Toole County Irr. Dist. v. Moody

Prior to April 27, 1937, appellees, Robert Moody, August J. Lang, Jr., and R. F. McMullen, 1 acquired 42 bonds of $500 each (Series B) dated July 1, 1921, 50 bonds of $500 each (Series C) dated January 1, 1922, and 55 bonds of $1,000 each (Series D) dated January 1, 1922 — in all, 147 bonds aggregating the principal sum of $101,000 2 —issued by the board of commissioners of appellant, Toole County Irrigation District, a Montana corporation, hereafter called the district. The bonds bore 6% interest and were due, but not paid, on January 1, 1930. Interest thereon was paid to July 1, 1932. Also, prior to April 27, 1937, 5% ($5,050) of the principal was paid, leaving an unpaid balance of $95,950. 3 For this balance, with interest, appellees, on April 27, 1937, brought an action against the district and, on June 2, 1941, obtained judgment against the district. The district has appealed.

The question is whether, as contended by appellees, the bonds constitute general obligations of the district or whether, as contended by the district, they are merely a charge on lands within the district.

The district was organized under and pursuant to chapter 146, Laws of Montana, 1909, 4 as…