Grater v. Logan County High School Dist.

• Decision Date: 03 June 1918
• Docket Number: 9032.
• Parties: GRATER v. LOGAN COUNTY HIGH SCHOOL DIST. et al.
• Court: Colorado Supreme Court

173 P. 714

64 Colo. 600

GRATER v. LOGAN COUNTY HIGH SCHOOL DIST. et al.

No. 9032.

Supreme Court of Colorado

June 3, 1918

Error to District Court, Logan County; Haslett P. Burke, Judge.

Action by W. C. Grater, suing for and on behalf of himself and for all other taxpayers similarly situated, against the Logan County High School District, in the State of Colorado, and others. A motion to exclude all testimony offered by plaintiff and to dismiss the complaint because of its failure to state a cause of action and for numerous other reasons was sustained, and plaintiff brings error. Affirmed.

Allen & Webster, of Denver, for plaintiff error.

Pershing Titsworth & Fry, of Denver, and Munson & Munson, of Sterling for defendants in error.

BAILEY J.

This is an action to enjoin the collection of a tax levied by the Board of County Commissioners of Logan County upon the taxable property within the Logan County High School District for the purpose of paying interest on bonds of the District and to prevent future tax levies for the payment of interest and principal thereof. Plaintiff below, plaintiff in error here, is a taxpayer of the district, and brought suit on behalf of himself and all others like situated. A motion by defendant to exclude all testimony offered by plaintiff, and to dismiss the complaint because of its failure to state a cause of action and for numerous other reasons, was sustained.

Plaintiff brings the judgment here for review. The parties are designated as in the court below.

As gound for the relief prayed plaintiff sets forth alleged irregularities in the statutory proceedings relative to the special elections upon which the bond issues are based, and claims that these irregularities were of a character and nature to invalidate the bonds. Also that he has no adequate remedy at law.

Relief by injunction is a summary remedy, and should not be granted for threatened invasion of property rights except under unusual conditions. 14 R.C.L. 307. Neither should it be granted without notice to all parties in interest. Here it is sought to enjoin the High School District as a corporation and the County Commissioners and others as officers of Logan County. The bond holders are not joined; probably because as stated in the pleadings no service of process could be had upon them. Nevertheless, it is manifest that the bond holders are not only proper parties, but absolutely necessary and indispensable parties. As matter of fact, the school district and the county officers are but nominal defendants, with only a casual interest in the outcome of the application. The bond holders alone are immediately and substantially affected. To grant the relief asked would be to render their bond holdings mere scraps of paper, and this without due, or any, process of law so far as their right to a day in court is concerned. As is stated in the syllabus of Ribon v. R. R. Co., 83 U.S (16 Wall.) 446, 21 L.Ed. 367:

'The rule in equity as to parties defendant is that all whose interests will be affected by the decree sought to be obtained, must be before the court, and if any such persons cannot be reached by process * * * the bill must be dismissed.'

It appears from the complaint that the bonds are now in the hands of unknown third parties. In such circumstances, the bond holders being necessary parties, the great weight of authority is against the granting of injunctive relief. 14 R.C.L. 325; City of Anthony v. State, 49 Kan. 246, 30 P. 488; Carpenter v. Hindman, 32 Kan. 601, 5 P. 165; Stallcup v. Tacoma, 13 Wash. 141, 42 P. 541, 52 Am.St.Rep. 25; Hope v. Mayor, 72 Ga. 246; Ramsey v. Marble Rock, 123 Iowa 7, 98 N.W. 134; Savage v. Sternberg, 19 Wash. 679, 54 P. 611, 67 Am.St.Rep. 751.

The bonds involved are negotiable instruments. The law authorized their issuance under certain circumstances and conditions. They contain recitals, according to the pleadings, to the effect that all statutory requirements preliminary to issue have been fully complied with. In any event, since this is not negatived by the averments of the complaint, it must be conclusively presumed...