Board of Com'rs of Kearny County, Kan., v. Vandriss

• Decision Date: 23 April 1902
• Docket Number: 1,648.
• Citation: 115 F. 866
• Parties: BOARD OF COM'RS OF KEARNY COUNTY, KAN., v. VANDRISS.
• Court: U.S. Court of Appeals — Eighth Circuit

115 F. 866

BOARD OF COM'RS OF KEARNY COUNTY, KAN., v. VANDRISS.

No. 1,648.

United States Court of Appeals, Eighth Circuit.

April 23, 1902

Milton Brown and S. S. Ashbaugh, for plaintiff in error.

T. F Garver (J. B. Larimer, on the brief), for defendant in error.

This action was brought by L. Vandriss, the defendant in error against the board of county commissioners of Kearny County Kan., the plaintiff in error, on 280 coupons that had been detached from municipal bonds. Said bonds, together with the certificate of the county clerk and state auditor, were in the following form:

'No.-- $250.00

'United States of America.

'Funding Bond.

'Township of Lakin, Finney County, State of Kansas.

'Know all men by these premises that the township of Lakin, county of Finney, in the state of Kansas, for value received, promises to pay to the holder of the indebtedness funded by the issue of this bond, or bearer, the sum of two hundred and fifty dollars, at the fiscal agency of the state of Kansas, in the city of New York, on the first day of January, A.D. 1907, with interest at the rate of six per cent. per annum, payable at the fiscal agency of the state of Kansas, in the city of New York, semiannually, on the first days of January and July in each year, on presentation and surrender of the interest coupons hereto attached as they become due. After ten years from date the said township expressly reserves the right, upon service of notice at said fiscal agency at any time when coupons are due, to pay off this bond at such time thereafter, not less than one year, as may be named in said notice. This bond is one of twenty bonds of like tenor and date, issued for the purpose of funding certain indebtedness of said township of Lakin, under the provisions of an act of the legislature of the state of Kansas entitled 'An act to authorized the township board of Lakin, Finney county, Kansas, to issue bonds of said township to fund its outstanding floating indebtedness.' Approved March 5th, 1887. And it is hereby certified and recited that all acts, conditions, and things required to be done precedent to and in the issuing of said bonds have been properly done, happened, and performed in regular and due form as required by law.

'In testimony whereof, the township, by its trustee and township clerk, have hereunto set their hands. Done at Lakin this 12th day of March, 1887.

'(Seal.) A. B. Roylan,

'Township Trustee.

'Attest: F. C. Kennedy,

'Township Clerk.

'State of Kansas, Finney County-- ss.: This bond was duly registered in my office according to law this 14th day of March, A.D. 1887.

'A. H. Burlis. 'County Clerk.

'I, T. McCarthy, auditor of the state of Kansas, do hereby certify that this bond has been regularly and legally issued, that the signatures thereto are genuine, and that such bond has been duly registered in my office according to law this 15th day of March, 1887.

'Witness my official seal.

'(Seal.) T. McCarthy,

'Auditor State of Kansas.'

Section 1 of the act of March 5, 1887, which is referred to in the bonds as the authority under which they were issued, is as follows: 'An act to authorize the township board of Laking, Finney county, Kansas,

to issue bonds of said township to fund its outstanding floating indebtedness.

'Section 1. That the township board of Lakin, Finney county, Kansas, be and said board is hereby authorized and directed to issue the bonds of said township, in amount not exceeding five thousand ($5,000) dollars, for the purpose of funding the floating debt of said township. Said bonds shall be known and designated as Lakin township funding bonds, shall be issued in denomination of two hundred and fifty ($250) dollars each, shall be made payable at the fiscal agency of the state of Kansas, in New York City, and shall bear interest at the rate of six (6) per cent. per annum, payable semi-annually, and shall have interest coupons attached therefor. The principal shall be payable twenty (20) years from date, and at the option of the township at any time after ten (10) years said township may call and pay any one or more of said bonds. ' Laws Kan. 1887, c. 65.

The action was brought by the plaintiff below against Kearny county because Kearny county had become, as it was claimed, by reason of certain local legislation, the legal successor of the township of Lakin, Finney county.

Before CALDWELL, SANBORN, and THAYER, Circuit Judges.

THAYER Circuit Judge, after stating the case as above, .

The testimony below showed, without contradiction, that the entire issue of bonds in suit, amounting to $5,000, was sold in the open market for cash, at a small premium above their par value, in the month of March, 1887, shortly after they were executed, and that the purchaser had no knowledge of any facts or circumstances impairing their validity, save such as was disclosed by the bonds themselves, when read in connection with the act under which they have been issued. The original purchaser of the bonds, and all subsequent holders thereof, who succeeded to his rights, must be regarded, therefore, as bona fide holders, unless the bonds themselves, or the act under which they were issued, or both, when read together, disclosed that they were for that reason invalid. E. H. Rollins & Sons v. Board of Com'rs of Gunnison Co., 26 C.C.A. 91, 80 F. 692, 700; Id., 173 U.S. 255, 274, 19 Sup.Ct. 390, 43 L.Ed. 689; Rathbone v. Board, 27 C.C.A. 477, 83 F. 125; Commissioners v. Clark, 94 U.S. 278, 286, 24 L.Ed. 59. If they were bona fide holders, the recital in the bonds is obviously of such a nature as will cure any irregularity in the exercise of the power to issue them which was conferred on the municipality by the act of March 5, 1887. The recital also estops the municipality from pleading that its officers acted fraudulently in issuing the bonds or in disposing of the proceeds. These defenses are eliminated by the recital, upon the assumption that the securities were sold to an innocent purchaser for value.

Counsel for the plaintiff in error urge in their brief that the act referred to above, authorizing Lakin township to issue the securities, was invalid, under section 17, art. 2, of the constitution of the state of Kansas, which prohibits the enactment of a special law like the one under consideration when a general law can be made applicable. But this contention is without merit, since the doctrine is firmly established in the state of Kansas that it is the province of the legislature, and not the province of the courts, to judge of the necessity for special legislation. The subject was considered by this court in Rathbone v. Board, 27 C.C.A. 477, 83 F. 125, and in Travellers' Ins. Co. v. Owsego Tp., 7 C.C.A. 639, 59 F. 58, and the Kansas decisions on the subject are there collected,-- particularly in the case first above cited. We deem the local decisions construing the constitutional provision in question as binding upon this court, and nothing further need be said on that subject.

The next proposition which is urged, in behalf of the county, to defeat the payment of the bonds, is that they were not issued in conformity with the statute from which the authority to issue them was derived, because they were made payable on January 1, 1907, and were issued, as the certificate of the state auditor indicates, subsequent to March 15, 1887, so that they matured in somewhat less than 20 years. It will be observed, however, that by the terms of the statute the township had the option to call in and pay any one or more of the bonds after the lapse of 10 years, and as we construe the act, in the light of this provision, its effect was to fix a time, to wit, 20 years, beyond which the bonds could not run while it gave the municipality the privilege of paying them at any time after the expiration of 10 years. As the township had the power to call in and pay the bonds after the lapse of 10 years, we perceive no reason why it...