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Another case cited is Speidel v. N. Barstow Co. (D. C.) 243 Fed. 621, before Brown, District Judge, who calls attention to the fact that two of the plaintiffs were alien enemies residing in Germany at the time of the commencement of the suit, but that the other plaintiffs were residents of this country at that time. He says:
"It is conceded by plaintiffs' counsel that an alien enemy resident in his own country is under disability during the war to institute and maintain suit. That this disability applies to Fredrich and Eugene Speidel seems well settled by authority. According to good authority, however, this disability does not attach to the alien enemy plaintiffs resident in this country" (citing authorities).
He then discusses the difficulty of dismissing as to two of the plaintiffs and continuing as to the others, and finally reaches the conclusion that the proper course was to continue the case until the termination of the war.
The case of The Kaiser Wilhelm II, 246 Fed. 786, 159 C. C. A. 88, L. R. A. 1918C, 795, is also cited. This was a decision before the Third Circuit Court of Appeals, opinion by Buffington, J. The court in its opinion says:
"This case is exceptional in its situation, and calls for the exercise of that range of discretion which the broad powers of a court of admiralty enable it to exercise. Such broad powers and range of discretion are, in our judgment, fittingly exercised by an order which will make due provision for, first, giving the German citizen and belligerent an opportunity to litigate his rights, if relations with his country are hereafter resumed; second, providing for adjudging, if the government hereafter so desires, its rights and liabilities, if any, in taking over libeled property of the German subject; third, adjudging hereafter what effect the taking of this ship by the government had on the claim of the British lienor, and the further obligation of the German vessel owners as between themselves. In following this course, and protecting the unprotected rights of an absent German citizen while this country is at war with the imperial government of its country, we are impelled by three all-sufficient reasons: First, the innate sense of fairness, decency, and justice, which respects the rights of an enemy; second, the broad principles of international intercourse, which leads courts and nations that believe in international rights to be the more careful to observe them toward belligerents; and, lastly, because the awarding to this German citizen, with whom our country is at war, the careful preservation until times of peace of its rights is in line with those high ideals of Anglo-Saxon justice which led the British courts year ago, in Re Boussmaker, 13 Vesey, 71, decided in 1806, to allow the claim of an alien enemy to be proved in time of war and the dividends held by the British court until peace. Indeed, the fact that our country is now at war with Germany is all the more reason why this court should most scrupulously award to this German citizen those international and equitable rights which no fair-minded people ever deny even to their enemies in times of war."
This case has been cited with approval by the United States Supreme Court in Watts, Watts & Co., Limited, v. Unione Austriacal Di Navigazione, etc., 248 U. S. 9, 39 Sup. Ct. 1, 63 L. Ed.
I think that the severity of the ancient rule, which denied the rights of an alien enemy in the courts of this country, has been moderated by the trend of the modern authorities, and that the rule is at present more honored in the breach than in the observance, for, if the reason for the rule is the fact that to permit an alien enemy to recover prop
erty is to give that property to the alien enemy during the time of war, then this purpose can be easily and effectually accomplished by postponing the hearing of a cause until peace is declared.
If, on the other hand, the rule is that an alien enemy has no standing in the courts of this country, then this rule is relaxed, and held not to apply where the suit was brought before the declaration of war, and where the suit was brought by an alien enemy resident of this country. These decisions are inconsistent with the general rule that an alien enemy has no standing in the courts of this country.
There can be no difference between the standing of an alien enemy who is a resident here, and one who has instituted suit before the declaration of war, and one who resides in his own country; if each of them is an alien enemy, and if an alien enemy can have no standing in the courts, then they can have no standing during the existence of a state of war.
The progress of modern thought and judicial opinion is growing much more liberal, and as the Supreme Court has so frequently had occasion to say, "where the reason of the rule ceases, the rule ceases,' and I can see no reason for dismissing a suit now brought, knowing that, as soon as peace is declared, the same party can institute the same suit again, and it seems to me the better rule would be to continue the case until peace is declared, preserving to the parties the rights they now have for determination then.
Taking the instant case, this sailor was employed by the Italian bark Oropa, after the declaration of war by this country against Austria. He served on this bark without objection on the part of the claimant until the dispute arose as to his wages; the vessel will leave, and may never come back; the sailor has declared his intention to become naturalized, and, if his libel is dismissed, he may lose for all time the right to try the question of his wages.
I am therefore of the opinion that the case should not be dismissed, but should be continued until the conclusion of peace; and such a decree will accordingly be entered.
BOARD OF TRUSTEES FOR REGINA PUBLIC SCHOOL DIST. NO. 4 OF SASKATCHEWAN v. SPITZER et al.
(District Court, N. D. Ohio, W. D. January 9, 1919.)
1. SCHOOLS AND SCHOOL DISTRICTS 97(7)—VALIDITY OF BONDS-ProceedINGS PRELIMINARY TO ISSUE.
Under a statute requiring trustees of a school district, before issuing bonds, to embody the proposition in a by-law and post notices containing the same in public places, to afford the electors opportunity of demanding a poll, bonds of a district are not invalid because, whereas, the preamble to the by-law recited that they should bear interest at not more than 8 per cent., payable annually, as issued the interest was made payable semiannually, with a rate of 5 per cent., which made the loan more favorable to the district.
For other cases see same topic & KEY-NUMBER in all Key-Numbered Digests & Indexes
When the enacting portion of a statute or by-law is unambiguous, its meaning will not be controlled or affected by anything in the preamble or recitals.
3. SCHOOLS AND SCHOOL DISTRICTS 97(7)-BONDS-SUBSTANTIAL COMPLIANCE WITH STATUTE.
Where school district bonds have been issued in compliance with statutory requirements in every substantial matter, they are not invalidated by immaterial variations, such as the fixing of a particular place of payment, or providing for payment of interest semiannually, instead of annually; things which are not prohibited by the statute, which merely prescribes the annual rate of interest.
4. CONTRACTS 328(5)-CHANGING DEFENSES.
Where defendants based their refusal to perform a contract on a specific ground, they cannot, when sued for its breach, shift their defense to other grounds, which, if they had been made known at the time, might have been obviated.
5. SCHOOLS AND SCHOOL DISTRICTS 97(5)-BONDS-CONTRACT TO PURCHASE -ACTION FOR BREACH.
One contracting to purchase bonds to be issued by a school district, and who by his attorney, before making the contract, carefully examined the statute under which they were to be issued, cannot avoid the contract because of a fact claimed to render them less desirable than he supposed, but which was plainly disclosed by the statute.
6. SCHOOLS AND SCHOOL DISTRICTS
97(5)—CONTRACT FOR SALE OF BONDS
A contract by a school district for the sale of bonds to be issued by it is not invalid, because the bonds are not then in existence, where the district has taken all the steps required by statute to authorize their issue. 7. SCHOOLS AND SCHOOL DISTRICTS 97(5)-CONTRACT FOR PURCHASE Of BONDS-VALIDITY.
A contract for the purchase of bonds of a school district, subject to approval of the proceedings leading to their issuance by purchasers' attorneys, cannot be avoided on the ground that such approval was not given, where, after receiving a transcript of all such proceedings, with time for its examination, and without objection thereto, purchasers prepared the bonds and sent them to the district for execution.
58-VALIDITY OF CORPORATE ENACT
8. SCHOOLS AND SCHOOL DISTRICTS
MENT NECESSITY OF SEAL.
Under the common law, acts of the trustees of a school district, who are made by statute a corporate body with a seal, passed at a regularly constituted meeting and made of record, need not be sealed.
97(5)-SALE OF BONDS-VALIDITY OF
9. SCHOOLS AND SCHOOL DISTRICTS CONTRACTS-ULTRA VIRES PROVISION.
A provision in a contract by a Canadian school district for sale of its bonds, to be issued, that they should be made payable in money of the United States, held, while ultra vires, since the statute only authorized the issuance of bonds payable in Canadian or English money, a separable provision, which did not invalidate the contract as a whole, especially where it was so treated by the parties, by abandoning such provision and making the bonds conform to the statute.
10. SCHOOLS AND SCHOOL DISTRICTS 97(5)—SALE OF BONDS-ULTRA VIRES CONTRACTS-EFFECT OF PART PERFORMANCE.
Where a school district, after making a contract for the sale of its bonds, on the faith of the contract and in carrying it out, incurred a considerable expense and entered into lawful contracts for the purchase of property, to be paid for from the proceeds of the bonds, the purchasers could not afterward avoid their obligation to take the bonds, on the ground that the contract contained provisions which on the part of the district were ultra vires.
For other cases see same topic & KEY-NUMBER in all Key-Numbered Digests & Indexes
11. SCHOOLS AND SCHOOL DISTRICTS 97(10)—VALIDITY OF BONDS--"BONA FIDE HOLDERS."
Under a statute of Saskatchewan, Canada, requiring the proceedings of a school district for the issuance of debentures to be submitted to the minister of education, and providing that on his approval the validity of the debentures, when executed and presented to and countersigned by him, should not be questioned in any court of the province in the hands of a bona fide holder, such "bona fide holder" includes any purchaser from the district for value and without actual fraud.
[Ed. Note.-For other definitions, see Words and Phrases, First and Second Series, Bona Fide Holder.]
12. SCHOOLS AND SCHOOL DISTRICTS 97(5)-CONTRACT FOR SALE OF BONDS -DAMAGES FOR BREACH.
An accepted offer to purchase bonds of a school district, made in response to a public advertisement for tenders, does not create a contract merely for the loan of money, but is one for the sale and purchase of negotiable public securities, for the breach of which by the purchaser compensatory damages are recoverable.
At Law. Action by the Board of Trustees for Regina Public School District No. 4 of Saskatchewan against Adelbert L. Spitzer, Horton C. Rorick, and Carl B. Spitzer, doing business as Spitzer, Rorick & Co. Trial to the court, and judgment for plaintiff.
Marshall & Fraser, of Toledo, Ohio, and Brown, Thom, McMorran, Bastedo & Jackson, of Regina, Sask. (D. J. Thom, of Regina, Sask., of counsel), for plaintiff.
Tracy, Chapman & Welles and James S. Martin, all of Toledo, Ohio, for defendants.
KILLITS, District Judge. The defendant, a copartnership known as Spitzer, Rorick & Co., of Toledo, Ohio, dealing in municipal and other securities, entered into an agreement in April, 1913, with the plaintiff, the board of trustees for the Regina public school district No. 4, province of Saskatchewan, Canada, to purchase at the rate of 95 per cent., or for $475,000, $500,000, par value, of debentures which the plaintiff proposed to issue. These debentures were to be dated May 1, 1913, to run for 20 years, and were to be issued pursuant to the school laws as found in chapter 100 of the revision in 1909 of the laws of the province, with subsequent amendments. In citing these laws by section number hereafter, it will be understood that the numbering is that of chapter 100 of this revision. After making the agreement in question, the board proceeded to the execution of the debentures, which, as to the last $400,000, were declined by defendant for reasons hereafter discussed; the first installment, of $100,000, being accepted at the contract rate of 95 per cent. ($95,000), the defendant reserving its objection to taking the rest. Defendant finally declining to take the balance, after some delay plaintiff sold them at the rate of 90 per cent., and this action is to recover the difference between the offer of defendant of 95 per cent. of par and the price at which they were sold to third parties, or $20,000, as damages for defendant's default. A jury has been waived, there being little dispute as to the facts, and the case is tried to the court upon the facts and law. The
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defense raises the question of the validity of the issue and the regularity of the proceedings by the plaintiff board preliminary to issue, principally on grounds raised for the first time in the answer. The case requires an interpretation of certain of the school laws of Saskatchewan as to which we are not materially assisted by local adjudications.
By section 82 of the laws in question:
"The trustees of every district shall be a corporation under the name "The Board of Trustees for the School District No. of Saskatchewan.'"
It is provided elsewhere that the board shall consist of five members, a majority of which shall constitute a quorum, and section 88 avoids as invalid and unbinding on any party an act not adopted at a regular or special meeting with a quorum present. Section 92 provides for organization, the keeping of records, to be signed by the chairman and secretary, and for other details of control and management, including an obligation to provide and maintain adequate school property and facilities. By paragraph 2 of this section the procuring of a corporate seal is made obligatory, and by paragraph 3 is directed the prompt transmission of reports and statements respecting the board's transactions, as elsewhere required by the act to be given the provincial minister of education.
Other provisions of the chapter determine that the districts may be rural, village or town; that they shall have territorial extent, which in case of a municipality may be coterminous or otherwise with the limits thereof. By section 41 it is provided that, where a public school district has already been organized, a minority of the ratepayers therein, of whatever religious faith, Protestant or Roman Catholic, may demand and secure the erection in the same territory of a separate school district, and that in such case the ratepayers establishing such separate district "shall be liable only to assessments of such rates as they impose upon themselves in respect thereof"; and by section 45, thereafter the board of such separate district shall have the same privileges. obligations, duties, and responsibilities respecting the same as devolve upon the board of the public district. Both districts are municipal corporations of the same quality, called "public" or "separate" by way of designation only, and it is clearly provided in paragraph 2 of section 45 that no one who is legaily assessed or assessable for a public school shall be liable to assessment for any separate school, nor shall "the ratepayers of the religious faith of the minority" supporting a separate district be assessable for school purposes other than for his own district.
By section 106 it is directed that the board of any district, desiring to borrow money "upon the security of the district for securing, purchasing, adding to, extending or improving a school site or sites," etc., shall pass a by-law to that effect, to be substantially in the form prescribed by the minister of education, this by-law to be "under the corporate seal of the district," and to be inscribed in the minute book containing the board's record of proceedings.
Section 107 requires that, within five days from the passing of the