The S. C. & St. P. R. Co. v. Osceola County

• Decision Date: 09 October 1879
• Citation: 2 N.W. 593,52 Iowa 26
• Parties: THE S. C. & ST. P. R. CO. v. OSCEOLA COUNTY
• Court: Iowa Supreme Court

2 N.W. 593

52 Iowa 26

THE S. C. & ST. P. R. CO. v. OSCEOLA COUNTY

Supreme Court of Iowa, Des Moines

October 9, 1879

Appeal from Osceola Circuit Court.

THE county of Osceola issued warrants in 1872, amounting to $ 24,040.19, and in 1873, amounting to $ 20,167.04. Upon the warrants issued during the year 1872, judgments were recovered during said year against the county for the sum of $ 11,490, and to pay the same and interest and costs, the county during said year, issued its negotiable judgment bonds, under the provisions of chapter 87, of the acts of the Fourteenth General Assembly, to the amount of $ 11,700. During the year 1873, judgments were rendered against the county upon the warrants issued in 1872 and 1873, to the amount of $ 21,466.35, and to pay the same and interest and costs, the county during said year issued its negotiable judgment bonds, under said chapter 87, acts of Fourteenth General Assembly, in the amount of $ 21,600. The principal of all of these bonds is unpaid. During the year 1872, the county issued ten negotiable bonds in the sum of $ 500 each for the purpose of building a court-house, four of which remain unpaid. From August 1st, 1874, to July 6th, 1876, the board of supervisors of said county issued its negotiable bonds in the manner and form prescribed in section 289, of the Code of 1873, to the amount of $ 24,200, and the same were sold or exchanged, under the provisions of section 289 and the following sections of the Code, for the warrants or other evidences of indebtedness against the county. Of the above amount, $ 9,000 of bonds were issued in exchange for judgments which had been obtained against the county upon county warrants, and the sum of $ 15,200 were issued in exchange for county warrants held against the said county. All of the bonds aforesaid were transferred by the original holders thereof, before the commencement of this suit, and the present owners thereof are unknown. All of the warrants aforesaid, both those reduced to judgment and those funded without being reduced to judgment, were issued in excess of the limit of indebtedness which the county might incur under section 3, article 11 of the Constitution.

The plaintiff is the owner of 17 99/100 miles of railroad track in said county, which was duly assessed at $ 3,000 per mile.

There was levied against said property for the year 1876 the following taxes, to-wit: For payment of principal and interest on court-house bonds, five mills. For payment of principal and interest on judgment bonds, twelve mills. For payment of principal and interest on county funding bonds eight mills. The plaintiff has paid the court-house bond tax and has deposited with the treasurer four mills of the judgment bond tax. The plaintiff asks that the other taxes be adjudged void, and that the treasurer be restrained from collecting the same.

The tax above described, of twelve mills on the dollar, was levied to pay the interest, and a portion of the principal, of the bonds described as having been issued under the authority of chapter 87, acts of the Fourteenth General Assembly. The tax of eight mills on the dollar was levied to pay the interest, and a portion of the principal, of the bonds issued under authority of section 289 of the Code. The court rendered a judgment canceling five mills of the eight mill levy, to pay funding bonds, being such part of that tax as would be required to pay interest on such funding bonds as were issued to fund warrants, and dismissed the plaintiff's petition as to the remainder of the tax. The plaintiff appeals.

AFFIRMED.

J. H. Swan, for appellant.

S. M. Marsh and Geo. W. Wakefield, for appellees.

DAY, J BECK, CH. J., dissenting.

OPINION

DAY, J.

I.

The tax of eight mills on the dollar was levied for the purpose of paying the interest, and a part of the principal, of the funding bonds issued under the authority of section 289 of the Code. The court refused to restrain the collection of three mills of this tax, being the portion necessary to pay interest on such of the funding bonds as were exchanged for judgments rendered against the county upon county warrants. Appellant insists that these bonds are void, and that any levy of tax to pay them is illegal. The original holders of these bonds had transferred them before the commencement of this action. The present holders are not parties to this suit. They must, therefore, for the purposes of this action be regarded as innocent holders for value. In a case between these same parties, 45 Iowa 168, it was held by a majority of this court that the validity of negotiable bonds of a county, issued in satisfaction of a judgment, in the hands of innocent holders for value, cannot be questioned by showing that the judgments were rendered upon warrants...