Section 96. The law is settled beyond dispute that, where a contract is wholly ultra vires, i. e., beyond the scope of corporate powers and authority, the municipal corporation is not liable, and all persons dealing with such corporations are charged with knowledge of the nature and extent of their corporate powers.

"The general principle of law is settled beyond controversy, that the agents, officers, or even city council of a municipal corporation, cannot bind the corporation by any contract which is beyond the scope of its powers, or entirely foreign to the purposes of the corporation, or which, not being in terms authorized, is against public policy.

"This doctrine grows out of the nature of such institutions, and rests upon reasonable and solid grounds. The inhabitants are the corporators; the officers are but the public agents of the corporation.

5 Draper vs. Springport, 104 U. S., 501; Head vs. Insurance Co., 2 Cranch. (U. S.), 127.

6 Dillon, Mun. Corp., Chap. XIV

(3rd Ed.), Par. 450, and cases cited in footnote. 7 Duncombe vs. Fort Dodge, 38 la., 281.

The duties and powers of the officers or public agents of the corporation are prescribed by statute or charter, which all persons not only may know, but are bound to know. The opposite doctrine would be fraught with such danger and accompanied with such abuse that it would soon end in the ruin of municipalities, or be legislatively overthrown. These considerations vindicate both the reasonableness and necessity of the rule that the corporation is bound only when its agents or officers, by whom it can alone act, if it acts at all, keep within the limits of the chartered authority of the corporation. The history of the workings of municipal bodies has demonstrated the salutary nature of this principle, and that it is the part of true wisdom to keep the corporate wings clipped down to the lawful standard.

" It results from this doctrine that unauthorized contracts are void, and in actions thereon the corporation may successfully interpose the plea of ultra vires, setting up as a defense its own want of power under its charter or constituent statute to enter into the contract."8