Board of Education of City of Atchison, Kansas v. De Kay

• Decision Date: 10 April 1893
• Docket Number: No. 176,176
• Citation: 148 U.S. 591,37 L.Ed. 573,13 S.Ct. 706
• Parties: BOARD OF EDUCATION OF CITY OF ATCHISON, KANSAS, v. DE KAY
• Court: U.S. Supreme Court

148 U.S. 591

13 S.Ct. 706

37 L.Ed. 573

BOARD OF EDUCATION OF CITY OF ATCHISON, KANSAS,

v DE KAY.

No. 176.

April 10, 1893.

Action by Francis M. De Kay against the board of education of the city of Atchison, Kan., on certain school bonds. There was judgment for plaintiff, and defendant brings error. Affirmed.

Statement by Mr. Justice BREWER:

On January 1, 1869, the board of education of the city of Atchison issued $20,000 of bonds. They were in this form:

'No. ___. School Bond. $1,000.00.

'City of Atchison, State of Kansas.

'Know all men by these presents that the city of Atchison, Kansas, for value received, is indebted to the bearer in the sum of one thousand dollars, which it promises to pay on the 1st day of January, A. D. 1884, at the National Park Bank, in the city of New York, with interest at the rate of ten per cent. per annum, payable semiannually, on the 1st day of January and on the 1st day of July of each year, upon presentation at the said National Park Bank of the interest coupons hereto attached as they mature; the last installment of interest payable with this bond. This bond is issued under and by virtue of an act of the legislature of the state of Kansas entitled 'An act to organize cities of the second class, approved February 28th, 1868,' and is secured by pledge of the school fund and property of said city of Atchison for the payment of the principal and interest thereof, as the same may become due.

'Dated at Atchison, this 1st day of January, 1869.

[Signed] 'Jno. A. Martin,

'President of the Board of Education.

'W. F. Downs, Clerk.

'[Countersigned] Frank Smith, Treasurer.'

Each bond had interest coupons attached. On June 30, 1885, plaintiff, Francis M. De Kay, claiming to be the owner of certain of these bonds and coupons, commenced suit in the circuit court of the United States for the district of Kansas. The defendant answered, a trial was had, and on June 6, 1889, judgment was entered in favor of the plaintiff for $31,699.40, from which sum $1,325 was thereafter remitted, as excessive interest. To reverse this judgment, defendant sued out a writ of error from this court.

Henry Ellison and David Martin, for plaintiff in error.

T. J. White, for defendant in error.

Mr. Justice BREWER, after stating the facts in the foregoing language, delivered the opinion of the court.

Two questions are presented: First. Were the bonds and coupons valid obligations? Second. If valid, was the board of education of the city of Atchison the proper defendant, and could judgment be rightfully entered against it for the sum of these bonds and coupons?

The bond on its face purports to be the obligation of the city of Atchison, secured by pledge of the school fund and property of the city, and was executed by the president and clerk of the board of education. It is insisted that the board of education had no power to bind the city by such a promise to pay. To a clear understanding of this question an examination must be made of the statutes of Kansas. The city of Atchison was incorporated under an act of the territory of Kansas of February 12, 1858, Priv. Laws 1858, p. 172. By an act passed the same day, providing for the organization, etc., of common schools, (Pub. Laws 1858, pp. 47, 51, c. 8, §§ 15, 37,) each county superintendent of common schools was authorized to divide his county into school districts, and every school district organized in pursuance of the act was declared to be a body corporate, possessing the usual powers of a corporation for public purposes, with the name and style of 'School District No. ___, County of _____.' Under that act 'school district number 1, Atchison county,' was organized, with territorial limits the same as those of the city of Atchison.

On February 23, 1867, an act was passed to incorporate cities of the second class, that class being of those cities having more than 1,000 and less than 15,000 inhabitants, to which class the city of Atchison belonged. Laws 1867, p. 107. Section 14 is as follows: 'Each city shall constitute at least one school district, and the city shall not be divided into more than one school district without the consent of a majority of the council, but such council may divide the city into as many school districts as it may deem expedient.' On February 26, 1867, a supplemental act was passed, (Laws 1867, p. 128,) providing for a board of education in cities of the second class, to have charge of school matters. Particular reference to the provisions of this act is unnecessary, as both these acts were superseded in the Revision of 1868. Gen. St. Kan. p. 154, c. 19. This act was entitled 'An act to incorporate cities of the second class.' This was a new enactment, though practically only a consolidation and revision of the statutes of 1867 in reference to such cities. It contained section 14, heretofore quoted, of the law of 1867, and placed, as did the supplementary act of 1867, the entire control of school matters in a board of education.

Nothing the act a little in detail, section 55 provides that 'at each annual city election there shall be a board of education, consisting of two members from each ward, elected,' etc. Section 57: That such board shall 'exercise the sole control over the schools and school property of the city.' By section 67 the board of education was empowered to estimate the amount of funds necessary to be raised by taxation for school purposes, and report the same to the city council, by which body the amount was levied and collected as other taxes. Under section 68 the moneys thus collected were paid into the hands of the city treasurer, subject to the order of the board of education. Sections 69-71, 76, 77, are as follows:

'Sec. 69. The whole city shall compose a school district for the purposes of taxation.

'Sec. 70. The title of all property held for the use or benefit of public schools shall be vested in the city.

'Sec. 71. No school property of any kind shall be sold or conveyed by the mayor or councilmen, except at a regular meeting of the same, and not then without the concurrence of the board of education.'

'Sec. 76. Whenever it shall become necessary, in order to raise sufficient funds for the purpose of a school site or sites, or to erect a suitable building or buildings thereon, it shall be lawful for the board of education of every city, coming under the provisions of this act, with the consent of the council, to borrow money, for which they are hereby authorized and empowered to issue bonds, bearing a rate of interest not exceeding ten per cent. per annum, payable annually or semiannually, at such place as may be mentioned upon the face of said bonds, which bonds shall be payable in not more than twenty years from their date, and the board of education is hereby authorized and empowered to sell such bonds at not less than seventy-five cents on the dollar.

'Sec. 77. The bonds, the issuance of which is provided for in the foregoing section, shall be signed by the president and clerk of the board of education, and countersigned by the creasurer; and said bonds shall specify the rate of interest, and the time when the principal and interest shall be paid, and each bond so issued shall be for a sum not less than fifty dollars.'

Section 78 peremptorily required the board of education in its annual estimation, authorized in section 67, to include a sufficient amount to pay the interest on such bonds and create a sinking fund, and such amount the city council was required to levy and collect. Section 81 reads: 'The school fund and property of such city is hereby pledged to the payment of the interest and principal of the bonds mentioned in this article, as the same may become due.'

What, now, are the specific objections to the validity of these bonds and coupons? First. It is objected that the bond purports to be issued under authority of an act entitled 'An act to organize cities,' etc., approved February 28, 1868; that no such act is to be found in the statutes of that year; and that, therefore, the bonds were issued without authority of law, and are not valid obligations. This is trifling. There was an act giving authority to the board of education to borrow money and issue bonds, and whose title was exactly as described in this bond, except in place of the word 'organize' the word 'incorporate' was used. 'Falsa demonstratio non nocet.' Commissioners v. January, 94 U. S. 202. An error in copying into an instrument a single word in the title of a statute does not vitiate the deliberate acts of the proper officers of a municipality as expressed in the promise to pay which they have issued for money borrowed.

Again, it is insisted that the board of education had no power to bind the city of Atchison as a municipal corporation, but only that other and quasi corporation, known as 'School District No. 1, Atchison County.' The argument is that there were two corporations: First, a school-district corporation, whose name and corporate existence were prescribed by the laws of 1858; and another, a strictly municipal corporation, known as the 'City of Atchison,' with the ordinary powers attached to such a municipality; that, though they embraced within their limits the same territory and population, they were in fact distinct corporate entities; and that the board of education, having control of the affairs of the one corporation, had no power to bind the other by its promises to pay. It may well be doubted whether there were two distinct corporations. Section 14 of the acts of 1867 and 1868, incorporating cities or the second class, provided that 'each city shall constitute at least one school district.' There is no pretense, under the power reserved in that section, that the city of Atchison was ever divided into districts; so by that section Atchison city constituted a school district. The members of the board of education were to be elected at the annual city election, and to the board was...