It is a determination of a fact by the proper tribunal, which cannot be attacked collaterally, and in a suit by the bona fide holder no evidence will be allowed to be introduced to show that the prerequisites of issue have not been complied with.1

d. Where there is a seeming grant of power, but the defect in conferring it is such as to show a want of power in the agent-whether that want of power arise from the fact that the bonds are issued in aid of another corporation than that designated by the enabling act;2 from the repeal of the act granting the authority; from the fact, when dependent on an election, that there was no no election;1 or that a condition of the exercise of the power which is a matter of record, and could be ascertained by an examination of the record, has not been complied with-in such cases the power being a delegated and limited one, and the excess of power by the agent being in a matter essential to the exercise of the power, and not merely in a matter of form, the bonds are void.

e. The last proposition is in conflict with the rule as laid down by the Supreme Court of the United States, but at the October term of that court, in 1875, in the dissenting opinion of Judge Miller, concurred in by Judges Field and Davis, a most vigorous attack was made on the former rulings of the court, and it was said that these rulings were for the first time defended on principle at that term of the court.

What is the principle involved? It is agreed on all sides that the power being a conditional one, if any of the conditions are not performed, the act of the agent is without authority, there being want of power to act. But the agent is clothed with authority upon the happening of certain events, or the doing of certain acts. The cases in the Supreme Court of the United States say, if the agent exercises the power and declares on the face of the instrument executed under the power, that he, the agent, has done the acts required, or that the events designated have happened, that this declaration is conclusive evidence on the subject. This declaration may be in general terms, as that the bonds are issued in accordance with the statute. Why

1 24 How. 287; 1 Wall. 291, 384; 13 Alb. Law Jour. 269, 293, 413; 48 Mo. 167; 51 Mo. 134; 11 Ohio, N. S. 183; 15 Ind. 395.

210 Wall. 176.

22 How. 364; Town of Concord ". Portsmouth Savings Bank, U. S. Supreme Court, October Term, 1875, 2 Otto, 625; 6 Kansas, 256; 13 Alb. Law Jour. 369.

4 51 Mo. 134.

5 19 Wisc. 280; 68 II. 160; 38 Ill. 44; dissenting opinion of Miller, J., in Humbolt Township v. Long, 13 Alb. Law Jour. 413; s. c. 2 Otto, 642, 646; Judge Dillon, in Southern Law Review, October, 1876, p. 487.

should the acts of the agent be thus conclusive? That he is an agent of limited powers, is admitted. Would it not appear reasonable that a person dealing with such an agent, should ascertain that he is acting. within the limits of the power? We are referred to the case of the Royal British Bank v. Torquand,1 as sustaining these cases. There the directors had power to borrow money, to be exercised when directed by a resolution of the board. They borrowed money, and it was held that those dealing with them had the right to presume a resolution to borrow, finding that they had authority which could be made complete by resolution. The reason of the rule is found in an earlier case, which contains a principle of the law of agency well settled, that when an agent is clothed with authority to act, and he exceeds his authority, if one of two innocent parties must suffer from such act, it should fall on the principal who intrusted the agent with such authority. A commission merchant authorized to sell cannot pledge, nor would the authority be aided at all by his declaration that he was authorized to pledge. The agent to issue bonds which are to be paid by taxation, and which are only to be issued on certain conditions, being an agent for a special purpose, with no general authority to act in such matters, can it be said that when he acts without the performance of the conditions, he is in the condition of one who, clothed with a general authority on the subject, has exceeded his powers, and that the principal who clothed him with such powers, ought to be the one of the innocent parties to suffer? His authority is special and limited, and those who deal with him, who it is admitted must examine to see that there is a grant of power, knew it.

It may be within that rule to say that when the acts to be done are acts in pais, the evidence of which may be lost, and which those dealing with the agent cannot readily ascertain, then the declarations of the agent shall be evidence. The principal having limited the authority in such a manner that those dealing with the agent cannot readily ascertain the limits of the authority, if one of the innocent parties is to suffer, it should be the principal. But when the limits of the authority are matters of record, easily ascertained, and when the grant of power shows that there is a limit, it is surely going too far to say, in such a case, that the declaration of the agent is conclusive.

16 Ellis & Bl. 245. Hewitt v. New York &c. R. R. Co. 12 Blatchf. C. C. 452, contains a review of the cases in the Supreme Court of the United States. See also an article by Judge Dillon, in the Southern Law Review, October, 1876, for a full and able dissertation on municipal bonds.

2 Hern v. Nichols, 1 Salkeld, 289.

It cannot even be said that one who deals with such agent, without inquiry, is an innocent party. He who deals with an agent of professedly limited powers, and does not examine the recorded limits of those powers, would seem rather to be one who was willfully ignorant of the limits of the power.

These remarks apply to bonds issued under special acts, enabling cities, counties or towns, to issue bonds in aid of railroad or other enterprises. Where there is a general power in the agent to act, as in the case of De Voss v. City of Richmond,1 the remarks do not apply. The case then comes within the rule of Hern v. Nichols.2 It may be said that the officers who issue the bonds in aid of railroads are usually supervisors, and other officers having general authority. It is true that they have a general authority as to certain matters, but in the issue of these bonds their authority is a special one.

Dissenting Opinion of Justice Miller. The following is the dissenting opinion of Mr. Justice Miller, in the case of Humbolt Township v. Long, which was concurred in by Justices Davis and Field, and which has already been referred to: 3

"We have had argued and submitted to us during the present term some ten or twelve cases involving the validity of bonds issued in aid of railroads by counties and towns in different States.

"They were reserved for decision until a late day in the term, and the opinions having been delivered in all of them within the last few weeks, I have waited for what I have thought proper to say by way of dissent to some of them until the last of these judgments are announced, as they have been to-day.

"I understand these opinions to hold that when the Constitution of the State or an act of its legislature imperatively forbids these municipalities to issue bonds in aid of railroads or other similar enterprises, all such bonds issued thereafter will be held void. But if there exists any authority whatever to issue such bonds, no restrictions, limitations or conditions imposed by the legislature in the exercise of that authority can be made effectual if they be disregarded by the officers of those corporations.

"That such is the necessary consequence of the decision just read, in the cases from the State of Kansas, is too obvious to need argument or illustration. That State had enacted a general law on the subject of subscriptions by counties and towns to aid in the construc

1 18 Gratt. 339.

? 1 Salkeld, 289; and see Lord Denman, in Pickard v. Sears, 6 Ad. & Ellis, 469. 3 Ante, p. 420.

tion of railroads, in which it was declared that no bonds should be issued on which the interest required an annual levy of a tax beyond one per cent. of the value of the taxable property of the municipality which issued them.

"In the case under consideration this provision of the statute was wholly disregarded. I am not sure that the relative amount of the bonds, and of the taxable property of the towns is given in these cases with exactness, but I do know that in some of the cases tried before me last summer in Kansas it was shown that the first and only issue of such bonds exceeded in amount the entire value of the taxable property of the town as shown by the tax list of the year preceding the issue.

"This court holds that such a showing is no defense to the bonds, notwithstanding the express prohibition of the legislature. It is therefore clear that so long as this doctrine is upheld, it is not in the power of the legislature to authorize these corporations to issue bonds under any special circumstances, or with any limitation in the use of the power, which may not be disregarded with impunity. It may be the wisest policy to prevent the issue of such bonds altogether. But it is not for this court to dictate a policy for the States on that subject.

"The result of the decision is a most extraordinary one. It stands alone in the construction of powers specifically granted, whether the source of the power be a State Constitution, an act of the legislature, a resolution of a corporate body, or a written authority given by an individual. It establishes that of all the class of agencies, public or private, whether acting as officers whose powers are created by statute, or by other corporations, or by individuals, and whether the subjectmatter relates to duties imposed by the nation, or the State, or by private corporations, or by individuals, on this one class of agents, and in regard to the exercise of this one class of powers alone, must full, absolute, and uncontrollable authority be conferred on them, or none. In reference to municipal bonds alone, the law is that no authority to issue them can be given, which is capable of any effectual condition or limitation as to its exercise.

"The power of taxation, which has repeatedly been stated by this court to be the most necessary of all legislative powers, and least capable of restriction, may by positive enactments be limited. If the Constitution of a State should declare that no tax shall be levied exceeding a certain per cent. of the value of the property taxed, any statute imposing a larger rate would be void as to the excess. If the

legislature should say that no municipal corporation should assess a tax beyond a certain per cent., the courts would not hesitate to pronounce a levy in excess of that rate void.

"But when the legislature undertakes to limit the power of creating a debt by these corporations which will require a tax to pay it in excess of that rate of taxation, this court says there is no power to do this effectually. No such principle has ever been applied by this court, or by any other court, to a State, to the United States, to private corporations, or to individuals. I challenge the production of a case in which it has been so applied.

"In the Floyd Acceptance Cases (7 Wall. 666), in which the Secretary of War had accepted time drafts drawn on him by a contractor, which, being negotiable, came into the hands of bona fide purchasers before due, we held that they were void for want of authority to accept them. And this case has been cited by this court more than once without question. No one would think for a moment of holding that a power of attorney made by an individual cannot be so limited as to make any one dealing with the agent bound by the limitation, or that the agent's construction of his power bound the principal. Nor has it ever been contended that an officer of a private corporation can, by exceeding his authority, when that authority is express, is open and notorious, bind the corporation which he professes to rep

resent..

"The simplicity of the device by which this doctrine is upheld as to municipal bonds is worthy the admiration of all who wish to profit by the frauds of municipal officers. It is, that wherever a condition or limitation is imposed upon the power of those officers in issuing bonds, they are the sole and final judges of the extent of those powers. If they decide to issue them, the law presumes that the conditions on which their powers depended existed, or that the limitation upon the exercise of the power has been complied with, and especially and particularly if they make a false recital of the fact on which the power depends in the paper they issue, this false recital has the effect of creating a power which had no existence without it.

"This remarkable result is always defended on the ground that the paper is negotiable, and the purchaser is ignorant of the falsehood. But in the Floyd Acceptance Cases this court held, and it was necessary to hold so there, that the inquiry into the authority by which negotiable paper was issued was just the same as if it were not negotiable, and that, if no such authority existed, it could not be aided by giving the paper that form. In county bond cases it seems to be otherwise.