Lincoln and Dawson County Irrigation District v. McNeal

• Decision Date: 03 October 1900
• Docket Number: 11,376
• Citation: 83 N.W. 847,60 Neb. 613
• Parties: LINCOLN AND DAWSON COUNTY IRRIGATION DISTRICT v. ISAAC A. MCNEAL
• Court: Nebraska Supreme Court

83 N.W. 847

60 Neb. 613

LINCOLN AND DAWSON COUNTY IRRIGATION DISTRICT v. ISAAC A. MCNEAL

No. 11,376

Supreme Court of Nebraska

October 3, 1900

ERROR to the district court for Dawson county. Tried below before SULLIVAN, J. Reversed.

REVERSED.

W. D Giffin and E. A. Cook, for plaintiff in error.

George W. Thomas and G. W. Fox, contra.

OPINION

HOLCOMB, J.

This action is submitted on a printed abstract of the record and briefs of counsel in the case. The plaintiff in error defendant below, is a corporation organized under and by virtue of an act of the legislature passed in 1895, providing for the organization and government of irrigation districts. Session Laws, 1895, ch. 70. The action is founded upon a claim for work and labor performed in the partial excavation of an irrigation canal proposed to be constructed by the district. The material allegations of the petition, in substance, are: The organization of the district; the voting of bonds by a majority of the electors in an amount sufficient to pay for the estimated cost of the proposed canal, and the issuance and execution thereof by the proper officers; that the bonds were at all times, and at the beginning of the action, in the possession of the defendant and had not been sold; that in December, 1895, the district desiring to have work begun on the proposed canal, by and through its board of directors, employed the plaintiff to do a certain amount of work in excavating said canal, said agreement not being in writing; that for such work the plaintiff was to be paid in bonds of the defendant corporation, provided the bonds could not be sold, but if said bonds were sold, then plaintiff was to be paid in money, in an amount not exceeding the lowest bid made for like work by a responsible bidder after advertising for bids; that under said agreement the plaintiff removed 2,980 cubic yards of dirt, and that the reasonable value thereof was $ 178.80. It is alleged that the defendant did not advertise or receive bids for work similar to that performed by the plaintiff, but received bids for similar work combined with other work of a different nature; that the work was done on, and prior to, January 31, 1896; that the plaintiff informed the defendant he would take bonds at par for the work done, and demanded that he be so paid, or paid in money, and that defendant refused to pay him either. Judgment was prayed for in the sum of $ 178.80 and interest. The answer admits the organization of the district, and otherwise in the main consists of a general denial. It denies liability to plaintiff for the alleged work; denies authority to enter into the contract pleaded, and alleges that it did not, and has not made any contract with the plaintiff, and was without authority under the law to enter into a binding contract; it alleges that it notified and warned the plaintiff that, should he do any work on its proposed canal, he would do so at his peril. It is also alleged that the petition failed to state facts sufficient to entitle plaintiff to recover. On the trial, objection was raised to the introduction of any evidence, because the petition failed to state a cause of action. Judgment was rendered for the plaintiff for the amount prayed for, and the case is, by error proceeding, brought here for review. The case was tried upon a stipulation of facts, which will appear in the further discussion of the case.

But two underlying questions are presented for consideration: First, does the petition state facts sufficient to constitute a cause of action; and, second, under the facts as stipulated, is the plaintiff entitled to judgment? A rightful determination of these questions, which we are disposed to consider together, hinges upon a proper construction of the different sections of the irrigation law referred to. By sections 9 and 10 a board of directors of an irrigation district is provided for, and their powers and duties defined. By section 13 it is provided that, for the purpose of constructing necessary irrigating canals, and acquiring the necessary property and rights, and otherwise carrying out the provisions of the act, the board of directors are to determine and estimate the amount of money necessary to be raised, and to call a special election, at which shall be submitted to the electors the question of voting bonds of said district, in the amount determined, and for the purpose mentioned. By section 14 it is provided that bonds may be sold from time to time, as may be most advantageous to raise the money for the construction of canals, and the acquisition of property and rights, and in otherwise carrying out the purposes of the act. The manner in which the bonds are to be sold is prescribed by the section, and it is provided that, in no event, shall such bonds be sold for less than ninety-five per cent of their face value. By section 22 it is provided that, after adopting a plan for the work contemplated, the board shall give notice by publication, inviting bids for the construction of all, or a part of, the proposed work, describing the work to be done, and inviting sealed proposals therefor, stating that the contract will be let to the lowest responsible bidder, and giving notice of the time and place for opening such proposals. It is provided that the board shall let the work, either in portions or as a whole, to the lowest responsible bidder, or they can reject any or all bids, and readvertise for proposals, or may proceed to construct the work under their own superintendence with the labor of the residents of the district. By section 24 of the act, as it then existed, it is provided that the costs and expenses of purchasing and acquiring property, and of constructing the works therein provided for, shall be wholly paid out of the construction fund. Provisions are therein made for levy of assessments and tolls for salaries of officers, current expenditures, repairs, etc. By section 29 it is declared that "the board of directors, or other officers of the district, shall have no power to incur any debt or liability whatever, either by issuing bonds or otherwise, in excess of the express provisions of this act, and any debt or liability incurred in excess of such express provisions shall be and remain absolutely void."

It is unnecessary here to speak of the alternative feature of the contract, mentioned in the petition, involving the alleged agreement of delivery and acceptance of the bonds of the district at their face value for the work of construction alleged to have been performed by the plaintiff. That branch of the controversy is not before us for consideration. The action was tried in the court below as one at law for the recovery of a money judgment, and, for the purpose of this case, a right of recovery is to be determined solely on defendant's liability for a judgment for money for the value of the services performed under the alleged contract.

The section of the statute providing for the disposition of bonds, as it stood at the time the work was being performed, contemplated that they should be sold, after advertisement, to the highest bidder, and for not less than ninety-five per cent of their face value, the proceeds to constitute a construction fund, to be used in the construction of the contemplated canal. This seemed to be the view of the legislature, which, at its last session, amended the section, by providing, under certain conditions therein mentioned, for an exchange of bonds for the work of construction. The original and amended sections were considered and construed in Baltes v. Farmers Irrigation District, 60 Neb. 310, 83 N.W. 83. It appears by the stipulation of facts that a proposition to destroy the bonds, before authorized to be issued, was submitted to the voters of the district in June, 1898, and adopted, and in pursuance thereof, by order of the board of directors, the bonds were destroyed in the succeeding month. As to what effect this proceeding had no the prior transaction, we are not in this case required to express an opinion. By the stipulated facts, the bonds authorized to be issued by the defendant district were advertised for sale; "but no one could be found who was ready to purchase said bonds." From this stipulation and the allegation in the petition that the bonds authorized to be issued were never sold, but remained the property of the district, but one inference can be drawn, viz. that the district officers were unsuccessful in disposing of the bonds at the minimum sum permitted by law, and therefore the bonds remained in the hands of the board of directors of the district, undisposed of.

This brings us directly to the proposition of whether a cause of action can be stated in the petition, when it is disclosed on the face of it that no construction fund, as contemplated by statute, has been created out of which can be paid the expenses incurred in the construction work. Under the stipulated facts it is shown that, after bonds had been voted, there was an order of the board...