out power to appropriate the moneys in its treasury, or by the conduct of its officers to subject itself to implied obligations.1

The powers conferred upon the municipal governments must also be construed as confined in their exercise to the territorial limits embraced within the municipality; and the fact that these powers are conferred in general terms will not warrant their exercise except within those limits. A general power "to purchase, hold, and convey estate, real and personal, for the public use" of the corporation, will not authorize a purchase outside the corporate limits for that purpose.2 Without some special provision they cannot, as of course, possess any control or rights over lands lying outside; and the taxes they levy of their own authority, and the moneys they expend, must be for local purposes only.4

But it is another question, how far the legislature of the State may authorize the corporation to extend its action to objects outside the city limits, and to engage in enterprises of a public nature which may benefit the citizens of the municipality in common with the people of the State at large, and also in some special and peculiar manner, but which nevertheless are not under the control of the corporation, and are so far aside from the ordinary purposes of local governments that assistance by the municipality in such enterprises would not be warranted under any general grant of power. For a few years past the sessions of the legislative bodies of the several States have been prolific in a

1 "In determining whether the subject-matter is within the legitimate authority of the town, one of the tests is to ascertain whether the expenses were incurred in relation to a subject specially placed by law in other hands. . . . . It is a decisive test against the validity of all grants of money by towns for objects liable to that objection, but it does not settle questions arising upon expenditures for objects not specially provided for. In such cases the question will still recur, whether the expenditure was within the jurisdiction of the town. It may be safely assumed that, if the subject of the expenditure be in furtherance of some duty enjoined by statute, or in exoneration of the citizens of the town from a liability to a common burden, a contract made in reference to it will be valid and binding upon the town." Allen v. Taunton, 19 Pick. 487.

Riley v. Rochester, 9 N. Y. 64.

* Per Kent, Chancellor, Denton v. Jackson, 2 Johns. Ch. 336. And see Bullock v. Curry, 2 Met. (Ky.) 171; Weaver v. Cherry, 8 Ohio, N. S. 564; North Hempstead v. Hempstead, Hopk. 294; Concord v. Boscawen, 17 N. H. 465.

In Parsons v. Goshen, 11 Pick. 396, the action of a town appropriating money in aid of the construction of a county road, was held void and no protection to the officers who had expended it. See also Concord v. Boscawen, 17 N. H. 465.

species of legislation which has flooded the country with municipal securities issued in aid of works of public improvement, to be owned, controlled, and operated by private parties, or by corporations created for the purpose; the works themselves being designed for the benefit of the State at large, or some particular portion of it, but supposed to be specially beneficial to certain localities because running near or through them, and therefore justifying, it is supposed, the imposition of a special burden by taxation upon such localities to aid in construction. We have elsewhere collected the cases in which it has been held that the legislature may constitutionally authorize cities, townships, and counties to subscribe to the stock of railroad companies, or to loan their credit to these enterprises, and to tax their citizens to pay these subscriptions, or the bonds or other securities issued, where a peculiar benefit to the municipality was anticipated from the improvement. The rulings in these cases, if sound, must rest upon the same right which allows such municipalities to impose burdens upon their citizens to construct local streets or roads, and they can only be defended on the ground that "the object to be accomplished is so obviously connected with the [municipality] and its interests as to conduce obviously and in a special manner to their prosperity and advancement." 2

1 In Merrick v. Inhabitants of Amherst, 12 Allen, 500, it was held competent for the legislature to authorize a town to raise money by taxation for a State agricultural college, to be located therein. The case, however, we think, stands on different reasons from those where aid has been voted by municipalities to public improvements.

Talbot v. Dent, 9 B. Monr. 526. See Hasbrouck v. Milwaukee, 13 Wis. 44. "I confess it appears to me, notwithstanding the weight of authority on this head, that a delegation of the power to municipal corporations to tax their citizens for works of such a large and general utility as railroads cannot be fairly called a taxation for local purposes, nor justified on that ground. The road may benefit the locality, but it is not easy to see how it can properly be called a local object.” Sedgwick on Statutory and Const. Law, 464. See also Cass v. Dillon, 2 Ohio, N. S. 624, per Thurman, J.; dissenting opinion of Ranney, J. in same case; Griffith v. Commissioners of Crawford County, 20 Ohio, 609, per Spaulding, J. And see the following cases in Iowa, where it has been held incompetent under the constitution of that State to confer any such power upon the municipality: Stokes v. Scott County, 10 Iowa, 166; State v. Wapello County, 13 Iowa, 388; Myers v. Johnson County, 14 Iowa, 47; Smith v. Henry County, 15 Iowa, 385; Ten Eyck v. Mayor, &c. of Keokuk, Ibid. 486; Clark v. Des Moines, 19 Iowa, 212.

"The corporation of St. Louis might be intrusted with power to borrow money, and with funds thus procured enter upon some great scheme of improve

The first requisite to the validity of any such subscriptions or securities would seem, then, to be a special legislative authority to make or issue them; an authority which does not reside in the general words in which the powers of local self-government are usually conferred,' and which must be followed by the municipality in all essential particulars, or the subscription or security will be void. And while mere irregularities of action, not going to the essentials of the power, would not prevent parties who had acted in reliance upon the securities enforcing them, yet as the doings of these corporations are matters of public record, and they have no general power to issue negotiable securities, any one who becomes holder of such securities, even though they be negotiable in form, will take them with constructive notice of any want of power in the corporation to issue them, and cannot enforce them when their issue was unauthorized.2

ment supposed to be beneficial to the city and the State. It must then, to this extent and for this purpose, be like any other incorporated company established for making roads, digging canals, or engaging in manufactures. I should doubt the power of the legislature to compel any man to become a shareholder in such a company without his consent." City of St. Louis v. Allen, 13 Mo. 415.

1 Bullock v. Curry, 2 Met. (Ky.) 171. A general power to borrow money or incur indebtedness to aid in the construction of "any road or bridge " must be understood to have reference only to the roads or bridges within the municipality. Stokes v. Scott County, 10 Iowa, 173; State v. Wapello County, 13 Iowa, 388; La Fayette v. Cox, 5 Ind. 38. There are decisions in the Supreme Court of the United States which appear to be to the contrary. The city charter of Muscatine conferred in detail the usual powers, and then authorized the city "to borrow money for any object in its discretion," after a vote of the city in favor of the loan. In Meyer v. Muscatine, 1 Wal. 384, the court seem to have construed⚫ this clause as authorizing a loan for any object whatever;. whereas we think such phrases are understood usually to be confined in their scope to the specific objects before enumerated; or at least to those embraced within the ordinary functions of municipal governments. This case was followed in Rogers v. Burlington, 3 Wal. 654, four justices dissenting. A municipal corporation having power to borrow money, it is held, may make its obligations payable wherever it shall agree. Meyer v. Muscatine, 1 Wal. 384. There are cases, however, which hold that such obligations can only be made payable at the corporation treasury, unless there is express legislative authority to make them payable elsewhere. People v. Tazewell County, 22 Ill. 147; Pekin v. Reynolds, 31 Ill. 529. Such corporations cannot give their obligations all the qualities of negotiable paper, without express legislative permission. Dively v. Cedar Falls, 21 Iowa, 565.

There is considerable confusion in the cases on this subject. If the corpóration has no authority to issue negotiable paper, or if the officers who assume to do so have no power under the charter for that purpose, there can be no doubt that

In some of the cases involving the validity of the subscriptions made or bonds issued by municipal corporations in aid of interthe defence of want of power may be made by the corporation in any suit brought on the securities. Smith v. Cheshire, 13 Gray, 318; Gould v. Sterling, 23 N. Y. 458; Andover v. Grafton, 7 N. H. 298; Clark v. Des Moines, 19 Iowa, 209. And in any case, if the holder has received the securities with notice of any valid defence, he takes them subject thereto. But where the corporation has power to issue negotiable paper in some cases, and it has assumed to do so in cases not within the charter, whether a bona fide holder would be chargeable with notice of the want of authority in the particular case, or, on the other hand, would be entitled to rely on the securities themselves as sufficient evidence that they were properly issued when nothing appeared on their face to apprise him of the contrary, is a question still open to some dispute.

In Stoney v. American Life Insurance Co., 11 Paige, 635, it was held that a negotiable security of a corporation which upon its face appears to have been duly issued by such corporation, and in conformity with the provisions of its charter, is valid in the hands of a bona fide holder thereof without notice, although such security was in fact issued for a purpose and at a place not authorized by the charter of the company, and in violation of the laws of the State where it was actually issued. In Gelpecke v. Dubuque, 1 Wal. 203, the law is stated as follows: "Where a corporation has power, under any circumstances, to issue negotiable securities, the bona fide holder has a right to presume they were issued under the circumstances which give the requisite authority, and they are no more liable to be impeached for any infirmity in the hands of such holder than any other commercial paper." In Farmers and Mechanics' Bank v. The Butchers and Drovers' Bank, 16 N. Y. 125, it is said: "A citizen who deals directly with a corporation, or who takes its negotiable paper, is presumed to know the extent of its corporate powers. But when the paper is, upon its face, in all respects such as the corporation has authority to issue, and its only defect consists in some extrinsic fact, such as the purpose or object for which it was issued, to hold that the person taking the paper must inquire as to such extraneous fact, of the existence of which he is in no way apprised, would obviously conflict with the whole policy of the law in regard to negotiable paper." In Madison and Indianapolis Railroad Co. v. The Norwich Saving Society, 24 Ind. 461, this doctrine is approved, and a distinction made, in the earlier case of Smead v. Indianapolis, &c. Railroad Co., 11 Ind. 104, between paper executed ultra vires and that executed within the power of the corporation, but, by an abuse of the power in that particular instance, was repudiated. In Halstead v. Mayor, &c. of New York, 5 Barb. 218, action was brought upon warrants drawn by the corporation of New York upon its treasurer, not in the course of its proper and legitimate business. It was held that the corporation under its charter had no general power to issue negotiable paper, though not being prohibited by law it might do so for any debt contracted in the course of its proper legitimate business. We quote from the opinion of Edwards, J.: "It was contended on the argument, that the rule of law-merchant which protects the bona fide holder of negotiable paper, without notice, was of universal application; and that, if the defendants had a right to issue negotiable paper, it must ex necessitate be subject to the same rules as the

nal improvements, there has been occasion to consider clauses in the State constitutions designed to limit the power of the legisla negotiable paper of an individual. This view seems plausible, but will it bear the test of examination? In the first place, the defendants have no general power, either express or implied, to issue negotiable paper. They have only a special or conditional implied power for that purpose; that it is necessary as a condition precedent to the validity of such paper that the debt which forms the consideration should be contracted in the proper legitimate business of the defendant. The act under which they were incorporated is declared to be a public act. Every person who takes their negotiable paper is bound to know the extent of their powers, and is presumed to receive it with a full knowledge that they have only a limited and conditional power to issue it. He is thus put on his inquiry, and takes it at his peril. The circumstances under which a bona fide holder, without notice, receives the negotiable paper of a natural person, or of a corporation having the general express power to issue negotiable paper, are very different. In both those instances, the power to issue such paper is general and unconditional; and hence the rules which have been established by commercial policy, for the purpose of giving currency to mercantile paper, are applicable. It results from the views which have been expressed, that the drafts in question, not having been issued by the defendants in their proper and legitimate business, are void in the hands of the plaintiff, although received by him without actual notice of their consideration." This decision was affirmed in 3 N. Y. 430. In Gould v. Town of Stirling, 23 N. Y. 458, it was held that where a town had issued negotiable bonds, which could only be issued when the written assent of two thirds the resident persons taxed in the town had been obtained and filed in the county clerk's office, the bonds issued without such assent were invalid, and that the purchaser of them could not rely upon the recital in the bonds that such assent had been obtained, but must ascertain for himself at his peril. Say the court: "One who takes a negotiable promissory note or bill of exchange, purporting to be made by an agent, is bound to inquire as to the power of the agent. Where the agent is appointed and the power conferred, but the right to exercise the power has been made to depend upon the existence of facts of which the agent may be supposed to be in an especial manner cognizant, the bona fide holder is protected; because he is presumed to have taken the paper upon the faith of the representation as to those facts. The mere fact of executing the note or bill amounts in itself, in such a case, to a representation by the agent to every person who may take the paper that the requisite facts exist. But the holder has no such protection in regard to the existence of the power itself. In that respect the subsequent bona fide holder is in no better situation than the payee, except in so far as the latter would appear of necessity to have had cognizance of facts which the other cannot [must ?] be presumed to have known." And the case is distinguished from that of the Farmers and Mechanics' Bank v. Butchers and Drovers' Bank, 16 N. Y. 125, where the extrinsic fact affecting the authority related to the state of accounts between the bank and one of its customers, which could only be known to the teller and other officers of the bank. The subject is reviewed in Clark v. City of Des Moines, 19 Iowa, 209. The action was brought upon city warrants, negotiable in form, and of which the plaintiff claimed to be bona fide