Rathbone v. Board of Com'rs of Kiowa County, Kan.

• Decision Date: 13 September 1897
• Docket Number: 788.
• Citation: 83 F. 125
• Parties: RATHBONE v. BOARD OF COM'RS OF KIOWA COUNTY, KAN. [1]
• Court: U.S. Court of Appeals — Eighth Circuit

83 F. 125

RATHBONE v. BOARD OF COM'RS OF KIOWA COUNTY, KAN. ^[1]

No. 788.

United States Court of Appeals, Eighth Circuit.

September 13, 1897

This suit was brought by Charles D. Rathbone, the plaintiff in error, against the board of county commissioners of Kiowa county, Kan., the defendant in error, upon 92 coupons detached from 46 railroad aid bonds which were issued by Kiowa county, Kan. Thirty-two of the coupons were detached from 16 bonds being a part of 60 bonds, of the denomination of $1,000 each, which were issued by said county on August 4 1887, to the Kingman, Pratt & Western Railroad Company (hereafter termed the 'Kingman Railroad Company '). The remaining 60 coupons were detached from 30 bonds, being a part of 85 bonds, of the denomination of $1,000 each, which were issued by said county on October 3, 1887, to the Chicago, Kansas & Nebraska Railway Company (hereafter termed the 'Chicago Railway Company '). The county originally agreed to issue bonds to the amount of $115,000 to the Kingman Railroad Company, and bonds to the amount of $120,000 to the Chicago Railway Company; but under a subsequent arrangement it only issued 85 bonds, of the denomination of $1,000 each to each of said companies. The bonds in question were issued under the provisions of an act of the legislature of the state of Kansas, which was approved February 25, 1876 (Laws 1876, p. 217, c. 107), the first and second sections of said act being as follows:

'Section 1. Whenever two-fifths of the resident tax-payers of any county, or two-fifths of the resident tax-payers of any municipal township, shall petition in writing the board of county commissioners, or whenever two-fifths of the resident tax-payers of any incorporated city shall petition the mayor and council of such city to submit to the qualified voters of such county, township or city, a proposition to subscribe to the stock of, or to loan the credit of such county, township or city to, any railroad company constructing or proposing to construct a railroad through or into such county, township or city, the county commissioners for such county or township, or the mayor and council for such city, shall cause an election to be held to determine whether such subscription or loan shall be made: provided, no county shall issue under the provisions of this act more than one hundred thousand dollars, and an additional five per cent. indebtedness of the assessed value of such county; and no township shall be allowed to issue more than fifteen thousand dollars, and five per cent. additional of the assessed value of the property of such township; and in no case shall the total amount of county, township and city aid to any railroad, exceed four thousand dollars per mile for each mile of railroad constructed in said county:

'Sec. 2. Before such subscription or loan shall be made, the question shall first be submitted to the qualified electors of such county, township or city, as provided by section one of this act, at a special or general election, as the same shall be specified in the petition; which petition shall also designate the railroad company, and the amount of stock proposed to be taken, or the amount for which it is proposed to lend the credit of such county, township or city, and the terms of payment, together with the conditions upon which it is proposed to make such subscription or loan, and the form of the ballots to be used at such election for and against such proposition.'

Other provisions of the act authorized the board of county commissioners to order the county clerk to make a subscription for stock, and also authorized a subsequent issue of bonds in payment therefor, which were to be signed by the chairman of the board of county commissioners, and attested by the county clerk, under the seal of the county if a majority of the qualified electors voting at an election duly called as aforesaid favored the subscription. The recitals contained in the bonds issued to the Kingman Railroad Company were as follows: 'This bond is one of a series of sixty bonds, each of like tenor, date, and amount, issued to the Kingman, Pratt & Western Railroad Company in part payment of subscription by the county clerk of said Kiowa county, for and in behalf of said county, for eleven hundred and fifty shares, of one hundred dollars each, of the capital stock of said railroad corporation; said subscription to stock and issue bonds in payment therefor being made by virtue of, and in full conformity and compliance with, the authority conferred by an act of the legislature of the state of Kansas entitled 'An act to enable counties, townships and cities to aid in the construction of railroads * * *,' approved February 25, 1876, and by acts of said legislature amendatory thereof and supplemental thereto, and by virtue of the authority of a special election duly, regularly, and legally called and held in said county on the 22d day of June, 1886. The provisions and requirements of said acts, and all the conditions precedent to the subscription aforesaid, and the lawful issue of this bond, have been in all respects fully and completely complied with and performed. ' The bonds issued to the Chicago Railway Company contained a representation that the total issue amounted to $120,000, and was 'not in excess of the limitations prescribed by law. ' In other respects the recitals contained in the two series of bonds were substantially the same. The special election by virtue of which the bonds in suit were authorized to be issued to the Kingman Railroad Company and the Chicago Railway Company appears to have been ordered by the board of county commissioners on May 21, 1886, in obedience to a petition to that effect which was presented to the board by the requisite number of taxpayers, and in all other respects the proceedings which culminated in a subscription for stock in the respective companies, and in an issue of bonds to each company, were strictly regular, and in conformity with the provisions of the act heretofore cited. Kiowa county was organized as one of the counties of the state of Kansas on March 23, 1886, on which date the governor of the state, in the mode provided by law, issued his proclamation appointing a board of county commissioners and a county clerk, and designating the town of Greensburg as the temporary county seat. The proceeding to organize said county was inaugurated, as it seems, on February 15, 1886, on which day the governor of the state, in compliance with a memorial that day filed, appointed a census taker for the unorganized territory constituting the county, pursuant to the provisions of an act relating to the organization of new counties, which was approved on March 1, 1876, and took effect on March 15, 1876. Laws Kan. 1876, p. 159, c. 63. Pending the taking of the census by the person thus designated by the governor, the act of March 1, 1876, pursuant to which the appointment of a census taker was made, was amended by the legislature by an act approved on February 18, 1886, which took effect on February 23, 1886. Laws Kan. 1886, p. 123, c. 90. The first section of the act of March 1, 1876, supra, contained a provision which was as follows: 'Provided further that no bonds of any kind shall be issued by any county, township or school district within one year after the organization of such new county under the provisions of this act. ' The same section, as amended by the act of February 18, 1886, supra, contained two provisions, which were as follows: 'Provided further, that none of the provisions of this act shall prevent or prohibit the county of Kiowa, or any township or school district therein, from voting bonds at any time after the organization of said county; and provided further, that no bonds of any kind shall be issued by any county, township or school district within one year after the organization of such new county under the provisions of this act. ' The assessed value of taxable property in Kiowa county, Kan., was $236,662 for the year 1886, $520,169 for the year 1887, and $1,647,580.10 for the year 1888. Under the contract existing between the respective railway companies and the county of Kiowa, in pursuance of which the stock was subscribed and the bonds in suit were executed, bonds to the amount of $60,000 were deliverable to each railroad company when its road was completed and in operation to Greenburg, the county seat of Kiowa county. The residue of the 115 bonds due to the Kingman Railroad Company were deliverable to it when its road was completed and in operation to the west line of Kiowa county, and the company bound itself to have its road completed both to the county seat and to the west line of the county by July 1, 1888. The residue of the 120 bonds due to the Chicago Railway Company were deliverable to it when its road was completed to the west or south line of Kiowa county; and that company bound itself to have its road completed and in operation to Greensburg by December 31, 1887, and to the west or south line of the county on or before May 1, 1888. Both companies duly completed their roads to the points above mentioned within the time limited. The plaintiff purchased 32 of the coupons in suit from H. W. Sage, for value, before maturity, and without actual notice of defenses existing against the same; the same being coupons which were detached from the bonds which were first issued to the Kingman Railroad Company. He purchased the remaining 60 coupons in suit under similar circumstances from George L. Williams; the same being coupons which were detached from the first bonds that were delivered to the Chicago Railway Company. The case was submitted to the trial court on an agreed statement, wherein the foregoing facts, in substance were admitted. On...