Schuerman v. Arizona

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 5 per centum 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to fund the bonds issued for the aid of the railroad company, but the board subsequently and on December 5, 1896, rescinded such request before it had been acted upon, and on the 17th of September, 1897, the holders of the bonds requested the board of loan commissioners to refund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.

'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 canceled 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 37 cents on each $100 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 37 cents on the $100, but only levied the sum of 6 cents on the $100 for the purpose of paying interest on the funded indebtedness of said county; said sum of 6 cents on the $100 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 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.

Mr. Reece M. Ling for appellants.

Mr. C. F. Ainsworth for appellee.

Mr. Justice Peckham, after stating the above facts, delivered the opinion of the court: