Anderson County Commissioners v. Beal - 113 U.S. 227 (1885)


U.S. Supreme Court

Anderson County Commissioners v. Beal, 113 U.S. 227 (1885)

Anderson County Commissioners v. Beal

Submitted January 9, 1885

Decided January 26, 1885

113 U.S. 227

Syllabus

Bonds issued by Anderson County, in Kansas, under legislative authority, and in payment of its subscription to the stock of a railroad company, after the majority of the voters of the county had at an election, voted in favor of subscribing for the stock and issuing the bonds, recited, on their face, the wrong statute, but also stated that they were issued "in pursuance to the vote of the electors of Anderson County, September 13, 1869." The statute in force required that at least 30 days' notice of the election should be given, and made it the duty of the Board of County Commissioners to subscribe for the stock and issue the bonds, after such assent of the majority of the voters had been given. In a suit against the board on coupons due on the bonds, brought by a bona fide holder of them, it appeared, by record evidence, that the board made an order for the election 33 days before it was to be held, and had canvassed the returns and certified that there was a majority of voters in favor of the proposition, and had made such vote the basis of their action in subscribing for the stock and issuing the bonds to the company, and the court directed the jury to find a verdict for the plaintiff,

Held:

(l) The statement in the bonds, as to the vote, was equivalent to a statement that the vote was one lawful and regular in form, and such as the law then in force required, as to prior notice.

(2) As respected the plaintiff, evidence by the defendant to show less than 30 days' notice of the election could not avail.

(3) The case was within the decision in Town of Coloma v. Eaves, 92 U. S. 484.

(4) The rights of the plaintiff there not affected by any dealing by the board with the stock subscribed for.

(5) The issue or use of the bonds not having been enjoined, for two years and

Page 113 U. S. 228

a half, between the day of election and the time the company parted with the bonds for value, and the county having, for 10 years, paid the interest annually on the bonds, it was estopped, as against the plaintiff, from defending on the ground of a want of proper notice of the election.

(6) As the bill of exceptions contained all the evidence, and the defendant did not ask to go to the jury on any question of fact, and the questions were wholly questions of law, and a verdict for the defendant would have been set aside, it was proper to direct a verdict for the plaintiff.

This was an action at law, brought in the Circuit Court of the United States for the District of Kansas, by Thomas P. Beal, against the Board of County Commissioners of the County of Anderson, in the State of Kansas, to recover the amount of 90 coupons for $70 each due January 1, 1881, and the same amount due January 1, 1882. The coupons were cut from bonds alike except as to their numbers, of the following form:

" No. ____ County of Anderson 1,000"

" United States of America State of Kansas"

"Know all men by these presents, that the County of Anderson acknowledges to owe and promises to pay to Leavenworth, Lawrence & Galveston Railroad Co., or bearer, one thousand dollars, lawful money of the United States of America, on the first day of January, in the year of our Lord one thousand nine hundred at the Farmers' Loan and Trust Co. Bank, in the City of New York, with interest at the rate of seven percent per annum, payable annually on the first day of January in each year, on the surrender of the annexed coupons as they severally become due."

"This bond is executed and issued under the provisions of, and in conformity to, An Act of the Legislature of the State of Kansas approved February 26, 1866, entitled, An Act to amend an Act entitled An Act to authorize counties and cities to issue bonds to railroad companies, approved February 10, 1865, and in pursuance to the vote of the electors of Anderson County, of September 13, 1869."

In testimony whereof, The Board of County Commissioners of the said County of Anderson have caused these presents to be signed by the chairman of said Board and by the clerk of

Page 113 U. S. 229

the county, and to be sealed with the seal of said county, and to be registered by the treasurer of said county.

"Dated January 1, 1870."

"[Seal]"

"H. CAVENDER, Chairman"

"A. SIMONS, Treasurer"

"J. H. WILLIAMS, Clerk"

The coupons read thus:

"No. ___ $70"

"The County of Anderson, State of Kansas, will pay to the Leavenworth, Lawrence & Galveston Railroad Company or bearer at the Farmers' Loan & Trust Co.'s Bank in the City of New York on the first day of January, A.D. 188_, seventy dollars, interest due on their bond."

"J. H. WILLIAMS, County Clerk"

The petition avers as to each bond that it erroneously recited that it was issued under the provisions of the Act of February 20, 1866, whereas it was issued

"under the provisions of, and in conformity to, the laws of the State of Kansas then in force, and in pursuance to the vote of the electors of Anderson County of September 13, 1869 at an election regularly and duly ordered and held for that purpose;"

that the bond was issued in payment of a subscription theretofore made by the county to the capital stock of the Leavenworth, Lawrence & Galveston Railroad Company; that on March 27, 1872, the bond was duly registered in the office of the auditor of the state; that as each coupon falling due prior to January 1, 1881, matured, the same was paid by the officers of the county with the proceeds of a tax levied and collected each year by said county from its taxpayers for that purpose, and that after said registration and before the coupons became due, they became for value the property of the plaintiff.

The answer admits that pursuant to an order passed by the board of county commissioners of the county on the 11th of August, 1869, ordering a special election therefor, the said board submitted to the qualified voters of the county the question

Page 113 U. S. 230

of issuing bonds to said company, a copy of the order being annexed to the answer. It averred that the bonds were issued without any consideration therefor and without authority of law, and a vote was taken in the county on the 13th of September, 1869, pursuant to said submission, without the legal notice of thirty days having been given at which election a majority of the persons voting voted in the affirmative; that up to the first of January, 1870, and for some time thereafter, the company's track was not completed, equipped, or in full operation to the Town of Garnett; that on the 5th of November, 1869, the company, through its president, Mr. Joy, corruptly induced Cavender and Lowry, who were a majority of the board, to agree to subscribe for 2,000 shares, of $100 each, of the capital stock of the company and to sell and transfer the stock for one dollar to Joy and to issue to Joy, in trust for the company, to be delivered by him to the company when the road should be completed to Garnett, $200,000 of the bonds of the county; that for that purpose, the commissioners made an order on that day, of which a copy is annexed to the answer, and carried out said agreement, and that the plaintiff had knowledge of such corrupt agreement and of said facts before he acquired any of said bonds or coupons. There was a reply denying all the allegations of the answer. The case was tried by a jury, which found a verdict for the plaintiff for $14,321.34, for which amount, with costs, judgment was rendered. The defendant has brought a writ of error.

There is a bill of exceptions setting forth all the evidence. The order of August 11, 1869, made by the board, was as follows:

"Ordered by the board, that a special election be held in the several voting precincts in the County of Anderson on Monday, September 13, 1869, whereat shall be submitted to the qualified voters, electors of said county, for adoption or rejection, the following proposition, to-wit: shall the County of Anderson subscribe $200,000 to the capital stock of the Leavenworth, Lawrence & Galveston Railroad Company, and issue the bonds of the county in payment thereof; said bonds payable

Page 113 U. S. 231

thirty years after their date, bearing interest at the rate of 7 percent per annum, payable annually; said bonds to bear date of January 1, 1870, and to be issued and delivered to said railroad company on the first day of January, A.D. 1870, and before that time, if said railroad shall on or before that time complete its line of railway to the Town of Garnett, in said county, and if said line of railway shall not be completed thus far by that time, then said bonds to be issued and delivered when said line of railway is completed to the Town of Garnett, in said county, provided the County of Anderson be released from all propositions or votes taken to subscribe stock and issue bonds to said railroad company. Electors desiring to vote on the above proposition shall have their tickets written or printed as above, and shall add thereto, for or against the subscription of stock to the Leavenworth, Lawrence & Galveston Railroad Company, as the electors may desire to vote."

"H. CAVENDER, Chairman"

"REUBEN LOWRY, Member"

"Attest:"

"J. H. WILLIAMS, Clerk"

Among the proceedings of the board were these:

"COUNTY CLERK'S OFFICE, GARNETT"

"ANDERSON COUNTY, KANS., September 17, 1869"

"Board of County Commissioners met pursuant to law for the purpose of canvassing returns of the election held in said county on the 13th day of September, 1869, for the purpose of voting upon a proposition to vote stock to certain railroad companies."

"Present: H. Cavender, chairman; J. B. Lowry, members present, and we find the vote as follows:"

Then follows a statement showing that there were 551 votes in favor of the proposition, and 372 against it, and the following certificate:

"We hereby certify that the proposition to subscribe stock to the Leavenworth, Lawrence & Galveston Railroad Company

Page 113 U. S. 232

received five hundred and fifty-one votes, and that there were three hundred and seventy-two votes against said proposition."

"H. CAVENDER, Chairman"

"J. B. LOWRY, Member"

"Attest:"

"J. H. WILLIAMS, Clerk"

The order of November 5, 1869, made by the board, contained the following:

"Resolved, that the board of County Commissioners of Anderson County, Kansas, for and in behalf of Anderson County, in accordance with the vote heretofore had and taken of the electors of said county to that effect, hereby subscribe for two thousand shares of the capital stock of the Leavenworth, Lawrence & Galveston Railroad company, of one hundred dollars each, making in amount two hundred thousand dollars."

"Resolved that the stock above subscribed for by this board in behalf of Anderson County is hereby sold and transferred, for and in consideration of the sum of one dollar, the receipt whereof is hereby acknowledged, to James F. Joy, president of said railroad company, and the chairman of this board is authorized to sign a transfer of said stock to said James F. Joy, and to assign the certificate for said stock issued to Anderson County by said railroad company, and to authorize, in such assignment, the necessary transfer of said stock on the books of said company."

Among the proceedings of the board were these:

"COUNTY CLERK'S OFFICE, GARNETT"

"July 8, 1870"

"Board of County Commissioners met pursuant to adjournment; full quorum present; minutes of preceding meeting read and approved."

"Whereas, on the 5th day of November A.D. 1869, the Board of County Commissioners of Anderson County, State of Kansas, did formally issue to the Leavenworth, Lawrence & Galveston Railroad Company the bonds of Anderson County to the

Page 113 U. S. 233

sum of $200,000, according to provisions of the vote of the electors of said county, and did place the said bonds in the hands of James F. Joy, to be delivered to said railroad company when the said railroad should be completed to the Town of Garnett, said bonds to bear interest at the rate of 7 percent per annum from the first day of January, 1870, but in case said railroad should not be completed to Garnett by the 1st day of January aforesaid, the interest accruing upon said bonds from said 1st day of January, 1870, to the time said road should be completed to said Town of Garnett should be cancelled,"

"And whereas, on the 8th day of July, 1870, M. R. Baldwin, sup't of said L., L. & G. R. Co., did certify to this Board that said railroad was completed, equipped, and operated to the Town of Garnett on the 1st day of March, 1870,"

"Therefore this Board do authorize the same James F. Joy to deliver said bonds to said railroad company upon returning the coupons of said bonds, and the amount of interest accrued upon said bonds between the 1st day of January and March, 1870, to the Treasurer of Anderson County."

"Minutes read and approved. On motion, Board adjourned to meet on Tuesday, July 19, 1870 at 9 A.M."

"GEO. W. ILER"

"Chairman of the Board of County Commissioners"

"Anderson County, Kansas"

"Attest:"

"[Seal] J. H. WILLIAMS, Clerk"

"COUNTY CLERK'S OFFICE"

"ANDERSON COUNTY, KANSAS, September 5, 1870"

"Being the first Monday of September, 1870, Board of County Commissioners met pursuant to law. Present, Geo. W. Iler, chairman, J. B. Lowry, and J. W. Vaughn. Met for the purpose of levying taxes for the year 1870 at which time the following taxes were levied, to be collected for the year 1870, to-wit: that there be levied on all the taxable property of said county the sum of four mills per dollar on all taxable property of said county, for road purposes. It is hereby ordered that there be levied on the taxable property of Anderson County the sum of 7 1/2 mills per each dollar, to pay ten months' interest

Page 113 U. S. 234

on the bonds of said county, issued to the Leavenworth, Lawrence & Galveston Railroad Company, for the year 1870; the two months' interest from January 1, 1870, to March 1, 1870, having been agreed upon between said railroad company and the board of county commissioners, to be cancelled."

"Iler and Vaughn for the levy."

"J. B. Lowry enters his protest as follows:"

"The undersigned, Commissioner of Anderson County, protests against the action of the majority of said board in the matter of the levying of taxes for the payment of the interest on the L., L. & G. R. Co. bonds for the following reasons, to-wit:"

"Said bonds are not legally in the hands of said railroad company if in the hands of said railroad company at all."

"J. B. LOWRY"

"Member of the Board of County"

"Commissioners of Anderson County"

"Attest:"

"[Seal] J. H. WILLIAMS, Clerk"

After the plaintiff had offered in evidence the coupons sued upon, and one of the bonds (the bond having on it a certificate of the auditor of the state, dated March 27, 1872, that it had been regularly issued, and had been duly registered in his office under the Act of March 2, 1872, and a guarantee by the company of the payment of it and of its coupons), and the order of August 11, 1869, and the proceedings of September 17, 1869, and July 8, 1870, and September 5, 1870, and a copy of the registration of the bonds in the office of the auditor of the state, he rested his case. Thereupon the defendant demurred to the evidence and asked the court to declare the law to be that upon the pleadings and proofs the plaintiff was not entitled to recover; but the court refused so to do, and the defendant excepted.

The defendant then introduced the two resolutions of November 5, 1869, above set forth, and also gave evidence for the purpose of showing that previous notice of the holding of the election was published in a newspaper at Garnett only twenty-four days before the day of the election, and not thirty days. There was also evidence given in reply by the plaintiff to show

Page 113 U. S. 235

that the county paid the interest on the bonds every year, down to that which fell due January 1, 1881; that in March, 1872, when the bonds were registered in the office of the auditor of the state, they belonged to the company, and that it afterwards sold them for full value to various parties. At the close of the evidence, the court instructed the jury to find a verdict for the plaintiff, and the defendant excepted to such instruction.

Page 113 U. S. 236



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