Board of Commissioners v. Board of Commissioners , 26 Kan. 181 ( 1881 )

The opinion of the court was delivered by

Brewer, J.:

This is an original action in this court, brought by the board of county commissioners of Marion county against the board of county commissioners of Harvey county, to compel the latter to extend upon its tax roll, so far as it affects certain, lands, a levy made by the former. It appears that in 1873, by an act of the legislature, a certain strip of land was detached from Marion and attached to Harvey county, and the object of this action is to compel such detached territory to bear a portion of the indebtedness incurred by Marion county prior to such detachment. This debt is of two classes: in 1871, Marion county issued $13,000 of bonds for the purpose of building bridges in the county; on the 30th day of September, 1872, Marion county issued $100,000 of bonds to the Kansas & Nebraska railroad company. To compel contributions to the payment of these two debts is the purpose of this action. The bridge bonds were due in 1881, and it does not appear that their validity as a debt of Marion county was ever questioned. The Kansas & Nebraska railroad was never built; Marion county denied the validity of those bonds; suit was brought thereon in the U. S. circuit court, and judgment rendered against the county. Thereafter, in 1879 and 1880, Marion county compromised with the holders of said bonds, coupons and judgments, and issued funding bonds in lieu thereof. These funding bonds were issued under the authority of chapter 50 of the Laws of 1879. The answer of the defendant sets up twenty-three different defenses; some of these, however, are waived by the defendant, and the agreed statement of facts eliminates certain others from consideration.

Several questions, however, of difficulty and importance remain to be considered; and first, we shall notice those having special reference to the bridge bonds. The validity of these bonds as an indebtedness of Marion county is not questioned. It is insisted, however, that none of the bridges for which these bonds were issued were built within the limits of the detached territory; and it seems to be suggested that this fact makes some sort of an equitable defense. That is a mistake. The bonds, when issued, were bonds of the entire county. The bridges, when built, were the property of the county, and wherever located were located for the benefit of the entire county. Every inhabitant of the county, and every tract of land in the county, had not only technically an interest, but in fact actually received a benefit from such bridges. Indeed, it is generally true that every improvement of the highways within or near any particular strip of land is an actual benefit thereto; and though this particular strip of land may now be attached to a different county, it is just as near as ever to those bridges, and receives as much as ever the benefit of the highways improved thereby. At the time of the detachment, the bonds were both legally and equitably a charge against this territory: and the fact that the political 1. Detached terri- J 3 x uSJpaymeifc relations of this territory have been changed affects neither the legal nor equitable liability. This is the only question as respects the bridge bonds, except those involved in the form of the certificate and the manner of the levy, and those questions will be considered hereafter.

In respect to the railroad or funding bonds, it is insisted that the bonds as originally issued were invalid, because the act under which they were issued was unconstitutional; and further, that even if they were valid, they have all been paid by the funding bonds, and that these latter, issued in 1879 and 1880, are a debt incurred since the detachment, and therefore not a debt for which the detached territory is liable.

The first part of § 16 of article 2 of the constitution of Kansas reads as follows: “No bill shall contain more than one subject, which shall be clearly expressed in its title.” This is the provision of the constitution which defendant claims is violated by chapter 29 of the Laws of 1869, under which the bonds were voted and issued, the title to that chapter being, “An act to amend §§ 51, 52 and 53 of an act entitled An act concerning private corporations.’”

Aside from the general doctrine that acts of the legislature should not be pronounced unconstitutional unless clearly in conflict with that instrument, and that questions of doubt should be solved in favor of their validity, there are many special reasons why the validity of these challenged sections should be maintained. On the faith of them, large property rights have been created, important enterprises conducted to completion, and the material prosperity of this state largely affected. For years they have stood unchallenged. It has been assumed that they are valid, and on that assumption many have acted. To now hold them invalid, would jeopardize large interests, introduce great confusion into affairs, and lead prudent men to hesitate about business enterprises in this state. It would shake faith in law, if sections of a statute, upon which for a dozen years so many and so large interests have been unhesitatingly founded, and which have been so universally known, and so universally assumed to be valid, were swept away by a decision of the courts, based upon a technical non-compliance with some section of the constitution.

Doubtless the section of the constitution is mandatory; its provisions may not be disregarded by the legislature, and must be enforced by the courts; but as often said, its provisions are to be liberally and reasonably construed. It was put into the constitution in the furtherance of justice and to prevent tricks and frauds; to guard against surreptitious and hasty legislation ; and should be so construed and enforced as to carry out the purpose of its enactment. To apply it, as counsel now contends that it should be applied, would in fact make it an instrument of injustice; would be applying it not as a guard against surreptitious legislation, but to overthrow deliberate and considered legislation, and legislation upon which vast rights have been founded; courts may well hesitate before they carry this section to such results. (Woodruff v. Baldwin, 23 Kas. 491.) That this was not surreptitious legislation, is demonstrated by the fact that in this amendment of 1869, the sole thought of the legislature — the sole object of the amendment — was the three challenged sections. Further than that, the amending act shows that the subject received the second and special consideration of the legislature. The question of the constitutionality of these sections is the same as though no amending act had been passed, and as though we were considering the original sections in the act of 1868.

Passing now to the specific objection, and it is this: The title of the act (ch. 23 of the General Statutes of 1868) is “An act concerning private corporations.” This chapter is a general act concerning private corporations; gives the purposes for which they may be incorporated, and the manner of incorporation; their powers and duties; provides for their dissolution; and also contains several special articles devoted to particular classes of corporations. Article 6 is thus devoted to railroad corporations, and in addition to the general powers of other corporations, gives them power to condemn the right of way, and also to take subscriptions to their capital stock from municipalities, and prescribes under what conditions such subscriptions shall be voted and received. The constitutionality of these latter provisions is what is challenged.

It is said, “There is no mutual or necessary relation, either direct or indirect, between the organization of private corporations, their powers or their duties, their success or their usefulness, and the bonds of municipalities.” Hence the matter of municipal bonds was neither clearly expressed nor suggested by a title which simply reads, “concerning private corporations.” Private corporations and municipal bonds are two entirely different and not related subjects; under the title of municipal bonds we have no right to look for anything concerning private corporations, and vice versa, under the title private corporations we are to look for nothing concerning municipal bonds. As thus stated, there is a plausibility and a force which demand examination. The title to the act, it will be noticed, is broad and comprehensive; it is an act “ concerning private corporations,” not concerning the organization of corporations, not concerning their powers and duties, not concerning their dissolution, nor concerning the purposes for which they may be formed, but generally concerning the private corporations themselves. Not only is the title thus broad and comprehensive, but the act is also equally comprehensive; it contains 134 sections, and was intended to comprise within the limits of a single chapter the whole law concerning private corporations. Such a compilation is justifiable and proper, even as in the code of civil procedure are found provisions concerning limitation, concerning evidence, mechanics’ liens, their formation as well as their enforcement, divorce and the causes therefor; mandamus and the cases in which it may be issued, etc., etc. Now a part of the law concerning corporations touches their organization — how it is to be effected, the amount of stock, when and by whom it may be subscribed, for and under what circumstances and in what kind of property subscriptions may be paid; and the latter is really all that these challenged sections provide. The fact that, as respects railway corporations, special provisions are made for subscriptions, does not take such provisions outside the subject-matter of private corporations. They are just as much a part of the law concerning private corporations as the general provisions of that chapter in respect to subscriptions to all corporations. Indeed, a law conerning private corporations which made no provision for subscriptions thereto, would seem to be deficient; and if the legislature may make general provision concerning subscription, it may also make special provisions. One is as much suggested by the title as the other. Suppose beyond the general provision as to subscriptions, the act specially provided that subscriptions to bank corporations should be paid in full in cash at the day of subscription, or that no nonresident or alien should be permitted to take stock in insurance corporations, or that no minor should be allowed to take stock in any corporation, without attaching thereto a certified copy of the order of the probate court of his county, allowing such subscription, or that the subscription of no married woman should be received without a written assent of her husband thereto: would any of these special provisions be held to be so foreign to the subject-matter of the organization of corporations as not to be included within the general title to that chapter? It seems absolutely clear, that if provisions concerning subscriptions to the capital stock of the corporation may be included in an act with this general title, that the detail and extent of such provisions is a matter of legislative discretion, and cannot be challenged in the courts. It cannot be said that one form of subscription and subscription by one set of parties are included within the title, while other forms of subscription, and by other parties, are not so included. These challenged sections simply provide that municipalities •may subscribe, when they may subscribe, and how they may subscribe, and how they may pay their subscriptions; and this comes fairly within the subject-matter of the organization of private corporations, and is included within the general title of this chapter. We conclude, therefore, that these sections are not unconstitutional, and that so far as this 2.'Original # 7 1 ft.^Gen'. question is concerned the original issue of railroad bonds constituted a valid debt of Marion county. See, in addition to the decisions of our own court, the following authorities: Foster v. Callaway County, 3 Dillon, 200; Dillon on Municipal Corporations, § 28, and note; Cooley’s Const. Lim., p. 144; San Antonio v. Mehaffey, 6 Otto, 312; Phillips v. Town of Albany, 28 Wis. 340; Phillips v. C. & C. B. Co., 2 Metc. (Ky.) 219; Supervisors v. The People, 25 Ill. 181; Home’s Appeal, 77 Pa. St. 77; People v. Briggs, 50 N. Y. 553; Brewster v. City of Syracuse, 19 N. Y. 116; Evans v. Sharp, 29 Wis. 564; Mills v. Charelton, 29 Wis. 400; Humboldt County v. Churchill County, 6 Nev. 30; State, &c., v. Union, &c., 33 N. J. 350.

Again, it is insisted that, conceding the validity of the railroad bonds as originally issued, the funding bonds were neither authorized nor issued till long after the detachment, and that therefore, under the authority of Chandler v. Reynolds, 19 Kas. 249, the detached territory is not liable. In that case, certain bonds were authorized before, but were not in fact issued till after the division, and the detached territory was held not liable. See also the case of Comm’rs of Sedgwick County v. Bunker, 16 Kas. 498. Looking to the letter simply, these funding bonds were neither authorized nor issued till after the detachment; hence apparently the detached territory was not liable. But looking behind the letter to the substance, we find that, before the division, the railroad bonds were in fact authorized and issued. At the time of the division, therefore, the debt thus created was a lien upon the detached territory. (Laws of 1873, ch. 142, §1.) The same liability was also affirmed by § 2 of ch. 59 of the Laws of 1873, an act which provides for the detachment, and which in said § 2, reads: “Provided, That nothing in this act shall be construed to release townships one and two, east, in township twenty-two, of Marion county, Kansas, from paying their proportionate indebtedness on all bonds authorized up to this date by said county.” There were therefore, at the time of the division, certain bonds outstanding, which were a lien upon the detached territory, and the indebtedness evidenced by which bonds has never in fact been paid. The funding amounts to this, and nothing more: in lieu of one certain evidence of debt, another is issued. In consideration, it is true, of a change in the time and interest, a change was made in the amount promised to be paid. But this change was a reduction, and therefore a benefit to the debtor. Still, neither the one paper nor the other was. the debt itself, but only the written evidence thereof. The debt remains the same. The change was in the evidence of that debt. Notwithstanding the financial theories popular with a few, the law does not yet recognize the substitution of one promise to pay for another as in fact a payment, and looks evermore beyond the form of the transaction to the substance thereof, and until the debt is in fact paid, it calls it in fact the same debt, notwithstanding many changes may be made in the evidences thereof. The books are full of cases in which, after a note and mortgage have been once executed, the note has been again and again renewed, and still the mortgage held as security for the debt, with all its original priorities. (Pratt v. Topeka Bank, 12 Kas. 572.) Nor does it make any difference that changes are made in the rate of interest, time of payment, or any other minor details, so long as the principal debt remains in fact unpaid. The same principle obtains here: the railroad bonds were legally issued; by statute they were a lien on the detached territory; that real estate was subject to taxation for their payment. The bonds have been exchanged for new ones, but the debt was unpaid in the exchange. The county received no new thing of value; made no promise in excess of that already outstanding. Changing time and 3' boícis,"a . rate of interest, it simply renewed a promise to pay the same debt. The funding bonds were therefore properly a debt against the detached territory. These are all the questions we deem it important to consider in reference to the question of the substantial liability of the detached territory for these debts; and as to both the bridge and the funding bonds, we hold that it is liable.

Other questions remain, but they run simply to the form and regularity of the proceedings; and the first one arises on the admission in the agreed statement of facts, that the levies of 1878 were made by the county board not within the limits of Marion county, but while acting as such without the state. The invalidity of such a levy has been adjudged by this court in Comm’rs of Marion County v. Barker, 25 Kas. 258. But it is insisted by the counsel for plaintiff, and we think correctly, that no such question is open for consideration under the pleadings. The defendant in its answer nowhere denies the allegations of the plaintiff’s pleadings, but simply sets out a series of facts which it claims constitute so many defenses thereto. The seventh paragraph of the answer to which counsel refers simply puts in issue the sending of the certificate by the county clerk, and tenders no issue as to the validity of the levy. Neither do we find anywhere else in 4. original case in the pleadings any allegation in respect thereto; and as the agreed statement of facts was submitted subject to all objections for incompetency, under the pleadings this, although admitted to be a fact, is not a fact in issue, and may therefore be ignored.

Another objection is, that it appears from the certificates sent by the county clerk of the one county to the county clerk of the other, that the county commissioners in making the levy simply fixed the rate per cent., instead of determining the amount to be raised for these several indebtednesses. We cannot think this a substantial defect; having the 6. Tax in detached assessed value of the property before them, it can make no substantial difference whether the resolution of the commissioners declared that so much money in gross must be raised, or that a certain rate per cent, be levied for such tax; the result is the same, and a mere difference in the form of the expression ought not to weigh against the substantial rights of either party. Our tax law in general terms provides that no mere irregularity shall defeat tax titles. The same principle controls here. We are dealing with the substantial rights of these respective parties. We are to determine what in fairness and justice either party may do or require, and nothing which does not go to the substance of things should be permitted to relieve this detached territory from paying its share of the debt which it assisted in creating. Even if the matter alleged be a technical non-compliance with the letter of the statute, it is not in a controversy like this such a defect as will absolutely vitiate the levy.

It is insisted that the certificates actually sent by the one county clerk to the other were defective in this, that they did not fully inform the latter of the specific indebtedness for which the tax was levied, and all the details of such indebtedness, or of the territory'embraced within such levy. Three certificates for the three several years are shown. We do not understand that these certificates are required to give a detailed history of all those circumstances connected with the creation of the indebtedness which justify an extension of the Levy and cm- levy beyond the territorial limits of Marion county. We are inclined to think that the certificates of 1878 and 1879 are sufficiently full and specific, while the certificate for 1880 is incomplete and defective. If this proceeding reached only to the tax of the latter year, there would probably be no default until a more full and specific certificate was sent; but as mandamus must be issued to enforce the levies for the two prior years, and as the levy was undoubtedly properly made for the year 1880, we think the mandamus may fairly go for the levies for the three years.

A final objection involves a mathematical computation of the amount actually raised by levies already made, and the amount needed to pay the accruing indebtedness. Counsel for the defendant contends that the levies already made and collected in Marion county have been sufficient to pay the bridge bonds and interest, and that the levy is excessive for the funding bonds.

So far as the bridge bonds are concerned, it does not appear that any levy was ever collected from the detached territory; and ignoring the levies for the last three years, which are now in controversy, it does not appear that the amounts collected in Marion county were sufficient to discharge this bridge indebtedness. This detached territory stands to Marion county in reference to this indebtedness precisely as though it remained still a part of such county, and we do not understand that the owner of one tract of land in a county can object to the payment of a tax levied upon his land on the ground that the other land-owners, having already paid the tax levied before he did, have paid into the county treasury enough to discharge the indebtedness. It is his duty to pay as they have paid, and if after all have paid there should chance to be some small surplus, it would be appropriated for the common benefit. It not unfrequently' happens that the county commissioners in providing for any fund have made a levy so large that when all have paid there remains a slight surplus in the treasury, but we do not understand that under such circumstances any tax-payer can wait until all the rest have paid and then decline to pay his tax because by such payment a slight surplus will be found in the treasury.

Again, we cannot think that the levy made for the funding bonds discloses such an excess as justifies the court in restraining the collection. It is a matter notorious, that some property is always delinquent, and in levying to meet a specific debt, the commissioners are justified in taking into account the probable amount of such delinquency. The commissioners should provide for the debt; they should take into account the probable amount of such delinquency, and if ‘not illegal for the taxes should chance to be paid more fully and promptly than expected, and a sum in excess of the amount actually needed be raised, the fact does not vitiate the levy as to the delinquent lands. "We see no such excess as justifies any interference with the proceedings. The fact remains undisputed and clear, that this detached territory has not contributed its share to the payment of this indebtedness. Justice and equity require that it should bear its proportionate share of the burden, and having paid nothing, it is in a poor condition to complain that the levy is a trifle,in excess of what it ought to be to fully discharge the debt. A large amount beyond anything already levied will assuredly be required in the future, and if in the final adjustment of this indebtedness it shall appear that the detached territory has already contributed more than its just share, it will then be time enough to equalize burdens. It is not pretended that the levy on the detached territory was other or different than that on the property in Marion county; thus far everything has been equal. The funding bonds are not yet paid, and until some inequality appears, or until the debt is fully paid, we think that the territory cannot be heard to complain.

These, we think, are all the substantial and important questions in the case. We have given the various matters full consideration, and we think that justice and fairness require that these levies should be enforced in the detached territory; that no sufficient legal objection has been shown thereto; and that therefore the mandamus must be issued as prayed for.

All the Justices concurring.