Commissioners of Buncombe County v. Payne

• Decision Date: 06 November 1898
• Citation: Commissioners of Buncombe County v. Payne, 31 S.E. 711, 123 N.C. 432 (N.C. 1898)
• Parties: COMMISSIONERS OF BUNCOMBE COUNTY v. PAYNE, County Treasurer.
• Court: North Carolina Supreme Court

31 S.E. 711

123 N.C. 432

COMMISSIONERS OF BUNCOMBE COUNTY v. PAYNE, County Treasurer.

Supreme Court of North Carolina

November 6, 1898

Appeal from superior court, Buncombe county; Norwood, Judge.

Action by the commissioners of Buncombe county against W. R. Payne county treasurer, to have certain bonds declared void.From a judgment for plaintiffs, defendant appeals.Affirmed.

Faircloth C.J., and Furches, J., dissenting.

Battle & Mordecal, for appellant.

A. C Avery, Moore & Moore, and Mark W. Brown, for appellees.

CLARK J.

The bonds whose validity is impeached by the present action contain no recital of the authority for their issue, but the order of the board of county commissioners upon which the question of their issue was submitted to popular vote, in 1875, recites as authority chapter 166, Priv.Laws 1858-59, to "amend the charter of the Greenville & French Broad Railroad Company."That act could confer no such authority after the adoption of the constitution of 1868, which by section 14, art. 2, requires such acts to be passed in the manner therein prescribed.This is held in Board v. Call (at this term)31 S.E. 481, and the reason there given is that the adoption of the new constitution, with the restrictions as to issue of municipal bonds, "annulled all special powers remaining unexecuted and not granted in strict conformity with its requirements."This has been repeatedly held by the United States supreme court.Norton v. Board,129 U.S. 479, 490, 9 S.Ct. 322;Railroad Co. v. Falconer,103 U.S. 821;Wadsworth v. Supervisors,102 U.S. 534, 537;Town of Concord v. Portsmouth Sav. Bank,92 U.S. 625.Such was evidently the legislative view also, for by chapter 48, Acts 1871-72, the general assembly created a new body politic, under the name and style of the "Greenville & French Broad Railroad Company," and gave it all the rights and immunities conferred by the incorporation act of 1854-55 and the amendatory act of 1858-59.Whether this be treated as an entirely new act, or as an attempt to revive and renew powers conferred by the prior acts, above recited, it could grant no valid power to issue these bonds, or order an election upon the subject, because of noncompliance with the requirements of the constitution(article 2, § 14), in that the bill was not "read three several times in each house of the general assembly, and passed three several readings, which readings were not on three different days, and agreed to by each house, respectively, and the yeas and nays on the second and third reading of the bill were not entered on the journal."Board v. Call, supra;City of Charlotte v. Shepard,122 N.C. 602, 29 S.E. 842;Rodman v. Town of Washington,122 N.C. 39, 30 S.E. 118;Board v. Snuggs,121 N.C. 394, 28 S.E. 539;Union Bank of Richmond v. Commissioners of Town of Oxford,119 N.C. 214, 25 S.E. 966; and McGuire v. Williams (at this term)31 S.E. 627,--in all of which this constitutional provision has been carefully considered.

The defendants further contend that conceding the invalidity of the act of 1858-59, and confirmatory act of 1871-72, as authority to issue the bonds, still the commissioners had authority to order the election by virtue of chapter 171,Laws 1868-69(which is now Code, § 1996); but the county had theretofore no interest in the railroad, and no work was done thereon in this state till after the said election, in 1875.The bonds were therefore not authorized, because not "necessary to aid in the completion of any railroad."Board v. Snuggs, supra;Board v. Call, supra.Besides the reasons given in those cases, there is this further consideration, that, even if it be conceded that a general act might authorize elections to issue bonds as to all railroads partly completed (in which counties were interested) at the adoption of the constitution, to aid in their completion, this corporation was never organized till after the charter of reincorporation of 1871, and hence could acquire no rights except those conferred in conformity with the provisions of the constitution of 1868.Not only must the bonds be authorized by a popular vote (Const. art. 7, § 7), and the authority to hold the election granted by a statute passed in the mode required by Const. art. 2, § 14, but, to exceed double the state tax (which is necessary), the special purpose must be authorized by a special act of general assembly (Const. art. 5, § 6).A general act authorizing any and all counties to issue bonds for railroad purposes would be invalid, especially when (as is the case here) it is necessary to exceed the constitutional limitation to pay interest or principal.State v. Commissioners of Haywood Co.,122 N.C. 812, at page 815, 30 S.E. 352;Herring v. Dixon,122 N.C. 420, at page 424, 29 S.E. 368.

The bonds were issued in 1876, 1877, and 1878, by virtue of an unauthorized election, and are unconstitutional and void; counties being expressly prohibited from issuing bonds unless authorized in the manner prescribed by the constitution.Lewis v. City of Shreveport,108 U.S. 282, at page 286, 2 S.Ct. 634;Ottawa v. Carey,108 U.S. 110, 123, 2 S.Ct. 361.The payment of interest on the bonds by the county authorities is not an estoppel nor does it validate them.Such payments were as much without constitutional warrant as the original issue, and one illegal act cannot validate another.Doon Tp. v. Cummins,142 U.S. 366, citing, at page 376(12 S.Ct. 220), Marsh v. Fulton Co.,10 Wall. 676;Citizens' Savings & Loan Ass'n v. Topeka,20 Wall, 655;Daviess Co. v. Dickinson,117 U.S. 657, 6 S.Ct. 897;Norton v. Shelby Co.,118 U.S. 425, 451, 6 S.Ct. 1121.

There is an act of the legislature, and only one, that purports to validate these bonds.Priv.Laws 1876-77, c. 40.But that can have no effect, because it was not passed in the mode required by Const. art. 2, § 14.Whether, if it had been enacted in the constitutional mode, it could have supplied the original lack of power to submit the question to popular vote, is a question not now before us.The later act of 1893(chapter 172) does not purport to validate these bonds.It simply recites that the bonds had been issued by proper authority (which is a judicial, and not a legislative, question), and, under that erroneous impression, the legislature proceeded to authorize the issue of new bonds, payable "in gold coin,"--which is a deviation from the terms of the original bonds,--to be exchanged for the said bonds, or sold, and with the proceeds purchase or pay them.The act did not submit the issue of the new bonds to popular vote, as was the case in County of Jasper v. Ballou,103 U.S. 745, but specially provides that the new bonds "shall be regarded and held as a continuation of the bonded indebtedness created as aforesaid"; so that, if the bonds issued in 1876, 1877, and 1878 were invalid, the new bonds are equally so.Whether or not a subsequent legislature can validate bonds issued upon the strength of an election which was held without authority, it is very certain they cannot be validated by inference from an act authorizing a sale of new bonds (issued without a popular vote) to take up the first bonds.The validating act must be a direct enactment.The wisdom of the sovereign people has inserted in the organic law, as a protection to taxpayers, the provision to be found in section 14, art. 2, and legislation coming within its scope is void, unless the constitutional requirement is observed.It is put there for that purpose.Holders of county bonds, who have taken them without ascertaining if there was constitutional authority for their issue, cannot expect the courts to disregard the constitution to save them from the consequences of their negligence.The judgment below is affirmed.

FAIRCLOTH, C.J., dissents.

FURCHES J. (dissenting).

The purpose of this action is to have declared void certain coupon bonds issued by plaintiffs in 1895, 1896, and 1897 to the amount of $98,000.In 1855the legislature passed an act chartering a railroad company by the name and title of the "Greenville & French Broad Railroad Company."Acts 1854-55, c. 299.This act was amended by the legislature of 1858-59, in which amended act it is provided "that it shall be competent for any county through which said road is intended to pass, to subscribe to the capital stock of said company any sum or sums that may be determined on by the court of pleas and quarter sessions of such county."Acts 1858-59, c. 166.The next act of the legislature affecting the question under consideration is Acts 1868-69c. 171.This act expressly authorizes the commissioners of any county to submit the question of subscription to a vote, and, if a majority of the qualified voters of the county vote for the proposition, to make the subscription.This act seems to have been literally complied with by the commissioners of Buncombe in making this submission to the voters of the county.The legislature of 1871-72 passed another act, as amendatory of the act of 1855, chartering the Greenville & French Broad Railroad Company, in which new directors are appointed, and this act closes by saying that the original act, and all other acts amendatory thereof, are re-enacted.Acts 1871-72, c. 48.The legislature of 1873-74 passed another amendment to the original act of 1855, chartering this road, appointing other incorporators, and giving further time to complete its organization.Acts 1873-74, c. 38.The legislature of 1874-75 passed another act, ratifying a consolidation of the Greenville & French Broad Railroad Company with the French Broad Railroad Company, under the name of the Spartanburg & Asheville Railroad Company.Acts 1874-75, c. 27.And under this legislation and organization the commissioners of Buncombe county, in 1875,...