213 F. 1014 | E.D.N.C. | 1914
The facts agreed upon, material to the decision of the controversy, are; The charter of the city of New Bern, N. C. (chapter 42, Private Laws of 1879), conferred upon said city, among specific powers not affecting the questions presented herein, “the power to do any and all things granted to municipal corporations under any general laws of the state of North Carolina.” The Legislature at its session of 1899 (chapter 30, Private Laws 1899) repealed the charter of said city and, by chapter 82, Private Laws 1899, granted a charter to said city, including the same territorial limits, granting the usual powers conferred upon municipal corporations and “the power to do any and all things not therein enumerated which were necessary and proper to be done to effectively carry on a municipal government.” Said acts were duly and regularly passed by the General Assembly of North Carolina in accordance with all the requirements of the Constitution of the state, and especially in accordance with the provisions of article 2, § 14, of said Constitution. Defendant D. M. Roberts is the duly elected and qualified treasurer of said city of New Bern, with the duties prescribed by said charter. Defendants named herein as such are the duly elected and qualified board of aldermen of said city, with the powers prescribed by the charter. The General Assembly of North Carolina, at its session 1887, passed an act entitled, “An Act to incorporate the East Carolina Land and Railway Company,” being chapter 198, Public Laws 1887. Said act conferred upon the counties of Jones and Onslow power to subscribe to the capital stock of said company in such amount as the commissioners of said counties should determine,
At its session of 1889, the General Assembly of North Carolina passed an act amending the act of 1887 (chapter 92, Laws 1889), in which it was provided, among other things, that any of the other counties, townships, towns or cities, through which or near the said company’s road is to be located, should, if they so desired, subscribe for stock in said company upon the application of not less than 25 freeholders and residenf taxpayers of the county, and the approval of a majority of all the qualified voters in such county, township, town, or city, etc. After the organization of'said company, it began the construction of its road, and continued the same from a point in Onslow county to the city of New Bern. While said company was engaged in constructing its road towards the city of New Bern, said city being desirous of subscribing for stock in said company and issuing bonds in payment thereof, some 25 or more freeholders and resident taxpayers petitioned the board of commissioners of Craven county, wherein said city is located, to submit the question of the subscribing for said stock to the amount of $50,000, to the qualified voters of said city as provided by said acts, and especially by sections 18, 19, 20, 21, and 22 of chapter 198 of the act of 1887, and the act amendatory thereof, to all of which reference is hereby made. By the terms of chapter 198 of the Laws of 1887 and chapter 92 of the Laws of 1889, the said city was authorized to subscribe for stock in said company and issue its bonds in payment thereof for the purpose of aiding in the construction of said road. Pursuant, to the provisions of said acts, and in accordance with the petition of said freeholders and taxpayers, the board of commissioners of Craven county, at a regular meeting, on November 5, 1889, ordered an election to be held in said city on January 9, 1890, for the purpose of submitting to the qualified voters of said city the question of the subscription by said city of $50,000 of the capital stock of said company and the issuance of bonds in payment thereof and the levy of taxes to pay the interest and principal of said bonds. At said election a large majority of the voters cast ballots approving said subscription issuing bonds therefor, and levying the tax to pay the same and the interest thereon. The result of said election was duly canvassed and declared, and pursuant thereto the commissioners of Craven county, on behalf of said city of New Bern, subscribed for $50,000 of the capital stock
“In pursuance of a vote of the majority of the qualified voters of said city of New Bern at an election held in said city on the 2d day of January, 1890, by order of the board of county commissioners of Craven county in pursuance of an act of the General Assembly of North Carolina, entitled ‘An act to incorporate the East Carolina Land and Bailway Company,’ ratified the 4th day of March, 1887, and the acts amendatory thereof.”
Thos. A. McIntyre, prior to January 1,1897, purchased-for full value in the open market all of the said bonds, except those numbered from one to six, inclusive. The said city of New Bern and the board of commissioners of Craven county levied, assessed, and caused to be collected from the taxable property of the inhabitants of said city, as required by law, for the years 1894, 1895, and 1896, with which to pay the coupons maturing on said bonds on the 1st day of January for said years and a sinking fund to pay said bonds at maturity, which money, so collected, was paid over to the treasurer of said city for said purpose and no other, and from said money so collected he paid the coupons for said years, but has refused to pay the coupons maturing for the years 1897 and 1898, or to apply any of the money in the sinking fund to the payment of said bonds or the coupons. He has transferred the said amount received from the collection of said taxes to other departments of the city government, and used the same for city purposes. Defendants have refused to apply said money, or any part thereof, to the payment of said coupons or the principal of said bonds, alleging that same were not the legal or valid obligations of said city. Defendants have refused to levy or assess any other or further tax on the property of the inhabitants of said city for the purpose of meeting the payment of coupons maturing since January 1, 1896, or providing a sinking fund to pay said bonds when due, alleging that said bonds were not legal and valid obligations of said city, although demand has been made upon them in respect to both the coupons and the sinking fund. At the time said bonds were voted and issued the debt 'of said city, including the amount of said bonds for the construction of railroads, the support and maintenance»of internal improvements, or for any special purpose whatsoever, did not amount to 10 per cent, of the assessed valuation of the real and personal property situated in said city.
The amount of taxes collected to pay the coupons and to be placed in the sinking fund, as hereinbefore recited, and transferred under the direction of the proper officers of said city, to other departments there
“No law shall be passed to raise money on the credit of the state, or to pledge the faith of the state, * * * or allow the counties, cities or towns to do so, unless a 'bill for tbe purpose shall have been read three several times in each house of the General Assembly and passed three several readings, which readings shall have been on three different days, and agreed to by each house respectively, and unless the yeas and nays on the second and third readings of the bill shall have entered on the journal.”
This constitutional limitation upon the power of municipal'corporations to contract debts, and prescribing the essential legislative procedure in the enactment of laws for that purpose, has, by a long and uniform line of decisions by the Supreme Court of this state, been held “to be mandatory upon the General Assembly, and a condition precedent which must be performed in its entirety before the bill can become a law.” Annotated Constitutions of North Carolina, Connor and Cheshire, 119, where all of the cases are collected. That no vote of approval of a proposition to subscribe for stock in a railroad company, by a municipal corporation pursuant to an act passed, authorizing an election
The bill will be dismissed at the cost of plaintiffs.