power of the agent." Analyzing in the case at bar the view of the court below, it will be found to involve three several distinct propositions:

1st. That the warrants in suit are negotiable paper. 2d. That the officers of the city (mayor and recorder) or at all events the city council, has power to create and issue negotiable paper; and, 3d. That warrants, like the ones in question, are valid in the hands of an innocent holder, even if issued without authority or without consideration. With reference to this, as well as other portions of the record, it is necessary to examine the propositions.

(a) The orders in suit are not bills of exchange, as a bill of exchange proper involves the idea of at least two distinct parties, drawer and drawee. The instruments in suit are orders by the city on itself-mere direction to the treasurer to pay the amount to the bearer. In legal effect they are the promissory note of the city. (Miller v. Thomson, 3 Man &. Gr., 576; followed, Fairchild v. The Ogdensburgh, Clayton and Rome Railroad Company, 15 N. Y., 337; Bull v. Sims, 23 Id., 570, 572; Clark v. Polk County, infra. [19 Iowa, 248.] And by usage and statute (Rev., Ch. 73) they pass by delivery, and the holder, as the real owner, may bring suit upon them in his own name. (Steel v. Davis County, 2 G. Greene, 469; Brown v. Johnson County, 1 Id., 486; Campbell v. Polk County, 3 Iowa, 467.) The debtor corporation may give a written acknowledgement of the debt. It may make this run to order or bearer without invalidating it; but it does not follow, as we shall show, that there is an implied power to invest these with all the qualities of commercial paper.

(b) There is further involved, in the view of the District Court, the propoistion that it is competent for the city officers (mayor and recorder) to issue its obligation in a negotiable form, and endow them with all the attributies of negotiable mercantile securities. Upon examining the charter under which these warrants were issued (Laws 1857, Ch. 185, p. 281), no express power to issue promissory notes or other negotiable paper is conferred. If the power exists to

make paper, which, in the hands of a bona fide holder, cuts off equities, it must be an implied power.

It is a familiar and elementary principle that municipal corporations have and can exercise such powers, and such only, as are expressly granted, and such incidental ones as are necessary to make those powers available and essential to effectuate the purposes of the corporation, and these powers are strictly construed. (2 Kent Com., 298; Mayor v. Cunliff, supra, and the authorities cited in connection therewith.)

It is held that banking and trading corporations have the implied or incidental power to make negotiable paper. (McCullough v. Moss, 5 Denio, 567; Straus v. Eagle Insurance Company, 5 Ohio, 59, 1855; Mott v. Hicks, 1 Cow., 513; Attorney-General v. Life & Fire Insurance Company, 9 Paige, 470; 2 Kent Com., 299; 1 Pars. N. and B., 165.) And the same rule has in some cases been applied, without much consideration, by way of analogy to municipal and public corporations; but not so as to cut off inquiry into the validity of the paper or just defenses. (Kelly v. The Mayor, etc., 4 Hill, 263; see Chemung Canal Bank v. Supervisors, etc., 5 Denio, 517; Carne v. Brigham, 39 Maine, 39; Clarke v. School District, 3 R. I., 199.) To this doctrine, as applied to commercial corporations, we see no objection; but we do see many and serious objections to treating the ordinary warrants of counties and cities as possessing all of the incidents and qualities of commercial paper.

These warrants are unlike bonds issued on time, negotiable in form, and for sale in the market, as, for example, those issued by towns, cities and counties to railroad companies, under express acts of the legislature (for they cannot be issued without express legislative authorization), in payment for stock subscribed. This class of securities are made and issued for

the express purpose of raising money by their sale, and the attainment of this object would be embarrassed or defeated if they were subject to equities in the hands of bona fide purchasers. They are, therefore, held to be negotiable with all the incidents of negotiability. (Clapp v. Cedar County, 5 Iowa, 15; Morris Canal Company v. Fisher, 1 Stock., Ch., 667, 1855; s. c., 3 Am. Law Reg. (o. s.), 423; Gelpcke v.

Dubuque, 1 Wall. (U. S.), 175; Craig v. Vicksburg, 31 Miss., 216; Jackson v. Railroad Company, 2 Am. Law Reg. (N. s.), 585; s. c., Id., 748, and note of Judge REDFIELD; Chapin v. Massachusetts and Vermont Railroad Company, 8 Gray, 575; Clark v. Janesville, 10 Wis., 136; Maddox v. Graham, 2 Metc. (Ky.), 56; Gould v. Sterling, supra; White v. Railroad Company, 21 How., 575; Id., 539; Bank v. The New York and New Haven Railroad Company, 3 Kern., 599; s. c., 4 Duer, 480.)

But with warrants like those in suit it is entirely different. Under the charter of the city (§ 18) it is made "the duty of the city council to liquidate and settle all claims and demands against the city." And by the same section it is provided that no money shall be drawn from the city treasury "except by order under the authority of the city council."

The city council audit and allow claims and demands, and their action in this regard is to be entered of record. (Charter, § 3.) Upon a certified copy of these proceedings the treasurer of the city would be authorized to pay the claimant.

But by usage, or, perhaps, under a by-law, orders like those before us are drawn upon the treasurer. This mode is adopted for convenience, and these instruments are not to be assimilated, in all respects, to ordinary commercial paper.

On this question the argument may be thus condensed: There is no express authority to the officers of this city to issue negotiable paper which shall be free from equities in the hands of purchasers. And the existence of such a power is not necessary as an incident to those granted, or to carry out the purposes and objects of the corporation, and would be attended with abuse and fraught with danger. It should not, therefore, be held to exist as an implied power. (Smith v. Cheshire, 13 Gray (Mass.), 318, 1859; Inhab. etc., v. Weir, 9 Ind., 224, 1857; Halstead v. The Mayor, etc., and other cases cited, supra.) Whether the corporation defendant could specially confer power upon its officers to bind it to negotiable paper, which should be free from equities, is a question which the record does not require to be decided.

(c.) It is further involved in the view of the District Court, that an innocent holder of one of these warrants may recover

thereon, though it be issued without consideration or without authority. The unsoundness of this view we have already pointed out. The warrants purport to be issued by the agents of the city. The plaintiff, in taking these warrants, was bound, at his peril, to ascertain the nature and extent of the power of these officers and of the city corporation. (Delafield v. State of Illinois, 2 Hill, 159, 174; 26 Wend., 192; s. c., 8 Paige, 53; Hodges v. Buffalo, 2 Denio, 110; Supervisors v. Bates, 17 N. Y., 242; Overseers v. Overseers of Pharsalia, 15 Id., 341; Butterfield v. Inhabitants of Melrose, 6 Allen, 187; Rossire v. City of Boston, 4 Id., 57; Zabriskie v. Cleveland, Columbus and Cincinnati R. R. Co., 23 How., 381, 398.)

By examination he may find that these warrants cannot lawfully be issued without the order of the city council. This must be entered of record "on the journals of the city, which shall be open" (so the charter declares), "to the inspection and examination of every citizen." A warrant issued by the mayor and recorder without the previous order of the council is void. They have no authority to do it, it would be substantially a forgery. A purchaser of such a warrant is bound, at his peril, at least to ascertain that the claim upon which it is founded has been liquidated and settled by the council. A representation by municipal officers that this has been done (and the issue of such a warrant is in substance such a representation), will not be binding upon the corporation. Why? The answer is because an agent can neither create nor enlarge his powers by his unauthorized representations. The law on this subject has of late years been much investigated, and will be found discussed and examined in a most critical, able and exhaustive manner, in the following important cases: Mechanics' Bank v. New York and New Haven R. R. Co. (Schuyler Frauds), 13 N. Y., 599, 1856; Farmers' Bank v. Butchers' and Drovers' Bank (where teller without real but with apparent power, certified negotiable checks as good), 14 N. Y., 623, s. c., 16 N. Y., 125; Claflin v. The Farmers' and Citizens' Bank, etc., 25 N. Y., 293; s. c., 2 Am. Law Reg. (N. s.), 92, and note; Gould v. Sterling, supra; the two last distinguished from the case in 14 N. Y., 623; Griswold v. Havens, 25 N. Y., 595, 1862; 26 N. Y., 505. Now without entering into these inter

esting discussions respecting liabilities of principals in certain cases, for the acts of agents apparently but not really within the scope of their commission, we need only observe that if it be conceded that the mayor and recorder Ifad the apparent power to issue warrants like the ones in suit, still if they did not really have this authority, their representations that they possessed it would not be the representations of a fact which from its nature (as in the case of the teller who certified the checks), rested peculiarly within the knowledge of the agent. On the contrary, the charter and the journals of the corporation, open to public inspection, afford to every person the certain means of ascertaining the existence of the authority of these officers to issue the warrants.

We have been able, after a very thorough investigation, to find no case which holds that city and county warrants, like those before us, are freed from equities when in the hands of bona fide holders. Nor has the plaintiff's counsel called our attention to any such. On the other hand, we have found several cases in the different States expressly holding that such orders were not commercial paper in the hands of an innocent holder, so as to exclude evidence of legality of their issue or preclude defenses thereto. See Halstead v. The Mayor, etc., of New York (on audited city warrants like those in suit), 5 Barb., 218, 1849; s. c., affirmed in Court of Appeals, but where the rights of a bona fide holder were not passed on, 3 Comst., 430, 1850; People v. El Dorado County (on audited county warrants distinctly holding that bona fide stood in shoes of payees), 11 Cal., 170, 1858; s. P., Sturtevant v. Liberty (town orders), 46 Maine, 457; Smith v. Inhabitants of Cheshire, 13 Gray (Mass.), 318, 1859; Andover v. Grafton (on note made by town), 7 N. H., 298, 1834; Sanborn v. Deerfield, 2 Id., 251, 254; Dalrymple v. Whittingham, 26 Vt. (4 Deane), 345; Inhabitants v. Weir, 9 Ind., 224, 1857; School District v. Thompson, 5 Minn., 280, 1861, approving 5 Barb., 218; Clark v. Polk County, infra [19 Iowa, 248], and cases cited by COLE, J.

It must not be supposed that certain cases recently decided by the Supreme Court of the United States have escaped attention. These cases were brought upon negotiable county