Page:Federal Reporter, 1st Series, Volume 8.djvu/793

HOPPEB V. TOWN OF COVINGTON. 779 �Municipal corporations are created to secure to the people residing •within their jurisdiction the benefits of local government, and not for business purposes. Unlike trading or business corporations, their powers are governmental and administrative. In addition to the power to raise revenue by taxation, and other express powers con- ferred upon them by their charters, they may exercise such incidental powers as are necessary to enable them to accomplish the object of their being. The power to make contracts and expenditures carries with it the implied power to incar indebtedness, and to issue proper obligations therefor. But it does not follow that beeause municipal corporations, in the exercise of their legitimate and ordinary juris- diction, may incur indebtedness and issue vouehers, orders, or other instruments for the same, they may issue commercial securities, pay- ment of which will be enforced against the tax-payers, in favor of bona fide holders, however irregular or fraudulent the issue may be. �The court, in Mayor v. Ray, 19 Wall. 477, say : �"If, in the execution of their important trusts, the power to borrow money and issue bonds or other commercial securities is needed, the legislature can easily confer it, under proper limitations and restraints, and with proper pro- visions for future repayment. Without such authority it cannot be legally exercised. * * * No such power ought to exist, and in onr opinion no such power does exist, unless conferred by legislative enaetment, either express or clearly Implied." �While concurring in the judgment of the court, but dissenting from Bome of the grounds upon which it was based. Justice Hunt said that in his opinion a municipal corporation might borrow money for legiti- mate uses and issue its commercial paper for the same, unless ex- pressly prohibited by its charter, or by some statute, from so doing. Police Jury v. Britton, 15 Wall. 566; Hitchcock v. Oalveston, 2 Woods, 272; Chisholm v. City of Montgomery, Id. 584. �But, while municipal corporations cannot borrow money or issue commercial securities without legislative authority, express or clearly implied, it is, nevertheless, the law in the federal courts that when a municipality, or its officers, are invested with authority to issue bonds and to decide whether the conditions exist under which a special enaetment authorizes the issue of such securities, and such officers issue bonds, reciting the existence of the necessary conditions, the recital is itself a decision by the appointed tribunal, which is eonclu- sive in favor of a honafidc purchaser. Coloma v. Eares, 92 U. S. 484. �In Buchanan v. City of Litchfield, 102 U. S. 278, the city issued its water bonds, amounting to $50,000, to aid in constiueting and main- ��� �