50 S.E. 589 | N.C. | 1905
By chapter 80, Private Laws, 1903, the city of Greensboro was authorized to issue its bonds for an amount not exceeding $250,000, to run not less than thirty years and not more than fifty years, and to bear no greater rate of interest than 5 per cent, and containing a provision that the bonds should not be sold, hypothecated, or disposed of for less than their par value.
It was further provided in said act that the proceeds of said bonds should be used for the following purposes and none other: Building, *132 constructing, and enlarging a waterworks plant to furnish water for the use of the city and its citizens; building, constructing, and maintaining a sewerage system; grading, paving, and macadamizing the streets of the city. Said act was not to become operative until after it had been submitted to an election of the voters of the city of Greensboro and approved by a majority thereof. The act authorizing said issue of bonds was read on three separate days in each house of the General Assembly and the ayes and noes entered upon the journals, as required by the Constitution.
Subsequent to the passage of this act the Board of Aldermen of the City of Greensboro passed a resolution by which it was decided that said bonds should run for fifty years and bear interest at the rate of 4 per centum per annum, and for the purpose of authorizing said issue an election was called to be held in accordance with the laws of the State of North Carolina and the charter of the city of Greensboro.
Thereafter, notice of election was published as required by law and the charter of the city of Greensboro, which said notice stated the time and place of holding said election, the amount of bonds to be (183) issued for each purpose, but made no reference whatever to the rate of interest said bonds should bear.
Thereafter the Legislature of North Carolina, at its session of 1905, passed an act, the preamble of which set forth the provisions of the act of 1903 in regard to the selling of the said bonds at not less than their par value, and further recited that it was impossible for the city of Greensboro to sell said bonds at par unless said city pay a commission brokerage to the party effecting said sale, but that by paying a commission brokerage of not more than 6 per cent the said city could sell its bonds and save its citizens and taxpayers several thousand dollars over and above the amount it would receive had it issued its bonds bearing 5 per cent interest and selling same at a premium of 108, the highest amount realized by the city at its last bond sale.
Thereupon said city advertised for bids, when and where Scott Stringfellow, the defendants in this action, became the last and highest bidders, said bid being par and accumulated interest, less a commission brokerage of 5 33-100 per cent.
Proffer of delivery of said bonds was made to defendants and refused, upon the ground that the issue of said bonds at less than par was invalid and the bonds would not be legal, valid, and binding obligations of the city of Greensboro beyond the net sum (95 2-3 per cent) paid. His Honor held otherwise, and adjudged that the defendants could deduct 5
The act of 1905, "To allow the city of Greensboro to pay a commission for the sale of its 4 per cent bonds," recited said bonds and "authorized and empowered" the city to "issue, sell and dispose of the said issue of bonds of $250,000" at not less than par, but to pay out of the same a commission brokerage of not more than 6 per cent. The object for which the bonds are issued, i.e., to provide the city with a waterworks plant, a sewerage system, and for grading and paving its streets, is for its necessary expenses, and hence the issue of bonds for such purpose need not be submitted to a popular vote. Fawcett v. Mount Airy,
The judgment below, doubtless by inadvertence, adjudged the costs against the plaintiff, but the city did not appeal. The costs of the appeal will be taxed against the appellants.
Affirmed.
Cited: Water Co. v. Trustees,
(185)
