Case Name: Missouri River, Ft. S. & G. R. Co. v. Commissioners of Miami Co.
Court: Kansas Supreme Court
Jurisdiction: Kansas
Decision Date: 1873-07
Citations: 12 Kan. 230
Docket Number: 
Parties: Missouri River, Ft. S. & G. R. Co. v. Commissioners of Miami Co.
Judges: (All the justices concurring.)
Reporter: Kansas Reports
Volume: 12
Pages: 182–187

Head Matter:
Missouri River, Ft. S. & G. R. Co. v. Commissioners of Miami Co.
July Term, 1873.
1. Railroad Bonds: Power of County to Issue: Election: Naming Railroad. It was essential to the validity of proceedings under the law of 1865, authorizing counties and cities to issue bonds to railroad companies, that some corporation be named as the recipient of the proposed subscription and bonds, and a vote to aid in the construction of a railroad along a certain route gave no authority to the commissioners to subscribe stock or issue bonds to any corporation.
2. Injunction: Equity: Public Funds. Where treasurers have in their possession moneys belonging to a county, which, unless restrained, they will pay to the holders of bonds of such county issued without warrant of law, and void in the hands of the holders, equity will interfere at the-suit of the county to restrain such payment.
Error from Miami district court.
Injunction, brought by the board of county commissioners of Miami county against the Missouri River, Fort Scott & Gulf Railroad Company, Josiah E. Hayes, treasurer of the state of Kansas, and William Crowell, treasurer of Miami county, to restrain the collection and payment of the interest on certain bonds issued by Miami county to the said railroad company by authority of the board of commissioners of said county. The petition alleges that the railroad company are still the owners and holders of said bonds, and that said bonds are void. Said bonds were issued under the supposed authority of chapter 12, Laws 1865. From the petition it appears that on the eighteenth of October, 1865, the board of commissioners of Miami county submitted to the electors thereof a proposition to subscribe $150,000 “to the capital stock of a railroad, commencing at or near the mouth of the Kansas river, on the south side; thence in a southerly direction, through the county of Johnson; thence south, by way of Paola, in Miami county;-thence in a southerly direction, through said county to the south boundary of the state of Kansas,” and this was the only designation or description of said railroad contained in *the order of submission. Under this order of submission, the electors of said county, by a majority vote, authorized the board of county commissioners to subscribe stock in the railroad described. On the second of December, 1865, said board of Commissioners subscribed $150,000 to the capital stock of the Kansas & Neosho Yalley Railroad Company,-name since changed to that of plaintiff in error, the Missouri River, Fort Scott & Gulf Railroad Company. On the eighteenth of June, 1868, the board of county commissioners of said county made an agreement with the Missouri River, Fort Scott & Gulf Railroad Company (then the Kansas & Neosho Yalley Railroad Company) whereby, for and in consideration of the sum of five dollars, and some other consideration recited, the same being substantially the conditions upon which the subscription was made, they sold to the said railroad company the stock subscribed for by the county of Miami. Said bonds were all delivered to the railroad company in 1869. The following is a copy of one of said bonds:
“Stock Bond of Miami County, Kansas.
“Thirty years after date, Miami County promises to pay to Kansas and Neosho Yalley Railroad Company, (a corporation organized and created under a general law of the state of Kansas, by virtue of a certificate of incorporation filed and recorded in the office of the secretary of state of Kansas, under date of March 8,1865,) or bearer, the sum of one hundred and fifty thousand dollars, for value received, with interest at the rate of seven per cent, per annum, payable semiannully at the Ninth National Bank, in the city of New York, from and after the first day of January, A. D. 1867. By order of 'the board of county commissioners of the county of Miami, dated December 2,1865. A. B., Chairman Board of Co. Com’rs.
“Attest: C. D., Co. Clerk, [l. s.]
“September 8, 1866."
The railroad company demurred to the plaintiff’s petition. The district court, at the May term, 1873, overruled the demurrer, and. gave judgment in favor of the county.
C. W. Blair and Pratt é Ferry, for plaintiff in error.
The petition discloses no sufficient ground for the interposition of the authority of a court of equity to order a cancellation and delivery of the bonds in question. There is no *allegation of facts showing that the defendant in error has not an adequate remedy at law. On the contrary, the petition states expressly that, the bonds are of no legal effect or force, and that there is no legal obligation on the part of the county of Miami to pay them. In an action at law brought upon these bonds, if these allegations are true, the remedy of the county by a defense to Such suit at law is adequate and undoubted. Eeed v. Newburg Bank, 1 Paige, 215; 2 Story, Eq. Jur. § 794. Nor is there any allegation that the defendant in error fears a negotiation of these bonds by the railroad company that would be to the prejudice of the county. Ferris v. Strong, 3 Edw. Ch. 129.
The petition discloses no grounds for an injunction against the county and state treasurers. These men are public officers whose duties are prescribed by law. In .the absence of any allegation in the petition to the contrary, this court will presume that, in the payment of the money by the county treasurer to the state treasurer, against which act an injunction is granted, the former would act in accordance with the law; that the money in his hands had been collected by him from the tax-payers of the county of Miami, for the purpose of paying the interest upon these bonds, and that he was about to pay the same over to the state treasurer in pursuance of the provisions of chapter 68 of the Laws of 1872; and that the state treasurer was likewise acting in pursuance of this law in receiving and paying over the moneys, against which acts an injunction is also granted. A court of equity will not enjoin public officers from the performance of the duties imposed upon them by law. 2 Story, Eq. Jur. § 955a; Mayor v. Meserole, 26 Wend. 132.
It is urged that the proposition submitted to the electors of the county did not designate the name of the corporation to whose capital stock the subscription was to be made. The statute (chapter 12, Laws 1865, § 1) contains no such requirement, either expressly or impliedly. All the statute required was that the corporation to whose capital stock subscription was proposed to be made should be one whose railroad was to be located “to, into, through, from, or near” the county of Miami. *The electors of the county were first to determine the question whether they would aid, and to what amount, in the building of any railroad to, into, through, from, or near the county; and this being determined in the affirmative, the county commissioners exercised their own discretion as to what corporation such aid should be extended, limited only by the provisions above stated as to the final location of the road. But if the law required the proposition to contain the name of the company, the omission of it might, perhaps, according to the strict rules of law, constitute a defense on the part of the county to an action brought upon the subscription, but it furnishes no claim to the consideration of a court of equity upon a bill of the character of the one filed in this cause, in view of the fact of the subsequent building and operating of its railroad through Miami county by this railroad company.
The law did not require the location of the road prior to the vote, or prior to the making of the subscription. The phraseology used in the statute, to-wit, “is, or may be, located,” indicates that the legis lature did not intend to limit the subscription to a road already located at the time of the vote or subscription, but proposed to give the commissioners of any county the means to hold out inducements to railroad corporations to locate their line of road through such county by voting aid and making a subscription to the stock of such company, conditional, of course, upon the ultimate location of the road. See James v. City of Milwaukee, Ch. Leg. N. Feb. 22, 1873.
It is also urged, as a reason why these bonds should be declared void and canceled, that no stock of the railroad company was issued and delivered to said county of Miami, or to any of its officers or public agents, in consideration for said bonds. The petition shows why no stock was ever issued to the county, — that the county commissioners entered into a written contract with the railroad company, by which they sold and transferred all of their stock to this railroad company. This contract is set forth in the petition as a valid and binding one, and whether the commissioners had the power *to make it or not, or whether the consideration was a good and sufficient one, are questions not involved in the consideration of this action. But if this stock had not been sold by the county, and it appeared in the petition that the railroad company refused to issue the. necessary certificate of stock, although the full amount of the subscription had been paid, the county might, by mandamus, compel the railroad company to issue such certificates, or might maintain an action at law for the damages sustained by such refusal; but would not be entitled to a return of the money so paid on the subscription, which is, in effect, the remedy sought by this petition. Arnold v. Suffolk Bank, 27 Barb. 427; Kortright v. Buffalo Com. B., 20 Wend. 91; Gen. St. 1868, p. 892.
No claim is made that the county of Miami has not reaped the full benefits that it expected when it authorized its county commissioners to aid this railroad company to the amount of $150,000 in the construction of its line of railroad through the county. They subscribed for the stock, sold it, and pocketed the proceeds, and now ask a court of equity to aid them in repudiating the obligations given by them in payment of such subscription. It is not the tax-payers of Miami county who are guilty of this dishonesty. The petition shows that the treasurer of the county has in his hands a large amount of money collected for the payment of the interest upon these bonds. If they desired to repudiate the bonds, they might have refused to pay this tax levied for the purpose of paying this interest. They have not done so, but have paid it. The order overruling the demurrer should be reversed.
B. F. Simpson, for defendant in error.
No railroad corporation is named in the order submitting the question of subscription to the electors. The law authorizing counties to subscribe to the capital stock of a railroad company expressly re quires the corporation to be named in the order of submission. The question submitted to the electors is whether or not stock shall be subscribed in *the railroad corporation. A name is a necessity. A corporation cannot exist without it. It cannot contract or do business except in its corporate name. A description of its line, or a designation of its route, is not sufficient. There may be several different railway corporations whose lines may have the same termini. 1 Kyd, 399; Ang. & A. Corp. § 98; Marsh v. Fulton Co., 10 Wall. 676.
No line was located to, into, through, from, or near Miami county at the time of said order of submission, or at the time of the subscription by the county commissioners to the capital stock of the Kansas & Neosho Yalley Kailroad Company. State v. Yan Horn, 7 Ohio St. 327; State v. Hancock Co. Com’rs, 11 Ohio St. 183. The location of the road through the county was a condition precedent to subscription or election, and not having been performed, the bonds are void. Starin v. Gould, 23 N. Y. 439; Dundon v. Starín, 19 Wis. 280; Connell v. Mutual Fire Ins. Co., 18 Wis. 411; Myrick v. City of La Crosse, 17 Wis. 442; Hopple v. Brown Tp., 13 Ohio St. 311.
The commissioners were not authorized to issue and deliver the bonds to the plaintiff in error, because they were not delivered in payment of stock in the railroad corporation. By the contract of June 18, 1868, — a contract made wholly in the interest and for the sole benefit of the plaintiff in error, — the county sold or leased its right to the stock, and then, after that, issued the bonds. The effect of this transaction is to donate the bonds; not to issue and deliver them in payment of stock, but to give them to the railroad company. This was not an execution of the power and authority granted, but an appropriation of them in a manner not contemplated by the legislature, and not assented to by the electors of said county. The contract of June 18,1868, was a revocation of the subscription by the county with the assent of the railroad company, and the subsequent delivery of the bonds by the commissioners to the railroad corporation was not based upon any actual bona fide subscription, and they are consequently illegal and void. If there was no subscription to the capital stock, no bonds could legally issue. Williams v. Savage Manuf’g Co., 3 Md. Ch. 418; Ex parte Holmes, 5 Cow. 426. The three vital and controlling requirements of the statute, *'whereby the rights and interests of the people are to be protected, are wholly disregarded, and powers assumed and exercised not conferred by the law, and for these reasons the bonds are to be declared illegal and void.
[Cobb é Cook, also for defendant in' error, filed an elaborate written argument in support of the points made in the foregoing brief.]
See Lewis v. Bourbon Co., ante, *186, and notes.

Opinion:
Brewer, J.
Two questions arise on this record: Were the bonds in controversy valid or void ? If void, were the defendants in error entitled to any relief under the petition ? The first question is dis posed of by the decision in the case of Lewis v. Bourbon Co. Com'rs, supra, *186. The question submitted to the voters of Miami county was "whether the board of county commissioners shall be authorized to subscribe capital stock in the name and for the benefit of Miami county, in the sum of $150,000, to aid in the construction of a railroad commencing at or near the mouth of the Kansas river on the south side; thence in a southerly direction through Johnson county, Kansas; thence south, by way of Paola, in Miami county; thence in a southern direction through said county to the south boundary of the state of Kansas." Such a question was not within the scope of the statute, and an affirmative vote thereon gave to the commissioners no power to issue the bonds of the county to the plaintiff in error, or any other corporation. The bonds, therefore, are without warrant of law, and are void.
Were the defendants in error entitled to any relief under the petition ? The plaintiffs in error demurred on the ground that the petition did not contain facts sufficient to constitute a cause of action. The demurrer was overruled, aud the case is before us on error from this ruling, so that if the defendants in error were entitled to any relief the demurrer was properly overruled. The petition, after reciting the steps taken in the issue of the bonds, alleges that the railroad company is still *the owner and holder of these bonds; that Josiah B. Hays, one of the defendants, is state treasurer, and holds $10,000 deposited with him by the county treasurer of Miami county for the purpose of paying the accrued and accruing interest on these bonds, and may and threatens to pay the same to said railroad company unless restrained; and that William Crowell, another of the defendants, is county treasurer of Miami county, and as such holds in his possession $10,000 belonging to said county, which he is about to pay over to said Hayes, the state treasurer, to be applied to the payment of the interest on these bonds, and that such payments would work great loss and hardship to the people of said county. The prayer for relief is that these payments be enjoined, the bonds declared void, the railroad company enjoined from attempting to collect them, or any interest on them, and ordered to return them to the county for cancellation. It appears, therefore, that two' of the defendants, officers of the state and county, have in their possession a large amount of money belonging to the county, which, unless restrained, they will pay to the railroad company on these bonds. Under these circumstances we think equity will interfere to restrain the payment. High, Inj. § 792, 809; Supervisors v. Wilder, Ch. Leg. N., March 1, 1873.
. The judgment will be affirmed.
(All the justices concurring.)