The failure on the part of public authorities to comply with constitutional or other provisions limiting the indebtedness legally incurrable usually renders void their acts and the indebtedness incurred by them, and this is especially true if power is lacking rather than a failure to comply with some formality required by law in the exercise of a granted power.2 The total obligation liable to rest upon a public corporation by the terms of a contract extending through a series of years for Peck v. City of Hempstead, 27 Tex. Civ. App. 80, 65 S. W. 653; Fowler v. City of Superior, 85 Wis. 411. 271 See note 44 Am. St. Rep. 241243; Norton v. Taxing Dist. of Brownsville Com'rs, 129 U. S. 479. The effect of a constitutional amendment restricting the incurring of municipal indebtedness upon a previous legislative act was to abrogate such previous legislative act and render void an indebtedness incurred through proceedings authorized by this legislative act and pending or not completed at the time of the passage of the constitutional amendment. Dodge v. City of Memphis, 51 Fed. 165; Lyon County v. Ashuelot Nat. Bank, 87 Fed. 137; affirming 81 Fed. 127; Parks v. Soldiers' & Sailors' Home Com'rs, 22 Colo. 86; following In re Appropriations by Gen. Assem., 13 Colo. 316; Dunbar v. Canyon County Com'rs, 5 Idaho, 407, 49 Pac. 409; Fuller v. City of Chicago, 89 I. 282; Griswold v. City of East St. Louis, 47 Ill. App. 480. School Town of Winamac v. Hess, 151 Ind. 229, 50 N. E. 81. The excess of indebtedness only held void in this case, and a contract for the construction of a school house the cost of which would raise the town indebtedness beyond the constitutional limitation was held enforceable, that part of the contract price Abb. Corp.-21. 271 within the limit, so the court held, being a sufficient consideration. McPherson v. Foster, 43 Iowa, 48. The excess only held void. McAleer v. Angell, 19 R. I. 688, 36 Atl. 588. Where the debt limit has been reached, a town cannot contract a further liability even for materials to be used in repairing highways which it is required by statute to keep in repair. Allen v. City of Davenport, 107 Iowa, 90; Painter v. City of Norfolk, 62 Neb. 330, 87 N. W. 31. The city was authorized to indorse on bonds issued by a private waterworks company that it would pay the annual interest in lieu of hydrant rentals to such amount. The city clerk indorsed the statement that the city would pay the interest as it matured. It was held that the indorsement as made was in excess of the authority conferred by the ordinance and therefore void. People v. Parmerter, 158 N. Y. 385; Drhew v. Altoona City, 121 Pa. 401, 15 Atl. 636. A city not liable for damages on account of a breach of contract where the amount of the obligation would raise the municipal indebtedness above the constitutional limit. State v. McGraw, 12 Wash. 541; State v. Winter, 15 Wash. 407. The assumption of indebtedness created by residents of the same territory, services to be performed from time to time is not usually considered an indebtedness to be included within the constitutional or other limitation. A future contract obligation is not an abso lute liability but is contingent on the performance of the contract before the corresponding obligation on the part of the munici pality is created.272 included within the limits of a municipal corporation subsequently organized, was held constitutional and within the limits of legislative pow er. 272 Walla Walla City v. Walla Walla Water Co., 172 U. S. 1; Anoka Water Works, E. L. & P. Co. v. City of Anoka, 109 Fed. 580; McBean v. City of Fresno, 112 Cal. 159; City of San Diego v. Higgins, 115 Cal. 170. A contract extending over several years is not invalidated by the fact that the aggregate amount of the contract obligation as estimated by the municipality exceeds its constitutional limit. City of Valparaiso v. Gardner, 97 Ind. 1; Crowder v. Town of Sullivan, 128 Ind. 486; Seward v. Town of Liberty, 142 Ind. 551; Foland v. Town of Frankton, 142 Ind. 546; Davis v. City of Des Moines, 71 Iowa, 500, 32 N. W. 470; Grant v. City of Davenport, 36 Iowa, 396; Ludington Water-Supply Co. v. City of Ludington, 119 Mich. 480, 78 N. W. 558: "The charter does limit the authority of the council in respect to incurring indebtedness, but the rule that a contract for future service to be paid for as rendered is not an incurring of indebtedness, is supported by abundant authority." Smith v. Town of Dedham, 144 Mass. 177, 10 N. E. 782; Saleno v. City of Neosho, 127 Mo. 627, 30 S. W. 190; Lamar Water & Elec. Light Co. v. City of Lamar, 128 Mo. 188; Ter. v. City of Oklahoma, 2 Okl. 158; Wade v. Borough of Oakmont, 165 Pa. 479. In Duncan v. City of Charleston, 60 S. C. 532, the court held that a contract for the supply of water and light to a city requiring the payment of a certain sum each year out of its current receipts was void, being in violation of a constitutional provision in South Carolina prohibiting the incurring of indebtedness in excess of a certain per cent of the value of the taxable property, the city making such contract being indebteded at that time to an amount in excess of the constitutional limitation. Stedman v. City of Berlin, 97 Wis. 505, 73 N. W. 57. See, also, § 257, post, and authorities cited. But see Coulson v. City of Portland, Deady, 481, Fed. Cas. No. 3,275. City of Springfield v. Edwards, 84 Ill. 626; Prince v. City of Quincy, 28 Ill. App. 490; affirmed 128 Ill. 443; Culbertson v. City of Fulton, 127 Ill. 30; Beard v. City of Hopkinsville, 95 Ky. 239; Niles Water-Works Co. v. City of Niles, 59 Mich. 311; Davenport v. Kleinschmidt, 6 Mont. 502; Read v. Atlantic City, 49 N. J. Law, 558. The court after reviewing several cases said: "The plain object of such restrictions is to require that all moneys which are to be paid for municipal expenses after the debt has reached the fixed limit shall be raised by taxation. In view of this object it is clear (and all the cases agree in this) that prohibitions § 150. Retroactive effect of limitations. the city within the meaning of a charter provision prohibiting the common council from creating "any debt or liabilities in any manner" against the city which shall exceed the sum of $1,000. City of Erie's Appeal, 91 Pa. 398. The question of the retroactive effect of such provisions has arisen at times. The uniform decision of courts has been that the adoption of constitutional provisions or the passage of legislation limiting and restricting the power and capacity of a public corporation to incur indebtedness of any character does not render illegal or void indebtedness which was valid at the time of adoption of such constitutional amendment or the passage of such legislation though such indebtedness may be in excess of the limit therein fixed.273 And it has even been held that debts against increasing the indebtedness the city, created a liability against or the debt of a municiaplity are not to be construed as limited to obligations which are debts eo nomine, but are to be extended to all contracts for the payment of money or contracts whereon the payment of money may be enforced. But where the money to be paid upon such contracts is provided for to be raised by taxation, upon some fixed and definite scheme, such contracts are not, in my judgment, within such prohibitions. Where, however, the money required to meet such contracts is not provided for either by being legally ordered to be raised by taxation and appropriated for that purpose, or by some legislative scheme which positively prescribes that it shall be raised by taxation and appropriated for its payment as needed, then such contracts do increase the indebtedness or debt of municipal corporations within the meaning of such prohibitions. Any other construction would deprive these restrictions of the force requisite to reach and cure the evil intended to be prevented thereby." Salem Water Co. v. City of Salem, 5 Or. 29. An agreement to pay the Salem Water Co., $1,800 per annum for seventeen years in quarterly installments for water to be furnished 273 Sibley V. City of Mobile, 3 Woods, 535, Fed. Cas. No. 12,829. Legislation affecting a contract obligation lawfully entered into and resulting in the incurring of an indebtedness is inoperative so far as it impairs that contract. Aydelott v. Town of South Louisville, 16 Ky. L. R. 166, 26 S. W. 717; City of Ludlow v. Board of Education of Ludlow, 16 Ky. L. R. 805, 29 S. W. 854; Warren v. City of Newport, 23 Ky. L. R. 1006, 64 S. W. 852; Bank of Columbia v. Taylor County, 23 Ky. L. R. 1483, 65 S. W. 451; City of Ashland v. Culbertson, 103 Ky. 161; Kansas City v. Wyandotte Gas Co., 9 Kan. App. 325, 61 Pac. 317. The passage of a subsequent law limiting assessments for the purpose of lighting streets and other public places does not authorize a municipality to repudiate a legal contract entered into before the passage of such legislation. In State v. Graham, 23 La. Ann. 622. created prior to the adoption of a state constitution are not to be considered in determining the indebtedness of a county with reference to the limitation placed upon such indebtedness by the constitution.274 § 151. Construction of statutory and other limitations. The courts in construing the extent and application of charter, statutory or constitutional limitations upon the power of a public corporation to incur an indebtedness, whether represented by negotiable bonds or other instruments, have constantly in mind the general limitations which should be applied in determining the extent of power attempted to be exercised by such corporations. The strict rule of construction therefore is the one most generally adopted. In this there is a difference between a public and a private corporation. The liberal rule of construction is the one usually adopted by the courts in cases of doubt in dealing with the attempted exercise of corporate powers by a private corporation, because that construction tends to facilitate the promotion of the enterprise, and the courts in such cases always hold that where this can be accomplished through the adoption of the liberal rule of construction it should be done, rather than the contrary one which might lead to the defeat of the enterprise or to the impairment of its success. The fundamental differences between a public and a private corporation necessarily lead the courts to adopt the strict rule of construction as applied to all Com'rs, 7 Okl. 686, it was held that the indebtedness to be taken into consideration in determining whether or not the federal limitation had been exceeded should be that at the time certain indebtedness was voted not the time at which the warrants or other evidence of indebtedness authorized were actually issued. Citing Seward County Com'rs Aetna Life Co., 32 C. C. A. 585, 90 Fed. 222; Rollins v. Rio Grande County Com'rs, 33 C. C. A. 181, 90 Fed. 575; and Mountain Grove Bank v. Douglas County, 146 Mo. 42; Baird v. Todd, 27 Neb. 782, 43 N. W. v. 1143; Lawrence County v. Meade County, 10 S. D. 175; Pleasant Valley Coal Co. v. Salt Lake County Com'rs, 15 Utah, 97, 48 Pac. 1032; Neale v. Wood County Ct., 43 W. Va. 90. 274 Rollins v. Rio Grande County Com'rs, 90 Fed. 575, citing Lake County v. Rollins, 130 U. S. 662; Wider v. Rio Grande County Com'rs, 41 Fed. 512; Lake County Com'rs v. Standley, 24 Colo. 1, 49 Pac. 29; People v. Rio Grande County Com'rs, 11 Colo. App. 124, 52 Pac. 748; Myers v. City of Jeffersonville, 145 Ind. 431, 44 N. E. 452. acts of public organizations. These differences consist in the purpose of organization, source of revenue, and expenditure of funds. Through the strict rule of construction the power to incur indebtedness of whatever character is denied in cases of doubt. There exists the difficulty already suggested that the indebtedness may be one morally binding upon a community but in excess of the legal limitation or not incurred pursuant to the formal acts required by law. In such case the courts, in order to render substantial justice as between the parties, may adopt the less strict rule of construction which will permit the enforcement of a moral obligation. In the note will be found reference. to cases construing particular charter, statutory and constitutional provisions as affecting the power of different public corporations to ineur indebtedness.275 275 Alabama: Alabama G. S. R. fore held incapable of contracting Co. v. Reed, 124 Ala. 253, 27 So. 19. this obligation. Under Const. art. 11, § 5, which prohibits counties from levying an amount greater than one-half of one per cent per annum except to pay a liability for the erection of necessary buildings, etc., a tax was held properly levied for the purpose of furnishing a court house with suitable furniture, the court holding that the authority for levying a tax for the erection of a court house would necessarily include the power to provide suitable furnishings. Arizona: McRae V. County of Cochise (Ariz.) 44 Pac. 299. A re ward of $3,000 offered by a board of county supervisors to be paid to any person first securing an artesian well in the county, the court holds an obligation or indebtedness within the meaning of Act of Cong. 1886 known as the "Harrison Act" limiting the indebtedness of any county to four per cent of the value of the taxable property. The reward as offered was in excess of the four per cent limit and the county was there California: Shaw v. Statler, 74 Cal. 258. The county income for each year must be used to pay the debts of that year, the constitution of the state providing that no county shall incur any liability or indebtedness exceeding in any year its annual income without a two-thirds vote of the electors. In Welch v. Strother, 74 Cal. 413, construing same constitutional provision, the court held that the salaries of the public officers being fixed by law and payable out of the general fund they should be paid in the absence of any showing that the general fund would be exhausted by such payment, although the amount thus paid in one month exceeded its proportionate share of the limit allowed for the year. Smith v. Broderick, 107 Cal. 644; Pacific Undertakers v. Widber, 113 Cal. 201. A claim under a contract between a board of supervisors and a firm of undertakers by which they were to bury the indigent dead for |