This section is from the book "The Law Of Contracts", by William Herbert Page. Also available from Amazon: Commercial Contracts: A Practical Guide to Deals, Contracts, Agreements and Promises.
All persons dealing with a public corporation are bound to take notice of the statutes creating it and conferring power upon it, and the mandatory statutes which prescribe the manner in which it may exercise its power.1 Thus where bonds
1 The Mayor of Nashville v. Ray, 19 Wall. (U. S.) 468; Richards v. Clarksburg, 30 W. Va. 491; 4 S. E. 774.
2 Schweiss v. Court, 23 Nev. 226; 34 L. R. A. 602; 45 Pac. 289.
3 Central, etc., Co. v. Wright, 164 U. S. 327. So may a school district. Curry v. District Township, 62 Ia. 102; 17 N. W. 191.
1 The Floyd Acceptances, 7 Wall. 666; Marsh v. Fulton Co., 10 Wall. 676; German Savings Bank v. Franklin Co., 128 U. S. 526; Bar-nett v. Dennison, 145 U. S. 135; Nes-bitt v. Riverside, etc., District, 144 U. S. 610; National Bank, etc., v. Granada, 54 Fed. 100; Coffin v. Kearney Co., 57 Fed. 137; Manhattan Co. v. Ironwood, 74 Fed. 535; were issued under a statute which fixed the levy at ten mills per annum for thirteen years, a sum insufficient to pay the bonds in full, the court said that all bondholders "were bound to take notice of the extent of the taxing district, and of the value of the property therein, and with those facts before them they acted at their peril as far as the property owners in this special taxing district are concerned."2 So bonds of a school district are void if for purpose for which it can not borrow money.3
 
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