Court Opinion

ID: 7962232
Source: CourtListenerOpinion
Date Created: 2022-09-09 00:47:21.682938+00
Date Added: 2024-06-11T16:34:31.603507
License: Public Domain

*378
By the Gowrt

McMillan, J.
This case comes up ou an appeal from an order overruling a demurrer to the complaint. The allegations in the complaint as to the election ordered, and the notices thereof, and the holding the election, we think, are sufficient; they are conclusions oí fact, or at least are not such purely legal conclusions as to be objectionable in pleading. People ex rel. Crane v. Ryan, 2 Kernan, 434. The object of the Legislature in the act approved August 11, 1858, under which the defendant proceeded in issuing the bonds in question, was to enable the district to pay off its then existing indebtedness; to accomplish this the act empowers the board, under certain limitations and restrictions, to borrow money and issue bonds. If a creditor within the terms of the act, sees proper to take the bonds of the defendant, issued in pursuance of the act in payment of his debt, the object of the act is certainly accomplished, and we think it is a substantial compliance with the law. The defendant could certainly negotiate the bonds to the creditor for cash, and then pay him his debt with the money. We are unable to see that any principle is violated in avoiding this indirection and formality, by using the bonds directly in payment of the debt. Meyer v. The City of Muscatine, 1 Wallace, 392. Nor is it necessary under the terms of this act, that the complaint should aver that the bonds were taken at par. If it should be held that the board was limited in disposing of these bonds, to sell them at par, it must be set up as a defense, and cannot be taken advantage of on demurrer to the complaint. But it is urged by the appellant that there is no allegation of facts showing the defendant indebted to Woodman, nor that he took them in settlement of any claim against the defendant. Whether the allegation of indebtedness in the complaint is sufficient or not, is not material in this case. The bonds are negotiable, and the plaintiffs are tona fide holders for value. The defendant having power under the act to issue bonds of this character, and the complaint alleging that the bonds were executed and de*379livered by tbe defendant, tbe presumption, yrvrna faeie, at least, is that the bonds were legally issued. If the fact that the bonds were not issued in accordance with the terms of the act conferring the authority to issue them, can be taken advantage of as against an assignee of the bonds for value and without notice, it must be taken by answer, and not by demurrer. Straus v. Eagle Ins. Co., 5 Ohio St. R. 62; Barker v. M. Fire Ins. Co., 3 Wend. 91; Gelpecke v. City of Dubuque, 1 Wallace, 223; Nininger v. Carver Co., 10 Minn. 133; Ang. & Ames on Corp. Sec. 267.
We do not deem it necessary that the complaint should show that a record of the election, held under the provisions of this act, was made. We have already determined that the averment as to the holding of the election is sufficient; that fact, therefore, distinctly appears. Assuming, for the purposes of this demurrer, that the question as to the election may be inquired into between these parties, the election is the material fact, and however th& proof of this fact may be affected by the failure to keep a record of it, we think the record is not essential to the power of the board to issue the bonds. The fourth point urged by the appellant is; that the bonds are not executed as required by said act; they should have been executed by the officers of the board as the “ Board of Education,” whereas, they are only executed by some persons styling themselves “ President and Inspectors,” and it is not alleged, even, that they were such officers as they style themselves, and the bonds are not attested by any clerk of the district, and they have not the corporate seal of the defendant, but only the individual seal of the “ President and Inspectors.” The language of the act in reference to the execution of the bonds is, that “ the Board of Education shall issue their bond, or bonds, executed in their name of office, binding themselves and their successors in office, for the payment of such sums as may be borrowed, and upon such terms as may be agreed upon, which bond, or bonds, shall be attested by *380the clerk of said school district.” The obligatory portion or body of the bonds, is in the name of the “ Board of Education of the town of Minneapolis, and their successors in office.” The concluding or ensealing clause is in the following language: “ In witness whereof, the President, Inspectors, and Secretary of said Board of Education, have hereunto set their hands and seals, the fourth day of October, Anno Domini, one thousand eight hundred and fifty-eight;” to which is signed the names of one person, “President,” four others “ Inspectors,” and attested by one as “ Secretary,” a scroll being attached to each signature. It is altogether proper, under this legislation, that the officers of the board should execute the bonds issued in pursuance of it; the only question is, whether, by the language of the ensealing clause, the bond is made the act of the individuals signing it, or does it stand as the bond of the corporation, conceding them to be the officers ? "We think the latter view must obtain; it would have been more accurate, undoubtedly, to have used the corporate style of the defendant in the ensealing clause, but we think there is nothing in the language used which is inconsistent with the body of the bond, purporting to be the bond of the Board of Education. No individual is named in the ensealing clause, but only certain officers by tbeir titles, and these, the officers of the board who must or may sign the bond, to constitute it the bond of the obligor. It is correctly stated by his Honor, the Judge of the District ‘ Court, that “ the act incorporating the defendant (Laws 1857, Extra Sess. p. 168) does not require or direct any corporate seal, nor define in what manner the board should execute instruments in writing. Sections 4, 5, and 6, prescribe the officers of the board and their duties; the board has no officer technically called ‘clerk,’ and there is no such officer in the School District under this act. The functions of clerk are performed by the secretary of the board; section 6. The act requiring the bonds to be attested by the clerk of the district, must be *381construed in connection with the act of 1857, and the attestation by the secretary of the board is all that could be done, and is, we think, a sufficient compliance with the law. The annexation of a separate scroll for a seal, opposite each name, does not vitiate the bonds, nor render the signers of them personally. liable in this case. The repetition of the seal is immaterial.” Reynolds v. Glasgow Academy, 6 Dana 37; Milldam Foundry v. Hovey, 21 Pick. 417.
The complaint alleges that the defendant is a corporation, and that it, by its duly elected and qualified officers, and under their hands and seals, executed the bonds sued upon; these facts, admitted by the demurrer, constitute a sufficient averment of the execution of the bonds by the defendant. Nininger v. Carver Co., 10 Minn. 133.
The order overruling the demurrer is sustained.