The opinion of the court was delivered by: Blatchford, J.
J. D. McCleverty, for plaintiff in error.
S. E. Brown, for defendant in error.
This is an action brought by the defendant in error in the circuit court of the United States for the district of Kansas against the city of Fort Scott, in the state of Kansas, to recover the amount of principal and interest due on 27 bonds for $500 each, issued by that city, 12 of which became due on July 1, 1873, and 15 on July 1, 1874. The bonds are coupon bonds, with interest payable annually on the first of July at the rate of 10 per cent. per annum, and are dated July 1, 1871. Each bond contains the heading, 'Special Improvement Bond of the City of Fort Scott, Kansas,' and this statement: 'Issued in accordance with sections 16 and 17 of an act of the legislature of the state of Kansas, entitled 'An act relating to the powers and government of cities of the second class, and to repeal certain sections of chapter 19 of the General Statutes of 1868, approved March 8, 1871,' and in pursuance of an ordinance of the city of Fort Scott, entitled 'An ordinance ordering the grading and macadamizing, etc., of certain streets and parts of streets, approved May 19, 1871.' Countersigned by the city treasurer, this twentieth day of September, 1871.' The suit was commenced July 1, 1880, and was tried by the circuit court without a jury. As to 11 of the 12 bonds that court found that all the coupons on them had been paid on and before July 1, 1873, but no payment of principal or interest had been made upon any of them since that date, except as stated in its fourth finding. As to the 15 bonds it found that all the coupons on them were paid on and before May 16, 1875, but no payment of principal or interest had been made upon any of them since that date, except as stated in its fourth finding. The remaining findings were as follows:
4. The court further finds, that, as to the remaining bond sued on herein, being bond number 78, it became due, by its terms, July 1, 1873, and on and prior to that date all the interest coupons thereon had been paid; that, on November 8, 1875, a payment was made on said bond number 78, of the sum of $290, and the balance of said bond remained due and unpaid at the time of the commencement of this action; that said payment upon bond 78 was made by Donnell, Lawson & Co., fiscal agents of the state of Kansas, upon the authority of certain letters sent them by J. H. Randolph, city treasurer of the defendant, written by him in the usual routine of his official duties, but without any special instruction or knowledge on the part of the city council of said city; which said letters are as follows, to-wit.
'FORT SCOTT, KANSAS, June 10, 1875.
'Mess. Donnell, Lawson & Co., New York–DEAR SIRS: Yours of the second inst. at hand. The coupons of our special improvement bonds are all retired except bonds Nos. 97 and 107 to 113; the last coupon on these Nos. (all past due) is not yet in; will give you statement of am't and Nos. of these bonds due and unpaid by next mail. You may redeem any one of these bonds whenever this fund in your hands is sufficient to do so. My remittance of May 26th, of $245, was all to apply on coupons of bonds issued to the M., K. & T. R. R. Co., and not $70 of it for special im. fund, as you state you have credited, in your letter of June 1st. The Nos. of the bonds to which these coupons belong are 1 to 7, inclusive. You will please make the transfer of the $70 to your Fort Scott City coupon acc't. About what would our city funding bonds bring in your market, bonds running 10 years, int. payable s. a. at 10 per cent. p'r annum?
J. H. RANDOLPH, City Treasurer.
'FORT SCOTT, KANSAS, August 6, 1875.
'Mess. Donnell, Lawson & Co., New York–GENTLEMEN: I give you below the Nos. of our special improvement bonds now unpaid. Nos. 6 to 15, 17 to 22, 24, 30 to 39, 53 to 58, 60 to 80, 83 to 85, 97, 98, 99, and 104 to 115, in all 70 bonds of $500 each, all past due. I will be in New York last of this month, and will call and explain to you the situation in regard to these bonds, so you may understand the reason why they are not paid, and that owners of the same may govern themselves accordingly.
J. H. RANDOLPH, City Treasurer.
'FORT SCOTT, KANSAS, August 11, 1875.
'Mess. Donnell, Lawson & Co., New York–GENTLEMEN: I inclose you herewith d'ft for $500 to apply on interest, due on Fort Scott City special improvement bonds.
'If not convenient to apply on interest use to pay on bonds.
On November 8, 1875, said fiscal agents paid bond 77 of this series, and said $290 on said bond 78, they being the only bonds presented to that date, which payments exhausted the funds in the hands of said fiscal agents. That the official accounts of the treasurer of said city contain the following entry of credit to himself: 'August 11, 1875. By Donnell, Lawson & Co., to pay interest on special improvement bonds, $500,' which was the moneys remitted by said treasurer in the letter of ...