Colorado § 37-41-117 - Bonds - contract - purposes - election.

§ 37-41-117. Bonds - contract - purposes - election.

(1) For the purpose of constructing or purchasing or acquiring necessary reservoir sites, reservoirs, water rights, canals, ditches, and works and of acquiring the necessary property and rights therefor; for the assumption of indebtedness to the United States or for entering into a contract with the United States or any agency thereof or water right owners for district lands; for the purpose of paying the first year's interest upon the bonds authorized in this article; and for otherwise carrying out the provisions of this article, the board of directors of any such district, as soon after such district has been organized as may be practicable, shall estimate and determine the amount of money necessary to be raised for such purposes and shall forthwith call a special election, at which election shall be submitted to the electors of such district possessing the qualifications prescribed by this article the question of whether or not the bonds of said district shall be issued in the amount so determined and, if applicable, whether the contract shall be approved.

(2) A notice of such election must be given by posting notices in three public places in each election precinct in said district for at least twenty days and also by publication of such notice in some newspaper published in the county where the office of the board of directors of such district is required to be kept, once a week for at least three successive weeks. Such notice shall specify the time of holding the election, the amount of bonds proposed to be issued, and, if applicable, the dollar amount of the contract to be entered into, and said election must be held and the result thereof determined and declared in all respects as nearly as possible in conformity with the provisions of this article governing the election of officers. No informalities in conducting such election shall invalidate the same if the election shall have been otherwise fairly conducted.

(3) At such election the ballots shall contain the words, if applicable, "Bonds - Yes" or "Bonds - No" or, if applicable, "Contract - Yes" or "Contract - No", or words equivalent thereto. If a majority of the legal electors who are freeholders and taxpayers or entrymen qualified as provided in this article within said district voting at said election have voted "Bonds - Yes" or "Contract - Yes", the board of directors shall immediately cause bonds in such amount to be issued and payable in series with such rate of interest as may be required to market said bonds as irrigation district bonds or cause the contract to be executed by the president and the secretary of the district.

(4) The principal and interest shall be payable at the office of the county treasurer of the county in which the organization of the district was effected and at such other place as the board of directors may designate in such bond. Said bonds shall be in denominations as may be determined by the board of directors and shall be negotiable in form, executed in the name of the district, and signed by the president and secretary, and the seal of the district shall be affixed thereto. Bonds deposited with the United States may call for the payment of such interest not exceeding the going rate for irrigation district bonds, may be of such denominations and may call for the repayment of the principal at such times as may be agreed upon between the district and the secretary of the interior, and, where the contract provides, may likewise call for the repayment of the principal at such times as may be agreed upon. Said bonds shall be numbered consecutively as issued and bear date at the time of their issue. Coupons for the interest shall be attached to each bond bearing the lithographed signatures of the president and secretary. Said bonds shall express on their faces that they are issued by the authority of this article, stating its title and date of approval.

(5) The secretary shall keep a record of the bonds sold, their number, date of sale, the price received, and the name of the purchaser; but any such district, by a majority vote of the legal electors of said district voting at said election, may provide for the issuance of bonds that will mature in any number of years less than thirty and arrange for the payment thereof in series. When the money provided by any previous issue of bonds has become exhausted by expenditures authorized therefrom and it becomes necessary to raise additional money for such purposes, additional bonds may be issued by submitting the question at a special election to the qualified voters of said district and otherwise complying with the provisions of this section in respect to an original issue of such bonds. The lien for taxes, for the payment of the interest and principal of any bond issue, or for any indebtedness under any contract with the United States or any agency thereof or another financial institution shall be a prior lien to that of any subsequent bond issue or under subsequent contract.

(6) If a contract is proposed to be made with the United States and bonds are not to be deposited with the United States in connection therewith, the question to be submitted to the voters at such special election is whether a contract shall be entered into with the United States or any agency thereof or any financial institution. The notice of election shall state the maximum amount of money payable to the United States for construction or other purposes, exclusive of penalties and interest, and the water rights and other property, if any, to be conveyed to the United States, any agency thereof, or another financial institution as provided in section 37-41-113. The ballots for such election shall contain the words "Contract with the United States or agency thereof or financial institution - Yes", and "Contract with the United States or agency thereof or financial institution - No", or words equivalent thereto.

Source: L. 05: p. 256, § 15. R.S. 08: § 3454. L. 17: p. 298, § 6. C.L. § 1983. CSA: C. 90, § 391. CRS 53: § 149-1-15. C.R.S. 1963: § 150-1-15. L. 77: Entire section amended, p. 1633, § 1, effective June 2.

ANNOTATION

Law reviews. For note, "A Survey of Colorado Water Law", see 47 Den. L.J. 226 (1970).

The constructions placed on this and the following sections by the supreme court of Colorado are binding on the federal courts. Denver-Greeley Valley Irrigation Dist. v. McNeil, 80 F.2d 929 (10th Cir. 1936).

Violation of rule was nonprejudicial where majority of qualified electors voted in favor of bond issue. The violation of this rule was nonprejudicial to plaintiff, where it appeared that the whole number of qualified electors entitled to vote at the election for a second bond issue was 10, and that at least six who voted "Yes" possessed the requisite qualifications, so that a majority voted in favor of the bond issue. Wilder v. Bd. of Dirs. of S. Side Irrigation Dist., 55 Colo. 363, 135 P. 461 (1913).

The power given to the irrigation district to issue its bonds, when exercised, imposed an obligation upon the district to levy a sufficient tax to pay such bonds as they became due unless the constitution or statutes of the state forbade. Norris v. Montezuma Valley Irrigation Dist., 248 F. 369 (8th Cir. 1918).

This section becomes a part of the contract with the bondholders. The bondholders must be held to have taken the bonds with the understanding and agreement that they were only entitled to the principal and the annual interest, and that no interest on the principal of the bonds or on the coupons was provided for or could be recovered after their maturity. In re Green City Irrigation Dist., 91 Colo. 202, 13 P.2d 1113 (1932).

One is entitled to a judgment against the district, but not entitled to execution unless perchance to reach moneys in the treasury which may have been collected from assessments levied in accordance with the underlying statute. She must look to the revenue provided by statute for the payment of her bonds. Divide Creek Irrigation Dist. v. Hollingsworth, 72 F.2d 859 (10th Cir. 1934).

Where bonds recite that all acts and things required to be done to render their issuance lawful have been done, the district cannot assert, against an innocent purchaser for value, that they were improvidently issued, or issued for a purpose not contemplated by the statute or election notice, or that those to whom they were issued did not live up to agreements contemporaneously made. Divide Creek Irrigation Dist. v. Hollingsworth, 72 F.2d 859 (10th Cir. 1934).

A third person having knowledge of infirmities in bonds should return them. In an action for the return of irrigation district bonds, a third party to whom they were delivered, having full knowledge of their infirmities, should return them, regardless of the relations existing between himself and the party to whom they were originally delivered. Henry L. Doherty & Co. v. Steele, 71 Colo. 33, 204 P. 77 (1922).

If bonds of an irrigation district are so wrongfully delivered that they ought to be returned, then they to whom they are delivered should return them, and they cannot relieve themselves of the obligation by transferring them to others, whether those others be holders in due course or not. Henry L. Doherty & Co. v. Steele, 71 Colo. 33, 204 P. 77 (1922).

The fact that the district is not liable on bonds which were wrongfully delivered is one reason why they should be returned. Henry L. Doherty & Co. v. Steele, 71 Colo. 33, 204 P. 77 (1922).

It was not error to enter judgment for the par value of bonds in case they could not be returned to the district. Henry L. Doherty & Co. v. Steele, 71 Colo. 33, 204 P. 77 (1922).

The delivery of certain rights-of-way of nominal value to an irrigation district held not a sufficient consideration for a transfer of bonds of the district of the face value of $250,000. Henry L. Doherty & Co. v. Steele, 71 Colo. 33, 204 P. 77 (1922).

This section provides that, so far as a second issue of bonds is concerned, the same procedure must be gone through as is provided for the first issue. This means everything concerning them. Thomas v. Patterson, 61 Colo. 547, 159 P. 34 (1916).

In order to be different liens for taxes, there must be different levies for these taxes. The proviso of this section says "the lien for taxes" not "the lien on taxes" and, in order to be different liens for taxes, there must be different levies for these taxes. Somewhat similar conditions pertaining to different liens for taxes have been recognized in different cases, some of which are cited, not as authority upon this question, but as referring to the subject and as recognizing a distinction between different liens for taxes for different purposes. City & County of Denver v. Keeler, 48 Colo. 54, 108 P. 998 (1910); Thomas v. Patterson, 61 Colo. 547, 159 P. 34 (1916).