12 S.D. 535 | S.D. | 1900
Lead Opinion
This is an action by the plaintiff to recover from the defendant the amount due upon a number of coupons detached from certain bonds of a series of 120 bonds, for 1500 each, issued by the defendant, bearing date October 4, 1890, payable 15 years after date, and which are in the usual form. To each of these bonds were attached 30 coupons, for the payment of the interest semiannually, which are in the usual form. Each bond contained the following recital: “And it is hereby certified and recited that all acts, conditions, and things required to be done precedent to and in the issue of said bonds have duly happened and been performed in regular and due, form as required by law, and that the total amount of this 'issue of bonds, together with all other outstanding indebted
It was alleged in the answ'er of the defendant that it was organized under and by virtue of Chapter 47 of the Session Laws of 1887, being Sections 1808 to 1839 of the Compiled Laws. By Section 1811, Comp Laws, it is declared that each public school organization effected in pursuance of the act should be a “body corporate,” and should possess the usual powers of a corporation for public pur
It is further alleged in the answer that the indebtedness of the defendant prior to the issue of bonds now under consideration was $32,000. That amount added to $60,000, the amount of the bonds of said issue, makes a total of §92,000. It is further alleged in the answer that the assessed valuation of the
The third defense, that the money was not used for the purposes for which the indebtednes was declared to be incurred on-the face of the’bonds, cannot be considered as a defense to the action. The defendant, being authorized to issue bonds for the purpose declared on their face, is estopped from showing that the money was misapplied, and not used for the purposes for which the bonds were issued. It is declared in the bonds that they are “issued in accordance with the provisions of Sections 1830, 1831, and 1832 of the Compiled Laws of 1887 of Dakota Territory, and in force in the State of South Dakota, authorizing boards of education to issue bonds to raise funds to purchase school sites and erect school buildings, or to fund bonded indebtedness.” It will be observed that the declared purpose for which the bonds were issued was in strict conformity with the provisions of Section 1830, Comp. Laws. The defenses we have been considering have been passed upon by the United States court of appeals for the eighth circuit, since this appeal wars taken and the brief’s in this case filed, in a case in which the board of education of the city of Huron, in the State of South Dakota, was plaintiff in error, and the National Life Insurance Company of Montpelier, Vt., was the defendant in error, and in two other cases in which said board of education was the plaintiff in error, wherein were involved a number of the bonds of the same series that are before us on this appeal; and that learned court reached the same conclusions to which this court has arrived in regard to the questions discussed. Board of Education of City of Huron v. National Life Insurance
The fourth defense, namely, that the defendant did not make provision before or at the time of issuing said bonds for the payment of an annual tax sufficient to pay the interest and principal of said bonds as the same became due. as required by the provisions of Article 13, § 5. of the constitution of this state, will now be considered. Said section reads as follows: “Any city, county, town, school district or any other subdivision incurring indebtedness shall, at or before the time of so doing, provide for the collection of an annual tax sufficient to pay the interest'and also the principal thereof when due, and all laws or ordinances providing for the payment of the interest or principal of any debt- shall be irrepealable until such debt shall be paid.” In the case of National Life Ins. Co. v. Board of Education of City of Huron, 10 C. C. A. 637, 62 Fed. 778, in which a portion of the bonds now under consideration were involved, the United States court of appeals for the eighth circuit held that the defendant was estopped from setting up this defense, by virtue of the recital contained in the bonds. In that case the court, after reviewing at length the authorities upon that question, says: “In view of the rule that these authorities establish and illustrate, there is no longer any difficulty in disposing of the question we have, been considering. Full power to perform the conditions precedent that were not fulfilled in the case before us, and to make a lawful issue of bonds, was vested in the board of education. * * * This board, by the act of issuing the bonds, decided that this and all other conditions precedent to their issue had been performed. It certified that fact on the face of the bonds it issued, and
It will be observed that Article 13, § 5, of our constitution provides that “any city, * * . * school district or any other subdivision incurring indebtedness shall at or before the time of so doing provide for the collection of an annul tax sufficient to pay the interest and also the principal thereof when due.” This provision is mandatory and self-executing. “It supplies a sufficient rule by means of which * * * the duty may be enforced.” Cooley, Const. Lim. (5th Ed.) 100; City of East St. Louis v. People, 124 Ill. 655, 17 N. E 447. No supplement al legislation is necessary in order to make it effectual. Every debt legally authorized, therefore, thereafter incurred by any of the public corporations mentioned in the section, carries with it the obligation of the corporation to levy and collect the necessary taxes required for its payment. This section of our constitution is substantially a copy of a portion of Article 9, 12, of the constitution of the State of Illinois, adopted in 1870. The portion of that section referred to reads as follows: “Any county, city, school district or other municipal corporation incurring any indebtedness as aforesaid shall, before or at the time of doing so, provide for the collection of a direct annual
Dissenting Opinion
(dissenting). I concur in the contusion that defendant is a public corporation, distinct from that of the city of Huron. The act providing for its creation expressly authorized the issuing of bonds for the purposes recited in the bonds in suit, upon a vote of the people, which the answer admits was had, and they seem in form, to meet all the requirements of the statute (Comp. Laws, §§ 1830-1882). But defendant alleges “that neither at the time of the issuance of the bonds mentioned and described in plaintiffs complaint, nor at any' other time, either before the issuance of said bonds, nor since the issuance thereof, has there been any provision made either by the city of Huron, the municipal corporation proper, or by the board'of education of the city of Huron as a department thereof, or otherwise, for an annual tax sufficient to pay the interest, and also the principal thereof, when due, or any part thereof, as required by Section 5 of Article 13 of the constitution of the St^te of South Dakota; and no resolution or action whatever was ever taken by any board or any authority of said 'city, or of the board of education, for providing for any tax for the payment of the principal or interest and coupons of the bonds mentioned and described in plaintiff’s complaint
The view taken by the state court in Texas is approved by the federal court of aippeals of the fifth circuit, and is, we think, sustained by the decisions of the United States supreme court. Quaker City Nat. Bank v. Nolan Co., 14 C. C. A. 157, 66 Fed. 883. In Dixon Co. v. Field, Mr. Justice Matthews, speaking for the federal sujireme court, says: “Recurring, then, to a consideration of the recitals in the bonds, we assume, for the Xiurposes of this argument, that they are, iu legal effect, equivalent to a rexiresentation or warranty or certificate on the part of the county officers that everything necessary by law to be
The principles upon which this controversy must be determined are stated with peculiar clearness and felicity in the foregoing quotation. The federal court says: “The constitution and statute intrusted to this board the power, and imposed upon it the duty, to ascertain and determine, before it issued the bonds, whether or not this condition had been performed. Neither the statute nor the constitution referred the purchaser to or required any public record of the performance of this condition, before or at the time of the issue of the bonds, other than the act of the board in issuing them. ” If these assertions are well founded, the conclusion of the national court is certainly correct. But, with all due deference to Che distinguished jurists who rendered the opinion, I am