Perris Irr. Dist. v. Thompson

• Decision Date: 05 May 1902
• Docket Number: 746.
• Citation: 116 F. 832
• Parties: PERRIS IRR. DIST. v. THOMPSON.
• Court: U.S. Court of Appeals — Ninth Circuit

116 F. 832

PERRIS IRR. DIST. v. THOMPSON.

No. 746.

United States Court of Appeals, Ninth Circuit.

May 5, 1902

Works Lee & Works, John D. Works, and Brander W. Lee, for plaintiff in error.

C. C Wright, for defendant in error.

The Perris irrigation district, the plaintiff in error, was the defendant in an action at law brought by Robert H. Thompson the defendant in error, to enforce the payment of certain bonds and coupons. The plaintiff in the action alleged that the defendant therein was an irrigation district organized, incorporated, and existing under and by virtue of an act of the legislature of the state of California of date March 7, 1887, and acts amendatory and supplementary thereto, and that said irrigation district, in the exercise of the power granted by said act of the legislature, and acting through its board of directors and officers thereunto duly authorized, issued the bonds and coupons which are the subject of the action under its corporate seal, and attested by the signatures of J. W. Nance, its president, and H. A. Plimpton, its secretary. The complaint sets forth the form of the bond in full, with all its recitals, one of which is that the bond was issued by the board of directors of said irrigation district 'pursuant to a vote of the electors of said district at an election held for that purpose on the 1st day of November, 1890. The said series of which this bond is one is composed of 884 bonds, each of the denomination of $500. Said bonds are issued by authority of, pursuant to, and after a full compliance with all the requirements of the 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 water and other property, and for the distribution of water thereby for irrigation purposes, approved March 7, 1887' (St. 1887, p. 29). The attestation clause is as follows: 'In witness whereof said Perris Irrigation District has caused these bonds to be issued and signed by its president and secretary, and its corporate seal to be hereunto affixed, and the lithographed signature of its secretary to be affixed to each of said coupons at the office of the board of directors in said district, this 1st day of January, A.D. 1891.' The answer of the defendant corporation denies that the defendant 'is, or was at all the times hereinafter mentioned, or at any time or at all, an irrigation district organized, incorporated, or existing under or by virtue' of said act of the legislature of the state of California; denies that the defendant 'issued any bond of said irrigation district in the form set forth in paragraph 4 of the complaint herein or at all'; denies that at the time of the issuance of said bonds and coupons thereto attached J. W. Nance was the president of the defendant's board of directors, or that H. A. Plimpton was secretary

thereof, or that the signatures to said bonds were the signatures of said Nance and Plimpton; and denies that subsequent to the issuance of said bonds, or prior to the commencement of the action, the plaintiff in good faith, in the ordinary course of business, and for value, before maturity of said bonds, purchased the same, or the coupons thereto attached. The case was tried before a jury, and judgment was rendered for the defendant in error upon said bonds and coupons for the full amount sued for.

Before GILBERT, Circuit Judge, and HAWLEY and DE HAVEN, District Judges.

GILBERT Circuit Judge, after stating the case as above, .

It is earnestly contended that the court erred in overruling the demurrer which the plaintiff in error interposed to the complaint on the ground that a single bondholder could not maintain an action upon a portion only of the bonds for the purpose of compelling the officers of the irrigation district to levy a tax for his individual benefit. The argument is that the statute directs the officers of a district to levy a tax for his individual benefit. The argument is that the statute directs the officers of a district to levy an annual tax for the payment of the interest, and, after 10 years, for the payment of the principal of the bonds, and that to order the levy of a tax for the payment of an individual bondholder is to require the corporation to perform an act for which it has no statutory authority, and which renders it subject to be harassed by a multitude of suits at the instance of other bondholders. No authority is cited in support of this contention. There are numerous decisions, however, in which the courts, while not discussing this point, have recognized the right of a holder of less than all the bonds to institute a suit to compel the payment of that which is due him. In the case of Waite v. City of Santa Cruz (recently decided) 22 Sup.Ct. 327, 46 L.Ed. 552, there were involved but 9 out of 360 of the bonds, and no question was made of the power of the court to grant relief at the suit of a single bondholder. We cannot see that the plaintiff in error has just ground of complaint if, by the judgment of the court in a case such as this, it is required to comply with the behests of the statute for the benefit of any one who has a valid claim against it. If it be the judgment of the court that the plaintiff in error ought to have levied the annual tax called for by the act, it cannot complain if it be called upon to levy such a tax for the benefit of a bondholder, although the amount due such bondholder may be less than the whole amount of the annual tax which the law contemplated for the payment of that which is due all bondholders. The corporation had a duty to perform as to the defendant in error. In compelling the performance of that duty the defendant in error was not required to bring into the suit all the other bondholders. If the corporation was in error concerning its duty to him or to the others, it is only the result of its own default if it be compelled to answer the suit of any who may have been aggrieved. It had, and still has, the power to relieve itself of such burdens by complying with the statute.

The issues upon which the action was tried before the jury, so far as they concern the questions which are presented upon the writ of error, are raised by the answer of the plaintiff in error by denying its own existence as an irrigation district, and denying that it had ever been organized and incorporated or in existence under the act of the legislature of the state of California, and further denying that it had issued the bonds sued upon, or that at the time of the issuance thereof the officers who executed the same as president and secretary were such officers, or that as such officers they signed said instruments, and denying that the defendant in error complains of the ruling of the circuit court in admitting certain evidence offered by the defendant in error. The defendant in error rested his case after introducing in evidence the bonds and coupons and a certified transcript of the decree of confirmation of the proceedings of the board of supervisors of the country of San Bernardino for the organization of the Perris irrigation district. To the latter the plaintiff in error objected on the ground that no proof was made or offered of the proceedings before the board of supervisors upon which the confirmation was had, and upon the ground that the records, if offered, would show that neither the petition for the confirmation nor any notice that was issued in said proceedings contained any description of the property embraced within the district, nor any notice to any property owner that his lands are within the district. The action of the court in overruling these objections is assigned as error. It is contended that the decree alone unaccompanied by the record of the...