Township of Washington v. Coler et al., 51 F. 362

Sanborn, Circuit Judge, after stating the facts as above, delivered the opinion of the court.' The act recited iu the bonds (chapter 107, Daws Kan. 1876, under which these bonds were issued) gave the authority to and imposed the duty on the county commissioners of determining whether the various provisions of the act and the various terms of the proposition adopted had been complied with before they issued the bonds.

They did determine that there had been a full compliance with these terms and provisions. and so recited in the bonds, and it is conceded by counsel for the defendant that it is estopped by these recitals, as against the plaintiffs, to claim that the bonds are invalid on any other ground than that-upon their face they appear to have been issued in violation of some constitutional or statutory restriction. Chaffee Co. v. Potter, 142 U. S. 355-364, 12 Sup. Ct. Rep. 216; Town of Coloma, v. Eaves, 92 U. S. 491; Lake Co. v. Graham, 130 U. S. 674-681, 9 Sup. Ct. Rep. 654.

It is not claimed that these.bonds were issued in violation of any restriction of" the constitution, and the only provision of statute which is claimed to so restrict the power of the board of county commissioners to issue these bonds as to make them void is the clause contained in

section 14 of the act, which reads as follows: “And to the said bonds shall be-attached coupons for annual installments of the principal and interest accruing from time to time by the terms of said bonds.” If this clause contained the only reference in the law to the time when these bonds should mature, there might be some force in the defendant’s contention, but the entire law must be considered, and the intent of the legislature drawn, not from a single clause, but from the entire body of the act. When this is done, the claim of the defendant is seen to be utterly without foundation.

Section 13 of the act expressly provides that the principal of the bonds “shall be made payable at any time that may he fixed in tine proposition voted upon, not exceeding thirty years from their date.”

Section 2 provides that the petition for the submission of the proposition to subscribe for stock shall state “ the terms of payment” therefor.

Section 3 provides that these terms of payment shall be submitted to the vote of the people as a part of the proposition.

Section 5 provides -that, if the proposition is carried by the vote of the people, the county commissioners shall cause such bonds, with such coupons attached, as may be required “by the terms of said proposition” to be issued. Doubtless a proposition might have been submitted and carried to issue bonds which should provide for the payment of annual installments of the principal, hut the terms of the proposition actually submitted and carried did not so provide, but provided for the issuance of bonds whose principal should be due in 30 years from their date, and in view of the express provision of

section 13, that the principal “shall be made payable at any time that may be fixed in the proposition voted upon, not exceeding thirty years from date,” it is very clear that the clause in

section 14, that “to the said bonds shall be attached coupons for annual installments of the principal and the interest accruing from time to time by the terms of said bonds,” cannot be held to mean more than that if the proposition submitted and the terms of the bonds issued in compliance therewith provide for the payment of the principal in annual installments, then coupons for such installments shall be attached to the bonds; and, as neither the proposition nor the terms of the bonds in this case did require the payment of any installments of the principal before the entire principal became due, no such coupons were necessar)*-, and this clause had no application to these bonds. Again,

section 6 of this law provides that it shall be the duty of the county commissioners to levy and collect annually a tax “sufficient to pay the interest on such bonds as the same shall become due, and to create a sinking fund sufficient to pay said bonds at maturity. ”

Section 7 provides that when there remains in the hands of-the treasurer any part of the moneys collected from this tax, after jjaying “all the interest due,” the board of county commissioners shall cause the treasurer to buy up the bonds at their market value, not exceeding par. And

section 10 provides that the taxes levied upon the property of any company, aided under the provisions of this law, shall be applied to the payment of the coupons, and “'to provide a sinking fund for the payment at maturity of the principal of the bonds issued by such township.” if the legislature intended by this law that installment bonds only should be issued under it. no sinking fund would be either necessary or useful.

A fax could be, and naturally would be, levied each year for the amount necessary to pay. interest and the installment of principal coming due the succeeding year, and no surplus funds would be accumulated to buy bonds before maturity.

The fact that a sinking fund was thus provided for is very persuasive that bonds could be issued under this law, the' entire principal of which would fall due at one timo; and when this law is compared with others passed by the same legislature, which do provide for the issuance of installment bonds, and it is found that in those laws no provision for a sinking fund is made, it becomes almost conclusive.

Chapter 87 of the Laws of Kansas for 1876 provides for the issuance by the county of Wyandotte of 8123,000 of funding bonds, payable in installments. It declares the exact amount that shall be payable in each 3*ear, and directs a levy annually oí a sum sufficient to pay the interest and the installment coming due the succeeding year, but makes no provision for any sinking fund.

Chapter 88, Laws Kan. 1876, authorizes tiie cit}’ of Lawrence to issue bonds pa.yable in not more than 30 years from their date, and provides that, “if said bonds shall he made payable in annual installments, they shall have separate coupons attached for such installments as they fall due.” 11 also provides that the mayor and council shall le\w in each year a sum sufficient to pay the installments, if the bonds are made payable in installments, and that if they are not they shall levy a sum sufficient to provide a sinking fund for the redemption of the bonds at maturity.

Chapter 49, Laws Kan. 1876, authorizes the counties of Douglass, Franklin, and Anderson to issue bonds in certain amounts, “each payable in equal semiannual installments,” and provides that a tax shall be levied in each year sufficient to pay the inte,rest and the installment of principal falling due in the succeeding jmar, and makes no provision for a sinking fund.

Chapter 50, Laws Kan. 1876, provides that the city of Chetopa may issue bonds in certain amounts, “payable in equal annual installments,” and that a lev}T of a tax shall he made in each year sufficient to pay the interest and the installment of the principal falling due in the succeeding year, but makes no provision for a sinking fund.

In each of these acts authorizing the issuance of installment bonds onty, the times of payment and the amounts of the installments are expressly fixed, and it is made the duty of the proper officers to levy and collect each year taxes just sufficient to pay the interest and the installment of principal falling due the ensuing year, but no sinking fund is provided for; while by

chapter 88, in which authority is given to the city of Lawrence to issue either installment bonds or bonds the entire principal of which shall fall due at one time, as the people may elect, the policy of the legislature is made plain by the fact that this act provides that in case installment bonds are issued, no sinking fund shall be provided for, but, in case bonds the entire 'principal of which shall fall due at one time are issued, a sinking fund shall be provided for. In

chapter 107, the act under which the bonds in question were issued, there is no provision fixing the amount of any installments of the principal or the times when they shall fall due, tliere is no provision for levying taxes to pay any installment; but there is a provision for the levy of taxes to provide a sinking fund, there is a provision for buying bonds before they mature, and an express declaration that the bonds issued under this act shall be made payable at any time that may be fixed in the proposition voted upon. The conclusion is irresistible that authority was intended to be and was here conferred to issue these 30-year bonds, and the judgment must be and is affirmed, with costs.