Shawnee Township v. Robb
Shawnee Township v. Robb
Opinion of the Court
The opinion of the court was delivered by
This is an original action in mandamus to compel the auditor of the State of Kansas to register certain waterworks revenue bonds issued under the provisions of G. S. 1949, chapter 80, article 16. The auditor’s answer discloses no dispute of fact. No question is raised as to the regularity of the proceedings had by the township board, the question for decision being solely whether the bonds tendered for registration are legal and valid under the above statutes, which are hereafter referred to only by chapter and section number.
For present purposes it is noted that under 80-1601, certain townships, of which petitioner is one, having a publicly-owned water system are authorized to contract for constructing water mains. Under 80-1602 the township board may issue revenue bonds to finance the cost of “constructing, reconstructing, repairing or improving such water system and such bonds shall be made a specific lien upon
The factual situation disclosed by the pleadings is summarized: Prior to November 1, 1947, the township board had caused to be issued and sold, and there were then outstanding revenue bonds in the amount of $295,000. On the last date the board adopted a resolution, hereafter referred to as the 1947 resolution, providing for the calling of those outstanding bonds and for the issuance of revenue bonds in the amount of $455,000 to pay the outstanding bonds and to proceed with the construction of extensions referred to in plans, specifications and estimates prepared, filed, adopted and approved by the board; that the bonds authorized to be issued were
Unless the auditor’s contentions are sustained, the bonds should be registered and we therefore consider his contentions as set forth in his brief.
In his brief the auditor sets forth three reasons why he believes the bonds are not eligible for registration. These will be taken up and answered in the order presented. He first contends that the covenants and agreements in the 1952 resolution authorizing the bonds presented for registration, violate the covenants and agreements contained in the 1947 resolution and the bonds issued thereunder, and our attention is directed particularly to the fact that the 1947 resolution made the bonds issued under it a first and specific lien upon the waterworks system “including all extensions and improvements thereto and the revenues derived therefrom” and that all revenues be paid into a fund to retire the bonds so long as any of the bonds were outstanding; that the bonds were outstanding, were not being refunded as permitted by statute, and that the covenants and agreements on which they were based were violated by the 1952 resolution, which provides for extension to the waterworks system and for another and different fund for the revenue derived from the extensions and that the bonds issued shall constitute a first lien on that fund. Stated another way, the auditor contends that
In our opinion, and as urged by the township board, the contention is not warranted by the statute. As has been noted, the township board issued bonds in 1947 to take up some outstanding bonds and to provide funds for making extensions according to plans and specifications then on file and approved. Under 80-1602 the township board was authorized to issue bonds to take up and pay for the issue of outstanding revenue bonds or to make an exchange therefor, plus an amount necessary to finance the cost of “additional construction, reconstruction, repairing or improving the water system. . . Under 80-1606 the township board was authorized and required to fix rates, fees and charges for water service sufficient to pay the cost of operation, maintenance, repair and improvement of the system and to pay the principal and interest on the bonds, provided, as more fully set forth in the statute, that none of the revenue “shall be used or expended for the purpose of extending said water mains beyond the system or extension as included in the plans and estimates upon which said bonds were issued.’
As applied here, it seems clear that the legislature intended that when bonds were issued in 1947 for statutory purposes as above quoted, the revenues from the system as existing or as it was to exist when the plans and estimates were completed, were what was to be devoted to operation, maintenance, repair and improvement of the system and then to payment and principal of the bonds, and that having prohibited the use of revenue for extensions, as above noted, it had no thought that if extensions were later built under other authority in the statute, that the revenue from the extensions, not then even in contemplation, could or would be pledged for the payment of the 1947 bonds. The 1952 bonds are authorized under the resolution adopted under that part of 80-1602 which provides the township board may issue revenue bonds to finance the cost of extending the water sysjqm and to constitute a first and prior lien upon the extension to the system and the revenues de
We note the auditor’s contention that the township board was authorized by 80-1606 to adopt a resolution authorizing issuance of revenue bonds which “may contain such other covenants, agreements and restrictions as may be deemed necessary ... to insure the payment of any revenue bonds . . .” and that the pledging of the future revenue from extensions not then in being nor in contemplation was proper. We think such a construction would be farfetched. Such other covenants, agreements and restrictions would have to be consonant with the statutory provisions and not contrary to them. It has been demonstrated above there is no authority to pledge revenue from service not in being, and that the statute provides that when the system is extended by proceeds of revenue bonds the revenues from the extended portion must be devoted to a specific purpose. Certainly the township board could not have intended, and we do not think it did, to make covenants, agreements or restrictions contrary to express provisions of the statute.
And finally the auditor contends that the 1947 resolution and the bonds then issued constitute a contract, and that the 1952 resolution and the bonds under it impair that contract in violation of article I, section 10, of the United States Constitution, and that the latter resolution operates to deprive persons of their property without due process of law under the Fourteenth Amendment to the United States Constitution. What has been said heretofore dispenses with the contention that the 1952 resolution impinges upon the 1947 one. Without discussion we hold that the 1952 resolution impairs no contract evidenced by the 1947 resolution and that no person is deprived of any property without due process of law by reason thereof.
In its brief the township has, presented other matters which we deem it unnecessary to discuss.
The court will retain jurisdiction and if the bonds are not registered within ten days from the filing of this opinion a writ of mandamus will issue. The costs are taxed against the plaintiff (Johnson County Comm’rs v. Robb, 161 Kan. 683, 171 P. 2d 784).
Case-law data current through December 31, 2025. Source: CourtListener bulk data.