Nesbit v. Independent District of Riverside

by David Josiah Brewer

United States Supreme Court

144 U.S. 610

Nesbit  v.  Independent District of Riverside

Action by Eleanor Nesbit against the independent district of Riverside to recover on certain bonds issued by the district. Judgment for defendant. Plaintiff brings error. Affirmed.

STATEMENT BY MR. JUSTICE BREWER.

This was an action on five bonds purporting to have been issued by the school district defendant. The case was tried by the court without a jury. Special findings of facts were made, of which the following are the only ones material to the questions presented:

'(2) The value of the taxable property within the boundaries of the independent district, as shown by the state and county tax lists, was for the year 1872 forty-one thousand four hundred and twenty-six dollars, and for the year 1873 sixty-eight thousand three hundred and seven dollars.

'(3) That on the 26th and 27th days of March, 1873, the indebtedness of said independent district, exclusive of the bonds declared on in this action, exceeded the sum of thirty-five hundred dollars.

'(4) That the bonds sued on in this action bear date March 27, 1873, maturing ten years thereafter, are five in number, for five hundred dollars each, or $2,500.00 in the aggregate, exclusive of interest, are numbered 14, 15, 16, 17, and 18, and that the signatures thereon are the genuine signatures of the officers of the district purporting to sign the same, and that said bonds, with the accrued interest, now amount to the sum of five thousand six hundred and ninety-five dollars, which bonds and interest coupons were produced in evidence by plaintiff. The said bonds and interest coupons are in all respects alike except as to number, and each coupon refers to the number of the bond to which it belongs and to said act under which it was issued. All of said bonds contain the following provision in the body thereof: This bond is issued by the board of directors of said independent school district under the provisions of chapter 98 of the Acts of the Twelfth General Assembly of the state of Iowa, and in conformity with a resolution of said board dated the 26th day of March, 1873. A copy of the act referred to is printed on the back of the bonds. The exhibits attached to plaintiff's petition are correct copies of said bonds and coupons.

'(4 1/2) That all of said five bonds and the coupons attached belong to the same series, and were issued at the same time, under the same circumstances, and part of the same transaction.

'(5) That the plaintiff, who is a citizen of Great Britain, bought these bonds, and all the interest coupons belonging thereto, as an investment from one Henry Hutchinson on the 20th day of December, 1877, paying him therefor the sum of two thousand dollars; that said plaintiff, when she made such purchase, had no other knowledge concerning the bonds, or of the facts connected with their issuance, than she was chargeable with from the bonds themselves, and from the provisions of the constitution and laws of the state of Iowa.

'(6) That said bonds were issued without consideration.

'(7) That plaintiff brought suit in the United States circuit court at Des Moines, Iowa, against the said independent district of Riverside upon certain of the interest coupons belonging to the bonds Nos. 14 and 15, being two of the bonds included in the present action, and in the petition in that cause filed the plaintiff averred that she was the owner of the two bonds Nos. 14 and 15, and the coupons thereto attached, and asked judgment upon the six coupons then due and unpaid. To this petition the defendant answered that at the time the bonds were issued the indebtedness of the district exceeded five per cent. of the taxable property of the district, as shown by the state and county tax lists, and that the bonds were therefore void, under the provision of the constitution of the state of Iowa; that no legal or proper election upon the question of issuing the bonds was held; that the bonds were issued under the pretense of building a schoolhouse with the proceeds thereof, but the same has not been built, nor was it intended that it should be built; that the district received no consideration for the bonds, and that the same are fraudulent and void; that plaintiff is not a bona fide holder of said bonds.

'The case was tried to the court, and judgment was rendered in favor of plaintiff for the full amount of the six coupons declared on in that cause. It is shown by evidence aliunde that the five bonds bought by plaintiff were in possession of plaintiff's counsel at the trial of the action at Des Moines, and that bonds Nos. 14 and 15 were actually produced and exhibited to the court at such trial, and offered in evidence. It is not shown that at such trial the fact that plaintiff had bought and was the owner of bonds Nos. 16, 17, and 18 was made known to the court. The judgment entry in said cause shows that on that trial it appeared from the evidence that when said bonds Nos. 14 and 15 were issued the indebtedness of the district, exclusive of these bonds, exceeded the constitutional limitation of five per cent.; that the judges trying said cause were divided in opinion upon the question whether the recitals in the bond estopped the defendant from showing this fact against plaintiff, and certified a division of opinion on this question, judgment being rendered in favor of plaintiff. It does not appear that the cause was taken to the supreme court upon the question certified.

'(8) Under the statutes of Iowa, in force in 1872 and 1873, regulating the assessment of property for the purpose of state and county taxation, the lists thereof could not be computed before the month of August, and in March, 1873, when these bonds were issued, the last computed tax list was for the year 1872.'

Upon these facts judgment was entered in favor of the defendant, (25 Fed. Rep. 635,) to reverse which judgment this writ of error was sued out.

Mr. Justice HARLAN, dissenting. 25 Fed. Rep. 635, affirmed.

W. Willoughby, for plaintiff in error.

[Argument of Counsel from pages 613-617 intentionally omitted]

Mr. Justice BREWER, after stating the facts in the foregoing language, delivered the opinion of the court.

Notes