Brd.Foot v. City Of Fayetteville

• Decision Date: 07 June 1901
• Citation: 128 N.C. 529,39 S.E. 20
• Court: North Carolina Supreme Court
• Parties: BROADFOOT. v. CITY OF FAYETTEVILLE.

39 S.E. 20

128 N.C. 529

BROADFOOT.

v.CITY OF FAYETTEVILLE.

Supreme Court of North Carolina.

June 7, 1901.

CONSTITUTIONAL LAW—MUNICIPAL CORPORATIONS—BONDS—INTEREST. Const, art. 7, § 7, provides that no municipal corporation shall contract any debt, except for the necessary expenses thereof, unless by a vote of the majority of the qualified voters therein. Laws 1874-75, c. 248, enabled the town authorities to fund the then bonded indebtedness of the town, and to execute and deliver new bonds for like amounts in payment of the outstanding bonds, with interest not to exceed 8 per cent, the outstanding bonds having been issued under Laws 1852, c. 207, and carried interest at 6 per cent. The town, acting under Laws 1875 issued bonds to plaintiff with interest at 7 per cent., but no election was held on the question of authorizing the issue of the bonds. Held, that that part of the act increasing the rate of interest was contrary to the constitution, and hence the whole interest would fail.

Appeal from superior court, Cumberland county; Moore, Judge.

Action by C. W. Broadfoot against the city of Fayetteville to recover a debt represented by certain bonds of the town of Fayetteville. From a judgment in favor of plaintiff, for the amount of the bonds and interest at the rate of 7 per cent, both parties appeal. Modified.

Geo. M. Rose and Hinsdale & Lawrence, for plaintiff.

Busbee & Busbee and D. T. Oates, for defendant

Defendant's Appeal.

MONTGOMERY, J. The general assembly, on the 22d of March, 1875, enacted a law (Laws 1875, c. 24S) enabling the proper authorities of the town of Fayetteville to fund the then bonded indebtedness of the town contracted for subscription to stock of the Western Railroad Company, and to execute and deliver new bonds for like amounts in payment of and in exchange for the outstanding bonds, which had been issued under an act of the general assembly in December, 1852 (Laws 1852, c. 207), for the payment of the stock of the Western Railroad Company. The rate of interest named in the bonds issued under the act of 1852 was 6 per cent., and the rate provided for by the act of 1875 was to be not more than 8 per cent. The proper officers of the town of Fayetteville, under the authority of the act of 1875, issued to the plaintiff on the 1st day of January, 1876, the bonds which are the subject of this action, bearing 7 per cent, interest, and the plaintiff surrendered to the mayor and commissioners a like number of bonds and for like amount of principal which had been issued under the act of 1852. No election was held in the town of Fayetteville upon the question of authorizing the issue of the bonds which were to be issued under the act of 1875. The question for decision, as we see it, is whether or not the loss of the entire interest follows the action of the mayor and commissioners under the act of 1875 on account of a failure to submit the question of the increase in the rate of interest to the qualified voters of the town, under article 7, § 7, of the constitution. The contention of the plaintiff is that the debt has not been changed; that the principal amounts of the bonds are of "like sums" (the words of the act) as the principal in the bonds issued in 1852; that interest is a mere incident of a debt and that a change in the rate of interest is, therefore, no change in the debt, and, as a consequence, that it was not necessary to have submitted that increase to a popular vote. The defendant insists that...