RATHBONE V. BOARD OF COy'RS.
125
RATHBONE v. BOARD OF Cm1:'RS OF KIOWA COUNTY, KAN.l {Oircuit COW't
of. Appeals, E1ghtlJ. Circuit.
September 13, 189701
No. 788.
L
CONSTITUTIONAL
Under the Kansas constitution (article 2, § 17), prohibiting specllll legislation unless necessary, it is for tbe legislature, and not the courts, to determine whether a special law i8 necessary.
LEGISLATION.
.. COUNTY BONDS-VALIDITY-TIME OF ISSUANCE.
The Kansas statute of Marcb 1, 1876, providing for the OTganization ()f counties, townslJ:lips, and scbool districts, as amended by the act of February 18, 1886 (Laws 1886, p. 123, c. 90), prOVides that no bonds of any kind sball be issued by any county within one year after the organization thereof; but the same section contains two prOVisos, the first of wbich declares that "none of the provisions of this act shall prevent or prohibit the county of Kiowa · · · from voting bonds at any time after the organization of SIlJ.d county." Held" that this pr'oviso In favor of Kiowa county was valid, and authorized it to vote bonds as BOon lIB it was organized. 73 Fed. 395, reversed.
.. SAME-EXCESSIVE ISSUES-CONSTITUTIONAL LIMITATIONS-AsSESSED VALUE.
County bonds were issued under Laws Kan. 1876, p. 159, c. 63, as amended by Laws Kan. 1886., p. 123, c. 90. The act limited such i8SUes to a certain proportion of tlJ.e assessed valuation of county property. It was not contemplated tlul.t these bonds should be Issued prior to December 31, 1887, and none were issued until August, 1887. Held, that the assessment for 1887, made lIB {)If March 1, 1887, was the one that controlled.
.. SAME-INNOCENT PURCHASERS-RECITALS.
KIowa county, Kan., had authority In 1887 to issue certain bonds, to the amount of $126,008, and no more. It issued two distinct seTies to two separate railroad companies,-each series for less than tbat amount, but together exceeding it. The total issue of each series, respectively, was reclted In tlle bonds belonging thereto (but not In the coupons), and they contained broad recitals as to due complian('e with legal reqUirements. Plaintiff bought coupons of one series from A., and of the other series from B., neither of Whom had owned bonds of botb seTles. Held that neither A. nor B. was charged with notice of the excess, and that plalntllr had acquIred all theIr respective rights. On Motion to Modify Judgment.
I.
DECISION ON ERROR-REVERSAL-CASE TRIED ON AGREED STATEMENT-ENTRY OF JUDGMENT BELOW.
Wben a jury bas been duly waIved, and the case tried to the court on an agreed statement of facts, and the damages recoverable are a liquidated sum, the appellate court, on reversing a jUdgment for defendant, will not award a new trial, but will direct a judgment to be entered against defendant.
of Kansas.
In Error to the Circuit Court of the United States for the District
'!'hIs 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 wbich were issued by Kiowa county, Kan. Thirty-two of the coupons were detached from 16 bonds, belnga 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 SIlJ.d county OD Octoher 3, 1887, to the Chicago, Kansas & NebrllBka Railway Company (bereafter termed the "Cbicago RaIlway Company"). '!'he county originally agreed I RehearIng denied December 6, 1897.
126
83 FEDERAL REPORTER.
to issue bonds to the amount ot $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 ill 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 eity 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 mOTe than one hundred thousand dollars, and an additional five per indebtedness of the 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 shall the total amount of county, township and city aid to any railroad, exceecl four t.housand 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 tlle 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 ot payment, together with the conditions upon which it is proposed to make such subscription or loan, and the fo,rm of the ballots to be used at such elect.ion for and against such proposition." Other provisions of the act authorized the board of county commissioners to order the county clerll: to make a SUbscription for stock, and also authorized a subsequent issue of bonds in payment t.herefor, 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 ealled 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 count.y 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 subsC'ription to stock and issue of 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 ald 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 autllOority 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 issne amount.ed to $120,000, and was "not in excess of the li.mitations 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 ot county commi'ssioners on May 21, 1886, In obedience to a petition to that
RATHBONE V. BOARD OF COM'RS.
127
effect which was presented to the board by the requisite number or 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 coonty 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 unorganize.d 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. 00. The first section of the act O'f 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 8lIJlle 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." value of taxable property in Kiowa eounty, Kan., was $236,662 for the year 1886, $520,169 for the year 1887, and $1,6.47,580.10 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 rood was completed and In operation to Greensburg, 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 rood 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 coopons 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 such agreed smtement the trial court rendered a judgment tn favor o;f the defendant. 73 Fed. 395. 'l'he case comes to this court on a writ of error brought to reverse said judgment.
E. F. Ware (Charles S. Gleed, James W. Gleed, D. E. Palmer, and C. Hamilton on the brief), John F. Dillon, Harry Hubbard, and John M. Dillon, for plaintiff in error. S. Ashbaugh and L. M. Day, for defendant in error. Before CALDWELL, SANBORN, and THAYER, Circuit Judges.
128
83
FEDERAL REPORTER.
THAYER, Circuit Judge, after stating the case as above, delivered the opinion of the court. The first question for consideration which arises upon this record, is whether the first proviso contained in section 1 of the act approved February 18, 1886 (Laws Kan. 1886, p. 123, c. 90), was a valid enactment. That proviso expressly authorized Kiowa county to vote bonds "at any time after the organization of said county," and if it was a provision which the legislature of the state of Kansas had the power to inject into the act of February 18, 1886, it would seem to be wholly unnecessary to consider the further question which is elaborately discussed in the briefs, whether the prohibition against issuing bonds within one year after the organization of the county, which is found in the second proviso to the same section of the act, operated as a prohibition against voting bonds within one year after the organization of the county, as well as a prohibition against delivering them or putting them in circulation within that period. If the first of these provisos is a valid enactment, then it is obvious that the word "issued," which is found in the second proviso, cannot be so construed, in its application to Kiowa county, as to prevent that county from voting railroad aid bonds during the year succeeding the date of its organization, whatever may be the meaning of the word "issued," and the effect of the second proviso, as applied to other counties of the state. The validity of the first proviso is challenged on the ground that it was special legislation, such as falls within the prohibition of section 17, art. 2, of the cOlistitution of the state of Kansas. That section of the constitution is as follows: "All laws of a general nature shall have a uniform operation throug1lout the state; and in all cases where a general law can be made applicable no specIal law shall be enacted." .
The construction which has been placed on the foregoing provision of the constitution of the state by the supreme court of Kansas is binding upon the federal tribunals, and it is manifest that, as there construed, the legislature of the state is left at full liberty to determine whether, in any given case, a general law can be made applicable; and the legislative determination of that question is not subject to review either by the state or the federal courts. In two cases (Darling v. Rodgers, 7 Kan. 592, and Robinson v. Perry, 17 Kan. 248) a contrary view seems to have been expressed, but it is now well settled by a long line of adjudications in that state that it is competent for the legislature to enact special laws, or to ingraft exceptions upon general laws, if, for any reason, it sees fit to take such action. In a late case (Elevator Co. v. Stewart, 50 Kan. 378, 383, 32 Pac. 33, 34) the supreme court used the following language: "The third contentIon of the plaintiff, that the new act is In contravention of section 17, art. 2, of the constitution, we think, is also untenable. Some good reasons may be urged in favor o'f the plaintiff's contention, and two decisions of this court seemingly, to some extent, favor it. Darling v. Rodgers, 7 Kan. 592; Ro'binson v. Perry, 17 Kan. 248. But some good reasons, and many de· cIsions of this court, are against his contention. Commissioners of Norton Co. v. Shoemaker, 27 Kan. 77; Harvey v. Commissioners of Rush Co., 32 Kan. 1'59, 4 Pac. 153; Weyand v. Stover, 35 Kan. 545, 551, 11 Pac. 355; City of Wichita v. Burleigh, 36 Kan. 34, 12 Pac. 332; State v. Sanders, 42 Kan. 228,
129
21 Pac. 1073; Hughes v. Milligan, 42 Kan. 396,22 Pac. 313; Commissioners of Linn Co. v. Snyder, 45 Kan. 636, 26 Pac. 21; Commissioners of Barber Co. v. Smith, 48 Kan. 332, 29 Pac. 565. It will be seen from an inspection of the decisions of this court, commencing with the case of State v. Hitchcock, 1 Kan. 178, that this court has uniformly held that the legIslature has the power, In its discretion, to pass special laws, although adequate general laws upon the same subject might be enacted, and although In fact such general laws have already been enacted, and are at the time In full force and effect, and although such special acts mIght have the effect to limit the operation of eXisting general laws, or existing laws of a general nature then having II. uniform operation throughout the state."
Still more pointed are some expressions found in the case of Eichholtz v. Martin, 53 Kan. 486, 488, 36 Pac. 1064, 1065. The court say: "The old question so often raised is again presented: Was it competent for the legislature to determine whether a general law could be made applicable, and whether a special law was necessary? If the question were a new one, the writer of this opinion would be inclined to the view that the courts should determine in each case whether this constitutional restriction had been violated or not; but the question has been put at rest by a long series of de· cisions holding that the decision of the question is exclusively for the legislature, and not for the corurts."
Some of the decisions above referred to were reviewed by this court in the case of Insurance Co. v. Oswego Tp., 19 U. S. App. 321, 328; 7 C. C. A. 669, and 59 Fed. 58; and we there held that the doctrine was well settled by local decisions that the legislature of the state of Kansas has power to pass special laws, notwithstanding the inhibition contained in section 17, art. 2, of the state constitution. The result is that the first proviso found in section 1 of the act ot February 18, 1886, supra, was a valid enactment. It is further suggested by the defendant in error that because the proceedings to organize Kiowa county were commenced under the provisions of the act of March 1, 1876 (Laws Kan. 18;6, p. 159, c. 63), that act should alone be considered, in determining the power of the county to vote bonds during the first year of its organIzation, and, therefore, that the first P"foviso found in the amendatory act of February 18, 1886 (Laws Kan. 1886, p. 123, c. 90), has no application to the case in hand. Our attention is particularly invited to the fact that the first proviso found in the act of February 18, 1886, declares "that none of the provisions of this act shall prevent the county of Kiowa .. ., ., from voting bonds at any time after the organization of said county," while "it does not .. ., ., say that none of the provisions of any other act" shall have such effect. This is a very narrow and technical view of the language contained in the proviso, which, if adopted, would defeat the manifest purpose of the lawmaker. The legislature obviously intended, for reasons that were satisfactory to itself, that the first proviso in the act of February 18, 1886, should go into immediate operation, and that Kiowa county should have the power to vote bonds as soon as it was organized, no matter what might be the effect of the second proviso upon other newly-organized counties. If such was not its purpose, the first proviso was meaningless and futile. The most important question presented by the record is whether the plaintiff below was prevented from recovering because the re83 F.-9
130
.·83 FEDERAL REPORTER.
citals contained in the two series of bonds from which the coUpons in suit were detached showed that the total issue to the Kingman Railroad Company and the Chicago Railway Company amounted to $180,000, whereas the assessed value of county property for the year 1887 was only $520,169. We are of the opinion that because the agreement between the county and the respective railroad companies did not contemplate that bonds should be issued prior to December 31, 1887, and because none of the bonds were in fact issued until August, 1887, it is the assessment for that year (which, under the laws of Kansas, was made as of March 1, 1887) that must control in determining whether the issue was in excess of the amount allowed by law. The assessment for that year being $520,169, the act under which the bonds in suit were executed authorized an issue to the amount of $126,008, and no more. It was held, however, by the supreme court of Kansas, in Turner v. Commissioners of Woodson Co., 27 Kan. 314, that, if more bonds are authorized by a popular vote than can be issued lawfully, such vote is not a nullity, but confers power to issue bouds up to the amount that is authorized by law. If we apply that rule to the case in hand, it is manifest that the plaintiff was entitled to recover on the 32 coupons that were detached from the bonds issued to the Kingman Railroad Company on August 4, 1887, since the 60 bonds issued to that company did not exceed the statutory limit of indebtedness, and were therefore valid obligations of the county. We think, however, without applying that doctrine, that the right to recover extends to all the coupons in suit, and is not limited to the series last mentioned. The plaintiff is armed with all the rights of H. W. Sage and George L. Williams, from whom he purchased the two series of coupons; and he is entitled to rely on the title so acquired, without reference to the fact that he purchased coupons which had been detached from both series of bonds, and was thereby advised, by recitals contained in both series of bonds, that the total issue to both railroad companies amounted to $180,000. Rollins v. Commissioners of Gunnison Co., 26 C. C. A. 91, 80 Fed. 692; Commissioners of Marion Co. v. Clark, 94 U. S. 278. 286. There is no evidence contained in this record that Sage ever owned any of the bonds issued to the Chicago Railway Company, or that Williams ever owned any of the bonds issued to the Kingman Railroad Company; and in the absence of such evidence no presumption can be indulged that either of these parties purchased bonds belonging to both series, and in that way acquired knowledge that the total issue exceeded the amount authorized by law. The facts which Sage and Williams will be presumed to have known concerning the bonds are such as were disclosed by the bonds which they respectively purchased, and such further facts as the law made it their duty to ascertain by inquiry. Chaffee Co. v. Potter, 142 U. S. 355, 12 Sup. Ct. 216. In Dixon Co. v. Field, 111 U. S. 83, 95, 4 Sup. Ct. 315, and Lake Co. v. Graham, 130 U. S. 674, 9 Sup. Ct. 654, it was held that a purchaser of county bonds was charged with the duty of ascertaining the assessed value of county property, where the constitution of the state had limited the amount of county indebtedness that might be contracted to a certain per cent. of the assessed value of county property, and that in such