The City of Independence v. Turner

• Decision Date: 10 November 1923
• Docket Number: 25,193
• Citation: 220 P. 195,114 Kan. 731
• Parties: THE CITY OF INDEPENDENCE, Plaintiff, v. N. A. TURNER, as Auditor, etc., et al., Defendant
• Court: Kansas Supreme Court

220 P. 195

114 Kan. 731

THE CITY OF INDEPENDENCE, Plaintiff, v. N. A. TURNER, as Auditor, etc., et al., Defendant

No. 25,193

Supreme Court of Kansas

November 10, 1923

Decided July, 1923.

Original proceeding in mandamus.

Judgment favored.

SYLLABUS

SYLLABUS BY THE COURT.

MANDAMUS--Maturing Bonded Indebtedness of City of Second Class May Be Refunded--Refunding Bonds Entitled to Registration. Under chapter 138 of the laws of 1915, a city of the second class having more than twenty-five hundred inhabitants may refund its maturing as well as its matured bonded indebtedness and such refunding bonds when issued are entitled to registration.

Chas. D. Shukers, city attorney, for the plaintiff.

C. B. Griffith, attorney-general, and W. C. Ralston, assistant attorney-general, for the defendant.

OPINION

JOHNSTON, C. J.:

The city of Independence, a city of the second class, brought this action to compel N. A. Turner, as auditor of state, to register certain refunding bonds issued by the city to take up and pay sewer bonds originally issued by the city in 1909 in the amount of $ 40,000, bearing interest at the rate of five per cent per annum, and which were purchased by the state school fund commission and are now held as a part of the school fund. In the original bonds was a reservation that the city could call in and pay the bonds at any time ten years after the date thereof. When the ten years had elapsed and on April 19, 1923, the city passed a resolution declaring that it exercised the option provided for in the original bonds to mature and pay them by the issuance of refunding bonds to the same amount, bearing interest at four and three-fourths per cent. When the refunding bonds were issued and presented to the auditor he refused to register them. He held and contends that only matured bonds may be issued under the statutes providing for the issuance of refunding bonds and that the exercise of the option mentioned did not operate to mature the original bonds. It is insisted by the defendant that the only way the city can redeem the bonds now held by the state is to bring in the cash and tender it to the state fiscal agency. The bonds sought to be matured and paid provided for the payment in thirty years and do not mature until 1939 unless it can be accomplished through the exercise of the option, and it is contended that only matured bonds can be refunded and that as those offered would not mature until 1939 they were issued without statutory authority and registration of them was rightly rejected by the defendant.

Does the statute relating to the refunding of city bonds of this character authorize the refunding of only matured bonds or may those that are maturing and are payable at the option of the city be refunded? The governing act treats of the refunding of maturing obligations as well as of those which have matured. The title of the act under which the refunding steps were taken is entitled: "An Act to enable cities of second class to refund their bonded indebtedness." The first section of the act provided that:

"Any city of the second class having a population of more than 2,500 inhabitants of the state of Kansas is hereby authorized to take up and refund its bonds issued on account of any subscription to the capital stock of any railroad company, or for any public improvement, or for any other purpose, including all accrued interest thereon." (Laws 1915, ch. 138, § 1.)

It will be observed that this section by its terms authorizes the refunding...