The result is a reductio ad absurdum. Plaintiff is, in fact, estopped by the judgment entered pursuant to the opinion of this court in Otis v. Weide, supra, from asserting that these certificates are good. He is, according to the city, estopped by the judgment in 1894 from asserting that they are bad. He is entitled to no rights in the premises because by this court the certificates have been held void. According to defendant, he is entitled to no refundment, because, by estoppel, the certificates are good. It is unnecessary to enter into a discussion of the subtleties of estoppel by judgment in such a case. A careful analysis of the principles on which that doctrine rests, and of the authorities most nearly in point or analogous, would not, we are inclined to think, result in the necessary stultification of the justice of the doctrine involved in the city's position. But, conceding a direct conflict to be the inevitable result of following the reasoning as to estoppel to its logical conclusion, and of also following the reasoning as to the rights of refundment ordinarily accruing under the city charter to its logical conclusion, we think that plaintiff's statutory rights of refundment must prevail.

The true view of the case we conceive to be this: When the city made the second sale on the second judgment, it entered into a new transaction. It made a new contract with the purchaser at such sale. It held a public auction, at which any qualified person might buy. By the issuance of certificates to any such purchaser, it agreed that the purchaser would receive either a valid title or have his money returned with interest, upon redemption or adjudication of invalidity. If a third person had bought these certificates, and in due time had brought a suit to quiet title against the owner of the land, and if it had been finally determined in good faith that the judgment upon which these certificates were issued was legally invalid, he would clearly have been entitled to refundment. If he had bought one half and the present plaintiff the other half of these certificates, and if it had been adjudicated that all the certificates were void because of the defective judgment, the city's position must be that the stranger would have been, and the plaintiff would not have been, entitled to refundment. In fact and in law the contract would have been the same. In common justice the rights under the contract must have been the same. Such a stranger would have been under no obligation to protect his interest

under his certificates against the foreclosure of the investment company's mortgage. That mortgagee stood in the shoes of the owner. The rights of a certificate holder were the same against him as against the owner himself. The plaintiff was no more compelled to protect his certificates against that foreclosure than such a stranger would have been.

It is not material whether the city may or may not be able to reassess the property. It may be that it must lose the amount it refunds. None the less it must bear the consequences of its own fault, and live up to its own contracts. Plaintiff had a right to expect that he would either get title to the land or get his money back. It has been determined that he had no title. He is entitled to his money.

Judgment reversed, with instructions to proceed in accordance with this opinion.

DANIEL L. BELL v. EDWARD J. KIRKLAND and Others.1

October 4, 1907.

Nos. 15,266, 15,267-(147, 148).

Municipal Contract-Ultra Vires-Bond.

A municipal corporation let a contract for the construction of a sewer without complying with charter requirements, and without obtaining the consent of two property owners through whose lands the sewer was to pass or of the federal authorities for its outlet on government land. Plaintiff sued for the balance of an account for materials furnished the contractor on a bond given, inter alia, for the benefit of materialmen. The bondsmen interposed the defense that the contract was void because ultra vires, and that, therefore, they were not responsible on the bond. It is held:

1. The tendency of judicial opinion to refuse to avoid contracts made by private corporations because ultra vires does not apply equally to contracts made by municipal corporations; but to both classes of contracts

1 Reported in 113 N. W. 271.

that doctrine should be so administered as not to defeat the ends of justice or to work a legal wrong.

2. A contract ultra vires in the general and primary sense that it is wholly outside the power of the corporation to make under any circumstances is ordinarily void in toto; but whether a contract strictly within the scope of the corporation's powers, but ultra vires in the restricted or secondary sense that the power has been irregularly exercised, or that it was beyond the power of the corporation "in some particular or through some undisclosed circumstances," is wholly void or not, depends upon the circumstances of the particular case.

3. The contract here in issue was ultra vires in the secondary and restricted sense only.

4. The fact that the city had not procured right of way through all lands of private owners through which it was to pass did not invalidate the contract.

5. The facts that as to a small portion of the contract with the municipality only it was ultra vires in any sense, and that it had been substantially executed by the parties basing rights of action upon it, are strong, if not conclusive, considerations for refusing to hold it absolutely void.

6. Neither the dictates of public policy nor the analogies of the law justify holding this contract void, as between dealers, who furnished material to the contractor in reliance on the bond, and the sureties thereon, who are in a position favored by the law.

7. The recital in the bond of the contract as valid and subsisting prevented the sureties thereon from asserting that it was ultra vires

Action in the district court for Ramsey county to recover $2,967.55 against the principal and sureties upon the bond described in the opinion. The case was tried before Kelly, J., who ordered judgment in favor of plaintiff for the sum demanded. From an order denying a motion for a new trial, defendants Ulmer, Warner, and Wagener severally appealed. Affirmed.

The recital in the bond was in the following words: "Whereas, the above bounden Edward J. Kirkland has entered into a contract with the city of St. Paul to construct a sewer on Somerville avenue from the Mississippi river to Eustis street; thence on Eustis street to Bayard street according to plans and specifications thereto annexed, for the consideration recited therein, which contract has been duly executed by each of the contracting parties, and bears date the 12th day of January, 1904, and is made a part hereof."

Lightner & Young, B. H. Schriber, and Markham & Calmenson, for appellants.

O'Brien & Albrecht, for respondent.

JAGGARD, J.

Plaintiff and respondent brought an action against defendants and appellants to recover the unpaid balance for materials furnished to one Kirkland to be used in the construction of the "Somerville sewer." Kirkland contracted to construct the sewer, and, as principal, signed an instrument in which the appellants joined as sureties, which purported to be a bond to the city of St. Paul conditioned for the performance of the contract, and for the payment for the labor and materials furnished in its execution. The total amount of the account was $6,286.30. The balance unpaid was $2,967.55. The amount of the bond was $59,200. The present is a test case. The court found for the plaintiff. It found as facts, inter alia, that the course of the sewer carried it under property hereinafter more fully set forth as to which the city had acquired no right by condemnation or grant. This appeal was taken from an order denying defendants' motion for a new trial.

Defendants' essential argument is that, if the contract was ultra vires and void, so also was the bond, and that the agreement was shown to have been ultra vires and void.

In the first place, the agreement required the construction of a sewer through property not owned by the city. The sewer provided for in the contract was a main sewer of about forty two hundred feet in length. It is cut into two almost equal parts by a railroad right of way and adjoining private property for two hundred five feet. It is proposed to construct it to the Mississippi river as an outlet. In connection with the latter proposition, it is argued that a sewer is of no value unless continuous, or unless it has an outlet. It cannot reach the river because the last eighty five feet is owned by the United States government. The result was two disjointed pieces of sewer without an outlet. The significant fact is that the ultra vires part of the contract leaves the sewer valueless. A contract to construct a useless sewer in private property is beyond the power of the city. The invalidity appears upon the face of the contract.

In the second place, defendants' argument proceeds, the contract was not entered into in accordance with the mandatory provisions of the city charter. We have examined the record adduced in support of this contention. It may fairly be regarded as showing a failure to let the contract as required by the city charter. It is unnecessary to consider the details of this want of compliance. It was, in fact, made by the board of public works, the proper body. A valid preliminary order, a specification of the portion of its cost to be paid out of general funds and other essentials, may properly be conceded to have been wanting.

1. A proper preliminary consideration of the legal questions thus presented involves a brief reference to the attitude of the courts to the doctrine of ultra vires. That doctrine has been attacked with an earnestness amounting sometimes to asperity. "The doctrine of ultra vires is of very modern date and entirely the creation of the courts. There is no such thing as ultra vires in the case of a common-law corporation (Case of Sutton's Hospital, 10 Coke, 30 C.), and it is not enacted in any statute. It affords, perhaps, the most remarkable instance in the history of English jurisprudence of the making of law by the judges; and, having once been created, it is now probably saddled onto the backs of the courts, like Sinbad's 'Old Man of the Sea', not to be shaken off." 6 Cent. Law. Jour. 3. "The reasoning (on the subject) involves a strange confusion of ideas." 2 Morawetz, Priv. Corp. § 649. Judge Seymour D. Thompson regards the modern doctrine of ultra vires as a revolt against the ancient doctrine based on a species of moral reformation. His conclusion is "that the doctrine of ultra vires has no proper place in the law of private corporations, except in respect of contracts which are bad in themselves, the making of which is prohibited by considerations of public morality, of justice, or of a sound public policy, and which, therefore, stand upon such a footing that neither party can be regarded as innocent or blameless in entering into them." 28 Am. Law Rev. 398. And see 5 Thompson, Corp. § 5969.

In 9 Harv. Law Rev. 255, Mr. George Wharton Pepper combats -and we think successfully-the existence of any clear distinction between the principles of the earlier and of the present decisions or of inextricable confusion on the subject in the American reports. He