US SUPREME COURT DECISIONS

Where a statute of Kansas authorized towns or counties to issue bonds "for the purpose of building bridges, or to aid in the construction of railroads, water power, or other works of internal improvement," and where another statute declared all custom grist mills to be "public mills," and regulated their management, held that bonds issued by a town of that state to aid in the construction and equipment of a steam custom mill owned by an individual were authorized by the statute.

This was a suit brought in the Circuit Court of the United States for the District of Kansas by Alfred W. Beasley against the Township of Burlington, in the County of Coffey, and State of Kansas, to recover the amount due upon sixty-four coupons, each for the sum of twenty-five dollars, together with interest thereon. Of these coupons, as well as of the bonds to which they had been originally attached, the said Beasley averred himself to have become the true and lawful owner and holder for value before maturity and also to be such owner at the commencement of his suit.

The bonds to which these coupons had been attached are a part of a series of sixteen bonds, each for the sum of $500, the whole amounting to the sum of $8,000, issued by said township Dec. 3, 1872, to aid one John S. Stow in the construction and completion and to furnish the motive power of a steam custom grist mill in said township, the same belonging to the said chanrobles.com-red

Page 94 U. S. 311

Stow and not being situated on a watercourse, or operated by water power.

A copy of one of said bonds is as follows, to-wit:

"$500] BOND OF BURLINGTON TOWNSHIP [No. 1"

"County of Coffey, State of Kansas"

"UNITED STATES OF AMERICA"

"Burlington Township, in the County of Coffey, State of Kansas, promises to pay John S. Stow, or bearer, the sum of $500 on the third day of December, A.D. 1877, and interest thereon at the rate of ten percent per annum, payable semiannually, upon presentation of the coupons therefor, hereto annexed, both principal and interest payable at the banking-house of Northrup & Chick in the City of New York."

"This bond is one of an issue of $8,000, made for the purpose of aiding internal improvements in said township, and in pursuance of an act of the legislature of the State of Kansas, entitled"

"An Act to authorize counties, incorporated cities, and municipal townships to issue bonds for the purpose of building bridges, aiding in the construction of railroads, water power, or other works of internal improvement, and providing for the registration of such bonds, the registration of other bonds, and the repealing of all laws in conflict therewith,"

"approved March 2, 1872."

"In testimony whereof the township trustee, clerk, and treasurer have caused this bond to be issued, duly signed, attested, and countersigned, this third day of December, A.D. 1872."

"H. R. FLOOK, Trustee"

"Attest: G. N. McCONNELL, Clerk"

"Countersigned: H. L. JARBOE, Treasurer"

The following is a copy of one of the coupons sued upon, to-wit:

"$25.00] [No. 3"

"The treasurer of Burlington Township, Coffey County, Kansas, will pay to the bearer twenty-five dollars, at the banking house of Northrup & Chick, in the City of New York, on the third day of June, A.D. 1874, for six months' interest on bond No. 1, issued on the third day of December, A.D. 1872."

"Attest: G. N. McCONNELL, Township Clerk"

"H. R. FLOOK, Township Trustee"

chanrobles.com-red

Page 94 U. S. 312

The case comes here on a certificate of division upon the following questions:

"First, does the second count of the defendant's answer set up a sufficient defense to the action?"

"Second, aid bonds having been issued to aid a steam custom grist mill, not situated on a watercourse or operated by water power, was there any power or authority to issue the same?"

"Third, if there was no such power or authority, are the bonds containing the recital therein appearing valid in the hands of a holder thereof for value before maturity who has no notice of the purpose for which the same were issued, other than as shown by the face of the bonds?"

The plaintiff recovered judgment, and the town now brings the case here by writ of error.