Board of County Com Rs of the County of Anderson v. Beal

• Decision Date: 26 January 1885
• Citation: 5 S.Ct. 433,28 L.Ed. 966,113 U.S. 227
• Parties: BOARD OF COUNTY COM'RS OF THE COUNTY OF ANDERSON v. BEAL
• Court: U.S. Supreme Court

113 U.S. 227

5 S.Ct. 433

28 L.Ed. 966

BOARD OF COUNTY COM'RS OF THE COUNTY OF ANDERSON v. BEAL.

January 26, 1885.

This is an action at law, brought in the circuit court of the United States for the district of Kansas, by Thomas P. Beal against the board of county commissioners of the county of Anderson, in the state of Kansas, to recover the amount of 90 coupons for $70 each, due January 1, 1881, and the same amount due January 1, 1882. The coupons were cut from bonds alike, except as to their numbers, of the following form:

'No.___. COUNTY OF ANDERSON. 1,000.

'UNITED STATES OF AMERICA,

STATE OF KANSAS.

'Know all men by these presents, that the county of Anderson acknowledges to owe and promises to pay to Leavenworth, Lawrence & Galveston Railroad Co., or bearer, one thousand dollars, lawful money of the United States of America, on the first day of January, in the year of our Lord one thousand nine hundred, at the Farmers' Loan and Trust Co. Bank, in the city of New York, with interest at the rate of seven per centum per annum, payable annually on the first day of January in each year, on the surrender of the annexed coupons as they severally become due.

'This bond is executed and issued under the provisions of and in conformity to an act of the legislature of the state of Kansas, approved February 26, 1866, entitled 'An act to amend an act entitled An act to authorize counties and cities to issue bonds to railroad companies,' approved February 10, 1865, and in pursuance to the vote of the electors of Anderson county, of September 13, 1869.

'In testimony whereof, the board of county commissioners of the said county of Anderson have caused these presents to be signed by the chairman of said board and by the clerk of the county, and to be sealed with the seal of said county, and to be registered by the treasurer of said county.

'Dated January 1, 1870.

[Seal.]

'H. CAVENDER, Chairman.

'A. SIMONS, Treasurer.

J. H. WILLIAMS, Clerk.'

The coupons read thus:

'No. ___. $70.

'The county of Anderson, state of Kansas, will pay to the Leaven worth, Lawrence & Galveston Railroad Company, or bearer, at the Farmers' Loan & Trust Co.'s Bank, in the city of New York, on the first day of January, A. D. 188_, seventy dollars, interest due on their bond.

'J. H. WILLIAMS, County Clerk.'

The petition avers, as to each bond, that it erroneously recited that it was issued under the provisions of the act of February 20, 1866, whereas it was issued 'under the provisions of, and in conformity to, the laws of the state of Kansas then in force, and in pursuance to the vote of the electors of Anderson county, of September 13, 1869, at an election regularly and duly ordered and held for that purpose;' that the bond was issued in payment of a subscription theretofore made by the county to the capital stock of the Leavenworth, Lawrence & Galveston Railroad Company; that on March 27, 1872, the bond was duly registered in the office of the auditor of the state; that, as each coupon falling due prior to January 1, 1881, matured, the same was paid by the officers of the county with the proceeds of a tax levied and collected each year by said county from its tax-payers for that purpose; and that, after said registration, and before the coupons became due, they became, for value, the property of the plaintiff.

The answer admits that, pursuant to an order passed by the board of county commissioners of the county on the eleventh of August, 1869, ordering a special election therefor, the said board submitted to the qualified voters of the county the, ques- tion of issuing bonds to said company, a copy of the order being annexed to the answer. It avers that the bonds were issued without any consideration therefor, and without authority of law, and a vote was taken in the county on the thirteenth of September, 1869, pursuant to said submission, without the legal notice of 30 days having been given, at which election a majority of the persons voting voted in the affirmative; that up to the first of January, 1870, and for some time thereafter, the company's track was not completed, equipped, or in full operation to the town of Garnett; that on the fifth of November, 1869, the company, through its president, Mr. Joy, corruptly induced Cavender and Lowry, who were a majority of the board, to agree to subscribe for 2,000 shares, of $100 each, of the capital stock of the company, and to sell and transfer the stock, for one dollar, to Joy, and to issue to Joy, in trust for the company, to be delivered by him to the company, when the road should be completed to Garnett, $200,000 of the bonds of the county; that for that purpose the commissioners made an order on that day, of which a copy is annexed to the answer, and carried out said agreement; and that the plaintiff had knowledge of such corrupt agreement and of said facts before he acquired any of said bonds or coupons. There was a reply denying all the allegations of the answer. The case was tried by a jury, which found a verdict for the plaintiff for $14,321.34, for which amount, with costs, judgment was rendered. The defendant has brought a writ of error.

There is a bill of exceptions setting forth all the evidence. The order of August 11, 1869, made by the board, was as follows:

'Ordered by the board, that a special election be held in the several voting precincts in the county of Anderson, on Monday, September 13, 1869, whereat shall be submitted to the qualified voters, electors of said county, for adoption or rejection, the following proposition, to wit: Shall the county of Anderson subscribe $200,000 to the capital stock of the Leavenworth, Lawrence & Galveston Railroad Company, and issue the bonds of the county in payment thereof; said bonds pay- able thirty years after their date, bearing interest at the rate of 7 per cent. per annum, payable annually; said bonds to bear date of January 1, 1870, and to be issued and delivered to said railroad company on the first day of January, A. D. 1870, and before that time, if said railroad shall on or before that time complete its line of railway to the town of Garnett, in said county; and, if said line of railway shall not be completed thus far by that time, then said bonds to be issued and delivered when said line of railway is completed to the town of Garnett, in said county, provided the county of Anderson be released from all propositions or votes taken to subscribe stock and issue bonds to said railroad company. Electors desiring to vote on the above proposition shall have their tickets written or printed as above, and shall add thereto, for or against the subscription of stock to the Leaven worth, Lawrence & Galveston Railroad Company, as the electors may desire to vote.

H. CAVENDER, Chairman.

'REUBEN LOWRY, Member.

'Attest: J. H. WILLIAMS, Clerk.' Among the proceedings of the board were these:

'COUNTY CLERK'S OFFICE, GARNETT,

'ANDERSON COUNTY, KAN., September 17, 1869.

'Board of county commissioners met pursuant to law for the purpose of canvassing returns of the election held in said county on the thirteenth day of September, 1869, for the purpose of voting upon a proposition to vote stock to certain railroad companies.

'Present: H. Cavender, chairman; J. B. Lowry, members present; and we find the vote as follows:——'

Then follows a statement showing that there were 551 votes in favor of the proposition, and 372 against it, and the following certificate:

'We hereby certify that the proposition to subscribe stock to the Leavenworth, Lawrence & Galveston Railroad Company received five hundred and fifty-one votes, and that there were three hundred and seventy-two votes against said proposition.

H. CAVENDER, Chairman.

'J. B. LOWRY, Member.

'Attest: J. H. WILLIAMS, Clerk.'

The order of November 5, 1869, made by the board, contained the following:

'Resolved, that the board of county commissioners of Anderson county, Kansas, for and in behalf of Anderson county, in accordance with the vote heretofore had and taken of the electors of said county to that effect, hereby subscribe for two thousand shares of the capital stock of the Leavenworth, Lawrence & Galveston Railroad company, of one hundred dollars each, making in amount two hundred thousand dollars.

'Resolved, that the stock above subscribed for by this board in behalf of Anderson county is hereby sold and transferred, for and in consideration of the sum of one dollar, the receipt whereof is hereby acknowledged, to James F. Joy, president of said railroad company, and the chairman of this board is authorized to sign a transfer of said stock to said James F. Joy, and to assign the certificate for said stock issued to Anderson county by said railroad company, and to authorize, in such assignment, the necessary transfer of said stock on the books of said company.'

Among the proceedings of the board were these:

'COUNTY CLERK'S OFFICE, GARNETT, July 8, 1870.

'Board of county commissioners met pursuant to adjournment; full quorum present; minutes of preceding meeting read and approved.

'Whereas, on the fifth day of November A. D. 1869, the board of county commissioners of Anderson county, state of Kansas, did formally issue to the Leavenworth, Lawrence & Galveston Railroad Company the bonds of Anderson county to the sum of $200,000, according to provisions of the vote of the electors of said county, and did place the said bonds in the hands of James F. Joy, to be delivered to said railroad company when the said reilroad should be completed to the town of Garnett, said bonds to bear interest at the rate of 7 per cent. per annum from the first day of January, 1870, but in case said railroad should not be completed to Garnett by the first day of January aforesaid, the interest accruing upon said bonds from said first day of January, 1870, to the time said road should be completed to said town of Garnett should be canceled.

'And whereas, on the eighth day of July,...