v. Madison, 7 Wis. 688; Clark v. Janesville, 10 Wis. 136; Clark v. School Dist., 3 R. I. No. 7, 199; State v. Babcock, 22 Neb. 614; Kenosha v. Lamson, 9 Wall. (U. S.) 477, 486. Right of private corporations to borrow money. See Curtis v. Leavitt, 15 (N. Y.) 9. In For difference between contracting a debt and borrowing money, see dissenting opinion of CHIEF JUSTICE AGNEW in Williamsport v. Čom., 84 Pa. St. 487; s. c., 24 Am. Rep. 208. this case the subject is elaborately discussed, and it is said that, "taken in its broad sense, the power to borrow money and issue bonds therefor, cannot be said to be among the implied powers of a municipal corporation." But it finally said: "The foregoing cases rest upon the principle, which we think a sound one, that where a municipal corporation has lawfully contracted a debt, it has the implied power, unless restricted by its charter or prohibited by statute, to evidence the same by a bill, bond, note or other instrument; that the power to contract a debt carries with it by necessary implication the right to give an appropriate acknowledgment of such debt, and to agree with the creditor as to the time and mode of payment; that, in the absence of statutory provision, there is no rule at law limiting the extent of the credit." In Indiana, it is held that, in the absence of express restrictions, corporations may borrow money as a means of executing their express powers. Floyd Co. v. Day, 19 Ind. 450; Miller v. Dearborn Co., 66 Ind. 162. Citing Ketchum v. Buffalo, 14 N. Y. 356; Mills v. Gleason, II Wis. 470; s. c., 78 Am. Dec. 721; State v. Madison, 7 Wis. 688; Bank v. Mayor etc. of Chillicothe, 7 Ohio 354; s. c., 30 Am. Dec. 185; Moss v. Harpeth Academy, 7 Heisk. (Tenn.) 283; Com. v. Pittsburgh, 34 Pa. St. 486; Clark v. School Dist. No. 7, 3 R. I. 199; Hardy v. Merriweather, 14 Ind. 203; Sheffield School Dist. v. Andress, 56 Ind. 157. Corporations, by implication, take all the reasonable powers which a natural person may adopt. New England F. & M. Ins. Co. v. Robinson, 25 Ind. 536; Lafayette v. Cox, 5 Ind. 38; Floyd Co. v. Day, 19 Ind. 450; Kyle v. Malin, 8 Ind 34; Haag v. Vanderburgh Co., 60 Ind. 511; s. c., 28 Am. Rep. 654; New Albany Second Nat. Bank v. Danville, 60 Ind. 504; Richmond v. McGirr, 78 Ind. 192, 198; Posey Co. v. Saunders, 15 C. of L.-78 17 Ind. 437; Daily v. Columbus, 49 Ind. 169. See Merrill v. Town of Monticello, 22 Fed. Rep. 589. In Illinois the power exists if authorized by a vote of the people. Folsom v. School Directors, 91 Ill. 404; Clark v. School District No. 1, 78 Ill. 474. But a law authorizing a donation of money by a municipal corporation to aid in the construction of a railroad, gives no power to borrow money or issue bonds in payment of such donation. Lippincott v. Pana, 92 Ill. 24; Middleport v. Etna L. Ins. Co., 82 Ill. 562; Dixon Co. v. Field, 111 U. S. 83. See Enfield v. Jordan, 119 U. Š. 680; Mather v. Ottawa, 114 Ill: 659. In Iowa, school districts have power to borrow money to pay legal debts and may pledge the credit of the district for the payment of the same. Austin v Dist. Township of Colony, 51 Iowa 102. Implied power to issue municipal bonds in Nebraska, see State v. Babcock, 22 Neb. 614. Section 39, ch. 14, Comp. St. 1887, gave to cities of the second class the right to make regulations to secure the general health of the city, and to construct sewers and regulate their use. Under this authority it was held that, when it became necessary to construct a sewer, the city had the power to borrow money therefor, and to issue its bonds for the same. "We are fully aware," said the court, "of the necessity for great care in the exercise of the right to borrow money by municipal corporations, and that the power so to do should not be held to have been conferred except when expressly given or where absolutely necessary to carry out and make effective the power expressly conferred. But we think the present case falls clearly within the latter class, and that the bonds were legally issued." By vote of the people, county bonds may be issued for current expenses. Dawson Co. v. McNamar, 10 Neb. 276. In Desmond v. Jefferson, 19 Fed. Rep. 483, the power to issue bonds was implied from the power to organize and regulate a fire department. See Danielly v. Cabaniss, 52 Ga. 211; Ivinson v. * Hance, 1 Wyoming Ter. 270. The question is discussed in Mayor etc. of Nashville v. Ray, 19 Wall. (U. S.) 468; Ottawa v. Carey, 108 U. S. 110; Hopper v. Covington, 8 Fed. Rep. 777; Town of Merrill v. Monticello, 14 1233 2. Quasi Municipal Corporations.-The powers of such governmental agencies, as counties, townships and school districts, are more strictly construed than in the case of incorporated municipalities. It is settled that this class of corporations have not the implied power to borrow money and issue negotiable bonds. Direct legislative authority is necessary. "Our opinion is, that mere political bodies, constituted as counties, are for the purpose of local police and administration, and, having the power of levying taxes to defray all public charges created, whether they are or are not formally invested with corporate capacity, have no power or authority to make and utter commercial paper of any kind, unless such power is expressly conferred upon them by law, or clearly implied from some other power expressly given which cannot be fairly exercised without it."1 Fed. Rep. 628: As to power of quasi municipal corporations, see Claiborne Co. v. Brooks, 111 U. S. 400. A provision in a city charter authorizing the corporation to borrow money for any public purpose is valid. Mitchell v. Burlington, 4 Wall. (U. S.) 270; Larned v. Burlington, 4 Wall. (U. S.) 275. Such a power authorizes the issue of bonds in aid of a railway. Rogers v. Burlington, 3 Wall. (U. S.) 654. What Is a "Borrowing of Money?”—A contract made by a city to pay a sum of money with interest to a person who has assumed the payment of interest on some of the city debt is not a "borrowing of money," but is a contract for the payment of a debt. Gelpecke v. Dubuque, 1 Wall. (U. S.) 175. A law authorizing a public corporation to borrow money and pay it by a tax does not take private property for public purposes, and is constitutional. Gilman v. Sheboygan, 2 Black (U. S.) 510. See Jones v. Columbus, 25 Ga. 610. An undertaking by a town beyond the scope of its powers creates no liability. Concord v. Boscawen, 17 N. H. 465. V. 1. Claiborne Co. v. Brooks, 111 U. S. 400-407, per BRADLEY, J.; Hall Memphis, 134 U. S. 198; Young v. Clarendon Township, 132 U. S. 340; Kelly v. Town of Milan, 127 U. S. 139; Mayor etc. of Nashville v. Ray, 19 Wall. (U. S.) 468; Breaux v. Parish of Iberville Parish, 23 La. An. 232; Marrionneau v. Police Jury, 23 La. An. 251; Dent v. Cook, 45 Ga. 323; Knapp v. Mayor etc. of Hoboken, 39 N. J. L. 394. The power of a county to issue negotiable bonds is the creature of statute. Hamlin V. Meadville, 6 Neb. 227. It was held that the power of a county to build a court house did not involve or include the authority to issue bonds therefor, and the bonds were held invalid. Claiborne Co. v. Brooks, III U. S. 400. Counties have not the general power to make negotiable paper. Govelnow v. Ramsey Co., II Minn. 31; Hancock v. Chicot Co., 32 Ark. 575. "It seems to us to be a power quite distinct from that of incurring indebtedness for improvements actually authorized and undertaken, the justness and validity of which may always be enquired into. It is a power which ought not to be implied from the mere authority to make such improvements. It is one thing for county or parish trustees to have the power to incur obligations for work actually done in behalf of the county or parish, and to give proper vouchers therefor, and a totally different thing to have the power of issuing unimpeachable paper obligations which may be multiplied to an indefinite extent. If it be once conceded that the trustees or other local representatives of townships, counties or parishes have the implied power to issue coupon bonds, payable at a future day, which may be valid and binding obligations in the hands of innocent purchasers, there will be no end to the fraud that will be perpetrated. We do not mean to be understood that it requires, in all cases, express authority for such bodies to is sue negotiable paper. The power has frequently been implied from other ex 3. Municipal Corporations Proper.-The powers of cities and incorporated towns are somewhat more liberally construed in the light of their charters and existing statutes. JUDGE DILLON, however, states, as the true doctrine, that " Merely as incidental to the discharge of its ordinary corporate functions, no municipality or public corporation has the right to invest any instrument it may issue, whatever its form, with that supreme and dangerous attribute of commercial paper which insulates the holder for value from defences and equities which attach to its inception."1 press powers granted. Thus, it has been held that the power to borrow money implies the power to issue the ordinary securities for its repayment, whether in the form of notes or bonds payable in the future." Police Jury v. Britton, 15 Wall. (U. S.) 566. Contra. For debts and obligations lawfully created, any corporation has implied authority, unless prohibited by statute, charter or by-law, to issue its securities in the form of note, bill or bond. First Municipality v. McDonough, 2 Rob. (La.) 244, 250; Barry v. Merchants' Exchange Co., 1 Sandf. Ch. (N. Y.) 280. Cited with approval in Curtis v. Leavitt, 15 N. Y. 9, and in Smith v. Law, 21 N. Y. 296, 299; Bank of Chillicothe v. Mayor etc. of Chillicothe, 7 Ohio, pt. 11, p. 31; Ketchum v. Buffalo, 14 N. Y. 356; Cases, p. 375; Douglass v. Mayor etc. of Virginia City, 5 Nev. 147; Richmond v. McGirr, 78 Ind. 192. The power to contract debts implies the power to agree with creditors upon the time and manner of payment, and to issue the usual written evidences, including negotiable bonds. Williamsport v. Com., 84 Pa. St. 487; s. c., 24 Am. Rep. 208. The officials of a municipal corporation, which is vested with the usual powers of such bodies, are authorized to issue bonds or promissory notes to evidence the credit price of any works for which they are authorized to contract, which in the hands of a bona fide holder will be protected by the law-merchant. The express authority in an agent to buy, provide for or procure a thing for his principal, carries with it the implied power to give the latter negotiated note for the price of the thing, and this rule at law applies to the officials or agents of municipal corporations. Holmes v. Shreveport, 31 Fed. Rep. 113. Construction of Statute. Hopple v. Brown, 13 Ohio St. 311. Under Pa. acts of March 25th and August 25th, 1864, see Meek v. Bayard, 53 Pa. St. 217. A county may maintain an action to cancel bonds issued without due authority in payment of a subscription in aid of a railroad. Anderson Co. v. Paola etc. R. Co., 20 Kan. 534. 1. The question was before the Supreme Court of the United States in 1872. Mayor etc. of Nashville v. Ray, 19 Wall. (U.S.) 468. But the decision was placed upon other grounds. MR. J. BRADLEY said: "The power to borrow money does not belong to a municipal corporation as an incident to its creation. To be possessed it must be conferred by legislation, either express or implied. It does not belong as a mere matter of course to local governments to raise loans. Their powers are prescribed by their charters, and these charters provide the means for exercising the powers, and the creation of specific means excludes others. . If, in the exercise of their important rusts, the power to borrow money and issue bonds or other commercial securities is needed, the legislature can easily confer it under the proper limitations and restraints and with proper provisions for future repayment. Without such authority it cannot be legally exercised." See Lynde v. Winnebago Co., 16 Wall. (U.S.) 6, which turned upon the construction of a particular Iowa statute. In Hitchcock v. Galveston, 96 U. S. 341, it appeared that the city contracted for building sidewalks, and to pay therefor in bonds of the city. The city council declared the contract null and void, and the contractors brought suit thereon. The defence was that the contract to issue the bonds was ultra vires. The city was held liable on the contract, but it was not decided whether the city had power to issue the bonds. Said STRONG, J.: "If payment cannot 4. May be Implied from Power to Borrow Money.-Express power to borrow money includes the power to issue negotiable bonds or other securities to the lender.1 5. Not Implied from Power to Subscribe for Stock.-Express power to subscribe for stock in a railway corporation does not authorize the issue of negotiable bonds, in payment of the subscription, unless the power to issue such bonds is expressly or by reasonable implication conferred by statute.2 6. Not Implied in Power to Tax.-The grant of power to appropriate money to aid a railroad corporation, where the power is accompanied with a provision directing the levy of taxes to meet the appropriation, gives no power to issue negotiable bonds.3 7. Aid Bonds-Express Authority Necessary.-A municipal be made on bonds because their issue is ultra vires, it would be sanctioning rank injustice to hold that payment need not be made at all. Such is not the law. The contract between the parties is in force so far as it is lawful. The present is not a case in which the issue of the bonds was prohibited by any statute. At most the issue was unauthorized." There Is a Fundamental Difference Between Using Bonds to Pay for Corporate Improvements and Issuing Bonds to Borrow Money to Pay for Such Improvements. Ketchum v. Buffalo, 14 N. Y. 356; Daniels Neg. Inst., § 1530. It is no defence to a suit on bonds issued to pay for stock subscribed for by a county, that the county issued its own bonds to pay for the subscription instead of negotiating a loan, as authorized by the enabling act. Street v. Craven Co., 70 N. Car. 644. 1. Comanche Co. v. Lewis, 10 Sup. Ct. Rep. 286; Com. v. Pittsburgh, 34 Pa. St. 496; Evansville etc. R. Co. v. Evansville, 15 Ind. 395; Com. v. Allegheny Co., 37 Pa. St. 241; Reinbolt v. Pittsburgh, 41 Pa. St. 278; Seybert v. Pittsburgh, i Wall. (U. S.) 272; Rogers v. Burlington, 3 Wall. (U. S.) 654, 666; De Voss v. Richmond, 18 Gratt. (Va.) 338; s. c., 98 Am. Dec. 647; Galena v. Corwith, 48 Ill. 423; s. c., 95 Am. Dec. 557; German Am. Bank v. Brenham, 35 Fed. Rep. 185; Police Jury v. Britton, 15 Wall. (U. S.) 572; Milner v. Pensacola, 2 Wood (U. S.) 637; Mayor etc. of Griffin v. Inman, 57 Ga. 370; Adams v. Rome, 59 Ga. 765; Tucker v. Raleigh, 75 N. Car. 267; Mayor etc. of Vicksburgh v. Lombard, 51 Miss. 125; Mercer Co. v. Hacket, 1 Wall. (U. S.) 83; Hitchcock v. Galveston, 2 Wood (U. S.) 272. Kan. act of February 29th, 1868, giving county commissioners power "to borrow" upon the credit of the county money sufficient for the erection of county buildings, gives them power to issue bonds. It is immaterial that the bonds issued under such act recite that they are issued for the purpose of erecting county buildings, instead of reciting that it is to borrow money for their erection, where the bonds refer to or recite the act. Comanche Co. v. Lewis, 133 U. S. 198; Lewis v. Comanche Co., 35 Fed. Rep. 343. Where a city has authority to issue scrip to a certain amount for the purpose of paying the cost of public buildings, the whole amount may be issued at once, and the proceeds invested until required. Foote v. Salem, 14 Allen (Mass.) 87. 2. Hill v. Memphis, 134 U. S. 198; Kelley v. Town of Milan, 127 U. S. 139, 150, construing Gen. Laws Tenn. Code of Ten., §§ 1142, 1161; Marsh v. Fulton Co., 10 Wall. (U. S.) 676; Wells v. Pontotoc Co., 102 U. S. 625; Clairborne Co. v. Brooks, 111 U. Š. 400; Ottawa v. Carey, 108 U. S. 110, 123; Daviess Co. v. Dickinson, 117 U. S. 657, 663; Norton v. Dyersburg, 127 U. S. 160; Mayor etc. of Pulaski v. Gilmore, 21 Fed. Rep. 870; Green v. Dyersburgh, 2 Flip. (U. S.) 477; Taxpayers of Milan etc. v. Tennessee Cent. R. Co., 11 Lea (Tenn.) 330. Such statutes contemplate that the stock shall be paid for out of money raised by taxation. Campbell Co. v. Knoxville R. Co., 6 Coldw. (Tenn.) 598. 3. Claiborne Co. v. Brooks, 111 U. S. 400, 406; Wells v. Pontotoc Co., 102 U. S. 631-32; Ogden v. Daviess Co., 102 U. S. 134, 639; Concord v. Robinson, 121 U. S. 165. corporation cannot, without express authority, issue its negotiable bonds in aid of an extraneous object, such as a railway corporation.1 4. Purposes for Which Bonds May be Issued.-The legislature cannot authorize the issue of bonds by a municipal corporation for every purpose. As such obligation must be discharged with money raised by taxation, the question resolves itself into an enquiry as to the purposes for which the power of taxation may be exercised. 1. Thomson v. Lee Co., 3 Wall. (U. S.) 327; Marsh v. Fulton Co., 10 Wall. (U. S.) 676; Police Jury v. Britton, 15 Wall. (U. S.) 566; Pendleton Co. v. Amy, 13 Wall. (U. S.) 297; Kenicott v. Wayne Co., 16 Wall. (Ü. S.) 453; St. Joseph Township v. Rogers, 16 Wall. (U. S.) 644; Town of Coloma v. Eaves, 92 U. S. 484; Town of South Ottawa v. Perkins, 94 U. S. 260; Weightman v. Clark, 103 U. S. 256; Lewis. Shreveport, 108 U. S. 282; Claiborne Co. v. Brooks, III U S. 400; Barnes v. Town of Lacon, 84 Ill. 461; Pitzman v. Freeburg, 92 Ill. 211; Delaware Co. v. McClintock, 51 Ind. 325; Clay v. Nicholas Co., 4 Bush (Ky.) 154; Williamson v. Keokuk, 44 Iowa 88; Hawkins v. Carroll Co., 50 Miss. 735; Reineman v. Covington etc. R. Co., 7 Neb. 310; New Orleans etc. R. Co. v. Dunn, 51 Ala. 128; Lafayette etc. R. Co. v. Geiger, 34 Ind. 185; Pennsylvania R. Co. v. Philadelphia, 47 Pa. St. 189; Fisk v. Kenosha, 26 Wis. 23. See Town of South Ottawa v. Perkins, 94 U. S. 260; McCoy v. Briant, 53 Cal. 247; Storm v. Town of Genoa, 23 N. Y. 439; People v. Mitchell, 35 N. Y. 351; English v. Chicot Co., 26 Ark. 454; Bridgeport v. Housatonic R. Co., 15 Conn. 475; Aurora v. West, 22 Ind. 88; s. c., 85 Am. Dec. 413; Lewis v. Shreveport, 3 Wood (U. S.) 205; Nichol v. Mayor etc. of Nashville, 9 Humph. (Tenn.) 252; Pennsylvania R. Co. v. Philadelphia, 47 Pa. St. 189; Lamoille Valley R. Co. v. Fairfield, 51 Vt. 257; Jeffries v. Lawrence, 42 Iowa 498. Municipal Corporation Becoming a Stockholder.-A municipal corporation, in order to exercise the power of becoming a stockholder in a railroad corporation, must have such power previously conferred by act of the legislature; and even such power does not carry with it the power to issue negotiable bonds in payment of the subscription, unless the latter power is expressly or by reasonable implication conferred by the statute. In a suit in chancery brought by the authorities of a town to have bonds declared invalid, a decree had been entered declaring them valid, on the consent to that effect signed by the mayor of the town. It was held that the consent of the mayor could give no more validity to the bonds than they before had, and that the decree was not an adjudication of their validity. Want of authority to issue them extended to want of authority to declare them valid. The mayor had no such authority, and the decree could not be set up as a judicial determination of the validity of the bonds. Russell v. Place, 94 Ŭ. S. 606; Manhattan L. Ins. Co. v. Broughton, 109 U. S. 121. There is nothing inconsistent with this view in Nashville etc. R. Co. v. United States, 113 U. S. 261. Kelley v. Town of Milan, 127 U. S. 139. In Illinois, an incorporated town is a village, and may make a donation to a railroad corporation under power conferred upon "any village, city, county or township." Enfield v. Jordan, 119 U. S. 680, disapproving Welch v. Post, 99 Ill. 471. Authority Must be Strictly Construed -Record of Proceedings.-"The authority of a majority of the taxpayers of a town to encumber the property of the minority against their will, in aid of a railroad or other corporation, receives no countenance from the principles of the common law. Every step, therefore, required by the statute must be in strict conformity .therewith. People v. Hulburt, 46 N. Y. 110. The rule is also inflexible that when a court or judicial officer exercises a special statutory power outside this scope of the usual jurisdiction of courts of general powers, the record of the proceedings must show that the statutory authority has been pursued; and in this regard the proceedings are on the same footing with that of courts of limited and in |