The Twin Falls times. [volume] (Twin Falls, Idaho) 1905-1916, 1913-07-08
COURT DECISION
ON BOND POWER
Dispute Over Rights Of Twin
Falls Canal Company Settled
DECISION OF JUDGE T., A.
WALTERS OF FOURTH DISTRICT.
Majority of Court UphoIds Legality of
Corporations 100000 Obligation
Justice Sullivan Dissents.

But this corporation shall have no
power to borrow money, or to exc
cute or negotiate any note, bond or
other obligation for the payment of
money, nor shall it convey by way of
deed or mortgage or deed of trust any
of its real property or water rights"
Provided in articles of incorpora-
ton of the Twin Falls Canal company,
as originally drawn.
And the corporation shall have
power to borrow money and to exc
cute notes, bonds or other obligations
for the payment of money for the pur-
pose of raising revenue to defray the
expense of the maintenance and oper-
alton of the canal company. Change
made in the articles of incorporation
of the Twin Falls Canal company with
the knowledge and consent of the state
land board.
In an elaborate opinion written by
Chief Justice Ailshie and concurred in
by Justice Stewart, the state supreme
court on Saturday decided that the
Twin Falls Canal company has the
right to bond the property of the COM
pany to raise revenue to defray the ex-
pense of maintenance and operation of
the system.
In this opinion the Judgment of
Judge Edward A. Walters of the
Fourth district is affirmed in refusing
to grant an injunction to prevent the
issuing of bonds. The title of the case
is E. r. Hobbs against the Twin Falls
Canal company and the Twin Falls
Land e Water company. The latter
is the construction company that put
in the system in Lincoln and Twin
Toll hot LOT Al
over to the Twin Falls Canal COM
pany that has since operated the sys-
TEN.
The case grew out of movement
by the Twin Falls Canal company to
issue bonds against the property of
the company, including the irrigation
the franchise to the amount of $780,
900.
Mr.. Hobbs is stockholder in the
Twin Falls Canal company and a set
tier under the canal system on land to
which the water right is appurtenant.
He attacked the bond issue and sought
to secure an injunction to prevent it.
In summing up his opinion, Chief
Justice Ailshie says: 1--WE conclude
that the canal company has the power
and authority, both under it's articles
of incorporation and the statute of the
state, section 2769, Revised Code, as
amended by the 1911 session of the
| legislature 1911 Session Laws, page
163) to borrow money and execute
bonds and mortgages therefor and
that the directors of the corporation
may do so without submitting the
question to the stockholders AS to
the form. contents and legal effects of
the mortgage in it's various stipula-
| tions and covenants, we express no
opinion, for the reason that no ques-
ton is raised or presented in respect
thereto. We have only dealt with the
power and authority of the corpora
tion to mortgage and of the directors
to represent and act for the corpora
| ton in so doing"
| Justice Sullivan dissents. He treats
the Twin Falls Canal company, in his
dissenting opinion, as simply an op-
Grating company trustee for those
who own the equitable title to the irri-
cation system and the water rights.
Justice Sullivan combats the idea that
the directors of such a company have
autocratic power to act without first
getting the sanction of the stockhold-
ers for whom they are in reality but
trustees. He closes with this pertin-
ent paragraph:
"The judgment of the trial court
should be reversed and the stockhold-
ers given the opportunity to pass up
on the question of mourning said in
debtedness, as said Indebtedness Is
not intended to be incurred for the
| payment of any present Indebtedness
due from the corporation to anyone. !"
Statesman.