Case ID: nc_150/html/0573-01.html
Source: Caselaw Access Project
Author: {"author": "Brown, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

R. H. BATTLE and WALTER CLARK, Executors of ELEANOR SWAIN, v. B. R. LACY, State Treasurer.
    
    (Filed 5 May, 1909.)
    Bond Issues — Repurchase by State — Treasury Assets — Legislative Authority — Constitutional Law — “Aye and No” Vote.
    An act authorizing and directing the State Treasurer to deliver ■certain State bonds, repurchased and held as a cash asset, to the payment and satisfaction of a debt against the State does not requir'e the “aye and no” vote, and the readings upon the several days, in accordance with Article II, section 14, of the Constitution. The bonds having theretofore been legally issued, no new debt is created by the act, and they are subject to the disposal by the Legislature as any other property in possession of the department.
    CONTROVERSY without action, submitted to Lyon, J., at April Term, 1909, of Ware.
    From tbe judgment in favor of tbe plaintiffs tbe defendant appealed.
    
      Walter Clark, Jr., and James H. Pou for plaintiffs.
    
      Attorney-General Bickett for defendant.
    
      
      Clark, C. J., took no part in the decision of this case.
    
   Brown, J.

At the session of 1909 the General Assembly enacted a law intended to be in full settlement of a claim of the estate of David L. Swain against the State, wbicb bas been the subject of negotiation between the estate of the late Governor Swain and the State authorities for many years. Tbis settlement bas been accepted by the representatives of said estate, but the Treasurer refuses to deliver the bonds called for, because the act was not passed in accordance witb Article II, section 14, of the Constitution, providing tbat “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, * * * unless the bill for the purpose shall have been read three several times in each bouse of the General Assembly and passed three several readings, wbicb readings shall be on three different days and agreed to by each bouse, respectively, and unless the yeas and nays on the second and third readings shall have been entered on the journal.” Tbe act in question reads as follows:

“Section 1. That tbe State Treasurer be and be is hereby authorized and directed to deliver to tbe said Walter Clark and Richard Battle, executors of Eleanor H. Swain, deceased, $3,500, par value, of tbe four-per-cent bonds of this State, of tbe series issued under tbe act of March 4, 1879, with interest coupons attached, only from tbe. ratification of this act. This payment is to be in full satisfaction and discharge of said indebtedness.
“Sec. 2. .This act shall be in force from and after its ratification.
“In tbe General Assembly read three times, and-ratified this 6th day of March, A. D. 1909.”

From the facts agreed it appears that the act of 4 March, 1879, was enacted in strict accordance with the section of the Constitution above cited, and that the bonds referred to in the act of 1909 are bonds heretofore issued under the act of 1879 and purchased by the State Treasurer as a cash investment and carried as treasury bonds or cash, and not canceled. It appears also that since the Legislature of 1879 authorized the issue of certain bonds it has been customary for the Treasurer to buy and sell the said bonds, as the condition of the treasury might require; and from time to time certain of said bonds have been repurchased and held in the treasury, and the same were available for resale or for such other disposition as might be made of them by the General Assembly; that the .General Assembly of 1887 directed that the claim due the'estate of the Rev. Solomon Pool be settled and discharged by the delivery of certain of said bonds, and the said debt was so discharged by the delivery of the same, and other claims against the State or departments of the State Government have been liquidated by the delivery of bonds in like manner.

Upon these facts it would seem that the act of 1909 does not raise money on the credit of the State and does nt>t pledge the faith of the State. The act simply' directs the payment of the sum agreed upon out of the cash assets of the treasury, and does not create a new debt. Tbe bonds in question are not due and bave never been canceled. They are negotiable securities, in daily circulation..

It is not pledging- tbe faitb of tbe State for tbe General As■sembly to order tbe State Treasurer to pay a debt witb money. Upon tbe same principle it is not pledging tbe faitb of tbe State for tbe' General Assembly to order tbe State Treasurer to pay a debt by delivering over some of these bonds, previously issued, in lieu of money.

These bonds having been legally issued, tbe faitb of tbe State is pledged absolutely until tbey mature and are redeemed by tbe State; and if any of these bonds, by any means, come into tbe possession of any department of tbe State, tbey are subject to ■such disposal as tbe General Assembly may order, as much so as •any other property in tbe possession of that department.

While, of course, tbe State Treasurer has no power to invest bis surplus cash in other bonds and securities, there can be no reasonable objection to bis investing it temporarily in the State’s ■own obligations which bave not matured for tbe purpose of saving interest, and bolding tbe same as cash assets, to be reconverted into money or paid out as such, as tbe exigencies of tbe State require. At least, such has been tbe custom, and in accordance witb that custom tbe bonds covered by tbe act of 1909 are held in tbe treasury as so much cash. Tbe judgment is

Affirmed.