the one case, it is asserting that its own act is invalid-in the other, that the act is not its act, but that of its officers.

The contrary opinion seems to originate in the apparent analogy between distinct classes of cases. Because it has been held that the courts will not, as against a bona fide holder of negotiable paper issued by a corporation through that body directly entrusted by the Legislature with the power, inquire into the pre-requisites of the issuance, it is assumed that the courts will not, as against suc. a holder of paper issued by the officer of the corporation, inquire into the pre-requisites of its issuance. But the analogy is in appearance, not in substance. In the one case, the body which acts under legislative authority is entrusted with the absolute power of deciding upon the pre-requisites to the exercise of its duty. In the other, the officer is a mere ministerial agent to execute a prescribed act. The authority of the one is legislative and judicial; of the other, merely ministerial. The one is the governing body, the other a servant. No provision is made for a formal record of the preliminaries to the exercise of the power by the one, which shall be notice to all the world, while ample provision is made for notice in the other. The one is a principal, in favor of whose acts every presumption is implied; the other is an agent, into whose authority every person is bound, at his peril to inquire.

All the authorities on the subject of agency, agree that an agent can not enlarge his authority by his own representations. This is distinctly laid down by Mr. Justice Miller, in the case of the Floyd Acceptances; is forcibly dwelt or by Judge Dillon, in the Des Moines case, and admirably expressed by Comstock, J., in the Schuyler fraud case: "Underlying," he says, "the whole subject of agency, there is this fundamental proposition, that a principal is bound only by the authorized acts of his agents. This authority may be prescribed by the instrument which creates it; and beyond the terms of the instrument, or of the verbal commission, it may be shown that the principal has held the agent out to the world, in other instances, as having an authority which will embrace the particular act in question. I know of no other mode in which a controverted power can be established. But, in whichever way this is done, it can not be limited by secret instructions of the principal on the one hand, nor can it be enlarged by the unauthorized representations of the agent on the other." 13 N. Y., 632.

It is a good defense to a negotiable security, even in the han ls of

VOL. I-2.

a bona fide holder, that the signature is not genuine, or was made without authority. And even if the signature be genuine, the signer may show that it was written for another purpose, or under a misapprehension, fraudulently superinduced, of the character of the instrument: Whitney vs. Snyder, 2 Lansing, 497. So a corporation may dispute the authority of any person who may have used its name or corporate seal, no matter into whose hands the paper may have come: Koehler vs. Black River Co., 2 Bl., 715; City of Leavenworth vs. Rankin, 2 Kan., 357-371; 2 Nev. & Man., 573; 5 B. & A., 866. We e are now prepared for the decisions, and we can not do better than to commence with the decision of the Supreme Court of the United States, in the case of the Floyd Acceptances, 7 Wal., 666. The question there, was as to the validity of the acceptances of bills of exchange by a high officer of the government-the Secretary of War-in the hands of an innocent holder. The Court say, p. 676: "An individual may, instead of signing with his own hands, the notes and bills which he issues, appoint an agent to do these things for him. And this appointment may be a general power to draw or accept, in all cases, as fully as the principal could; or it may be a limited authority to draw or accept, under given circumstances defined in the instrument which confers the power. But, in each case, the person dealing with the agent knowing that he acts only by virtue of a delegated power, must, at his peril, see that the paper on which he relies comes within the power under which the agent acts. And this applies to every person who takes the paper afterward; for it is to be kept in mind that the protection which commercial usage throws around negotiable paper can not be used to establish the authority by which it was originally issued. These principles are well established in regard to the transactions of individuals. They are equally applicable to those of the government. Whenever negotiable paper is found in the market, purporting to bind the government, it must necessarily be by the signature of an officer of the government; and the purchaser of such paper, whether the first holder or another, must, at his peril, see that the officer had authority to bind the govern

ment."

The holders of the acceptances sought to sustain them by proof of usage in similar cases. To this the Court say: "As regards usage, it must occur at once, that if there are instances in which the use of bills of exchange by officers of government is authorized by law, as undoubtedly there are, the use of them in such cases, however com

mon, can not establish usage in cases not so authorized." And, as if the learned Judge was aware of the erroneous inference drawn from the language of Judge Swayne, before quoted, he adds: "It can not be maintained that, because an officer can lawfully issue bills of exchange for some purposes, no inquiry can be made in any case into the purpose for which such a bill was issued. * ** Such a doctrine would enable a man in private life, to whom a well-defined and limited authority was given, to ruin the principal who had conferred it. So, it would place the government at the mercy of all its agents and officers, although the laws under which they act are public statutes. This doctrine would enable the head of a department to flood the country with bills of exchange, acceptances, and other forms of negotiable paper, without authority and without limit."

The foregoing doctrine, in its train of reasoning, places a public and private agent upon the same ground, and holds that neither can bind the principal by negotiable paper, unless authorized, and that all persons must, at their peril, see to the authority. Some of the State decisions draw a strong line of distinction between public and private agents.

"Though a private agent," says the Supreme Court of Maryland, "acting in violation of specific instructions, yet within the scope of a general authority, may bind his principal, the rule, as to the effect of a like act of a public agent, such as the officer of a municipal corporation, is otherwise. The powers and duties of such officers are specially defined and limited by ordinances having the character and force of public laws, ignorance of which can be presumed in favor of no one dealing with him as to matters thus conditionally within his official discretion. A municipal corporation, therefore, can not be held liable for the unauthorized acts of its agents, though done officii colore, without some corporate act of ratification or adoption:" Mayor of Baltimore vs. Eschba k, 18 Md., 276.

"The power of expending money," says the Supreme Court of Pennsylvania, 47 Penn., 23, "for public purposes in municipal corporations, is lodged with the legislative, and not the executive authorities, and must be exercised by ordinance legally enacted.

* * *

An independent, uncontrolled power to contract, resting in the several departments or chief officers of the city, would, in effect, take the control of their own finances out of the hands of the people, and lodge it where it would be liable to the most pernicious abuses by extravagance, favoritism and illegal expenditure"

"Some acts of corporations," says the Supreme Court of Kansas, "other than those created for governmental purposes, are to some extent, and for some purposes, estimated, measured, and construed by the same rules that apply to the acts of individuals; but municipal corporations can exercise only conferred powers, and must exercise these according to prescribed rules. * * * The charters of such corporations are public laws; their ordinances are published before taking effect; and all their business is conducted in the most public manner. All persons can inform themselves of their powers and the manner in which they are to be exercised; and if they propose to contract with them, are bound to inform themselves at their peril. ** * And the seal of a municipal corporation attached to a contract does not estop the corporation from enquiring into the power of its officers to make it": City of Leavenworth vs. Rankin, 2 Kan., 357, 371.

"The

The case of Clark vs. City of Des Moines, as we have already seen, is directly in point. There the offer was to show that the warrants in controversy were issued without any authority from the City Council. The court held the evidence to be admissible. plaintiff," say the court, "in taking these warrants was bound at his peril to ascertain the nature and extent of the powers of these officers and of the city corporation": citing 2 Hill, 159, 174; 26 Wend., 192; S. C., 8 Paige, 53; 2 Denio, 110; 17 N. Y., 242; 15 Id., 341; 6 Allen, 187; 4 Id., 57; 23 How., 381, 391.

"A warrant," they add, "issued by the Mayor and Recorder without the previous order of the Council, is void. They have no authority to do it; it would be substantially a forgery. A purchaser of such a warrant is bound at his peril, at least to ascertain that the claim upon which it is founded has been liquidated and settled by the Council. A representation by municipal officers that this has been done, (and the issue of such a warrant is in substance such a representation,) will not be binding upon the corporation. Why? The answer is because an agent can neither create or enlarge his powers by his unauthorized representations. The law on this subject has, of late years, been much investigated, and will be found discussed and examined in a most critical and exhaustive manner in

following important cases": citing Mechanic's B nk vs. N. Y. & N. H. R. R. Co., (Schuyler-fraud case,) 13 N. Y., 599; F rme's Bank vs. Butcher's Bank, (where teller contrary to instructions, certified a check to be good,) 14 N. Y., 623; S. C., 16 N. Y., 125;

Claflin vs. Farmers's and Citizen's Bank, 25 N. Y., 293; Gould vs. Sterling, 23 N. Y., drawing distinctions between that and teller case 14 N. Y., 623; 25 N. Y., 595; 26 N. Y., 505.

"Now," continue the court in the Des Moines case, "without entering into these interesting discussions respecting the liability of principals in certain case for the acts of agents apparently, but not realy, within the scope of their commission, we need only observe that if it be conceded that the Mayor and Recorder had the apparent power to issue warrants like the ones in suit, still, if they did not really have this authority their representations that they possessed it, would not be representations of a fact, which from its nature, (as in the case of the teller who certified the check,) rested peculiarly within the knowledge of the agent. On the contrary, the charter and journals of the corporation open to public inspection, afforded to every person the certain means of ascertaining the existence of the authority of these officers to issue warrants."

"Any other doctrine, they conclude, nullifies the limits and checks contained in the charter for the protection of the corporation, and needlessly invests the public officers and agents with the power successfully to 'Schuylerize' our public corporations without limit and with out remedy."

To the same effect is the language of Judge Cooley, Const. Lim., 196: "Even if a party is induced to enter upon work for a corporation by the false representations of corporation officers, that certain preliminary action had been taken on which the power of the corporation to enter upon the work depended, these false representations can not have the effect to validate a contract otherwise void, and can afford no ground of action against the corporation; but every party contracting with it must take notice of any want of authority which the public records would show ": citing Swift vs. Williamsburg, 24 Barb., 427; Goodrich vs. Detroit, 12 Mich., 279.

"The true rule," says the Supreme Court of Ohio, in the case of Treadwell vs. Commissioners, 11 Ohio St., 183, is, that the want of corporate power, or the went of authority in the municipal officers, can not be supplied by their unauthorized acts or representations": citing Gould vs. Town of Sterling, and distinguishing the case of Commissioners of Knox County vs. Aspinwall, and the case in 6 Ell. and Bl., on which it rests, as cases of "irregularity in the proceedings company having power to do the act." "The distinction, say

of a