Statement of the Case.

amendment except the defendant Tregea. He demanded that, in consequence of such amendment, a trial should be had de novo, but the court overruled his application, granted leave to file an amended answer, and permitted further evidence only in respect to the new matter set out in such amended pleadings. On November 29, 1889, written findings of fact and conclusions of law were filed and judgment entered, which judgment was in the following language:

"Wherefore, by reason of the law and the finding aforesaid, it is ordered, adjudged and decreed, that the proceedings by and under the direction of the board of supervisors of said county which are recited in the said findings, which were had for the organization of said irrigation district, the boundaries of which are described in said finding, including in said proceedings the election in said finding mentioned, which was held for the purpose of determining whether said proposed district should be organized as an irrigation district, be, and the same hereby are, approved and confirmed; and it is further ordered, adjudged and decreed that the proceedings had by and under the direction of the said board of directors which are recited in said petition and said findings, which were had for the purpose of the issue and sale of the bonds of said district to the amount of eight hundred thousand dollars, including in said proceedings the said election mentioned in said. petition and findings, which was held for the purpose of determining whether the bonds of said district should be issued; also the proceedings by and under the direction of said board, which are recited in said findings, by which a certain tract of land in said findings described, which was included within the boundaries of said district as it was organized as aforesaid, was excluded from said district, and by which the boundaries of said district are defined and described as said boundaries were and remained upon and after the exclusion from said district of said tract of land, which said boundaries are in said findings described, and also the proceedings by and under the direction of said board by which it was ordered that bonds of said district to the amount of four hundred thousand dollars, parcel of said amount of eight hundred thousand dollars of

Opinion of the Court.

said bonds, be offered for sale in the manner provided by law, be, and each and all of said proceedings is, and are hereby, approved and confirmed; and it is further ordered, adjudged and decreed that the said Modesto Irrigation District, ever since its organization as aforesaid, has been and now is a duly and legally organized irrigation district, and that said irrigation district possesses full power and authority to issue and sell from time to time the bonds of said irrigation district to the amount of eight hundred thousand dollars."

The defendant appealed from this judgment and decree to the Supreme Court of the State which, on March 19, 1891, modified the decree of the Superior Court by striking out so much thereof as confirmed the order of January 3, 1888, for the issue of $500,000 of bonds of the district, and, as so modified, affirmed it. The opinion of that court is found in SS California, 334. To reverse this judgment of the Supreme Court of the State the defendant sued out a writ of error from this court.

Mr. Thomas B. Bond for plaintiff in error. Mr. J. J. Scrivner and Mr. George W. Schell were on his brief.

Mr. John II. Boalt, as Amicus Curiæ, filed a brief in the interest of plaintiff in error.

Mr. A. L. Rhodes for defendant in error.

Mr. Benjamin Harrison for defendant in error.

Mr. C. C. Wright for defendant in error. Call was on his brief.

Mr. Joseph H.

Mr. Harry

Mr. John F. Dillon for defendant in error. Hubbard and Mr. John M. Dillon were on his brief.

MR. JUSTICE BREWER, after stating the case, delivered the opinion of the court.

A motion was made to dismiss this case on the ground of the lack of a Federal question. It appears from the opinion

Opinion of the Court.

of the Supreme Court of the State that the defendant contended before it that the attempt to bind the reconstituted district that is, the district diminished by the exclusion of 28,000 acres, and in which his property was situated — by a vote of the district prior to such exclusion in respect to the issue of bonds, was in violation of section 10, article I of the Constitution of the United States; and that it overruled and denied such contention. So there was considered by the Supreme Court of the State the distinct question of an alleged conflict between the proceedings confirmed by the decrce of the lower court and rights claimed under the Constitution of the United States, and the decision was against those rights. Further, the real contention of the defendant was and is that the operation of this statute is to deprive him of property without due process of law. The burden of his case from the first has rested in the alleged conflict between proceedings had under the irrigation statute and the Federal Constitution; so that beyond the express declaration in the opinion of the Supreme Court of the State, we may look to the real matter in dispute, and these unite in forbidding us to say that no Federal question was presented. The motion to dismiss on that ground must be overruled.

But going beyond this matter, we are confronted with the question whether, in advance of the issue of bonds and before any obligation has been assumed by the district, there is a case or controversy with opposing parties, such as can be submitted to and can compel judicial consideration and judgment. This is no mere technical question. For, notwithstanding the adjudication by the courts of the State in favor of the validity of the order made for the issue of four hundred thousand dollars of bonds, and, notwithstanding any inquiry and determination which this court might make in respect to the matters involved, there would still be no contract executed; no obligation resting on the district. All that would be accomplished by our affirmance of the decision of the state. court would be an adjudication of the right to make a contract, and, unless the board should see fit to proceed in the exercise of the power thus held to exist, all the time and labor

Opinion of the Court.

of the court would be spent in determining a mere barren

We are not concerned with any question as to what a State may require of its judges and courts, nor with what measures it may adopt for securing evidence of the regularity of the proceedings of its municipal corporations. It may authorize an auditor or other officer of state to examine the proceedings and make his certificate of regularity conclusive evidence thereof, or it may permit the district to appeal to a court for a like determination, but in either event it is a mere proceeding to secure evidence.

The directors of an irrigation district occupy no position antagonistic to the district. They are the agents and the district is the principal. The interests are identical, and it is practically an ex parte application on behalf of the district for the determination of a question which may never in fact arise. It may be true, as the Supreme Court say, that it is of advantage to the district to have some prior determination of the validity of the proceedings in order to secure the sale of its bonds on more advantageous terms, but that does not change the real character of this proceeding.

This is not the mere reverse of an injunction suit brought by an inhabitant of the district to restrain a board from issuing bonds, for in such case there is an adversary proceeding. Underlying it is the claim that the agent is proposing to do for his principal that which he has no right to do, and to bind him by a contract which he has no right to make; and to protect his property from burden or cloud the taxpayer is permitted to invoke judicial determination. If in such suit an injunction be granted, as is prayed for, the decision is not one of a moot question, but is an adjudication which protects the property of the taxpayer.

The power which the directors claim is a mere naked power, and not a power coupled with an interest. It is nothing to them, as agents, whether they issue the bonds or not; they neither make nor lose by an exercise of the alleged power; and if it be determined that the power exists, still no burden

Opinion of the Court.

is cast upon the property of the district because no bonds are issued save by the voluntary act of the board.

It may well be doubted whether the adjudication really binds anybody. Suppose the judgment of the court be that the proceedings are irregular, and that no power has been by them vested in the district board, and yet notwithstanding such decision the board issues, as provided by the act, the negotiable bonds of the district, will a bona fide purchaser of those bonds be estopped by that judgment from recovering on the bonds against the district? The doctrine of lis pendens does not apply. Neither is any such adjudication binding in respect to negotiable paper unless the party purchases with knowledge of the suit or the decree. Warren County

v. Marcy, 97 U. S. 96; Brooklyn v. Insurance Company, 99 U. S. 362; Orleans v. Platt, 99 U. S. 676; Cass County v. Gillett, 100 U. S. 585; Empire v. Darlington, 101 U. S. 87; Thompson v. Perrine, 103 U. S. 806; Carroll County v. Smith, 111 U. S. 556; Scotland County v. Hill, 112 U. S. 183.

The case of Carroll County v. Smith is instructive on this question. In that case, before the issue of the bonds in suit, an injunction had been issued by the chancery court of the county enjoining the county officials from issuing and delivering the bonds, which injunction was afterwards sustained and made perpetual by the judgment and decree of the Supreme Court of the State. Notwithstanding which the county officials fraudulently and illegally issued the bonds, and this court sustained a judgment on those bonds in favor of a bona fide holder, saying in the opinion: "The defendant in error was no party to that suit, and the record of the judgment is therefore no estoppel. The bonds were negotiable, and there was, therefore, no constructive notice of any fraud or illegality by virtue of the doctrine of lis pendens. Warren County v. Marcy, 97 U. S. 96. It is not alleged in the plea that the defendant in error had actual notice of the litigation, or of the grounds on which it proceeded, or that any injunction was served upon the board of supervisors; and, if he had, that notice would have been merely of the question of law, of