90 F. 523 | U.S. Circuit Court for the District of Northern Iowa | 1898
(after stating the facts as above). The first question presented for consideral ion in the briefs of counsel is that of the jurisdiction of the court:, it being claimed on behalf of the defendant ¡hat the plaintiff bank was not the original holder of the bonds sued on; that the action is therefore in the name of an assignee, and that the court cannot take jurisdiction, unless that right would exist if the action was in the mime of the assignors, from whom the plaintiffs derived title to the bonds sued on; and that, as the evidence shows that the bonds were originally issued to citizens of Iowa, it follows that this court is without jurisdiction. The bonds are made by a corporation, and if they were, in legal effect, payable to bearer when they became the property of the plaintiff, then they come within
“The ground upon which this ruling below is sought tó be maintained, is that these bonds were issued to citizens of Massachusetts, and as they could not be regarded as negotiable instruments, or, if negotiable, not payable to bearer, the plaintiff was disabled from suing in the federal court, within the prohibition of the eleventh section of the .judiciary act. Smith v. Clapp, 15 Pet. 125; Bank v. Wister, 2 Pet. 318; Bonnafee v. Williams, 3 How. 574; Sheldon v. Sill, 8 How. 441. in answer to this ground, we think it is quite clear, on looking into the agreed state of facts, in connection with the bonds and the mortgage given to secure their payment, that it was the intention of the company, by issuing the bonds in blank, to make them negotiable and payable to the holder, as bearer, and that the holder might fill up the blank with his own name, or make them payable to himself or bearer, or to order. * * * Assuming, then, that these bonds were intended to be made negotiable, we do not see the difficulty suggested in maintaining the suit in the federal court; for, until the plaintiff chose to fill up the blank, he is to be regarded as holding the bonds as bearer, and held them in this character till made payable to himself or order.”.
Coming to the merits of the cases, it appears that the only question involved is whether the bonds sued on, or any part thereof, are 'invalid because issued in contravention of section 3 of article 11 of the constitution of Iowa, which provides that:
“No county or other political or municipal corporation shall be allowed to become indebted in any manner or tor any purpose to an amount in the aggregate, exceeding five per centum on the value of the taxable property within such county or corporation, to be ascertained by the last state and county tax lists, previous to the incurring of such indebtedness.”
Under the facts of these cases, the question arises whether the value of the taxable property of the county, upon which the 5 per cent is to he calculated in determining the amount for which the county could create a valid indebtedness, should be held to include or exclude the exemption under what are known as the “Tree Culture Acts” of the legislature of (he state of Iowa. The law in force at the date when the bonds sued on were issued is found in section 1272 of McClain’s Code of Iowa for 1888, and reads as follows:
“Sec. 1272. Forest and Fruit Trees. For every acre of forest trees planted and cultivated for timber within the state, the trees thereon not being more than twelve feet apart and kept in a healthy condition, the sum of one hundred dollars shall be exempted from taxation upon tlie owner’s assessment for ten years after each acre is so planted; provided, that such exemption be applied only to the realty owned by the party claiming the exemption, not to exceed each one hundred and. sixty’acres of land, upon which the trees are grown, and in a growing condition. For every acre of fruit trees planted and suitably cultivated within the state, the trees thereon not being more than thirty-three feet apart and kept in a. healthy condition, the sum of iifty dollars shall be exempted from taxation upon the owner’s assessment, for five years after each acre is planted. Such exemption shall be made by the assessor at the time of the annual assessment, upon satisfactory proof that the party claiming the same has complied with this section; and the assessor shall return to the board of equalization the name of each person claiming exemption, the quantity of lands planted to timber or fruit trees, and tlie amount deducted from the valuation of liis property. Provided, that the amount so deducted shall not exceed one half of tlie valuation of the realty on which such exemption is claimed.”
In section 1271 it is declared that “ihe following classes of property are not to he taxed, and they may he omitted from the assessments herein required”; and liten follow eight classes of properly, none of which include the exemptions allowed for tree culture under the provisions of section 1272. From the provisions of these two sections, it is made clear that the realty upon which the trees are cultivated is not intended to he exempted from valuation and assessment, either in whole or in part. If that had been the intent of the legislature, the land would have been included within the classes of property enumerated in section 1271; and, furthermore, the exemption would have been of the land, or a certain proportion of it, instead of a given amount of money. Hection 1272 declares that the exemption shall be deducted from the
The next and perhaps the most material question arising in the cases is whether, in ascertaining the amount of indebtedness outstanding against the county at the several dates when the bonds sued on were issued, the series of bonds issued under date of July 1, 1873, to the amount of $100,000, and known as the “Shade Bonds,” are to be recognized as existing claims against the county; for, if they are to be included in the outstanding indebtedness of the county, then the limit had been exceeded before any of the bonds sued on were issued. The facts show that this issue was itself in excess of the constitutional limit, and therefore these bonds did not create a valid or enforceable indebtedness against the county; and in the case of Lyon Co. v. Ashuelot Nat. Bank, 30 C. C. A. 582, 87 Fed. 137, it was held by the circuit court of appeals for this circuit that the fact that in 1885 these bonds were retired by the proceeds of another series of bonds issued and sold by the county would not validate the Shade bonds as of any date prior to the date of their payment; and, under the ruling in this case, it is clear that the Shade bonds cannot be included as part of the indebtedness existing when the bonds sued on were issued, as they all bear date before May 1, 1885, and the Shade bonds were not taken up, as above stated, until after that time.
It is admitted by counsel for the defendant county that, if the Shade bonds are not to be computed as part of the existing indebtedness of the county, then no defense exists to the bonds issued June 1,1880, and September 6,1881; and therefore the next inquiry is as to the validity of the issue of June 13, 1882. At this date the total value of the property in Lyon county for the purposes of taxation was the sum of f 1,149,-773; being- the total valuation of the taxable property as shown by the tax lists for 1881, without deducting therefrom the exemptions allowed for tree culture. Upon this basis the limit of indebtedness would be the sum of $57,488.65, or, 'if the 5 per cent, be calculated' on the sum left after deducting the tree culture exemptions, the limit would be the sum of $48,912.95. On behalf of the defendant it'is claimed that there were outstanding on June 13, 3882, unpaid warrants to the amount of $15,225, which amount is not in dispute, and that in addition thereto there should be counted warrants to the amount of $3,244, which it is claimed the evidence shows were issued for claims that were in existence before June 13,1882, the date of the bonds now in issue, although the warrants bear dates subsequent to that time. Thus, the question arises whether unliquidated claims which have not been presented for allowance to the county board of supervisors can be included in the ex
“All laws should receive a sensible construction. General terms should be so limited in their application as not to lead to injustice, oppression, or an absurd result. It will always be presumed that the legislature intended exceptions to its language which would avoid results of this character. The reason of the law in such cases should prevail over its letter.”
The Code of Iowa (section 3528) enacts that:
“No action shall be brought against any county on an unliquidated demand, until the same has been presented to such board and payment demanded and refused or neglected.”
The practice is to file the claims, duly, sworn to, with the county auditor, who is, ex officio, the clerk of the board of supervisors, and then the same come before the board for its action. By thus invoking the action of the county board, a claim is asserted against the county, and in such form that notice thereof can be taken by all interested. Until a claim is thus presented, it cannot be known whether the holder thereof will ever- present it or seek to assert it. Can it be fairly said, within the meaning of the constitution, that- a county is indebted on a claim which the holder thereof has never presented against the county, and which the county board has never acted upon and allowed, or refused to allow? Until presented for allowance to the county board, the claim is one upon which no action can be maintained in a court, and for which no payment can be made from the county funds. Is a purchaser of county bonds compelled, at his peril, to take notice of inchoate claims of this character, which may never ripen into enforceable debts, and of the amount of which he cannot possibly obtain accurate knowledge? To so hold would make it impossible for the county officers, or a proposed purchaser of county bonds, to determine the amount of the
According to the claim of the defendant in the brief filed, the amount of the bonds outstanding on June 13,1882, was $133,400, which amount includes the Shade issue of $100,000, which, as already stated, cannot be included in the computa! ion; and thus the amount is reduced to $33,400. It is further admitted that, of this amount, the evidence shows tiiat $2,400 had been canceled before June 13, 1882; and thus the amount of bonds outstanding at that date is reduced to $31,000. Adding to this amount the warrants claimed to be outstanding at that date, and we have a total of $40,225 as the debt of the county on June 13, 1882, not including the $9,000 of bonds issued under that date, which being added would make the total $55,225, or an amount within the constitutional limit, if the 5 per cent, is to be calculated on the basis of the valuation of the taxable property of the county, without deducting the allowances made to the property owners under the tree culture acts.
The next issue of bonds was that of September 1, 1884, amounting to $3,100. The tax list for 1883 shows that the value of the taxable property in the county for that year was the sum of $1,561,471, or, excluding the allowances under the tree culture acts, the sum of $1,384,289. Upon the former basis the debt limit would be $78,073.55, and upon the latter, $69,214.45. According to the contention of defendant’s counsel, the number of bonds outstanding on September 1, 1884, exclusive of the Shade bonds, was $42,400, and of warrants, #25,-850, or a total of #68.250; hut from this total must be subtracted the amount of the bonds which had been paid and canceled before September 1, 1884, amounting to $4,300, which leaves a total of $63,-950, and adding thereto the bonds issued on that date would bring the final total up to $67,050, or a sum clearly within the limit, whether calculated on the basis of excluding or including the tree culture allowances in the valuation of the taxable property of the county, and without making allowance for the warrants which had been exchanged for bonds up to that date.
We thus reach the last issue of bonds, being those issued under date of March 1, 1885, none of which are held by the Keene Five-Cent Sav
The conclusion reached is that in each case the bonds sued on must be held to be valid, and the plaintiff' is entitled to judgment for the amount due upon the bonds and coupons sued on, except such coupons as had matured more than 10 years before these actions were brought; it having been decided by the supreme court in Amy v. Dubuque, 98 U. S. 470, that the statute of limitations is applicable to coupons, whether attached -to or detached from the bonds with which they were issued. . These suits were brought August 10, 1897, and therefore the statutory limitation of 10 years bars only the coupons that had matured before August 10, 1887, which includes coupons No. 14 of the bonds issued June 1, 1880, No. 10 of the issue of June 13, 1882, and No. 5 of the issue of September 1, 1884. Omitting these coupons, the amount due to the Keene Five-Gent Savings Bank, including the principal of the bonds, and interest thereon from the maturity of the bonds up to December 1, 1898, and the coupons, with interest from the maturity thereof to tire date named, is the sum of $33,275.20, for which amount judgment will be entered for plaintiff in that case. Upon the same basis, the total amount due to Eliza J. Faulkner is the sum of $5,504.92, for which sum judgment will be entered in her favor in the second case.