Graves v. Moore County Com'rs

• Decision Date: 12 April 1904
• Citation: 47 S.E. 134,135 N.C. 49
• Parties: GRAVES et al. v. MOORE COUNTY COM'RS.
• Court: North Carolina Supreme Court

47 S.E. 134

135 N.C. 49

GRAVES et al. v. MOORE COUNTY COM'RS.

Supreme Court of North Carolina

April 12, 1904

Appeal from Superior Court, Moore County; M. H. Justice, Judge.

Suit by G. C. Graves and others against the commissioners of Moore county. Decree for plaintiffs, and defendants appeal. Modified.

The Carthage Railroad Company was chartered by chapter 215, p 398, Laws 1885. By section 7 of said act the commissioners of Moore county, or any township through which said railroad might pass, were authorized to subscribe to its capital stock such an amount as, upon a vote at an election to be held as in said act provided, should be named. The said commissioners, upon taking such vote, were authorized to issue bonds for the purpose of borrowing money to pay such subscriptions as might be made pursuant to the provisions of said act. The commissioners were authorized to levy taxes to pay the interest on such bonds, and to provide a sinking fund to pay the principal. The bill constituting said act was not passed either in the Senate or House of Representatives in accordance with the provisions of section 14, art. 2, of the Constitution, in that the names of the Senators and members voting for and against said bill were not recorded on the journals. The commissioners, in accordance with the provisions of said act, caused an election to be held in Carthage township, in said county, in regard to subscribing $10,000 to said railroad, at which a majority of the qualified voters voted for said subscription. Pursuant thereto the commissioners issued the bonds of said township to the amount of $10,000. Said election was held between March 4, 1885, and November 1, 1886. The said bonds were in proper form, and attested according to law. They were put upon the market and sold and purchased in good faith for their full value, and without any notice, express or implied, to the purchasers of any infirmity therein, except such facts as appeared upon the record on the journals of the Senate and House, and of this the purchasers had no actual notice. The money derived from the sale of said bonds was spent in the construction and equipment of said railroad company, extending through said Carthage township. The stock of said company to the amount of $10,000 was issued to the board of commissioners for the benefit of Carthage township, and is now held by said board for said township, and the people of said township have enjoyed and continue to enjoy the benefit of said railroad. The defendant board of commissioners has each year since the issuance and sale of said bonds levied a tax upon the taxable property in Carthage township sufficient to pay the interest on said bonds, and has paid such interest, and it is the purpose of said board at the meeting on the first Monday in June to levy a tax upon the property and polls in said township for the purpose of paying the interest on said bonds accruing during the year 1903, and they will levy said tax unless restrained, etc. The bonds contain the following recital: "This bond is issued by virtue of an act of the General Assembly of North Carolina, ratified March 4, 1885 [Acts 1885, p. 398, c. 215], and by authority of an election held in Carthage township in pursuance thereof ratifying the same," etc. The defendant board in apt time requested the court to find from the affidavits the following facts "That when the said bonds were issued and sold, November 1, 1886, they were valid by the laws of North Carolina, as then expounded by all the departments of the government, and administered in its courts of justice. That said bonds were issued and sold prior to the decision in the case of State v. Patterson, 98 N.C. 660, 4 S.E. 350, and prior to the decision of said case every decision of the Supreme Court of said state had been in favor of the validity of said bonds and the act of the General Assembly under which they purport to be issued. That said bonds were sold for value and in good faith, and are now owned by the Jacob Tome Institute of Baltimore, not a party to this suit. That the validity of said bonds cannot be impaired by the decision of the courts of the state made subsequent to the issue and sale of the bonds." The court declined to find said facts and to hold as requested, and the defendants excepted. His honor being of the opinion that chapter 215, p. 398, Laws 1885, had never been passed in accordance with the provisions of section 14, art. 2, of the Constitution, and was invalid, and that the election held pursuant thereto, and the bonds issued by authority thereof, were void, enjoined the defendant board of commissioners from levying the tax to pay the interest or principal of said bonds. The defendants appealed.

U. L. Spence, for appellants.

H. F. Seawell and W. J. Adams, for appellees.

CONNOR J.

The defendant concedes that his honor's ruling in respect to the invalidity of chapter 215, p. 398, Laws 1885, is sustained by the decisions of this court in Bank v. Commissioners, 119 N.C. 214, 25 S.E. 966, Commissioners v. Snuggs, 121 N.C. 394, 28 S.E. 539, 39 L. R. A. 439, Rodman v. Washington, 122 N.C. 39, 30 S.E. 118, and Commissioners v. Payne, 123 N.C. 432, 31 S.E. 711, but contends that said bonds are valid under the decisions of the Supreme Court of the United States in Commissioners of Wilkes County v. Coler, 190 U.S. 107, 23 S.Ct. 738, 47 L.Ed. 971, and Commissioners of Stanly County v. Coler, 190 U.S. 437, 23 S.Ct. 811, 47 L.Ed. 1126. They say that prior to the passage of the act of 1885, p. 398, c. 215, and the issuance and sale of the bonds November 1, 1886, every decision of this court construing the Constitution tended to establish the principle that, when an act had been ratified and signed by the presiding officers of the Senate and House of Representatives, it was conclusive evidence that the bill had been passed in accordance with all of the provisions of the Constitution; that purchasers of bonds issued pursuant to such act are presumed to have contracted with reference to such decisions, and that they entered into and became a part of the contract; that to hold the bonds issued in pursuance of such acts invalid, in the light of such decisions, impairs the obligation of the contract, etc. If the premise be true, the conclusion must be conceded. The principle is well settled by numerous authorities, and commends itself to the judicial mind. This identical question, however, is decided by the Supreme Court of the United States in Wilkes Co. v. Coler, 180 U.S. 506, 21 S.Ct. 458, 45 L.Ed. 642. The Circuit Court of Appeals, under the judiciary act of 1891, certified to the Supreme Court three questions, two of which were: (1) Whether, if the bonds and coupons in question were issued, put in circulation, and came into the hands of purchasers for value and without notice, in due course of trade, and if there were at that time no decisions of the Supreme Court of North Carolina adverse to these bonds, or bonds issued under similar statutes, they are valid, etc.; (2) whether there was any decision adverse to the validity of these or other identical bonds, or any construction of the Constitution or law of North Carolina which affected the question of their validity. Mr. Justice Harlan, for the court, proceeds to examine the cases relied on by the bondholders to sustain their contention; being the same cases relied on by the defendant herein. Brodnax v. Groom, 64 N.C. 244; Gatlin v. Tarboro, 78 N.C. 119; Scarborough v. Robinson, 81 N.C. 409--all of which were decided prior to November 1, 1886. The learned justice carefully analyzes these cases, and comes to the following conclusion: "It thus appears that no one of the cases cited by the defendants involved a construction of article 2, § 14, of the state Constitution. Those cases arose under other provisions of the Constitution." The question is so fully discussed, and the conclusion so clearly stated, that we think it unnecessary to do more than refer to the opinion in that case. This court has since the decision of those cases kept the distinction between acts of ordinary legislation and acts coming within the provision of article 2, § 14, of the Constitution, clearly in view. Bank v. Commissioners, 119 N.C. 214, 25 S.E. 966; Carr v. Coke, 116 N.C. 223, 22 S.E. 16, 28 L. R. A. 737, 47 Am. St. Rep. 801; Wilson v. Markley, 133 N.C. 616, 45 S.E. 1023. The distinction was clearly defined in Bank v. Commissioners, supra.

2. The defendant says that if the bonds are not valid under chapter 215, p. 398, Laws 1885, the commissioners had power and authority to order the election, and pursuant thereto to issue the bonds, under section 1996 et seq. of the Code which provides that "the boards of commissioners of the several counties shall have power to subscribe stock to any railroad company, or companies when necessary to aid in the completion of any railroad in which the citizens of the county may have an interest." This court, in Commissioners v. Snuggs, 121 N.C. 394, 28 S.E. 539, 39 L. R. A. 439, discussed and decided this identical question, holding that the extent of power conferred upon the commissioners by section 1996 of the Code was confined by the express language used "to aid in the completion of any railroad," etc. This view was reaffirmed in Commissioners v. Call, 123 N.C. 308, 323, 31 S.E. 481, 44 L. R. A. 252. The defendant says this construction was repudiated by the Supreme Court of the United States in Stanly...