Town of Buffalo v. Walker

• Decision Date: 28 April 1925
• Docket Number: Case Number: 15090
• Citation: 1925 OK 338,126 Okla. 6,257 P. 766
• Parties: TOWN OF BUFFALO v. WALKER et al. (NEWKIRK et al., Interveners).
• Court: Oklahoma Supreme Court

1925 OK 338

257 P. 766

126 Okla. 6

TOWN OF BUFFALO v. WALKER et al. (NEWKIRK et al., Interveners).

Case Number: 15090

Supreme Court of Oklahoma

Decided: April 28, 1925

Syllabus

¶0 1. Appeal and Error--Parties Entitled to Review.

Where no judgment is rendered by the trial court in favor of or against an intervener and no order made as to him in a judgment rendered in the main action, his rights cannot be determined on appeal to this court from said judgment.

2. Same--Third Parties not Brought in.

Where it is contended that the rights of innocent third parties are involved in an action and they are not made parties to the action, their rights cannot be determined in the trial court nor by appeal to this court.

3. Municipal Corporations -- Bond Issue--Validity of Sale.

Where the city council, or trustees, of a municipal corporation in this state, undertakes to sell, or contracts to sell, the bonds of said municipal corporation, issued by a vote of the people, for any sum less than par with accrued interest added, and exchanges the same for labor and material for the building of the public improvement for which said bonds were voted, such exchange is unlawful, for the reason that it is in conflict with section 4281, Comp. St. 1921, which provides that such bonds shall not be sold for any sum less than par with accrued interest added, and that if sold through an agent, that after the commission is deducted from the amount received from said bonds there must still remain in the treasury a sum equal to par value and accrued interest.

4. Same--Sale of Bonds at "Par."

"Par" means equal, and "par value" means a value equal to the face of the bonds. A sale of bonds at par is a sale at the rate of a dollar in money for a dollar in bonds. This is the accepted meaning of the term in the mercantile world, which the Legislature is presumed to have adopted in enacting the statute.

Commissioners' Opinion, Division No. 5.

Error from District Court, Harper County; Arthur G. Sutton, Judge.

Action by the Town of Buffalo, Okla., against R. Y. Walker et al; B. F. Newkirk and another intervening. Judgment for defendants. Plaintiff brings error. Reversed.

O. C. Wybrant and D. P. Parker, for plaintiff in error.

Geo. P. Glaze, for defendants in error B. F. Newkirk and C. H. Taylor.

THOMPSON, C.

¶1 This action was commenced in the district court of Harper county, by the town of Buffalo, Okla., a municipal corporation, plaintiff in error, as plaintiff, against R. Y. Walker, C. E. McMinn, as town treasurer of the town of Buffalo, B. F. Willett, B. C. Krause, Tom Ricker, L. R. H. Durham, C. M. Anderson, W. D. Drake, G. W. Messinger, T. C. McElhiney and H. C. Bayne, composing the excise board of Harper county, Okla., defendants below, and B. F. Newkirk and H. Taylor, interveners, all defendants in error, to cancel $ 260,000 bonds against said town, together with coupons, and to enjoin the levying and collecting of any tax upon the taxable property of said town for the purpose of paying said bonds, or any part thereof, or any interest thereon, or to create a sinking fund for the purpose of paying for said bonds, and for costs.

¶2 The parties will be referred to in this opinion as plaintiff, defendants, and interveners, as they appeared in the lower court. Plaintiff's amended petition, among other things, alleged, in substance, that the board of trustees of the town of Buffalo, in the year 1917, after the same had been submitted to and voted for by the qualified electors of the town of Buffalo, issued $ 100,000 in bonds for the construction of waterworks, electric lights, and sewer system to be owned by said town and turned the same over, under contract, to the defendant R. Y. Walker, for which he was to construct said improvements; that nothing was ever done under said contract and that the town had never received any consideration for said bonds; that, in 1921, the sum of $ 260,000 in bonds was voted by the qualified electors of the town of Buffalo, for the purpose of erecting a system of waterworks in said town, said bonds being in the denomination of $ 1,000 each and numbered from one to 260, inclusive, and issued dated January 1, 1921, and it appears, upon the face of the bonds, that they were issued for the purpose of constructing waterworks improvements; that said bonds were issued to bear six per cent. interest per annum, payable semi-annually, on March 1st and September 1st of each year, and in said bonds the full faith and credit of the town were pledged for the payment of same; that said bonds were never sold by said town at par and accrued interest, but that the trustees of said town, by a written contract dated February 21, 1921, contracted with defendant R. Y. Walker, who, for the consideration of the entire issue of the bonds, was to build the system of waterworks and furnish, at his own cost and expense, all the material and labor, plans and specifications for the building of said system of waterworks, the town to furnish the site, building site, rights of way, engineer and inspector, at its own cost and expense; that the defendant R. Y. Walker was to surrender his former contract and to return to the town the $ 100,000 in bonds, issued in 1917, which had been delivered to the defendant Walker, and that, in the event any part of the said $ 100,000 bonds were not surrendered, the said Walker was to execute an indemnity bond to the town to insure it against loss for any amounts of said bonds not surrendered; that $ 5,000 from the sale price of the $ 260,000 bonds was to be set apart for engineering and incidental expenses and any part remaining of the $ 5,000 was to be expended for the benefit of the town for the distribution of water in the town; that said bonds, upon their face, were made payable on the 1st day of January, 1946, or 25 years from date; that the defendant R. Y. Walker was the contractor, to whom was turned over the entire issue of $ 260,000 in bonds; that the defendant C. E. McMinn was the town treasurer of the town of Buffalo, who turned over said bonds to the said contractor, R. Y. Walker; that the defendants B. F. Willett, B. C. Krause, Tom Ricker, L. R. H. Durham, C. M. Anderson, W. D. Drake, G. W. Messinger, T. C. McElhiney, and H. C. Bayne compose the excise board of Harper county, Okla.; that said excise board was threatening to and was about to make an assessment and levy a tax upon the taxable property within the town limits of Buffalo, for the purpose of paying the interest accrued, and that accruing upon the bonds, and to create a sinking fund for the purpose of paying for said bonds at maturity; that said bonds and each and all of them, and said interest coupons, attached to said bonds, were in all respects wholly void, and constitute no obligation or charge against the town of Buffalo or upon the taxable property of the residents thereof; that said bonds should be declared void and without force and effect, and should be surrendered and canceled as being wholly void and without force and effect, and that the defendant R. Y. Walker, or any other person claiming said bonds by, through, or under him, should be required to surrender the same into court for cancellation, and the excise board should be restrained from making any levy or assessing any tax upon the taxable property within the limits of the town of Buffalo for the purpose of paying said bonds or any part thereof or any coupons attached thereto. A copy of one of the bonds, together with one of the coupons and the written contract between the board of trustees of the town of Buffalo and the defendant R. Y. Walker is attached as an exhibit and made a part of the petition.

¶3 The defendant R. Y. Walker admitted the issuance of the bonds and the contract, and alleged that he received the bonds in the total sum of $ 260,000 as a consideration for the construction and completion of said waterworks system; that he complied with said contract, completed the waterworks system, and turned the same over to the town of Buffalo in May, 1922, and the same was accepted by said town, and that the town used said waterworks, passed ordinances for water charges, sold water and collected therefor, and used the same for municipal purposes; that the trustees and citizens of said town knew of the construction of said waterworks, knew of the contract, and stood idly by and permitted the work to proceed to the completion of the waterworks, and that said waterworks were reasonably worth the par value of the bonds and accrued interest; that the bonds were delivered to him and sold by him, and that the proceeds from said sale were used in the construction and cost of said system, and alleged that the said town was estopped from raising the question as to the validity of the contract and the sale of the bonds; that he had sold said bonds and they were now in the hands of innocent purchasers for value without notice of any infirmity, and that none of said bonds were now in his possession or control; and denied that the amended petition contained any equitable grounds for the relief prayed for, and denied that the plaintiff was entitled to any relief, either in law or in equity, and prayed that plaintiff be barred from introducing proof on all matters to which the defense of estoppel was pleaded, and that plaintiff take nothing by its amended petition, and that he be given and granted all relief, both legal and equitable, to which the court might find him to be entitled.

¶4 The plaintiff filed a reply to the answer of defendant R. Y. Walker in the nature of a general denial. The defendant C. E. McMinn, town treasurer, answered, denying that he was a party to the contract and that he took any part in the alleged sale of the bonds, but admitting that he turned over the bonds to the defendant R. Y. Walker under the direction of the town board under a resolution passed by said board, but that he did so under protest; that the only connection he had with the transaction...