Kansas City & Pacific Railroad v. Rich Township

The opinion of the court was delivered by

This was an action brought by Rich township, in Anderson county, to enjoin the board of county commissioners of that county from issuing, and the Kansas City & Pacific Railroad Company from receiving, bonds amounting to $21,000, voted by. the township in payment of a subscription to the capital stock of the railroad company. The facts in this case are substantially as follows:

On January 25, 1887, under the provisions of chapter 107, Laws of 1876, as amended by chapter 142, Laws of 1877 (Comp. Laws of 1885, p. 783), the board of county commissioners of Anderson county ordered an election to be held in Rich township on March 1, 1887, on a proposition for the township to subscribe $25,000 to the capital stock of the railroad company, the same to be paid by a like amount of the bonds of the township — the road to be constructed on or before the 31st day of December, 1888. The election was held, the vote canvassed, an order made that the county clerk subscribe for $25,000 of the capital stock of the railroad company, for and on behalf of the township, and the subscription was made, as ordered, on the regular stock-book of the railroad company furnished for that purpose. Several petitions were circulated asking for this submission; some of them designated one point in the northern part of the township as the site of a depot to be erected by the company, while the others designated another point a half-mile east. This discrepancy grew out of a mistake in copying the forms for the petition prepared by the railroad company. When the order *286was made, one of the petitions containing the mistake was taken as correct, so that the same mistake was carried into the order, notice, and proposition submitted, by which the depot was designated at a point a half-mile east from the point really intended by the company and by the people of the township. Relying upon the subscription, the company proceeded to, and did, build its road from the south into the township, before it discovered that its line as located did not extend to the point named for a depot in the proposition voted. Thereupon it suspended work, and finally, as a proposed way out of the difficulty, the company prepared and circulated petitions reciting the former vote and mistake, and asking for an election for $21,000 of bonds and a like subscription upon the route as located, designating the depot site at the point originally intended — the railroad to be constructed on or before the 31st day of July, 1888. On the 14th of October, 1887, at a special meeting of the board of county commissioners of Anderson county, at which two members of the board were present, an order was made for another election, to be held on the 14th day of November.» 1887, for the township to subscribe $21,000 to the capital stock of the railroad company; the same to be paid for by a like amount of the bonds of the township. The petition upon which the board ordered the election to be held was signed “by a majority of the qualified electors of Rich township.” A majority of the legal voters favored the proposition, and the board declared it carried, and made a second subscription for stock, for $21,000. The road was built within the time, and according to the terms stated in the second petition and vote. In the order and proposition of-the board, upon which the last vote was had, was a recital that, “if the subscription for $21,000 was made, then the $25,000 subscription before voted should be void, and no bonds should issue in payment thereof.” The second petition was presented and the election thereon held under the provisions of chapter 183, Laws of 1887 (Gen. Stat. of 1889, ¶ 1283). The railroad company, through its general attor*287ney and vice-president, initiated and had general charge of the proceedings upon which both subscriptions were based. The railroad company offered a certificate of its stock for $21,000 to the proper officers, and demanded the issuance of a like amount of township bonds, as provided in the second subscription, after the board of county commissioners had gone over the road and declared the terms of the subscription complied with.

The first question in this case is, whether, under the provisions of chapter 183, Laws of 1887, the election of the 14th day of November, 1887, was “a second election for the same purpose” for which the prior election of March 1,1887, was ordered and held. Section 1, chapter 142, Laws of 1877, provides: “That at any subsequent election to be held for the same purpose, the same shall not be held, unless upon a petition of a majority of the legal voters of such county, township or city.” Section 1, chapter 183, Laws of 1887, provides: “That a second election for the same purpose shall not be held, unless upon a petition of a majority of the legal voters of such county, township or city.”

*2882 second eiec-proportions— *287The petition for the proposition submitted at the first election' was for a subscription for $25,000 of stock, the road to go over a definite route to a particular place specified for one of the depots. In the last election, the petition was for a subscription of $21,000, the road to take a different route to a point where one of the depots should be built. The proposition submitted at the first election was for the construction of the railroad on or before the 31st day of December, 1888. In the second election, the proposition was for the construction of the road on or before the 31st day of July, 1888. The second election was for a different purpose than the first election. The amount of the subscription was different, the route of the railroad was different, the location of one of the depots of the road was different, and the time for the completion of the road was different; therefore we cannot decide, upon the facts found by the trial court, that the second election was “for the same purpose” as the first election. The proposi*288tions as submitted were not substantially the same, but materially different. As the jurisdictional facts or conditions Prece<Jent to a valid subscription by the township under the last proviso of § 1, of said chapter 183, were not complied with m voting or subscribing the $21,000 of stock to be paid for in township bonds, the railroad company has no right to have issued to it, under such proviso, the $21,000 of bonds.

In this connection, we copy the following from the able opinion of the learned trial judge, delivered at the time of rendering judgment:

“If this be not the proper construction of the statute, then almost any proposition may be voted upon in the first instance providing for a subscription by a township for stock in a railroad company, and then, if defeated, or if carried, a vote can be had upon another proposition asked by a majority of voters, entirely different from the one asked for by the tax-payers in the first instance. This construction would break down completely one of the statutory barriers against the hasty assumption of burdens by municipalities, viz., the tax-payers’ petition.”

The trial court, after properly holding that there tras no valid second election under the last proviso of §1, of said chapter 183, further ruled that the second subscription to the stock of the railroad company in its inception was illegal for want of power to make it, because the petition presented to the board of county commissioners was not signed by two-fifths of the resident tax-payers of the township. The railroad company vigorously contests this finding of fact and the conclusion of law of the trial court thereon. Counsel for the company says that—

“This point was not raised upon the trial of the case at all. The reasons set forth in the petition why the railroad company was not entitled to the bonds in substance are : 1st, because of the first subscription for $25,000, which it is alleged has never been canceled or annulled; 2d, because there were only two commissioners present at the meeting at which the election was called; and because the petition for the election had never been presented to the chairman of the board, *289and there had been no call for the meeting, and the meeting at which the election was called was held without authority of law; 3d, because there was no security given for the expenses of the election; and 4th, because certain articles were published by the railroad company in a newspaper circulated in the township, wherein it was claimed that the first subscription was valid, and would be enforced unless the last proposition was carried, and if the last proposition was carried the first would be released; and because these publications, together with the proviso in the last proposition to the same effect, operated as an inducement and bribe to the voters of the township to vote in favor of the last proposition, but for which the same would have been defeated. This covers and includes the substance of every allegation of fact in the petition except the formal allegations of incorporation, official character, etc. Not a single allegation, not a word attacking the sufficiency of the petition for the election, can be found in the petition. No testimony was introduced upon the trial showing or tending to show that the petition did not contain two-fifths, or any other proportion of the resident tax-payers of the township. The ease was taken under advisement by the court and briefs were filed. The only attack made upon the petitions was because they ‘did not contemplate a completed’ railroad, as the word ‘constructed’ was used instead of ‘completed.’ ”

The opposing counsel answer as follows:

“The railroad company press the alleged fact that the point upon which the district judge decided the casein favor of the township was not urged in the court below. The principle underlying this point was pressed with all the force at our command. The broad general allegation in the petition is, that the railroad company is not entitled to these or any other bonds of Rich township. It is true that the allegations are very general, but they were sufficient to present the question considered and decided. If the defendant was not satisfied with the petition, it should have filed its motion to have it made more definite and certain. The sufficiency of the petition for the last election was assailed at the outset, and continuously, and after all, in the opinion of the district judge, the ease turned upon it. A copy of it was attached to the petition of the township in this case; it showed on its face that it was signed by voters only, and the board of county •commissioners so found. What more could have been re*290quired? The question was presented upon the pleadings; it was in the case; and the trial judge considered it as conclusive in the township’s favor.”

This is an equitable suit, and in considering the complaint against the ruling of the trial court, that the second petition was not a tax-payers’ petition, various other matters disclosed by the record should be referred to. The township trustee signed the second petition and voted for the proposition. Everybody supposed the second subscription contract to be valid, and ¿11 parties interested treated it as valid until the trial before the district court. The form of ballots used at the second election in favor of the proposition was “for extending aid to the Kansas City & Pacific Railroad Company on the new proposition,” and against the proposition was, “Against extending aid to the Kansas City & Pacific Railroad Company on the new proposition.” In building the railroad through the township, the line had to be lengthened several thousand feet and considerable additional expense incurred in order to comply with the terms of the subscription. But for the subscription of Rich township the road would have been located and built, by an equally favorable route, through Blue Mound township, about six miles east of its present location. The railroad has been regularly operated through the township since its completion.

*291í TownaMp iSi'roadcom-pany petition. *290On February 27, 1888, the township board, believing that the railroad company was about to have the bonds issued while the road was yet unfinished and not in operation as required by the subscription, met and took action in the matter, the result of which was that the treasurer, trustee and clerk caused to be sent to the company a written notice, signed by all of them, in substance stating that the township board would not accept the railroad in its present condition. About ten days thereafter the township commenced an action to enjoin the issuing of the bonds, in which the railroad company filed an answer, setting forth in substance, among other things, that it did not claim to be then entitled to receive the bonds in payment of the subscription, and did not propose asking for them *291until the railroad was completed and in operation in all respects as required by the terms of the subscription, and thereupon the township caused the action to be dismissed without prejudice. Ou April 30,1888, the company had the railroad completed and in operation, with depots and side-tracks and stock yards, in'all respects in compliance with the terms of the subscription, and thereupon notified the proper county and township officers of that fact; and on May 2 the board of county commissioners met as requested, and, accompanied by the county clerk and township officers, went over and carefully inspected the road. The record of the meeting of the board of county commissioners shows, among other things, that “the board went over the said railroad on May 2,1888, . . . and noted carefully the construction thereof, and finds that said railroad is fully completed and in operation in accordance with the subscription of said township to the capital stock/’ And, after reciting the facts about the tender of the stock, the refusal thereof, and demand for the bonds, the record further shows that “the board finds that while the company ... is entitled to the bonds, yet the board having been, on May 2, at seven o’clock p.m., enjoined from issuing them, it cannot take further action until said injunction suit is settled.” In 1887, Rich township, including the little villages within it, had nine hundred and ninety-nine inhabitants. At the first election one hundred and thirty-six votes were cast for the proposed subscription, and one hundred and twenty-four against. At the second election one hundred and twenty-eight votes were cast for the subscription and one hundred and nine against. The act of 1877, as also the act of 1887, prescribes that before a first election shall be held in any town-skip to subscribe to the capital stock of any railroad company, a petition in writing should £jrgj. q,e presented to the board of county commissioners signed by two-fifths of the resident tax-payers of the township. The petition presented to the board of county commissioners on the 15th day of October, 1887, did not show *292upon its face that it was signed by two-fifths of the resident tax-payers.

If the petition was merely defective, or irregular only, within the authorities, the township is not in a position to refuse the payment of its subscription.

3. Estoppel “A municipality may be estopped by its course of dealing with the railroad company to interpose a defense of irregularity in the exercise of the power of issuing bonds; and its position then in regard to the company is similar to that which it occupies to bona fide holders of the bonds without notice. A distinction is to be observed that ratification by acquiescence, or by affirmative acts, has been established only in cases of irregularities in the exercise of the power to issue bonds, and not in any case where there was a total want of power to issue the bonds.” (Jones, Rly. Secur. § 280, and cases there cited.)

See also Comm’rs of Morris Co. v. Hinchman, 31 Kas. 729; Railroad Co. v. Comm’rs of Osage Co., 38 id. 597; Railroad Co. v. Evans, 41 id. 94; Railroad Co. v. Stewart, 39 Iowa, 267; Hitchcock v. Galveston, 96 U. S. 340; Brown v. Kramer, 25 N.W. Rep. 356.

Even in judicial matters, this court has already decided that if the jurisdictional facts necessary to warrant service upon a defendant by publication were in existence at the commencement of the action, and the affidavit for publication is defective only and not void, the court, after judgment, may permit an amended affidavit for publication to be filed, and such affidavit when filed gives jurisdiction to the court and relates back to the time of the commencement of the action. (Long v. Fife, just decided; Pierce v. Butters, 21 Kas. 124; Wilkins v. Tourtellott, 28 id. 833; Harrison v. Beard, 30 id. 532.)"

The railroad company has proceeded upon the faith that it was to receive the bonds in due time; has complied with all the conditions upon which it was to become entitled to them; has expended large sums of money in constructing its road through the township, which it would not have done but for the promise of the legal voters that the bonds should issue in *293payment of the township subscription when the company had performed its part of the contract. During all of this time, the board of county commissioners, the township officers, the tax-payers and citizens of the township, seeing and knowing that the railroad company was expending its money within the township, in the construction of a public improvement which was to benefit the township and the property therein, stood by and made no complaint or objection to the petition presented for the second election. The first time that it was suggested that the proceedings were wholly void, because of the absence of a tax-payers’ petition, was upon the trial of this case, and if the statement of the counsel of the railroad company is correct, the suggestion was not seriously considered by the parties until the decision of the trial court was rendered. In view of all the facts presented, we think that the question, whether the petition for the second election was signed by two-fifths of the resident tax-payers of the township, ought to be fully litigated. The evidence pro and eon upon this question should be presented to the trial court.

*2944. Injunction township-show proper election to vote bonds. *293We think, considering the conduct of the county and township officers, the tax-payers and citizens of the township, and the form of the petition praying for the injunction against the issuance of the bonds, that the railroad company never understood, until after the decision against it, that the validity of the petition presented to the board of county commissioners was challenged. It was not specifically informed on the trial by the allegations of the pleadings, or any evidence offered, that the petition was defective upon the ground of not having been signed by two-fifths of the resident tax-payers of the township. So it had no fair opportunity on the trial of supplying proof in that regard. Of course, the rule is that if a petition is not sufficiently definite, a defendant may file his motion to have it made more specific, but the petition for the injunction nowhere alleged that the proceedings were void for the want of a tax-payers’ petition, and the petition did specifically state several other reasons why the railroad company was not entitled to the bonds. These specific alie-*294gations limited and qualified the general allegations of the petition, and therefore we cannot say that the counsel of the railroad company was negligent or guilty of laches in failing to file a motion to make the petition more certain, or in failing to understand that the question of a tax-payers’ petition was in controversy. (Wiley v. Keokuk, 6 Kas. 94; Banking Co. v. Riley County Bank, 30 id. 163.) The allegations of a pleading are to be taken most strongly against the pleader. If, upon a new trial, it shall be made to appear that the petition presented to the board of county cominis- . , . r* n i r> i . n sioners was signed, by two-fifths ot the resident tax-payers of Rich township, then, at most, the petition -for the second election was merely de- * . j fective, or irregular only. It ought to have stated upon its face that it was signed by two-fifths of the resident tax-payers of the township, or the board in ordering the election should have so found, but if, as a matter of fact, it was actually thus signed, then §1, of chapter 183, for a first election, would be so far complied with as to uphold the proceedings, considering all the other facts of the case. The jurisdictional facts or conditions precedent to a valid subscription by a township under the act referred to are, a petition of two-fifths of the resident tax-payers, an order by the commissioners for an election, a notice for such election, and an affirmative vote upon the proposition.

The power of the township to vote aid was not exhausted by the election of March 1, 1887, if the second election be regarded as a vote upon a new proposition. If irregularities only intervened and the second subscription was otherwise valid, it annulled and canceled the prior subscription. (Supervisors v. Galbraith, 9 Otto, 214.) If it can be established by sufficient proof that the petition for the second election was signed by two-fifths of the resident tax-payers of Rich township, as it is conceded that the commissioners ordered the election, that notice of the election was given and an affirmative vote of a majority of the legal voters of the township was cast upon the proposition, it cannot well be urged that *295there was a total want of power to make the subscription. If there was power to make the subscription, although the proceedings were irregular, then, in view of all the equities favoring the railroad company, the bonds ought to issue. It is not contended that there was anything unfair in the election, or that the voters of the township did not generally participate therein. As before stated, all of the parties interested treated the second petition as sufficient and valid, until the perpetual injunction was granted. If, as a matter of fact, this petition was signed by two-fifths of the resident tax-payers of the township, then the proceedings precedent to making the subscription were irregular only, not fatally defective — not void.

There is nothing in the petition presented to the board of county commissioners, or in the order or notice for the election, stating or showing that the signers to the petition were not tax-payers of the township. The petitioners were qualified electors of the township and may have also been taxpayers. Generally, a majority of the qualified electors of a township in this state embraces two-fifths of the tax-payers of the township; at least, a majority of the qualified electors of a township is more likely to include two-fifths of the taxpayers of a township, than a majority of the qualified electors of a city or large village is likely to include two-fifths of the tax-payers of such city or village. Whether the majority of the qualified electors of Rich township, signing the petition, included among them two-fifths of the tax-payers of the township, will be determined upon the new trial.

Noffzigger v. McAllister, 12 Kas. 315, referred to, was a night-herd-law decision. The only evidence introduced on the trial in that case to show that any petition was ever presented to the board of county commissioners, was merely the order of the board mentioning the same. Of course, the mere recital in the order of the county commissioners that a petition had been previously presented to them to consider and act upon, is not sufficient evidence of such fact, if it be specifically denied.

Other questions in the record as to the alleged conditions *296precedent to a valid subscription need not be considered, because they all concern irregularities merely, and the township is “estopped by its course of dealing with the railroad company to interpose a defense of irregularity in the exercise of the power of issuing the bonds.”

In view of another trial, the pleadings should be amended so as to allege specifically that the petition upon which the second election was called was not signed by two-fifths of the resident tax-payers of the township. Then this matter will be clearly in issue.

The judgment of the district court will be reversed, and the cause remanded for new trial in accordance with the views herein expressed.