The daily dispatch. [volume] (Richmond [Va.]) 1850-1884, 1875-01-05
THE TWO vIRGINIAs.
THEIR LIABILITY FOB THE DEBT
OF THE OLD COMMoNWEAETH.
DECISION OF THE SUPREME COURT.
The Dfsmembernnensof of Virginia snot
Exceeded I'm Atroefty by the
Partition OF Po!and. >, t.ga <c
A Readable Opinion.

State debt aud the liability of the States o
Virginia and West Virginia therefor.1
/" Higain5othdm's Ezecutrtr vs The Common
lilt'', 1cedlh Ur Vsrctnid."HoF go
| ]. Under g compact entered into between tn,
State Of Virginia and the old James River Com
Company Isthe successor) the Sate OF Virginia Il
liable forever, the stockholders Of the latter
company for the annuity Of fifteen per centuH
per annunl ontheir stock. In consideration OF Ger
tain stock which she now holds, "aostho,s abate
naent or ;dininutioa." a.'e qsa5. nfe.t,i A 80.
] II. The dismemberment of the State does no
and the creditors. ;.t,l l.e ~ ..,.,s;I III
NJ Ihs STATE o5 sss ss,! gtsgtnts as i as? bound
at the time of the dfsm.mberment. AS bstween ihe
two States, they are bound Tdtd6tg and II Virgins
IN hep for wnes ga A
gtata, tohtch SIZE can enforce in the United States
". The principle as to the liability of each State
for the Whole debt to the creditor is the same
whether the partition was created by consent po-
lence the new State cannot by her separate action
exfinguish or even divide the claim of a creditor
,oto,t htS conSe.a SO long as they can be fdenti-
ned, even though each may have assumed a new
name, edch is boundto the creator Tor the iohote
debt. ~
Y. When State IS conquered, its nationality ex-
tinguished and it's peone and territory absorbed by
the conqueror, The latter is boand for the debts Of
~ vi Virginia is still STATE. and has not lost her
counties forming West Virginia.
VII. Virginia las conSented TO be sued in her own
for claims due b sn9 to her her b1 szeGs IS an
by the claim he Icing nr on ne
win. No opinion expressed as to the right to sue
on State bond for the princlpc! Of the debt.
Is. No opinion expressed as 10 the rights OF Ihose
creditors who have accepted the provisions OF the
- funding bill.
y. When the claim is over $500 the court can
only determine its justice and enter Its judgment
against the State for the amount. The payment is
to be provided for by the Legislature in the exercise
of its discretion. ''.
This was writ Of error to judgment of
the Circuit Court of the city of Richmond
dismissing, with costs, petition of the plain.
tiii in error. filed in said court to recover
debt alleged TO be due to the petitioner from
the State of Virginia. The case was briefly
this: The petitioner is exeeatrix OF Daniel
Higginbotham, deceased, who was owner of
twelve shares of stock in the old James
River Company. BY an amendment to the
charter of that company passed February
II, 1920, and dulyaccepted by the company,
the company became the agent of the State
to carry on the work on State account and
under the direction and control of the Gen.
eral Assembly, and it was agreed between
the State and the company that in lieu Of the
annual dividends which might have been
thereafter declared on the stock the CON-
pany should he allowed twelve per
centum per dnnum on Its stock for
twelve years from the commencement Of
the amendatory act and fifteen per ceatun
per dnaur1 thereafter foreoer. This act was
declared on its face to be "a compact be.
tween this Commonwealth and the said COM
pany, subject, however, at all times to such
change and modification as the Legislature
may think proper to make, ProUsded, that
no such change or modification shall be made
as will take from the james River Company
their right to the dividends, or any part OF the
dividends upon their stock allowed to them
by this act" -
Here, then, we have ....s -o4fs E.
A SOLEMN "CoMPACT"
between the State and the company, form
ally declared to be such on its face, that from
and after the commencement of the amends
tory act aforesaid the dividend or annuity,
as it is in effect, thereby secured to be paid
on each share Of stock should be forever
paid without abatement or diminution.
Such was the solemn obligation. as.
sumed by the State as the price
Of the stockholders property. BY the
said act of February II, 1920, and by sundry
acts passed thereafter down tothe 10Th OF
March, 1882, the powers and duties OF the
James River Company, acting for the State,
were from time to time extended and en-
larged: but until the date last mentioned the
company itself continued to exist under its
own organization. On that day, however, a
new company, with greatly-ex.endedp powers,
was chartered, called the James River and
KanaWha Company, to which all the interest
of the State in the old James River Company
was transferred; but this transfer was made
expressly" subject to the payment of fifteen
per centum per annu7n forever to the stock.
holders Of the old company. By this act the
James River and kanawha Company became
the successor Of the old James River
Company; and the duty of providing
forever for the dividend, as it is called,
of fifteen per centunt per df,nunl to the stock
holders OF the old company devolyed, as we
have seen, directly on the James River and
Kanawha Company under its agreement
with the State; and by the act of March 22,
1856, the State required the latter company
to pay these dividends into the public trea-
sury, to be disbursed among the stockholders
OF the old James River Company by the Sc
cond Auditor: thus again solemnly ac-
knowledging the right of the stockholders
to these "dividends," and the duty Of the
State to see that they were punctually paid,
by recurring her assignee TO pay them into
the public treasury to be disbursed to the
stockholders by State officer. .3.,.s -f
Such was, in substance $50 far as necessary
to be here considered), the state OF
Z: LEGISLATION ON THIS SUBJECT
when the act of March 90, 1860, was passed,
| nv which the State became again directly
hound to the stockholders of the old James
River Company for the dividends z: afore,
said, having assumed the payment thereof IN
| consideration of certain shares OF stock oil
| the James River and KanaWha Company IS
sued by said company to the State.
We thus see that in March, 1860, the State
of Virginia again became directly bound to
the stockholders of the old James River Com
1 pany for an indebtedness the justice anC
binding force of which she had often &C
knowledeed, and which forty years before
| She had herself contracted and agreed to pay
as the price of their property granted to be-
under q Legislative contract which on its fac'
lis formally declared to be compact be
| tween the State and the said company" ant
| by which the annuity Aforesaid is secured Z
the stockholders without abatement or diml
mutton forever; thus solemnly declaring tn
Eobligation of this compact" on the Stat
should be eternal. I 1t is unnecessary to dis
cuss the question whether the nature ant
original terms OF the ",eompact" " and To
subsequent dealing of the State with it adj
at all to its binding force as q compact
between the parties. It Is enough 70 sa
THAT it is O compact Of the State with a POI
Etion OF her citizens, entered into on: terms
4 unusual solemnity, and that her action dow
to the close of the late war between ID
i States indicates at all times careful purpos
on her part to preserve intact the .'z
RIGHTS OF TIE STOCKHOLDERS