State Ex Rel. v. Bishop , 169 Or. 448 ( 1942 )

Motion to strike defendant's amended return allowed September 29, 1942 ON MOTION TO STRIKE AMENDED RETURN 129 P.2d 276 Our order which sustained a demurrer to the defendants' return granted them ten days in which to plead further. Within the allowed time they filed an amended return. The matter is now before us upon a motion by the plaintiff to strike the amended pleading upon the ground that it does not state facts materially different from those alleged in the original return.

Section 1-714, O.C.L.A., provides that sham and frivolous answers may be stricken out on motion. Farris v.Hayes, 9 Or. 81, says:

"A pleading that is but a repetition of a former one adjudged insufficient, may be regarded as frivolous."

Many decisions by this court announced since that one illustrate the application of the principle which it states. Accordingly, if the amended return submits the same matters that are stated in the original return and nothing else, it must be stricken from the files as frivolous.

The principal difference between the original and the amended return is that the latter includes papers which the defendants deem copies of minutes of the meetings of the commissioners who assessed the benefits and damages anticipated from the reclamation work. The copies of those papers and interpretative averments based upon them are virtually the only difference between the original and the amended pleadings. The defendants' purpose in making the amendments just mentioned was to show that the benefits, which the commissioners found, did not total $294,245.10, as stated in our original opinion, but only $80,104.47. If the benefits were found to be $80,104.47, then at least some of the relief which the plaintiff seeks is not available in this proceeding. The brief submitted in support of the amended return does not claim that we misinterpreted the original return or the statutes governing drainage districts, but it urges that the copies of the purported minutes show that the benefits were assessed by the commissioners in the sum last mentioned.

It will be recalled from our previous decision that after the supervisors of the drainage district had adopted a plan for the drainage of the district, the county judge of Malheur county appointed three commissioners charged with the duty of assessing the benefits and damages which would ensue from the construction of the project. The appointments were made obedient to the statutes which govern drainage districts. The commissioners later filed the report which is mentioned in our previous decision. The amended return, referring to the commissioners, says: "The record of their actions in so determining benefits, are set forth in the minutes of the meetings of such commissioners as follows: * * *" Then follow quotations which purport to be copies of the minutes of five meetings of the commissioners.

The pleading does not state whether the minutes were ever filed in any public office. Likewise the pleading does not disclose the source from which the defendants obtained the minutes. There is no averment that anyone who purchased any of the bonds, which are the subject-matter of this proceeding, saw or knew of the minutes.

We shall now quote the parts of the minutes which the defendants seemingly believe are material to this cause. They follow:

"After having viewed the lands in question and now satisfying themselves as to the proper classification of all the lands in the District the commissioners then proceeded to assess the public highways, power and telephone lines and irrigation canals affected by the proposed plan of reclamation.

"The public utilities being assessed as follows:

Malheur County $2,180.00 Electric Investment Co. 150.00 Malheur Home Telephone Co. 150.00 Owyhee Ditch Co. 750.00 Wilson Ditch 500.00

"The commissioners then decided to give a benefit rating per acre to each class of land about as follows:

Class 1, 25% benefit, or $ 7.00 per acre Class 2, 40% benefit, or 11.20 per acre Class 3, 40% benefit, or 11.20 per acre Class 4, 70% benefit, or 19.60 per acre Class 5, 80% benefit, or 22.40 per acre

"A motion was then made by W.B. Eaton, seconded by R.H. DeArmond, that C.F. Ashford draw up the Commissioners' Report, and that we now adjourn until such time said report is ready for our approval. Motion Carried and so ordered."

The above is the only part of the minutes to which the defendants' brief expressly refers. The quotation was made from the minutes of the fourth meeting of the commissioners; it was held on July 20, 1916. It will be seen from the minutes that at that meeting the commissioners devised "a benefit rating per acre" for each class of land "about as follows: * * *" and authorized one of the commissioners, C.F. Ashford, to draft the report. We now pass on to the minutes of the last meeting of the commissioners held on July 28, 1916. According to the copy which forms a part of the amended return, those minutes said:

"* * * The meeting was called to order by the chairman, C.F. Ashford, who announced that the report of the assessments of benefits and damages for each of the owners of the lands in the Nyssa-Arcadia Drainage District, was now tabulated and written up and ready for comparison with the original memorandum made by them on the ground.

"After the table appended in the report was examined and prepared, W.B. Eaton moved that part of the report be adopted and approved as the true findings of the Commissioners to accompany the written report. The motion was seconded by R.H. DeArmond and when put to a vote by the chairman was carried unanimously.

"When the written part had been typewritten it was read by the chairman and members of the Commission, and R.H. DeArmond moved, seconded by W.B. Eaton, that this part of the report be approved and adopted as the true report to accompany the table.

"When put by the Chairman, the motion was carried unanimously.

"The report was then signed by all the commissioners, and there being no further business, a motion to adjourn by W.B. Eaton, seconded by R.H. DeArmond, was carried."

As is indicated in our previous decision, 1915 Session Laws, Ch. 340, § 13 (§ 123-118, O.C.L.A.), says:

"The board of commissioners shall prepare a report of their findings which shall be * * * filed in the office of the county clerk."

As is further indicated in our previous decision, the board prepared a report and it was filed in the office of the county clerk. Our previous decision quoted the parts of the report which we deemed material. We shall revert to the report shortly. It will be observed that the statute contemplates that the board shall speak through its report — not through its minutes.

Section 13 of the act just mentioned (§ 123-120, O.C.L.A.) directs the county clerk, after receipt of the report, to publish for three weeks notice of the fact that the report is on file and that those interested may examine it. Section 15 (§ 123-121, O.C.L.A.) permits any owner of land in the district to file exceptions to any part of the report. It next says:

"All exceptions shall be heard by the court and such amendments and modifications made to the report of the commissioners as may in the judgment of the court be equitable, * * *."

The section next says that if the court finds that the estimated cost of the improvement is less than the estimated benefits "the court shall approve and confirm said commissioners' report as so amended and modified." The section under review renders it the duty of the county clerk to transmit "a certified copy of the court decree and copy of the commissioners' report as confirmed or amended by the court" to the secretary of the board of supervisors of the district and to the recorder of each county in which land of the district lies. The section says: "The same shall become a permanent record." The final words of the section are: "Any person may appeal from the judgment of the court."

The act nowhere expressly prescribes a duty upon the commissioners to keep minutes, and, that being true, it, of course, makes no provision for the filing of minutes. The act does, however, require the commissioners to elect one of their number chairman, and further requires the secretary of the district's supervisors to serve the board of commissioners as secretary.

It will be helpful to recapitulate in chronological order: (1) After a district has adopted a plan for reclamation the county judge appoints three commissioners charged with the duty of assessing benefits and damages; (2) the action taken by the commissioners is indicated by their report which is filed in the office of the county clerk; (3) the county clerk publishes notice for three weeks that the report is on file in his office and that exceptions may be filed; (4) the county court is required to hear the objections and is granted the power, after determining the merits of the objections, to confirm, amend or modify the report; (5) "a certified copy of the court decree and copy of the commissioners' report, as confirmed or modified" by the county court are sent to the secretary of the board of supervisors and to the recorder of each county within which there lie lands of the district; and (6) those papers are "a permanent record."

The brief submitted by the defendants in support of their amended pleading says:

"That said commissioners prepared a report showing their assessment of benefits to all property benefited by the proposed Plan for Reclamation and listed and showed the acreage of each of the 5 classes of land held by each landowner, and listed the total benefits thereunto accruing at the respective rates of $7.00, $11.20, $19.60 and $22.40 in the 12th column thereof under the heading `Levy for Bond Issue.' That in the 11th column thereof under the heading `Cost Engineer's Estimate,' was shown the estimated cost of construction chargeable to each tract of land and property. That the 10th column of such report entitled `Units' was a column of figures used for the convenience of the commissioners and engineer in computing the 11th column `Cost Engineer's Estimate' and the 12th column of benefits entitled `Levy for Bond Issue', in the following manner:

"* * * We believe that a sufficient allegation of facts has been made in this amended return to show that the commissioners did determine benefits of $80,104.47 and used the `Units' column as a convenience in computation only."

By reverting to our original decision it will be seen that a part of the commissioners' report consisted of some sheets containing twelve columns. In the first column the commissioners entered the name of the owner of every tract of land in the district. In the second they wrote opposite the owner's name a legal description of his property. In the third they listed the section in which his tract was located. In the fourth they indicated the number of acres in his tract. For the time being we shall omit mention of the fifth, sixth, seventh, eighth and ninth columns. They are described at length in our previous opinion. We add, however, that immediately over the fifth to the eleventh columns the commissioners wrote "Class of Land, Benefit Rating, and Cost per Acre on $70,000 Bond Issue." It will be seen from the paragraph above quoted from the defendants' brief that the defendants contend that the tenth column, which is headed with the word "Units" represents "figures used for the convenience of the commissioners and engineer" in computing the eleventh column. Our previous decision held that the tenth column contained the entry of the estimated benefits. Reverting again to the words above quoted from the defendants' brief, it will be seen that they concede that the commissioners entered in the eleventh column, which is entitled Cost Engineer's Estimate, the part of the construction cost which was chargeable to each tract of land. We construed the column in the same manner when we wrote our previous opinion. We come now to the twelfth column headed Levy for Bond Issue. Reverting to the defendants' above-quoted language, it will be seen that they claim that the commissioners entered in that column their determination of benefits and claim that these totaled $80,104.47. A few lines ahead of the quoted language to which we have just adverted the defendants said: "* * * listed the total benefits thereunto accruing at the respective rates of $7.00, $11.20, $11.20, $19.60 and $22.40 in the 12th column thereof under the heading `Levy for Bond Issue.'" Thus the defendants construe the twelfth column, which has the heading Levy for Bond Issue, as being the determination by the board of the benefits which each tract would receive from the construction of the reclamation work. Our decision deemed the words "Levy for Bond Issue" to mean exactly what that language signifies. Hence, the defendants disagree with us upon two columns, the tenth and the twelfth. The former is entitled Units and the latter Levy for Bond Issue. The defendants deem the column entitled Units, which we held was the determination of the benefits, a mere mathematical convenience to which the board resorted, and the twelfth column entitled Levy for Bond Issue the entry of benefits. The defendants do not claim that we misconstrued the commissioners' report, but argue that the minutes which the amended return submits render clear the meaning of the commissioners. Our original opinion found that the meaning of the report was evident.

Before considering the minutes we shall revert to columns five, six, seven, eight, nine and ten. Our previous opinion dwells at length upon those columns. We interpreted columns five to eleven as being classifications by the commissioners of every acre of land in the district according to the character of the land and the benefits which it would receive from the improvement. We remind ourselves of the heading which appears over those columns: "Class of Land, Benefit Rating * * *." Explanatory sentences in the report say, in part:

"Column 5 Poor Dry Land is rated with the lowest benefit, 25, and will be taxes for the Bond issue $7.00. Column 6 Poor Wet Land is rated 40 and will be taxes for bond issue $11.20. * * * Column 8 Good Land That is losing Crop Production by reason of a rising water table: is rated at 70. and taxes $19.60. Column 9 Good land that is now swamp * * *. Column 10, Units, is formed by the sum of the units of Columns 5 to 9 inclusive. That is, the number of acres in each class multiplied by the rating of that class gives the number of units. * * *"

Over the eleventh column entitled Cost Engineer's Estimate there appears:

"Cost Engineer's Estimate Per Acre

: #1- $5.575 : #2- 8.60 : #3- 8.60 : #4- 15.05 : #5- 17.20"

Immediately over the fifth column is the following:

"#1 7.00 25."

The heading of the eighth column is:

"#4 19.60 70"

and the ninth:

"#5 22.40 80"

A moment of patience and a study of the report render clear the meaning of those symbols. The symbol #1 refers to the like indicator in Cost Engineer's Estimate Per Acre, and, of course, is the means of apportioning the engineer's estimate of cost of construction to each tract which is entered in the fifth column. The symbol 7.00 refers to the explanation which we quoted from the report beginning with words "Column 5 Poor Dry Land." It is there explained that land of that character "will be taxes for the bond issue $7.00." The figure 25 refers to the same quotation, that is, about poor dry land. As will be recalled, it says that that kind of land is "rated with the lowest benefit, 25."

The meaning of the entries becomes clear, we believe, when one of the tracts of land entered upon the sheets is taken for the purpose of illustration. The first tract entered was owned by L. Adams. We mentioned him in our previous opinion, but would like to carry the illustration a little further. As is shown by the fourth column, he owned a total of 19.55 acres in the district. None of his land was entered in the fifth, sixth or seventh columns, but we encounter a part of it in the eighth column, which is headed:

"#4 19.60 70"

There we find the figure 7.55. In the ninth column, headed:

"#5 22.40 80"

the commissioners entered the figure 12. The latter added to 7.55 is 19.55, the total acreage owned by Adams. In the tenth column, which is entitled Units, they entered 1488.5. In the eleventh column, which is entitled Cost Engineer's Estimate, they wrote 320.02, and in the twelfth column, entitled Levy for Bond Issue, we find 416.78.

We shall now explain how the commissioners derived 1488.5, 320.02 and 416.78. We shall begin with 1488.5. By writing 7.55 in the column at the head of which was 70, the commissioners found that 7.55 of Adams' acres would be benefited $70.00 per acre; and by writing 12 in the column over which 80 appeared they found that 12 of his acres would be benefited $80.00 per acre. 7.55 X 70 equals 528.50. 80 X 12 yields 960. 528.50 plus 960 equals 1488.50, being the entry in the tenth column. We explained in our previous opinion that the commissioners thought that Adams would be benefited to the extent of $1488.50 by the improvement. We adhere to that belief. We come now to the entry opposite Adams' name in the column entitled Cost Engineer's Estimate. We have quoted the heading of the eighth column. It will be recalled that it includes the symbol #4. Under that symbol we find the aforementioned entry of 7.55. The symbol #4 manifestly refers to the like symbol in the data entitled Cost Engineer's Estimate Per Acre. There we find opposite the symbol #4, 15.05. 15.05 X 7.55 is 113.62. In the ninth column under the subtitle #5 we find opposite Adams' name the aforementioned entry 12. Opposite #5 in the Cost Engineer's Estimate Per Acre we find $17.20. 17.20 X 12 equals 206.40. That sum added to 113.62 gives a total of 320.02, being the entry which the commissioners placed in the eleventh column under the heading of Cost Engineer's Estimate. Manifestly, $320.02 was the commissioners' estimate of Adams' share of the bare cost of the improvement. That disposes of the eleventh column. We now come to the twelfth column entitled Levy for Bond Issue; it contains the entry 416.78. Clearly, the levy for the bond issue would have to be more than the engineer's estimate of the bare cost of construction. For instance, interest would have to be provided for. Moreover, the bonds might sell for less than par. The commissioners' report explains those matters and says that they also made an allowance for contingencies. We observed that 7.55 acres of Adams' land was in the eighth column and 12 of his acres in the ninth column. We have also seen that one of the headings of the eighth column is 19.60 and one of the headings of the ninth column is 22.40. The report explains that in Column 8, among other matters, the commissioners entered: "Taxes $19.60." And it explains that in Column 9, among other entries, they wrote "Texas $22.40." Therefore, we believe that the symbol 19.60, which appears in the subtitle of Column 8, indicates the required levy upon the kind of land entered in Column 8; that is, "Good land that is losing crop production * * *," and that the subtitle entry, 22.40, in Column 9, was found to be the required levy upon the land entered under that subtitle. 19.60 X 7.55 equals 147.98. 22.40 X 12 equals 268.80. The total of those two sums is 416.78, which is the entry in the twelfth column entitled Levy for Bond Issue.

The above gives us a clear explanation of every entry in the columns of the report. The explanation in the defendants' brief, quoted in a preceding paragraph, renders the tenth column, entitled Units, virtually useless, and instead of making the twelfth column, entitled Levy for Bond Issue, mean what it says, converts it into an estimate of benefits.

As we have seen from our review of the applicable statute, the report had no effect until action was taken upon it by the county court. After the report of the commissioners was filed the county clerk published the required notice and exceptions were filed by some property owners. Still later hearings took place, in the course of which the exceptions filed by H.M. Plummer were sustained in part. All other exceptions were overruled. In the column entitled Units, opposite Plummer's name, the commissioners had entered 1528. In its order modifying the commissioners' report and approving it as modified, the county court wrote:

"It is further ordered that the remonstrance of the said H.M. Plummer be and the same is hereby sustained in part and the said assessment of benefits is hereby reduced by the sum of $764.00 and the assessment of benefits is hereby assessed in the sum of $764.00 or 764 units. That the Court herein in making such reduction has taken into consideration * * * and that item #44 be and the same is hereby amended to and shall read to carry a total assessment of benefits of 764 units or $764.00."

Thus, the estimate of Plummer's benefits was reduced 50 per cent. As a result of this modification the total units were reduced from 283,089.1, as found by the commissioners, to 282,325.1, and the levy for bond issue was reduced from $80,104.47 to $79,890.55. No other alteration was made in the commissioners' report, but the order confirming it in its modified form said: "One unit being equal to $1.00 of benefit." It will be observed by adverting to the above quoted paragraph that the county court used the word Unit and the dollar sign interchangeably.

Section 15 of the act from which we have quoted authorized the county court to take the action it pursued. That section authorizes county courts to amend or modify reports of commissioners, provided the notice has been given that is required by § 14 of the act. The defendants' answer concedes that the notice was duly published. Section 15 further provides that when a report has been approved, whether in its original condition or as modified, the report, together with the order of the county court pertaining to it, becomes "a permanent record" in the offices of the county recorder and of the secretary of the district. The same section further provides that any property owner affected by the report "may appeal from the judgment of the court." Thus, it is certain that it is the order of the court, entered after notice, which gives finality and efficacy to the report of the commissioners.

The foregoing renders it clear that the findings of the assessing commissioners upon the subject of benefits were expressed in language capable of clear understanding. Very likely the commissioners could have chosen a better means of expression, but a little study of their report would render its meaning clear to anyone. The order of the county court, which made a modification in the commissioners' report and then approved it as modified, cleared the report of uncertainty if any existed. In its modified, approved form the report found that the project would bestow $282,325.10 in benefits upon the district.

The question now occurs whether the copies of the minutes of the meetings of the commissioners which form a part of the amended return are entitled to any effect whatever in this proceeding.

In considering that issue it is pertinent to take note of the fact that the relators are to be deemed holders in due course of some of the bonds issued by the defendant drainage district. The defendants admit that the relators own some of the bonds. The bonds described in the complaint are negotiable in form. A presumption is warranted that the relators are holders in due course. Section 69-409, O.C.L.A.; Rivers Bros. v. C.F.T. Co.,Inc., 124 Or. 157, 264 P. 368; Jones, Bonds and Bond Securities, 4th ed., § 295; and 11 C.J.S., Bills and Notes, § 654, p. 48.

It is inevitable that the officials of a municipality which contemplates the issuance of bonds will prepare in the course of their deliberations and negotiations some writings. Some may be minutes of meetings similar to those which form a part of the amended return. Some of the papers may be written upon the volition of the municipal officials and for their own purposes, while others may possibly be written and kept because the statutes which control the municipality's right to issue bonds demand that such records be made and filed. Generally, the right to issue bonds is circumscribed with statutory limitations imposed for the protection of the municipality. Those limitations may deny the municipality the privilege of issuing bonds unless its officials or some commission appointed by them conduct an investigation exacted by the statutes and file a report of their findings. Limitations of that kind are conditions precedent to the right to issue bonds and must be met. In the present instance, the drainage district act, for the obvious purpose of imposing upon the municipality sound business methods, orderly procedure and the protection of its credit, demands that before a district can issue bonds (1) the supervisors of the district must adopt a plan for reclamation and then file it; (2) the county judge must appoint commissioners charged with the duty of assessing benefits and damages and the order making the appointment must be filed; (3) the commissioners must report their findings in writing and the report must be filed; (4) the county court must conduct a hearing upon the report and after the hearing enter an order in regard to the report, which order must be filed; and (5) the anticipated benefits must exceed the cost of construction.

The above requirements are conditions which must be met before the drainage district's officials gain the right to issue bonds. Manifestly, the purposes of requiring a document to be filed are (1) to afford those affected by the document an opportunity to inspect it; and (2) to give notice of the contents of the document. All persons dealing with a municipality are charged with notice of the laws which govern it and are, therefore, required to take notice of the public documents which the laws demand that the municipality's officials must prepare and file before they possess the right to act.

As we have seen, the report of the assessing officials, after being slightly modified, was approved by the county court and thereupon both the report and the county court's order were filed in the appropriate public offices. All of this is conceded by the amended return. Manifestly, anyone purchasing the municipality's bonds would be charged with notice of the two documents just mentioned. A problem very different from our present one would be submitted if the amended return stated that the two documents just mentioned failed to show that the benefits anticipated from the reclamation work were more than the cost of construction.

It will be seen from what we have already stated that the defendants propose to charge the relators with notice of the contents of documents which the drainage district act does not require to be filed in any public office and which, seemingly, were never filed among any public records. From 44 C.J., Municipal Corporations, § 4236, p. 1243, we now quote:

"* * * but a purchaser is not charged with notice of parts of the record not connected with such bonds, nor is he required to look beyond the record; * * *"

From Jones, Bonds and Bonds Securities, 4th ed., § 309, we quote:

"In a general sense, all persons are bound to take note of matters which are required to be spread upon the public records. That is what such records are for. In the matter of municipal bonds, if purchasers were required to take notice of all things in connection with their issuance of which a public record is necessarily made, their negotiability would be greatly impaired and their free circulation from hand to hand would be clogged through the uncertainty as to their validity that would arise in the minds of intending purchasers who, in many cases, would not be conveniently at hand to make the necessary investigations. The result would be diminished marketability of public bonds, or their sale at any unprofitable figure.

"Properly, every step in the issuance of municipal bonds is made a matter of record — the petitions, if any, that are filed; the resolutions or ordinances of the governing body; the publications made; the elections called and held; the determination that a debt-limit has not been exceeded; the provisions for a tax levy to pay interest and principal; arriving at the form and terms of the bonds; and providing for their sale — somewhere there must be a record of each of such matters. Must a purchaser of the bonds investigate the records and decide their sufficiency at his peril when, in all other respects, he is qualified to become a holder in due course? There is no doubt that at an earlier day in the development of the law governing municipal bonds, the purchaser was required to take notice of all such records. Many losses to purchasers occurred through the operation of such a stringent requirement, and there came into vogue the practice of inserting in most bonds recitals to the effect that all of the conditions precedent had been complied with which, in general, the courts held to constitute estoppels against the issuing municipalities in favor of bona fide purchasers, and which were therefore deemed sufficient to absolve purchasers from the necessity of examining into the records to ascertain the existence of essential facts * * *.

"A sensible application of the Uniform Negotiable Instruments Law ought to absolve the purchaser from the duty of taking notice of records of all those matters constituting the authority of municipal representatives to issue the bonds, as such term is distinguished from the power of the municipality mentioned at the beginning of this article. Under the Uniform Negotiable Instruments Law, notice means either actual knowledge of defects or infirmities in the bonds, or knowledge of such facts that the action of a purchaser in taking them amounts to bad faith. Of course, if a purchaser has actual notice that the records show some act or omission of the authorities that would invalidate the bonds, it would be an inane contention that he could become a holder in due course. Then the only other manner, under the section of the uniform act just cited, in which his status as a holder in due course could be assailed, would be that he had knowledge of such facts that his action in taking the bonds amounted to bad faith. How could it be an act of bad faith merely to omit to examine records made, or required to be made, by the very authorities who issue the bonds? Do they not, by executing, issuing, and sending them forth into the markets of the world, impliedly represent that they have performed all acts necessary to their validity? * * *

"The right of purchasers to rely upon recitals of the due performance of conditions precedent, made upon bonds by representatives authorized to determine the facts and to make the recitals, has gained general recognition."

We are clearly satisfied that the relators were not chargeable with notice of anything said in the minutes. That being true, their inclusion in the amended return, in our opinion, did not effect any change in the pleading material to this proceeding. The averments, which the amended return makes at variance with the contents of the report of the commissioners as approved by the court's order, are entitled to no effect. The report and the order are made by the defendants a part of the amended return and the parties deem the exhibits as controlling the averments.

We now go on to consider some other departures from the original return made by the amended pleading. Here and there the change consists of nothing more than the substitution of a synonym for a word found in the original pleading. However, the amended return dwells at length upon the 1918 issue of bonds ($15,000) and the benefits which it was anticipated would come from the supplemental plan for reclamation. It will be recalled that the 1918 issue was made after 204 acres had been added to the district. The defendants seem to believe that their additional averments indicate that the work, which was paid for out of the proceeds of this issue, was not performed upon and did not confer any benefit upon the original 5,090.83 acres. However, we observe that the resolution by the board of supervisors of the district, which authorized the issue of the bonds and levied the tax, said:

"WHEREAS, It has been found that the works set out in the Plan for Reclamation are insufficient to reclaim a part of the lands within said district, and the Board of Supervisors have formulated amended plans extending laterals and ditches so as to more effectually reclaim the said lands of said district, and to furnish the benefits assessed against said lands; and

"WHEREAS, additional works have caused an indebtedness, and it has been found that the total tax levied under the levy heretofore made, upon which bonds were issued to the amount of Seventy Thousand Dollars, and the proceeds from the sale of said bonds is insufficient to complete the work of said district; and

"WHEREAS, the total assessment of benefits against all the lands of said Nyssa-Arcadia Drainage District is the sum of Two Hundred Ninety-four Thousand Two Hundred Forty-five 10/100 Dollars ($294,245.10); and the total taxes levied thereon is the sum of Eighty-one Thousand Nine Hundred Fifty-one 78/100 Dollars ($81,951.78); and the said district has issued and sold drainage bonds to the amount of Seventy Thousand Dollars ($70,000.00); and

"WHEREAS, it has been found that additional funds will be necessary to pay indebtedness and complete the work of said district, including the additional works found necessary. * * *"

It will be observed that the resolution indicates that the new work was to be performed, not only upon the additional 204 acres but also to "complete the work of said district." It seems to us that the resolution clearly indicates that the proceeds of the issue would be spent, in part, to "complete the work" paid for in large part by the 1916 issue.

Our previous decision quoted the recital contained in the bonds of the drainage district which said that all conditions exacted by law as precedents to the issuance of the bonds had been faithfully fulfilled. We held that the recital estopped the defendants from alleging that the bonds were invalid because of some minor matters which they said the district's officials should have performed before issuing the bonds but failed to perform. The same matters are alleged in the amended return in somewhat amplified form. The principle which we had in mind is thus stated in Klamath Falls v. Sachs, 35 Or. 325, 57 P. 329, 76 Am. St. Rep. 501:

"In legal effect, adequate recitals contained in negotiable municipal bonds are equivalent to a representation, or warranty, or certificate on the part of the officers, that everything necessary by law to be done has been done, and every fact necessary by law to have existed did exist, to make them legal and binding. * * *

"The gist of the rule is aptly stated by Mr. Justice Strong, in Town of Coloma v. Eaves, 92 U.S. 484, as follows: `Where it may be gathered from the legislative enactment that the officers of the municipality were invested with the power to decide whether the condition precedent had been complied with, their recital that it has been, made in the bonds issued by them, and held by a bona fide purchaser, is conclusive of the fact, and binding upon the municipality; for the recital is itself a decision of the fact by the appointed tribunal.' Hence it may be stated, as a general rule, that recitals in bonds which functionaries of a municipality have been empowered to issue, respecting the existence of specified facts, and the performance of the requisite conditions which are within their appropriate functions or province to ascertain and determine, will estop the municipality to assert or maintain anything to the contrary as against the claim of innocent holders."

The recitals in question are made over the signatures of the defendant district's president and secretary. It is true that the drainage district act (1915 Session Laws, Ch. 340) did not expressly authorize those officials to include the recitals in the bonds. The question, therefore, occurs whether they had implied authority so to do. The following circumstances determine that issue. The defendant drainage district was legally organized. The drainage district act authorizes such bodies to issue bonds: 1915 Session Laws, Ch. 340, § 25 (as amended, § 123-144, O.C.L.A.). The two officials who signed the bonds on behalf of the district had express authority so to do (same section as last cited). Obviously, before they signed the bonds it was the duty of those officials to determine whether the conditions precedent to the issuance of the bonds had been fulfilled. The authority to issue bonds grants authority to make the bonds negotiable in form: Town of Klamath Falls v. Sach, supra; and Jones, Bonds and Bond Securities, 4th ed., § 286. These bonds were negotiable. We believe that by necessary implication the authority to issue and sell these bonds carried with it authority to include the recitals: Jones, Bonds and Bond Securities, 4th ed., §§ 257 and 259.

We are satisfied that the recitals in the bonds estop the defendant drainage district from claiming, against the relators, that the supervisors who were in office when the bonds were issued omitted to perform any act required of them by the drainage district statute. The purchasers of the bonds were justified in believing the recitals contained in them. The statements there made were as effective to show compliance with the pertinent statutes as any other written record of their acts.

The extensive argument in the defendants' brief that the county court, upon a hearing of the exceptions filed against the report of the three assessing commissioners, had no right to increase the assessment of benefits, has no place in this proceeding. No increase was made. To the contrary, as already indicated, the total benefits were reduced by the county court $764, and a corresponding reduction was made in the assessed tax.

Forming a part of the amended return is a prayer, which says in part:

"These defendants further pray, that in event such answer and return be not found a sufficient defense, that for their direction and instruction in complying with any writ of mandamus that may issue, the following points of law and facts be specifically decided and explained, * * *:"

Then follow twelve "points of law and facts" many of which are accompanied with citations to previous decisions of this court. There is no averment that the defendants are unaware of the proper answers to the questions which they submit to us. The fact that they follow their questions with citations to Oregon decisions is an indication that they have the answers. Nor is it alleged that any action which the defendants may take in compliance with an order entered in this proceeding will meet with objection from those whom the defendants seem to fear. To answer all of the defendants' questions would require this court to write a textbook upon the subject of taxation and municipal securities. Seemingly, the defendants desire to convert this proceeding into one for an advisory opinion. We are satisfied that the prayer is inappropriate.

The above disposes of every issue properly before us. The motion to strike is allowed.