Hagood v. Southern Same v. Williams

• Decision Date: 01 March 1886
• Citation: 29 L.Ed. 805,117 U.S. 52,6 S.Ct. 608
• Parties: HAGOOD, Comp. Gen. of South Carolina, and others v. SOUTHERN and another, Assignees, etc. SAME v. WILLIAMS. Filed
• Court: U.S. Supreme Court

6 S.Ct. 608

117 U.S. 52

29 L.Ed. 805

HAGOOD, Comp. Gen. of South Carolina, and others v. SOUTHERN and another, Assignees, etc.

SAME

v. WILLIAMS.

Filed March 1, 1886.

These two cases were heard together in the circuit court upon the same testimony, and the same decree passed in each. The facts common to both are as follows: By an act of the general assembly of South Carolina, passed September 15, 1868, entitled 'An act to authorize additional aid to the Blue Ridge Railroad Company in South Carolina,' the state, by a guaranty indorsed thereon, pledged its faith and funds to the payment of the principal and interest of bonds to be issued by the railroad company, to the amount of $4,000,000. The bonds authorized by the act, with the guaranty indorsed, were in fact issued. On March 2, 1872, an act of the general assembly of South Carolina was passed entitled 'An act to relieve the state of South Carolina of all liability for its guaranty of the bonds of the Blue Ridge Railroad Company by providing for the securing and destruction of the same.' The preamble to this act recites the issue of the bonds, the fact of the guaranty indorsed, the liability of the state on account thereof, and the desire of the state to withdraw them, and thus relieve itself. It then proceeds to require that all such bonds then held by the financial agent of the state, as security for advances of money made to the railroad company by the state, shall be delivered up and canceled, releasing the railroad company from all liability on account of such advances. It then provides that upon the surrender by the company to the state of the balance of the issue of $4,000,000 of said bonds, issued and guarantied as aforesaid, the state treasurer should issue in lieu thereof, to the amount of $1,800,000, certificates of indebtedness, styled revenue bond scrip, expressing that the sum mentioned therein is due by the state of South Carolina to bearer, and that the same will be received in payment of taxes and all other dues to the state, except special tax levied to pay interest on the public debt. The act also provides as follows:

'Sec. 4. That the faith and funds of the state are hereby pledged for the ultimate redemption of said revenue bond scrip, and the county treasurers are hereby required to receive the same in payment of all taxes levied by the state, except in payment of special tax levied to pay interest on the public debt, and the state treasurer and all other public officers are hereby required to receive the same in payment of all dues to the state; and still further to provide for the redemption of said revenue bond scrip, an annual tax of three mills on the dollar, in addition to all other taxes, on the assessed value of all taxable property in the state, is hereby levied, to be collected in the same manner and at the same time as may be provided by law for the levy and collection of the regular annual taxes of the state; and the state treasurer is hereby required to retire, at the end of each year from their date, one-fourth of the amount of the treasury scrip hereby authorized to be issued, until all of it shall be retired, and to apply to such purpose exclusively the taxes hereby required to be levied.

'Sec. 5. That if any such revenue bond scrip is received in the treasury for the payment of taxes, the treasurer be, and he is hereby, authorized to pay out such revenue bond scrip in satisfaction of any claim against the treasury, except for interest that may be due on the public debt.'

The exchange contemplated by this act was effected; private individuals holding the guarantied bonds as collateral security for loans of money to the railroad company surrendered them and accepted, in lieu thereof, revenue bond scrip at the lower rate. In this way Amos D. Williams, the appellee in one of these causes, became and remains the holder of $165,000 of revenue bond scrip, for which he surrendered $417,000 of guarantied bonds; and Edward B. Wesley became the holder of $1,005,000 of revenue bond scrip, for which he advanced in case $344,925, with which were redeemed $2,902,000 of guarantied bonds, also surrendered to the state. Wesley became, by leave of court, a party complainant with Williams in his bill, before final decree. Subject to the lien of Wesley for the payment of his cash advance as above stated, the assignees in bankruptcy of the Blue Ridge Railroad Company, who are appellees in the other cause, claim to own the revenue bond scrip held by Wesley as collateral security for his advance. Other bonds of said railroad company guarantied by the state, by like exchanges, were surrendered by other holders, who received and hold corresponding amounts of said revenue bond scrip, and who have come in, under the bill of Williams, which was filed on behalf of himself and all others in like interest choosing to do so, and have proved their claims before a master, so that the whole issue of $4,000,000 of said bonds, except about $4,000 thereof, are shown to have been surrendered to the state and canceled, on the faith of said revenue bond scrip.

After the consummation of these transactions the legislature of the state of South Carolina, by an act passed March 13, 1872, abolished the office of state auditor, and vested his powers in the comptroller general; and by an act approved October 22, 1873, repealed the fourth section of the act of March 2, 1872, providing for an annual tax of three mills on the dollar for the redemption of the revenue bond scrip, and also forbade the comptroller to levy any tax for any purpose whatever, unless expressly thereafter authorized to do so by statute. On December 22, 1873, it also passed an act forbidding any state or county officer to accept payment of taxes in revenue bond scrip.

In a similar case, between the same parties, in which the complainant's bill was dismissed without prejudice, and reported as Williams v. Hagood, 98 U. S. 72, it was said by this court: 'This legislation was manifestly inconsistent with the undertaking of the state expressed in the act of March 2, 1872, and in the revenue bond scrip issued thereunder, and its constitutionality and obligatory force would be a legitimate subject for consideration if the complainant had placed himself in a position to invoke our judgment. But he has not. His bill does not aver that he has been injured, or will be injured, by this legislation, or by any act or neglect of the comptroller general or the county treasurer. It does not aver that the comptroller general has neglected or refused to perform every duty imposed upon him by the statute under which the revenue bond scrip was issued, nor even that he threatens such neglect or refusal. It does not aver that the county treasurer has refused, or even threatened to refuse, receiving the complainant's scrip, or any scrip, in payment of taxes or dues to the state, other than taxes levied to pay the interest on the state debt. It does not aver any demand from the state treasury or any tender to the county treasurer. Its object is plainly to obtain from this court a declaration that the legislative acts of October 22 and December 22, 1873, are unconstitutional, because impairing the obligation of the contract made by the act of 1872, and the certificates thereby authorized and thereunder issued, and this without any averment that the complainant will be injured by them. The question presented to the court is therefore merely an abstract one,—such an one as no court can be called upon to decide,—and the bill shows no equity in the complainant. Hence it was properly dismissed in the court below, and it must be dismissed here, but without prejudice to the complainant's right to bring and prosecute another suit, when he shall be in a condition to exhibit an equity in himself.'

To supply the omissions of his former bill it is alleged by the complainant in the present one that in April, 1879, he tendered the said certificates of indebtedness, amounting to about $166,000, to the treasurer of the state of South Carolina, and demanded payment thereof, which was refused; and that thereupon, having advised the defendant Hagood, the comptroller general of the state, of this refusal of payment by the state treasurer, he requested the comptroller general 'from time to time to prepare and transmit to the several county auditors all such forms and instructions as he might deem necessary for collection, in the same manner and at the same time as had been provided by law for the levy and collection of the regular annual taxes of the state for the current fiscal year, the taxes provided to be levied by the fourth section of the aforesaid act of the general assembly for the redemption of said scrip, which class of duties your orator avers were duties imposed upon the comptroller general by the said act of March 2, 1872;' but that the said comptroller general has neglected and refused to comply with said request. It is also alleged in the bill that the revenue bond scrip, prior to the passage of the acts of the legislature complained of, had a market value equal to 70 per cent. of its face value, according to which the complainant could dispose of the same to parties desiring to use the same in payment of taxes levied by the state of South Carolina, and that the complainant lately disposed of a quantity of said scrip, on a conditional sale, that it could be so used in payment of taxes; but that the county treasurers of the different counties of the state, among others of the counties of Charleston, Oconee, Anderson, and Richland, have refused, and continually refuse, to receive the said revenue bond scrip in payment of taxes; and that thereby the said revenue bond scrip has ceased to have any market value.

It is not averred, however, in the bill that either of the complainants Williams or Wesley had ever tendered revenue bond scrip in payment of taxes due from either of them; but in the bill filed by Southern and...