[* 217] porations in aid of internal * improvements, there has been occasion to consider clauses in the State constitu 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. See also Brady v. Mayor, &c. of New York, 2 Bosw. 173; Hopple v. Brown Township, 13 Ohio, N. s. 311; Veeder v. Lima, 19 Wis. 280. The subject is reviewed in Clark v. Des Moines, 12 Iowa, 209. The action was brought upon city warrants, negotiable in form, and of which the plaintiff claimed to be bona fide assignee, without notice of any defects. The city offered to show that the warrants were issued without any authority from the city council, and without any vote of the council authorizing the same. It was held that the evidence should have been admitted, and that it would constitute a complete defence. See further Head v. Providence, &c. Co., 2 Cranch, 169; Royal British Bank v. Turquand, 6 El. & Bl. 327; Knox County v. Aspinwall, 21 How. 544; Bissell v. Jeffersonville, 24 How. 287; Sanborn v. Deerfield, 2 N. H. 254; Alleghany City v. McClurkan, 14 Penn. St. 83; Morris Canal and Banking Co. v. Fisher, 1 Stock. 667; Clapp v. Cedar Co., 5 Iowa, 15; Commissioners, &c. v. Cox, 6 Ind. 403; Madison and Indianapolis R. R. Co. v. Norwalk Savings Society, 24 Ind. 457; Bird v. Daggett, 97 Mass. 494. It is of course impossible to reconcile these authorities; but the doctrine in the case of Gould v. Town of Stirling appears to us to be sound, and that, wherever a want of power exists, a purchaser of the securities is chargeable with notice of it, if the defect is disclosed by the corporate records, or, as in that case, by other records, where the power is required to be shown. See Fish v. Kenosha, 26 Wis. 24, and McClure v. Oxford, 94 U. S. Rep. 429. That the powers of the agents of municipal corporations are matters of record, and the corporation not liable for an unauthorized act, see further Baltimore v. Eschbach, 18 Md. 276; Johnson v. Common Council, 16 Ind. 227. bonds voted to one railroad company and issued to another are void, see Big Grove v. Wells, 65 Ill. 263. Those who deal with a corporation must take notice of the restrictions in its charter, or in the general law, regarding the making of contracts. Brady v. Mayor, &c. of New York, 2 Bosw. 173; s. c. 20 N. Y. 312; Swift v. Williamsburg, 24 Barb. 427; Zabriskie v. Cleveland, &c. R. R. Co., 23 How. 381; Hull v. Marshall County, 12 Iowa, 142; Clark v. Des Moines, 19 Iowa, 199; McPherson v. Foster, 43 Iowa, 48; Marsh v. Supervisors of Fulton Co., 10 Wall. 676. That tions designed to limit the power of the legislature [* 218] to incur indebtedness on behalf of the State, and which clauses, it has been urged, were equally imperative in restraining indebtedness on behalf of the several political divisions of the State. The Constitution of Kentucky prohibited any act of the legislature authorizing any debt to be contracted on behalf of the Commonwealth, except for certain specified purposes, unless provision should be made in such act for an annual tax sufficient to pay such debt within thirty years; and the act was not to have effect unless approved by the people. It was contended that this provision was not to apply to the Commonwealth as a mere ideal abstraction, unconnected with her citizens and her soil, but to the Commonwealth as composed of her people, and their territorial organizations of towns, cities, and counties, which make up the State, and that it embraced in principle every legislative act which authorized a debt to be contracted by any of the local organizations of which the Commonwealth was composed. The courts of that State held otherwise. "The clause in question," they say, "applies in terms to a debt contracted on behalf the Commonwealth as a distinct corporate body; and the distinction between a debt on behalf of the Commonwealth, and a debt or debts on behalf of one county, or of any number of counties, is too broad and palpable to admit of the supposition that the latter class of * debts [* 219] was intended to be embraced by terms specifically desig 1 nating the former only." The same view has been taken by the courts of Iowa, Wisconsin, Illinois, and Kansas, of the provisions in the constitutions of those States restricting the power If they are not valid, no subsequent ratification by the corporation can make them so. Leavenworth v. Rankin, 2 Kan. 357. If bonds are voted upon a condition, and issued before the condition is complied with, this, as to bona fide holders, is a waiver of the condition. Chiniquy v. People, 78 Ill. 570. Compare Supervisors of Jackson v. Brush, 77 Ill. 59. In some States, after paper has been put afloat under laws which the courts of the State have sustained, it is very justly held that the validity and obligation of such paper will not be suffered to be impaired by subsequent action of the courts overruling their former conclusions. See Steines v. Franklin County, 48 Mo. 167; Osage, &c. R. R. Co. v. Morgan County, 53 Mo. 156; Smith v. Clark Co., 54 Mo. 58; State v. Sutterfield, 54 Mo. 391; Columbia Co. v. King, 13 Fla. 421; Same v. Davidson, 13 Fla. 482. 1 Slack v. Railroad Co., 13 B. Monr. 16. of the legislature to contract debts on behalf of the State in aid of internal improvements; but the decisions of the first-named State have since been doubted,2 and those in Illinois, it would seem, overruled. In Michigan it has been held that they were inapplicable to a constitution adopted with a clear purpose to preclude taxation for such enterprises.4 1 Dubuque County v. Railroad Co., 4 Greene (Iowa), 1; Clapp v. Cedar County, 5 Iowa, 15; Clark v. Janesville, 10 Wis. 136; Bushnell v. Beloit, 10 Wis. 195; Prettyman v. Supervisors, 19 Ill. 406; Robertson v. Rockford, 21 Ill. 451; Johnson v. Stark County, 24 Ill. 75; Perkins v. Lewis, 24 Ill. 208; Butler v. Dunham, 27 Ill. 474; Leavenworth Co. v. Miller, 7 Kan. 479. 2 State v. Wapello County, 13 Iowa, 388. And see People v. Supervisor, &c., 16 Mich. 254. 3 In People v. Mayor, &c. of Chicago, 51 Ill. 34, it is held expressly that the provision of the State constitution prohibiting the State from creating a debt exceeding fifty thousand dollars without the consent of the people manifested at a general election, would preclude the State from creating a like debt against a municipal corporation, except upon the like conditions. And it was pertinently said: "The protection of the whole implies necessarily the protection of all its organized parts, and the whole cannot be secure while all or any of its parts are exposed to danger. What is the real value of this provision of the constitution if the legislature, inhibited from incurring a debt beyond fifty thousand dollars on behalf of the State, may force a debt tenfold or one hundred-fold greater for there is no limit to the power-upon all the cities of the State? We can perceive none." We do not see how this can be reconciled with the earlier Illinois cases, and it is so manifestly right, it is hoped the learned court will never make the attempt. The following extract from the opinion in Bay City v. State Treasurer, 23 Mich. 504, is upon this point: "Our State had had a bitter experience of the evils of the government connecting itself with works of public improvement. In a time of inflation and imagined prosperity, the State had contracted a large debt for the construction of a system of railroads, and the people were oppressed with heavy taxation in consequence. Moreover, for a portion of this debt they had not received what they bargained for, and they did not recognize their legal or moral obligation to pay for it. The good name and fame of the State suffered in consequence. The result of it all was that a settled conviction fastened itself upon the minds of our people, that works of internal improvement should be private enterprises; that it was not in the proper province of government to connect itself with their construction or management, and that an imperative State policy demanded that no burdens should be imposed upon the people by State authority, for any such purpose. Under this conviction they incorporated in the constitution of 1850, under the significant title of Finance and Taxation,' several provisions expressly prohibiting the State from being a party to, or interested in, any work of internal improvement, or engaged in carrying on any such work, except in the expenditure of grants made to it; and also from subscribing to, or being inter Another class of legislation, which has recently demanded the attention of the courts, has been little less troublesome, from the ested in, the stock of any company, association, or corporation, or loaning its credit in aid of any person, association, or corporation. Art. XIV. §§ 9, 8, and 7. "All these provisions were incorporated by the people on the constitution, as precautions against injudicious action by themselves, if in another time of inflation and excitement they should be tempted to incur the like burdensome taxation in order to accomplish public improvements in cases where they were not content to wait the result of private enterprise. The people meant to erect such effectual barriers that if the temptation should return, the means of inflicting the like injury upon the credit, reputation, and prosperity of the State, should not be within the reach of the authorities. They believed these clauses of the constitution accomplished this purpose perfectly, and none of its provisions had more influence in recommending that instrument to the hearty good-will of the people. "In process of time, however, a majority in the legislature were found willing, against the solemn warning of the executive, to resort again to the power of taxation in aid of internal improvement. It was discovered that though "the State" was expressly inhibited from giving such aid in any form, except in the disposition of grants made to it, the subdivisions of which the State was composed were not under the like ban. Decisions in other States were found which were supposed to sanction the doctrine that, under such circumstances, the State might do indirectly through its subdivisions what directly it was forbidden to do. Thus a way was opened by which the whole purpose of the constitutional provisions quoted might be defeated. The State could not aid a private corporation with its credit, but it might require each of its townships, cities, and villages to do so. The State could not load down its people with taxes for the construction of a public improvement, but it might compel the municipal authorities, which were its mere creatures, and which held their whole authority and their life at its will, to enforce such taxes, one by one, until the whole people were bent to the burden. "Now, whatever might be the just and proper construction of similar provisions in the constitutions of States whose history has not been the same with our own, the majority of this court thought when the previous case was before us, and they still think, that these provisions in our constitution do preclude the State from loaning the public credit to private corporations, and from imposing taxation upon its citizens or any portion thereof in aid of the construction of railroads. So the people supposed when the constitution was adopted. Constitutions do not change with the varying tides of public opinion and desire; the will of the people therein recorded is the same inflexible law until changed by their own deliberative action; and it cannot be permissible to the courts that in order to aid evasions and circumventions, they shall subject these instruments, which in the main only undertake to lay down broad general principles, to a literal and technical construction, as if they were great public enemies standing in the way of progress, and the duty of every good citizen was to get around their provisions whenever practicable, and give them a damaging thrust whenever convenient. They must construe them, as the new, varied, and peculiar questions involved, than that in relation to municipal subscriptions in aid of internal improvements. As the power to declare war and to conduct warlike operations rests in the national government, and that government is vested with unlimited control of all the resources of the country for those purposes, the duty of national defence, and, consequently, the duty to defend all the citizens as well as all the property of all the municipal organizations in the several States, rests upon the national authorities. This much is conceded, though in a qualified degree, also, and, subordinate to the national government, a like duty rests doubtless upon the State governments, which may employ the means and services of their citizens for the purpose. But it is no part of the duty of a township, city, or county, as such, to raise men or money for warlike operations, nor have they any authority, without express legislative sanction, to impose upon their people any burden by way of taxation for any such purpose.1 Nevertheless, when a war arises which taxes all the energies of the nation, which makes it necessary to put into the field a large proportion of all the able-bodied men of the country, and which renders imperative a resort to all available means for * filling the ranks of the army, recruiting the navy, and [* 220] replenishing the national treasury, the question becomes a momentous one, whether the local organizations those which are managed most immediately by the people themselves may not be made important auxiliaries to the national and State governments in accomplishing the great object in which all alike are interested so vitally; and if they are capable of rendering important assistance, whether there is any constitutional principle which would be violated by making use of these organizations in a case where failure on the part of the central authority would precipitate general dismay and ruin. Indeed, as the general government, with a view to convenience, economy, people did in their adoption, if the means of arriving at that construction are within their power. In these cases we thought we could arrive at it from the public history of the times." 1 Stetson v. Kempton, 13 Mass. 272; Gove v. Epping, 41 N. H. 545; Crowell v. Hopkinton, 45 N. H. 9; Baldwin v. North Branford, 32 Conn. 47; Webster v. Harwinton, 32 Conn. 131. See also Claflin v. Hopkinton, 4 Gray, 502; Cover v. Baytown, 12 Minn. 124; Fiske v. Hazzard, 7 R. I. 438; Alley v. Edgecomb, 53 Me. 446; People v. Supervisors of Columbia, 43 N. Y. 130; Walschlager v. Liberty, 23 Wis. 362; Burril v. Boston, 2 Cliff. 590. |
