Pullen v. School District No. 3

186 P. 9 | Or. | 1920

Lead Opinion

BENSON, J.

There are a number of questions presented and argued upon this appeal, but the view which we take of the matter renders a discussion of many of them unnecessary.

1. ¥e may assume at the outset that the Circuit Court had jurisdiction of the subject matter. Chapter 172 of the Laws of Oregon for 1913 provides that after an election for the issuance of school district bonds—

“All such bonds shall be signed by the chairman of the district school board, attested by the district clerk, and registered by the county treasurer; and the interest coupons thereto annexed shall be signed by said chairman and clerk, by their original or engraved facsimile signatures.

‘ ‘ The county treasurer shall register each bond in a book kept for that purpose in his office, noting the school district, amount, date, time and place of payment, rate of interest and such other facts as may be deemed proper, and cause said bonds to be delivered promptly to the purchasers thereof upon payment therefor, and he shall hold the proceeds of the sale of said bonds subject to the order of the district board to be used solely for the purpose for which said bonds were issued; and when said bonds shall have been so executed, registered and delivered, their legality shall not be open to contest by such school district or by any person or corporation for or on its behalf for any reason whatever.”

It is not necessary to consider the question of whether or not there may be any legal limitation to the broad language of the last provision above quoted, but it is beyond question that in the absence of fraud or some fatal defect in the proceedings, known to the purchaser of the bonds at the time of, or prior to such purchase, all further questioning is foreclosed. The bonds in the present case were executed, registered and delivered in strict accordance with the requirements of the statute, and after a very careful investigation of the evidence in the case, we find no indication whatever of any conspiracy or any fraud, or that the purchasers of the bonds had any notice or knowledge of any irregularity or defect in the proceedings which resulted in the issue of the bonds.

The decree of the lower court is therefore affirmed.

Affirmed.

McBride, C. J., and Bennett and Harris, JJ., concur.

Denied February 17, 1920.

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Rehearing

Petition for Rehearing.

(187 Pac. 624.)

On petition for rehearing.

Rehearing Denied.

Mr. Ralph R. Duniway and Mr. James R. Rain, for the petition.

Messrs. Wilson & Guthrie, for respondent, School Dist. No. 3, contra.

Messrs. Teal, Minor & Winfree, for respondents, Keeler Bros, and Fred Grlenn, contra.

Mr. George W. Mowry, for respondents, Walter H. Evans, District Attorney, and John M. Lewis, contra.

BURNETT, J.

The petition for rehearing contends that this court should have directly examined into the question of whether or not certain electors who voted at the bond election mentioned in the pleadings were really qualified to vote on that question. We remember that the essence of the complaint is that the directors of the district, its clerk, the judges and the clerk of the election, the district attorney of Multnomah County, the purchasers of the bonds, and their agents all entered into a conspiracy to defraud the district by loading upon' it an unauthorized indebtedness to be accomplished by permitting fraudulent voting in the election called for the purpose of sanctioning the issuance of bonds. Section 2 of Chapter 172 of the Laws of 1913 authorizes the school districts of the state to contract a bonded indebtedness for the purpose of providing funds for the erection of school buildings, the purchase of sites therefor, etc. The school board may, and when petitioned by ten legal voters of the district must, give notice of an election to determine whether bonds shall be issued for the purpose named. The form of the notice is prescribed by the statute. This excerpt is taken from subdivision 1 of that section:

“Immediately prior to opening the polls, the legal voters of the district shall convene (the chairman or some other member of the district school board calling the meeting to order), and elect three judges and a clerk who shall conduct the election, and when the polls are closed, canvass the vote and certify the result to the district school board, the county treasurer and the county superintendent. ’ ’

It is said further in subdivision 2:

“If a majority of the ballots cast are ‘Bonds — Y es, ’ the district school board shall, without a further vote of the legal voters and as soon as practical, issue the negotiable coupon bonds of the district, not exceeding in par value the amount stated in the notice of election and for the purpose therein named, bearing not to exceed legal interest per annum, payable semi-annually, redeemable at the pleasure of the district but due and payable absolutely 20 years from date; * * all such bonds shall be sold by the district school board for the best price obtainable, but in no event for less than par and must recite that they are issued under the provisions of this act; all such bonds shall be signed by .the chairman of the district school board, attested by the district clerk, and registered by the county treasurer; and the interest coupons thereto annexed shall be signed by said chairman and clerk, by their original or engraved facsimile signatures.”

And in subdivision 3:

“The county treasurer shall register each bond in a book kept for that purpose in his office, * * and cause said bonds to be delivered promptly to the purchasers thereof upon payment therefor, and he shall hold the proceeds of the sale of said bonds subject to the order of the district board to be used solely for the purpose for which said bonds were issued; and when said bonds shall have been so executed, registered and delivered, their legality shall not be open to contest by such school district or by any person or corporation for or on its behalf for any reason whatever.”

2. No pretense is made in the complaint that the bond election was not legally called or that regular notice was not given, nor is it contended that the legal voters did not elect the three judges and clerk who conducted the election. We thus have a tribunal chosen by the people themselves in popular assembly, authorized to conduct the election and certify the result to the school board, the county treasurer, and county superintendent. The statute does not authorize any appeal, review or contest of the decision of that tribunal. Contests of elections are authorized by statute only as between nominees claiming to be elected to an office. Contests as such are not provided for respecting elections about measures submitted to the people. As said in Bradburn v. Wasco County, 55 Or. 539 (106 Pac. 1018):

“The determination of election contests is a judicial function only, so far as authorized by statute.”

The same language is quoted in Tazwell v. Davis, 64 Or. 325 (130 Pac. 400).

3. In substance and effect the effort of the complaint is to contest the election by which the bonds were authorized. In the absence of a statute permitting this to be done, we cannot entertain that contention. The question of whether or not the voters mentioned were authorized to vote is not available in this case. The decision of the tribunal created by law and chosen by the people to decide such matters is final, in the absence of some statute authorizing us to review its determination, or unless fraud is shown sufficient to vitiate the proceeding. It was in reference to this last feature that the court, speaking by Mr. Justice Benson, used the language:

“But it is beyond question that in the absence of fraud or some fatal defect in the proceedings, known to the purchasers of the bonds at the time of, or prior to such purchase, all further question is foreclosed.”

4. We must presume that the election was regularly called, and that the' assembled electors regularly chose the judges and clerk of the election. It is not alleged in the complaint that any objection was urged by challenge or otherwise against the right of the individuals to vote who are named in.the complaint as illegal voters. Neither is it intimated that the election officers had any notice that any of those offering to vote were not entitled to vote. Fraud cannot be predicated on such a complaint. In other words, given a tribunal -properly organized to decide a question, its determination, in the absence of fraud, must stand as against collateral attack in the absence of any statute affording a right of contest or appeal, or otherwise reviewing that decision. The proceeding before us was commenced too late, in any event, to raise the question, for the statute expressly says that:

“When said bonds shall have been so executed, registered and delivered, their legality shall not be open to contest by such school district or by any person or corporation for or on-its behalf, for any reason whatever. ’ ’

In the original brief, under the second subdivision of their points and authorities the plaintiffs maintain that:

‘ ‘ This isa suit to cancel the bonds issued by the Park-rose School District.”

In their brief in support of the petition for rehearing, they argue vehemently that “this suit is not to contest the legality of the bonds, but to require the defendant to redeem the bonds,” and they say that the bonds can be paid at any time. Even so; but the statute already quoted makes them redeemable at the pleasure of the district, but due and payable absolutely twenty years from date. The statute is not an authority for the contention of the plaintiffs. The district is not, so far as the record -shows, attempting to exercise its option to redeem the bonds. If this be considered as a suit to redeem the bonds, it is not at the pleasure of the district, but at the behest of some discontented electors.

The authorities cited in the brief for rehearing to the effect that the plaintiffs are entitled to the relief of a judgment for the school district for whatever damages it has suffered or will -suffer as a result of the bond issue, are based upon the principle that fraud has been shown in the genesis of the bonds, or that there was no authority in law for their issuance. For instance, in Plainview v. Winona etc. R. R. Co., 36 Minn. 505 (32 N. W. 745), the town, under an unconstitutional statute, issued bonds in aid of a railroad. The defendant, the beneficiary, took them with full knowledge of their invalidity and negotiated them to citizens of another state for full value. The United States court gave judgment in favor of the holders against the town for unpaid coupons, holding that they took in good faith. The state court held in the case under consideration that the bonds were void; that the defendant participated in their issuance, knowing all the facts, and had negotiated them so that the town could not recall them, and hence equity would give a money relief to cover the liability of the town as declared by the federal court.

In Farnham v. Benedict, 107 N. Y. 159 (13 N. E. 781), the bonds were issued in aid of a fictitious railroad company, which failed to perform the consideration of the bonds. The court held the bonds void except as to innocent holders, but held liable to the extent for which the town was liable the defendants who negotiated the same with knowledge of their defects. In McMillan v. Barber Asphalt Paving Co., 151 Wis. 48 (138 N. W. 91, Ann. Cas. 1911B, 53), the contract for paving under which the bonds were to be issued was vitiated by the fraud of bribing an alderman of the city, who was thus induced to assent to the contract. Litigation was instituted to prevent the execution of the contract and to declare it void. But, notwithstanding the pendency of this litigation, the company performed the contract and thus apparently authorized an imposition upon the property of the plaintiff to pay its proportionate cost of the pavement. The court there held that, on account of the plaintiff’s property having been made liable to innocent holders of the bonds, the company which had brought about 'this situation in pur-' suance of the fraud practiced should save him harmless from the impost by paying the amount thereof. In Luetzke v. Roberts, 130 Wis. 97 (109 N. W. 949), the defendant by means of fraud induced the plaintiff to sign a promissory note. Pending the plaintiff’s suit to cancel the same, the defendant sold it to an innocent purchaser. As it was thus placed beyond the power of the court, the final decree for the plaintiff was for a money damage in lieu of the paper, as equitable relief instead of the cancellation. This feature is common to all the precedents cited in the brief supporting the petition for rehearing. As pointed out in the former opinion, there is no evidence of fraudulent conduct on the part of anyone connected with this proceeding; in fact, none is set forth in the complaint except statements amounting only to conclusions of law. On this account the precedents cited by the plaintiffs are not in point.

Reduced to its lowest terms, the most that is charged in the complaint is that the judges of the election decided erroneously the matter of .the right of certain individuals to vote. In the absence of fraud or. want of jurisdiction, neither of which is shown in the present procedure, we cannot review the decision of the judges of which the plaintiffs complain. We adhere to the former opinion. Affirmed. Rehearing Denied.

McBride, C. J., and Benson, J., concur. Harris, J., concurs in the result.