This section is from the book "Popular Law Library Vol8 Partnership, Private Corporations, Public Corporations", by Albert H. Putney. Also available from Amazon: Popular Law-Dictionary.
Section 61. In considering the powers of municipal corporations respecting the acquisition and holding of property, a rather brief reference to their capacity, in this particular, in the earlier times might not be wholly unprofitable or uninteresting.
"The Roman jurisprudence seems originally to have denied to cities a capacity to inherit, or even to take by donation or legacy. They were treated as composed of uncertain persons, who could not perform the acts of volition and personality involved in the acceptance of a succession. The disability was removed by the Emperor Adrian in regard to donations and legacies, and soon legacies ad ornatum civitatis and ad honorem civitatis became frequent. Legacies for the relief of the poor, aged, and helpless, and for the education of children, were ranked of the latter class. This capacity was enlarged by the Christian Emperors, and after the time of Justinian there was no impediment. Donations for charitable uses were then favored; and this favorable legislation was diffused over Europe by the canon law, so that it became the common law of Christendom."1
This law, however, encountered subsequently some modification in Europe, due to the acrimonious strife between the clergy and the temporal authority; but those changes were never introduced into our systems of jurisprudence and, therefore, a municipal corporation in this country possesses, as a rule, the power to purchase and hold all such real and personal property, unless restrained by charter or statute, as may be necessary to the proper exercise of any powers specifically conferred, or essential to those purposes of municipal government for which it was created.2
1 McDonough Will Case, 15 How. (U. S.), 367.
The law is well settled that the municipal authorities have no authority to purchase lands and erect buildings for any but municipal purposes.
In the case of Sherlock et al. vs. Village of Win-netka, 59 III., 399, the court said: "The council had no authority to purchase land, erect buildings, and issue bonds pledging the corporate property, and the faith and credit of the corporation, for any but corporate purposes. If the original design was, as is alleged, and which the facts stated seem to warrant, to purchase the land, erect the building and issue the bonds, for private uses, to the exclusion of corporate purposes, and for private gain, it was a gross breach of trust, a fraud upon the law and the tax payers of the village, and a court of equity should take cognizance of the case, by virtue of its inherent jurisdiction over fraud and trusts."
The authorities hold that municipal corporations, unless specially authorized, cannot purchase property for investment purposes; nor have they the authority to engage in the real estate business, or purchase land for donation to private enterprises.
 
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