Lawrence Lewis.

American and English corporation cases : a collection of all corporation cases, both private and municipal (excepting railway cases), decided in the courts of last resort in the United States, England, and Canada [1883-1894] online

. (page 61 of 73)
Online LibraryLawrence LewisAmerican and English corporation cases : a collection of all corporation cases, both private and municipal (excepting railway cases), decided in the courts of last resort in the United States, England, and Canada [1883-1894] → online text (page 61 of 73)
Font size
QR-code for this ebook


it after maturity, on January loth. From the facts stated,
there is no evidence or presumption that the plaintiff or any
prior holder acquired the coupon both before maturity and
without notice. Whatever be the negotiable nature or
immunities of the coupon, the plaintiff is not in a situation
to invoke them. The coupon upon its face shows that it was
a ticket for the forty-fourth instalment of interest due on
bond No. TJ^y which instalment was $3. There is in the writ
a general omnibus money count, broad enough to include
the plaintiff's claim for that instalment He cannot recover
the amount named in the coupon. He only claims interest
upon the instalment from the date of his demand, January 15.
Judgment for plaintiff for $3, with interest from January
10, 18^3.



State of Kansas

V.

School District No. 3, Chautauqua Co.

{Advance Case, Kansas, October 9, 1885.)

Where an objection is made to the introduction of evidence at the trial
on the ground that the petition does not state facts constituting a cause
of action, the averments of the petition should be liberally construed in
support of the petition.



Digitized by



Google



588 KANSAS V. SCHOOL DISTRICT NO. 3, CHAUTAUQUA CO.

Where a petition includes several causes of action, an objection to the
introduction of evidence on the ground that the petition states no cause
of action should be overruled if any of the causes of action included are
well stated.

It is well settled that a Statute of Limitations will not run against the
State or sovereign authority, unless the statute to that effect is so strong
as to be utterly unavoidable.

As to whether the Statute of Limitations would run against the State,
when the State procured the debt or claim after the statute had com-
menced to run, quare.

The statute authorizing school districts to issue bonds provided that
the bonds should specify on their face the purpose for which they were
issued. Certain school-district bonds specified on their face that they
were issued in pursuance of this statute, but did not specify the purpose
for which they were issued. Held, that inasmuch as the statute in ques-
tion only authorized the issuance of bonds for a certain purpose specified
in the statute, the reference on the face of the bonds to the statute was a
sufficient specification of the purposes for which the bonds were issued.

Where the bonds appear on their face to be regular, and issued by
proper authority, it is for the defence to aver and prove that an3rthing was
done or omitted in reference to the execution of the bonds that would
render them invalid.



Error from Chautauqua county.

This was an action brought by the State of Kansas against
school district No. 3, Chautauqua county, Kansas, to recover
on 7 school-district bonds and 35 accompanying coupons.
The petition contained a separate count and a separate state-
ment of a cause of action upon each of the 7 bonds and on
each of the 35 coupons. The statement of the cause of action
upon the first bond reads as follows :

" That on the first day of January, 1873, at Peru, in the
county of Howard and State of Kansas, school district No.
135, county of Howard, State of Kansas, the same being then
a school district duly organized and existing under the laws
of the State of Kansas, and acting as such, and by J. O.
Greytrax, director ; Albert Kees, clerk, and J. M. Brown,
treasurer of said district, the same having been duly elected,
appointed, qualified, and acting as such officers, made and
issued its certain bond, dated on said day at said place,
whereby, for value received, it promised, on the first day of
June, A.D. 1875, to pay to A. B- Close, or bearer, two hundred
dollars, at the banking-house of W. N. Coler & Co., in the
city of New York, with interest at the rate of ten per cent



Digitized by



Google



KANSAS V. SCHOOL DISTRICT NO. 3, CHAUTAUQUA CO. 589

per annum, payable annually on the first day of June of each
year, according to divers coupons thereto attached, which
bond, in order to distinguish it from others of like character,
was marked * No. one.* A copy of said bond is hereto at-
tached and made part hereof. That on the sixteenth day of
January, 1873, said bond was duly registered in the office of
the county clerk of said Howard county, Kansas.

" And said plaintiff further says that, in pursuance of an
act of the legislature of the State of Kansas entitled ' An
act to divide the county of Howard, and to errect the terri-
tory thereof into the counties of Chautauqua and Elk, to pro-
vide for the due organization of said counties, the filling of
vacancies in offices, for the proper division of the property
and indebtedness of Howard county, and in regard to the
taxes and records thereof,* approved March 3, 1875, the ter-
ritory embraced in school district No. 135 of Howard county,
Kansas, became, and still is, a part of Chautauqua county,
Kansas. Thereupon, said Chautauqua county being organ-
ized in pursuance of the act of the legislature aforesaid, the
county superintendent of said Chautauqua county proceeded
to and did change the name of said school district No. 135,
Howard county, to said defendant, school district No. 3, Chau-
tauqua county, State of Kansas ; that said school district No.
3 of Chautauqua county lies wholly within the boundaries
of the former school district No. 135 of Howard county,
Kansas, and includes within its borders all the inhabitants of
school district No. 135, Howard county, and is the same cor-
porate entity as school district No. 135, Howard county,
Kansas. And plaintiff further says that school district No.
13s, Howard county, Kansas, is wholly merged in and be-
come a part of said school district No. 3 of Chautauqua
county. State of Kansas, which has succeeded to and become
possessed of all the property, rights, and privileges formerly
enjoyed by said school district No. 135, Howard county ; that,
before said bond by its terms became due and payable, the
said bond came to, and for value became the property of, this
plaintiflF, the same having been sold and delivered for a valu-
able consideration to the commissioners of the permanent
school fund of the State of Kansas for this plaintiff, who there-
fore became, and ever since has been, and still is, the true
and lawful owner and holder thereof; that when said bond



Digitized by



Google



590 KANSAS V. SCHOOL DISTRICT NO. 3, CHAUTAUQUA CO.

by its terms became due and payable the same was duly pre-
sented at the place of payment therein mentioned and pay-
ment demanded, but refused because said defendant had not,
nor had said school district No. 135, Howard county, nor did
either of said districts, ever have funds at said place ; that
the said plaintiflF has often applied to said defendant to pay
the said bond, but it has refused to do so, notwithstanding it
is justly indebted thereon to the plaintiflF in the full sum of
two hundred dollars, which it claims, with interest at the
rate of ten per cent per annum from the first day of June,
A.D. 1875."

The statement of the cause of action upon each of the other
bonds is precisely the same as the statement of the cause of
action upon the first bond, except that such statements show
that the bonds were numbered consecutively from one to
seven, and became due in successive years from June i, 1875,
to June I, 1 88 1. The statement of the cause of action upon
each of the coupons is precisely the same as the statement of
the cause of action upon the bonds, except that clauses with
reference to thd coupons are added. A copy of each of the
bonds and of each of the coupons is attached to the petition
and made a part thereof, and a part of the statement of the
cause of action to which it properly belongs. The first bond
reads as follows:

No. I. $200

United States of America, State of Kansas.

District School Botid of School District No. 135, Howard County:

Know all men by these presents, that school district No.
135, county of Howard, State of Kansas, is indebted unto
A. B. Close, or bearer, in ,the sum of two hundred dollars,
lawful money of the United States, to be paid on the first day
of June, A.D. 1875, at the banking-house of W. N. Coler & Co.,
in the city of New York, with interest at the rate of ten per
cent per annum, payable annually on the first day of Jime of
each year, on presentation of the annexed coupons, as the
same becomes due. This bond is issued in pursuance of an
act of the legislature of the State of Kansas entitled " An act
to enable school districts in the State of Kansas to issue



Digitized by



Google



KANSAS V. SCHOOL DISTRICT NO. 3, CHAUTAUQUA CO. $9 1

bonds," approved February 26, 1866, and acts amendatory
and supplemental thereto.

In testimony whereof, this bond has been issued, signed by
the director, countersigned by the clerk, and registered by
the treasurer of said district.

Dated at Peru, County of Howard^ State of Kansas, this first
day of January, 1873. J. O. Greytrax, Director.

Countersigned : Albert Kees, Clerk.

Registered by J. M. Brown, Treasurer.

Indorsed: No. i. $200. State of Kansas. Registered
school bond of school district No. 135, Howard county.
Ten per cent interest, payable annually on the first day of
June, at the banking-house of W. N. Coler & Co., New York.
Matures June i, 1875.

Each of the other bonds is the same as this, except as to
number and date of maturity. The first coupon attached to
the first bond reads as follows :

School district No. 135, county of Howard, Kansas, will
pay to bearer on the first day of June, 1874, twenty-eight and
33-100 dollars, at the banking-honse of W. N. Coler & Co.,
in the city of New York, being one year's interest on bond
numbered one. J. O. Greytrax, Treas.

Albert Kees, Clerk.

Each of the other coupons is the same as this, except as to
number and date of maturity.

The defendant answered to the plaintiff's petition, setting
up five separate defences, and the plaintiff replied to this an-
swer by filing a general denial. Upon the issues made up by
these pleadings the action came on for trikl before the court
without a jury, and the plaintiff, to maintain the issues on his
part, put a witness on the stand and asked him a question ;
whereupon the defendant objected to the introduction of any
evidence under the petition, upon the ground that the same
did not state facts sufficient to constitute a cause of action
against the defendant, and the court sustained the defendant's
objection and dismissed the plaintiff's action ; to all of which
the plaintiff duly excepted, and now brings the case to this
court for review.

W. A. Johnston for the State.

C /. Peckham and M, B. Light for defendant in error.



Digitized by



Google



592 KANSAS V. SCHOOL DISTRICT NO. 3, CHAUTAUQUA CO.

Valentine, J. — The only ruling of the court below com-
PBAcncB-QOTcs- plained of in this case is the sustaining of an objec



TIOIONO SUFKI-

ciKNCT or ncTi-

TIOK ON ATPBAL.



tion made by the defendant to the introduction of
any evidence under the plaintiflPs petition, upon
the ground that the petition did not state facts sufficient to
constitute a cause of action against the defendant, and the
dismissal of the plaintiff's action upon the same ground.
Preliminarily, we would say that such an objection is not
favored by courts, and that where the sufficiency of the
petition is raised for the first time, and only by such an ob-
jection, the courts will construe the allegations of the petition
very liberally for the purpose of sustaining the petition, if it
can reasonably be sustained. Barkley v. State, 15 Kan. 99,
107; Mitchell V. Milhoan, 11 Kan. 617, 625, 626, and cases
there cited. Also in this case, besides the direct allegations
contained in the body of the petition, copies of the bonds and
BoHM AjiD oou coupons sued on were attached to and made a part
oFncTmo/^' of the petition; and, therefore, in construing the
allegations of the petition, the contents of the bonds and
coupons, as contained in such copies, must also be con-
sidered as a part of the petition. Budd v, Kramer, 14 Kan.
loi, 102 et seq. See, also, Reed v. Arnold, 10 Kan. 103;
Campbell v. Blanke, 13 Kan. 62; Andrews v, Alcorn, 13 Kan.
351. Besides, section 123 of the Civil Code provides, among
other things, that "in an action, counterclaim, or set-off,
founded upon an account, promissory note, bill of exchange,
or other instrument, for the unconditional payment of money
only, it shall be sufficient for a party to give a copy of the
account or instrument, with all credits and the indorsements
thereon, and to state that there is due to him on such account
or instrument from the adverse party a specified sum, which
he claims, with interest."

The first objection made by the defendant to the plaintiff's
LnoTATioK. petition is that a portion of the 42 causes of action
set forth therein is barred by the five-years statute of limita-
tions contained in the first subdivisipn ot section 18 of the
Civil Code. But this objection can certainly avail nothing;
for if any one of the several causes of action set forth in the
plaintiff's petition is good, the court below should not have
sustained the objection of the defendant to the introduction
of all evidence under the petition, and should not have dis-



Digitized by



Google



KANSAS V. SCHOOL DISTRICT NO. 3, CHAUTAUQUA CO. 593

missed the plaintiff's action. The action was commenced on
December 18, 1882, and at least 14 of the several causes
of action set forth' in the plaintiff's petition accrued within
less than five years prior to that time. These causes of
action cannot therefore be considered as having being barred
by any statute of limitations when this action was commenced.
But are any of the causes of action set forth in the plaintiff's
petition barred by any statute of limitations ? Now, it is uni-
versally held by courts that no statute of limitations will run
against the State or the sovereign authority unless the statute
itself expressly so provides, or unless the implica- samb-aoawst
tions of the statute to that effect are so strong as to "^"=-
be utterly unavoidable. It requires no citations of authorities
to sustain this proposition. Even where there is a doubt as
to whether the State was intended to be included within the
provisions of the statute, the doubt must be solved in favor
of the State and the State held not to be included. Des
Moines Co. v. Harker, 34 Iowa, 84, and cases there cited.
And even where the State holds the claim or debt sued on as
the assignee or transferee of some individual person, still the
statute of limitations will not run against the State where
such statute has not commenced to run before the State ob-
tained the claim or debt. U. S. v. White, 2 Hill, 59.

We need not decide the question whether the statute would
continue to run, and to run against the State, where the State
procured the claim or debt after the statute had commenced
to run, for no such question is involved in this case. We think
that no statute of limitations has so run against the State in
the present case as to bar any of the causes of action set forth
in the plaintiff's petition.

The next question urged by the defendant against the
plaintiff's petition is that the bonds set forth therein and sued
on do not state, as required by statute, the purpose J^oT™raSSi
for which they were issued. The bonds 'were %^ ""^^SSS
issued under section i of an act entitled " An act SSSSf ^^ ^
to enable school districts in the State of Kansas to issue
bonds," approved February 26, 1866, as amended by section
I, chapter 95, of the Laws of 1872 ; and that section provides,
among other things, that " they [the bonds] shall specify on
their face the date, amount, for what purpose issued, to whom,
the time they run, and the rate of interest/' while the bonds
9 Cor. Gas.— 38



Digitized by



Google



594 KANSAS V. SCHOOL DISTRICT NO. 3, CHAUTAUQUA CO.

in the present case do not in terms specify for what purpose
they were issued. We think, however, under the present
circumstances, and as the question is now presented, that the
bonds are sufficient in this respect. It must be remembered
that the question has been raised only by an objection to the
introduction of evidence under the petition. It must also
now be considered that the bckids were issued in good faith ;
that the school district received ample compensation for thera,
and that the State of Kansas is an innocent and bona fide pur-
chaser of them ; for nothing appears to the contrary in the
petition, and all the allegations of the petition would tend to
indicate this. We have stated that the bonds do not in terms
specify upon their face the purpose for which they were
issued ; but we think they do m effect The bonds specify on
their face that they were *' issued in pursuance of an act of
the legislature of the State of Kansas entitled 'An act to
enable school districts in the State of Kansas to issue bonds,'
approved February 26, 1866, and acts amendatory and supple-
mental thereto." Now, under that act bonds could be issued
only for one purpose, that of providing a school-house for
the district, either by erecting or purchasing the same. It is
true that it was not necessary that the bonds should recite
the act under which they were issued, and it was necessary
that they should recite the purpose for which they were issued ;
but as the bonds did recite the act under which they were
issued, and as that act authorizes bonds to be issued only for
one purpose, the bonds do in effect recite the purpose for
which they were issued.

The next point made by the defendant is "that none of the
several counts of said petition allege or show that the condi-
pleadwo per. tioJ^s precedent, or any of them, had been complied
toSS^SJs piST with when said bonds were made and executed."
'^■"- We think the petition is sufficient. It alleges that

the school district made and issued the bonds ; that it made
and issued them by its proper officers, for^ value received;
and copies of the bonds are given and made a part of the
petition, which shows that the bonds were issued in pursuance
of the said act of the legislature of 1866, and the acts amenda-
tory and supplemental thereto ; and we think the bonds are
valid upon their face. See section 123, Civil Code, above
cited. Presumptively the school district and its officers acted



Digitized by



Google



KANSAS V. SCHOOL DISTRICT NO. 3, CHAUTAUQUA CO. 595

in good faith and according to law, and the oflScers did their
duty ; and if anything was done or omitted that would render
the bonds invalid, it is for the defendant to set the sanie up
in its answer as a defence. In this connection we would cite
the case of Mosher v. Independent School District of Steam-
boat Rock, 42 Iowa, 632.

The fourth and last objection made by the defendant to
the plaintiff's petition is " that none of the several counts of
said petition allege or show that the conditions precedent to
the sale of said bonds had been complied with when said
bonds were negotiated and sold, or that they were sold at a
price fixed by the district, as required by law." What has
been said with reference to the last preceding objection may
be said with reference to this. ' The petition alleges that the
bonds were made and issued by the school district and its
oflScers for value received, and the copies of the bonds show
that they were made and issued in pursuance of the statute in
such cases made and provided, and presumptively they were
made and issued in accordance with law. It was not necessary
for the plaintiff to state in his petition the amount of the con-
sideration for which the bonds were issued, or the prices fixed
by the qualified electors of the district for the sale of the
bonds. When the bonds were issued they passed from the
district and beyond its control, and into other hands, and pre-
sumptively they were valid ; but if for some reason they were
not valid, it devolves upon the defendant to allege and prove
their invalidity. The petition certainly does not show they
were invalid, but, on the contrary, shows that they were valid.

The judgment of the court below will be reversed and
cause remanded for further proceedings.

HoRTON, C. J., concurring. Johnston, J., having been of
counsel, did not sit.

Statutes of Limitation do not apply to the State or Sover-
eignty UNLESS IT IS Especially Provided that they shall apply
to it. — Unless the State is especially included in the operation of a
Statute of Limitation, such statute will not apply to the State. This is
equally true of Statutes of Limitation barring the right of entry to lands
after a certain period of adverse possession, and of statutes taking away
the right of action on personal claims unless brought within the pre-
scribed period. That statutes tolling the right of entry after a certain
period of adverse possession do not apply to lands owned by the State,
see Brinsfield v. Carter, 2 Ga. 143; Wright v. Swan, 6 Port, (Ala.) 84;



Digitized by



Google



596 KANSAS V. SCHOOL DISTRICT NO. 3, CHAUTAUQUA CO.

Doe V, Townsley's Heirs, 16 Ala. 239; Troutman v. May, 33 Pa. St. 455:
Wallace's Lessee v. Miner. 6 Ohio, 366; Harlock v, Jackson, 3 Brev.
(S. C.) 254; State V, Arledge, 2 Bailey (S. C). 401 ; Lindsey v. Miller, 6
Pet. (U. S.) 666; Wilson v, Hudson, 8 Yerg. (Tenn.) 398; Levasser v,
Washburn, 11 Gratt. (Va.) 572; Kirschner v. Western & Atlantic R. R.
Co., 67 Ga. 760; Glaze v. Western & Atlantic R. R. Co., 67 Ga. 761.

That statutes taking away the right of action on personal claims or de-
mands, unless brought within the prescribed time, do not apply to claims
or demands of the State, see Ware v. Green. 37 Ala. 494; State v,
Joiner, 23 Miss. 500; Swearinger v. United States, 11 G. & J. (Md.) 373
(judgment recovered by U. S.) ; People v, Gilbert, 18 John (N. Y.), 227;
Nimmo's Executor t/. Commonwealth (judgment), 4 H. & M. (Va.) 57;
Parks V, State, 7 Mo. 194 (surety on bond) ; McKeehan v. Common-
wealth, 3 Pa. St. 151 ; (Commonwealth v, Hutchinson, 10 Pa. St, 466
(taxes) ; Commonwealth v. Baldwin, i Watts (Pa.), 54 (judgment lien) ;
State Treasurer v. Weeks, 4 Vt. 215 (tort); In re Life Association of
America, 12 Mo. App. 40 (period fixed by court, under provisions of stat-
ute, within which to present claims against an insolvent company).

The State must be named in Express Words in the Statute if
IT IS TO APPLY TO THE STATE.— The State must, it would seem, be
named expressly in the Statute of Limitations, or the statute will not
apply to it. If there is the slightest doubt as to whether the statute was
intended to apply to the State or not, it will be held not to apply. County
of Des Moines v, Harker, 34 Iowa, 84; Josselyn v. Stone, 28 Miss. 753,
763; People V, Gilbert, 18 Johns (N. Y.), 227; United States v. Hoar, 2
Mason (U. S. C. Ct.), 311, 314. This is a rule of construction, and the
reason of it is well stated by Judge Story in the case of United States v.
Hoar, supra. " Where the Government is not expressly or by necessary
implication included, it ought to be clear from the nature of the mis-
chief to be redressed, or the language used, that the Government itself
was in contemplation of the Legislature, before a court of law would be
authorized to put such an interpretation upon any statute. In general,
acts of the Legislature are meant to regulate and direct the acts and
rights of citizens; and in most cases the reasoning applicable to them
applies with very different, and often contrary, force to the Government
itself. It appears to me, therefore, to be a safe rule founded in the prin-
ciples of the common law, that the general words of a statute ought not
to include the Government, or affect its rights, unless that construction be
dear and indisputable upon the text of the act.''

In the County of Des Moines v, Harker supra, the Statute of Limita*
tions provided that it should be '* applicable to all actions brought by or
against all bodies, corporate or politic, except when otherwise expressly
provided." It was held that even this provision was not explicit enough
to include the State within the operation of the statute. The court say :
"There are subjects to which this statute can be applied, in all its language
and force, without including the Sute. The L^islature does not, when
prescribing a rule for the State, call it a * body politic and corporate.'
It is not probable such a designation can be found in the entire history



Digitized by




Online LibraryLawrence LewisAmerican and English corporation cases : a collection of all corporation cases, both private and municipal (excepting railway cases), decided in the courts of last resort in the United States, England, and Canada [1883-1894] → online text (page 61 of 73)