Morrill v. Smith County

• Decision Date: 19 December 1895
• Docket Number: (No. 1,003.)
• Citation: 33 S.W. 899
• Parties: MORRILL v. SMITH COUNTY.
• Court: Texas Court of Appeals

33 S.W. 899

MORRILL v. SMITH COUNTY.

(No. 1,003.)

Court of Civil Appeals of Texas.

December 19, 1895.

Appeal from district court, Smith county; W. C. Buford, Special Judge.

Action by M. A. Morrill against Smith county to recover the amount of bonds issued in aid of the construction of a railroad. Judgment was rendered for defendant, and plaintiff appeals. Reversed.

Dickson & Moroney, T. W. Gregory, and D. W. Doom, for appellant. James M. Edwards and H. C. & Cone Johnson, for appellee.

GARRETT, C. J.

This action was brought, November 6, 1893, by the appellant against the county of Smith to recover on 23 coupon bonds, issued by it in aid of the construction of the Houston & Great Northern Railroad. The case was tried below without a jury, and resulted in a judgment in favor of the county.

Four hundred bonds were issued by the county at the same time, and all are of the same tenor, and differ only as to the number written on them. Each of them is as follows:

                         "United States of America
                "No. ____.    County of Smith,         $500
                              "State of Texas
                

"The county of Smith, in the state of Texas, a body politic and corporate by the general law of the state, hereby acknowledges that for value received it is indebted and bound, and hereby promises to pay, unto the Houston & Great Northern Railroad Company, or their assigns, at the office of the treasurer of the state of Texas, at the expiration of twenty years from the date hereof, the sum of five hundred dollars, in lawful money of the United States of America (or as much thereof as may then remain unpaid,—that is to say, five hundred dollars less the annual installments of two per cent., which are to be paid annually, commencing on the first day of January, A. D. 1874); and also that it is bound and will pay interest on the said sum of five hundred dollars, or so much thereof as may be unpaid, at the rate of eight per cent. per annum, on the first day of January, A. D. 1874, and on the first day of January of each year thereafter, to and including the first day of January, A. D. 1893, to the bearer, according to the respective coupons therefor, hereto annexed, for forty dollars each, signed by the presiding justice and attested by the clerk of the county court of said county, upon presentation thereof at the office aforesaid, and warrant therefor of the comptroller of the state, and so much of the said forty dollars as is not required to pay the interest due at the time of said payment, shall be applied in payment of the principal of this bond. This bond is authorized by a vote of two-thirds of the qualified electors of said county, and the general law of the state, on the thirtieth day of April, and the first, second, and third days of May, 1872, to take the opinion of the electors of said county on a proposition to donate to the Houston & Great Northern Railroad Company, on certain conditions therein expressed, two hundred thousand dollars in the bonds of said county, which proposition was accepted, and all of said conditions fully performed and complied with by said Houston & Great Northern Railroad Company, as by the records of said court fully appears, and by an order of said court requiring the issue of this series of bonds, in accordance with said proposition. The bond is one of a series of four hundred of like tenor and effect, and is secured by a decree of the county court of said Smith county and the general law of the state, requiring and levying an annual tax upon all the real and personal property in said county of Smith, to raise an annual fund sufficient to pay the interest and two per cent. annually on the two hundred thousand dollars, as hereinbefore stipulated, and, further, by the constitution of the state, providing that the law levying said tax is irrepealable until the principal and interest shall be fully paid.

"In witness whereof, the presiding justice of the county court of said Smith county hereto signs his name, and the clerk of said court attests, with the seal of said court hereto affixed at Tyler, in said county, the 15th day of May, A. D. 1873.

                  "[Seal.]
                        "J. H. Whitmore, Presiding Justice
                  "Attest: W. L. T. Burns, Clerk."
                

The first coupon to each bond was as follows:

                            "Coupon No. 1. $25.00
                

"On the first day of January, 1874, at the office of the treasurer of the state of Texas, for value received, the county of Smith, in said state, will pay to bearer $25.00, the annual interest on county bond No. ___, issued to the H. & G. N. R. R. Co., on the 15th day of May, 1873.

                             "J. H. Whitmore, P. Justice.
                  "Attest:  W. L. T. Burns, C. Clerk."
                

The other coupons were all for forty dollars each, and of like tenor and contained the recital, "Which amount is to be indorsed in payment of the interest and principal of said bond." Indorsed on the bonds was the certificate of the comptroller of the state that they had been registered in his office. There was printed on the back of each bond a table, with ruled columns, for the entry each year, from 1874 to 1893, of the following items: "Amount Due on Bond," "Amount Paid" by "Coupon" and "Percentage of Principal" and "Total," and "Balance Due on Bond." The bonds involved in this suit are of the same issue, and are numbered from 82 to 95, inclusive, 185, 186, 187, 250, 298, 300, 301, and 302. They were issued by the county court of Smith county, pursuant to proceedings under an act of the legislature of the state of Texas, entitled "An act to authorize counties, cities and towns to aid in the construction of railroads and other works of internal improvement," approved April 12, 1871. Gen. Laws 12th Leg. (1st Sess.) p. 29.

On March 27, 1872, upon a petition presented to the county court by more than 50 free-holders of Smith county, asking for an election to take the opinion of the electors of the county on a proposition that said county should donate to the Houston & Great Northern Railroad Company the sum of $200,000, in bonds of Smith county, payable in installments of 20 years from the date of their delivery, bearing interest at the rate of 8 per cent. per annum, to be paid annually on the 1st day of January, the court made an order that such election be held. The proposition submitted to the electors of the county was to donate bonds as above specified "to aid in the construction of a railroad in said county. The main line of said railroad shall pass through the corporate limits of the town of Tyler, in said county. The bonds as aforesaid for one hundred thousand dollars to be delivered to said company whenever they shall construct a railroad from some point on the International Railroad to the corporate limits of the town of Tyler, and shall run regularly thereon. The bonds for the other one hundred thousand dollars to be delivered to said company whenever they shall construct and put in running order a railroad from the corporate limits of said town of Tyler to northern or western boundary of Smith." The election was held at the time designated in the order of the county court, and on May 6, 1872, the court declared, as the result of the election, that the proposition had carried, and ordered that it be accepted, and in all things complied with. On May 26, 1873, at a session of the county court, Galusha A. Grow, the president of the Houston & Great Northern Railroad Company, made an application to the county court for the issue of the bonds which had been voted to the company by the electors of the county, and represented that the company had fully complied with all the conditions of the proposition prior to the 15th day of said month. On the next day (May 27th) the court entered an order which recited, inter alia, the above-mentioned application, and all the prior proceedings in the matter, and that it appeared that the company had accepted the proposition voted, and had completed the work in aid of which the donation was proposed, prior to the 15th day of May, 1873, and had by that time fully performed and complied with the conditions on which said donation was offered, and adjudged that the company was entitled to said donation on May 15, 1873, and to have the bonds then issued to them as of that date; levied a tax of ¾ of 1 per cent. on the assessed value of all the real and personal property situated in Smith county as a sufficient amount for the payment of the annual interest and a sinking fund of 2 per cent. per annum on said bonds, and directed the issuance of the bonds, the form of which was set out in the order. The recitals in the order, as entered in the minutes of the court, that the company had completed the work and complied with the conditions of the proposition and was entitled to said donation, were erased, as were also the words "three-fourths of one per cent." in the tax levy. At the same term, on May 29th, the court entered an order appointing a committee of three persons to investigate and report at the next term of the court as to the compliance by the company with the terms of the contract. The erasures were found by the trial judge to have been made at the direction of the court at the time the order was entered. At the next regular term of the court, on July 31st, an order was made appointing referees on the part of the county to whom, with others appointed by the company, the matter of the issuance of the bonds should be submitted, and on the next day the whole matter was continued until the next regular term of the court; the order reciting that a full court was not present, and that the members who were present were not satisfied to issue the bonds and coupons in the form demanded by the company. But at the next following term (October 2, 1873) an order was made which, without any reference to the prior orders above recited, levied a tax and directed the issuance of the bonds as follows: "Ordered by the court that an annual tax of one-half per cent. on the assessed value of the real and...