111 Kan. 104 | Kan. | 1922
The opinion of the court was delivered by
The,Central Trust Company sued Grant county upon thirty-four coupons <of a bond issued by the county in 1890 under the general statute authorizing counties and other municipalities to refund their indebtedness. (Gen. Stat. 1915, §§ 642-652.) The case was heard upon an agreed statement of facts. Recovery was denied upon all the coupons which were by their terms payable more than five years before the action was brought. The plaintiff appeals from this ruling.
The plaintiff invokes the rule that where a municipal obligation is payable only out of a particular fund the statute of .limitation does not begin to run thereon until the fund has been provided (17 R. C. L. 763; 25 Cyc. 1103), which it contends is applicable here. The cases announcing this rule and illustrating its application are quite fully collected in notes to the texts cited. Almost without exception they involve either warrants as distinguished from bonds or bonds affected by peculiar circumstances. In the leading and often cited case of Lincoln County v. Luning, 133 U. S. 529, the instruments sued upon were bonds and coupons, but because of default in meeting the interest the legislature had made a new provision for their payment, requiring the coupons to be registered and paid in the order of their presentation as money should
These excerpts from recent opinions appear to bear upon the point under consideration:
*106 “It is insisted on behalf of the defendant in error that the statute of limitations is inapplicable to the case, and has never commenced to ’run against any of the coupons here involved for the reasons, as claimed by counsel, that the bonds . . . are not general obligations of the district, but are payable only out of a nonexisting ‘particular fund’ and ‘amount in effect, if not in terms, to a promise on the part of the district to pay the principal and interest of the bond at the dates therein mentioned, provided the fund out of which the payment is to be made shall have been collected.’ . . . They [the bonds in question] were required to contain, and did contain, an absolute promise to pay to the bearer of them certain sums of money at certain specified dates, with interest thereon at a certain specified rate, with appropriate interest and installment coupons annexed thereto. Neither on their face nor in the statute authorizing their issue is there any condition attached to their payment, nor, in our opinion, any provision in either from which any such condition can be implied. True, each bond recites that ‘all the said bonds and the interest thereon are to be paid by revenue derived from an annual tax upon the real property of the district,’ and that both such tax and the bonds are by the act under which the latter were issued made a lien upon all of the real property of the district; but that is very far from saying that the taxes so to be levied and collected should constitute a particular or special fund out of which only the principal and interest due upon the bonds should be paid.” (Rialto Irr. Dist. v. Stowell, 246 Fed. 294, 301, 302.)
“If it can be said that these bonds and coúpons were to be paid out of a ‘particular fund,’ within the meaning which plaintiffs seek to ascribe to the remarks of the Supreme Court in Lincoln County v. Luning, then it can be said with equal force that any municipal bond, for the payment of which the statute provides for the creation of a sinking fund or other fund to be raised by general taxation, without limiting the right to sue on the bonds before the fund is created, is a ‘particular fund,’ and hence, in any such case, the statute of limitations would not apply to a suit on the bonds, where the municipality had neglected to assess the taxes necessary to meet the bonds. But that would be contrary to the general rules that suit may be instituted on municipal bonds and coupons when they mature, and that the statute of limitations begins to run from the date when the cause of action accrues; it would also seem to be at variance with that line of federal authorities which hold that, before mandamus will issue to compel the assessment of a tax, a bondholder must obtain a judgment on the bonds. ... As the bonds and coupons in suit were payable at stated times, and as the statute which authorized their issuance provided, as the ultimate means for their pasunent, for the raising of money in the ordinary way, by the levying and collection of taxes, I am unable to perceive any reason why the general rule that a cause of action arises on such bonds and coupons at the dates of their maturity respectively, does not apply.” (Smythe v. Inhabitants of New Providence Tp., 253 Fed. 824, 830, 831.)
The judgment is affirmed.