delivered tlie principal opinion of the Court.
The bill in equity filed in this suit was by taxpayers of the State of Tennessee, as complainants, against the Funding Board of the State, seeking to have declared unconstitutional and void a provision of an act of the general assembly of Tennessee, approved by the governor on February 21, 1913, authorizing the issue and sale of State bonds in amount sufficient to provide funds with which to pay off-the outstanding bonded indebtedness of the State maturing July 1 and August 1. 1913, aggregating approximately $12,000,000.
Of the members of the Funding Board made defendants, the governor and comptroller answered, denying that the provision so attacked was invalid, and insisting upon the constitutionality thereof; and the treasurer and secretary of State in their answers join with complainants in the attack made by them.
The cause was heard on bill and answers, and on complainants’ motion for an injunction to inhibit the issuance of the bonds, with an incorporation therein of the feature so denounced by the bill of complainants as unconstitutional and void. The chancellor held that the provision attacked was not unconstitutional, but was within the power of the State, acting through the legislature, denied the injunction, and dismissed the bill. From his decree the complainants and two defendants, the treasurer and secretary of State, have appealed to and assigned errors in this court.
*444The provision of said act attacked as unconstitutional is the second pa-oviso of the second subsection of the first section thereof, which is as follows: “And provided, further, that neither the principal nor the interest of said bonds shall be taxed by this State or any county or municipal corporation thereof, and it shall be so stated in the face of said bonds.”
It is insisted by appellants that this provision is in violation of article 2, section 28, of the constitution of the State, which is as follows: “All property, real, personal or mixed, shall be taxed, but the legislature may except such as may be held by the State, by counties, cities or towns, and used exclusively for public or corporation purposes. . . . All property shall be taxed according to its value, that value to be ascertained in such manner as the legislature shall direct, so that taxes shall be equal and uniform throughout the State. No one species of properly from which a tax may be collected shall, be taxed higher than any other species of property of the same value, but the legislature shall have power to tax merchants,” etc.
The contention of appellants, for error, is that the legislature is without power to direct the execution of a contract or to authorize thei issuance of bonds by an act which is repugnant to the restrictions imposed by the constitution upon the legislative power; that the people of the State, speaking through the constitution, having ordained that all property shall be taxed, save certain enumerated classes of property which the legislature may exempt, and other classes which it shall exempt, its *445power to exempt from taxation is restricted to tbla enumerated classes, neither of which includes State bonds; that the act in question in its attempt to exempt1 property in bonds from taxation is repugnant to and in contravention of article 2, section 28, of the constitution,: and cannot be made the basis of, or establish a valid corn-tract.
The insistence of appellees is that the question pré-j sented by the proviso is.not one of tax exemption of| property, but one relating to the power of the State'in contracting to borrow money for governmental pur-] poses; that the real effect'of the proviso is to recognize^ and preserve the State’s immunity from taxation up¡jái¡ its credit — its power to borrow money to the best advhn-1 tage; and in so far as any idea or consequence of exemp- j tion from taxation is involved, the word “exemption”1 not being used in the act, it is in reality only an exemp.- j tion of the State’s credit — a thing not touched or ai-? fected by the constitution, except as to the purposes for | which that credit shall be used.
It may be said by way of premise that the question thus raised is different from the question under immediate decision in the case of State National Bank v. City of Memphis, 116 Tenn., 641, 94 S. W., 606, 7 L. R. A. (N. S.), 663, 8 Ann. Cas., 22. The question, involved and determined in the case of Bank v. Memphis was that'; State bonds are taxable in the hands of any one who may hold them, it not appearing that auv provision had been made, in the act authorizing their issuance, to. exempt “ them from taxation; whereas, in the present t *446case, the contention is that the legislature may validly provide in advance of issuance by the act of authorization, and in the face of the bonds, a contract stipulation for their nontaxability, based upon advantages. and a consideration accruing to the State itself.
How far the reasoning and principle embodied in the opinion of the court in Bank v. Memphis, supra, are applicable in the solution of the question here for determination will be adverted to later in this opinion.
A fundamental argument advanced by appellees to support rhe nontaxability, or the exemption from taxation, of the bonds under consideration, is that the power of the State to borrow for public purposes is a sovereign attribute or function, which was not limited or even touched by the constitution. This argument is met by a denial on the part of appellants, who insist that, while the power to borrow money by means of a bond issue is inherent in the State, nevertheless, the exercise of this power by the State does not involve an attribute of soveréignty, or more than a right inhering in the State as a corporate entity, citing Bank v. Smith, 7 Ohio State, 53, 54, quoted by this court in Bank v. Memphis, supra. While it is true that in several cases, including the Ohio case just referred to, the contract of borrowing money is said not to be referable to a State’s sovereign power, we believe that these cases mean to have reference to obligations incident to transactions without the scope of sovereign power, or to the status of a State in respect of such contract when made; that is, that the State’s rights as to construction of the instrument evidencing the contract are no higher than those of the individual with *447whom the contract may have been made. When a State’s power to issue bonds based on her credit is considered, many cases hold that it inheres in a State in her sovereign capacity. Piqua Branch Bank v. Knoop, 16 How., 369, 14 L. Ed., 977; Danolds v. State, 89 N. Y., 36, 42 Am. Rep., 277; State v. Smyrna Bank, 2 Houst. (Del.), 99, 73 Am. Dec., 699; Jessup v. United States, 106 U. S., 151, 1 Sup. Ct., 74, 27 L. Ed., 86; Lynn v. Polk, 8 Lea, 121, 240. It is because the power so inheres in a; State that the bonds issued by her are held not to be-taxable by the United States; such bonds being but; means for carrying on the work of the State government. Mercantile Bank v. New York, 121 U. S., 138, 162, 7 Sup Ct., 826, 30 L. Ed., 895; Pollock v. Farmers’ Loan & Trust Co., 157 U. S., 429, 15 Sup. Ct., 673, 39 L. Ed., 759; s. c., 158 U. S., 630, 15 Sup. Ct., 912, 39 L. Ed., 1108; McCray v. United States, 195 U. S., 27, 24 Sup. Ct., 769, 49 L. Ed., 78, 1 Ann. Cas., 561. Such power may be required to be exercised by the State in times of her dire necessity, or to preserve her existence, and is therefore; ;to be deemed an attribute of her sovereign power.
This conceded, it is argued that the imposition of a tax upon bonds so issued is a tax upon the State’s credit, and so far that it must be within the power of the legislature in issuing the bonds to validly- stipulate for their nontaxability.
This brings us to a consideration of whether or not it is competent to a State to tax her bonds issued upon her credit,. It is apparent, that this question differs from that.involved in the decisions of the supreme court of *448the United States denying power in tlie federal government to tax such securities of its coordinate sovereignty, S^hich decisions are placed upon the ground that to do so would be to perniit one sovereign power, acting in a national capacity, to tax the power of the State in respect of instrumentalities used in the borrowing of money. A sovereign State may, in its own discretion, in the absence of ,any constitutional prohibition, permit its own agencies or arms of government and its own prop-«eft.to be taxed; and, a fortiori, evidences of indebtedness ^issued on the basis of her credit, even when deemed to be instrumentalities of a State'in the exercise of its p'ower to borrow money. State Chancellor v. Elizabeth, 65 N. J. Law, 479, 47 Atl., 454; Norfolk v. Perry Co., 108 Va., 28, 61 S. E., 867, 35 L. R. A. (N. S.), 167, 128 Am. St. Rep., 940; 37 Cyc., 872.
In the Virginia case last cited, it is said that this theory of a State’s power to subject property held' by itself for its own public purposes is in practical effect but a constitutional concept, since thus the public would be taxing itself in order to raise money to pay over to itself, and no one would be benefited but the officers em-ployéd, whose compensation would go to increase the useless levy. Cooley on Taxation (3d Ed.), 263. Practically all State constitutions, therefore, exempt from taxation property held by the State; but this is far from being true in respect of bonds of a State. Bank v. Memphis, supra, and cases cited in 7 L. R. A. (N. S.), 663; 37 Cyc., 884.
The present case must turn, for solution, upon the *449question whether it is competent for the legislature to create such evidences of indebtedness, stamping the same in the act of creation as immune from taxation in the hands of an after holder, in the exercise of power conferred, or not withdrawn, by necessary implication, by the constitution of the State.
There is no express specific power granted by the constitution to the legislature looking to the issuance of bonds based upon public credit, but the power exists, nevertheless, in the legislature.
But this attribute of power is not to be contemplated as existent independent of, or dissociated form, the constitution. In the case of Bank v. Cooper, 2 Yerg., 599, 602 (24 Am. Dec., 517), that great jurist, Judge Green, said: “By the constitution all the legislative power of the people is vested in the general assembly; and it follows that the legislature may do anything within the legitimate scope of legislation which is not forbidden in the constitution, either in express terms or by implication.”
A contention that a legislative power (that of contracting) exists in the legislature, independent of the constitution, is untenable. All power of sovereignty resided in the people, and when a constitution was being ordained by them, they, as the State, judged what provisions should be inserted in their constitution, and how the powers of government should be apportioned in order to their exercise. This distribution of power was made as they pleased and willed in the organic law, and in the quantity they pleased and .willed: Cooley, Const. *450Lim. (6th Ed.), 45; Livingston v. Moore, 7 Pet., 469, 8 L. Ed., 751. The people in a constitution may validly vest a quantum of legislative power in a board, beyond the eontrol of their legislature-. Mobile, etc., Commissioners v. Putnam, 44 Ala., 537.
In Cooley’s Constitutional Limitations. (6th Ed.), 104, it is said in reference to the extent of legislative power: “In creating a. legislative department and conferring upon it legislative power, the people (in the constitution) must be understood to have conferred the full and complete power as it rests in, and may be exercised by, the sovereign power of any country, subject only to such restrictions as they may have seen fit to impose.” See, also, Id., p. 108.
The constitution is therefore the supreme law of the land to our legislature. Pope v. Phifer, 3 Heisk., 687.
In respect of the legislative power to contract, the people in our constitution have restricted the same, in 'the denial of power to their legislative agent to contract in a loan of the State’s credit in aid of any person (article 2, section 31), and to contract for her ownership of stock in any corporation (Tb.). And in resnect of the particular power here in question (bond issuance) it is prohibited to the legislature to issue her bonds to any defaulting railroad company (article 2, section 33). It cannot be denied that the power might have been prescribed or restricted in greater detail, in the sovereign’s power of attorney to its legislative departmefit.
The declaration of that instrument (constitution 1870, art. 2, sec. 3) that “the legislative authority of .this *451State shall be vested in a general assembly” carried with it plenary power of action within the sphere of the legislative function, except so far as restrained by the same constitutional charter; and as a part of that power, as by way of inclusion in, or necessary implication from, the general grant, is this power to issue bonds based, upon the State’s credit. .
The exercise of a legislative power by the general as* sembly, in order to be prohibited or circumscribed, need not be prohibited or circumscribed expressly. Limitations may attach by force of clear and necessary implication. Andrews v. State, 3 Heisk., 165, 175, 8 Am. Rep. 8; Lynn v. Polk, 8 Lea, 138; Redistricting Cases, 111 Tenn., 234, 291, 80 S. W., 750, and cases cited.
Considering, now, how far forth the power to issue such bonds is restricted by the constitution, if at all:
As we have seen, embodied in the constitution is an express stipulation that “all property, real, personal, or mixed, shall be taxed” by laws to be passed by the legislature. Accompanying this mandate is an optional power given the legislature to exempt such property as may be held by the State and used exclusively for public or corporation purposes. This court in Railroad v. State, 8 Heisk., 663, 805, said:
“Limitations on the taxing power are self-imposed by; the sovereign, and these alone are to be found in the bill» of rights and constitutions vouchsafed to the subject for his protection. No government could exist for a day ■without this attribute of super-eminent sovereignty. . . . It is the paramount power of all others which *452guarantees to the subject absolute protection upon the condition of absolute obedience and promptness in meeting its pecuniary exactions, by which alone it has the power to protect. The government can create its own sources of revenue without restriction, except such as it has imposed upon itself. Its power in this respect is imperial and all-pervading, and in the free States of America it is as unfettered and absolute, to the extent of their territorial jurisdiction, and subject only to the self-imposed restrictions of their own organic laws, as it was in imperial Rome when the ‘decree went forth from Caesar Augustus that all the world should be taxed/ The power to tax involves the power to exist.”
And again, at pages 794, 795, of the same opinion, in respect of the power of the Legislature under the consti-: tution of 1870 to exempt property, it is said:
“Whatever is the subject of ownership, ■ is actually owned, and is appreciable in value, is property in the-sense of the constitution; and ‘all property shall be taxed’ is the imperative, and not merely potential or' directory, injunction, which would seem to embrace every conceivable species of property as subject to thef burden, except such as are specially exempt, or may be1 exempted at the will of the legislature.”
The contention of appellees is, on analysis, that it is I within the power of the legislature, for a consideration passing to the State, by way of anticipation, in the! greater sums presumably to be paid for the bonds on that account, to make the bonds nontaxable in the hands ©f purchasers and future holders. This involves, of\ *453necessity, the exemption of such bonds so to be held, under a contract supported by a consideration. In respect of the power of the legislature to exempt by contract this court has spoken.
In Ellis v. L. & N. R. R. Co., decided by this court at the December term, 1876 (the opinion of the court being reported in the Commercial Legal Reporter of March 11, 1877, but not officially reported, along with Judge McFarland’s opinion in 8 Baxt., 530), there was involved :he consideration of the power of the legislature to enter mto contracts with certain railroads whose existing charters had exempted them from taxation, by which contracts, for a period of ten years, they were released from the method provided for taxing other railroads upon consideration of payment by the former of 1J per cent, of their gross receipts, such railroads consenting to an amendment to their respective charters to the effect that after ten years no exemptions of any property of the company should exist, but that all such property should be on the same footing as the property of other corporations and individuals. The opinion of the court, as rendered through Chief Justice Deaderick, is quoted by Chancellor Cooper in the case of Memphis & Charleston Railroad v. Gaines, 3 Tenn. Ch., 606-611; and therein it was held that under the constitution of 1870 it was heyond the power of. the general assembly to exempt the property of a railroad from taxation, even in order by the contract to secure to the State a release of the immunity from taxation contained in the railroad’s char:ter. It was argued by the railroad company there involved thatike surrender of exemptions in favor of the *454road owned by it, under lease or purchase, ought to tak® the case out of the general rule, but Chief Justice Deaderick said:
“The surrender of the supposed immunity from taxation, though it might be a good consideration for the grant of special exemptions or privileges, in the absence of any constiutional prohibition to make such grant, cannot give validity to an act of the legislature which it is prohibited by the constitution to pass.”
Chancellor Cooper, in the case of Memphis & Charleston Railroad Company v. Gaines, supra, among other things, said in relation to a like contention: “The decision is that the surrender of an immunity from taxation, though a good consideration for anything the legislature can constitutionally grant, cannot confer upoi. the legislature a power it is expressly forbidden to exercise. The constitutional mandate that ‘all property shall be taxed’ prevents the legislature from granting any exemption whatsoever, no matter what may be the consideration. It can make no difference, therefore,, whether the immunity surrendered be on the same prop-, erty or on other property, or what may be the considera-, tion, it is beyond the legislative competency to grant an. exemption of property from taxation. It is not the nature or extent of the consideration which is to be looked' to, but the legislative power. It is precisely as if thei constitution had forbidden the legislature to pledge thei State credit for any purpose, and the legislature were' to undertake to buy up existing indebtedness by pledg-1 inn the State credit for a longer period. However supreme' its authority may be in other directions, or however wise *455and judicious may be the exercise of its authority in the particular direction, the question is one of constitutional power. The court says the legislature is expressly forbidden to exempt. Existing exemptions cannot, of course, be interfered with, but new exemptions are beyond legislative competency. It has unlimited power- to deal with existing exemptions. The consideration it pays may take any other shape but that. Trask v. Maguire, 18 Wall., 392, 407 [21 L. Ed., 938].”
In Railway v. Wilson County, 89 Tenn., 597, 607, 15 S. W., 446, 448, Judge Caldwell had under review an attempted tax exemption by a county court, offered as an inducement for the location and construction of a railroad, and in reliance on which the railroad was thereafter built. After discussing lack of power in the county court, it was said:
“Moreover, we must not be understood as agreeing that the legislature has the power to confer any such authority upon county courts, or to exercise it itself. Section 28 of article 2 of the Constitution requires that equal and uniform taxes shall be laid on all taxable property, and it enumerates the property that may be and that shall be exempt from taxation by the legislature. In that enumeration railroads are not mentioned or included; hence, they must be taxed at the same rate that other property is taxed. . . .
“This constitutional mandate that all property (except that mentioned therein for exemption) shall be taxed prohibits even the legislature from granting any other exemption whatever, no matter what the con*456sideration; and if it attempt to do so, the effort is unavailing and void for want of legislative power. M. & C. R. R. Co. v. Gaines, 3 Tenn. Ch., 611; Ellis v. L. N. R. R. Co., 8 Baxt., 530; Chattanooga v. Railroad Co., 7 Lea. 576, 577; Railroad v. State, 8 Heisk., 789, 796.
“The constitution has declared what property shall bo taxed, and what may and what shall be exempt from taxation. Complainant’s property is among that which shall be taxed; therefore, there was in 1886, and is now. no power in the legislature or elsewhere to grant the' exemption now claimed. It could not be done even upon the understanding that the railway was yet to be located and built, and that it was to be done with foreign capi tal. It is not the nature or extent of the consideration which is to be looked to, but the legislative power.”
Conceiving, as we do, that the legislature has power to issue bonds in a funding of the outstanding bonds, what is the effect of this power, in conjunction with the express constitutional provision that all property shall be taxed, with exceptions not covering bonds? Can the power implied in or as a part of the general grant of legislative power to the legislature be allowed to override the explicit mandate in respect of a power, in fcom-parison, the higher and more vital? Rather, both should be construed together, and the exercise of the former be made to depend, in conditions of exercise, upon compliance with the latter. The mandate by clear and necessary implication affects the power.
In Memphis v. Bank, 91 Tenn., 574, 586, 587, 19 S. W., 1045, 1048, this court, speaking through Judge Caldwell, said:
*457“So it is, also, with reference to tlie constitution of 1870.11'The whole instrument must, be taken into con-, sideratioa, and no part so construed as to impair or destroy any other part. Legislative powers enumerated in one clause must be defined and exercised with reference to limitations and requirements made in, other clauses.”
See, also, Lynn v. Polk, 8 Lea, 121; McKinney v. Hotel Co., 12 Heisk., 104.
When we turn to other jurisdictions for authority, we find and are cited to no case, decided by a court of last resort, that discusses and decides the exact point before us.
The case of Pullen v. Corporation Commission, 152 N. C., 548, 68 S. E., 155, decided in 1910, is urged by ap-pellees as supporting their insistence.
The constitution -of North Carolina provides that “laws shall be passed, taxing by- uniform rule, all moneys, credits, investments in bonds, stocks, joint stock companies, or otherwise, and also all real and personal property, according to its true value in money. . . . Property belonging to the State . . . shall be exempt from taxation.”
The principal portions of the several opinions in that' case deal with questions as to proper assessment for taxation, under the legislative enactments there under review; but the court said in passing upon section 4 of the act, which provided for the nontaxability of State' bonds issued under it: “In the hands of the owner, and ever held, and regardless of what part of his money *458is invested in them, the State bonds issued under this act are clearly exempted from taxation, general or special, direct or indirect. This being the clear intent and policy of the State, speaking through the legislative department, and exercising a power uniformly recognized and conceded, it is our plain duty to uphold the will of the State and not to be astute to search for ways to evade it.” <
The constitutional provision, above quoted, ,was not even referred to; nor was the interrelation of the constitutional bond-issuing power and the above constitutional provision discussed. Evidently the point under discussion in the present case was there not debated but conceded.
Counsel of appellees next urge, upon us that the case of Champaign County Bank v. Smith, 7 Ohio St., 42, quoted freely in the case of Bank v. Memphis, supra, is authority for their position.
It appears that there had been no stipulation on the face of the particular bonds in question in that case, nor for nontaxability in the special law of Ohio, under which they were issued. It is argued that the inevitable inference from the language used by the court in that case, quoted by Mr. Justice Neil, in Bank v. Memphis, supra (therefore not necessary to be here quoted), is that if there had been such a stipulation the court would have held the bonds to have been nontaxable.
It is conceded that the Ohio court therein held that — -- tstx exemntion, and it does not *459clearly appear what was the language of the Ohio constitution that was in effect at the date of the enabling act.
It seems, however, that the contention over this phase of tax exemption had a later history in the courts of Ohio. Alter the decision in Bank v. Smith, supra, rendered in 1857, the power of the legislature of that State to exempt State bonds from taxation arose in the case of Probasco v. Raine, in the superior court of Cincinnati, on the bench of which Judge Taft was at that time sitting. The bonds there involved were issued prior to the Ohio constitution of 1851, which is identical in its language with the constitution of North Carolina, quoted above; and Judge Taft, who afterwards displayed great ability on the bench of the United States Circuit Court of Appeals for the Sixth Circuit, said, in respect of the validity of an act undertaking to exempt such State bonds from taxation:
“It is true that the constitution does not execute itself, and if the legislature simply fails in its constitutional duty to pass laws taxing any kind, of property, . . . no tax can be collected on it. But when, instead of mere positive disobedience, it expressly enacts an exemption, it is void, and if under the general provisions of the law the property is taxable, the exemption fails and the property must be returned.” 21 Wkly. Law Bul. (Ohio), 88, citing Bank v. Smith, 7 Ohio St., 42, and other Ohio cases.
The case was appealed from the superior court of Cincinnati to the supreme court. That court expressly disclaimed any intention of passing upon *460the merits of the question as'to the tax exemption. Judga Burket said: “For myself, I think that these stocks [State bonds] are expressly exempted from taxation by ¡the act of April 8, 1856, taken in connection loith the act 'of February á, 1S25, and that the act of 1856 is constitutional. But as the court is divided upon this question, jthe point is left undecided.” Probasco v. Raine, 50 Ohio St., 378, 393, 34 N. E., 536, 539. It thus inferentially appears that, had the bonds been issued after the Ohio constitution of 1851, without reference to power exercised validly under an earlier constitution in respect of ithe subject-matter of the legislation, the court would |have held the tax exemption invalid, as Judge Taft had done.
We are next referred by appellees to the case of Penick v. Foster, 129 Ga., 217, 58 S. E., 773, 12 L. R. A. (N. S.), 1159, 12 Ann. Cas., 346, decided in 1907, as bearing upon the present issue. That case was decided under ¡the Georgia constitution, by no means identical with [ours in respect to the imperative requirement that the [legislature shall tax all property. The exemption clause !of the Georgia constituí ion permitted the exemption ifrom taxation of “all public property.” The court held [that municipal bonds were exempt from taxation in the ¡hands of holders, on the theory that the municipality was [an arm of the State government, and that its bonds were fby implication excluded from taxation. This Georgia ¡case is directly contrary to Bank v. Memphis, supra, unless differentiated by the dissimilar constitutional pro-jtiaiona applicable, respectively»
*461But we find that the supreme court of the United States, in the very recent case of Berryman v. Board of Trustees, 222 U. S., 334, 350, 32 Sup. Ct., 147, 151, 56 L. Ed., 225, 230, had under consideration a contention that the legislative power of contracting (and in so doing to exempt for consideration from taxation) should not be deemed to be restricted by a clause in the organic law of the territory of Washington, to the effect “that the legislative assembly shall not grant private charters or special privileges.” Mr. Chief Justice White, in delivering the unanimous opinion of the court, said (the italicizing ours):
“We at once, moreover, concede, for the sake of the argument, that the exemption from taxation which was conferred was upon a consideration, and therefore rested in contract, and, if it was in the power of the territoral government to make, is protected from impairment by the contract clause of the constitution. With this concession in mind, and before coming to determine whether the exemption was valid — that is, whether, in and by virtue of the prohibition in the organic law forbidding especial privileges, the territorial legislature was incompetent to grant a contract exemption — we briefly advert, to the contention made that a broad meaning must be given to organic act for the purpose, if it can be done, of establishing that there was no limit upon the power of the territorial legislature to exempt. It is conceded that the elementary rule is that exemptions from taxation must be strictly construed. But it is said that this applies only to the contract of alleged exemption, and has *462no relation to the inquiry whether the legislature had the power to exempt, because full legislative power must be presumed to exist, unless there is a plain prohibition to the contrary. While we are of .opinion that the contention has no direct bearing on the more important proposition here to be decided, we cannot give it, even by silence, our assent, because we consider that it admits, on the one hand, the rule of strict construction, and at once denies it upon the other, by improperly restricting the area of its operation. We say this because, if in a particular case, the duty arises of determining whether words of restriction found in the fundamental law are intended to operate a limitation on the legislative power to grant contract exemptions from taxation, the rule of strict construction is just as applicable as it would be to a case where it was applied for the purpose of determining whether the particular terms of an alleged contract did or did not embrace an exemption from taxation. We thinlc the rule of construction is as broad as the subject to which it relates', and its operation does not depend upon whether the question is one of limitation of legislative power or of the true interpretation of a contract asserted to be one of exemption . . .
“It is urged that, as in this case there was a consideration for the especial privilege granted, the agreement of the incorporators to establish and maintain an institution of learning, therefore the exemption cannot be held to be an especial privilege within the intendment of the organic act, since the privilege so bestowed was conferred not as an especial privilege, but as an equivalent! *463for the contract obligations assumed. As we have seen, however, it is the contract of exemption which, in the very nature of things, characterises the grant as an especial privilege. When this is borne in mind, it appears that the proposition is that the feature which gaye to the grant the essential characteristic of an especial privilege must be held to cause it not to be of that nature.”
To our minds the reasoning of Mr. Chief Justice White, on this closely related point, is substantially that of this court in cases quoted above, and is therefore conclusive against the construction contended for, and so ably enforced, by counsel of appellees.
Returning, now, to the case of Bank v. Memphis, supra, the latest deliverance. of this court on the subject, and to a consideration of how far the principle of that case is decisive of the present contention: The decision there was based upon a refusal of this court to imply from the constitution of this State a power to exempt State bonds from taxation; the only express intention to exempt being found in the act of the legislature there under consideration. It being conceded by appellees that there is no power expressly granted to the legislature to relieve State bonds from taxes, we are asked to imply that power by way of grafting upon the power of the sovereign to issue bonds an implied power to exempt them from taxation. The court having held in Bank v. Memphis that there was no power in the legislature to exempt such bonds inferable, in the face of the mandate that all property shall be taxed, we have but to apply the same principle to the different facts of this case — -to the at*464tempt on the part of- the legislature to render nontaxable, on issue, State bonds as for a contract consideration accruing to the State. ’ As in the case of Bank v. Memphis, supra, the only express intention to' exempt is found in the proviso of the legislative act. It is absent from the constitution. The power of exemption from taxation' is not so much an incident to the power of borrowing money as it is to the power of taxation, from the exercise' of which the supreme law permits the legislature to grant immunity. In a constitution, the natural place for a grant of exemptions and all exemptions, at legislative option, is the article where appears a mandate that the taxing power be exercised. When we look to that article of our constitution; we do not. find State bonds to be within the purview of permissible exemptions. We find other kinds of property there closely defined for inclusion.
We recognize the rule of construction that leaves the sovereign not included in, but, so to speak, withdrawn from, the general language of a statute or constitution, unless specifically mentioned. Dollar Savings Bank v. United States, 19 Wall., 237, 22 L. Ed., 82; United States v. Herron, 20 Wall., 251, 22 L. Ed., 275; Lewis v. United States, 92 U. S., 618, 23 L. Ed., 513; Carr v. State, 127 Ind., 204, 26 N. E., 778, 11 L. R. A., 370, 22 Am. St. Rep., 624; Seton v. Hoyt, 34 Or., 266, 55 Pac., 967, 43 L. R. A., 634, 75 Am. St. Rep., 641; State v. Crutchfield, 3 Head, 113.
But in the article of our constitution permitting exemptions the State is mentioned specifically,, and. its *465property, in order to exemption, is required, to be held and used exclusively for public or corporation purposes.
We cannot undertake to pare away constitutional mandates, or to amend the constitution,- by subtle refinements; the legislature may not.
In the dissenting opinion of Mr. Justice Green it' is indicated that the decision of this case should be based upon the authority of cases by him cited, which hold it to be within the power of the legislature to make immune from taxation the bonds of counties and municipalities and it must be conceded that the power, once admitted as herein contended for, would work to that end, and could not, if put in operation, be substantially difieren tiate'd from the power sought to be exercised by the Legislature in the act under review. If the principle urged in that dissenting opinion is sound, we conceive that it will prove a matter of surprise to the bar, and the experienced legislator, in that for the forty-two years following the adoption of the constitution the power, thus contended to be broadly applicable, has never been utilized, nor has it even been sought to be exercised. . The constitutional convention of 1870 has been perhaps not improperly described by Caldwell in his Constitutional History of Tennessee, as having been “composed of strong men; it was probably the most intellectual body that ever was elected in Tennessee for any purpose.” No inconsiderable portion of its membership, was active in affairs of ' State under that constitution, and ■ as legislators. One of the members sat on this bench, as Chief Justice, and participated in giving trend to the *466construction of that instrument; and before they passed away, no one advanced, for adoption by the legislature, the doctrine here so earnestly urged on us.
What these, our predecessors, did in making and molding the fundamental law, what our predecessors on this bench said by way of construction so soon thereafter, we 'have no disposition to cast aside, and to adopt, in lieu, a theory that would, in our opinion, pave the way to special privilege which the-framers of the constitution were, concededly, so solicitous to bar and forbid.
Nor can we concur in the validity of the argument, embodied in the dissenting opinion of Mr. Justice Lansden, that the State has power to repudiate her bonds, w3%h power argues for or demonstrates the existence of the power to make them property beyond the reach of her taxing power. The judiciary of a sovereign State will not contemplate an act of baseness on her part as evidencing power. As said by Judge Elliott, speaking to the same point for the supreme court of Indiana: “Might and opportunity do not constitute power in the true sense; to constitute power, another element must be present, and that element is right.” Carr v. State, 127 Ind., 204, 26 N. E., 778, 11 L. R. A., 370, 22 Am. St. Rep., 624.
It is true that the State may, by failure to make appropriations, defeat a just claim against her, and that she cannot be sued in respect thereof. But this does not go to the substance of the contract, which is and remains valid, under her conceded power to make it. The State, w to-í«cM of nouaction. mav defeat a iust noncontract *467claim, equally with one resting on contract. Immunit,'. of a sovereign from suit is wholly distinct from, and ha,s no proper relation to, her power to validly engage her self by contract. Another insistence of appellees is tha ¡ even if the proviso in the legislative act in question bi deemed an exemption from taxation, the bonds being, at the time the exemption was declared and effected, tli property of the' State and held for public purposes such exemption is1 within the purview of article 2, section 28, of the constitution, and valid; that the bonds, being owned by the State when stamped as immune,' continu so to be through the life the bonds. The case of Chester County v. White Bros., 70 S. C., 433, 50 S. E., 28, is cited as sustaining this contention. That decision was rested on a constitutional provision in respect of ta:. exemption materially different from ours, and peculia. in its phraseology.
It suffices to respond to the contention that until emitted from the treasury by the State, her bonds have no status as property, and only until they become property are they subject to taxation. When they become property, they must be taxed along with all other property, unless the legislature may exempt them, and that it may not we have just held.
The last contention of appellees is that the attempt to issue the bonds as nontaxable securities may be supported as a valid exercise of the police power on the part of the legislature. On consideration, we hold that we have not here presented a case falling within the power thus invoked.
*468The chancellor was in error,- as herein indicated, and it results that his decree is reversed, and remanded for -further proceedings in accord herewith.