State, ex rel. Keith et al., v. Common Council of Michigan City et al.

only in so far as it complies with the instructions given to the mayor by the council when he was authorized to execute it.

The language last quoted from the return leaves no room for doubt as to what those instructions were which were given to the mayor by the council, and which were his only warrant for contracting at all. He was instructed to enter into the contract, which had already been awarded to the appellants by the acceptance of their bid, made in response to the publication of the city.

"The said contract was awarded to the said relator, Keith, and the common council instructed William F. Woodson, mayor of said city, to enter into contract with said relator, Keith."

All of this action was taken under the ordinance, and it certainly could not be claimed, with reason, that the mayor was authorized by these instructions, to enter into any contract differing from the ordinance by which the work was ordered.

The appellants say, in their petition: "The mayor entered into the contract in pursuance of this authority." Could he, in pursuance of this authority, have bound the city by a contract providing for a pavement of brick instead of cedar block, as ordered by the ordinance? Could he have contracted for a pavement sixty feet in width instead of fifty-four and a half feet in width, as specified in the ordinance? And if he had so contracted, would the court order the assessment of the extra cost against the abutting property? Certainly not; for the reason that his authority was limited to the agreements required by this ordinance, and for the further reason that the foundation for no other contract had been laid by the common council. The ordinance is the pillar which supports the contract. According to the record before us, it is the only action taken by the common

State, ex rel. Keith et al., v. Common Council of Michigan City et al.

council, as a body, authorizing this improvement or justifying an assessment; and no action taken by any person or any other body can alter its specifications or amend its conditions.

The position here taken is only a part of the law of agency, but it has been frequently applied to municipal law by the text-books on that subject.

In Dillon on Municipal Corporations, section 447, fourth edition, the author says: "And it is a general and fundamental principle of law that all persons contracting with a municipal corporation must at their peril inquire into the power of the corporation or of its officers to make the contract." "This prin

ciple is more strictly applied, and properly so, than in the law of private corporations. So, also, those dealing with the agent of a municipal corporation are likewise bound to ascertain the nature and extent of his authority. This is certainly so in all cases where this authority is special and of record, or conferred by statute."

Also from section 452 of the same work: "Where officers or agents of a corporation, duly appointed, and acting within the scope of their authority," sign an instrument, the instrument is to be regarded as the simple contract of the corporation. Note 2, under this section: "The general rule is unquestionable that a municipal corporation is not bound by the unauthorized acts of an individual, whether an officer of the corporation or a mere private person. Davies v. Mayor of New York, 93 N. Y. 250.

Where a committee was empowered to contract for the erection of a building at a price not to exceed a specified sum, it was held that they had no power to contract for a larger sum, and that the person contractVOT. 138-30

State, ex rel. Keith et al., v. Common Council of Michigan City et al.

ing with them was bound to take notice of the extent of their powers. Turney v. Town of Bridgeport, 55 Conn.

412.

In section 935 of the second volume of Dillon on Municipal Corporations, the rule is thus stated: "Nor, as we have before stated, is a municipal corporation bound by contracts, within the scope of its chartered powers, if made by officers or agents not thereunto authorized."

The cases cited by counsel for the appellants in this branch of his argument are not at all opposed to the doctrine stated.

In Clements v. Lee, 114 Ind 397, it is held that a person about to enter into a contract with a city must inform himself as to the jurisdiction of the council to contract.

Taber v. Ferguson, 109 Ind. 227, decides that, as the statute does not require the proof of notice by publication to be filed with the clerk, the transcript will not be held bad on demurrer for want of the notice.

In City of Indianapolis v. Imberry, 17 Ind. 175, the court holds that it is not necessary for the council to place of record its determination as to whether or not the general fund shall bear a portion of the cost of the improvement. We think these decisions are of no avail in determining what contract was made by the city, and what are its corporate obligations under the facts set forth in the return.

The third proposition submitted by appellants' counsel is, that the return of the writ furnishes no legal reason why the parties could not have contracted in total disregard and in ignorance of the provisions of the ordinance, which makes provision for the payment of a part of the cost of the improvement by the street railway company. In our opinion the ordinance sought to be disregarded became an essential part of

State, ex rel. Keith et al., v. Common Council of Michigan City et al.

the agreement.

It is the duty of the contractors to inform themselves as to the ordinance on which their claim is based, and which creates the lien on the property that insures payment for the work.

"A person

In Clements v. Lee, supra, it is said: about to enter into a contract with a city council, must examine the records so far as to see that the common council has taken, or attempted to take, the steps necessary to enter into a contract."

In Johnson v. Common Council of City of Indianapolis, 16 Ind. 227, which was a suit for work done in grading and graveling a certain street, the action was defeated for want of a petition as required by the law of 1852. The court say: "Of this the contractor was bound to take notice; and, hence, the duty devolved upon him, before he took the contract, of ascertaining whether the council had so conducted the letting as to render the property-holders liable. It was also his duty to satisfy himself as to their ability to pay." In the case at bar there is a provision in the ordinance which relieves the property from its liability to pay the cost of the part of the pavement between the rails, of which the appellants were bound to take notice. But counsel claim for appellants, that they were justified in ignoring this provision, by the fact that it has no legal force; this is based on the assumption that the clause in the street railway company's franchise, adopted in 1886, gives the council no right to assess against the company the cost of the pavement between the rails. The clause reads: "Said street railway company shall plank, or otherwise and substantially pave the space between the tracks to the height equal to the surface of the rails laid by it." The acceptance of a franchise containing this clause, by the street railway company, would constitute an agreement to pave between the tracks. In Western Paving and Supply Co. v.

State, ex rel. Keith et al., v. Common Council of Michigan City et al.

Citizens' Street R. R. Co., 128 Ind. 525, the court said: "It is settled that a charter granted by the common council to a street railway company to construct and operate a street railway within the corporate limits of a city, constitutes a contract between such railway company and the city." "It is also settled that such charter is to be strictly construed against the railway company, and that it has no doubtful rights under such charter, for where there are doubts they are construed against the grantee and in favor of the city." They further say: "It seems to be settled that a street railway company is bound to keep in repair that portion of the street used by it, even in the absence of a stipulation in its charter requiring it to do so, but the question as to whether it is compelled to improve the street as ordered by the city, in the absence of a contract to that effect, seems to be in some doubt." In the case under consideration there is a contract in the charter of the company to pave. In Gilmore v. City of Utica, 121 N. Y. 561, the question of the liability of the street railway company for a part of the care of the street pavement was raised by the action of a lot owner to restrain the collection of an assessment. The decision is to the effect that the provision in the charter granting to the common council power to assess the cost of paving between the rails against the street railway company, is permissive, and not mandatory, and, as the council saw fit to assess the whole cost against the abutting property, it was not a matter of complaint on the part of the propertyowners. In the case at bar, the council adopted a plan exactly the reverse, and caused the cost of the pavement between the rails to be assessed against the street railway company.

Mention is made in this decision of a clause in the franchise, by which the railway company agrees to "re