they termed their complaint in intervention of an order of the board of supervisors of in this action (which is nothing more than that county was duly filed with the county an answer to the complaint), in which they recorder on September 14, 1889; that order set up that the defendant Kelly was a citi-recited that the board of supervisors of Tuzen of the United States and a resident of lare county, state of California, met as a the state of Massachusetts, and that ever board of canvassers on Monday, September since January 1, 1889, he had been, and was 2, 1889, for the purpose of determining the at the time of the commencement of the result of the special election held in Tulare suit, the owner of the land which is de- county on August 24, 1889, to vote upon the scribed, and which was situate within the subject of the organization of the Tulare boundaries of the county of Tulare, Califor- irrigation district and officers therefor, by nia, and within the boundaries of the al- which it appeared that there were 484 votes leged Tulare irrigation district; that Jau- cast in favor of forming the district, and 7 chius, the other defendant, was a citizen of against it. The order then continued as folthe United States and a resident of the lows: "And we further declare the terristate of California, and that he, ever since tory embraced in the following described January 1, 1889, had been the owner of cer- limits, to wit: [describing territory] an tain other described real property also situ irrigation district duly organized under the ate in the district, and they alleged that name and style of "Tulare irrigation disthey were interested in the subject-matter trict,' being situate in the county of Tulare, of the action and in the success of the de- state of California." This declaration was fendant; that if the bonds and coupons made in accordance with § 3 of the act to mentioned in the plaintiff's complaint were form irrigation districts. The order furadjudged valid claims against the district, ther declared the election of the directors then the property of interveners in the dis- in the various divisions of the district. trict would be assessed and taxes levied thereon to pay the claim of the plaintiff. They then set up substantially the same defenses that were pleaded by the irrigation district in its answer; also, that to permit the collection of the bonds would take de fendants' property without due process of The persons declared by the order of the law and in violation of the Federal Consti- board of supervisors to have been elected as tution. officers of the district immediately thereaftThe chief defect as set up in both pleader assumed to organize as such officers, and ings and specially argued here was in re gard to the organization of the district, the defect being an alleged insufficiency of the notice of the intended presentation of the petition to the board of supervisors, by reason of which, as averred, no legal notice was given, and, therefore, all subsequent proceedings were void and of no effect. Subsequently to the service of the answer Jauchius died, and his executor was made a party in his place. The case came to trial upon a stipulation to waive a jury, was submitted upon an agreed statement of facts, and thereafter the court made its general findings in favor of the plaintiff, assessed his damages at the sum of $13,185, and ordered judgment against the irrigation district for that sum. It was stipulated that any of the facts contained in the statement might be offered in evidence by any party to the action, and when so offered the party not offering the same might object to such facts or any of them upon legal grounds which might exist against their admissibility. The statement of facts contained twenty-one paragraphs. The first twelve were offered in evidence on the part of the plaintiff, and received by the court under the defendant's objection and exception. The facts thus admitted showed that under the provisions of the irrigation act of the state of California, approved March 7. 1887, an effort was made in the county of Tulare to form an irrigation district to be known as "Tulare irrigation district," and such proceedings were had in that behalf that what purported to be a certified copy The material sections of the act under which the attempt to form the district was made are to be found set forth in the case of Fallbrook Irrig. Dist. v. Bradley, 164 U. S. 112, 116, 17 L. ed. 369, 370, 17 Sup. Ct. Rep. 56. thereupon entered upon their duties the same as though said district had been legal. ly organized and as though they had been legally elected as such officers, and they and their successors in office have ever since continued to act as such officers and to maintain the name of "Tulare irrigation district," and in its name have caused the defendant to act as though it was in every respect legally organized as an irrigation district under the act of the legislature, and in that behalf it has at all such times had the name "Tulare irrigation district" printed upon a sign above a door in front of an office in which the archives and papers of said defendant are kept; and its board of directors have met from time to time in such room from the time of such purported organization thereof until the present, weekly and sometimes oftener, averaging twice a month. In June, 1890, pursuant to the provisions of the statute, an election was held within the district to determine whether its bonds should be issued, resulting in favor of issuing the same, and in the years 1891, 1892, 1893 its board of directors purported to issue bonds of such Tulare irrigation district in the sum of $500.000, being 1,000 bonds of the face value of $500 cach, and levied assessments on the property embraced in said district, purporting to act in so doing under the act of the legislature, and previous to July 1, 1896, it assessed, levied, and collected taxes upon the lands in such district of over $100,000, and paid the same out through its treasurer as interest upon such bonds; the proceeds arising from the sale of the bonds have been | tioners desired to provide for the irrigation used by the district in constructing a sys- of the same; that the proposed district as tem of canals, ditches, and laterals through described was susceptible of one mode of the lands of the district, by means of which irrigation from a common source and by such lands have been irrigated; it has en- the same system of works, by conveying the gaged in litigation as plaintiff in suits be waters of Kaweah river by means of dams fore the issuing of such bonds, and therein thereon and by main and distributing alleged that it was a corporation under the canals therefrom. The petitioners prayed provisions of the act of the legislature, and that the district described in the petition from the time of its purported organization be organized into an irrigation district ununtil the present time, whatever it has done der the act of the legislature of California and performed, it has done and performed approved March 7, 1887. The petition then in the same manner as if it had been legal-gave the boundaries of the proposed disly organized as such district, in full com-trict, and asked that it be designated as the pliance with the law, and so continues to Tulare irrigation district. This petition act and hold itself out as a corporation or- was signed at the end thereof, each petiganized under that law. No one ever tioner stating the number of acres owned brought suit or took any action to prevent by him. Following these signatures was a the issuing of any of the bonds, nor was paper like this: any suit or action ever brought to annul or cancel or have declared void any of the bonds until after the year 1896. No action in the nature of a quo warranto was ever commenced, nor any other proceeding, to test the validity of the organization of the district. The plaintiff at the commencement of the action was the holder and owner of the coupons upon which action was brought, and became the holder of the coupons on whch he brought his action under the circumstances detailed in the agreed statement of facts, showing that he was a bona fide holder for value without notice. The plaintiff also offered, and the same was received, in evidence, the judgment roll in the Matter of Tulare Irrigation District, in the superior court of Tulare county, which was a proceeding under what is called the California confirmation act in regard to irrigation districts, and which is mentioned in Tregea v. Modesto Irrig. Dist. 164 U. S. 179, 181, 41 L. ed. 395, 396, 17 Sup. Ct. Rep. 52. The proceedings under this confirmation act showed a judgment of the court confirming the validity of the organization of the district. This was duly objected to, and received under the exception of the defendants. After some oral evidence had been given in regard to the execution of the bonds by the officers of the district, the plaintiff rested. Notice. Pursuant to the statutes in such cases made and provided, notice is hereby given, that the above and foregoing petition will be presented to the board of supervisors in and for the county of Tulare, at their first regular meeting in the month of July, 1889, to wit, on Monday the 1st day of July, 1889, at which time any person or persons desiring so to do may present their objections, if any they have, why said petition should not be granted. The signatures to the petition were not repeated at the end of the notice. This notice was in the same type as the petition, the petition, between two black lines across and in the newspaper it was inclosed, with the column, the first at the head of the petition and the last at the end of the notice. The alleged defect in this publication consists in the fact that although the petition signers with the number of acres owned by was printed in full and the names of the them follow the petition, yet as the notice the signatures to such petition, and the noof the presentation of the petition follows tice is not signed by the petitioners, it lacks those essential signatures, and for that reason is not a valid notice, and becomes in law no notice whatever. The defendants also offered in evidence a The defendants then offered separately lare Irrigation District, setting aside the second judgment in the Matter of the Tueach of the remaining paragraphs from former judgment of confirmation and refus thirteen to twenty-one, both inclusive, in the agreed statement of facts, and each, un-zation of the district. The judgment was ing to confirm the validity of the organider the objection of the plaintiff and excep- excluded upon the objection of the plaintiff. tion of the defendants, was excluded. From All these offered facts having been excluded, the facts thus offered it appears that a peti- the court made a general finding in favor tion addressed to the board of supervisors of Tulare county was on July 1, 1889, filed with the board at a regular meeting; that this petition was printed and published prior thereto for two weeks during the month of June, 1889, and in a newspaper printed and published in Tulare county. The petition contained a statement that the petitioners were freeholders owning land within the district which was described in the petition, and that it was all situated within Tulare county, and that the peti of the plaintiff. The individual defendants Messrs. George H. Maxwell, John Garber, Calvin L. Russell, G. W. Zartman, and R. M. F. Soto for plaintiffs in error. Mr. S. F. Leib for defendant in error. Mr. Justice Peckham, after making the immediately preceding the petition, and anforegoing statement of facts, delivered the other black line across the column at the opinion of the court: end of the notice. In this way it was sepaIt is agreed in the statement of facts in rated from all other matter in the paper. It this case that the moneys received from the is now urged that this failure to reprint sale of the bonds in suit were applied to the signatures to the petition at the end building and constructing the irrigation of the notice rendered it of no effect in law, works now in use by the defendant corpora- and that the result was the same as if tion. It has, therefore, received the full no notice at all had been published. It consideration for which the bonds were is- is therefore argued that the action of sued, has built its works with the proceeds, and uses such works for the purposes intended. Notwithstanding these facts, it now refuses to pay the bonds or the interest thereon, and, while acting as a corporation, at all times, still sets up that it was never legally organized, and hence had no legal right to issue any bonds. In the case of Douglas County v. Bolles, 94 U. S. 104, 110, 24 L. ed. 46, 48, a case involving facts somewhat similar, this court said: "Common honesty demands that a debt thus incurred should be paid." That sentiment has lost no force by the lapse of time, and we think it applies in its full strength to this case. Unless there be some settled rule of law which prevents a recovery in this action, the judgment under re view should be affirmed. The sole ground of defense which has been urged at the bar has been an alleged defect in the notice of the intended presentation of the petition to form the district, to the board of supervisors, the defect consisting in the omission to add at the end of the notice the names of the signers to the petition which immediately precedes it. the board of supervisors when the petition was in fact presented and proof taken in regard to the facts stated therein, in accordance with the published notice, was without legal effect, and the determination of the board of supervisors, after a hearing before it, that some of the lands described in the petition would be benefited by irrigation, including those of the individual plaintiffs in error, was wholly without validity, because the board acquired no jurisdiction over the subject on account of the absence of notice; the board, having no jurisdiction, could make no valid determination as to the organization of the district; the district could issue no valid bonds; and the fact of the absence of notice could be shown as a defense to bonds that were issued, no matter under what circumstances the defense should arise. It was then contended that to permit a recov ery would result in the taking of the property of the individual defendants by means of an assessment and without due process. of law. It is not urged here that the plaintiff below was not a bona fide purchaser for full Section 2 of the act approved March 7, value without notice of any defective organi1887, commonly called the "Wright act" of zation or want of power in the corporation the California legislature, provides that the to issue the bonds. Upon the stipulation petition for the organization of an irriga- of facts no such defense could prevail. The tion district shall be presented to the whole force of the defense rests, therefore, board of supervisors of the county in which upon this alleged defective notice because of the lands are situated, signed by the re- the failure to reprint the names of the signquired number of freeholders mentioned in ers to the petition at the end of such nothe 1st section, which petition must de- tice. Is this such a defect as to practically scribe the proposed boundaries of the dis- amount to an absence of notice so that the trict, and pray that the same may be or- board of supervisors could acquire no jurisganized under the provisions of the act. diction upon presentation of the petition? The petition must be presented at a regular Certainly the notice could mislead no one.. meeting of the board of superivisors, and be It gave full and detailed information in republished, for at least two weeks before the gard to the time and place at which the petime at which the same is to be presented, tition would be presented to the board of in some newspaper printed and published supervisors. It cannot be claimed that the in the county where the petition is to be notice itself did not give all the information presented, "together with a notice stating provided for by the statute, and it warned the time of the meeting at which the same all persons who might desire so to do to prewill be presented." In this case a proper sent their objections, at the time and place petition complying with the provisions of named, why the petition should not be the act was made and signed by the re granted. Anyone on reading the notice obquisite number of freeholders. The peti- tained thereby all necessary knowledge to tion, with the signatures of such freehold-enable him to attend at the time and place ers appended, was published in the proper mentioned and present any objection that newspaper, together with a notice as provided for in the act, but the signatures of the freeholders which were appended to the petition were not reproduced at the end of the notice. The petition, signatures, and notice were published in the same column and as one entire proceeding, separated from the rest of the contents of the newspaper by a black line across the column he might have against the granting of the petition. The petition which preceded the notice was signed by a sufficient number of landowners, and the notice which followed the signatures to the petition evidently formed part of the proceeding inaugurated by the signers to the petition to take the necessary steps to organize an irrigation district. The whole thing, petition, names. of signers thereto, and notice, was published although the statute under which an irriga the statutory time and also posted as re- tion district is to be formed provides for a quired. As published, it evidently formed determination of the fact of due organizabut one proceeding, and the notice was part tion by the board of supervisors, yet the thereof. Could anyone fairly misunder-proceedings under the confirmation act are stand the fact that the notice was part of expressly directed to be had to review the the action of the signers to the petition, determination of that board, so that there and, when precisely in accordance with the is express statutory authority to go behind terms stated in the notice, the petition was that determination in that proceeding. publicly presented to the board of supervisors, was not the statute sufficiently complied with to give jurisdiction to that body to proceed to determine the facts in accordance with the provisions of the statute? Was not the notice fairly and substantially authenticated as a notice given by the signers to the petition? In the case of Re Central Irrig. Dist. Bonds, 117 Cal. 382, 49 Pac. 354, the supreme court of that state has held that the publication of a notice similar to this, unsigned and unauthenticated, was invalid, and the defect could not be cured by proof of actual notice or knowledge on the part of those to be affected thereby. It is urged that this decision of the supreme court of the state should be followed by us, because it is in effect the construction given by the state court to a statute of the state. We are not entirely persuaded that this claim is well founded. It might, on the contrary, be urged with much force that the decision was based upon principles of general law as to whether a notice presupposes by its very terms, and makes absolutely necessary in all cases, a signature at the end thereof, and it might be claimed that the case came within the principle decided in Venice v. Murdock, 92 U. S. 494, 23 L. ed. 583, where this court refused to follow the prior decisions of the court of appeals of the state of New York made in cases arising upon a New York statute and under a similar state of facts, on the ground that those decisions did not present a case of statutory construction. See also Thompson v. Perrine, 103 U. S. 806, 26 L. ed. 612. And again, the bonds in question here were issued not later than 1893, while the decision of the California state court was not made until June, 1897, and there being no other decision of the state court upon the particular point it might be reasonably maintained that the matter should be regarded as open to be decided in accordance with our own views of the subject. But assuming that the failure to sign the notice resulted in a failure to organize a de jure irrigation district, and that in a direct proceeding, such as is provided for by the confirmation act, or in a quo warranto action, the determination of the board of supervisors could be reviewed, it does not follow that such determination could be reviewed in a collateral action on the part of a bona fide holder of bonds to recover the principal or interest thereon. In the case spoken of, the supreme court of California, while deciding upon the invalidity of the organization, refused to pass upon the question whether the bonds of the district were void for the reason that proper notice was not given; and the court in refusing to decide the question remarks that "it is not proper because some of the bonds (it is insisted) had been sold and had passed into the hands of bona fide purchasers before the institution of this proceeding. After the issue and before the sale of any bonds it may well be of advantage to the district and to intending purchasers that the judgment of a court should be invoked to pass upon the regularity of the action of the district officers, but after sale different questions present themselves. The bonds are negotiable; public corporations are estopped from setting up many defenses of irregularity against the innocent holders of such negotiable securities. Whether or not the holder be an innocent purchaser and a purchaser without notice is itself a question which cannot be determined in this proceeding. From all these considerations, and others which will readily suggest themselves, it is proper, in cases where bonds of a district have been actually sold before institution of confirmation proceedings, to refuse consideration to questions of the regularity of such sales, leaving their determination to that forum before which appropriate action may be brought to test the questions, for it is only in such an action before such a court that there will be found full We do not deem it necessary to decide the and unquestioned jurisdiction of the subquestion here, because there are other facts ject-matter, and of all the necessary parupon which we can base our judgment with- ties, as well as power to determine all obout impugning the decision of the state jections and defenses." We may therefore court. Assuming, therefore, for the pur- proceed to the inquiry as to the liability pose of this case, though not deciding, that of the corporation to a bona fide holder of the notice was insufficient, and did not fully its bonds, without further reference to the comply with the statute, it will be seen that above case. the case above referred to does not decide that the question of the defective organization could be raised as against bona fide holders of bonds issued by the district. The action in that case was commenced under a California statute providing for the taking of proceedings to confirm the validity of the -organization of an irrigation district, and The supreme court of the state has held that irrigation districts were public munici pal corporations (Central Irrig. Dist. v. De Lappe, 79 Cal. 351, 21 Pac. 825; Re Madera Irrig. Dist. Bonds, 92 Cal. 296, 14 L. R. A. 755, 28 Pac. 272, 675; Quint v. Hoffman, 103 Cal. 506, 37 Pac. 514, 777), and the stat ute providing for their creation has been held 14 to be one that should be liberally construed. | of the peace of the county; that their ac 79 Cal. 351, 21 Pac. 825, supra. The su- tion in holding a county court was void, and preme court of California and this court that their acts in subscribing to the stock have also decided that the irrigation act is of the Mississippi Railroad Company and isa valid statute, and that it violates neither suing bonds in payment therefor were void. the state nor the Federal Constitution. Those acts the bondholders had endeavored Fallbrook Case, 164 U. S. 112-159, 41 L. ed. to sustain by claiming that they were the 369-388, 17 Sup. Ct. Rep. 56, and cases acts of de facto officers, and that under such cited. circumstances it was not material whether the board of commissioners had a lawful existence or not. This court held there could be no de facto officer where the office itself had no legal existence. If there be no office to fill, there can be no officer either de jure or de facto, and as the act attempting to create the office never became a law, the office itself never came into existence; it was a misapplication of terms to call one on officer who holds no office, and a public office could exist only by force of law. Even though the irrigation district failed to become organized as a de jure corporation, it may still have been acting as a corporation de facto. That there may be such a corporation cannot be doubted. Baltimore & P. R. Co. v. Fifth Baptist Church, 137 U. S. 568, 571, 34 L. ed. 784, 786, 11 Sup. Ct. Rep. 185; Shapleigh v. San Angelo, 167 U. S. 646, 655, 42 L. ed. 310, 313, 17 Sup. Ct. Rep. 957; see also cases decided by the Federal courts in California, Miller v. Perris Irrig. Dist. 85 Fed. 693, again re- In the case now before us there was ported in 99 Fed. 143; Herring v. Modesto valid law providing for the creation of just Irrig. Dist. 95 Fed. 705; also Lamming v. such a corporation as the defendant claimed Galusha, 81 Hun, 247, 30 N. Y. Supp. 767, to be. There was a bona fide attempt to affirmed by the court of appeals on the opin-organize under it, and there had been a user ion of the court below in 151 N. Y. 648, 45 N. E. 1132; Stout v. Zulick, 48 N. J. L. 599, 7 Atl. 362; Snider's Sons' Co. v. Troy, 91 Ala. 224, 11 L. R. A. 515, 8 So. 658; American Salt Co. v. Heidenheimer, 80 Tex. 344, 15 S. W. 1038; Taylor, Corp. 4th ed. § 146. From the authorities, some of which are above cited, it appears that the requisites to constitute a corporation de facto are three: (1) A charter or general law under which such a corporation as it purports to be might lawfully be organized; (2) an attempt to organize thereunder; and (3) actual user of the corporate franchise. The case at bar contains these requisites. There was a general valid law under which a corporation such as the defendant is claimed to be could be formed, there was undoubtedly a bona fide attempt to organize thereunder, and there has been actual user of the corporate franchise. In the progress of the attempt to organize the district the determination of the board of supervisors was made, under the provisions of the statute, declaring the body to be a duly organized irrigation district. Subsequently officers were elected and took office and have ever since discharged the duties thereof under the statute, and a special election was held to determine the question of issuing bonds, and the bonds were issued pursuant to the result of such election, and suits have been commenced in the name of the corporation. In brief, if anything can constitute a de facto corporation, the defendant herein constitutes one. The case of Norton v. Shelby County, 118 U. S. 425, 30 L. ed. 178, 6 Sup. Ct. Rep. 1121, contains no doctrine in opposition. In that case the state court of Tennessee had held that the so-called board of commissioners of Shelby county, organized under the act of March 9, 1867, had no lawful existence; that it was an unauthorized and illegal body, and its members were usurpers of the functions and powers of the justices of the franchise, and within the authorities already cited a corporotion de facto was thereby constituted. Being a de facto corporation, the general rule is that none but the state can call its existence in question. The courts of California agree that such is the rule. People v. Montecito Water Co. 97 Cal. 276, 32 Pac. 236; Quint v. Hoffman, 103* Cal. 506, 37 Pac. 514, 777, supra; see also Cooley, Const. Lim. 4th ed. p. 312; Swartwout v. Michigan Air Line R. Co. 24 Mich. 389, 393. The rule as stated by Cooley is as follows: "In proceedings where the question whether a corporation exists or not arises collaterally, the courts will not permit its corporate character to be questioned, if it appear to be acting under color of law, and recog nized by the state as such. And the rule, we apprehend, would be no different if the Constitution itself prescribed the manner of incorporation. Even in such a case, proof that the corporation was acting as such, under legislative action, would be sufficient evidence of right, except as against the state, and private parties could not enter upon any question of regularity. And the state itself may justly be precluded, on the principle of estoppel, from raising such an objection, where there has been long acquiescence and recognition." It was held in Shapleigh v. San Angelo, 167 U. S. 646, 42 L. ed. 310, 17 Sup. Ct. Rep. 957, supra, that none but the state could impeach the validity of the creation of a municipal organization, and that if it acquiesced therein the corporate existence could not be collaterally attacked. The court, through Mr. Justice Shiras, said: "The doctrine successfully invoked in the court below by the defendant, that where a municipal incorporation is wholly void ab initio, as being created without warrant of law, it could create no debts and could incur no liabilities, does not, in our opinion, apply to the case of an irregularly organized corporation which had obtained, by |
