State ex rel. Hall, v. County Court of Mercer County
| Decision Date | 29 September 1925 |
| Docket Number | 5525. |
| Citation | 129 S.E. 712,100 W.Va. 11 |
| Parties | STATE EX REL. HALL, STATE TAX COM'R., ET AL. v. COUNTY COURT OF MERCER COUNTY ET AL. |
| Court | West Virginia Supreme Court |
Submitted September 8, 1925.
Syllabus by the Court.
In a mandamus proceeding to compel a county court, which has issued sold, and delivered to purchasers refunding bonds under the provisions of chapter 46, Acts 1925, to cancel all its refunding orders, recall the bonds and cancel them, on the ground that they are invalid as having been issued under an unconstitutional act, and as creating a debt without the sanction of the voters as provided by the Constitution, this court will not consider and pass upon the constitutionality of the statute nor upon the validity of the bonds, unless the bondholders are made parties or have their day in court.
Mandamus will not issue to compel a party to perform an act which he has already begun to do, and it is apparent that he will in good faith perform.
Original proceeding by the State, on the relation of Grant P. Hall State Tax Commissioner, and a taxpayer of Mercer County, for mandamus to be directed to the County Court of Mercer County and others. Writ refused.
Walter V. Ross, Pros. Atty., and A. J. Lubliner, Asst. Pros. Atty both of Bluefield, and Poffenbarger, Blue & Dayton, and Houston G. Young, all of Charleston, for respondents.
LIVELY P.
The state tax commissioner and a taxpayer of Mercer county pray the court to require the county court of Mercer county, by the extraordinary writ of mandamus to rescind all of its orders, acts, and contracts relating to the refunding of certain road bonds of said county aggregating $815,000 issued and sold in the years 1914 and 1915, and to recall from the City Bank of New York City all of the refunding bonds placed there by it under a contract of sale of the bonds to A. C. Allyn & Co., of Chicago, Ill., to cancel said refunding bonds, and to require it to apply the sinking fund in its hands to the discharge of the original bonds; the sinking fund for that purpose now amounting to approximately $300,000 (the exact amount as shown by the return being $294,417.37, as of the 4th day of September, 1925).
Demurrer to the petition and motion to quash the alternative writ were interposed by the county court, and return made to the writ.
From the pleadings, it appears that the county court legally issued and sold road bonds aggregating $500,000, dated April 15, 1914, maturing April 15, 1944, with privilege of retiring the entire issue after 10 years, and likewise issued and sold road bonds dated July 1, 1915, in the aggregate sum of $350,000, maturing on July 1, 1945, interest at 5 per cent on both issues, payable semiannually. In these issues a sinking fund was provided for by taxation, all of which fund, after 10 years from the date of the bonds, was to be applied to the payment of the bonds, beginning with bond No. 1, and then, whenever the sinking fund amounted to $5,000, it was to be applied in like manner. On July 1, 1925, $35,000 of the first issue was paid off, leaving $815,000. Later $15,000 of the sinking fund was set aside to discharge that amount of bonds, but which sum has not been used; the bonds never having been presented for redemption. The exact amount in the sinking fund as of September 4, 1925, including the $15,000 so set aside, is $294,417.37.
On June 27, 1925, the bonds of the two issues outstanding amounted to $815,000, with a sinking fund on hand applicable to their partial discharge of approximately $294,000. On that date the county court, acting under chapter 46, Acts 1925, an act authorizing counties, municipalities, etc., to issue bonds for the purpose of refunding indebtedness evidenced by bonds, entered an order to issue and sell to A. C. Allyn & Co. refunding bonds to pay off and discharge the original bonds to the amount of $800,000, the new bonds to be dated July 1, 1925, drawing 4 3/4 per cent. interest, payable semiannually, the last batch maturing and to be paid off on July 1, 1945. These refunding bonds were duly issued and placed with the National City Bank of New York City, to be simultaneously exchanged for like amount of the old bonds. Prior to the issuance of the alternative writ, $643,000 of the old bonds had been exchanged for a like amount of the refunding bonds, and the old bonds so paid had been returned to the sheriff of Mercer county and had been canceled. The old bonds outstanding amounted to $172,000; a like amount of refunding bonds is yet with the National City Bank, and presumably at the disposition of the county court.
Respondent admits that it should have first used the sinking fund to reduce the amount of the old bonds before taking steps to refund the remainder, and, being so advised (having theretofore acted in good faith and without improper motive in issuing refunding bonds to the amount of $800,000), on August 21, 1925, it ordered that the entire sinking fund be applied upon the bonded indebtedness, subject to the mandate of this court. The alternative writ had then been served on respondent. And on August 25, 1925, it entered an order reducing the levy so that there would be derived from taxation an amount to pay the interest on the indebtedness thus reduced by application of the sinking fund, and also to provide a sinking fund to take care of the remainder.
So it will be seen that respondent has in its hands $294,417.37 to apply on its bonded indebtedness, and there are outstanding old bonds amounting to $172,000, which, when paid, as directed by the order of August 21, 1925, will leave the sum of $122,417.37 in the sinking fund. Where shall it be applied? How can the sheriff carry out the order? The refunding bonds have been delivered. They embody a contract for payment at a future date. Into whose hands these refunding bonds have passed does not appear. Allyn & Co. are not parties to this suit, and the bonds are not within the jurisdiction of this court. It is practically conceded that in refunding outstanding indebtedness, without authority from the taxpayers, a county court cannot create additional indebtedness. Refunding is merely an extension of the old debt, not the creation of a new debt; and, if a new debt be thus created, swelling the old debt, it cannot be effective, at least in so far as the additional debt is concerned. Allyn & Co., realizing that questions of serious import may be raised over the payment of bonds covering this excess and the interest thereon,...
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