or increase of municipal indebtedness beyond certain limits, or except upon certain conditions. The judicial construction of some of these provisions will be noticed in this place. The constitution of Maryland contains a provision that "No debt shall be created by the mayor and city council of Baltimore" (except for specified temporary purposes), unless it shall be first sanctioned by the legislature and approved by the voters of the city. The city being the owner of a large amount of stock in the Baltimore and Ohio Railroad Company, without previous legislative authority or the approval of the voters, passed an ordinance to provide for the raising of one million of dollars, by hypothecating its railroad stock, and for the investment of the same in the bonds of another railroad company in process of construction. The validity of this ordinance being drawn in question, the court considered it to be plain, that the constitutional provision quoted was intended to prohibit the city from aiding in the construction of works of internal improvement without the previous assent of the legislature and of a majority of the voters of the city; and that the ordinance (notwithstanding the ingenious use of the phrase raising instead of borrowing money, and the further provision that the parties furnishing the money should look for its repayment exclusively to the stock pledged, and that the city should not be responsible for any deficit) did create a debt within the meaning of the constitution, and was therefore void.'

§ 86. Under a charter prohibiting the common council of a city from "authorizing any expenditure, for any purpose," in the current political year, exceeding the amount of the annual tax levy, the council cannot authorize any expenditure to be made within the year exceeding the limit; but they are not forbidden to authorize, in that year, an expenditure to be made in a subsequent year, for services to be performed in such subsequent year.'

Baltimore v. Gill, 31 Md. 375, 1869. That a debt may be created by borrowing money, although there be a provision exempting the borrower from liability beyond the property pledged, see Newell v. People, 3 Seld. 9, 87.

Weston v. Syracuse, 17 N. Y. 110, 1858. See, also, Cook v. City of Buf

§ 87. A municipal charter provided that it should not be lawful for the city council to make, or authorize to be made, "any contract for the payment of money beyond the current fiscal year," declaring every such prohibited contract "illegal and void." In construing this language the court say: By this section of the charter, the legislature have, in the most explicit manner, prohibited the city council from contracting any debt beyond the fiscal year. If the city council had, at the time the contract was made, in 1845, passed an ordinance that the expense of lighting the streets of the city for that year should be paid in 1848, by a tax then assessed for that purpose, it would have come within the letter of the prohibition. It is none the less a violation of its spirit, that the council did not pass the ordinance providing for its payment until 1848." *

§ 88. If a municipal corporation has the means in its treasury to meet its indebtedness, the issue of warrants to an amount larger than five per cent. of its taxable property is not a violation of the section of the state constitution which provides that "no municipal corporation shall be allowed to become indebted, in any manner or for any purpose, to an amount exceeding five per cent. of the taxable property within the corporation." In such case it would not become indebted within the meaning of the constitutional clause. An act of the legislature prohibiting counties and falo, 1 Clinton's N. Y. Digest," Buffalo," sect. 2. Limitation on rate of tax to be annually levied construed. State v. Mayor, 23 La. An. 358. The charter of a city provided that "no funded debt shall be contracted." It was decided, that a city bond, issued on time, for the purchase of market grounds, was not a funded debt. Ketchum v. Buffalo, 14 N. Y. 356. Meaning of "funded debt" and "funding" considered by Selden, J., 1b. p. 367, and by Wright, J., p. 378. City may fund valid debt and issue its bonds therefor, without express authority. Galena v. Corwith, 48 Ill. 423, 1868. How fund, Smith v. Morse, 2 Cal. 524. Ante, secs. 41, 36; 15 Wall. 566.

Per Caldwell, J., Jonas v. Cincinnati, 18 Ohio, 318, 322, 1849. Construction of similar provision in other charters: Goodrich v. Detroit, 12 Mich. 279; Philadelphia v. Flanigen, 47 Pa. St. 21; Johnson v. Philadelphia, Ib. 382; Wallace v. San Jose, 29 Cal. 180; Bladen v. Philadelphia, 60 Pa. St. 464, construing an act applying to the city to the effect that no debt shall be binding unless authorized by law or ordinance, and a sufficient appropriation therefor be made.

Dively v. Cedar Falls, 27 lowa, 227, 1869. A contract by the corpo

cities from thereafter "contracting any debt or pecuniary liability, without fully providing, in the ordinance creating the debt, the means of paying the principal and interest of

ib.

ration to pay for work when it shall be performed, in the future, does not constitute an indebtedness, within the meaning of this provision of the constitution, until the performance of the work. But quaere. Sce Davenport, &c. Gas Co. v. Davenport, 13 Iowa, 229. A similar provision exists in the constitution of Illinois and of some other states. The meaning and effect of the Iowa constitution, quoted above, were much discussed before the Supreme Court of Iowa, in a very recent case, in which the question was, Is a city corporation liable to a bona file holder, upon its negotiable bonds issued for value, when at the time of such issue the city was indebted to the full extent of the constitutional limit? The cause was settled before being decided, and no opinions were filed; but the judges differed in their judgment. In the Western Jurist (vol. VI. p. 1, January, 1872), will be found two able and interesting articles upon the question above stated, containing the arguments upon both sides of it-the one being prepared, as it is understood, by Mr. Justice Beck, and the other by Mr. Justice Cole, of the Supreme Court of Iowa. The proposition upon which they differ is whether the power given to a city to issue its bonds, absolutely ceases as to innocent holders, the moment the consitutional limit is reached, the same as if it had never been conferred. In view of the language shall not "be allowed;" the course of decision in the United States Supreme Court, elsewhere noticed, protecting the holders of this class of securities; and the impractibility, and even impossibility, of purchasers ever to ascertain, at a given moment, the amount of indebtedness of a corporation, the author, while appreciating the difficulties of the question, is inclined to think that if the power to issue negotiable securities be given, and the inhabitants stand by and allow such bonds to be issued, for value received by the corporation, and sold, that it should be held liable thereon. If the bonds are void, and the city has received value, it would be liable to pay back what it had received from innocent persons, or else the provision of the constitution would operate to ensnare and defraud those who deal with it; and, if thus liable, the constitutional limit may be exceeded in this way, as well as by sustaining the right to recover on the bonds.

The provision of the Iowa constitution, above quoted, was further expounded in the late case of Grant v. Davenport, April term, 1873, not yet reported, which involved the validity of a contract by the city to supply itself with water; and it was held that where a contract made by a municipal corporation pertains to its ordinary expenses, and is, together with other like expenses, within the limit of its current revenues and such special taxes as it may legally, and in good faith intends to levy therefor, such contract does not constitute "the incurring of indebtedness" within the meaning of the constitutional provision limiting the power of municipal corporations to contract debts.

The charter of the City of Portland, Oregon, prohibited the city from contracting an indebtedness exceeding $50,000; and it was held by Judge

the debt so contracted," does not extend to ordinary street work, which forms part of the current expenses of the corporation, and which may be paid out of its current revenues.'

§ 89. A restrictive provision in a city charter, that the "council shall not create, or permit to accrue, any debts or liabilities which shall exceed" a specified sum, unless a certain course be pursued by the council and approved by a vote of the people, has been considered to have no relation to liabilities arising ex delicto, or to those which the law may cast upon the corporation, and to apply, at most, only to contracts or liabilities voluntarily created. The court, indeed, regarded the provision as directory simply, and not as limitation on the power of the council to create debts.'

But in another case a provision in a city charter that the council shall not have power to pledge the credit of the city for more than a specified sum without submitting the question to the voters of the city was regarded as a definite restriction on the power; and hence a statute authorizing the city to issue bonds to defray the expenses of building a bridge is subordinate to, and does not override, the restriction in the charter."

$ 90. Constitutional limitations on state indebtedness. apply to the state alone, and not to her political and municipal subdivisions. A legislative provision prohibiting the

Deady that an ordinance assuming a liability of $350,000, to be paid in semi-annual instalments extending through twenty years was in violation of the charter, and this although the ordinance made provisions for the payment of such instalments as they fell due by the levy of taxes for that purpose. Coulson v. Portland, Deady, 481, 1868.

As to constitutional provision requiring the legislature to restrict the power of municipalities to levy taxes, borrow money, &c. see, ante, chap. III. sec. 27.

1 Reynolds. Shreveport, 13 La. An. 326, 1858.

McCracken v. San Francisco, 16 Cal. 591, 1860.

• Cumberland v. Magruder, 34 Md. 381, 1871. But see Butz v. Musca tive, 8 Wall. 575, 1869. Post, sec. 107.

Pattison v. Supervisors, 13 Cal. 175, 1869; Cass v. 607, 1853; Slack v. Railroad Company, 13 B. Mon. 16; 10 Wis. 136; Prettyman v. Supervisors, 19 Ill. 406.

Dillon, 2 Ohio St Clark v. Janesville See People v. Super

city authorities from incurring an indebtedness beyond a designated amount, does not apply to the legislature of the state; and the latter may, of course, by a subsequent act, authorize an increase of the amount.'

Rewards for Offenders.

§ 91. The governing body of a municipal corporation (which has power to protect the property and promote the welfare of its inhabitants), may offer a reward for the detection of offenders against the general safety of its people, as, for example, those guilty of the crime of arson within the corporate limits.' If made by the mayor, it may be ratified by the city council subsequently, and is binding upon the city, though not so ratified until after the performance of the service for which the reward is claimed.' A promise to reward an officer for doing that which, without such reward, it was his duty to do, is void. Such a promise is, on general principles, without consideration,

visors, 16 Mich. 254, and Mr. Justice Lowe's individual opinion--not the court's-in State v. County of Wapello, 13 Iowa, 388, 418-422; Dubuque County v. Railroad Company, 4 G. Greene, 1; Dean v. Madison, 7 Wis. 688.

1

Amey v. Allegheny City, 24 How. (U. S.) 364, 1860. Construction of particular limitation: Ib. See, on the general subject, Wallace v. Mayor, 29 Cal. 180; Wyncoop v. Society, 10 Iowa, 185; Rice v. Keokuk, 15 Iowa, 579; Gibbon v. Railroad Company, 36 Ala. 410; Foote v. Salem, 14 Allen, 487; Dunnova v. Green, 57 Ill, 30.

2 York v. Forscht, 23 Pa. St. 391, 1854; Crawshaw v. Roxbury, 7 Gray, 374, 1856. Such an offer is not void for ambiguity, and entitles a person to the reward who gives information to the police officers of the city upon which the incendiary is arrested, he being afterwards convicted. The power of towns in Maine to offer rewards denied; Gale v. South Berwick, 51 Maine, 174. See Lee v. Fleminsburg, 7 Dana, 59.

* Crawshaw v. Roxbury, supra. Under a statute authorizing the mayor and city council of any city, or the selectmen of any town, to offer and pay from the treasury of such city or town a suitable reward, not exceeding $300, for apprehending and securing a person charged with a capital or other high crime, any city or town may be bound by an offer of a reward in such cases; and city person who performs the service, relying upon such offer, may, in action of assumpsit, recover the amount offered of such city or town. Janvrin v. Exeter, 48 N. H. Requisites of declaration where reward is offered by a town, see Codding v. Mansfield, 7 Gray, 272.