Branch v. Commissioners of Sinking Fund

• Decision Date: 09 April 1885
• Citation: 80 Va. 427
• Parties: BRANCH v. COMMISSIONERS OF SINKING FUND.
• Court: Virginia Supreme Court

80 Va. 427

BRANCH v. COMMISSIONERS OF SINKING FUND.

Supreme Court of Appeals of Virginia.

April 9, 1885

Petition of Thomas Branch & Co. for a writ of mandamus to compel the commissioners of the sinking fund of the state of Virginia, to fund two coupon bonds of the state, numbered 7,742 and 4861, and dated August 4th 1853, and January 1st, 1867, respectively, and payable to bearer; which bonds had been redeemed by the state, and a registered bond, numbered 595, dated January 11th, 1866 issued instead of number 7742, and a coupon bond, dated January 1st, 1866, issued instead of number 4861; and which bonds, numbered 7742, and 4861, respectively, had been subsequently stolen from the treasury of the state, and had been afterwards purchased, bona fide for value without notice of the theft, by the petitioners from one John B. Manning, a broker and member of the New York stock exchange.

Opinion states the case.

Pegram & Stringfellow, for petitioners.

Attorney-General, F. S. Blair, and Judge E. C. Burks, for respondents.

OPINION

FAUNTLEROY, J.

Upon the petition of John P. Branch and Fred. R. Scott, partners trading under the name of Thomas Branch & Co., representing that, on the 2d of June, 1879, they purchased from John B. Manning, a broker, and member of the New York stock exchange, a coupon bond of the state of Virginia, issued under an act passed by the general assembly, May 25th, 1852, dated August 4th, 1853, of the par value of $1,000, and numbered 7742; and on the 24th day of June, 1879, they purchased from the same party another coupon bond of the par value of $500, numbered 4861, and issued under an act passed March 2d, 1866, and dated January 1st, 1867, for which they paid the full market price; that both of said bonds are payable to bearer, and redeemable after the 1st day of January, 1887; that under the acts of February 14th, 1882, and November 29th, 1884, they are entitled to have said bonds, with the coupons attached, funded into or exchanged for bonds, or a bond and fractional certificates, as provided in said acts; that Morton Marye, first auditor of the state, F. G. Ruffin, second auditor, and Isaac R. Barksdale, treasurer, constitute the board of commissioners of the sinking fund, and are charged by law with the duty of issuing bonds and fractional certificates, under the aforesaid acts of February 14th, 1882, and November 29th, 1884, and of exchanging the same for the bonds and coupons held by petitioners; that the petitioners presented their said bonds, and coupons attached, from January 1st, 1880, inclusive, to the said board of commissioners of the sinking fund, and demanded that they should fund or exchange the same, and issue to them the bond and fractional certificates to which they are entitled under the terms and provisions of the aforesaid acts of Feb'y 14th, 1882, and Nov'r 29th, 1884, which the said board refused to do, upon the ground that the said bonds were stolen; a rule was awarded by this court against the said Morton Marye, first auditor, Frank G. Ruffin, second auditor, and Isaac R. Barksdale, treasurer, constituting the board of commissioners of the sinking fund, to appear here on the 5th day of March, 1885, and show cause, if any they can, why the commonwealth's writ of mandamus should not be awarded the petitioners to command the said Morton Marye, first auditor, Frank G. Ruffin, second auditor, and Isaac R. Barksdale, treasurer, constituting the board of commissioners of the sinking fund, to issue to petitioners the bond and fractional certificates to which they allege themselves to be entitled under the said acts of February 14th, 1882, and November 29th, 1884, in manner and form, and for the amounts required by said acts, in exchange for their bonds and coupons aforesaid.

To this rule nisi the respondents make return, and demur to the petition and to the rule as insufficient in law, and answer, that they believe that the two bonds with the coupons attached referred to in the rule and filed with the petition, to-wit: bond No. 7742, for $1,000, dated August 4th, 1853, and bond No. 4861, for $500, dated January 1st, 1867, were duly issued by the commonwealth at their respective dates. That both of these bonds were, after being issued, duly redeemed by the commonwealth, by giving in exchange for them other bonds of the commonwealth, to-wit: a registered bond No. 595, dated January 11th, 1860, in lieu of bond No. 7742, and a coupon bond, dated January 1st, 1866, in lieu of bond No. 4861, as shown by duly attested copies of the records in the offices of the treasurer and second auditor, herewith filed as a part of this answer. The said bonds No. 7742 and No. 4861, were taken in by the state at the respective dates of redemption thereof, and filed by the treasurer for preservation in his office. Though noted on the records aforesaid, by marks of cancellation, as cancelled, yet, as it appears, no actual marks of cancellation were then impressed on the face of said bonds, and afterwards they were stolen or unlawfully abstracted from the office of the treasurer by some person or persons unknown to respondents; and in June, 1879, came into the hands of petitioners (Thomas Branch & Co.), who presented them, on the 17th day of August, 1882, to the then commissioners of the sinking fund, to be funded under the act of the general assembly (popularly known as the " " Riddleberger Bill" ), approved February 14th, 1882.

When the bonds were thus presented, it was discovered, from the records of the treasurer's office, after R. W. N. Noland, a clerk in the said office, had put marks of cancellation on said bonds and the coupons attached, that the said bonds had theretofore been redeemed as aforesaid, and noted on said records by marks as cancelled; and thereupon the then commissioners of the sinking fund refused to fund them. Afterwards, to-wit: on the day of , 1885, the petitioners (Thomas Branch & Co.) presented the said bonds, with the coupons attached, to respondents, then and now commissioners of the sinking fund, and asked that they be funded, under the act aforesaid of February 14th, 1882, and the act amendatory thereof, approved November 29th, 1884. Respondents, as commissioners aforesaid, refused to fund the said bonds and coupons, and they are advised that they properly so refused, and cannot be required by this honorable court to fund them.

First. Because the said bonds, with the coupons, having been stolen, or unlawfully abstracted from the custody of the state, after they had been redeemed and taken in as aforesaid, she is not liable for them to the petitioners, although they may be, as they claim to be, bona fide purchasers for value, without notice.

Secondly. Because even if the state be so liable, she has given no authority to respondents, either by the act aforesaid of February 14th, 1882, or any other act, to fund said bonds and coupons under the circumstances stated. To this return the relators demurred.

The relators claim that these bonds and coupons are negotiable instruments, having all the qualities of negotiable paper and that they are bona fide holders thereof for valuable consideration, and had no notice of the theft at the time they acquired them: and that, as such, they are entitled to fund or exchange them under and according to the terms and intendment of the act of February 14th, 1882 (known as the " Riddleberger bill" ), and the act of November 29th, 1884,...