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 604*] 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 Treasury responsible, as he should be, for the proper administration of this branch of the public service.

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.

argument 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.

ALEXANDER ROBERTSON et al., Appts.,

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 present as a party to a bill against the surety, that the principal may assist in making a defense, and in 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.

2. Where a bill charges fraud and conspiracy in a sale by executors, and that the purchaser was 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 has 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.

PPEAL from the Circuit Court of the Unit

Aed States for the District of South Caro

lina.

The case is stated by the court.

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 without the approval of his superior. The legislation 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 approval is a condition precedent, without which the Solicitor has no authority whatever to act. It is said, however, if this be so, that the 605*] 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 statute, to dispense with proof of this approval. One of the main objects of the statute Story, Eq. Jur., sec. 72; Russell v. Clark, 7 was to subject the action of the Solicitor to the control of the Secretary in a matter of great Cranch, 98; Shields v. Barrow, 17 How., 130. public concern, in which he had heretofore acted 141, 15 L. ed. 158, 161; Barney v. Baltimore, 6 without control. This change of the system Wall., 280, 18 L. ed. 825; Bk. v. Campbell, 14 contemplated a change in the mode of proceed-Wall., 87, 20 L. ed. 832; Northern Ind. R. R. ing 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

Messrs. Edward McCready and Edward
McCready, Jr., for appellants:
The bills are incurably defective for want of
proper parties.

Co. v. Mich. Cent. R. Co. 15 How., 233; Coiron v. Millaudon, 19 How., 113, 15 L. ed. 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

NOTE. Necessary parties in equity-see note to Marshall v. Beverly, 5 L. ed. U. S. 97. 86 U. S.

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, 20 L. ed. 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.

tion between Hyatt, McBurney & Co., E. N. | it. This renders Gillespie an indispensable Ball and Robertson, the executor, was fraudu- party. Watson v. Spence, 20 Wend., 260; Story lent and void. It seeks to charge the Dean Hall Eq. Pl., 192, 197; Barb. Parties, 463; 491; property with the amount of the debt secured Shaw v. Hoadley, 8 Black, 165; Betts v. Starr, by the mortgage, and to call Elias N. Ball and 5 Conn., 551. his surety to account upon their obligations for the proceeds of the personal property. The parties defendant made by the bill are the executors, Robertson and Blacklock, and McBurney, Elias N. and Wm. J. Ball, and William and James Carson. Process was returned not found, as to William and James Carson and Elias N. Ball. The two former having assigned all their rights and interest to everything in controversy, it was not necessary to make them parties. Nothing more need be said in regard to them. Garrett v. Puckett, 15 Ind., 485; Whitney v. McKinney, 7 Johns. Ch., 147. But 105*] as the pleadings stand, the *presence of Elias N. Ball was necessary in both aspects of the case.

First. As to the personal property:

The bill does not aver that he is insolvent, and gives no reason why he should not or cannot be brought before the court. The answer of Wm. J. Ball, takes the objection of his absence and alleges that he represents the debt to be paid. The surety is entitled to have him present that he may assist in making this defense, that he may assist in taking the 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. Story, Eq. Pl., sec. 169; Madox v. Jackson, 3 Atk., 406; Angerstein V. Clark, 2 Dick., 738; Cockburn v. Thompson, 16 Ves., 326; Bland v. Winter, 1 Sim. & S., 246.

Second. As to the real estate:

The bill charges fraud and conspiracy, and that he was a party to them. It denies that the mortgage was paid, alleges that the bonds are still in force, avers that the release was a nullity and seeks to enforce the mortgage.

If these allegations are maintained, the whole amount of the debt will be rehabilitated against him. He is entitled to an opportunity to repel these imputations and to protect himself if he can do so. His vendees are entitled to his aid. His defense is their defense. It does not appear whether his deed to McBurney and Gillespie contains the usual covenants of title. If so, he would be liable over to his grantees in the event of the mortgage being enforced. This would be an additional reason for his being a party when the case is disposed of.

The general rule is that a mortgagor who has parted with his interest in the mortgaged premises need not be a party in a suit for foreclosure, unless he has warranted the title to his as

It appears that Hyatt has released his interest to his copartners, but it also appears that they have given him a mortgage upon the premises to secure the payment of $40,000. If he shall not be made a party, and the complainant shall be successful, his rights will not be affected by the decree. In such case he can file a new and independent bill and renew the litigations as to all the questions touching the prior mortgage which are involved in this controversy. Haines v. Beach, 3 Johns. Ch., 459; Ensworth v. Lambert, 4 Id., 605; Judson v. Emanuel, 1 Ala., N. S., 598; Brainard v. Cooper, 10 N. Y., 356; Story, Eq. Pl., sec. 192.

The complainant has the option to make him a party or to proceed without him and take the hazard of the consequences.

The Statute of South Carolina referred to by the counsel for the appellee, does not affect the

case.

The Act of Congress of June 1, 1872, 17 Stat. at L., 196, was passed several years after this bill was filed. The 13th section has, therefore, no application to the question of parties in this litigation.

It is competent for a party to make a change of domicil for the purpose of giving jurisdiction to the Federal Courts where it could not otherwise exist. With that privilege and the help of this section, there can hardly in any case be an irremediable difficulty as to [*107 jurisdiction, however diversified the residence of those necessary to be made defendants.

This record is in a singularly defective and confused condition. The allegations in the bill lack clearness and precision. This has perhaps arisen from the want of full and accurate information until the coming in of the answers. There are important averments on both sides unsupported by evidence. Important papers are referred to, but copies are not given, and there is no proof of their contents. There are many matters of detail of no moment to the rights of the parties which should be expunged. If there were no defect of parties, we should have great difficulty in disposing of the case upon the pleadings and proofs before us. If the case shall be brought here again, these objections, it is to be hoped, will in the meantime

be obviated.

The decree of the Circuit Court is reversed,

and the cause will be remanded, with directions to proceed in conformity to this opinion.

NASHVILLE, Plffs, in Err.,

v.

H. LINDSEY.

signee. Whether there were such warranty by THE MAYOR AND CITY COUNCIL OF 106*] Ball or not, we hold him to be an indispensable party by reason of the circumstances of the case. Calv. Part., 179; Milroy v. Stockwell, 1 Cart., 35; Haines v. Beach, 3 Johns. Ch., 459; Worthington v. Lee, 2 Bland, 682; Ducker v. Belt, 3 Md. Ch., 13; Hallock v. Smith, 4 Johns. Ch., 649; Bigelow v. Bush, 6 Paige, 343; Drury v. Clark, 16 How. Pr., 424.

Gillespie was one of the grantees in the deed of E. N. Ball. The legal title was vested by that instrument in him and McBurney, and there is no averment that they do not yet hold

(See S. C., "Mayor v. Lindsey" 19 Wall., 485-486,

note.)

1. The checks sued on in this case are precisely similar in form and origin to the checks sued on in Nashville v. Ray, ante, which case is followed and affirmed.

2. The doctrine that municipal corporations, without legislative authority, have no power to issue notes, checks or other securities for the pay 86 U. S.

ment of money of a commercial character, free from legal and equitable defenses in the hands of bona fide holders, and that the holder takes them subject to such defenses, followed.

Argued Jan. 12, 13, 1874. Decided Apr. 6, 1874.
ERROR to the Circuit Court of the United

IN Richmond, supra, Mun. p. Ibid.,

The case is substantially the same as Nashville 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 recorder upon the Treasurer, countersigned by the Mayor, are promissory notes.

Story, Prom. N., sec. 16; Miller v. Thompson, 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 Ia., 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 Francis-vate co, 7 Cal., 463; held, warrant void because a note city being specially prohibited from making notes. Bayerque v. Same, 1 McAll., 175,

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. 355,0lcott v. R. R. Co., 27 N. Y. 556; Bk. v. 2 Greenl. Ev., secs. 62, 65; Story, Ag., sec. also, Amendment, sec. 12, Act, Feb. 18, 1858; Ib., pp. 10, 11.

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, 19 L. ed. 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, 16 L. ed., 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 without resolution, city estopped to deny resolution. Knox Co. v. Wallace, 21 How., 547, 16 L. ed., 211; Bissell v. Jeffersonville, 24 How., 288, 16 L. ed. 668; Woods v. Lawrence Co., 1 Black, 386, 17 L. ed., 122; Moran v. Miami Co., 2 Black, 722, 17 L. ed., 342; Mercer Co. v. Hackett, 1 Wall., 83, 17 L. ed. 548; Gelpcke v. Dubuque, 1 Wall., 175, 17 L. ed. 520; Van Hostrup v. Madison, 1 Wall., 291, 17 L. ed., 538; Meyer v. Muscatine, 1 Wall., 384, 17 L. ed. 564; Supervisors v. Schenck, 5 Wall., 772, 18 L. ed., 556; Lee Co. v. Rogers, 7 Wall., 181, 19 L. ed. 160; Pendleton Co. v. Amy, 13 Wall., 298, 20 L. ed. 579; Lexington v. Butler, 14| Wall., 282, 20 L. ed., 809; also De Voss v. Richmond, 18 Gratt., 338; Prince Wales Life & Ed. As. Co. v. Harding, 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. I; 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.

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 v. Des 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 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, 19 L. ed. 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, 16 L. ed. 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 Parallel perfect between act of Mayor and | acquiescence, see Allegheny City v. McClurkan,