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Atijn, the joint committee unanimously agreed on the plan of compromise sct forth in the following circular letter, which we recommend be sent to each person holding city and school-district bonds, except Macadam bonds, about which latter we make no report:

*" •City CLERK'S OFFICE, Fort SCOTT, KANSAS, Sept. 3, 1878. “ · DEAR SIR: The city council of Fort Scott address this to each person holding bonds of the city of Fort Scott, Kansas, with a view to bring about such an amicable adjustment of the indebtedness of our city, if possible, as will be fair to the bondholders in view of our circumstances, and at the same time be such an one as the city can reasonably expect to be able to meet. Nearly all of our county, city, and school-district indebtedness was incurred at or about the year 1870, which was what would be called our times flush, when money was plenty and property of ready sale at good figures. In 1870 the assessed valuation of all kinds of property in the city was $1,445,730, as shown by the tax-roll, while our assessed valuation for the year 1878 is only $814,457, being a decline in valuation of $631,273, or nearly one-half, a decline which cannot be accounted for upon the basis of the general decline in values, but is doubtless largely attributable to the excessive burden of our debt and taxation. For the year just past our levy for all funds in the city was 5.25 per cent., while, this year, had an adequate levy been nade, it would have been nearly 7 per cent., and this, too, without making any levy for sinking-fund purposes to meet our railroad bonded indebtedness. A careful examination of our financial condition convinced us that to meet our indebtedness in its present form, including our share of the county and school-district indebtedness, would, within two or three years, require a levy of 10 per cent., and, should the extreme decline in our assessed valuation continue, the rate would exceed that figure. Our assessed valuation of all kinds of property in the city, beginning with the year 1870, as shown by the tax-roll, is as follows: 1870,

$1,445,730 1871,

1,421,682 1872,

1,382,950 1873,

1,233,624 1874,

1,386,294 *1875,

1,071,831 1876,

958,896 1877,

904,368 1878,

814,457 “• The increase in valuation in 1874 is explained by the fact that nearly 250 acres of outlying additions were that year annexed to the city. In the face of this great decline in value our indebtedness is rapidly maturing, and is yet to be provided for. The indebtedness of our county in railroad bonds is $300,000, of which $150,000 are in litigation, and upon which there is nearly $40,000 of an accumulation of unpaid interest, and all may yet be adjudged a valid indebtedness. The assessed valuation of the county, including the city, this year is $3,509,164; the valuation of the city being about one-fourth of that, places one-fourth of the county's burden upon the city. A statement of our indebtedness, then, upon that basis is as follows: One-fourth Co. debt,

$ 85,000 City railroad debt,

100,000 City school-district bonds,

37,500 City bridge and funding bonds,

41,500 City special improvement bonds and accrued interest,

45,000 Other sundry indebtedness, about

6,000

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Total,

$315,000

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« • From this statement it will be seen that the ratio of our total indebtedness to our assessed valuation is about 40 per cent. Of our indebtedness, our school-district, bridge, and funding bonds bear ten per cent. interest, and for these the city has had something in the shape of value received. In the matter of our railroad 7 per cent, bonds, however, both county and city, the universal sentiment of our people is that we have not been rightly treated. Each of the railroad companies promised that their machine shops should be built and located in Fort Scott. The M., K. & T. made a written contract to that effect, and the city railroad debt of $100,000, and a county railroad debt of $150,000, was created. The bonds were delivered, but the railroad companies have built their shops elsewhere. The M., K. & T. Railroad, after receiving $100,000 of city and $150,000 of county bonds, not failed to comply with its contract, but started a new town, built its machine shops there, and has since lent every effort of its great power to foster a rival town within fifty miles of this place. Had the railroad companies fulfilled their pledges, Fort Scott nor Bourbon county would not now be asking leniency at the hands of their creditors; our debts would not have been out of proportion to our valuation, our people would have been satisfied, our town and county prosperous.

“; We have incurred the debt; we have failed to receive the benefits. Both of the railroad companies are bankrupt, and we are without remedy or hope of redress. A strong sentiment has always existed in favor of utterly repudiating our railroad debt, and now that the time approaches for levying a sinking-fund tax to pay that debt, this sentiment increases. The present bondholders may be blameless as to the bad faith of the railroad companies, but the result to us is all the same, and our debt burden in nowise relieved by that fact. Our inability to pay such a debt seems apparent, and sooner or later we know that we must fail. An increase in taxation means a decrease in value, the refusal of the tax-payer to pay, the driving out of capital already invested, and the turning away of those who would otherwise settle here. Realizing this, we have this year omitted to make a levy for debt purposes, either principal or interest, and hope, by a statement of the facts and of our circumstances, together with the safeguards which we propose for the future, to effect a compromise, which, while burdensome still to us, yet we know we can meet, and at the saine time give to the bondholder as high a marketable value as he now has in the paper he now holds. We feel, however, that a difference ought to be made in the two classes of bonds, and hence we propose to refund the city and school-district debt upon the following terms: The city railroad and machine shop 7 per cent. bonds to be refunded, at 50 cts. on the dollar, into a 30-year 5 per cent. bond, payable at any time after 10 years, and the school-district funding and bridge 10 per cent. bonds to be refunded into a like bond, at the rate of 75 cts. on the dollar of the present amount of bonds outstanding. This would make the amount of our city and school-district debt about 20 per cent. of our valuation, leaving out of consideration our proportion of the county indebtedness, which, if considered, would still leave our debt about 30 per cent. of the valuation.

"• To effect this compromise we will need new legislation, and, in obtain. ing this, we propose and suggest the following provisions of law, as a protection to the holders of the compromise bonds against a subsequent overissue, which might compel a new compromise, to-wit: A tax levy for interest, to be made annually, sufficient to pay the interest then due. At the end of 10 years one-twentieth, or five per cent., of the principal to be collected, and for each year thereafter, until the whole refunded debt is paid or liquidated Making any officer who shall prevent such levy personally liable to any bond. holder for the amount then due, to be recovered in a civil action; making it a misdemeanor, punishable by fine and imprisonment, for any officer to divert any portion of the funds so collected to any other purpose than the payment

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of nese bonds and interest, the fine to be not less than the sum so diverted; making a provision that the aggregate amount of our bonded indebtedness, when the now proposed compromise is effected, shall never be exceeded, until the entire amount of the compromise bonds shall be fully paid, and making any bonds that might be issued in excess of that amount absolutely null and void. The bonds issued under such a law as this would be absolutely protected against an overissue in the future, and, with this safeguard, would sell, in the aggregate, for more dollars and cents than the entire amount of co our present bonded indebtedness.

" . In response to this, we ask each bondholder to express his views fully, stating the amount and kind of bonds he holds; and we sincerely hope that a compromise can be fully agreed upon by the time our legislature meets in January next, so that the proper legislation may be obtained, and the refunding bonds issued in time for the making of a levy in 1879. By order of the city council of the city of Fort Scott, September 3, 1878.

City Clerk.'" At said meeting of August 21, 1878, said city counsel also adopted the following motion, as appears by said records:

“On motion, the city clerk was instructed to have one hundred copies printed of the circular letter, with the report of the finance committee on our indebtedness, as the city attorney may direct, to be sent to the holders of our city bonds.”

(6) That, under date of September 3, 1878, the city clerk of said city caused to be printed 100 copies of said circular letter, each being printed with a dotted head-line in which to write the name of the person addressed, and sent a copy of the same to each of the holders of the bonds of said city, except to the holders of said special improvement or Macadam bonds, but did not send said circular to this plaintiff, nor to any agent or representative of his, nor to any other holder of said special improvement or Macadam bonds. The reason why said city clerk did not send any of said circulars to any of the holders of said special improvement or Macadam bonds was because of the directions to that effect made in the adopted report of the finance committee of said city council, as set forth in finding No. 5 herein. Each of the circulars so sent out by said city clerk were signed by him in writing, and had the name of the person to whom sent written in the dotted head-line thereof. Some persons holding bonds of said city, other than said special improvement or Macadam bonds, did receive copies of said circular in which no name was written in said dotted head-line, but were signed by said city clerk.

(7) That, in 1878, and after September 3d, one Thomas W. Marshall, of Westchester, Pennsylvania, where plaintiff resided, who held some of the bonds of said city other than said special-improvement or Macadam bonds, received one of said circulars, which he showed to plaintiff, which was signed by said city clerk in writing, over the words “city clerk” at the end, and one H. Burkhalter, at Westchester, Pennsylvania, who also held some of the bonds of said city other than said special improvement or Macadam bonds, received one of said circulars in 1878, which he gave to plaintiff._Said circular was also received by other persons residing at Westchester, Pennsylvania, who held bonds of said city other than said special improvement or Macadam bonds.

(8) That the class of bonds sued on herein are described on their face as “special improvement bonds,” but were commonly called “Macadam bonds” by the holders thereof, and by the officers of said city, and were issued by said city in payment for macadamizing certain streets in said city.

On the foregoing findings of fact the court held, as matter of law, that the plaintiff was entitled to recover on the bonds $26,385.23, and to have judgment accordingly, and judgment was entered for that amount, to bear in.

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terest at the rate of 10 per cent. per annum.

The defendant has brought a writ of error. The declaration of the plaintiff avers the adoption by the city council of the motion of August 21, 1878, and sets forth a copy thereof and of the circular letter, and alleges that one of the circulars was sent to the plaintiff, and one to each of the other holders of the defendant's bonds; that thus the defendant fully acknowledged and recognized the plaintiff's bonds as valid and subsisting obligations of the defendant; and that, on the eighth of November, 1875, the defendant recognized the existence and validity of the plaintiff's bonds by paying to him that day $290 on account thereof. The answer avers that the $290 was paid and credited wholly on bond No. 78; that there is due on that bond $434, which surn the defendant offers to pay and brings into court; that more than five years elapsed after the maturity of the other bonds before this suit was brought, and it is barred by the statutes of limitation of Kansas; that the defendant never acknowledged or recognized the plaintiff's bonds as subsisting obligations, as alleged in the declaration; and that the circular was never sent to the plaintiff by the city, or by its clerk, or by any of its officers, and the plaintiff never received it from the city, or from any party on behalf of the city. To this answer there is a reply containing a general denial.

The statute of Kansas in force when this suit was commenced (Gen. St. Kan. c. 80, art. 3, § 18, subd. 1, p. 633) provided that an action on any agreement, contract, or promise in writing could only be brought within five years after the cause of action accrued, and not afterwards. Consequently, this suit was barred as to all the bonds, unless saved under the following provisions of the statute, (Id. § 24, p. 634:) “In any case founded on contract, when any part of the principal or interest shall have been paid, or an acknowledgment of an existing liability, debt, or claim, or any promiso to pay the same,*shall have been made, an action may be brougbt in such case within the period prescribed for the same, after such payment, acknowledgment, or promise; but such acknowledgment or promise must be in writing, signed by the party to be charged thereby.” The construction of section 24 by the supreme court of Kansas, in Elder v. Dyer, 26 Kan. 604, is that a case may be taken out of the operation of section 18 in three ways: (1) By the payment of part of the principal or interest; (2) by an acknowledgment in writing of an existing liability, debt or claim, signed by the party to be charged; (3) by a promise of payment, in writing, signed by the party to be charged; that it is not necessary all these things should co-exist, but only requisite that one of them should exist; and that it is not necessary the acknowledgment should amount to a new promise. But it is also held by the same court that the acknowledgment, to be effective, must be made, not to a stranger, but to the creditor, or to some one acting for or represente ing him. Sibert v. Wilder, 16 Kan. 176; Schmucker v. Sibert, 18 Kan. 104; Clawson v. McCune's Adm'r, 20 Kan. 337.

In the present case, the circuit court finds that the committee, in its report, recommended that the circular letter should " be sent to each person holding city and school-district bonds, except Macadam bonds;" that the report stated that the committee made no report about Macadam bonds; that, on the report, the city council adopted a motion instructing the city clerk to have 100 copies printed of the circular letter, with the report, to be sent to the holders of the city bonds; and that the clerk caused to be printed 100 copies of the circular letter, and sent a copy of the same to each of the holders of the bonds of the city, except to the holders of the special improvement or Macadam bonds, but did not send the circular to the plaintiff, or to any agent or representative of his, or to any other holder of the special improvement or Macadam bonds. It is not found that any copy of the circular was received from the city, or from any one acting for it, by any holder of any Macadam bond, or his agent or representative. The-recommendation of the committee, and

its statement that it made no report about the Macadam bonds, and the fact that the circular letter offers no compromise as to those bonds, was a sufficient reason for not communicating with the holders of those bonds. In this connection, it may be observed that, by the report of the case of U.S. v. Fort Scott, 99 U. S. 152, it appears that, in that case, the city of Fort Scott, at October term, 1878, contested, in this court, its obligation to impose a tax on all the taxable property of the city to pay like bonds of the same issue, claiming that it was bound to levy a tax only on property benefited, and that this court reversed the decision of the circuit court of the United States for the district of Kansas, which had decided in favor of the city, and against a holder of Macadam bonds, as to that question. That decision by this court was announced after the report of the committee was made, and after the date of the circular letter.

It is plain that the city made no acknowledgment to the plaintiff. It held no communication with him. It sent no copy of the circular letter to him. It intentionally refrained from doing so. It had a cogent reason for refrain: ing in the decision which had been so made in its favor. He received no circular letter from the city. Nor did the exhibition to him of the circular letter by persons who held other bonds than Macadam bonds amount to an acknowledgment by the city to him. The circular letter states that the city council addresses it to each person holding bonds of the city; but it also states that this is done with a view to a compromise, and then it proposes compromises as to other bonds, not including the Macadam bonds. So, also, the circular letter, at its close, asks that each bondholder will express his views fully, stating the amount and kinds of bonds he holds. But this applies, necessarily, only to those who hold bonds which are to be compromised and refunded. There is nothing in the circular letter which makes, or which evinces any intention of making, an acknowledgment to holders of Macadam bonds. In view of all this, the placing in the list, under the heading "A, statement of our indebtedness,” of the item, “city special improvement bonds and accrued interest, 45,000,” cannot be held to amount to an*acknowledg-ment to the plaintiff of any then existing liability to him on the Macadam bonds he held. It was merely a statement that the city had issued that amount of special improvement or Macadam bonds, which it classed generally as “indebtedness," which others might claim was valid indebtedness against it, but which it carefully omitted from any proposal of compromise, and said no more about in the circular.

Although an acknowledgment need not, under the Kansas statute, amount to a new promise, yet the rule is applicable: that an ack nowledgment cannot be regarded as an admission of indebtedness where the accompanying circumstances are such as to repel that inference, or to leave it in doubt whether the party intended to prolong the time of legal limitation. Roscoe v. IIale, 7 Gray, 274. Nor is there any ground for holding that what was entered upon the records of the city council is to be regarded as having been addressed to all the holders of bonds, including the plaintiff, and as having been in that way a sufficient acknowledginent to him without the sending to him of a copy of the circular letter; for that record states distinctly that no report is made about Macadam bonds, and that the circular letter is not to be sent to their holders; and the observations before made as to the contents of the circular letter, and as to the circumstances attending what is said in it about the indebtedness on the Macadam bonds, apply with even more force to this branch of the case. The record, taken as a whole, did not amount to an acknowledgment to the plaintiff as a holder of the Macadam bonds. It is not found that the plaintiff ever knew of the record till after he brought this suit.

The settled doctrine in Kansas, and the weight of authority el ere, is that statutes of limitation are statutes of repose, and not merely statutes of

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