Leeman v. Perris Irrigation District

CHIPMAN, C.

This is an action to recover the amount of certain so-called “installment coupons,” attached to certain bonds of defendant, a corporation organized under the commonly called Wright Act (Stats. 1887, p. 29). The trial court gave judgment for defendant upon the ground that the bonds to which these coupons were attached were disposed of “in a manner and for a purpose unauthorized by law, and that said bonds are, and each of them is, absolutely void.” Plaintiff appeals from the judgment and from the order denying his motion for a new trial. The bonds in question are numbered 192, 623, and 656, and are part of a series aggregating $442,000, signed and ready for issue January 1, 1891.

Bond No. 192 was one of a large number delivered to the Bear Valley Irrigation District under a certain contract in exchange for certain so-called class B acre water-right certificates, under circumstances similar to a like exchange in the case of

Stimson

v.

Alessandro Irrigation Dist.,

135 Cal. 389. Plaintiff had notice of all the facts relating to the exchange of this bond. On the authority of the case just cited, this bond was void in plaintiff’s hands. Bonds Nos. 623 and 656 were, among many others, part of the original issue of January, 1891, and were parted with in exchange for outstanding warrants of defendant on May 1, 1894, which latter had been

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previously delivered because there was no money in the treasury of defendant to pay current liabilities, and the court found that “said warrants in all instances were issued for salaries of officers of the district, and for defraying the expenses incurred in the care and operation of the district.” The following is the form of these warrants: “To the treasurer of the Perris Irrigation District: Pay to the order of . . . the sum of . . . dollars, payment in full of claim . . . and charge the same to general fund.” Appellant does not challenge the finding that he had notice when the bonds were transferred to him that they were issued in payment of outstanding warrants of the district. But this is not a finding that plaintiff had actual knowledge that these two bonds were issued for warrants that were given in payment of claims for labor and salaries. It is hence claimed that the'findings do not support the decision. It was held in