Garden City, Gulf & Northern Railroad v. Board of County Commissioners

— 801 — The opinion, of the court was delivered by Porter, J.: From the foregoing statement of facts, about which there is no serious controversy, it is apparent that the plaintiff company has substantially complied with the terms and conditions of its contract. The same question has been frequently before the court, and the principle adopted in the decisions is one which has received the approval of courts everywhere. The principle is well stated in section 851a of volume 2 of the second edition of Elliott on Railroads as follows: “A condition that the road shall be built for use within a specified time is to be reasonably construed, Rowever, and is generally regarded as complied with when the road is built so as to be in as reasonably fit condition and as safe and convenient for the public use as new roads usually are in similar localities.” The following cases are directly in point: C. K. & W. Rld. Co. v. Comm’rs of Osage Co., 38 Kan. 597; S. K. & P. Rld. Co. v. Towner, 41 Kan. 72; C. K. & W. Rld. Co. v. Makepeace, 44 Kan. 676; C. K. & W. Rld. Co. v. Comm’rs of Chase Co., 49 Kan. 399, 411; Pontiac, etc., R. R. Co. v. King, 68 Mich. 111; The C., D. & M. R. Co. v. Schewe, 45 Iowa, 79; Brocaw et al. v. The Board of Commissioners of Gibson County et al., 73 Ind. 543; Freeman et al. v. Matlock, 67 Ind. 99; Hunt v. Upton, 44 Wash. 124. The defendants rely largely upon the case of M. K. & C. Rly. Co. v. Thompson, Mayor, &c., 24 Kan. 170. There time was expressly made of the essence of the contract, and the details as to the kind and character of the equipment of the road were expressly stipulated and provided for. The case is distinguished from the cases cited supra, in the opinion in S. K. & P. Rld. Co. v. Towner, 41 Kan. 72. In the present case the township might have stipulated for a depot at Scott City of a particular kind and dimensions, but in fact it only •stipulated for a station. The word “depot” is not men — 802 — tioned in the contract. There is no express provision as to the kind or character of the depot which the company agreed to establish in Valley township, and the evidence shows that the one erected is sufficient for all practical- purposes. Nor does the contract bind the company to maintain an agent at the depot. The defendants insist that time is of the essence of the contracts upon which the bonds were voted, and this is true as to some of the conditions named. Wherever the contracts provide that something shall be done by a day named, time is essential. In the proposition submitted to the voters of Scott township the only express provision with regard to time is that “said railroad shall be built and ready for the operation of engines and cars over the same from a point on the south line of Scott township to said Scott City, Kan., on or before the 31st day of December, 1909; . . . that said railroad be completed from Scott City, Kan., to Garden City, Kan., on or before December 31, 1909.” It can hardly be seriously claimed that there was not a substantial compliance with these conditions within the time limited. As this court held in S. K. & P. Rld. Co. v. Towner, 41 Kan. 72, in order to constitute a substantial compliance with the terms of such a contract the road “need not have been perfect in every respect at the prescribed date for its completion,” provided it was “completed and in operation at that date, in such a manner that it might be properly and regularly used for the purpose of transporting freight and passengers.” (Syllabus.) The only express provision with regard to time in the Valley township proposition was “that said railroad shall be built and ready for the operation of engines and cars over the same, by or before the 31st day of December, 1909.” Immediately following, this language is used: “And that when the railroad of said railroad company shall be built and completed and shall be in opera — 803 — tion, under lease or otherwise, . . . with a station, depot, switch tracks, stockyards and shipping facilities, the said board of county commissioners shall cause said bonds, with coupons attached as aforesaid, to be issued.” There is much force in the argument of the plaintiff that the last provision quoted should be construed as authorizing the completion of the station, depot, switch tracks, stockyards and shipping facilities within a reasonable time after, the 31st day of December, provided the road was built and ready for the operation of engines and cars on or before that date. In determining whether time is of the essence of the contract courts of equity look further into the intention of the parties to ascertain whether in fact they intended performance by the day named to be controlling. (9 Cyc. 606.) The rule appears to be that time will be deemed of the essence of the contract wherever the benefit to accrue from the consideration materially depends upon a strict performance in point of time. (St L. & S. F. Rly. Co. v. Rierson, 38 Kan. 359.) Thus, where time is not expressly made the essence of the contract it may be held to be so intended from the nature of the contract itself. (9 Cyc. 606; Kirby v. Harrison et al., 2 Ohio St. 326.) It must be apparent that a court of equity would not be justified in holding that time was of the essence of the contract here, 'in the sense that the plaintiff was required to have every condition on its part fully complied with and the road completed in every particular by December 31, 1909. A railroad in a sense is never completed; it is constantly undergoing changes and alterations in its track and roadbed. This is especially true of a new road, some portions of which must necessarily be constructed at first in a temporary manner, as occasion requires, and afterward be replaced with more permanent material and construction. Thus,, in C. K. & W. Rld. Co. v. Comm’rs of Chase Co., 49 Kan. — 804 — 399, 411, temporary pile bridges were put in on some portions of the railroad, and later in the same year the company replaced them with iron bridges, but the court held that, notwithstanding the fact that when the first bridges were built the company contemplated putting in a better class of bridges, this did not make the road incomplete as first constructed nor prove that it had failed to meet the requirements of the contract. In the language of the court in Pontiac, etc., R. R. Co. v. King, 68 Mich. 111, “it is a matter of common knowledge that much usually remains to be done in completing a railroad track, and in making it safe for regular freight and passenger business, long after the cars have commenced running upon it.” (Page 114.) Of course, a colorable compliance, such as laying a temporary track and running an engine and a few cars over it, with the intention to fulfill merely the letter of the contract and procure the issuance of bonds, would not be sufficient, and in such a case the courts will not hesitate to hold that there has not been a substantial compliance. Good faith is required. There was no demand made for the issuance of the bonds of Scott township until January 31, 1910, at which time the plaintiff had substantially complied with the other conditions of the contract, and its road was equipped “with a station, stockyards, switch tracks and shipping facilities at Scott City.” The subsequent completion of the road furnishes conclusive evidence of the good faith with which the plaintiff appears to have attempted to comply with the terms and conditions of its contract, and upon every principle of equity and fair dealing it must be held entitled to its bonds. In. the briefs of the defendants it is urged that the decision of the board of county commissioners to the effect that the conditions precedent to the making of the subscription and issuance of the bonds have not been fulfilled is final and conclusive. In support of this rather startling proposition the cases of the Board of County — 805 — Commissioners of Day County v. State of Kansas, 19 Okla. 375, and Commissioners of Knox County, Indiana, v. Aspinwall et al., 62 U. S. (21 How.) 539, are cited. The latter case is frequently referred to as authority for the proposition that an innocent purchaser of municipal bonds may rely upon the recitals in the bonds themselves as to the performance of the conditions precedent, but is not authority for any such doctrine as the defendants urge. In the opinion this language was used: “We do not say that the decision of the board would be conclusive in a direct proceeding to inquire into the facts previously to the execution of the power, and before the rights and interests of third parties had attached.” (Page 544.) The other case cited merely holds that a decision of the district court of Day county finding that certain warrants which had been issued by the county commissioners were valid is conclusive and binding upon the county in a suit upon the warrants, as well it might be, since it was the solemn judgment of a court. There remains the question whether the election in Valley township was void for irregularities. In the first publication of the sheriff’s notice the recitals in the preamble contained a number of errors. It gave the 21st day of September as the date when the petition was presented and the order made by the board, and recited that the board ordered that a special election be held on the 26th day of October when it should have recited that the election was ordered for the 28th day of December. The notice itself gave the correct date of the election, and the errors of the preamble were corrected in the subsequent publications. The notice which the sheriff posted also gave the date of the election correctly. The defects were merely formal and not sufficient to render the election void. Another objection urged is that the election was the seventh one held in Valley township at which propo — 806 — sitions were submitted by the plaintiff company. It appeared that the seven propositions differed materially in the conditions as to the route and other matters. The statute provides for the calling of bond elections to grant aid to railroads upon the petition of two-fifths of the resident taxpayers, and further provides that a second election may be had upon the petition of a majority of the legal voters. The language of the statute is: “Provided further, that a second election for the same purpose shall not be held unless upon a petition of a majority of the legal voters of such county, township or city.” (Laws 1887, ch. 183, § 1; Gen. Stat. 1909, § 7027.) The objection is based upon -a narrow, technical meaning of the word “second,” which evidently means in this statute another, or subsequent, election. Webster’s International dictionary gives “another” as one of the meanings of the word. It is urged that municipalities must not be harassed or badgered by the calling of several elections. The answer is that another election can only be called upon the petition of a majority of the legal voters, and where a majority has petitioned for it no injustice can result in holding the election. The peremptory writ is allowed.