Black v. Fishburne

• Decision Date: 08 January 1910
• Citation: 66 S.E. 681,84 S.C. 451
• Parties: BLACK v. FISHBURNE et al.
• Court: South Carolina Supreme Court

66 S.E. 681

84 S.C. 451

BLACK v. FISHBURNE et al.

Supreme Court of South Carolina

January 8, 1910

Original petition for injunction by H. W. Black, Jr., against E. L Fishburne, as intendant, and others. Petition dismissed.

W. J Fishburne, for petitioner. W. B. Gruber, for respondents.

WOODS J.

H. W Black, a resident and taxpayer of the town of Walterboro filed his petition in this court on the -- day of January, 1910, alleging that the defendants, the intendant and wardens of the town, were about to issue illegally bonds of the town to the amount of $20,000, maturing in 10 years, for the purpose of raising funds to be used in the erection of a school building, and praying that such bond issue be prevented by an order of injunction. Sections 2021 and 2022 of the Civil Code of 1902 authorize the issue by towns of bonds for school purposes upon compliance with the requirements therein set forth. The petition sets out the steps taken under these sections, and shows that all formal requirements of the law have been met, and that the bonds will be valid obligations of the town, unless rendered invalid by the following considerations, which are alleged against their validity:

"(a) That the said bonds bearing date August 2, 1909, are in contemplation of law issued as of that date, and the ordinance of the town council of date July 30, 1909, as amended by ordinances of date August 28, 1909, and October 11, 1909, are not in compliance with the requirement contained in section 7 of article 8 of the state Constitution that 'cities and towns shall on the issuing of such bonds create a sinking fund for the redemption thereof at maturity,' it being respectfully submitted that the sinking fund created by ordinances has been created after, and not before, the issuing of such bonds.

"(b) It appearing that the charter of the town of Walterboro will expire during the year 1910, long prior to the maturity of the bonds thus issued, it is respectfully submitted that the town of Walterboro is without authority to issue bonds payable at a period beyond its corporate life.

"(c) That after the town of Walterboro is reincorporated under the renewal law, as set forth in this petition, the town council of the new corporation would be without authority to execute, sell, and deliver as valid obligations of the town the bonds authorized by the former corporation." The defendants demurred to the petition on the ground that it does not state facts sufficient to constitute a cause of action, because it appears on the face of the petition that the bonds will be legal and valid.

The first position stated against the validity of the bonds seems to have been taken in excess of caution. The Constitution in section 7, art. 8, providing for issue of bonds by cities and towns, requires "that such cities and towns shall on the issuing of such bonds create a sinking fund for the redemption thereof at maturity." Even if it be assumed that this means that the sinking fund must be created before the bonds can be legally issued, the validity of these bonds would not be impaired. The date August 2, 1909, printed or written on the bond, is not conclusive of the date of the issue. They are still in fact in the hands of the town council, and cannot be regarded "issued" until a contract of sale is completed and the bonds actually or constructively delivered. Cleveland v. Spartanburg, 54 S.C. 83, 31 S.E. 871; Brownnell v. Town of Greenwich, 114 N.Y. 518, 22 N.E. 24, 4 L. R. A. 685; Yesler v. Seattle, 1 Wash. St. 322, 25 P. 1014; State v. Pierce, 52 Kan. 528, 35 P. 19.

The second objection that the charter of the town of Walterboro will expire during the present year, long before the expiration of the 10 years for which the bonds are to run, we think is disposed of by the terms of the sections 2021 and 2022 of the Civil Code, which authorize cities and towns to issue bonds for erecting school buildings and the other purposes therein mentioned. The statute is made to apply to any incorporated city or town, and, after the petition has been filed and the election has been held with a result favorable to the bond issue, the municipal authorities have no discretion to refuse to issue the bonds. There are no exceptions in the law, and it would make no difference that the charter of the town would expire immediately after the election and issue of the bonds, for the statute would nevertheless apply and authorize the issue. The terms of the act are so broad that even in such a case the municipal authorities are given full power to fix any date for the maturity of the bonds they may see fit. When a town council thus exercises the power thus given and fixes the maturity in issuing the bonds, it makes a contract for a municipality under express authority of the General Assembly; and the validity of the contract cannot be impaired by the fact that it is to operate beyond the time limit of the charter. That the General Assembly did not intend that such a limitation on the power of the municipal authorities to fix the maturity of the bonds should be implied is clearly shown by other legislation on the same general subject. By reference to Civ Code, § 1963, it will be seen the corporate life of towns of more than 1,000 and of less than 5,000 inhabitants is limited to 30 years, yet all towns, including those of the class above mentioned, are authorized by section 2008 to...