prohibited any subscription or the issue of any bonds for such subscription without such previous sanction. "No subscription shall be made or purchase bond issued by any county," says the law, "unless a majority of the qualified voters of such county * shall vote for the same." And the law further requires that the notices calling for the elec tion "shall specify the company in which stock is proposed to be subscribed."

**

These provisions furnish the answer to the first question presented. The only subscription authorized by the voters of Fulton county was that to the Mississippi and Wabash Railroad Company, and one to the Petersburg and Springfield Company. The Central Division of the Mississippi and Wabash Railroad Company was a different corporation from the original company. It has been so held by the Supreme Court of Illinois in a case involving the consideration of a portion of the bonds in suit and the remaining sixty thousand dollars of bonds of the original subscription.

The amendatory act of 1857 dividing the road into three divisions, and subjecting each division to the control and management of a different board, clothed with all the powers of the original board, so far as the division was concerned, worked a fundamental change in the character of the original corporation, and created three distinct corporations in its place. A subscription to a company whose charter provided for a continuous line of railroad of two hundred and thirty miles, across the entire State, was voted by the electors of Fulton county; not a subscription to a company whose line of road was less than sixty miles in extent, and which, disconnected from the other portions of the original line, would be of comparatively little value.

But it is earnestly contended that the plaintiff was an innocent purchaser of the bonds without notice of their invalidity. If such were the fact we do not perceive how it could affect the liability of the county of Fulton. This is not a case where the party executing the instruments possessed a general capacity to contract, and where the instruments might for such reason be taken without special inquiry into their validity. It is a case where the power to contract never existed-where the

instruments might, with equal authority, have been issued by any other citizen of the county. It is a case, too, where the holder was bound to look to the action of the officers of the county and ascertain whether the law had been so far followed by them as to justify the issue of the bonds. The authority to contract must exist before any protection as an innocent purchaser can be claimed by the holder. This is the law even as respects commercial paper, alleged to have been issued under a delegated authority, and is stated in the case of Floyd's Acceptances (7 Wallace, 676). In speaking of notes and bills issued or accepted by an agent, acting under a general or special power, the court says: "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 afterwards; for it is to be kept in mind that the protection which commercial usage throws around negotiable paper cannot be used to establish the authority by which it was originally

issued."

It is also contended that if the bonds in suit were issued without authority their issue was subsequently ratified, and various acts of the supervisors of the county are cited in support of the supposed ratification. These acts fall very far short of showing any attempted ratification even by the supervisors. But the answer to them all is that the power of ratification did not lie with the supervisors. A ratification is, in its effect upon the act of an agent, equivalent to the possession by him of a previous authority. It operates upon the act ratified in the same manner as though the authority of the agent to do the act existed originally. It follows that a ratification can only be made when the party ratifying possesses the power to perform the act ratified. The supervisors possessed no authority to make the subscription or issue the bonds in the first instance without the previous sanction of the qualified voters of the county. The supervisors in that particular were the mere agents of the county. They could not, therefore, ratify a subscription without a vote of the county, because they could not make a subscription in the first instance without such authori

zation. It would be absurd to say that they could, without such vote, by simple expressions of approval, or in some other indirect way, give validity to acts, when they were directly in terms prohibited by statute from doing those acts until after such vote was had. That would be equivalent to saying that an agent, not having the power to do a particular act for his principal, could give validity to such act by its indirect recognition. (McCracken v. City of San Fancisco, 16 California, 624.)

We do not mean to intimate that liabilities may not be incurred by counties independent of the statute. Undoubtedly they may be. The obligation to do justice rests upon all persons, natural and artificial, and if a county obtains the money or property of others without authority, the law, independent of any statute, will compel restitution or compensation. But this is a very different thing from enforcing an obligation attempted to be created in one way, when the statute declares that it shall only be created in another and different way.

We perceive no error in the record, and the judgment of the Circuit Court must, therefore, be

AFFIRMED.

APPLICATION OF THE DOCTRINE IN CASE OF MUINCIPAL RAILROAD BONDS.

TWENTY-SIXTH SELECTED CASE.

ALEXANDER BUCHANAN V. THE CITY OF LITCHFIELD, ILLINOIS.

1. The constitution of the State of Illinois, article nine, section twelve, which was adopted in 1870, provides that "no county, city, township, schooldistrict, or other municipal corporation, shall be allowed to become indebted, in any manner, or for any purpose, to an amount, including existing indebtedness, in an aggregate exceeding five per centum on the value of the taxable property therein, to be ascertained by the last assessment for State and county taxes previous to the incurring of such *Reported in 102 U. S., 278.

indebtedness." A statute of the State, approved April 15, 1873, authorized any city of the State to construct water-works, and for that purpose it was authorized to borrow money, and to levy and collect a tax in the manner that other municipal taxes might be levied and collected.

The City of Litchfield subsequently passed an ordinance authorizing and directing the issuing of the bonds to an amount not exceeding $50,000, to be used to borrow money for the erection, constructing, and maintenance of water-works for the city.

The city issued such bonds, which bore date January 1, 1874, in accordance with the city ordinance; each bond containing the statement that it was issued under authority of an act of the legislature of the State of Illinois, entitled "an act authorizing cities, incorporated towns and villages to construct and maintain water-works," which was approved April 15, 1873, and an ordinance of said city, entitled “an ordinance to provide for the issuing of bonds for the construction of the Litchfield waterworks, approved December 4, 1873."

The twelfth section of the constitution of Illinois was not referred to in the statute or the ordinance, and the ordinance does not refer to the indebtedness of the city, but it did appear that at the time of the issuance of the bonds the city indebtedness exceeded the limits fixed by the constitution.

Under these facts a bona fide holder brought suit upon unpaid coupons attached to bonds issued by the city as aforesaid, but it was held by the court that he was not entitled to recover.

2. The court held that inasmuch as neither the constitution nor the statute prescribed the mode by which a party dealing with the city could determine the amount of the city's indebtedness, it was a quære whether, if the bonds had contained recitals which could be interpreted as amounting to a representation by the official representatives of the city who executed the same, that the indebtedness then existing and that created by the bonds, did not exceed the limits fixed by the constitution, would constitute an estoppel against the city from setting up as a defense that such recital was untrue in fact.

3. It appeared in this case that there had been no assessment of the property within the city during the year preceding the execution of the bonds. But the court, in determining the question whether the city had exceeded the constitutional limitations in issuing the bonds, permitted the defendant, under objections, to introduce the assessments of a preceding year for State and county taxes of all the taxable property within the county and township within which the city was situated, and from which, in connection with a map, the location and taxable value of the property within the limits of the city could be determined, and this was held to be the best evidence which could be produced of the value of the assessable property, and proper evidence.

4. Whether the city could be compelled to refund the money which her authorized agents and officers had received on the bonds and paid into the treasury of the city, and which was expended in the construction of the water-works, was a question not properly before the court and was left undecided.

Error to the Circuit Court of the United States for the Southern District of Illinois.

THIS was an action of assumpsit, brought November 25, 1876, by Alexander Buchanan against the city of Litchfield, Illinois, to recover the amount of certain coupons of which it was admitted that he was the bona fide holder for value. The declaration, besides a count upon the coupons themselves, contains the usual counts for money lent and advanced, and for money had and received. The city defended the action upon the ground that the bonds were issued in violation of the constitution of the State, and that they were consequently void. The court which, by the stipulation of the parties, tried the issue found for the defendant, and the plaintiff sued out this writ.

The legislature of Illinois passed, April 15, 1873, an act entitled, "An act authorizing cities, incorporated towns, and villages to construct and maintain water-works," by the first section of which act it is provided that all cities, incorporated towns, and villages in this State be, and are hereby, authorized and shall have power to provide for a supply of water for the purpose of fire protection and for the use of the inhabitants of such cities, incorporated towns and villages by the erection, construction and maintaining of a system of water-works.

The second section provides that such cities, incorporated towns and villages may borrow money and levy and collect a general tax in the same manner as other municipal taxes may be levied and collected for the erection, construction and maintaining of such water-works, and appropriate money for the

The city council, the legislative authority of the city, adopted December 4, 1873, an ordinance in the words following:

"An ordinance to provide for the issuing of bonds for the construction of the Litchfield water-works.