City of Anthony v. State Ex Rel. Beebe

• Decision Date: 08 July 1892
• Citation: 49 Kan. 246,30 P. 488
• Parties: THE CITY OF ANTHONY et al. v. THE STATE OF KANSAS, on the relation of T. J. Beebe, County Attorney
• Court: Kansas Supreme Court

30 P. 488

49 Kan. 246

THE CITY OF ANTHONY et al. v. THE STATE OF KANSAS, on the relation of T. J. Beebe, County Attorney

Supreme Court of Kansas

July 8, 1892

Error from Harper District Court.

ACTION by The State, on the relation of the county attorney of Harper county, against the City of Anthony, and others, to have certain bonds of the city declared void. Judgment for the plaintiff, at the October term, 1891. The defendants bring the case to this court. The facts appear in the opinion.

Judgment reversed.

F. C Raney, for plaintiffs in error:

The only question we desire to submit to this court is this: Are the bonds in question void by reason of their having been issued in excess of the 10 per cent. limit mentioned in § 797, General Statutes of 1889? These bonds, issued 3 1/2 years ago, were exchanged for outstanding city warrants and passed into the hands of innocent purchasers. Taxes have been levied and collected from year to year to pay the interest. The city has received and appropriated the benefits arising from the issue of these bonds, and her citizens should not be allowed, at this late day, to come in and repudiate them. Section 797 mentions two kinds of bonds which are not to be considered in estimating the amount of bonded indebtedness, viz.: Bonds issued for improvements for which a special tax is levied upon the property improved, and bonds issued to refund existing bonded indebtedness.

This court, in the case of C. K. & N. Rly. Co. v. City of Manhattan, 45 Kan. 419, holds another class of bonds, viz bonds issued in aid of railroad companies in securing and paying for right-of-way, depot grounds, and terminal facilities, shall not be considered in estimating the amount of bonded indebtedness, for the reasons that the statute under which they were issued was complete in itself, and was subsequent to the statute containing the 10 per cent. limitation.

In the same opinion (45 Kan. 421) are these words: "An examination of the various provisions of the act of 1872, and the amendments thereto, renders it doubtful whether that act was intended to apply to any bonds except those referred to or issued under that act." The same reasoning holds good in the case at bar.

The act of 1872 and its amendments is the act which contains the 10 par cent. limitation. There is no allegation in the petition that the bonds in question were issued under the act of 1872 or the amendments thereto. In fact, it will be admitted that they were issued under a subsequent statute, chapter 50 of the Laws of 1879, which is complete in itself, providing not only for the issuance of the bonds, but for their registration and payment; even going so far as to make public officers both civilly and criminally liable unless taxes are levied and collected to pay the interest and provide a sinking fund; and providing punishment for the wrong use of the funds.

It is evident that the legislature intended that this law should stand alone and be complete in itself, and that bonds issued in pursuance to it should be valid, regardless of any limitation contained in a former statute.

Shepard, Cherry & Shepard, J. P. Grove and H. Parke Jones, for defendant in error:

Our view of the law in this matter is, that the city is barred from issuing over 10 per cent. of assessed valuation, etc., in bonds, except in the matter of the provisos set out in Gen. Stat. of 1889, § 797, and one other--in regard to bonds issued to secure terminal facilities, etc., for railroads. C. K. & N. Rly. v. City of Manhattan, 45 Kan. 419.

And if it does, that the bonds are void in the hands of any purchaser, innocent as the driven show or otherwise; or, in other words, the bonds are void from their inception, and no rule of commercial law can breathe life into them by their reaching at last an ignorant and innocent purchaser. We contend that the officers who issued these bonds were not authorized to decide the fact upon which these bonds were issued. They had no authority to determine and certify as to their power to issue them; the fact necessary to the existence of the authority was by law to be ascertained, not officially by the officers charged with the execution of the power, but by reference to some express and definite record of a public character.

If the bonds had been issued upon a judicial determination of a fact or facts which the officers issuing them had a right to determine, then the rule would be different. But where they are issued upon a "condition," and the officers issuing them are not the appointed tribunal to decide the fact which constitutes the condition, their act or any recital will not be accepted as a substitute for proof. Marcy v. Oswego, 92 U.S. 637; Commissioners v. Ballis, 94 id. 104; Commissioners v. Clarke, 94 id. 278; Warren Co. v. Marcy, 97 id. 96; Pana v. Bowles, 107 id. 529; County of Dixon v. Field, 111 id. 83.

"The purchaser of the bonds was certainly bound to take notice, not only of the limitation upon municipal indebtedness, but of such facts as the authorized official assessments disclosed concerning the valuation of taxable property within the city for the year 1873." Buchannon v. Litchfield, 102 U.S. 278; National Bank v. Porter, 110 id. 608.

There can be no question, under the authorities cited, and especially under the authority of County of Dixon v. Field, supra, that the bonds complained of are null and void, and of no force or effect whatever in the hands of anyone.

VALENTINE, J. All the Justices concurring.

OPINION

VALENTINE, J.:

This was an action brought in the district court of Harper county on August 25, 1891, in the name of the state of Kansas, by T. J. Beebe, county attorney, against the city of Anthony, and its mayor, city clerk, and councilmen, and the county clerk and county treasurer, for the purpose of having certain city bonds declared void, etc. The prayer of the petition reads as follows:

"Wherefore plaintiff prays judgment that said bonds be adjudged null and void, and of no force or effect whatever; that during the pendency of this action the said defendants be temporarily enjoined from...