Carpenter v. Hindman

• Decision Date: 28 November 1884
• Parties: A. G. CARPENTER, as Treasurer of Johnson County, v. JOHN HINDMAN
• Court: Kansas Supreme Court

5 P. 165

32 Kan. 601

A. G. CARPENTER, as Treasurer of Johnson County, v. JOHN HINDMAN

Supreme Court of Kansas

November 28, 1884

Error from Johnson District Court.

INJUNCTION brought by Hindman against Carpenter, as treasurer of Johnson county, to restrain the collection of a certain tax. Judgment for plaintiff at the March Term, 1884. The defendant brings the case to this court. The facts are stated in the opinion.

Judgment reversed.

John T Little, county attorney, A. Smith Devenney, John W. Day, and James A. Troutman, for plaintiff in error.

J. P Hindman, for defendant in error.

HURD J. All the Justices concurring.

OPINION

HURD, J.

On the 8th day of March, 1879, the legislature passed an act entitled "An act to enable counties, municipal corporations, the boards of education of any city, and school districts, to re-fund their indebtedness," (Laws of 1879, page 80,) the first section of which is as follows:

"SECTION 1. That every county, every city of the first, second or third class, the board of education of any city, every township and every school district, is hereby authorized and empowered to compromise and re-fund its matured and maturing indebtedness of every kind and description whatsoever, upon such terms as can be agreed upon, and to issue new bonds, with semi-annual interest coupons attached, in payment for any sums so compromised; which bonds shall be issued at not less than par, shall not be for a longer period than thirty years, shall not exceed in amount the actual amount of outstanding indebtedness, and shall not draw a greater interest than six per cent. per annum."

The third section of which is as follows:

"SEC. 3. When a compromise has been agreed upon, it shall be the duty of the proper officers to issue such bonds at the rate agreed upon to the holder of such indebtedness, in the manner prescribed in this act; but no bonds shall be issued under this act until the proper evidence of the indebtedness for which the same are to be issued shall be delivered up for cancellation: Provided, That no compromise by any township or school district shall be of any validity unless assented to by the legal voters of such township or school district, at an election or school meeting called for such purpose; of which election or school meeting at least ten days notice shall be given."

At the time of the passage of this act, Johnson county was indebted for and on account of bonds issued to railroad companies, some past due, and in judgments against the county, and others past due which had not been sued, and others which would not become due and payable for several years thereafter. In the winter and spring of 1881, the board of county commissioners undertook to compromise and re-fund such indebtedness under the act aforesaid. The holders of such indebtedness refused to receive new bonds of the county in settlement, but were willing to compromise it for money. The commissioners entered into agreements with W. R. Osborne, the Municipal Security Company, and other parties in New York, owners and holders of bonds, some of which were due and some of which would not be due for many years, and judgments, amounting in the aggregate to more than $ 72,000, to compromise such bonds and judgments at the price of $ 72,000, to be paid in money on the surrender and discharge of such indebtedness.

For the purpose of compromising such indebtedness, George O. Marcy & Co., of Chicago, proposed to purchase from the county its bonds to be issued under and pursuant to the act aforesaid, in the sum of $ 72,000, and to pay therefor par, and one-fourth of one per cent. premium, which proposition was accepted by the county commissioners. They then caused to be issued, in conformity to the act aforesaid, seventy-two bonds of the county, with semi-annual interest coupons attached, payable to George O. Marcy & Co. or bearer, each in the sum of one thousand dollars; and afterward, and about July 1, 1881, delivered them to the payees. A portion of the bonds and judgments so agreed to be compromised were then in the hands of Marcy & Co., and before the delivery of the bonds to them were returned to the agent of the county and canceled, and the remainder of the price of the bonds was paid in money. Immediately thereafter the county paid the money so received to the persons aforesaid whose claims were not in the hands of Marcy & Co., and took up and canceled the indebtedness held by them.

The Kansas City, Fort Scott & Gulf railroad company was the owner of bonds and judgments against the county, amounting in the aggregate to more than $ 95,000, and agreed with the county commissioners to compromise and settle the same for the sum of $ 95,000 in money. For the purpose of procuring the money to make this settlement, the county commissioners entered into a contract with John Francis, by which he agreed to purchase the bonds of the county issued under the act aforesaid, in the amount of $ 95,000, at par. The county commissioners caused ninety-five bonds to be executed in conformity with the said act, each in the sum of one thousand dollars, with semi-annual interest coupons attached, payable to John Francis or bearer, and caused them to be registered in the office of the auditor of state; and immediately thereafter the authorized agent of the county, John Francis, payee in the bonds, and the agent of the railroad company, met in Kansas City, the indebtedness of the county so agreed to be compromised was surrendered to the agent of the county and canceled, and immediately thereafter the ninety-five bonds were delivered to Francis, and the $ 95,000 so agreed to be paid therefor was paid over to the railroad company for the indebtedness so compromised and surrendered.

In 1882 a tax of three and one-fourth mills was levied upon all of...