With respect to the liabilities of munici pal corporations it may be said generally that as parties to a contract where they act qua private corporations, they are liable on their contract, and contracting parties are liable to them in the same manner as pri vate persons and corporations are. A city can bind parties by such contracts only as it is authorized by its charter to make; Syra cuse W. Co. v. Syracuse, 116 N. Y. 167, 22 N. E. 381, 5 L. R. A. 546. Those who con tract with them are protected where their contracts are made according to law ; Mack ey v. Columbus, 71 Mich. 227, 38 N. W. 899 ; Sullivan v. Leadville, 11 Colo. 483, 18 Pac. 736; and those who deal with them must ex ercise reasonable diligence to ascertain whether there be legally provided the funds from which the obligation to be created may be met ; and the public is not estopped from setting up the illegality of the obligation by the fact that the other party has acted in reliance upon its validity ; Atlantic City W. W. Co. v. Read, 50 N. J. L. 665, 15 Atl. 10.
Where a municipality acts in the dual ca pacity of furnishing public utilities both for public and private use, it stands upon the same footing as 'a private corporation and is liable for its negligent or unlawful acts; Wagner v. Rock Island, 146 Ill. 154, 34 N. E. 545, 21 L. R. A. 519; Omaha W. Co. v. Oma ha, 156 Fed. 922, 85 C. C. A. 54; id„ 147 Fed. 1, 77 C. C. A. 267, 12 L. R. A. (N. S.) 736, 8 Ann. Cas. 614.
No common law duty rests upon a munici pality to light its streets and highways ; Ran dall v. R. Co., 106 Mass. 276, 8 Am. Rep. 327; contra, Prather v. Spokane, 29 Wash. 549, 70 Pac. 55, 59 L. R. A. 346, 92 Am. St. Rep. 923; the mere fact that it has charter authority to light its streets does not ren der it guilty of negligence for failure to do so; Thuis v. Vincennes, 35 Ind. Aim: 350, 73 N. E. 1098; nor does mere statutory au thority impose upon it the obligation to light the streets ; White v. Newberne, 146 N. C. 447, 59 S. E. 992, 13 L. R. A. (N. S.) 1166, 125 Am. St. Rep. 476; nor will the fact that an ordinance of the municipality required a light to be placed where the injury occurred render the city liable for its failure to main tain such light ; Lyon v. Cambridge, 136 Mass. 419; but when a city has once under taken to light its streets and is then guilty of negligence in furnishing the light, or fur nishes one insufficient to put the street in a reasonably safe condition for travel at night in the ordinary modes, it will be liable ; Chi cago v. Baker, 195 Ill. 62 N. E. 892.
A municipality is not bound to furnish wa ter for fire protection, and if it does so, it does not subject itself to greater liability ; a majority of the American courts hold that a tax payer has no such right under an agreement between the municipality and a water company as to enable him to sue in contract or tort for a violation of the public duty thereby assumed ; German A. Ins. Co.
v. Water Supply Co., 226 U. S. 220, 33 Sup. Ct. 32, 57 L. Ed. 195, 42 L. R. A. (N. S.) 1000.
Contracts may be entered into by the offi cers of a corporation binding upon it, with out the use of the corporate seal ; University v. Young Men's Soc., Mich. 138. Without express legislative authority, a municipality cannot act as surety or guarantee ; Clark v. Des Moines, 19 Ia. 199, 87 Am. Dec. 423. Where the statute provides that no city offi cer should be interested in a municipal con tract, and that any such contract contrary to that provision should be void, a contract with a school director for street work was held void ; Capron v. Hitchcock, .98 Cal. 427, 33 Pac. 431; and the same is true if the in terest of the officer is indirect. Merely, as the member of a contracting firm or corpora tion ; Stroud v. Water Co., 56 N. J. L. 422, 28 Atl. 578 ; such contract may be ratified by subsequent municipal action after the officer has ceased to be such, for it is a new con tract ; Fort Wayne v. R. Co., 132 Ind. 558, 32 N. E. 215, 18 L. R. A. 367, 32 Am. St. Rep. 277. Even if there be no penal stat ute prohibiting the execution of such con tract, it is void on grounds of public policy, but so long as it is executory it is voidable merely, and if entered into in good faith for a proper purpose and the city has received the benefit, there may be a recovery on a quantum meruit; Concordia v. Hagaman, I. Kan. App. 35, 41 'Pac. 133. For cases on the general subject of the liability of municipal corporations on contracts, see 6 L. R. A. 318, note.
The liability of municipal corporations for the misfeasance, or negligent nonfeasance, of their officers, is affected primarily by the distinction between their public functions as an instrumentality of government, and their private relations as a corporation transacting ordinary business. See supra. •Within the sphere of the former they are entitled to exemption from liability, inas much as they are a part of the government. and to that extent their officers are public officers, and as suoh, entitled to the protec tion of this principle ; but within the sphere of the latter, they drop the badges of their governmental offices and stand forth as the delegates of a private corporation in the ex ercise of private franchiseg, and are amena ble as such to the fundamental doctrine of liability for the acts of a servant ; Richmond v. Long, 17 Gratt. (Va.) 375, 94 Am. Dec. 461. Although the difference between the two kinds of powers is plain and marked, yet, as they approximate each other, it is sometimes difficult to ascertain the exact line of distinction. All that can be done with safety is to determine, as each case arises, under which class it falls ; Lloyd v. New York, 5 N. Y. 369, 55 Am. Dec. 347.