25 S.E. 966 | N.C. | 1896
FAIRCLOTH, C. J., dissents. The following issues were made up under the direction of the court and submitted to the jury, to wit:
"1. Is the plaintiff a corporation duly organized and existing under the laws of Virginia, having power to engage in a general banking business, and to purchase bonds and other instruments?
"2. Did the Board of Commissioners of Oxford have lawful authority to issue the bonds and coupons sued on in the complaint?
"3. Did the plaintiff, before bringing this action, make presentation of the interest coupons sued upon, and demand payment thereof from the Treasurer of the town of Oxford, at his office in Oxford, and was payment refused?
"4. Is plaintiff the owner of the bonds and coupons sued on, and did it purchase the bonds for a valuable consideration and in good faith, without notice?
"5. Did the Oxford and Coast Line Railroad Company tender to the defendant the release provided for and directed by the judgment rendered at July Term, 1892, and if so, when?
"6. Was any demand ever made by defendant upon said railroad (216) company to execute said release?"
Upon the trial the defendant consented that the jury should answer the first and third issues submitted to them "Yes," the fifth issue submitted to them "Yes, on 3 December, 1894"; and on the sixth issue submitted to them, "No."
"EXCEPTION 2. — As to the other issues submitted to the jury, the plaintiff offered in evidence chapter 315, Laws 1891 (being the charter *125 of the Oxford and Coast Line R. R. Company); this evidence was objected to by the defendant as incompetent, irrelevant and material, in so far as it was offered to prove that the Board of Commissioners of Oxford had power to hold the election mentioned in the pleadings, and to issue the bonds and coupons sued on.
The objection was overruled by the court, and the evidence admitted, and the defendant excepted.
"EXCEPTION 3. — The plaintiff also offered in evidence chapter 21, Pr. Laws 1885 (being the charter of the town of Oxford). This evidence was also objected to by the defendant as incompetent, irrelevant and immaterial, in so far as it was offered to prove that the Board of Commissioners of Oxford had power to order or hold said election, or to issue said bonds and coupons."
The objection was overruled by the court and the evidence admitted, and defendants excepted.
"EXCEPTION 4. — The plaintiff also offered in evidence the following proceedings of the Board of Commissioners, as appearing in the minutes: Proceedings 9 March, 1891 (petition to provide for an election); proceedings 14 March, 1891 (ordering an election to be held 25 May, 1891); proceedings 24 March, 1891 (changing the time for holding said election to 27 April, 1891); notice of election on question of issuing bonds to amount of $40.000 to subscribe to capital stock of (217) Oxford and Coast Line R. R. Company, proceedings 19 April, 1892 (being resolution reciting election held, and ordering issuing of $40,000 of bonds). Proceedings 30 August, 1892 (being order spreading on record receipt from Oxford and Coast Line R. R. Company for $20,000 of bonds, issued pursuant to judgment, July Term, 1892; and resolution of the Board of Commissioners), proceedings 16 March, 1893 (being order directed to be issued on Treasurer to pay $600 on coupons). All said evidence was objected to by defendant as incompetent, irrelevant and immaterial, in so far as it offered to prove that said Board of Commissioners had any power to order or hold said election or to issue said bonds and coupons."
The objection was overruled, and the evidence admitted, and defendants excepted.
The plaintiff also offered in evidence the record of the judgment and other proceedings in the cases (consolidated) of the Oxford and Coast Line R. R. Company and J. T. Pruden against the Board of Commissioners of Oxford and A. A. Hicks, Mayor, mentioned and referred to in the pleadings, and the agreement in said judgment referred to.
The plaintiff introduced A. L. Boulware as a witness on behalf of plaintiff, who testified that he resided in Richmond, Va.; was president of the Union Bank of Richmond; that said bank has owned the bonds *126 described in the complaint, and shown to him, since September, 1892; that the said bank paid 97 1/2 cents on the dollar for them; that first coupons of February, 1893, were paid, but no others.
The witness Boulware was recalled and testified that plaintiff had no notice of anything except the matters recited in the bonds.
The defendant offered in evidence the printed Journal of the House of Representatives of the General Assembly of the State of North Carolina, at its session of 1891, especially pages 324, 641, 709, 924, (218) and 926, and also the printed Journal of the Senate of the General Assembly of the State of North Carolina, at its session of 1891, especially pages 647, 742, 745, 759, and 798.
The evidence was offered for the purpose of showing that chapter 315, Laws 1891, (entitled "An act to incorporate the Oxford and Coast Line R. R. Company,") if construed and used as conferring upon the Board of Commissioners of Oxford, or any other municipality, authority to issue bonds to aid in building the Oxford and Coast Line R. R., or to issue bonds for any other purpose, then it was not passed in conformity with the requirements of Article II, section 14, of the Constitution of North Carolina, and in so far as it does give such authority it is unconstitutional and void, though in other respects good, inasmuch as said act in the said House of Representatives did not pass three several readings on three different days, but the second and third readings on the same day, nor were the yeas and nays, if any, on the second and third readings, or any other reading, in said House of Representatives entered on the Journal.
The plaintiff objected to the evidence, not on the ground of incompetency as to the mode of proof in the use of the printed instead of the certified copies thereof, but on the ground of incompetency and irrelevancy and immateriality of the proof itself, and that the ratification of the act is conclusive, and the legal effect of the act is not dependent upon the manner of its passage, and that plaintiff can not be compelled to look behind the act as published; and also upon the ground that the Supreme Court of North Carolina has held that the town of Oxford was authorized by said chapter 315, Laws 1891, to issue bonds; and (219) on the ground that the Journal was offered to attack the ratification, though defendant disclaimed such purpose.
The objection was overruled and the evidence admitted, and plaintiff excepted.
It appeared by said House Journal that said act, chapter 315, Laws 1891, passed its second and third readings in the House of Representatives on one and the same day, and that the yeas and nays, if any, were *127 not entered on the Journal. Defendant's counsel stated that they had certified copies from the Secretary of State of the pertinent parts of the Journals, but their production was waived.
His Honor charged the jury that if they believed the evidence they should answer the sixth issue "No" and all the other issues "Yes," and fix the date of the tender of the release as 3 December, 1894. Defendant excepted. The jury found all the issues in favor of the plaintiff, fixing the date of the tender of said release as 3 December, 1894.
The court thereupon rendered judgment in favor of the plaintiff, and the defendant excepted and appealed.
When this case was here before (
The questions decided before need not be called in controversy. We must take it that our former opinion settles that the town had authority to compromise a valid liability for a smaller sum, and that chapter 315, Laws 1891, on its face, authorized the election. When the second trial was had below the point was taken for the first time that, conceding, as this Court had held, that Laws 1891, chap. 315, by its terms authorized the election, that act was invalid because not passed as required for all acts empowering counties, cities and towns to issue bonds. The Constitution, Art. II, sec. 14. This section of the Constitution is imperative and not recommendatory, and must be observed; otherwise this wise and necessary precaution inserted in the organic law would be converted into a nullity by judicial construction. It was intended as a *128 safeguard, and has been held mandatory in all other courts in which that question has been presented, as will be seen below. This point was not raised below in the former trial, nor in this Court, as the plaintiff was then relying upon the charter of the town, which we held invalid for that purpose. On this second trial, when the plaintiff offered for the first time Laws 1891, chap. 315, as authority to show a valid (221) election authorizing the indebtedness of $40,000 as a basis to authorize the compromise (for, except as a compromise, the judgment would be void on its face, being ultra vires), the defendant contended that Laws 1891, chap. 315, while valid as a railroad charter, was unconstitutional and void so far as authorizing the creation of an indebtedness by the town, because not enacted in the manner required by the Constitution, Art. II, sec. 14. The Journals were put in evidence and showed affirmatively that the act was not read three several days in each House, and that the ayes and noes were not entered on the readings in the House, as required by the Constitution for acts authorizing the creation of public indebtedness. The point, therefore, thus arises for the first time in this case, and was not presented and could not be presented in the former appeal for the reasons above given. The point is one of transcending importance, and is simply whether the people, in their organic law, can safeguard the taxpayers against the creation of State, county and town indebtedness by formalities not required for ordinary legislation, and must the courts and the Legislature respect those provisions? This safeguard is section 14 of Article II of the Constitution. It provides "No law shall be passed to raise money on the credit of the State, or to pledge the faith of the State, directly or indirectly, for the payment of any debt, or to impose any tax upon the people of the State, or to allow the counties, cities or towns to do so, unless the bill for the 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 been entered on the Journal." The (222) Journals offered in evidence showed affirmatively that "the yeas and nays on the second and third readings of the bill" were not "entered on the Journal." And the Constitution, the supreme law, says that, unless so entered, no law authorizing State, counties, cities, or towns to pledge the faith of the State or to impose any tax upon the people, etc., shall be valid.
This case has no analogy to Carr v. Coke,
The following is a list of the authorities, in number 93, sustaining this view either directly or by very close analogy. It is believed that no Federal or State authority can be found in conflict with them. Decisions can be found, as for instance Carr v. Coke, supra, to the effect *130
that where the Constitution contains no provision requiring entries on the Journal of particular matters, such, for example, as calls of the yeas and nays on a measure in question, the enrolled act can not (224) in such case he impeached by the Journals. That, however, is a very different proposition from the one involved here, and the distinction is adverted to in Field v. Clark,
Alabama —
Arkansas —
California — 8 Sawyer, 238;
Colorado — 5 Col., 525; 11 Id., 489; 20 Id., 279.
Florida —
Georgia —
Illinois —
Indiana —
Iowa —
Kansas —
Kentucky —
Louisiana — 44 La., Ann., 223.
Maryland —
Michigan — 2 Gibbs, 287; 1 Doug., 351;
Minnesota —
Missouri —
Nebraska —
Nevada —
New Hampshire —
New York —
Ohio —
Oregon —
Pennsylvania — 26 Pa. St., 446.
South Carolina —
Tennessee — 6 Lea, 549;
Texas —
Virginia —
West Virginia —
Wisconsin —
United States — 6 Wall., 499;
Of these cases, especially pertinent are
To same purport are Black's Constitutional Law, Secs. 31, 102; Cooley Constitutional Lim. (6 Ed.), 156, 163, 168; Smith's Const. Lim., 833; Story Const., 590; Sedgwick Stat., 539, 551; Cush. Leg. Assemb., sec. 2211; 1 Whart. (3 Ed.), 260; 1 Greenleaf Ev., 491.
Constitutional requirements as to the style of acts or the manner of their passage are mandatory not directory. S. v. Patterson,
The history of the country at large, and of this State as well, has shown the necessity of this safeguard as to acts authorizing the creation of public indebtedness, which has been incorporated also into several other State constitutions. We have no power nor wish to nullify so plain and mandatory a provision, so carefully and explicitly worded, and which has been held binding by all other courts wherever the question has been presented.
The judgment on its face is by consent and for railroad subscription. It is therefore on its face to be treated as void, being ultra vires, unless a special authority is shown authorizing the indebtedness for which it was a compromise (Kelly v. Milan,
The consent judgment entered into by the town authorities could not bind the town to a subscription to a railroad unless the power to subscribe or donate had been legally granted by the Legislature.
Consent judgments are in effect merely contracts of parties, acknowledged in open court and ordered to be recorded. As such they bind the parties themselves thereto as fully as other judgments, but when parties act in a representative capacity such judgments do not bind thecestuis que trustent unless the trustees had authority to act, and when (as in *132 (227) the present case) the parties to the action, the town authorities, had, as appears above, no authority to issue the bonds, their honest belief, however great, that they had such power would not authorize them to acquire such power and bind the town by consenting to a judgment. It is not a question of a fraudulent judgment but a void judgment from want of authority to consent to a decree to bind principals — the taxpayers — for whom they had no authority to create an indebtedness by consenting to a judgment, any more than they would have had by issuing bonds. If authorized to create the indebtedness, either the bonds or the consent judgment would be equally an estoppel, but as they had no such authority neither bond nor judgment is binding on the taxpayers. It is not their bond nor judgment. In Kelly v. Milan, supra, Blatchford, J., says: "The declaration of the validity of the bonds contained in the decree was made solely in pursuance of the consent to that effect contained in the agreement signed by the mayor and the officers of the railroad company. The act of the mayor in signing that agreement could give no validity to the bonds, if they had none at the time the agreement was made. . . . The adjudication in the decree, under the circumstances, can not be set up as a judicial determination of the validity of the bonds. This was not the case of a submission to the Court of a question for its decision on the merits, but was a consent in advance to a particular decision by a person who had no right to bind the town by such consent, because it gave life to invalid bonds, and the authorities of the town had no more power to do so than they had to issue the bonds originally."
In R. R. v. R. R.,
In Mfg. Co. v. Jamesville,
In Lamb v. Gatlin,
The certificate of the speakers is not good for more than it certified,i. e. that the bill has been read three times in each House and ratified. And ordinarily that makes the bill a law. But for this (230) *134
class of legislation the Constitution provides that the facts thus certified by the speakers will make no law unless it further appears that the yeas and nays have been recorded on the Journals on the second and third readings in each House. The Constitution makes the entry on the Journals essential to the validity of the act. If it be conceded that presumption of regularity arises from the publication of the act in this case, it was rebutted, for the Journals were offered by the defendant, and showed that no constitutional authority had been conferred to issue the bonds or contract the indebtedness. It is incumbent upon the purchaser of municipal bonds to examine whether the power to issue has been duly granted. Lake v. Graham,
In instructing the jury upon the evidence to find the issues in favor of the plaintiff there was
ERROR.
FAIRCLOTH, C. J., dissents.
Cited: Russell v. Ayer,
(231)