Jaeger v. City of Hillsboro

• Decision Date: 06 March 1948
• Docket Number: 37057.
• Parties: JAEGER et al. v. CITY OF HILLSBORO et al.
• Court: Kansas Supreme Court

190 P.2d 420

164 Kan. 533

JAEGER et al. v. CITY OF HILLSBORO et al.

No. 37057.

Supreme Court of Kansas

March 6, 1948

Appeal from District Court, Marion County; James P. Coleman, Judge.

Action by Dr. L. G. Jaeger and another against the City of Hillsboro and others to enjoin the city from selling its bonds. From an adverse judgment, plaintiffs appeal.

Syllabus by the Court

1. The general rule is that a private citizen and taxpayer has no standing to question the sale of allegedly void municipal bonds to be issued in payment for public improvements unless he plead and prove that his taxes will be increased or that he will be financially injured otherwise.

2. The record examined in an election for authority to issue municipal bonds, and held, that deviation in the form and arrangement of the ballot as prescribed by G.S.1935, 10-120 and irregularity in use of capital letters and punctuation did not vitiate the election where it appears that the form and content of the ballot did not frustrate or tend to prevent the free expression of the electors' intention nor otherwise mislead them.

3. The record further examined, and held, that the proposition submitted as set forth in the ballot is sufficient in form and that issuance of bonds 'for the purpose of constructing an electric light plant and distribution system for said city' is for a single improvement and is not bad as submitting dual propositions.

4. The record further examined, and held, that the fact that over nine months after the bond election, a bidder on a construction contract offered to the city free use of certain generating equipment, does not render the election invalid for the reason that the bond proposition submitted to the electors did not disclose such offer.

5. The record further examined, and held, that an election was duly called and held on a proposition to vote municipal bonds for the purpose of constructing an electric light plant and distribution system and that a majority of the electors voting at the election voted in favor of the proposition; that the record does not disclose the bonds were to be issued under the provisions of G.S.1935, 12-843, which requires an affirmative vote of a majority of the qualified electors of the city; that bonds for the above purpose may be authorized and issued under G.S.1935, 12-801 and 12-834, each of which requires an affirmative vote of a majority of the electors voting at the election; that in the absence of proof to the contrary it must be assumed that where an election has been held and bonds authorized and subsequently prepared for issue and duly registered with the state auditor that the bonds have been duly authorized.

6. The date when municipal bonds are issued is the date the bonds are sent out, delivered or put into circulation, and in determining whether proposed bonds considered with other bonds outstanding and proper to be considered, exceed in amount the statutory limitation fixed by G.S.1935, 10-303 the effective date is date of issue and not date of authorization.

7. Other complaints examined, and held, not to affect the substantial merits of the matters under consideration.

Clayton E. Kline and Willard N. Van Slyck, Jr., both of Topeka (John E. Wheeler, of Marion, and M. F. Cosgrove, Balfour S. Jeffrey, Robert E. Russell, Philip E. Buzick and Earl C. Moses, Jr., all of Topeka, on the brief), for appellants.

Braden C. Johnson, of Marion (David W. Wheeler, of Marion, and Robert B. Fizzell, of Kansas City, Mo., on the brief), for appellees.

THIELE Justice.

This was an action by the plaintiffs against the City of Hillsboro, its officers and other persons to enjoin the city from selling its bonds, the proceeds of which were to be used for the purpose of constructing an electric light plant and distribution system and from carrying out certain contracts in connection therewith. Issues were joined, and at the trial, demurrers of all the defendants to plaintiffs' evidence were sustained, and plaintiffs appeal from the rulings thereon.

Omitting formal allegations, the gist of the petition was that on March 16, 1946, the governing body of the city passed an ordinance providing for the issuance of $162,000 of general obligation bonds, the proceeds thereof to be used for constructing an electric generating plant and distribution system, a copy of the ordinance being attached as an exhibit; that on April 12, 1946, the proposition was submitted to vote, a copy of the ballot used being attached as an exhibit, and 433 votes were cast in favor of the proposition and 360 votes were cast against it. Then follow allegations that the city advertised for bids; that the only bids received were excessive and that thereafter there was no further solicitation for bids; that thereafter and on December 10, 1946, the city caused the bonds to be registered with the state auditor and to be delivered to The Crummer Company of Wichita; that on February 4, 1947, the city entered into a contract with Fairbanks, Morse and Company for the construction of a power plant, distribution system and for installation of generating equipment for a total sum of $152,000, and at the same time and as a part of the consideration for that contract that company submitted a letter pertaining to the use of an old engine without charge. Then follow detailed allegations that the Fairbanks, Morse contract is void. Plaintiffs also allege that the $162,000 bonds created an indebtedness in excess of the amount authorized by law. Plaintiffs also allege that the city entered into a contract to sell the bonds to The Crummer Company at par; that the bonds were not submitted to competitive bidding and had they been the city would have received a premium; that the contract was a fraud upon the taxpayers of the city and should be enjoined. Plaintiffs further allege that unless the defendants are enjoined from carrying out the Fairbanks, Morse and Company contract, they will sell the bonds and unlawfully use the proceeds for the construction of an electric generating plant and distribution system in violation of law. The prayer is for judgment enjoining the sale of the bonds and the performance of the contracts mentioned.

Later an amendment to the petition was filed. The general tenor was that the bond election was void because the ballot used was not in conformity with law. Details will be later mentioned so far as may be necessary.

We here note that there is no allegation in the petition or amendment to the petition that the sale of the bonds or the performance of either contract will increase the taxes of the plaintiffs or that they will be financially injured otherwise, or that the matters asserted by them affect them in any different manner than other residents and taxpayers of the city.

The city and its officials filed an answer denying the capacity of the plaintiffs or either of them to maintain the action either individually or as a class, and generally admitting the factual matters pleaded as to the bonds and denying otherwise. The Crummer Company filed a similar answer and denied it had any contract with the city for purchase of the bonds.

At the trial it was stipulated among other things that a bond election was called for April 12, 1946, and that a certain form of ballot was used; that at the election 433 electors voted for the bonds and 360 voted against; that the bonds were registered; that the city officials certified to the state auditor the bonds did not exceed the actual cost of the improvement; that they also certified as to valuation and that, including the issue of $162,000, the bonded indebtedness amounted to $186,300. It was further stipulated that the contract to sell the bonds to The Crummer Company had been canceled. It was also stipulated that at time of trial the outstanding bonded indebtedness was $19,600, not including the bonds in controversy. Other matters will be mentioned if necessary.

The evidence of the witnesses, as abstracted, is interlarded with much comment and argument of counsel made to the trial court, and much of the evidence covers maters of no particular consequence in disposing of this appeal. It also covers matters which, by reason of the stipulations at the beginning of the trial, were not in issue but were useful in developing other evidence. As an instance, controversy developed whether the election was held under G.S.1935, 12-843, and plaintiffs sought to learn how many qualified electors there were in Hillsboro, an objection to their question was sustained and they then sought to prove that no canvass to determine the number was made. In connection with the election, the ballot form used was also the subject of much argument. It was also developed that on February 4, 1947, a construction contract was awarded Fairbanks, Morse and Company for $152,000 and that on April 29, 1947, by reason of the present litigation the contract was rescinded. It was also developed that the contract with The Crummer Company for sale of the bonds was rescinded. If need be a fuller statement will be made later. At the close of plaintiffs' evidence the city and its officials demurred on the ground that plaintiffs were not proper parties plaintiff and that neither had shown any special damage or otherwise, and on the further ground that plaintiffs had failed to establish any cause of action. The Crummer Company demurred on like grounds.

In ruling on these demurrers the trial court stated that variations in the ballot from statutory forms would not be fatal to the ballot; that the statutory language was directory and not mandatory, and that there could be no doubt in anybody's mind as to what was being voted on and the instruction as to how to vote. On the question of the right of plaintiff to maintain...