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* It must follow that, if in any case a party assumes to [* 196] deal with a corporation on the supposition that it possesses powers which it does not, or to contract in any other manner than is permitted by the charter, he will not be allowed, notwithstanding he may have complied with the undertaking on his part, to maintain a suit against the corporation based upon its unauthorized action. Even where a party is induced to enter upon work for a corporation by the false representations of corporate officers, in regard to the existence of facts on which by law the power of the corporation to enter upon the work depends, these false representations cannot have the effect to give a power which in the particular case was wanting, or to validate a contract otherwise void, and therefore 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. This is the general rule, and the cases of unau
470; Hamlin v. Meadville (Sup. Ct. burg had power to open, regulate, Nebraska), 2 Western Jurist, 596. See grade, and pave streets, but only upon also Nashville v. Ray, 19 Wall. 468; petition signed by one-third of the Milhau v. Sharp, 17 Barb. 435, 28 persons owning lands within the assessBarb. 228, and 27 N. Y. 611; Doug- ment limits. A party entered into a lass v. Placerville, 18 Cal. 613; Mount contract with the corporation for imPleasant o. Breeze, 11 Iowa, 399; proving a street upon the false repreHooper v. Emery, 14 Me. 375; Mayor, sentations of the council that such a &c. of Macon v. Macon and Western petition had been presented. Held, R. R. Co., 7 Geo. 224; Hopple v. that the provision of the law being Brown, 13 Ohio, n. s. 311; Lackland public, and all the proceedings leading 6. Northern Missouri Railroad Co., to a determination by the council to 31 Mo. 180; Smith v. Morse, 2 Cal. make a particular improvement being 524; Bennett v. Borough of Birming- matters of record, all persons were ham, 31 Penn. St. 15; Tucker v. chargeable with notice of the law and Virginia City, 4 Nev. 20; Leaven- such proceedings; and that, notwithworth v. Norton, 1 Kan. 432; Kyle standing the false representations, no 6. Malin, 8 Ind. 34; Johnson v. Phila- action would lie against the city for delphia, 60 Penn. St. 451; Kniper v. work done under the contract. Swift Louisville, 7 Bush, 599; Johnston v. v. Williamsburg, 24 Barb. 427. Louisville, 11 Bush, 527.; Williams v. the plaintiff can recover on the state Davidson, 43 Tex. 1; Burrit v. New of facts he has stated in his complaint, Haven, 42 Conn. 174; Logan v. Payne, the restrictions and limitations which 43 lowa, 524; Field v. Des Moines, the legislature sought to impose upon 39 Iowa, 575; Vance v. Little Rock, 30 the powers of the common council Ark. 435; English v. Chicot County, will go for nothing. And yet these 26 Ark. 454; Pullen v. Raleigh, 68 provisions are matters of substance, N. C. 451; Chisholm v. Montgomery, and were designed to be of some ser2 Woods, 584,
vice to the constituents of the com1 The common council of Williams- mon council. They were intended to
thorized action which may bind the corporation are exceptional, and will be referred to further on.
protect the owners of lands and the able with notice of the contents of all tax-payers of the city, as well against these papers. It is obvious that the the frauds and impositions of the con- restrictions and limitations imposed tractors who might be employed to by the law cannot be thus evaded. make local improvements, as against The consent of the parties interested the illegal acts of the common council in such improveinents cannot be disthemselves in employing the contrac- pensed with; the responsibility, which tors. But if the plaintiff can recover the conditions precedent created by in this action, of what value or effect the statute impose, cannot be thrown are all these safeguards? If the com- off in this manner. For the effect of mon council desire to make a local doing so is to shift entirely the burden improvement, which the persons to be of making these local improvements, benefited thereby, and to be assessed to relieve those on whom the law therefor, are unwilling to have made, sought to impose the expense, and the consent of the owners may be to throw it on others who are not wholly dispensed with, according to liable either in law or morals.” the plaintiff's theory. The common So where the charter of Detroit council have only to represent that provided that no public work should the proper petition has been presented be contracted for or commenced until and the proper proceedings have been an assessment had been levied to detaken, to warrant the improvement. fray the expense, and that no such They then enter into the contract. work should be paid or contracted to The improvement is made. Those be paid for, except out of the proceeds other safeguards for an assessment of of the tax thus levied, it was held, the expenses and for reviewing the that the city corporation had no power proceedings may or may not be taken. to make itself responsible for the price But when the work is completed aud of any public work, and that such is to be paid for, it is found that the work could only be paid for by funds common council have no authority to actually in the hands of the city treaslay any assessment or collect a dollar urer, provided for the specific purfrom the property benefited by the pose. Goodrich v. Detroit, 12 Mich. improvement. The contractor then 279. But if the city receives the brings his action, and recovers from fund and misappropriates it, it will the city the damages he has sustained be liable. Lansing v. Van Gorder, by the failure of the city to pay him 24 Mich. 456. the contract price. The ground of Parties dealing with the agents his action is the falsity of the repre- or officers of municipal corporations sentations made to him. But the must, at their own peril, take notice truth or falsity of such representations of the limits of the powers both of might have been ascertained by the the municipal corporation, and of party with the use of the most ordi- those assuming to act on its behalf. nary care and diligence. The existence State v. Kirkley, 29 Md. 85; Gould of the proper petition, and the taking v. Sterling, 23 N. Y. 464; Clark 8. of the necessary initiatory steps to Des Moines, 19 Iowa, 209; Veeder v. warrant the improvement, were doubt- Lima, 19 Wis. 280; East Oakland less referred to and recited in the con- v. Skinner, 94 U. S. Rep. 253; Dillon, tract made with the plaintiff. And Mun. Corp. § 381. he thus became again directly charge
Corporations by Prescription and Implication.
The origin of many of the corporate privileges asserted and enjoyed in England is veiled in obscurity, and it is more than probable that in some instances they had no better foundation than an uninterrupted user for a considerable period. In other cases the royal or baronial grant became lost in the lapse of time, and the evidence that it had ever existed might rest exclusively upon reputation, or upon the inference to be drawn from the exercise of corporate functions. In all these cases it seems to be the law that the corporate existence may be maintained on the ground of prescription ; that is to say, the exercise of corporate rights for a time whereof the memory of man runneth not to the contrary is sufficient evidence that such rights were once granted by competent authority, and are therefore now exercised by right and not by usurpation. And this presumption concludes the crown, notwithstanding the maxim that the crown shall lose no rights by lapse of time. If the right asserted is one of which a grant might be predicated, a jury is bound to presume a grant from that prescription. In this particular the claim to a corporate franchise stands on the same ground as any claim of private right which requires a grant for its support, and is to be sustained under the same circumstances of continuous assertion and enjoyment. And even the grant of a charter by the crown will not preclude the claim to corporate rights by prescription ; for
a new charter does not extinguish old privileges.4 A corporation may also be established upon presumptive evidence that a charter has been granted within the time of memory. Such evidence is addressed to a jury, and, though not conclusive upon them, yet if it reasonably satisfies their minds, it will justify
Introduction to Willcock on Mu- 8 2 Kent, 277; Angell & Ames nicipal Corporations; The King v. on Corp. § 70; 1 Kyd on Corp. 14. Mayor, &c. of Stratford upon Avon, 4 Hadduck's Case, T. Raym. 439 ; 14 East, 360; Robie v. Sedgwick, 35 The King v. Mayor, &c. of Stratford Barb. 326. See Londonderry v. An- upon Avon, 14 East, 360; Bow v. dover, 28 Vt. 416.
Allenstown, 34 N. H. 366. See Jame* Mayor of Hull v. Horner, Cowp. son v. People, 16 111. 259. 108, per Lord Mansfield. Compare People v. Maynard, 15 Mich. 470; State v. Bunker, 59 Me. 366.
them in a verdict finding the corporate existence. “ There is a great difference," says Lord Mansfield, “ between length of time which operates as a bar to a claim, and that which is only used by way of evidence.
A jury is concluded by length of time that operates as a bar; as where the Statute of Limitations is pleaded in bar to a debt; though the jury is satisfied that the debt is due and unpaid, it is still a bar. So in the case of prescription. If it be time out of mind, a jury is bound to conclude the right from that prescription, if there could be a legal commencement of the right. But any written evidence, showing that there was a time when the prescription did not exist, is an answer to a claim founded on prescription. But length of time į used merely by way of evidence may be left to the consideration of the jury, to be credited or not, and to draw their inference one way or the other according to circumstances.”] The same ruling has been had in several cases in the courts of this country, where corporate powers had been exercised, but no charter could be produced. In one of these cases, common reputation that a charter had once existed was allowed to be given to the jury; the court remarking upon the notorious fact that two great fires in the capital of the colony had destroyed many of the public records.2 In other cases there was evidence of various acts which could only lawfully and properly be done by a corporation, covering a period of thirty, forty, or fifty years, and done with the knowledge of the State and without question. The inference of corporate powers, however, is not one of law; but is to be drawn as a fact by the jury.! Wherever a corporation is found to exist by prescription, the
same rule as to construction of powers, we apprehend, (* 198] would apply as in other cases. * The presumption as to
the powers granted would be limited by the proof of the usage, and nothing could be taken by intendment which the usage did not warrant.
1 Mayor of Hull v. Horner, Cowp. barton, 13 N. H. 409, and 15 N. H. 108, 109; citing, among other cases, 201; Bow v. Allenstown, 34 N. H. Bedle v. Beard, 12 Co. 5.
351; Trott v. Warren, 2 Fairf. 227. 2 Dillingham v. Snow, 5 Mass. 552. 4 New Boston v. Dunbarton, 15 And see Bow v. Allenstown, 34 N. H. N. H. 201; Bow v. Allenstown, 34 351; Bassett v. Porter, 4 Cush. 487. N. H. 351; Mayor of Hull v. Horner,
8 Stockbridge v. West Stockbridge, 14 East, 102. 12 Mass. 400; New Boston v. Dun
Corporations are also said sometimes to exist by implication. When that power in the State which can create corporations grants to individuals such property, rights, or franchises, or imposes upon them such burdens, as can only be properly held, enjoyed, continued, or borne, according to the terms of the grant, by a corporate entity, the intention to create such corporate entity is to be presumed, and corporate capacity is held to be conferred so far as is necessary to effectuate the purpose of the grant or burden. On this subject it will be sufficient for our purpose to refer to authorities named in the note. In these cases the rule of strict construction of corporate powers applies with unusual force.
The power of municipal corporations to make by-laws is limited
in various ways.
1. It is controlled by the Constitution of the United States and of the State. The restrictions imposed by those instruments, and which directly limit the legislative power of the State, rest equally upon all the instruments of government created by the State. If a State cannot pass an ex post facto law, or law impairing the obligation of contracts, neither can any agency do so which acts under the State with delegated authority. By-laws, therefore, which in their operation would be ex post facto, or violate contracts, are not within the power of municipal corporations; and whatever
1 Dyer, 400, cited by Lord Kenyon, § 332; Stuyvesant v. Mayor, &c. of in Russell v. Men of Devon, 2 T. R. New York, 7 Cow. 588; Brooklyn 672, and in 2 Kent, 276; Viner's Abr. Central Railroad Co. v. Brooklyn City tit. “ Corporation;" Conservators of Railroad Co., 32 Barb. 358; Illinois River Tone v. Ash, 10 B. & C. 349; Conference Female College v. Cooper, 5. c. 10 B. & C. 383, citing case of 25 N. 148. The last was a case Sutton Hospital, 10 Co. 28; per Kent, where a by-law of an educational corChancellor, in Denton v. Jackson, 2 poration was held void, as violating Johns. Ch. 325; Coburn v. Ellen- the obligation of a contract previously wood, 4 N. H. 101; Atkinson v. entered into by the corporation in a Bemis, 11 N. H. 46; North Hemp- certificate of scholarship which it had stead v. Hempstead, 2 Wend. 109; issued. See also Davenport, &c. Co. Thomas 1. Dakin, 22 Wend. 9; per v. Davenport, 13 Iowa, 229; Saving Shau, Ch. J., in Stebbins o. Jennings, Society o. Philadelphia, 31 Penn. St. 10 Pick. 188; Mahony v. Bank of the 175; Haywood v. Savannah, 12 Geo. State, 4 Ark. 620.
404. Angell & Ames on Corporations,