106 U.S. 487 (1883), City of Parkersburg v. Brown

Citation:106 U.S. 487, 1 S.Ct. 442, 27 L.Ed. 238
Party Name:CITY OF PARKERSBURG v. BROWN and others.
Case Date:January 08, 1883
Court:United States Supreme Court

Page 487

106 U.S. 487 (1883)

1 S.Ct. 442, 27 L.Ed. 238



BROWN and others.

United States Supreme Court.

January 8, 1883

Appeal from the Circuit Court of the United States for the District of West Virginia.


Page 488

[1 S.Ct. 443] C. C. Cole and Wm. A. Cook, for appellant.

Chas. Marshall and B. M. Ambler, for appellees.



On the fifteenth of December, 1868, the legislature of West Virginia passed an act which provided as follows, (chapter 118:)

'Section 1. That the mayor and council of the city of Parkersburg are hereby authorized and empowered to issue the bonds of said city, to an amount not exceeding $200,000, for the purpose of lending the same to manufacturers carrying on business in or near the said city, in the said county of Wood. The said bonds shall run 20 years, and bear interest at the rate of 6

Page 489

per centum per annum; and they shall be issued upon the recommendation of the followingnamed persons, who shall be considered the trustees of said loan; that is to say, * * * who shall have power to fill all vacancies that may occur in their number. They shall have power to make loans of said bonds to good, solvent companies or individuals on the following terms; that is to say: When persons engaged in manufacturing business shall have invested in their business thirty-five (35) per cent. of the amount proposed to be employed in the business of manufacturing, clear of all liabilities, to be shown to said trustees by affidavits of the applicants, or by other satisfactory evidence, and when such proof is furnished, then said trustees, five members concurring, may lend to such applicants such amounts of said bonds as they may deem proper and judicious, not, however, to exceed 65 per cent. of the capital proposed to be used in manufacturing by the applicant: provided, however, when such loans shall be made, the interest thereon shall be paid by the borrower semi-annually to the treasurer of said city; and 5 per cent. of the principal shall be paid annually to the said city by the borrower, to be placed to the account of the sinking fund of said city, until the several loans are paid in full. The said loans shall be secured by deed of trust or mortgage on real estate, or by other satisfactory security, sanctioned by said trustees. And provided, also, that no bonds shall be issued under this section until a majority of the qualified voters of said city concur in the same, by voting for or against the same, at an election to be held for that purpose.'

On the seventeenth of April, 1869, an election was held in the city of Parkersburg, under authority of an ordinance passed by the mayor and city council of said city, 'upon the proposition to suthorize the said city council to issue bonds of the said city to the amount of $200,000, to be loaned to manufacturers under the provisions of said law and said ordinance.' At said election 441 votes were cast in favor of said proposition, and 19 against it. On the sixth of September, 1870, a communication having been received by the city council from M. J. O'Brien & Bro. in regard to the erection of a manufacturing establishment and marine railway within the city limits, it [1 S.Ct. 444] was 'resolved that the council agree, when the trustees of the improvement loan certify that the Messrs. O'Brien & Bro. have satisfactorily

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secured the bonds loaned to them, and complied with the act of the legislature authorizing the loan of said bonds, that they will release said parties from city taxation on their property, to the amount of bonds invested in the same, not exceeding $20,000: provided, however, the release shall extend so long as the said property shall be used or operated as a manufacturing establishment and marine railway, but not, in any event, to exceed 20 years.'

Nothing further was done on the subject until after section 8 of article 10 of the new constitution of West Virginia went into operation on the twenty-second of August, 1872, which was as follows:

'(8) No county, city, school district, or municipal corporation, except in cases where such corporations have already authorized their bonds to be issued, shall hereafter be allowed to become indebted, in any manner, or for any purpose, to an amount, including existing indebtedness, in the aggregate exceeding 5 per centum on the value of the taxable property therein, to be ascertained by the last assessment for state and county taxes previous to the incurring of such indebtedness; nor without, at the same time, providing for the collection of a direct annual tax sufficient to pay, annually, the interest on such debt, and the principle thereof, within, and not exceeding, 34 years provided, that no debt shall be contracted under this section, unless all questions connected with the same shall have been first submitted to a vote of the people, and have received three-fifths of all the votes cast for and against the same.'

On the twenty-second of April, 1873, the city council adopted the following resolution:

'Be it resolved by the mayor and council of the city of Parkersuburg, that, in the event of the firm of M. J. O'Brien & Bro. taking from the city a loan of twenty thousand (20,000) dollars of its bonds, authorized under former resolution, dated September 6, 1870, for manufacturing purposes, and paying punctually the interest thereon and five per cent. (5) of the principal for sixteen years, the said firm be released from any further payments, and the balance of said bonds be paid by the city, and the said M. J. O'Brien & Bro. are released from making a marine railway.'

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At a meeting of the city council on the thirteenth of May, 1873, the trustees of said loan made a report, showing that they had adopted the following resolution:

'Whereas, M. J. O'Brien and W. S. O'Brien, composing the firm of M. J. O'Brien & Bro., are desirous of obtaining a loan of the bonds of the city, under and by authority of an act of the legislature of West Virginia, passed December 15, 1868, for manufacturing purposes, to the amount of $20,000, for the purpose of aiding them in the erection of a foundry and machine works in the city of Parkersburg; and whereas, for the purpose of erecting [1 S.Ct. 445] these works, they have bought of Mrs. Joanna Wait, widow of Walton Wait, deceases, and also from her as the guardian of Bettie C. Wait, infant heir of Walton Wait, deceased, lot No. 80 in said city of Parkersburg, on Kanawha street, being 85 by 170 feet, and have received a conveyance from her of said lot, both as the widow of said Walton Wait and as the guardian of said Bettie C. Wait; and whereas, it appears, by a schedule of personal property of said M. J. O'Brien & Bro., verified by affidavit, and now in the hands of the city attorney, that said M. J. O'Brien & Bro. are the owners of $15,000 worth of personal property in their works at Volcano, free of incumbrance, we, therefore, recommend to the city council of the city of Parkersburg, upon the said M. J. and W. S. O'Brien and their wives executing a deed of trust to the said city on the said $15,000 worth of personal property, as well as upon the said lot No. 80, the city council to take from Mrs. Joanna Wait, or some one for her, bank stock, with power of attorney to dispose of the same, or solvent bonds, to the amount of $15,000, as security that said Joanna Wait, guardian, will obtain from the circuit court of Wood county, within two years, authority to convey to M. J. and W. S. O'Brien the said lot No. 80, for and on behalf of said ward, and when said authority is obtained, and said deed made, said stock or bonds to be given up, then the city council may deliver to said M. J. and W. S. O'Brien, upon the deposit of the aforesaid collaterals, $10,000 of said city bonds; and when said M. J. and W. S. O'Brien have put a building or buildings on said lot ready for the roof, costing not less than $8,000 when completed, shown by bills rendered and authenticated for same to the council, and when said Joanna Wait, guardian of said Bettie C. Wait, by the authority of the said circuit court of Wood county, has conveyed for and on behalf of her said ward the said lot No. 80, free of incumbrance, to said O'Brien & Bro., or made a further deposit of bank stock or

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bonds to the amount of $8,000, under the conditions aforesaid, as security that she will obtain such authority within two years from the date hereof, and make said conveyance, which shall be held by said city as security for the payment of said bonds and interest until said deed is made by authority of said court, then said city...

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