Court Opinion

ID: 7902741
Source: CourtListenerOpinion
Date Created: 2022-09-08 21:57:23.948836+00
Date Added: 2024-06-11T16:32:18.944119
License: Public Domain

Dawson, J.
(dissenting) : I think that the words “subject to the legality of the issue” as mentioned in the city’s offer and the words “subject to approval as to legality” as set forth in the bank’s bid should be interpreted according to the custom *414of the trade. That custom is so well known as to need no evidence to show it, although it was abundantly shown by the defendant bank. The qualification “subject to legality” or “subject to approval as to legality” does not mean a judicial determination. It means that the contract was conditioned upon the approval of the purchaser’s lawyer or bond expert touching the proceedings leading up to and involved in the bond issue, and it means that the examination of the proceedings by the bank’s lawyer or expert should be made in good faith, and that to excuse the purchaser from its bargain such examination should show some rational or tangible doubt as to the legality of the issue and not some mere quibble. In this capítol building where this court sits is the largest bond market in Kansas — that of the School Fund Commission; and that body by statute and practice invariably purchases bonds with that same qualification and never otherwise. Bond purchasers no more than real-estate purchasers should be held to their bargains if there is any serious chance of legal infirmities in the matters which are the subject of the contract. It will not tend to expedite either public or private business to lay it down dogmatically that the successful bidder for municipal bonds is bound absolutely, notwithstanding the honest misgivings of his lawyers as to the legality of the issue, when it its after-wards judicially determined that the bond issue is valid. The defendant bank was denied the privilege of making this defense.
The city should have recoupment to the amount of $33 for the reprinting of the bonds at the behest of the bank. For the errors of the trial court on which this court unanimously agrees there should be a new trial; and I would confine it largely to questions pertaining to the bank’s good faith in its consultation of attorneys as to the legality of the issue, and whether the legal infirmities pointed out by the bank’s attorneys were fair questions of legal debate or mere evasive quibbles. I therefore dissent.
Mr. Justice Marshall concurs in this dissent.