Greenhow v. Vashon

• Citation: 81 Va. 336
• Parties: GREENHOW, TREASURER, v. VASHON.
• Decision Date: 14 January 1886
• Court: Virginia Supreme Court

81 Va. 336

GREENHOW, TREASURER, v. VASHON.

Supreme Court of Appeals of Virginia.

January 14, 1886

Error to judgment of hustings court of city of Richmond, rendered 1885, on a petition by George S. Vashon, a tax-payer in said city, to obtain from the said court a writ of mandamus to compel S. C. Greenhow, treasurer of said city, to receive of him (Vashon) coupons cut from bonds of the State of Virginia, issued under the act approved March 31, 1871, in payment of the State taxes for which said Vashon was indebted for the year 1884. Greenhow demurred to Vashon's petition, and then answered, setting forth his reasons for refusing to receive said coupons. The hustings court sustained the demurrer, and there being no dispute about the facts, issued a peremptory mandamus as aforesaid.

Opinion states the case.

Attorney-General F. S. Blair and W. R Meredith, for the plaintiff in error.

R L. Maury, and Sands & Bryan, for the defendant in error.

OPINION

RICHARDSON J.

The defendant in error, George S. Vashon, a tax-payer in the city of Richmond, being indebted to the State of Virginia for State taxes, for the year 1884, to the amount of $35.63, on the 12th day of November of that year tendered to S. C. Greenhow, the treasurer of said city, and the officer appointed by law to receive said tax, in payment thereof, certain coupons, cut from bonds of the State of Virginia, issued under the act of the general assembly, approved March 31, 1871, entitled, " An act to provide for the funding and payment of the public debt," one for one thousand dollars, No. 3174, and one for one hundred dollars, No. 1279; said coupons being of the denomination of $30.00 and of $3.00, which coupons were then past due according to the stipulated time of payment mentioned on the face thereof. At the same time the said Vashon offered to pay said treasurer said tax in legal tender notes and coin, and demanded that said treasurer receive said coupons, along with said legal tender notes and coin, for the purpose of identification and verification in manner and form as required by an act of the general assembly, approved January 14th, 1882, entitled, " An act to prevent frauds upon the Commonwealth and holders of her securities in the collection and disbursement of revenue."

The treasurer offered to accept the money in discharge of said taxes, but refused to accept the coupons, and particularly so much thereof as were offered in payment of such portion of said taxes as was set apart by the constitution and laws of this State for the support and maintenance of the public free schools of this Commonwealth. But Vashon refused to pay in money unless the coupons were accepted and forwarded by the said treasurer to said hustings court for verification as aforesaid; and thereupon obtained from said court a rule nisi against said treasurer, requring him to appear and show cause, if any he could, why a mandamus should not issue compelling him to receive the coupons tendered as aforesaid. The treasurer demurred to Vashon's petition, but the court overruled the demurrer, and he then answered, setting forth his reasons for refusing to receive said coupons--which answer is as follows:

1. " That the constitution of Virginia provides in section 7, Article VIII, what specific sums shall be set apart as a permanent and perpetual literary fund, and includes such other sums as the general assembly may appropriate.

2d. That section 8, of same article, provides that the general assembly shall apply the annual interest on the literary fund and an annual tax on the property of the State of not less than one mill nor more than five mills on the dollar for the benefit of the public free schools.

3d. That in pursuance of this constitutional authority the general assembly has provided in acts of 1883-'84, p. 561, that on tracts of land and lots a tax of ten cents on every hundred dollars of the assessed value thereof shall be levied, which shall be applied to the support of the public free schools of the State.

4th. Again, the last general assembly, in acts of 1883-'84, p. 683, has provided that all taxes assessed on property--real or personal--and dedicated to the maintenance of the public free schools of the State, shall be paid and collected only in lawful money of the United States, and shall be paid into the treasury to the credit of the free school fund, and shall be used for no other purpose whatsoever."

And the respondent averred that to have forwarded such of the coupons as were offered in payment of the tax dedicated to the public free schools would have been a violation of the constitution and laws above referred to.

To this answer the petitioner, Vashon, demurred, and the treasurer joined therein, and there being no controversy as to the facts at the hearing, the said hustings court sustained the demurrer, and awarded a peremptory mandamus requiring the said treasurer to receive the money mentioned in the petition-- to-wit, $35.63, in payment of the taxes, together with the coupons mentioned therein, and to forward the coupons to the court for verification according to law.

The ticket for the taxes against Vashon represented that there was due the Commonwealth from him for the year 1884 on certain lots in said city " " government tax" to the amount of $25.97, and " school tax" to the amount of $9.66--total, $35.66; which separation and specification was made pursuant to section 113, chapter 450, Acts 1883-'84, p. 603. The coupons tendered as aforesaid are, on their face, made " receivable at and after maturity for all taxes, debts, and demands due the State."

On the application of the respondent, Greenhow, treasurer, a writ of error and supersedeas to said judgment was awarded by one of the judges of this court.

The precise question here involved has never before been presented to this court for determination. The decision in Antoni v. Wright, 22 Gratt. 833, though perhaps expressed in terms sufficiently broad to have done so, did not, however, embrace it, as the matter there adjudicated differed from the matter here to be passed upon, in that the latter depends upon specific provisions of our State constitution and legislative enactments made in pursuance thereof, whilst the former rests for the most part on general principles. The question here involved, briefly stated, is this: Do the matters set up in the respondent's answer constitute a sufficient defence in law for his refusal to accept the coupons tendered to him by the tax-payer, Vashon, and particularly so much of said coupons as were tendered in payment of such portion of the tax as had been set apart by law for the support of the public free schools of the Commonwealth? And the question thus stated is pregnant with another of vast importance to the people of this Commonwealth, and that is: Are sections 2 and 113 of chapter 450, of the acts of the general assembly of 1883-84, pp. 561 and 603, constitutional and valid?

Obviously, the questions thus presented make it incumbent upon this court to inquire into, though not to pass upon, the constitutionality and validity of the act of the general assembly of March 30, 1871, commonly known as the funding bill. And in doing this it becomes necessary to review the doctrine laid down in the majority opinion in Antoni v. Wright, supra, decided by this court in 1872. In his opinion in that case, Bouldin, J., speaking for the majority of the court, after stating the questions involved, starts out with this remark: " The first and all-essential question is, Was there a valid contract between the State and her bondholders?" The question in Antoni v. Wright arose on the act of March 7, 1872, which, in effect, repealed that feature of the funding act of March 30, 1871, which made coupons " receivable at and after maturity for all taxes, debts, and demands due the State."

Proceeding to answer the question propounded by himself, (was there, by virtue of the funding act of 1871, a valid contract between the State and her bondholders), Judge Bouldin calls attention to the fact that, prior to the dismemberment of this State, she had contracted a debt which, at the time of the passage of the funding act in 1871, amounted to some $40,000,000 of principal; that during the war, and by an act of violence the State was powerless to resist, about one-third of her territory and population was cut off and formed into the State of West Virginia; and that the State of West Virginia, so formed and constituted, had been admitted a member of the Federal Union; that both States in their constitutions and by legislation, had acknowledged their respective liability for a just and equitable proportion of the old debt; and that efforts had been made from time to time to adjust that liability, but that very little progress towards a settlement had been made. " " In the meantime" (says the same judge) " the payment of interest on the debt was, for a time, wholly suspended, and afterwards only partially resumed by the State of Virginia alone; whilst West Virginia had not, and has not to this day, paid any part of the debt, principal or interest; and the entire debt standing in the name of the State of Virginia, and her bonds being held for the whole amount, much anxiety was felt and manifested on the subject, as well by the State as by her creditors."

He then proceeds: " Under the circumstances, and hopeless of an early settlement with West Virginia, the State of Virginia proposed to her creditors, by the act aforesaid of the 30th of March, 1871, a separate adjustment of what she deemed her own indebtedness--which she assumed (italics ours) to be two-thirds of the entire debt. Her object, as declared in the preamble to the act, was ‘ to enable the State of West Virginia to settle...