Page v. Oneida Irr. Dist.

• Decision Date: 23 May 1914
• Citation: 141 P. 238,26 Idaho 108
• Parties: JAMES PAGE, Appellant, v. ONEIDA IRRIGATION DISTRICT, a Corporation, Respondent
• Court: Idaho Supreme Court

141 P. 238

26 Idaho 108

JAMES PAGE, Appellant, v. ONEIDA IRRIGATION DISTRICT, a Corporation, Respondent

Supreme Court of Idaho

May 23, 1914

TAXPAYER ESTOPPED-IRREGULARITY IN BOND ISSUE-VOID BOND ISSUE.

1. Where it is shown that a land owner within an irrigation district seeks to avoid the payment of assessments levied against his land by the district because of alleged irregularities or infirmities in the issue of bonds, and who with full knowledge of such alleged defects or infirmities has, by his silence, acquiesced in the expenditure of the fund derived from the sale of said bonds, and who has had knowledge that said bonds were passing into the hands of bona fide purchasers, held, that he will be estopped by his laches from being heard to object to the payment of such assessments.

2. A taxpayer may, by his conduct, be estopped from questioning the validity of municipal bonds because of alleged irregularities or infirmities in their issue.

APPEAL from the District Court of the Fifth Judicial District for the County of Franklin. Hon. Alfred Budge, Judge.

Action to have declared void certain liens and encumbrances created by assessments levied by an irrigation district, and to have determined the nature and amount of such liens as were legally created, and for the purpose of enjoining respondent from creating or attempting to create other or additional liens or encumbrances by levying future assessments. Judgment for defendant. Affirmed.

Judgment of the district court affirmed. Costs awarded to respondent.

W. A Lee and W. H. Wilkins, for Appellant, cite no authorities on points decided.

Richards & Haga, for Respondent.

"A taxpayer is barred by laches from enjoining the collection of a tax where he has stood by and permitted large numbers of taxpayers to pay such taxes." (Kennedy v. Montgomery County, 98 Tenn. 165, 38 S.W. 1075; Abbot, Public Securities, sec. 62; Schnell v. City of Rock Island, 232 Ill. 89, 83 N.E. 462, 14 L. R. A., N. S., 874.)

"There is estoppel where the validity of bonds has been recognized by duly authorized public officials whereby the corporation has evidenced by its course of conduct that existing outstanding securities are valid obligations." (Amey v. Mayor of Allegheny, 24 How. (U.S.) 364, 16 L.Ed. 614; Abbot, Public Securities, sec. 330.)

"The requirement of diligence and the loss of the right to invoke the arm of a court of equity in cases of laches is particularly applicable where the subject matter of the controversy is a public work." (Penn Mutual Life Ins. Co. v. City of Austin, 168 U.S. 685, 18 S.Ct. 223, 42 L.Ed. 626.)

We call the court's attention to the case of Rogers v. Thomas, 193 F. 952, 113 C. C. A. 580, which is quite similar to the case at bar.

Ordinarily, the want of power to issue bonds for a given purpose may be raised as a defense to the enforcement of the bonds, but once the power to issue securities is conceded, it is not competent to defend against their collection upon the ground of fraud in their execution, or any irregularities in their delivery. (Baxter v. Vineland Irr. Dist., 136 Cal. 185, 68 P. 601; Leeman v. Perris Irr. Dist., 140 Cal. 540, 74 P. 24.)

WALTERS, District Judge. Ailshie, C. J., and Sullivan, J., concur.

OPINION

WALTERS, District Judge.

--The appellant, who was the plaintiff below, is a land owner within the bounds of the respondent irrigation district, said lands being subject to certain liens and encumbrances created by said irrigation district.

This action was brought by appellant for the purpose of having declared void said liens and encumbrances which had been created by assessments made by respondent irrigation district and which appellant had failed to pay; that the court determine the nature and amount of the liens, if any, which had been legally created by defendant; and for the further purpose of enjoining respondent from creating or attempting to create other or additional liens or encumbrances by levying future assessments.

The relief asked for by plaintiff was by the trial court refused, from which judgment and the denial of a motion for new trial the plaintiff has prosecuted this appeal.

The record discloses that the defendant irrigation district was organized under and pursuant to the laws of the state of Idaho on the 3d day of May, 1902, after which it caused surveys and plans to be made and formulated for the construction of an irrigation canal system; that to defray the expenses of the construction of said canal system said district authorized and caused four separate bond issues to be executed and disposed of in the years 1902, 1905, 1906 and 1910.

It further appears that certain assessments have been levied against the land of plaintiff for the payment of interest on said bonds and for maintenance of the canal system.

The court found that in addition to the bonded debt a certain other debt was outstanding and unpaid, but that no levies of assessments or taxes have been made for the payment of the same, nor interest thereon.

The plaintiff charges (1) that a portion of said bonds was disposed of by said defendant for less than par with accrued interest; (2) that a portion of said bonds was delivered to various persons for work and labor performed for defendant district; (3) that a portion of said bonds was delivered to a certain person for which the defendant district received no consideration, and (4) that a portion of said bonds was not legally executed, in that they were not signed by the president of the defendant district.

In relation thereto the court found, and the evidence authorizes the court in so finding, (1) that a portion of said bonds was sold for their full cash value and accrued interest, but that after repeated efforts upon the part of the district to sell the bonds, they employed a broker to sell the same, paying him a commission therefor; (2) that a portion of said bonds had been delivered to contractors or others for work or labor in lieu of cash and in payment for work and labor performed and materials furnished, and that said bonds so delivered were accepted at their full face or par value with accrued interest; (3) that certain of said bonds given to certain contractors in payment of work and labor performed and material furnished were by said contractors placed as collateral security with a certain bank for loans made and moneys advanced to said contractors; that for default in the payment of said loans said bank now claims to hold said bonds as a bona fide purchaser; (4) and that certain of said bonds were signed by the president of said defendant district after his term of office had expired, inasmuch as the bonds had been dated and prepared for signature at a time when said person was president aforesaid; that said signature had been affixed to said bonds at the request of the board of directors and the then president of said defendant district, and with the full knowledge, acquiescence and consent of the same.

The court found that practically all of said bonds had passed from the original purchaser directly or by means of sales through bond brokers into the hands of many and divers persons not parties to this suit, who had purchased the same in good faith for value, and without any notice or knowledge of the facts which plaintiff claims created defects and infirmities in said bonds as hereinbefore set forth.

1. From our view of the case it will be unnecessary to discuss or determine the merit or lack of merit in the objections made by plaintiff to the payment of assessments for the purpose of meeting interest on the bonds in question and maintenance charges for the operation of the canal system, inasmuch as it appears that the plaintiff in this action was a holder of land within the bounds of the irrigation district at the time of its organization in 1902 until the present...