Fernald v. Town of Gilman

Citations

• 123 F. 797
• 1903 U.S. App. LEXIS 4943

Syllabus

<p>1. Municipal Bonds—'Validity—Effect op Erroneous Recital.</p> <p>An erroneous recital in municipal bonds that they were issued under a certain legislative act, which did not in fact authorize their issuance, is mere surplusage, and does not render the bonds invalid.</p> <p>2. Same—Powers of Town.</p> <p>An incorporated town in Iowa, having power to become indebted for various purposes, which borrowed money for a lawful corporate use, had power to issue an evidence of its indebtedness, and where it issued to the lender its negotiable bonds therefor, on which it paid interest until their maturity, it is liable on such bonds in the hands of the lender or his assignee for the amount so borrowed, whether or not it had statutory power to issue negotiable obligations.</p> <p>3. Statute of Frauds—Contract not to be Performed within One Year.</p> <p>A parol contract by which a town borrowed money and agreed to repay it at the end of 10 years is not void under the Iowa statute of frauds, as construed by its Supreme Court, on the ground that it was not to be performed within one year, when it was to be performed by the lender on his part at once, and was performed by his paying over the money.</p> <p>4. Municipal Corporations—Liability for Borrowed Money—Invalidity of</p> <p>Bonds.</p> <p>One who in good faith lent money to a town to be used for a corporate purpose, taking its bonds therefor, is entitled to recover, in an action for money had and received, where the bonds are void for want of power in the town to issue the same.</p>