US SUPREME COURT DECISIONS

The Act of Congress of June 6, 1896, c. 339, 29 Stat. 262, authorizing the refunding of outstanding obligations of the Territory of Arizona, was within the power of Congress to pass, and by it the bonds therein described were made valid.

Under the Territorial Funding Act of Arizona, approved March 19, 1891, it was sufficient for the holder of the bonds to make the demand for the exchange, and it was not necessary that the demand should be made by the municipal authorities.

It was the intent of Congress under the said Act of June 6, 1896, to provide that there should be no funding of bonds or other indebtedness which arose subsequently to January 1, 1897, and the statute was not intended to limit the mere process of exchanging one bond for the other to the time specified.

The Territorial Statute of Arizona of 1887 is the foundation for the appointment of the loan commissioners, and the body thus created comes directly within its provisions. chanrobles.com-red

Page 184 U. S. 343

This is an appeal by the defendants below from a judgment of the Supreme Court of the Territory of Arizona affirming a judgment of the district court granting a mandamus. Upon the trial of the case, certain facts were agreed upon -- in substance, that the defendants were the Supervisors of the County of Yavapai, and that, prior to the year 1890, the County of Yavapai had issued what were known as railroad bonds in aid of the Prescott & Arizona Central Railroad Company, upon which there was due on the 17th of September, 1897, $260,218.80, and on that day they were received in exchange by the board of loan commissioners, who thereupon issued 258 funding bonds of the territory, each of the denomination of $1,000, and bearing interest at the rate of five percentum per annum, payable semiannually. On the 18th of November, 1896, the board of supervisors of defendant county requested the board of loan commissioners to fund the bonds issued for the aid of the railroad company, but the board subsequently, and on December 5, 1896, rescinded such request before it had been acted upon, and on the 17th of September, 1897, the holders of the bonds requested the board of loan commissioners to refund the same, which they did upon such demand. The statement of facts then continues as follows:

"5. At the meeting of said board of loan commissioners at which said bonds were funded, only two members of said board were present or acted; the third member of said board of loan commissioners was at the time of said meeting absent from the Territory of Arizona, and took no part in the funding of said bonds, and was not in any manner consulted with relation thereto."

"6. On January 15, 1898, there became due and payable as interest on the 258 territorial funding bonds issued in exchange for the bonds of said Yavapai county as aforesaid, the sum of $4,288.33 according to the tenor of said territorial funding bonds, and thereafter on the 15th days of July and January of each year, there became due and payable as interest on said territorial funding bonds, according to the tenor thereof, the sum of $6,450.00, payable at the office of the territorial treasurer of the Territory of Arizona. "

Page 184 U. S. 344

"7. In compliance with the terms and conditions of said territorial funding bonds the territorial treasurer of said Territory of Arizona has paid all the interest thereon at the times when the same became due and payable, amounting in all at the date hereof to the sum of $23,638.33, and has taken up and cancelled interest coupons attached to said bonds to that amount."

"9. Save as aforesaid, no demand was ever made by the Board of Supervisors of said Yavapai county for the funding of said P. & A.C. Railroad bonds, and no notice was ever given to said board of supervisors at or about the time of the funding that said bonds had been funded."

"10. For the year 1899, the territorial board of equalization of said territory at its annual session for that year, levied the sum of thirty-seven cents on each one hundred dollars of valuation of the taxable property in said Yavapai County, for the purpose of paying interest on the funded indebtedness of said County of Yavapai, including the interest on the territorial funding bonds aforesaid maturing in the year 1900, and the territorial auditor duly certified the levy of said tax to the Board of Supervisors of said Yavapai County, that the defendants, comprising the board of supervisors of said county, failed and neglected to levy said tax of thirty-seven cents on the one hundred dollars, but only levied the sum of six cents on the one hundred dollars for the purpose of paying interest on the funded indebtedness of said county; said sum of six cents on the one hundred dollars was sufficient to pay the interest on all the funded indebtedness of said county other than the territorial funding bonds issued in lieu of said P. & A.C. Railroad bonds as aforesaid, but was insufficient to pay the interest on said territorial funding bonds or any part thereof."

"11. The above-mentioned P. & A.C. Railroad bonds were originally issued by the County of Yavapai in aid of the construction of the Prescott & Arizona Central Railroad, a line of railway running from Prescott Junction or Seligman to Prescott, Arizona, and were granted and issued as a subsidy to the corporation building and owning said railroad."

The county having refused to levy any taxes for the purpose of collecting money to pay any of the interest maturing on the chanrobles.com-red

Page 184 U. S. 345

bonds of the territory given in exchange for the bonds issued by the county, this proceeding was undertaken to compel the board of supervisors to levy a tax in accordance with the provisions of the statute, for the purpose of paying the interest which had been paid by the territory on the bonds.