City of Florence v. Anderson, No. 4228.

CourtUnited States Courts of Appeals. United States Court of Appeals (4th Circuit)
Writing for the CourtPARKER, NORTHCOTT, and SOPER, Circuit
Citation95 F.2d 777
Decision Date05 April 1938
Docket NumberNo. 4228.
PartiesCITY OF FLORENCE v. ANDERSON et al.

95 F.2d 777 (1938)

CITY OF FLORENCE
v.
ANDERSON et al.

No. 4228.

Circuit Court of Appeals, Fourth Circuit.

April 5, 1938.


95 F.2d 778

William H. Smith, of Florence, S. C. (J. D. Gilland, of Florence, S. C., on the brief), for appellant.

Lanneau D. Lide, of Marion, S. C. (Lide & Schoolfield, of Marion, S. C., on the brief), for appellees.

Before PARKER, NORTHCOTT, and SOPER, Circuit Judges.

PARKER, Circuit Judge.

This is an appeal from a judgment for the balance due on four negotiable promissory notes of $10,000 each issued in the year 1931 by the City of Florence, S. C. The notes were payable to bearer, and pledged the faith and credit of the city to their payment. They were issued pursuant to resolutions of the city council directing that the taxes of that year be pledged for their payment, and contained recitals to the effect that they were issued pursuant to resolution of the council, that all conditions precedent to their issuance had been performed in strict compliance with the Constitution and laws of the state, and that they were within "every debt and other limit prescribed by law." They were acquired by a national bank and were pledged by it before maturity with the state treasurer to secure a deposit of state funds. Upon the failure of the bank they were sold to enforce the rights of the pledgee, were acquired upon the sale by plaintiff Anderson, and were pledged by him as collateral security to his coplaintiff, the Wilmington Savings & Trust Company. It was shown upon the hearing that at least three of the notes were issued to pay off pre-existing indebtedness of the city which matured during the year 1931, and that the total of tax anticipation notes issued during that year was $333,000, or more than double the amount of the current taxes. It was not shown, however, that the bank or any subsequent holder of the notes had knowledge of these facts; and there is no contention that when the state treasurer took the notes in pledge he did not acquire them in good faith and for value.

The case was heard by the court below without a jury. The city contended that the notes were payable only out of taxes for the current year, and that they were invalid because issued, not for current expenses, but to pay a pre-existing indebtedness, and also because the aggregate of the notes issued during the year exceeded the year's taxes. These points were saved by motion for judgment on the ground of the alleged insufficiency of the evidence and by exceptions to the exclusion of testimony offered.

The first question to be determined is whether the notes sued on are negotiable instruments pledging the general credit of the city, or whether they are mere nonnegotiable certificates of indebtedness payable only out of the taxes of the current year. This is the same question which we have just decided contrary to the contention of the city in the case of City of Georgetown v. Elliott et al., 4 Cir., 95 F. 2d 774; and in accordance with our decision there we hold that the notes, which are in form negotiable municipal obligations, were authorized as such by section 4554 of the Civil Code of 1922, and that there is nothing in article 8, § 7, of the Constitution of the state, which prevents a municipal corporation issuing tax anticipation notes of this character. Our reasons for so holding are fully set forth in the opinion in that case,...

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4 practice notes
  • City of Georgetown v. Elliott, No. 4267.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (4th Circuit)
    • 5 Abril 1938
    ...city. The instruments involved in Bolton v. Wharton, supra, were not tax anticipation notes at all, and did not purport to be. They were 95 F.2d 777 not even notes executed for a proper corporate purpose but in payment of a subscription to a private enterprise. In Tarver v. Town of Johnston......
  • U.S. Fidelity & Guaranty Co. v. Wells, No. 5--4794
    • United States
    • Supreme Court of Arkansas
    • 3 Marzo 1969
    ...Co., 137 Cal.App. 180, 30 P.2d 446 (1934); In re Canal Bank & Trust Co., 186 La. 366, 172 So. 421 (1937); City of Florence v. Anderson, 95 F.2d 777 (4th Cir.1938); Wheeler v. Wallace, 167 S.W.2d 1043 (Tex.1943)); or without payment of value (Ferber v. Third Street Realty Co., 166 App.Div. 7......
  • Knott County v. Aid Ass'n for Lutherans, No. 9571.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (6th Circuit)
    • 24 Enero 1944
    ...innocent holders, that the obligations were issued for some other purpose not within its power. City of Florence v. Anderson, 4 Cir., 95 F.2d 777. Appellant relies upon Sutliff v. Lake County Commissioners, 147 U.S. 230, 13 S.Ct. 318, 37 L.Ed. 145, where it was held, under the circumstances......
  • St. Paul Fire & Marine Ins. Co. v. TOWN OF MONONGAH, W. VA., Civ. A. No. 674-F
    • United States
    • United States District Courts. 4th Circuit. Northern District of West Virginia
    • 1 Junio 1962
    ...(1944), and the cases cited in an exhaustive note on the subject in 158 A.L.R. 938. See also City of Florence v. Anderson (Cir. 4, 1938), 95 F.2d 777. The order of the Public Service Commission is a nullity, and the plaintiff is entitled to the declaratory judgment as prayed for and a prope......
4 cases
  • City of Georgetown v. Elliott, No. 4267.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (4th Circuit)
    • 5 Abril 1938
    ...city. The instruments involved in Bolton v. Wharton, supra, were not tax anticipation notes at all, and did not purport to be. They were 95 F.2d 777 not even notes executed for a proper corporate purpose but in payment of a subscription to a private enterprise. In Tarver v. Town of Johnston......
  • U.S. Fidelity & Guaranty Co. v. Wells, No. 5--4794
    • United States
    • Supreme Court of Arkansas
    • 3 Marzo 1969
    ...137 Cal.App. 180, 30 P.2d 446 (1934); In re Canal Bank & Trust Co., 186 La. 366, 172 So. 421 (1937); City of Florence v. Anderson, 95 F.2d 777 (4th Cir.1938); Wheeler v. Wallace, 167 S.W.2d 1043 (Tex.1943)); or without payment of value (Ferber v. Third Street Realty Co., 166 App.Div. 73......
  • Knott County v. Aid Ass'n for Lutherans, No. 9571.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (6th Circuit)
    • 24 Enero 1944
    ...innocent holders, that the obligations were issued for some other purpose not within its power. City of Florence v. Anderson, 4 Cir., 95 F.2d 777. Appellant relies upon Sutliff v. Lake County Commissioners, 147 U.S. 230, 13 S.Ct. 318, 37 L.Ed. 145, where it was held, under the circumstances......
  • St. Paul Fire & Marine Ins. Co. v. TOWN OF MONONGAH, W. VA., Civ. A. No. 674-F
    • United States
    • United States District Courts. 4th Circuit. Northern District of West Virginia
    • 1 Junio 1962
    ...(1944), and the cases cited in an exhaustive note on the subject in 158 A.L.R. 938. See also City of Florence v. Anderson (Cir. 4, 1938), 95 F.2d 777. The order of the Public Service Commission is a nullity, and the plaintiff is entitled to the declaratory judgment as prayed for and a prope......

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