PUBLIC OR MUNICIPAL CORPO RATIONS AS PARTIES TO COMMERCIAL PAPER. The State or Federal governments as corporations may, by their duly authorized agents, become parties to the different species of commer cial paper, either as drawer, maker or acceptor. (United States v. Bank, 15 Pet., 377; State ex rel. Plock v. Cobb, 64 Ala., 156.) But as the ordinary exercise of their powers does not require the use of this power, the courts do not recognize any officer or agent of the government as possessing implied power to bind the government by making or accept ing commercial paper. The authority to make or accept commercial paper in order to bind the gov ernment must be expressly granted to the officer by the legislative department of the government or necessary to carry out some express power.
A slight distinction is sought to be drawn between public corporations and municipal corporations, the latter having reference more particularly to incor porated villages, towns and cities. (Dillon Mun. Corp., Sec. io.) But the distinction is of little importance as the legislature in each case fixes the powers of these corporations by special acts or general laws.
It is conceded by the weight of authority that municipal corporations may exercise the power to borrow money as an implied power, though not expressly granted, if necessary to carry out the pur poses for which they were created. (Williamsport v. Commonwealth, 84 Pa. St., 487; City of Galena v. Corwith, 4S Ill., 423.) But it seems that the weight of authority would deny them the right to issue negotiable paper to secure such borrowed money unless they had been expressly authorized to borrow. It being claimed that it is not necessary to the exercise of the power that negotiable secu rities be issued. (Reinboth v. Pittsburg, 41 Pa. St., 278; Railroad Co. v. Evansville, i5 Ind., 395; Mayor v. Ray, 19 Wall., 476.) Other cases hold that for lawful debts a municipal corporation not restricted by its charter or prohibited by statute, may issue notes, bills, or bonds, and that these in the hands of bona fide holders will be free from equitable and other defences not appearing on the face of such instruments or to be gathered from the ordinances or published notices in reference to such securities.