disposition of unproductive lands should be subject to the approval of the Secretary, and other property, which, in this case, consisted of valuable real estate in the City of New Orleans, with buildings on it, be left to the sole disposal of a subordinate officer. All property of what ever kind obtained in the way pointed out is embraced within the scope of the statute. If the Congress of 1830 intended that the Solicitor of the Treasury should be the sole judge of the propriety of selling the property of the United States taken in payment of debts, the Congress of 1863 thought proper to abandon that policy, and to declare that in no case should there be a sale without the approval of the Secretary of the Treasury. It went further and said that all sales should be at public auction, and gave the power to lease for a limited time, but whether the property were leased or sold, the Secretary should be first consulted and his consent obtained, and all persons given a fair and equal opportunity of buying. The system thus inaugurated did away with the objections to private sales, and made the Secretary of the Treas ury responsible, as he should be, for the proper

gument against the rule of presumption contended for. As the important power of selling the property of United States acquired in payment of debts can only be exercised by the Solicitor with the approval of the Secretary, there would seem to be the best of reasons for requiring some written evidence of this approval, not only for the security of the purchaser, but for the protection of the Government.

The defendant, therefore, is not in default, because there is nothing in the record to show that this consent of the Secretary had been obtained.

If the authority to make the sale had been delegated to the Solicitor alone, and its exercise confided to his discretion, his acts would carry with them prima facie evidence that they were within the scope of his authority. But where the power is divided there must be joint action before any presumption can arise. Judgment affirmed.

ice.

The next point to be considered is, whether the defendant was obliged to comply with the terms of sale on tender of the deed. This deed was executed by E. C. Banfield, and recites that, acting in the capacity of Solicitor of the Treasury, under the 9th section of the Act of 1863, he had caused the property to be exposed at public sale, but it does not contain any recital that the Secretary authorized the sale, nor was any evidence offered to the defendant in connection with the deed that this authority had been obtained.

It is manifest, if any effect is to be given the Act invoked by the Solicitor as the basis of his authority, that he could not proceed at all with out the approval of his superior. The legisla tion of Congress would be wholly ineffectual to prevent the evils which it was designed to remedy, if this approval should not be treated as a substantial requirement, a thing essential to give validity to the sale. The question is one of power, and the power is given to sell when the Secretary thinks it advisable to do so.

His ap

proval is a condition precedent, without which the Solicitor has no authority whatever to act. It is said, however, if this be so, that the court will presume this approval, and that it is not necessary that it should appear either in the conveyance or in any other mode. It would defeat the obvious purpose of Congress, which is to be considered in the construction of a stat ute, to dispense with proof of this approval. One of the main objects of the statute was to subject the action of the Solicitor to the control of the Secretary in a matter of great public concern, in which he had heretofore acted without control. This change of the system contemplated a change in the mode of proceeding on the part of the Solicitor. If this were not so, there would be no security that the Solicitor would not continue to sell property as he had been accustomed to sell it. Indeed, the very sale in question is defended on the ground that the power conferred by the Act of 1830 remains unimpaired by the Act of 1863, and the action of the Solicitor in this case furnishes a potent ar

v.

CAROLINE CARSON.

(See S. C., 19 Wall., 94-107.)

Principal, necessary party to bill against sureties -purchaser, when necessary party-grantee of, when necessary party.

1. A surety is entitled to have his principal presprincipal may assist in making a defense, and in ent as a party to a bill against the surety, that the taking account of what is due if the defense fail, that the decree, in that event, may be primarily against him for payment, and that the amount may be conclusively fixed for which he will be liable over to the surety, if the latter should be compelled to pay the debt.

sale by executors, and that the purchaser was a 2. Where a bill charges fraud and conspiracy in a party to the fraud, and denies that a mortgage given on the purchase was paid, alleges that the bond is still in force, and that the release thereof was a nullity, and seeks to enforce the mortgage. the purchaser is a necessary party.

3. Where the purchaser from the executors bas deeded the property, the sale of which is sought to be set aside, such grantee is a necessary party. [No. 209.]

Argued Jan. 27, 28, 1874. Decided Apr. 6, 1874.

APPEAL from the Circuit Court of the United

States for the District of South Carolina. The case is stated by the court. Messrs. Edward McCready and Edward McCready, Jr., for appellants:

The bills are incurably defective for want of proper parties.

Story, Eq. Jur., sec. 72; Russell v. Clark, 7 Cranch, 98; Shields v. Barrow, 17 How., 130, 141 (58 U. S., XV., 158, 161); Barney v. Baltimore, 6 Wall., 280 (73 U. S., XVIII., 825); Bk. v. Campbell, 14 Wall., 87 (81 U. S., XX., 832); Northern Ind. R. R. Co. v. Mich. Cent. R. R. Co., 15 How., 233; Coiron v. Millaudon, 19 How.. 113 (60 U. S., XV., 575).

Messrs. C. Cushing, James Lowndes, A. G. Magrath and W. W. Boyce, for appellee:

I. The Federal Equity Courts are exceptionally liberal in dispensing with parties, the rule

Marshall v. Beverly, 18 U. S. (5 Wheat.), 313.
NOTE.-Necessary parties in equity. See note to

in regard to parties being itself subject to the discretion of the courts.

Two things have led these courts to this exceptional liberality. The first is the limitation upon their jurisdiction by the citizenship of parties. The other, the limitation upon their jurisdiction by their inability, until the late statute, to bring in parties by publication. The narrowing effect upon their jurisdiction of these limitations has led them to enlarge the rule as to parties. Hallett v. Hallett, 2 Paige, 17; Mallow v. Hinde, 12 Wheat., 198; Eberly v. Moore, 24 How., 158 (65 U. S.. XVI., 614).

:

II. In pursuance of this liberal policy, the courts of the United States have acted upon this principle, viz that where a party, not be fore the court, is not an inhabitant of nor found within the district where the suit is brought, the court will proceed without such party, unless he is an indispensable party, or one whose rights are necessarily affected by the decree.

There are three classes of parties: 1. For mal parties. 2. Necessary or convenient parties. 3. Indispensable parties. The Federal Courts dispense with parties of the first two classes.

Shields v. Barrow, 17 How., 139 (58 U. S., XV.. 160), where all the cases on this point are collected; Canal Co. v. Gordon, 6 Wall., 561 (73 U. S., XVIII., 894): Payne v. Hook, 7 Wall., 431 (74 U. S., XIX., 262); Bk. v. Campbell, 14 Wall., 94 (81 U. S., XX., 833).

To apply these principles to this case: The assignee in bankruptcy of E. N. Ball is surely not an indispensable party. Ball passed all his interest in Dean Hall to McBurney and Gillespie by his deed. Ball's presence or that of his assignee in bankruptcy would be convenient to the defendants, because they might make their claim over against him. But he is only a convenient party, and his convenience is to the defendants. A stronger case than this is that of a mortgagor making a second mortgage; but in South Carolina, he need not be made a party. Gen. Stat., 389.

The case of Caldwell v. Carrington, 9 Pet., 86, was a case similar to this.

Gillespie, in his character of co-trustee with McBurney, is not an indispensable party.

1. The other trustee, McBurney, is before the court and fully represents the trust estate. If Gillespie came in, he would have nothing to do but to sign McBurney's answer.

2. It has been decided that an absent cotrustee was not an indispensable party. West v. Randall, 2 Mas., 191.

3. The appellants, in order to get possession of the appellee's property, dealt with one of her trustees. It would be hardship that they should argue for the authority of one trustee in obtain ing her property, and deny the authority of one trustee in defending it against her suit.

Hyatt, McGahan, Hasseltine and Gillespie, in their character of copartners of Hyatt, McBurney & Co., are not indispensable parties.

1. They are cestuis que trust, under the conveyance to McBurney and Gillespie, and their trustee, McBurney, who is before the court, fully represents them.

2. By the 49th Rule in Equity, the trustee under a devise of realty is the proper party to defend a suit affecting it. This case is an analogous one.

3. It is decided that a copartner is not an indispensable party, a partner before the court being taken to represent sufficiently the others. Story, J., West v. Randall (supra).

4. At law, service on one copartner is sufficient in South Carolina. 7 Stat. at L., 281. Suits like this are within the reason of that rule.

5. The property is realty, a fact which makes the case stronger than Payne v. Hook, and Bk. v. Campbell.

III. There is another principle observed by the Federal Courts of Equity, viz.: that where the rejoinder of a party will oust the court of its jurisdiction, it will go very far in dispensing with parties. Story, J., West v. Randall (supra); Payne v. Hook (supra).

IV. Since the decree was rendered in this case, and Act of Congress, 17 Stat. at L., 198, sec. 13), has provided that absent defendants may be brought into the United States Courts by publication. If this court holds that this Act so enlarges the jurisdiction of the Federal Courts as to allow the absent parties in this case to be brought in, then the rule laid down in Pugh v. McCormick, 14 Wall., 361 (81 U. S., XX., 789), will apply, viz.: that this court will not send back a case when, by reason of a new statute, the decree appealed from has ceased to be error.

Mr. Justice Swayne delivered the opinion

of the court:

This is an appeal in equity from the decree of the Circuit Court of the United States for the District of South Carolina.

We have not found it necessary to come to any conclusion as to the merits of the case. Aside from that subject, there is an insuperable difficulty arising from the want of parties. A brief statement will be sufficient to show the foundation upon which this objection rests.

William Carson, by his will, after certain other bequests, directed his executors, Robertson and Blacklock, to sell all his real and personal property, and after paying his just debts, to hold the residue of the proceeds upon the trusts prescribed, for his widow, Caroline Carson, and his two children, William and James Carson. The executors were authorized to invest and reinvest as they should deem best. They sold a plantation known as Dean Hall, to Elias N. Ball, and took his bonds for the purchase money, secured by a mortgage upon the premises. They sold also a large amount of personal property to the same Elias N. Ball, and took his bonds for the proceeds with William J. Ball as his surety. Elias N. Ball sold the Dean Hall property to Hyatt, McBurney & Co. The firm consisted of Hyatt, McBurney, Gillespie, Hazelton and McGann. The property was conveyed to McBurney and Gillespie, to be held by them for themselves and for such uses as they should appoint for the benefit of the other members of the firm. They paid Ball in Confederate money, and he paid his debt to the estate of Carson in the same medium. Robertson, one of the executors, thereupon gave up his bonds and released the mortgage. The legatees, William and James Carson, after reaching the age of majority, assigned all their rights under the will to the complainant, who is the widow of the testator. The bill charges that the transac

2. The doctrine that municipal corporations, without legislative authority, have no power to issue notes, checks or other securities, for the payment of money of a commercial character, free from legal and equitable defenses in the hands of bona fde bolders, and that the holder takes them subject to such defenses, followed. [No. 221.]

words of Bk. v. Jacobs, 6 Humph., 515, and the merest glance into Ang. & Am., 237, 238, etc., is conclusive of this.

A chartered city is, as to a large class of powers, a private corporation.

Bailey v. Mayor, 3 Hill, 531; Detroit v. Corey, 306; Lloyd v. Mayor, 5 N. Y., 369; De Voss v.

IN ERROR to the Circuit Court of the United

States for Middle District of Tennessee. The case is substantially the same as Nash ville v. Ray, ante, 164, referred to in the opinion. See arguments in that case.

Mr. H. Cooper, for plaintiff in error. Messrs. R. McP. Smith, R. I. Meigs and Geo. F. Edmunds, for defendant in error: 1. The instruments in suit, orders of the re corder upon the Treasurer, countersigned by the Mayor, are promissory notes.

Story, Prom. N.. sec. 16; Miller v. Thomp son, 3 Man. & G., 576; Clark v. Des Moines, 19 Ia., 208; Lyell v. Supervisors, 6 McLean, 447; Bull v. Simms, 23 N. Y., 570; Fairchild v. R. R. Co., 15 N. Y., 337; Campbell v. Polk Co., 3 La.,470; Steel v. Davis Co., 2 G. Greene (Iowa), 469; Hasey v. Beet Sugar Co., 1 Doug. (Mich.). 193; Crawford Co.v. Wilson, 2 Eng. (Ark.), 214; Justices v. Orr, 12 Ga., 137: Kelley v. Mayor, 4 Hill, 263; Lucas v. San Francisco, 7 Cal., 463; held, warrant void because a note-city being specially prohibited from making notes. Bay erque v. Same, 1 McAll., 175, involved same

reason.

Being promissory notes payable to bearer, they were, of course, negotiable. And Code, section 1957, would have made them so, had they not been so otherwise.

Such instruments, issued in payment of debts or to draw money from treasury are, not only in legal effect notes, but intended as such.

2. The City had power, under its charter, to execute negotiable paper and to borrow money. For powers conferred by charter, see Act of Jan. 31, 1848; Comp. City Laws, 1868, p. 3; also, Amendment, sec. 12, Act, Feb. 18, 1858; 1b., pp. 10, 11.

That such powers imply powers in question, see, Ang. & Ames, Corp., sec. 257; Bk. v. Jacob, 6 Humph., 525; Mills v. Gleason, 11 Wis., 470; Ketchum v. Buffalo, 14 N.Y., 356; Clarke v. School District, 3 R. I, 199; State v. Madison, 7 Wis., 688; People v. Brennan, 39 Barb., 522; State v. Chillicothe, 7 Ohio St., 358; Doug las v. Virginia City, 5 Nev., 147; Com v. Pitts burg, 34 Pa., 496; Pars. Bills & N., 164.

The authorities do not make distinctions as to implied powers between chartered munici pal and private corporations, but between quasi corporations (mere skeleton corporations), and chartered municipal and private corporations. And where warrants are held not fully negotiable, this is not because of their form, but on account of defective power of the body issuing them.

Courts cite cases of private, as applicable to municipal corporations, and vice versa, e. g., Knox Co. v. Aspinwall,, 21 How., 540 (62 U. S., XVI., 209), relies on Royal Brit. Bk. v. Tur quand, 6 El. & Bl., 327; Supervisors v. Schenck, 5 Wall., 782 (72 U. S., XVIII., 559); Bk. v. Dandridge, 12 Wheat.,70; De Voss v. Richmond, 18 Gratt., 358; on Tarquand case; Bank Teller case, 2 Cold., 654, quotes as to Memphis, their

sec. 39.

Richmond (supra), Dill. Mun. Corp., p. 33, Ibid., Nature of quasi corporations--hardly corporations at all.

Cooley, Const. Lim., 240, 247; Dill. Mun. Corp.. p. 31, sec. 10, n.; lb., p. 33; lb., sec. 39; Hamilton Co. v. Mighels, 7 Ohio St., 109.

Courts deny quasi corporations implied power (conceded to cities), on account of meagreness of corporate life.

Goodnow v. Ramsey Co., 11 Min., 40; Inhab., etc., v. Wear, 9 Ind., 224; Dill. Mun. Corp., p. 396, sec. 407, n. 1.

Judge Dillon's ipse dixit, that "ordinary warrants" do not cut off equities, true only as to quasi corporation warrants, and solely on account of defective power.

City with charter, for manifold purposes private corporation. Quasi corporation purely public. Financial transactions of city of private character.

De Voss v. Richmond (supra).

Quasi corporation cases, based on meagerness of corporate functions, inapplicable to chartered city with exuberant powers, New York decisions deny power to former (Bk. v. Supervisors, 5 Den., 517; Supervisors v. Weed, 35 Barb., 136), and concede it to latter. Kelley v. Mayor, 4 Hill, 263.

3. Long continued usage of execution of such instruments, by mayor and recorder, evidence of authority to execute. Corporation holding out to public, officers as clothed with functions, bound by their acts within scope of power usually exercised.

2 Greenl. Ev., secs. 62, 65; Story, Ag., sec. 55; Olcott v. R. R. Co., 27 N. Y., 556; Bk. v. Dandridge, 12 Wheat., 64; Bk. v. Monteath, 17 Barb., 171; Lester v. Webb, 1 Allen, 34; Abb. Dig. Corp.,secs. 30,32,35; Supervisors v. Schenck (supra).

In U. S. v. Reeside, the doctrine applied by Judge Baldwin to government; but this not legitimate. Corporate resolution may be presumed from acts of officers, acquiesced in; but Acts of Congress, source of Government officers' authority, are not subject of presumption. If wanting, they must be known to be wanting.

4. If instruments in suit are issued by officers authorized to issue on proper occasions, a purchaser having no reason to suspect otherwise, is entitled to presume proper occasion of issuance.

Where act of agent is apparently conformable to power, party dealing with agent may accept his statement as to extrinsic fact peculiarly within his knowledge, upon which depends real conformity.

A gent authorized to execute note in principal's business, executed one for the accommodation of third party; and principal held.

Bk. v. Aymar, 3 Hill, 263.

Agent authorized to write notes on inside of blank paper left indorsed by principal to be is

sued in principal's business and note filled up and otherwise used, and principal held.

Putnam v. Sullivan,4 Mass., 45, Parsons, Ch. J. Teller authorized to certify checks only when funds on hand; certified when no funds, and bank held.

Farm. Bk. v. Butch. Bk., 16 N. Y., 133. Approved in Merch. Bk. v. State Bk., 10 Wall., 644 (77 U. S., XIX., 1018), and principle pronounced "axiomatic."

Agent authorized to issue certificates of stock when previously issued ones were surrendered, issued them without this, and the overissues held valid in bona fide hands.

R. R. Co. v. Schuyler, 34 N. Y., 69. Commissioners empowered to issue bonds, when should have been authorized by vote of corporators, and issued without the proper vote; bonds held valid.

Knox Co. v. Aspinwall, 21 How., 540 (62 U. S., XVI., 209).

Directors empowered to issue bonds, only when authorized by resolution of shareholders, and they issued without the resolution; bank is estopped from denying the resolution.

Royal Brit. Bk. v. Turquand, 8 El. &. Bl., 327, approved in Knox Co. case (supra).

Identical case, where mayor and recorder empowered to issue checks when authorized by resolution of council, etc., and they issue with out resolution, city estopped to deny resolution. Knox Co. v. Wallace, 21 How., 547 (62 U. S., XVI, 211); Bissell v. Jeffersonville, 24 How., 288 (65 U. S. XVI., 668); Woods v. Lawrence Co., 1 Black, 386 (66 U. S., XVII., 122); Moran v. Miami Co., 2 Black, 722 (67 U. S.. XVII., 342); Mercer Co. v. Hackett, 1 Wall., 83 (68 U. S., XVII., 548): Gelpcke v. Dubuque, 1 Wall., 175 (68 U. S., XVII., 520); Van Hostrup | v. Madison, 1 Wall., 291 (68 U. S., XVII., 538); Meyer v. Muscatine, 1 Wall., 384 (68 U. S.. XVII., 564); Supervisors v. Schenck,5 Wall., 772 (72 U. S., XVIII., 556); Lee Co. v. Rogers, 7 Wall., 181 (74 U. S., XIX, 160); Pendleton Co. v. Amy, 13 Wall., 298 (80 U. S., XX., 579); Lexington v. Butler, 14 Wall.,282 (81 U. S., XX., 809); also De Voss v. Richmond, 18 Gratt., 338; Prince Wales Life & Ed. As. Co. v. Hard ing, El., Bl. & El., 183.

Mayor and recorder of corporation are its agents to issue checks, equally as the commissioners, etc., agents of their corporations (in foregoing cases) to issue the bonds. Grant of power in either case to issue after certain prerequisites are fulfilled, impliedly required agents to adjudicate as to fulfillment of prerequisites. Corporations involved, estopped from disputing adjudication implied in issuance.

Action of mayor and recorder within their powers as much action of corporation as action of council within their powers, either merely wield what powers of corporation verily bestowed upon them. Inhabitants are the corporation. Act, Jan. 31, 1848, sec. 1; Clark v. Des Moines, 19 Iowa, 209.

Name of corporations and name of agents being the same, immaterial. Mayor and City Council of Nashville in one sense, Mayor and City Council of Nashville in the other sense. Act of Mayor and City Council, the agents, not that of Corporation, unless, etc.; and in such case, act of Mayor and Recorder equally that of Corporation.

Parallel perfect between act of Mayor and Recorder presupposing requisite resolution of Council, authorizing issuance of checks; and act of Mayor and City Council the agent, presupposing requisite vote of corporators authorizing issuance of bonds.

Either case, in the abstract, that of agents clothed with authority, limited in exercise to certain cases, and thereby necessarily made the judges as to these cases. Fact as to whether resolution of Council, or exigencies of waterworks, or other emergencies under existing laws, authorized issuance of checks, an extrinsic one, peculiarly within knowledge of the officers.

Public not charged with notice of private records of city; entries of financial transactions, of this character. De Voss v. Richmond, 18 Gratt., 338.

Case distinguished from Clark Des v. Moines, 19 Ia., 209. There allowance by council, the only proper origination of warrant; and charter expressly required record of these to be laid open to public. Aliter here. Allowance by council, only one of several sources of origination; and no such book for record.

But Clark v. Des Moines, erroneous.

Misconceived points involved. Supposed plaintiff to contend that negotiability of form precluded contestation of authority. Relied on, Gould v. Sterling, 23 N. Y., 456, etc., pronounced in People v. Mead, 36 N. Y., 224, in conflict with Knox Co.v. Aspinwall. Maintained doctrine of dissenting opinion of Comstock, J., in Farm. Bk. v. Butch. Bk., 16 N. Y., 143, and evidently missed significance of the adverse reasoning of Judge Selden.

See, p. 136 of 16 N. Y., S. C., approved by this court in Merch. Bk. v. State Bk., 10 Wall., 644 (77 U. S., XIX., 1018).

Note 1, sec. 420, Dill. Mun. Corp. shows misconception of authority as to principle of estoppel, enforced in Bank Teller's case and municipal bond cases, by view taken of U. S. v. Bk. of Col., 21 How., 356 (62 U. S., XVI., 130).

The principle involved is estoppel in pais, not exemptions of negotiability. One of two innocent persons having to suffer from act of mayor and recorder in line of their agency, it should be the city, from whose act in appointing and accrediting the agent to the public as trustworthy, the loss emanated; and not the purchaser who merely bestowed confidence where the city invited it. Hern v. Nichols, 1 Salk., 289; De Voss v. Richmond (supra), precisely in point, full and able.

5. If usage of finance committee, known to Corporation, to pledge checks as collateral security for notes, and checks prematurely sold, still purchaser, ignorant of any irregularity, entitled to recover.

This results from application of proposition previously maintained-that the checks were promissory notes, entitled by virtue of their form (and cumulatively, through Code, 1957) to attribute of negotiability; that City has power to execute such instruments; that Mayor and Recorder being agents of the City to issue them, purchaser might confide in their assertion. implied in issuing them, as to existence of proper occasion of issuance, of extrinsic conformity to power, of acts intrinsically conformable.

But, for effect of estoppels resulting from acquiescence, see Allegheny City v. McClurkan,