Board of Com'rs of Oxford, N.C. v. Union Bank of Richmond, Va.

• Decision Date: 11 August 1899
• Docket Number: 297.
• Citation: 96 F. 293
• Parties: BOARD OF COM'RS OF OXFORD, N.C., et al. v. UNION BANK OF RICHMOND, VA.
• Court: U.S. Court of Appeals — Fourth Circuit

96 F. 293

BOARD OF COM'RS OF OXFORD, N.C., et al. v. UNION BANK OF RICHMOND, VA.

No. 297.

United States Court of Appeals, Fourth Circuit.

August 11, 1899

R. O Burton, for plaintiffs in error.

C. M Busbee and J. S. Manning (John W. Hinsdale, on the brief) for defendant in error.

In Error to the Circuit Court of the United States for the Eastern District of North Carolina.

Before GOFF, Circuit Judge, and MORRIS and WADDILL, District Judges.

GOFF Circuit Judge.

This action at law was brought in the circuit court of the United States for the Eastern district of North Carolina by the Union Bank of Richmond, Va., a corporation organized under the laws of the state of Virginia, against the board of commissioners of Oxford, a municipal corporation existing under the laws of the state of North Carolina. The object of the suit was to recover the amount claimed by the plaintiff to be due from the defendant for interest on certain bonds as shown by coupons then in the possession of the plaintiff, and also to compel the defendant, by mandamus, to levy taxes and pay the plaintiff the sum due it.

The general assembly of the state of North Carolina, at its session held in the year 1891, passed an act to incorporate the Oxford & Coast Line Railroad Company. Laws 1891, c. 315. Under the provisions of this act certain counties, cities, towns, and townships were authorized to issue bonds to aid in the construction of said railroad.

On March 9, 1891, certain of the citizens and taxpayers of the town of Oxford petitioned the mayor and board of commissioners of that town to provide for an election, under the provisions of the then existing laws, on the proposition to subscribe the sum of $40,000 to aid in the building of the Oxford & Coast Line Railroad, and to issue the bonds of said town to that amount for such purpose. Such election was ordered and duly held, with the result that the bonds were authorized to be issued. On the 4th of August, 1891, at a meeting of the board of commissioners of Oxford, the following order was passed and entered of record:

'Resolved, that the bonds of the town of Oxford, to the amount of forty thousand dollars, of the denomination of one thousand dollars each, payable on the 1st day of December, 1921, with interest not exceeding six per cent. per annum, payable on the first days of June and December every year until maturity, with the right to the town, after ten years, upon three months' notice in some newspaper published in the town of Oxford and the cities of Baltimore and New York, to redeem said bonds, upon paying the sum of $1,050, and the accrued interest on each bond, and upon the completion of a contract by the authorities of the Oxford & Coast Line Railroad for the construction of the same, be delivered to the president of said railroad company to aid or assist in building said railroad, and that whatever proportion of said $40,000 is used in building and equipping said road shall be considered a subscription to the capital stock of said railroad, and a certificate shall be issued to the town of Oxford for stock to said amount.'

On the 14th day of July, 1892, the Oxford & Coast Line Railroad Company, together with one James T. Pruden, instituted a proceeding for a mandamus in the superior court of Granville county, N.C., against the board of commissioners of Oxford, returnable to July term, 1892. In the complaint then filed the facts hereinbefore stated were referred to, and, in addition, it was set forth that on the 26th of February, 1892, a contract was duly entered into by and between said railroad company and James T. Pruden for the construction and operation of the road from Dickerson's Station, on the Durham & Northern Railroad, to the town of Oxford; and that on the 3d day of March, 1892, said Pruden began the actual construction of said line of road, and had been, and then was, engaged in grading and preparing the roadbed, and would soon be ready to lay the track and complete the road for the transportation of freight and passengers; that on May 2, 1892, the said board of commissioners adopted a resolution concerning said bonds, which attempted to nullify the action of said board taken when the result of the election was declared, and that the mayor of the town of Oxford had refused to sign the ordinance directing said subscription, and that said board of commissioners have resolved to and do uphold him in such refusal, contrary to the plighted faith of said town as expressed at said election, and as declared by the resolution of the commissioners themselves; also that the railroad company was desirous of performing its contract with said Pruden, and was unable to do so because of the refusal of said commissioners to issue and deliver the bonds. Therefore the plaintiff in such petition prayed that the defendants be required to perform their said contract, and that a writ of mandamus issue commanding said board to issue the $40,000 of bonds so subscribed by said town, and for other and proper relief. The defendants duly answered the petition, and, pending the controversy, an agreement of compromise was entered into between the railroad company, its contractor, Pruden, and the board of commissioners of Oxford, by which it was provided that, in the adjustment of the existing differences, the town should issue its bonds for $20,000 (in the sum of $1,000 each, payable August 1, 1922, with interest, as shown by coupons attached), which purport on their face to be issued under and in pursuance of said chapter 315, Laws 1891, and chapter 21 of the Private Laws of 1885, and the election held April 27, 1891, as also under the said agreement of compromise, which was to be entered in said suit as the judgment of the superior court of Granville county, with the assent of all the parties thereto. The compromise agreement was dated July 25, 1892, and the judgment of the court, in substance the same as the agreement, was entered during its July term, 1892. On August 1, 1892, the board of commissioners of Oxford issued 20 bonds of the denomination of $1,000 each, which were delivered to the president and treasurer of the Oxford & Coast Line Railroad Company. It is recited on the face of each of said bonds, as follows:

'This bond is issued in pursuance of the powers and the authority granted by the state of North Carolina, as provided in chapter 49 of the Code of North Carolina, and in pursuance of the authority granted by section 30 of the charter of said town of Oxford, which is embraced in chapter 21 of the Private Laws of 1885, as passed by the general assembly of said state, and in pursuance of the authority granted by chapter 315 of the Laws of 1891, passed by the general assembly of North Carolina, ratified the 5th day of March, 1891, entitled 'An act to incorporate the Oxford & Coast Line Railroad Company,' and in pursuance of an election held in said town of Oxford on the 27th day of April, 1891, and of a settlement and adjustment of a controversy and litigation in which the Oxford & Coast Line Railroad Company et al. were plaintiffs and the board of commissioners of Oxford and the mayor of said town were defendants, adopted by the board of commissioners July 25, 1892, and the judgment and decree of his honor, H. G. Connor, judge presiding at the hearing of said action, at July term, 1892, of Granville superior court.'

The plaintiff below, on the 12th day of September, 1892 purchased in good faith, in the usual course of business, 16 of said bonds, paying for each the sum of $975, the plaintiff having no other notice than such as the law implies and as is contained on their face concerning such bonds. The coupons maturing May 1, 1893, were paid by defendants below when the same were presented. The other coupons, showing the interest...