to make up $225,000 at some price or another, and Sipes was to have all of the excess over that number of shares. It is quite clear that the negotiations of the parties, or at least what their understanding was in respect to this matter, must be ascertained before we can come to any correct construction of the agreement; and nothing of that kind is set forth in the complaint. This instrument was drawn and executed in New York, and, according to the complaint, the consideration proceeding from Sipes to Seymour was $800 cash, and about $500 more paid out for maps and plans to be used in making sale of the mine. That was something like $1,300. Upon that payment, Sipes, if his own statements in this complaint are to be regarded, is to recover from the defendants here over $500,000. Such an agreement as that would require very close scrutiny to see whether it is not within the usury law of the state of New York, where the paper was drawn. In any event, before we can reach a conclusion as to what the agreement may be, and before we can allow any action to stand upon it, we must know what the understanding of the parties was at the time this agreement was drawn, what they were trying to express in writing, not for the purpose of varying the terms of the writing, or contradicting it, not for the purpose of avoiding it in any way, but merely to understand it, to know its meaning. The plaintiff has not in his complaint set forth any of the negotiations. He has not told us with what understanding the parties made this agreement. Therefore we cannot reach any conclusion upon it. I think the demurrer ought to be sustained. The plaintiff ought to be required to give more of the circumstances of the agreement between the parties at the time this instrument was drawn, so that we may know what theory they were proceeding upon when they made this paper. It may be, true, as is contended by the plaintiff, that if this was drawn by J. F. Seymour, with the authority and under the direction of the other defendants in the suit, Mrs. Seymour and Pell, they are bound equally with J. F. Seymour. I think probably that is true; but the more important matter for us in the outset is to get some understanding about what the agreement means; what the purpose of the parties was when they framed it; how it is to be construed in order to determine the rights of the parties in respect to it. ETNA LIFE INS. Co. v. LYON COUNTY. (Circuit Court, N. D. Iowa, W. D. December 15, 1890.) 1. COUNTIES INDEBTEDNESS-REFUNDING BONDS. Refunding bonds issued by a county for the purpose of taking up a prior valid indebtedness of the county are not rendered invalid by the fact that they exceed the constitutional limitation on the indebtedness of counties and other municipalities. 2. SAME-ACTION ON BONDS-ESTOPPEL. Representations made by an agent appointed by a county board "for the purpose of funding and refunding the county indebtedness" that all the indebtedness proposed to be refunded by means of such bonds has been reduced to judgment, and then bonded, thus rendering the new bonds valid, though they exceed the constitutional limitation, do not estop the county to show the contrary, and that the bonds are invalid as against a purchaser thereof from such agent, as the county records are the best evidence of the purpose in issuing the bonds, and purchasers are bound to take notice thereof. 8. SAME. Where a county, having power to fund its indebtedness, issues bonds in payment of judgments standing in full force against it, it cannot attack the validity of the bonds, in an action thereon, by showing that the judgments against it are invalid because in excess of the constitutional limitation of its indebtedness. 4. SAME-JUDGMENT WITHOUT PREJUDICE. In an action at law on county refunding bonds which are part of a particular series, where a portion only of the amount for which such series of bonds was issued constitutes a valid and enforceable indebtedness of the county by reason of the constitutional limitation on its indebtedness, the court cannot determine the order in which the bonds were sold or the rights of the respective owners thereof, and judgment must be rendered for defendant without prejudice to plaintiff's right to establish its claim in some other proceeding. By consent of parties, this case was tried to the court, and, from the evidence submitted, the court makes the following finding of facts: (1) This action is brought upon 410 interest coupons, for $30 each, originally attached to certain negotiable bonds, duly executed by the defendant, the county of Lyon, on the 1st day of May, 1885, and thereafter negotiated and delivered to the purchasers thereof, under the circumstances hereinafter stated, the said bonds being numbered as follows: 028 to 047, inclusive; 056 to 090, inclusive; 096 to 0120, inclusive. (2) The defendant, the county of Lyon, is a municipal corporation, organized under the laws of the state of Iowa, within the meaning of section 3, art. 11, of the constitution of the state of Iowa, and was so organized early in the year 1872. (3) The first state and county lists of the county were those for the year 1872, and the amount of taxable property within the defendant county, as shown by the state and county tax-lists for the various years since the organization of the county, is as follows: (4) The first bonds issued by the county were issued July 29, 1872. During the year commencing July 29, 1872, and ending July 28, 1873, the sum of $55,000 in bonds was issued by the defendant county, under chapter 174 of the Acts of the 14th General Assembly of Iowa, upon the following judgments, in the following amounts, at the date given below: On Wilson & Joy judgment, dated July 18, 1872, $6,018.00, 8 bonds, dated July 29, 1872, amounting to.... $ 6,000 "Jas. H. Wagner judgment, dated July 18, 1872, for $1,269.96, 3 bonds, dated July 29, 1872, amounting to... "John A. Schmidt judgment, dated Oct. 11, 1872, for $6,001.50, 10 bonds, dated Oct. 14, 1872, amounting to.. 1,200 6,000 "J. P. Gilman judgment, dated Oct. 11, 1872, for $402.28, 4 bonds, dated Oct. 14, 1872, amounting to... 400 "E. W. Lewis judgment, dated Oct. 11, 1872, for $1,528.40, 3 bonds, dated Oct. 14, 1872, amounting to.. 1,500 66 A. G. Case... 66 "Joy & Wright judgment, dated Oct. 11, 1872, for $743.10, 3 bonds, dated Jan. 6, 1873, amounting to.... Wm. Larrabee judgment, dated Oct. 11, 1872, for $1,840.34, 5 bonds, dated 1,800 700 "Wm. Larrabee judgment, dated Apr. 18, 1873, for $2,266.74, 4 bonds, dated Apr. 19, 1873, amounting to.. 2,200 "C. E. Gortz.... "Thos. Thorson judgment, dated Apr. 18, 1873, for $809.94.. "J. P. Gilman judgment, dated Apr. 18, 1873, for $499.20, 1 bond, dated Apr. 21, 1873, amounting to... 500 "C. A. Greeley judgment, dated Apr. 18, 1873, for $5,411.30, 7 bonds, dated Apr. 22, 1873, amounting to. 5,400 "Clark & Grant judgment, dated Apr. 18, 1873, for $8,197.70, 14 bonds, dated Apr. 22, 1873, amounting to.. 8,200 "Van Sickle & Bro. judgment, dated Apr. 18, 1873, for $1,268.70, 2 bonds, dated Apr. 22, 1873, amounting to.... 1,200 "Jas. H. Wagner judgment, dated Apr. 18, 1872, for $892.55, 4 bonds, dated May 5, 1873, amounting to..... 900 "J. C. Buchanan judgment, dated Apr. 18, 1873, for $1,210.24, 4 bonds, dated May 5, 1873, amounting to.... 1,200 "E. W. Lewis judgment, dated July 23, 1873, for $2,414.30, 7 bonds, dated July 28, 1873, amounting to.. 2,400 "P. H. Parsons judgment, dated July 23, 1873, for $2,897.89, 4 bonds, dated July 28, 1873, amounting to.... 3,000 "Geo. W. McQueen judgment, dated July 23, 1873, for $4,326.95, 7 bonds, dated July 28, 1873, amounting to.. 4,300 "C. L. Wright judgment, dated July 23, 1873, for $505.37, 1 bond, dated July 28, 1873, amounting to... 500 "C. A. Greeley judgment, dated July 24, 1873, for $6,754.66, 18 bonds, dated July 28, 1873, amounting to..... Total........ 6,800 $55,000 The last above judgment, being against the defendant and in favor of C. A. Greeley for the sum of $6,754.66, rendered on July 24, 1873, was rendered, bonded, and reversed under the following circumstances: C. A. Greeley brought a suit against the defendant county, in the district court of Plymouth county, Iowa, for the sum of $6,754.66. In this suit one F. W. Allen, a citizen and tax-payer of Lyon county, appeared and filed his petition of intervention prior to the rendition of judgment against the county, claiming and alleging that he was a citizen and tax-payer in the defendant county; that a great portion of the warrants sued on in the suit in which the petition of intervention was filed were fraudulent, and without consideration; that at the time they were issued the indebtedness of Lyon county exceeded the amount of 5 per centum of the taxable property of said county; and that the warrants upon which the suit was based were in excess of such limitation of indebtedness, and void. The petition of intervention further alleges that the board of supervisors of the county well knew that there was a good and valid defense to said warrants, and that the defendant county was not liable thereon, and that the warrants were fraudulent; and that, knowing these facts, they corruptly and fraudulently entered into an arrangement assisting the plaintiff in procuring a judgment against the said county upon the said warrants, and entered into conspiracy with the plaintiff to have a judgment taken upon the same, and to prevent a full and impartial defense being made by the defendant county. The plaintiff and defendant county each moved to strike this petition of intervention from the files, on the ground that the tax-payer had no right of intervention, or to defend for the county. The court in Plymouth county sustained these motions to strike, and at the same time entered judgment against the defendant county, in favor of the plaintiff, for the full amount claimed. From this judgment and these orders the intervenor appealed, and the supreme court of the state of Iowa, on December 9, 1874, reversed the judgment of the court beiow, rendered-against the county, and remanded the same for further proceedings. Thereafter, and on the 5th day of February, 1875, the case was transferred to Lyon county, on motion of the intervenor, where it was continued from term to term, and not disposed of, and no other judgment was entered therein. The judgment above referred to, and which was reversed by the supreme court, was entered against the county on the 24th of July, 1873. On the 28th day of that month, a transcript of the judgment was filed in Lyon county, and on the same day bonds were issued thereon in the sum of $6,800. The total amount of bonds issued upon judgments, not including the last judgment above referred to, was $48,200, and, including the judgment above referred to, there were issued an aggregate of $55,000. (4) I further find that the board of supervisors of Lyon county, on the 16th day of April, 1873, passed a resolution in the following form, to-wit: 66 Whereas, there is now considerable outstanding indebtedness of the county of Lyon, in the shape of county warrants; and "Whereas, the time for putting into judgment, and bonding the same, as provided by law, will expire on the 1st day of Sept. 1873; and "Whereas, it is the opinion of the board of supervisors of Lyon county, Iowa, that the best interest of said county will be subserved by said indebtedness being bonded, in accordance with law: "Now, therefore, be it resolved, and it is hereby moved and carried, by a majority of said board, convened as by law provided, that the holders thereof be, and hereby are, authorized and empowered to bring suit upon the same in any court in this judicial district, and obtain judgment on the same for the purpose of bonding: provided, however, that J. F. Eccleson and H. B. Wilson are hereby employed as sole attorneys, to appear in any court of this judicial district, and defend said county against all such warrants wherein the consideration thereof had failed, or wherein there is no consideration.” (5) From July 28, 1873, date of the issuance of the last of the $55,000 of bonds heretofore referred to, up to July 1, 1879, funding bonds were issued by the defendant county, under the provisions of chapter 1, tit. 4, of the Code of Iowa for 1873, as amended by chapter 9 of the Acts of the 15th General Assembly, and chapter 154 of the Acts of the 17th General Assembly, at various dates, and in various amounts, as follows: All of the bonds were issued under resolutions of the board of supervisors, introduced in evidence, and which showed the purpose for which the bonds were issued; such purpose being to fund outstanding warrants and floating indebtedness against the county. 66 (6) I further find that on July 1, 1879, the defendant county issued $100,000 of 8 per cent. refunding bonds, under the provisions of chapter 58 of the Acts of the 17th General Assembly of the state of Iowa, and upon the following resolution of the board of supervisors of said county, of date April 3, 1878: 'Whereas, in accordance with an act of the seventeenth general assembly of the state of Iowa, authorizing counties, cities, and towns to refund outstanding bonded indebtedness at a lower rate of interest, and to provide for the payment thereof, the board of supervisors of Lyon county, Iowa, in regular session assembled, deem it for the public interest to refund all indebtedness of said county, evidenced by bonds thereof, heretofore issued and outstanding at the time of the passage of this act. "Therefore, be it resolved by said board of supervisors, that the chairman of said board and the auditor of said county are hereby authorized and empowered to issue the coupon bonds of said county in sums not less than one hundred dollars, ($100.00,) nor more than one thousand dollars, ($1,000.00,) having not more than fifteen years to run, redeemable in lawful money of the United States of America, at the pleasure of said county of Lyon, after five years from date of issue, and bearing interest, payable semi-annually, at the rate of eight per centum (8 per cent.) per annum, which bonds shall be substantially in the form set forth in said bill, to-wit, from lines eleven (11) to twenty-nine, (29,) inclusive, and deliver the same to J. Shade, the treasurer of said Lyon county, Iowa, who is hereby authorized to sell and dispose of said bonds so issued, in accordance with said act of the seventeenth general assembly of the state of Iowa, and for no other purpose, whatever. "It is further resolved by the board of supervisors of said Lyon county that two per centum (2 per cent.) be, and the same is hereby, appropriated of the bonds herein authorized to be issued, to pay the costs or expense of preparing, issuing, advertising, and disposing of the same, and that J. Shade is hereby employed as financial agent therefor, with power to employ an assistant, if he so desire, and that all matters herein set forth shall be done in strict conformity with this resolution, and the provisions of said act. "The foregoing was approved by all the members of the board of supervisors of Lyon county." (7) The foregoing resolution was spread upon the records, and is upon page 337 of Book A of the records of the proceedings of the board of supervisors of said county; and the proceeds of this issue of Shade refunding bonds, amounting to $100,000, were used to pay the principal and interest of bonds issued prior thereto, as follows: The amount of $53,500 thereof was used to pay in full all of the $55,000 of judgment bonds heretofore referred to, and which were issued in 1872 and 1873, and which were outstanding and unpaid, being in amount $53,000 of principal and $500 of interest, including the whole of the $6,800 issued upon the judgment in favor of C. A. Greeley, and which was reversed in the supreme court of Iowa, as herein before found. The remainder of the proceeds arising from the sale of the issue of Shade refunding bonds of $100,000, issued July 1, 1879, was used to pay said above-mentioned $47,300 of funding bonds, not issued upon, or to pay judgments with accrued interest thereon, amounting to $1,085, herein before referred to as being issued between October 19, 1874, and February 7, 1878, both dates inclusive. |