Herring v. Modesto Irr. Dist.

• Decision Date: 30 June 1899
• Docket Number: 12,615.
• Citation: 95 F. 705
• Court: U.S. District Court — Northern District of California
• Parties: HERRING v. MODESTO IRR. DIST.

95 F. 705

HERRING v. MODESTO IRR. DIST.

No. 12,615.

United States Circuit Court, N.D. California.

June 30, 1899

Rosenbaum & Scheeline and Chickering, Thomas & Gregory, for plaintiff.

Rodgers Paterson & Slack and C. W. Eastin, for defendant.

On Motion of Defendant for Judgment on the Pleadings.

MORROW Circuit Judge.

This is a suit brought by the plaintiff, a citizen of the United Kingdom of Great Britain and Ireland, for the payment of 1,176 interest coupons attached to 271 bonds, in the sum of $500 each, issued by the defendant, of which plaintiff is now the owner and holder. It is alleged in the complaint that the defendant is an irrigation district organized, incorporated and existing under and by virtue of an act of the legislature of the state of California entitled 'An act to provide for the organization and government of irrigation districts and to provide for the acquisition of later and other property, and for the distribution of water thereby, for irrigation purposes,' approved March 7, 1887, and the several acts passed by the said legislature amendatory and supplementary to said act, and that said irrigation district is wholly situate in the county of Stanislaus, state of California; that on or about January 1, 1892, the bonds were issued to which the coupons herein sued upon were attached, being a portion of the bonds of said district, to the amount of $800,000, authorized to be issued by the vote of the qualified electors of said district at an election duly called and held; that no part of the coupons enumerated in the complaint has been paid; and that there is owing to plaintiff therefor $17,640, with interest at the rate of 7 per cent. per annum from the date when each of said coupons, respectively, fell due. A motion for a judgment on the pleadings has been made by the defendant on the grounds that the complaint does not state facts sufficient to constitute a cause of action; that the interest coupons can be paid only out of a special fund to be raised by the district, through its officers, in a specified mode, prescribed by the statutes providing for the organization and government of quasi public corporation, like the defendant; that the complaint does not allege or show that the officers of the district have failed to adopt all or any of the means prescribed by the aforesaid statutes to raise or create such fund, or that the failure to pay the interest coupons sued upon is due to the fact that no such fund has been raised or created; that, if the failure to pay the interest coupons was based upon a denial of their validity, such validity can be determined only in a suit in equity; that if the failure to make such payment was due to a mere arbitrary disobedience or disregard of the statutes, while there was in existence the special fund above mentioned, out of which payment could have been made, then the remedy of the plaintiff was limited to proceedings in mandamus in the state courts, against the treasurer of the district, to compel payment out of said fund; that if such nonpayment was due to the fact that there was no such fund in existence, out of which payment could have been made, because of the neglect of the officers of the district to pursue the means prescribed by said statutes for the creation of such fund, then the remedy of the plaintiff is limited to a mandamus proceeding in the state courts to compel said officers to make the necessary levy to raise or create such fund; that, if the interest coupons sued upon are concededly valid, then they amount or are equivalent to audited claims, and a judgment thereon could give them no greater validity, and the plaintiff's remedy would still be mandamus to compel payment out of an existing special fund, or to compel the creation of the same; that a judgment herein would not change the nature or character of the claim of the plaintiff, nor make the same payable out of a different fun or in a different manner from that prescribed by said statute; that, inasmuch as the district has no general power of taxation or of levying assessments, the plaintiff can in no event be paid, except out of such moneys as may be found in or raised for said special fund; that inasmuch as the defendant is a mere public agency, and as all property acquired, held, owned, or possessed by it has been acquired and is held, owned, and possessed by it in trust, and not in private ownership, to enable it to carry into effect the objects for which it has been created, none of such property can be subjected to execution. The demurrer to the complaint heretofore interposed by the defendant, and overruled, disposed of all questions as to the sufficiency of the complaint raised by defendant's motion for a judgment on the pleadings, but the importance of the questions involved will justify the court in further considering the matters urged upon the attention of the court by this motion.

The bonds to which were attached the coupons involved in this action were issued under the authority of an act of the legislature of the state of California commonly known as the 'Wright Act.' It is entitled 'An act to provide for the organization and government of irrigation districts, and to provide for the acquisition of water and other property, and for the distribution of water thereby for irrigation purposes,' approved March 7, 1887 (St. Cal. 1886 & Ex. Sess. 1887, p. 29). The act has been several times amended (St. Cal. 1889, p. 15, and St. Cal. 1891, pp. 53, 142, 147, 244), and at the session of the legislature of 1897 an entirely new act was passed (St. Cal. 1897, p. 254). The provisions of the act of 1887, as amended, relating to the issue of bonds by the boards of directors of irrigation districts, and providing for the payment of the principal and interest of such bonds, are as follows:

'Sec. 15. For the purpose of constructing necessary irrigating canals and works, and acquiring the necessary property and rights therefor, and otherwise carrying out the provisions of this act, the board of directors of any such district must, as soon after such district has been organized as may be practicable, and whenever thereafter the construction fund has been exhausted by expenditures herein authorized therefrom, and the board deem it necessary or expedient to raise additional money for said purposes, estimate and determine the amount of money necessary to be raised, and shall immediately thereafter call a special election, at which shall be submitted to the electors of such district, possessing the qualifications prescribed by this act, the question whether or not the bonds of said district in the amount as determined shall be issued. Notice of such election must be given, by posting notices in three public places in each election precinct in said district, for at least twenty days, and also by publication of such notice in some newspaper published in the county where the office of the board of directors of such district is required to be kept, once a week for at least three consecutive weeks. Such notices must specify the time of holding the election, and the amount of bonds proposed to be issued; and said election must be held and the result thereof determined and declared in all respects as nearly as practicable in conformity with the provisions of this act governing the election of officers; provided, that no informalities in conducting such an election shall invalidate the same, if the election shall have been otherwise fairly conducted. At such election the ballots shall contain the words, 'Bonds-- Yes,' or 'Bonds-- No,' or words equivalent thereto. If a majority of the votes cast are 'Bonds-- Yes,' the board of directors shall cause bonds in said amount to be issued; if a majority of the votes cast at any bond election are 'Bonds-- No,' the result of said election shall be so declared and entered of record, and whenever thereafter said board in its judgment deems it for the best interests of the district that the question of issuance of bonds in said amount, or any amount, shall be submitted to said electors, it shall so declare of record in its minutes, and may thereupon submit such question to said electors in the same manner and with like effect as at such previous election. Said bonds shall be payable in gold coin of the United States. * * * The principal and interest shall be payable at the place designated therein. Said bonds shall be each of the denomination of not less than one hundred dollars nor more than five hundred dollars; shall be negotiable in form, signed by the president and secretary, and the seal of the board of directors shall be affixed thereto. * * * Coupons for the interest shall be attached to each bond, signed by the secretary. Said bonds shall express on their face that they were issued by authority of this act, stating its title and date of approval, and shall also so state the number of the issue of which such bonds are a part. * * * ' Amended by the act of March 20, 1891 (St. Cal. 1891, p. 147).

'Sec. 17. Said bonds, and the interest thereon, shall be paid by revenue derived from an annual assessment upon the real property of the district; and all the real property in the district shall be and remain liable to be assessed for such payments as hereinafter provided. ' Re-enacted as section 33, Act March 31, 1897 (St. Cal. 1897, p. 265).

'Sec. 18. The assessor must, between the first Monday in March and the first Monday in June, in each year, assess all real property in the district to the persons who own, claim, have the possession or control thereof, at its full cash value. ' Amended by the act of March 31, 1891 (St. Cal. 1891, p. 244).

'Sec. 22. The board of directors shall then levy an assessment sufficient to raise the annual interest on the

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