Bank of Statesville v. Town of Statesville

• Decision Date: 31 January 1881
• Citation: 84 N.C. 169
• Court: North Carolina Supreme Court
• Parties: BANK OF STATESVILLE v. TOWN OF STATESVILLE.

84 N.C. 169

BANK OF STATESVILLE

v.TOWN OF STATESVILLE.

Supreme Court of North Carolina.

January Term, 1881.

CIVIL ACTION tried at August Special Term, 1879, of IREDELL Superior Court, before Gudger, J.

The plaintiff bank brought this action to recover the amount alleged to be due from the defendant town on account of the non-payment of certain coupon bonds issued by the defendant in aid of the construction of the Atlantic, Tennessee and Ohio railroad. Verdict and judgment for plaintiff, appeal by defendant.

Messrs. Reade, Busbee & Busbee and R. F. Armfield, for plaintiff .

Messrs. J. M. McCorkle, J. M. Clement and D. M. Furches, for defendant .

SMITH, C. J.

By an act of the general assembly, ratified and taking effect on January 26th, 1861, the town of Statesville was re-incorporated with prescribed boundaries, and its government committed to a board, consisting of a town magistrate and four commissioners, to be chosen by the electors therein, on the last Monday in February following, and every two years thereafter, on the same day. Acts 1860-'61, ch. 176.

It is enacted in section 7, that the said town magistrate and commissioners, or a majority of them, shall have full power and authority, by and with the consent of the majority of the voters within the limits of the corporation of the town of Statesville, to subscribe a number of shares to the capital stock of any work or works of internal improvement, in which they may have an interest, a sum not exceeding thirty thousand dollars.

The next section directs the manner of ascertaining the will of the electors, and, if it shall favor the proposed subscription, section nine declares, that “it shall be the duty of the said town magistrate and commissioners, to issue coupon bonds, signed by the town magistrate and commissioners, (and) by the town clerk and treasurer” (one and the same person) “in sums not exceeding five hundred dollars, bearing interest at six per cent., payable semi-annually, and redeemable within twenty years from the dates thereof, at any point or points within the state.” A proviso annexed, requires the levy of a sufficient tax to meet the interest and principal, as they fall due.

In pursuance of this authority, and after the approval of a popular vote, by the direction, and in behalf of, the board of commissioners, a subscription was made for five hundred shares, of the par value of fifty dollars each, in the capital stock of the Atlantic, Tennessee and Ohio railroad company, and a stock certificate issued therefor. The stock was afterwards sold by the board, for twenty thousand dollars, and the proceeds applied to the use of the town. In part payment for the stock, the board caused to be prepared and, on its behalf, authenticated by the signatures of the town magistrate and the treasurer, coupon bonds, in the sum of fifteen thousand dollars, and delivered to the agent of the railroad company, of which the following is the form:

+--------------------------------------+
                ¦STATE OF NORTH CAROLINA,      ¦       ¦
                +------------------------------+-------¦
                ¦Statesville, Iredell County.  ¦$500.00¦
                +--------------------------------------+
                

On the first day of July, Anno Domini eighteen hundred and eighty-one, the town of Statesville promises to pay to the Atlantic, Tennessee and Ohio railroad company, or bearer, the sum of five hundred dollars, with interest at the rate of six per centum per annum, payable semi annually on the first days of January and July in each year. This bond is issued in accordance with an act passed by the general assembly of the above state, in part payment of a subscription of twenty-five thousand dollars, made by said town, under said act.

In testimony whereof, the town of Statesville has authorized the town magistrate to sign, and her treasurer to countersign, and the seal of said town to be affixed, this the first day of July, 1861.

+--------------------------------------------------+
                ¦                               ¦C. L. SUMMERS,    ¦
                +-------------------------------+------------------¦
                ¦                               ¦Town Magistrate.  ¦
                +-------------------------------+------------------¦
                ¦C. A. CARLTON,                 ¦                  ¦
                +-------------------------------+------------------¦
                ¦Treasurer.                     ¦                  ¦
                +-------------------------------+------------------¦
                ¦Coupons attached to correspond.¦                  ¦
                +--------------------------------------------------+
                

These bonds were accepted by the treasurer of the railroad company, and a written acknowledgment thereof given, but, under an arrangement between the treasurer of the company and the treasurer of the town, were left in the hands of the latter to be sold for the benefit of the company, and most of them were disposed of through this agency, and such as were not, and the moneys received for such as were sold, were delivered to the company. A portion of the sold bonds were bought by R. F. Simonton, who conducted a banking business in the name of The Bank of Statesville, the coupons from which, as from others (from what source derived does not appear), are now in suit, at the instance of the plaintiff, his executrix, made a party during the progress of this action. The bonds sold to the testator by the company's agent were purchased, part at 90 and part at 95 cents on the dollar. The interest on all the bonds issued was regularly paid by the board from 1867 up to 1873, as proved by a witness who filled the office of clerk and treasurer during that interval, but no interest has been paid since.

The instructions asked and refused, may be condensed, and are embodied in these propositions:

1. The bonds are void for non-compliance with the directions of the statute, and the...