Eastern Kansas Utilities, Inc. v. City of Paola ex rel. Arn

196 P.2d 199, 165 Kan. 558, 1948 Kan. LEXIS 483
CourtSupreme Court of Kansas
DecidedJuly 10, 1948
DocketNo. 37,259
StatusPublished
Cited by3 cases

This text of 196 P.2d 199 (Eastern Kansas Utilities, Inc. v. City of Paola ex rel. Arn) is published on Counsel Stack Legal Research, covering Supreme Court of Kansas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Eastern Kansas Utilities, Inc. v. City of Paola ex rel. Arn, 196 P.2d 199, 165 Kan. 558, 1948 Kan. LEXIS 483 (kan 1948).

Opinion

The opinion of the court was delivered by

Harvey, C. J.:

This was a suit to enjoin the defendant from issuing and selling certain “electric light plant bonds” of the city. [559]*559The city of Paola will be referred to as defendant unless otherwise stated. The appeal is from the judgment of the court overruling plaintiff’s demurrer to defendant’s answer, denying plaintiff's oral request to file a reply to the answer and sustaining the defendant’s motion for judgment in its favor on the pleadings. Facts alleged by plaintiff, in its petition, and admitted in defendant’s answer, may be stated as follows: Plaintiff is a corporation which owns and operates the electric distributing plant in the city and is the owner of real and personal property within the city upon which it pays ad valorem taxes; that the defendant is a city of the second class, having all the power and authority conferred upon such cities by our statutes; that on October 7, 1947, the governing body of the city passed an ordinance, the first section of which reads:

“Section 1. The municipal officers of the City of Paola, Kansas, having authority to call an election in such municipality, or a majority of them, are hereby authorized and directed to call a special election of the qualified electors of said City to vote upon the proposition of authorizing the issuance of $380,000.00 of Electric Light Plant Bonds of said City for the purpose of constructing electric light works, including an electric generating plant and distribution system and appurtenances thereto, for the purpose of supplying such City and its inhabitants with electric light and power.”

Other sections fixed the date of the election as November 4, 1947, named the polling places, set out the form of the ballot, and provided that due notice of the election should be given. The pertinent part of the notice for the election reads:

“Newness of Bond Election
“Public notice is hereby given to all qualified electors residing in the City of Paola, Kansas, that a special election will be held in said City on Tuesday, November 4, 1947, pursuant to an ordinance duly passed by the governing body of said City and approved by the Mayor, for the purpose of submitting to the legally qualified electors of said City the proposition of issuing the Electric Light Plant Bonds of said City in. the sum of $380,000.00 for the purpose of constructing electric light works, including an electric generating plant and distribution system and appurtenances thereto, for the purpose of supplying such City and its inhabitants with electric light and power.”

It also fixed the polling places and the hours the polls would be open. The ballot used at the election reads:

“Official Ballot
“Shall the following be adopted?
“Shall the City of Paola, Kansas, issue its Electric Light Plant Bonds in the sum of $380,000.00 for the purpose of constructing electric light works, including an electric generating plant and distribution system and appurte[560]*560nances thereto, for the purpose of supplying such City and its inhabitants with electric light and power?”

Directions were given for the marking of the ballot. At the election on November 4, 1947, 676 votes were cast in favor of the bonds and 671 against.

On November 14, 1947, the governing body of defendant caused to be published the following:

“Nonas of Bond Sale $380,000 Electric Light Plant Bonds of the City of Paola, Kansas “(General obligation, payable from unlimited ad valorem taxes).”

The notice fixed November 25 as the time for receiving bids and recited:

“Said issue will consist of 380 bonds, each in the denomination of $1,000, dated December 1, 1947, and becoming due serially $20,000 on December 1 in each of the years 1949 to 1967, inclusive.”

There were other provisions as to redeeming certain- of the bonds before maturity, the rate of interest the bonds should bear, and that interest would be payable June 1, 1949, and June 1 and December 1 of each year, and provisions pertaining to the printing of the bonds and the furnishing of the legal opinion of named attorneys, and recited:

“All of said bonds will constitute general obligations of said City, payable both as to principal and interest from ad valorem taxes which may be levied without limit as to rate or amount upon all tangible taxable property, real and personal, within the territorial limits of said City.”

It gave the assessed value of the property within the city for the years 1946 and 1947, and stated the total bonded indebtedness of the city was $33,000 aside from the bonds being offered for sale. The city ordinance, notice of election, official ballot and notice of bond sale were attached to the petition as Exhibits “A,” “B,” “C,” and “D,” and made a part thereof.

The plaintiff further alleged that the bonds of the defendant which it contemplates issuing and selling are general obligation bonds which if issued will constitute general obligations of the city and will become due and payable at all events by the city whether the revenues, if any, arising from the electric-light plant and distribution system constructed from the proceeds of the bonds be sufficient or not to meet the principal and interest; that the threatened action of the city is not authorized by law and may and will [561]*561result in the creation of a public burden and the levy of an illegal tax charge and assessment because of the necessity of making payments in' all events by the city of the principal and interest on the bonds; that the bonds provide for the first payment of interest on June 1, 1949, and the payment of $20,000 on the principal and semiannual interest on December 1, 1949; that it is impossible, under existing conditions, for the city to construct an electric-light works, including an electric generating plant and distribution system and appurtenances thereto, so as to realize any possible profit to meet the interest obligation payable June 1, 1949, and the principal and interest payable December 1, 1949; and that in order to meet such obligations it will be necessary that a special bond levy be assessed for the tax year of 1948 upon the property of this plaintiff and all other taxpayers in the city.

It was alleged that the bonds are unauthorized by law and their issue would be illegal in the following respects: (a) There have been in effect at all times since October 7, 1947, laws providing for elections in cities of the second class, such as defendant, by which the electors may vote upon a proposal for the issuance of general obligation bonds, and there were also statutes providing for a vote for the issuance of revenue bonds payable only out of the revenues to be derived from such a plant and distribution system. (b) In the ordinance calling the election, in the notice of election, and in the ballot, Exhibits “A,” “B,” and “C,” the following words appear:

“Shall the City of Paola, Kansas, issue its Electric Light Plant Bonds in the sum of §380,000.00 for the purpose . . .” etc.

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502 P.2d 639 (Supreme Court of Kansas, 1972)
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Cite This Page — Counsel Stack

Bluebook (online)
196 P.2d 199, 165 Kan. 558, 1948 Kan. LEXIS 483, Counsel Stack Legal Research, https://law.counselstack.com/opinion/eastern-kansas-utilities-inc-v-city-of-paola-ex-rel-arn-kan-1948.