Turner v. Roseberry Irrigation District

• Decision Date: 14 May 1921
• Citation: 198 P. 465,33 Idaho 746
• Parties: M. TURNER, Respondent, v. ROSEBERRY IRRIGATION DISTRICT, a Municipal Corporation, and W. H. H. MEADOR, CHARLES MCDONALD and WILLIAM BARKER, Constituting the Board of Directors Thereof, and W. H. H. MEADOR, as Secretary, and WILLIAM BARKER, as President Thereof, Appellants
• Court: Idaho Supreme Court

198 P. 465

33 Idaho 746

M. TURNER, Respondent, v. ROSEBERRY IRRIGATION DISTRICT, a Municipal Corporation, and W. H. H. MEADOR, CHARLES MCDONALD and WILLIAM BARKER, Constituting the Board of Directors Thereof, and W. H. H. MEADOR, as Secretary, and WILLIAM BARKER, as President Thereof, Appellants

Supreme Court of Idaho

May 14, 1921

MUNICIPAL CORPORATION-IRRIGATION DISTRICT-BONDS-POWER TO ISSUE-CONDITIONS-BOARD OF DIRECTORS-POWERS OF WITH RESPECT TO BONDS-AUTHORITY NOT LOST BY LAPSE OF TIME-STATUTORY DATE OF BONDS-MATURITY-ISSUE-RESOLUTION BY BOARD OFFERING ISSUE FOR SALE-OFFICERS AUTHORIZED TO SIGN BONDS.

1. The power of municipal corporations to issue bonds depends upon a grant of authority from the legislature. While a municipality has discretion to issue such bonds as will best accomplish the general object to secure which their issue was authorized, yet the legislature in granting authority therefor may impose such conditions as it may choose, and unless the conditions are complied with, the issue is unauthorized and the bonds are invalid.

2. Under the provisions of C. S., sec. 4367, the board of directors of an irrigation district may in their discretion offer for sale and sell duly authorized bonds of the district from time to time, in such quantities as may seem under existing circumstances to be desirable. Delay of the board in acting does not nullify the action of the electors in authorizing a bond issue. Such delay does not operate to relieve the board of their duty nor deprive them of their authority to issue bonds which have been duly authorized provided they have not previously withdrawn the bonds from issue in accordance with the statute, and no showing is made of a change of circumstances which would render it impossible to carry out the purpose for which the bonds were authorized.

3. Under the provisions of C. S., sec. 4360, all bonds of a series authorized by vote of the electors of an irrigation district, regardless of when they may be issued, must bear the date of Janu- ary 1st, or July 1st next following the date of their authorization.

4. An irrigation district is without authority to issue bonds maturing less than 11 or more than 20 years from the date of issue thereof.

5. Under the provisions of C. S., sec. 4360, an issue of bonds of an irrigation district is all or some part of a series offered for sale at any one time by the board of directors and such bonds begin to mature from the date of the resolution by the board of directors offering the issue for sale.

6. Bonds of an irrigation district may be signed by the officers of the district in office at the time of their issuance and delivery.

APPEAL from the District Court of the Third Judicial District, for Valley County. Hon. Chas. P. McCarthy, Judge.

Action to restrain the issuance of irrigation district bonds. Judgment for plaintiff, modified and affirmed.

Cause remanded to the district court, with instructions, and affirmed.

D. M Cox, for Appellants.

The power of an irrigation district to dispose of bonds authorized at an election held June 6, 1910, is not lost by failure to exercise it until 1920. (Secs. 4367, 4359, C. S.; Baltes v. Farmers' Irr. Dist., 60 Neb. 310, 83 N.W. 83.)

The statute provides a uniform date of issue for all bonds of a series, which date is the January 1st or July 1st next following the election at which the bonds are authorized. From this date interest begins to run and maturity is determined. (Emmett Irr. Dist. v. Thompson, 253 F 316, 165 C. C. A. 98.)

"Issue" in sec. 4360, C. S., does not refer to date of "sale" or "delivery," but, as in financial parlance, refers to the arbitrary date fixed as the beginning of the term for which the bonds are to run. (O'Neill v. Yellowstone Irr. Dist., 44 Mont. 492, 121 P. 283; Board of Directors v. Mineah (Wash.), 192 P. 997.)

Irrigation district bonds may be executed at any time after authorization and before delivery by the persons holding the office of president and secretary at the date of execution, and delivery thereafter estops the district to question the validity of execution. (Secs. 4360, 4330, 4331, 4343, C. S.; Emmett Irr. Dist. v. Thompson, supra; Yesler v. City of Seattle, 1 Wash. 308, 25 P. 1014; O'Neill v. Yellowstone Irr. Dist., supra.)

Power to issue irrigation district bonds is wholly statutory, and the validity of such bonds even in the hands of innocent purchasers depends upon strict compliance with the statute. (People's Bank v. School Dist. No. 52, 3 N.D. 496, 57 N.W. 787, 28 L. R. A. 642; Anthony v. Jasper County, 101 U.S. 693, 26 L.Ed. 1005, see, also, Rose's U. S. Notes.)

Hawley & Hawley and Sam S. Griffin, for Respondent.

The authority to dispose of irrigation district bonds is lost by failure to exercise such authority within a reasonable time after the election granting it. (Sec. 4367, C. S.)

Each issue of a series of irrigation district bonds should bear a different date, i. e., the January 1st or July 1st next following the date of adoption of a resolution of the board of directors, providing for the disposal of the issue. (Secs. 4360, 4367, C. S.; Sess. Laws 1903, pp. 165, 166; Sess. Laws 1907, pp. 495, 496.)

Irrigation district bonds running either a less or greater term than the statute provides are void, even in the hands of bona fide holders. (19 R. C. L., "Municipal Corp.," 994; Norton v. Town of Dyersburg, 127 U.S. 160, 8 S.Ct. 1111, 32 L.Ed. 85; Barnum v. Town of Okolona, 148 U.S. 393, 13 S.Ct. 638, 37 L.Ed. 495, see, also, Rose's U. S. Notes; Woodruff v. Okolona, 57 Miss. 806; People's Bank v. School Dist. No. 52, 3 N.D. 496, 57 N.W. 787, 28 L. R. A. 642; Anthony v. Jasper County, 101 U.S. 693, 25 L.Ed. 1005, see, also, Rose's U. S. Notes; State v. Moore, 46 Neb. 590, 50 Am. St. 626, 65 N.W. 193; Board of Commrs. v. Vandriss, 115 F. 866, 53 C. C. A. 192; City of South St. Paul v. Lamprecht Bros. Co., 88 F. 449, 31 C. C. A. 585; Dows v. Town of Elmwood, 34 F. 114; Rock Creek Twp. v. Strong, 96 U.S. 271, 24 L.Ed. 815, see, also, Rose's U. S. Notes; Syracuse Twp. v. Rollins, 104 F. 958, 44 C. C. A. 277.)

Interest begins to run from, and maturities of bonds are determinable by, the date actually sold and delivered. "Issue" in sec. 4360, C. S., refers to such date. (Secs. 4360, 4371, 4387, 4388, 6058, C. S.; Nampa etc. Irr. Dist. v. Brose, 11 Idaho 474, 83 P. 499; Black v. Fishburne, 84 S.C. 451, 19 Ann. Cas. 1104, 66 S.E. 681; Brownell v. Greenwich, 114 N.Y. 518, 22 N.E. 24, 4 L. R. A. 685; Sechrist v. Rialto Irr. Dist., 129 Cal. 640, 62 P. 261; Sess. Laws 1903, pp. 150, 165, 166; Sess. Laws 1907, p. 485; Wright v. East Riverside Irr. Dist., 138 F. 313, 70 C. C. A. 603; Stowell v. Rialto Irr. Dist., 155 Cal. 215, 100 P. 248; Emmett Irr. Dist. v. Thompson, 253 F. 316, 165 C. C. A. 98.)

Bonds should be executed by the persons holding the offices of president and secretary at the date of issue. (Emmett Irr. Dist v. Thompson, supra; Paxton Irr. Dist. v. Conway, 94 Neb. 205, 142 N.W. 797; Wright v. East Riverside Irr. Dist., supra; Yesler v. City of Seattle, 1 Wash. 308, 25 P. 1014.)

BUDGE, J. Rice, C. J., and Dunn and Lee, JJ., concur. McCarthy, J., did not sit at the hearing and took no part in the opinion.

OPINION

BUDGE, J.

This is an action brought by respondent to restrain appellant district and its board of directors from the proposed execution, issuance and sale of certain bonds. From a decree perpetually enjoining and restraining the district from executing, issuing, selling or otherwise disposing of bonds of the form proposed, and setting forth a form of bonds which the district might execute and dispose of, the district appeals.

The facts, which are stipulated, are substantially as follows: That respondent is a resident, land owner and taxpayer within the district; that the district was organized January 11, 1910; that a series of bonds in the total amount of $ 15,000 was authorized by the electors of the district at an election held June 6, 1910; that bonds to the amount of $ 7,500, designated as first series, first issue, have been executed, issued and sold, and with respect to which no question is now raised; that Walter Watts and H. F. Erwin were respectively president and secretary of the district on July 1, 1910; that the organization of the district and the authorization of the series of bonds was confirmed by a decree of the district court on August 1, 1911.

The appellant board of directors, consisting of W. H. H. Meador, secretary, Charles McDonald, and William Barker, president, adopted a resolution on March 30, 1920, declaring an intention to sell the remaining $ 7,500 bonds, authorized June 6, 1910, and providing that the bonds and coupons should be dated July 1, 1910; that maturities should be figured from that date; that interest coupons falling due each January 1st and July 1st beginning January 1, 1911, and ending January 1, 1920, being coupons numbered 1 to 19, inclusive, should be detached upon sale, and that coupons numbered 20 to twice the number of years within which the bonds are to mature should remain attached to the bonds.

It was stipulated that appellants will, unless restrained, execute and dispose of such bonds, in such form, designated as "first series--second issue," principal $ 100 each bonds numbered 1 to 4 inclusive, being further designated "eleven year bonds," maturing July 1, 1921, or eleven years after their date of July 1, 1910, and statutory percentages of the remaining bonds being designated as 12, 13, and successively to 20-year bonds, maturing the designated number of years after July 1, 1910; that the president and secretary will execute the bonds on behalf of the district, though not such officers on July 1, 1910; and that appellants intend that such...