floating debt or refund prior bonds, would increase the total indebtedness of the public corporation beyond the constitutional limit; in dealing with which proposition the courts, if not uniformily, yet nearly so, have held the constitutional limitation would not be exceeded, because the new bonds would not constitute a new debt; therefore, would not increase the indebtedness. But the principle of the decisions is that such a funding or refunding of bonds is not a "becoming indebted" on the part of a municipality or county, for the reason that it is already indebted and is simply changing the evidence or form of the indebtedness. If the issue of bonds is not a new debt, when to hold it is would stand in the way of the issue as being an infringement of the Constitution, it is difficult to perceive how it can be a new debt, when to so hold will sanction the issue as constitutional. But regardless of the technical distinctions taken in this connection, the essential fact is that Section 12, and similar limitations, were not adopted with reference to refunding debts, but with reference to incurring them.

For the foregoing reasons I respectfully dissent from the majority opinion herein.