AEtna Life Ins. Co. v. City of Burrton

• Decision Date: 15 September 1896
• Docket Number: 407.
• Citation: 75 F. 962
• Parties: AETNA LIFE INS. CO. v. CITY OF BURRTON.
• Court: U.S. District Court — District of Kansas

75 F. 962

AETNA LIFE INS. CO. v. CITY OF BURRTON.

No. 407.

United States Circuit Court, D. Kansas, Third Division.

September 15, 1896

Rossington Smith & Dallas, for plaintiff.

J. W Rose and Peters & Nicholson, for defendant.

FOSTER District Judge.

This action is brought to recover upon interest coupons attached to bonds issued by the defendant corporation to aid in the construction of the Kansas Midland Railway, by virtue and under authority of chapter 107 of the act of the legislature of 1876, entitled 'An act to enable counties, townships and cities to aid in the construction of railroads, and to repeal section 8 of chapter 39 of the Laws of 1874. ' The total issue of bonds was $14,000, bearing date December 1 1887, were to run 30 years, and bore interest at the rate of 6 per cent. per annum, payable semiannually. The defendant corporation is, and was at the time of the issuance of the bonds, a city of the third class. The defendant makes defense to this action on several grounds, and, first, that the city of Burrton, under the provisions of section 4 of chapter 60 of the act of 1871, is a part of the municipal township of Burrton for the purpose of subscribing stock in aid of constructing railroads, and cannot issue bonds as a city that the city of Burrton never had a population of 1,000 inhabitants, nor an assessed value of real and personal property of $100,000, and hence has never become a separate township for any purpose under the provisions of paragraph 925 of the General Statutes of 1889. As a further defense, the defendant avers that the total assessed value of all property, real and personal, in Burrton township, including the city of Burrton, for the year 1886, was $226,961.42, and that the law only authorized the issue by townships of bonds in aid of railroads to the amount of $15,000, and 5 per cent. additional of the assessed value of the township. It further avers that the municipal township of Burrton, prior to the issuing of the bonds in controversy, had issued $26,000 of its bonds in aid of the said railway company, that being the full amount which it was authorized by law to issue. As a further defense, it is averred that the total mileage of the main line of the Kansas Midland Railway in Harvey county was 13.18 miles, and, including side tracks and switches 15.1 miles; that, prior to the issuance of these bonds, Lake township, in said county, had issued $20,000 of its bonds to said railway company, in addition to the $26,000 issued by the township of Burrton; and that the act of the legislature of 1887 (chapter 183), which was in force at the time the bonds were issued, limited the total issuance of bonds for county, township, and city in aid of any railroad to $2,000 for each and every mile constructed in the county, and therefore the said bonds in controversy were in violation of said act, an overissue, illegal, and void. In reply to the last defense, the plaintiff avers that the limit of $2,000 per mile does not apply, because these bonds were voted in 1886, and the law at that time permitted the issue of $4,000 per mile, and the law of 1887 contained provisos saving all rights acquired under the former act.

The first question to be considered is the intent and meaning of section 4 of chapter 60 of the act of 1871, providing for the organization and government of cities of the third class. It reads as follows:

'Sec. 4. Municipal corporations regulated and governed by this act shall be and remain a part of the corporate limits of the municipal townships in which the same is situated for all township purposes of electing justices of the peace, constables, for the purpose of building bridges, and subscribing stock in aid of constructing railroads. All elections for justices of the peace and constables, and for issuing township bonds for building bridges and railroads, shall be held at such place as shall be prescribed for holding the township elections.'

It will be observed that the city is not made a part of the municipal township for all purposes, but for all township purposes of electing justices of the peace, constables, building bridges, and subscribing stock in aid of railroads. The effect of this section was to make the city of Burrton a part of the municipal township of Burrton for issuing township bonds in aid of railroads. So, when the municipal township of Burrton came to act on that subject, as a township, the people and territory of the city of Burrton were to be considered as included in the township. The act of 1870 (chapter 90) had provided for townships issuing bonds in aid of railroads. An election should be called by the county commissioners on the petition of 50 qualified voters, etc.; and section 5 required three-fifths of the electors voting to favor the subscription in order to carry the proposition. Section 4, before cited, does not, when considered with other provisions of the law, either expressly or by implication deprive the city of the right to issue its bonds as a city in aid of railroads. Section 63 of the same act provides as follows:

'Sec. 63. The council shall take all needful steps to protect the interests of the city, present or prospective, in any railroad leading from or toward the same; but they shall not take or subscribe any stock in any railroad, unless at least two-thirds of the electors of such city voting at a legal election vote in favor thereof.'

Without holding this action sufficient authority for the city to have issued its bonds, at least it indicates the legislative intent. It required a different proportion of electors of the city (two-thirds)...