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by-law, a notice of the board's intention to apply to the minister of education for authority to borrow shall be given to the community in a form prescribed by the minister, and by posting at a post office situated therein and in at least four widely separated and conspicuous places elsewhere therein; and by section 108, if the amount exceeds $800, 20 ratepayers in a town district, acting within 15 days of the date of the posting of the notice in question, may demand a poll for and against the by-law.

It is provided by section 109 that, in case no poll is demanded, there shall be transmitted to the minister a certified copy of the by-law and of the notice provided by section 107, with proof of the posting thereof, and a statutory declaration stating the amount of the assessed value of the real property in the district as shown by the last revised assessment roll in a case of a town district. Paragraph 3 of this section 109 continues as follows:

"And upon receipt of the same and upon being satisfied that the several conditions required by this act have been substantially complied with the minister may in writing authorize the board of trustees to borrow the sum or sums of money mentioned in the by-law or a less sum and shall publish notice of authorization in the Saskatchewan Gazette."

Paragraph 1 of section 127, after a preliminary which does not apply in the instant case, reads as follows:

"Upon being satisfied that the several conditions required by this act have been complied with the minister may in writing authorize the board of trustees to borrow the sum or sums of money mentioned in the by-law and shall publish notice of authorization in the Saskatchewan Gazette. The board may thereupon issue a debenture or debentures to secure the amount of the principal and interest of the loan so authorized or of any less sum upon the terms specified in the by-law and the debenture or debentures and the coupons thereto shall when signed by the chairman and treasurer of the district and countersigned by the minister as provided in section 129 hereof be sufficient to bind the district and create a charge or lien against all school property or rates in the district."

Subsequent paragraphs of this same section limit the amount of the issue to one-tenth "of the total assessed value of the real property within such district as shown by the last revised assessment roll," and provide that the debentures shall be in either of three alternative forms. If form 3 is followed, it is provided that annually by assessment a sum for a sinking fund should be raised sufficient, when compounded at 4 per cent., to meet the indebtedness at maturity.

Section 128 directs that, when the securities are executed by the local board, they shall be sent before issue to the minister for registration. All preliminaries to issue are concluded by the observance of the provisions of section 129, which we quote in full as follows:

"The minister shall thereupon if satisfied that the requirements of this act have been substantially complied with and if the authority to make the loan has not been withdrawn register and countersign the debenture and such countersigning by the minister shall be conclusive evidence that the district has been legally constituted and that all the formalities in respect to such loan and the issue of such debenture have been complied with and the legality of the issue of such debenture shall be thereby conclusively established and its validity shall not be questionable by any court in Saskatchewan

but the same shall to the extent of the revenues of the district issuing the same be of good and indefeasible security in the hands of any bona fide holder thereof."

The Saskatchewan Gazette is an official publication. The school district here under consideration has boundaries identical with those of the city of Regina. Some years before the events giving rise to this action, a separate or Roman Catholic district had been erected within the same limits under the provisions of sections 41 to 45, inclusive.

The plaintiff, taking the first step under the statutes, preparatory to the issue of debentures, on February 14, 1913, regularly passed, adopted, and sealed by-law No. 16. By way of preamble was recited the necessity that the sum of $500,000 should be borrowed on the security of the district for the purpose of erecting certain new school buildings and furnishing and equipping the same, including the purchase of sites, and to improve a school already built. These debentures, as stated in the preamble, were to be "payable to the bearer at the end of twenty years, with interest at not more than 8 per cent. per annum, payable annually." The enacting portion following the preamble reads as fol lows:

"Now, therefore, the board of trustees of the said district enacts as follows:

"1. That the necessary proceedings be taken under the School Act to obtain the sanction of the minister of education to the said loan.

2. That if the minister of education shall empower in writing the said board to borrow the said sum pursuant to the said act then debentures of the said district will be issued payable to the bearer at the end of twenty years with interest at not more than 8 per centum per annum and shall be executed by the chairman and treasurer of this board."

Notice of this by-law and its purposes was duly given the public and the proper declarations were made to the minister by whom it was approved, and the proposed issue authorized in writing, publication whereof was duly made in the official Gazette, whereupon the plaintiff advertised for tenders. Early in April, 1913, the defendant sent its representative, Mr. Mann, to Regina to investigate the matter, subsequently notifying the board of his full authority to represent it. Mr. Mann, who is an attorney of this bar, spent about two weeks in and about Regina upon this and other business. In behalf of defendant, April 12, he submitted a proposition in writing that the defendant would pay for $500,000 of plaintiff's 5 per cent, debentures, to be dated May 1, 1913, and to mature May 1, 1933, $475,000, with accrued interest to date of delivery. This proposition stipulated that the debentures were to be in the denomination of $1,000 each, with principal and semiannual interest payable in lawful money of the United States at either of the two branches of the Bank of Montreal at the option of the holders, located in New York City or Toronto, and that defendant would take up $100,000 of the issue August 1, 1913, and the balance in equal installments on the 1st of each of the succeeding four months. The tender concluded as follows:

"We will print and deliver to you at Regina at our expense lithographed blank debentures ready for execution.

"Prior to our taking up and paying for said debentures you are to furnish us complete transcripts of all proceedings leading up to and culminating in

the issuance of said debentures evidencing their legality to the satisfaction of our attorneys. Should our attorneys deem any additional by-law necessary, you are to pass same.

"This offer is for immediate acceptance and time is to be the essence of the contract. We will remit in New York exchange for said debentures."

A majority of the board indorsed their acceptance on this offer, whereupon a notice was regularly given for a special meeting to act formally. At this meeting, April 16, was adopted and duly recorded a resolution in detail accepting the tender following its terms. The resolution was not sealed.

The proposition of defendant embodied terms not within the provisions of by-law 16, whereupon, at the instance of Mr. Mann, representing the defendant, and who directed its substance, a new by-law, given the number 17, was passed at the same meeting. This by-law differed from by-law 16 only in that in the preamble it recited that it was desired to borrow the money with interest payable semiannually, and that in the enacting portion it read that the interest should be payable semiannually and the obligations should be payable "in lawful money of the United States at the Bank of Montreal in the state and city of New York or at the Bank of Montreal in the city of Toronto, Canada, at the option of the holders." Notice of this by-law was not given to the community, but the same was subsequently approved by the minister of education, and formal authority given to the board to issue the debentures therein provided for. Subsequently a transcript of all the proceedings of the board and of the several approvals of the minister of education was sent to defendant in Toledo and acknowledged by the latter's letter of April 22, the first paragraph whereof reads as follows:

"We acknowledge receipt of your esteemed favor of the 17th instant, with inclosures as listed. We will turn same over to our attorneys, and promptly advise you as to the result of their examination."

The attorneys in question appear to have approved the validity of the proposed issue, for defendant proceeded to prepare the blanks. May 21 the latter were forwarded by express, with a long letter of instruction from defendant as to how they should be executed, quoting the advice of defendant's Canadian counsel. It appears from the evidence that the expense incurred by defendant in preparing the blanks was approximately $100, a reprinting having been had as a matter of precaution on the part of defendant, because of the omission. of the word "public" in the title of the district, which, it appears, was not regarded as vital by defendant's Canadian counsel. Meanwhile, defendant extensively advertised these securities and negotiated the sale of a substantial part of the first issue about the 1st of July. Receiving the amended blanks, the plaintiff proceeded to execute the debentures, which were countersigned by the minister of education as required by section 129. July 5 the defendant telegraphed instructions for immediate forwarding to its correspondents in New York the first installment of $100,000, which was to be delivered August 1; the defendant having already effected sales. The request for expedition involved plaintiff in the extraordinary expense of sending its secretary

to British Columbia to secure the signature of the minister. The form of the debentures, as finally provided by the defendant, conformed exactly with that prescribed as the third alternative by paragraph 5 of section 127. Each read as follows:

"The Regina Public School District Number 4, of Saskatchewan. "Under the authority of the School Act and of by-law No. 16, passed on the 14th day of February, 1913, and by-law No. 17 passed on the 16th day of April, 1913, the board of trustees of the said school district promises to pay the bearer the sum of one thousand dollars of lawful money of Canada at the principal office of the Bank of Montreal in the city of Toronto, in Canada, or at its office in the city of New York, state of New York, in the United States, at the holder's option, on the first day of May, 1933, and to pay to the bearer the amount of each of the several interest coupons hereto attached as the same shall respectively become due. Dated May 1, 1913."

Attached thereto were semiannual interest coupons in the exact wording of the third form prescribed therefor in the statute. There was no statute directing or limiting the place of payment.

Defendant first expressed dissatisfaction with its purchase on July 8, when, by wire, it inquired whether lands liable to assessment for debenture indebtedness at the time of incurring the latter remained liable to and subject to assessment for its liquidation until that had been accomplished, or whether the subsequent transfer of lands within the public district at the time of the execution of the debentures to a Catholic owner supporting a separate school would relieve such property of the lien of the indebtedness. By letter of July 22, in which the matter was gone into at length, defendant indicated its intention to decline to take the issue because of its belief that the security was affected on account of the theoretical fluctuation of the amount of real property subject to assessment for the district's purposes, due to the provision for public and separate schools. This letter concludes with the following paragraph:

"While these debentures are not worth as much money as we contracted to pay for them, if it turns out that the security back of them is unfixed and unstable, yet to show our good faith in this matter, and as the district is probably in urgent need of funds, we are willing to take up the $100,000 now in New York pending the further investigation of this matter, if the district desires us to do so, with the express understanding that we are not waiving our rights under the contract, and are not approving the entire issue."

The offer to take the first installment without waiving the objection was accepted by the board. Under date of August 15, the defendant, referring to its letter of July 22, definitely refused to take the balance of the issue, saying, among other things, "Under the circumstances you are at liberty to dispose of the debentures elsewhere." Thereupon the board entered into negotiations with other persons, and sold the issue in September at the rate of 90 cents on the dollar. About this time, but not, however, until after the board had become obligated to sell the issue at 90, defendant made a new proposition to take the remaining $400,000 at 92.

In anticipation of the acquirement of funds through its agreement with the defendant, the plaintiff had entered into contracts and incurred obligations in the purchase of sites and the contracting for

the erection of the school buildings for which the loan was to be effected, a fact which the defendant recognized in its offer to take up the first $100,000, as indicated by the paragraph we have quoted from its letter of July 22. This anticipation of funds seems to have been in accordance with local laws (section 127a).

In this recitation of facts, two things are to be noted:

First, that the only reason given by the defendant, prior to the commencement of this action, for refusing to take the complete issue, is that fully stated in its letter of July 22, and ratified by that of August 15, to wit: Its conclusion that the laws of the province respecting the security by way of lien upon the lands within the school district at the time of issue were less favorable than it thought; and,

Second, that the debentures, as finally issued, have behind them a record which is in substantial conformity to the laws of the province.

As this second proposition plays a very important part in the final disposition of this case, it seems proper that there should now be discussed the reasons which lead the court to this conclusion. What we mean by it is this: That every step necessary to authorize the issue in question was substantially taken; that is, the statutory regulations thereto were substantially followed. To recapitulate, these steps are, successively: (a) The passage of a proper by-law which is to be sealed; (b) the opportunity through notice for a poll of the ratepayers; (c) a certified copy of the by-law and of the notice, giving an opportunity to demand a poll, with a declaration stating the amount of the assessed value of the real property of the district, to be transmitted to the minister of education; (d) the approval by the minister of the record so certified to him, followed by his authorization in writing that the loan may be effected, together with a notice of the authorization in the official publication; (e) the preparation and execution of debentures conformably to the form selected from the statute; (f) the second examination of the record made by the board had by the minister of education, followed by a registration of the issue in his office and his countersigning the several debentures.

Every one of these steps was taken in the case of this issue in substantial compliance with the law. By-law 16 was passed and sealed; notice to the community was duly given; the minister was furnished a transcript, with a proof of the notice, and the proper declaration; his authority in writing for the issue was granted-all before the representative of the defendant appeared on the scene. No one contends but that the law was followed exactly, respecting by-law 16, down to the point of execution of the debentures in substantial compliance with its provisions. The intermediate steps thereafter were properly taken as they came, and finally debentures were executed and countersigned by the minister which conformed exactly to the form prescribed by statute which the board of a district such as this may choose under paragraph 5 of section 127. Except for the filling up of the necessary blanks, the form of the debentures in question, as well as that of the coupons attached thereto, is exactly in the wording of the third alternative set of forms for debentures and coupons in the section in question.

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