This section is from the book "The Law Of Contracts", by William Herbert Page. Also available from Amazon: Commercial Contracts: A Practical Guide to Deals, Contracts, Agreements and Promises.
A public corporation cannot by contract assume liabilities of private corporations or individuals, even to induce such action on their part as will benefit the individuals who comprise the public body. Such aid cannot be given indirectly by agreeing to pay a given rental for a waterworks if the lessor builds a railroad.1 However, power to build its own road is not subject to the objection that it is aiding a railroad.2 A public corporation cannot buy land to donate to a manufacturing plant,3 nor issue bonds for such purpose,4 nor pledge itself to aid an association,5 nor contract to secure a right of way for a railroad,6 nor contract to pay stenographer's fees in an action to which the city is not a party and from which no liability could arise,7 nor erect a building on the land of another,8 nor contract to build a bridge outside its own limits, not for the benefit of its own citizens but to draw trade.9 A city cannot agree to extend a lighting contract if the contractor will erect a plant to produce electric power for operating machinery for individuals, as this is not contracting for the benefit of the municipality.10 A public corporation cannot contract for obtaining the location of the state capital,11 or the county-seat.12 A city cannot employ an attorney to appear before the Secretary of the Interior to try to induce him to locate a railroad through its limits.13 A public corporation cannot contract for the expenses of a committee to represent the city at the convention of American municipalities,14 nor for the expenses of members of a council committee to visit cities on municipal matters,15 or for placing a stone from the county in the state's building at the World's Fair,16 or for the entertainment of invited guests at an encampment of the Grand Army of the Republic,17 or at an exposition.18
1 Higgins v. San Diego, 118 Cal. 524, 537; 45 Pac. 824; modified on rehearing, 50 Pac. 670.
2 Sun, etc., Association v. Mayor, etc., of New York, 152 N. Y. 257; 37 L. E. A. 788; 46 N. E. 499; (citing Walker v. Cincinnati, 21 O. S. 14; 8 Am. Rep. 24; Taylor v. Eoss Co., 23 0. S. 22; Wyscaver v. Atkinson, 37 0. S. 80; Counterman v. Dublin Township, 38 0. 3. 515).
3 Markley v. Mineral City, 58 O. S. 430; 65 Am. St. Rep. 776; 51 N. E. 28.
4 Adams v. Nemeyer, 54 O. S. 614; 46 N. E. 1154.
5 Park v. Modern Woodmen, 181 111. 214; 54 N. E. 932.
6 Covington, etc., Ey. v. Athens, 85 Ga. 367; 11 S. E. 663.
7 City of Chicago v. Williams, 182 111. 135; 55 N. E. 123; reversing 80 111. App. 33.
8 State ex rel. Knight v. Cape May, 61 N. J. L. 149; 38 Atl. 752.
9 Manning v. Devil's Lake. - N. D. - ; 99 N. W. 51.
10 Mealey v. Hagerstown, 92 Md. 741; 48 Atl. 746.
11 John Hancock, etc., Co. v. Huron, 80 Fed. 652; (bonds issued for such expenses, as for printing matter to be used in securing to the location of the state capital in that city; Shannon v. Huron. 9 S. D. 356; 69 N. W. 598.
12 Schneck v. Jeffersonville, 152 Ind. 204; 52 N. E. 212.