Court Opinion

ID: 9308336
Source: CourtListenerOpinion
Date Created: 2022-12-02 17:18:59.034478+00
Date Added: 2024-06-11T17:14:01.421780
License: Public Domain

SHIRAS, District Judge
(after stating the facts). Upon the foregoing facts I hold as a matter of law that the plaintiff is entitled to judgment for the amount due upon the bonds and coupons declared on. The evidence shows that when the district township of Garfield was segregated from the district township of Doon it assumed the payment of the Wagner bonds as part of the indebtedness equitably chargeable to it, this being done in accordance with the provisions of section 2821, McClain’s Code of Iowa, which provides that upon the division of an existing district into two or more new districts an equitable division of the assets and liabilities shall he made. The Wagner claim, having been put into judgment against the district township of Doon, became a valid and enforceable debt against that district, which then included the territory subsequently set apart as the district township of Garfield. This judgment was satisfied by the issuance to Wagner of $5,200 of the bonds of the district township of Doon, and the payment thereof was assumed by the ■district township of Garfield upon its separation from the parent township. If there existed a defense to the claim of Wagner against the district township of Doon because of the exorbitant prices *755charged, for the erection of the school houses in the township, or because the district had reached the limit of indebtedness which it could lawfully incur under the provisions of the constitution of the state of Iowa, these defenses should have been availed of to prevent the rendition of the judgment entered in the district court of Lyon county. The rendition of the judgment established the validity of the claim sued on, and, when the district township refunded the judgment in bonds issued for that purpose, the latter were not open to a defense which might have been urged against the original Wagner claim. As already stated, the payment of these bonds, which had passed into the hands of innocent holders, was assumed by the district township of Garfield, which in turn, under the provisions of the laws of Iowa, refunded the same by exchanging therefor the bonds in suit. This exchange did not increase the indebtedness of the district township of Garfield, the facts bringing the case within the exception recognized by the supreme court in Doon Tp. v. Cummins, 142 U. S. 372, 12 Sup. Ct. 220, to the effect that an actual exchange of bonds for a pre-existing indebtedness would not be held to increase the indebtedness of the municipality. See, also, City of Huron v. Second Ward Sav. Bank, 30 C. C. A. 38, 86 Fed. 272. As the evidence fails to show that the Wagner bonds were invalid wheij, payment thereof was assumed by the defendant district, and as it does not appear that a defense could have been successfully made thereto by the present defendant after it had assumed payment thereof, it follows that no defense is made out by showing that the bonds in suit were exchanged for those assumed by the defendant district. Judgment for the plaintiff.