94 Neb. 205 | Neb. | 1913
Plaintiff was organized in 1895 as an irrigation district to make a canal from the South Platte river through the lands of the organizers in Lincoln and Keith counties for the purpose of irrigation. To that end some work was done, but the project was a failure. The canal was never completed nor used to carry water for irrigation. When water was needed, the river was generally dry at the point of diversion. Bonds in the sum of $100 each were executed by the district July 1, 1896, to the extent of $27,000.
A reversal is demanded on the ground that plaintiff had an adequate remedy at law, which defeated jurisdiction in equity to cancel the negotiable bonds held by appellants. The decision is not controlled by the rule invoked. Plaintiff is a public corporation and is seeking by lawful means to end an unprofitable existence. Many of the bonds have never passed out of the hands of the officers of the district. If they are negotiable, they ought to be destroyed when the district is dissolved. Taxes levied against the lands in the district will be affected by the cancelation of the bonds. Bonds said to be void are in the possession of different holders. Warrants and claims for excavating were in some instances exchanged for bonds. It is alleged that contracts for work on the canal were void, and that bonds were accepted in payment for such work. These are conditions under which equity will take jurisdiction to prevent a multiplicity of suits.
The next point argued is that plaintiff, in any event,
Were the bonds void? Plaintiff insists they were issued in violation of the statutory provisions that they shall be “signed by the president and secretary,” and that “the seal of the district shall be attached thereto.” Laws 1895, ch. 70, sec. 13. The bonds purport on their face to have been executed July 1, 1896. The trial court properly found from the evidence that Elmer P. Mason was secretary at that time, and that he continued to be such until February 20, 1907. The bonds do not bear his name as secretary, but purport to have been signed by “B. M,
There was also a finding below that no seal had been provided for the district, and that the one used was unauthorized. This finding is not disproved by the record. An original bond was submitted to the trial court, while the bill of exceptions contains a copy, only, which does not bear the impression of a seal.
The notice and call for the special election at which the bonds were voted proposed the issuance of bonds to mature in 20 years, though the statute required their payment in instalments maturing at different times, beginning in 11 years. Laws 1895, ch. 70, sec. 13.
Ratification of the bonds by levying and collecting taxes and by paying interest is urged as an objection to the injunction. Taxes wére levied in compliance with a peremptory mandamus previously issued by the trial judge who presided in the present case. The validity of the bonds, however, was not decided on the application for the writ, and it is a well-settled rule that a public corporation, by paying interest on void bonds, does not ratify them or estop itself from assailing them.
Appellants also resisted the injunction on the ground that plaintiff is concluded by a former order in which the district court confirmed the proceedings leading up to the execution of the bonds. The order invoked confirmed the proceedings as regular. It was made by the judge who presided in the present case. A proceeding to confirm the preliminary steps before the bonds are negotiated is authorized by the irrigation law. The order, however, did not affect the sale and delivery of the bonds. At the time they were delivered the statute did not authorize the district to dispose of them in the manner in which they were procured by appellants, but provided: “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 liabilitv incurred in excess of such
The record does not show that appellants were innocent holders. Miles had been an officer, and knew the circumstances under which the bonds were voted, negotiated and transferred. Scliurtz acquired bonds in the sum of $500 for services which he admits did not exceed $350 in value. He received them under circumstances which should have put him upon inquiry. The First National Bank transacted its business in Lincoln county, and was not only required to know the provisions of the statute, but was charged with notice of the public records which the officers of the irrigation district kept.
The findings of the court below are justified by the evidence. No error has been found, and the judgment is
Affirmed.