Travis v. First Nat. Bank

• Decision Date: 24 January 1924
• Docket Number: 3 Div. 641.
• Citation: 98 So. 890,210 Ala. 620
• Parties: TRAVIS ET AL. v. FIRST NAT. BANK OF EVERGREEN ET AL.
• Court: Alabama Supreme Court

98 So. 890

210 Ala. 620

TRAVIS ET AL. v. FIRST NAT. BANK OF EVERGREEN ET AL.

3 Div. 641.

Supreme Court of Alabama

January 24, 1924

Appeal from Circuit Court, Conecuh County; John D. Leigh, Judge.

Bill in equity by M. A. Travis and others against the First National Bank of Evergreen and others, to enjoin the payment of certain county bonds. From a decree sustaining demurrer to the bill, complainants appeal. Reversed and rendered.

Hill Hill, Whiting & Thomas, of Montgomery, for appellants.

Hamilton Page & Jones, of Evergreen, for appellees.

MILLER J.

This is a bill in equity filed by M. A. Travis and others, each over the age of 21 years, resident citizens and taxpayers of Conecuh county, against the First National Bank of Evergreen a corporation, and the duly designated depository for the county funds of Conecuh county, S. P. Dunn, the judge of probate, and I. F. Goodson, and the other members of the court of county commissioners of Conecuh county. The bill as amended seeks to restrain and enjoin the defendants from paying certain bonds and interest on the bonds mentioned in the bill, authorized and issued by said court of county commissioners, "unless and until a judgment or decree is otherwise rendered by a court of competent jurisdiction on appropriate proceedings brought by or on behalf of one or more of the owners or holders of said bonds," on the ground when the bonds were issued the county of Conecuh was indebted in an amount greater than 3 1/2 per centum of the assessed value of the property therein, the constitutional limit of the indebtedness of the county, and by reason thereof the bonds are wholly void. The defendants demurred to the bill as amended, which demurrers the court sustained by decree. This appeal is prosecuted from such decree, and it is the error assigned.

There is equity in the bill; a taxpayer can secure injunctive relief to prevent a misappropriation of the funds of the county by the county officials. It is the proper remedy.

Potts v. Com'rs Court, 203 Ala. 300, 82 So. 550; Reynolds v. Collier, 204 Ala. 38, 85 So. 465.

That part of section 224 of the Constitution of 1901 here pertinent reads as follows:

"No county shall become indebted in an amount, including present indebtedness, greater than three and one-half per centum of the assessed value of the property therein."

The defendants insist the amended bill is defective in failing to clearly aver that the indebtedness of the county exceeded the constitutional limit when the bonds were sold. The bill alleges the court of county commissioners did in September, 1919, authorize the issuance of bonds or obligations of indebtedness of the county in the principal sum of $15,000, to be dated January 1, 1919, to mature on January 1, 1949, bearing interest at 5 per cent. per annum, payable semiannually, and that, on, to wit, May 8, 1922, this court of county commissioners did authorize the issuance of bonds or obligations of indebtedness of the county in the total principal sum of $20,000, to be dated January 1, 1922, payable January 1, 1952, bearing 5 per cent. per annum interest, payable semiannually. The bill further alleges:

"That pursuant to the said authorization by said court of county commissioners said bonds have been issued and are now outstanding in the hands of the purchasers thereof or their assigns."

The bill also states:

"That at and before the time said bonds, and all and each of said bonds, were issued, and also on said 2d of September, 1919, and also on said 1st of January, 1919, and also on said 8th day of May, 1922, and also on said 1st day of January, 1922, and at each and all of said times, the said county of Conecuh was indebted in an amount greater than 3 1/2 per centum of the assessed value of the property therein, the constitutional limit of indebtedness of said county, and by reason of said fact the purported issuance of said bonds and of each of said bonds and the purported incurring of said additional indebtedness of said county evidenced by said bonds and each of them was and were wholly void, nil, and of no effect."

What do these words in the bill mean, "at and before the time *** said bonds were issued"? The word "issue," according to Mr. Webster, means "to deliver or give out." The word "issued" "ordinarily means emitted or sent forth." 4 Words and Phrases First Series, p. 3778. In Wright v. E. Riverside Dist., 138 F. 313, 323, 70 C. C. A. 603, 613, the word "issued" is defined in the following manner:

"The word 'issued,"' in reference to bonds is "used in two distinct senses; *** bonds are sometimes said to be issued when they are merely authorized. Again, they are said to be issued when they are actually executed and delivered for value."

The complainants did not use the word "issued" to mean merely authorized or to mean authorized, because they state clearly twice that the commissioners "did authorize the issuance of the bonds," the first $15,000, and give the date of the authorization; and the complainants again state the commissioners "did authorize the issuance of the bonds," the $20,000 bonds, and give the date of this authorization. So the word "issued" as and where used by the complainants in the bill was intended to mean and does mean when the bonds were actually executed and delivered for value to the purchasers.

The averments of the bill appear clear that the complainants intend to and do aver that at and before the time said bonds-all and each of the bonds-"were issued" (meaning when they were each executed and delivered for value to the purchasers), and on the different dates they were each authorized to be issued, the said county of Conecuh was indebted in an amount greater than 3 1/2 per centum of the assessed value of the property therein, the constitutional limit of indebtedness of the county. The bill sufficiently avers facts showing the bonds were sold and delivered to the purchasers, and at and before the time they were sold and delivered to the purchasers the indebtedness of the county exceeded the constitutional limit. The averments of the bill were not insufficient in these particulars. O'Rear v. Sartain, 193 Ala. 275, 69 So. 554, Ann. Cas. 1918B, 593; Goodson v. Dean, 173 Ala. 301, 55 So. 1010, and authorities supra.

The bill alleges one or more of the interest installments on these bonds have already been paid out of funds of this county, and the commissioners are threatening to allow warrants to pay interest on these bonds, and the probate judge is threatening to draw warrants and pay interest on these bonds, and the bank, the depository of the funds of the county, is threatening to pay out the funds of the county on these warrants for interest on these bonds. The bill also avers "each and all of said officers and persons will do such respective acts and things unless restrained or enjoined by this court from so doing."

The allegations show more than a threatened wrong. These averments clearly state and show an intent on the part of the officials of the county to pay the interest on these bonds out of the funds of the county unless prevented by injunction. These averments, if true, are sufficient to authorize injunctive relief. Alston v. Dunn, 176 Ala. 421, 58 So. 300; O'Rear v. Sartain, 193 Ala. 275, 69 So. 554, Ann. Cas. 1918B, 593; Goodson v. Dean, 173 Ala. 301, 55 So. 1010.

The appellee insists the demurrers to the bill were properly sustained because the holders and owners of the bonds are not parties to this cause; that they are necessary, indispensable parties, and the court cannot and should not proceed without joining them as parties. Are the defendants, appellees, correct in this contention? It appears from the bill...