The Abbeville press and banner. [volume] (Abbeville, S.C.) 1869-1924, 1879-01-08

full knowledge of the facts, the act Of Deem
Der 22d, 1873, was passed, wherein the state
proposed to her creditors therein enumerated
the terms of compromise contained therein.
The consideration offered to the ~bondhoideIs
was q security, rs was supposed and intendea,
unqucstioncd and unquestionable, with hlgh-
er guarantees, at fifty cents on the dollar, IN
exchange for n security whose validity mas
been aSsailed.
The consideration moving the State was the
reduction of her outstanding liabilities to less
than one-thIrd of its original amount.
MUTUAL GAIN.
The effect OF the compromise was mutual
gain to the parties In interest. The state
debt, and the creditor gained In receiving asc-
curity of u higher grade though less In
amount, but of unquestionahle validity.
"If a compromise of n doubtful right Is fair.
~ made between parties, Its validity cannot
depend on any future adjudication or that
right. And where compromises Of this sort
are fairly entered into, whether the uncer-
t nnIni Of Ge iaw "n9 po e do oaFtj ef f ass E fn Z td aeu ZANE ne
Ignorance the compromise Is equally blnding
and cannot be affected by any subsequent III
vestigatiOn and result" StOry's Eq. Jur.,
Cam, l p, VIM. III Stapleton VS.. Stapleton,
In Gibbons vs.. Count, 4 Yes. $40, Lord Al
THnIey says: III parties VIII WIFI lull hnOWf
edge Of the doubts and difficulties as to their
rights. act upon them, though turn ont ma
one gain n great advantage, II the argument
wns fair and reasonable ut lifetime, 1t shall De
binding"
In Durham VS.. Waddlihgton, 2 Strob. En.
25S, 1t was likewise held, following the Ian.
guagc Of Story, that where n compromise OF
u doubtful right is fairly made between the
doubt OF fact. or q doubt In point of law, II
both parties are in the same Ignorance the
c2r!promise is equally binding and cannot bc
affected by any subsequent investigation and
result"
Other cases equally M strong and perhaps
more applicable might be referred toand eliza
lions made tlerefrom did space permit. we
Eng. L. and Eu. 100: Union Bank Of George
town VS., Geary. S Pct. 80; Barlow VS.. Ocean In
surance Company Nit, 20.
1t makes no diiferc. zee that we are dealing
with a contract entered into by o sovereign
State.
STATE SAME AS INDIVIDUAL CONTRACT
Contracts of States are measured by. the
same rules and governed by the same primer,
Piles OF law as control the compromises ana
contracts Of private individuals. n,.
,c tn rns se Muf ss 4s y; a 'n nec elIy c aset tGe Supreme en-
Court OF the United States Gays: 'The truth
Ia, States and cities. when they borrow
and contract to repay with interest are mo ~
the level OF ordinary individuals. Their con-
tracts have the sume meaning rs that Of SIM
liar contracts between private persons.
Hence, instead OF there being in the contract
OF O State or city to pay a reservation OF a SOW
ercign right to Withhold payment. the con-
tract should be regarded as MI assurance that
such q right will not be exercised. A prom
ise TO pay with n reserved right to deny or
change tho effect Of the promise, Is an alb
surdity."
by Section 2 Of the said lAct 1t Is enacted
"Tha the state treasurer Ia hereby nuthoriZ-
| ol tn ranptyn from tho hpldprc willing IN g1r-
render the same all the coupons upon the bonds
before mentioned, which have accrued. or
will accrue, on the first OF january, 1874, and
the Interest orders upon interest due upon
certificates of stock as aforesaid. to the date
aforesaid !; and shall thcreupon, In exchange
for and In lieu OF such coupons and interest
coupon bonds or certificates OF stock, as they
may desire, equal In amount TO fifty percen-
tum Of the face value Of the coupons or Inter-
est orders so surrendered"
several matters which, 1t was alleged, affected
the validity Of these coupons, and which were
subsequently stated in the Dunn report; but:
nevertheless, that body made no discrimina-
treasurer was required under severe penalties
to consolidate all coupons maturing before
January LIST. 1874, rs well as the bonds to
which they were attached or from which they
had been clipped. In the work OF consolida.
ting these coupons the treasurer. IN 1876. wa
Interrupted by the aforesaid address for his
removal, but the Legislature after mature &c.
liberation ordered him to proceed and he did
so.
The Consolidation net lisa compact and com:
prOmisc-a contract between the state and
the holders of bonds issued In exchange fol
vouchers enumerated In the net.
This contract the courts are bound 10 recog'
nize and enfoIcc: and Gny attempt ut lcslsla'
ton designed to alter, vary or violate the same
would be In violation OF Sec. 10, Art. l OF the
Constitution Of the United States.
III.
These Consolidation bonds are negotiable
instruments, and In the hands OF bona ldt
holders for value before maturity, II Issued by
competent authority, are unaffected by, and
under which they were put in circulation
2 Dan. Negotiable Inst. Sec. l5O2.
States enjoy tho rights and incur the liabili
ties Of individuals when they deal in com.
bonds, 40 much 10 that In n recent New York
case coupons are held TO he entitled TO days o.
, grnce.
ton, 80 U. $. 49,, 1t IL said "When states and
cities borrow MONEY and contract to repuy II
with interest, they are not acting as sover
eighties; they. come down to the level OF or
dinury individuals, their contracts nave tho
; same meaning MS similar contracts between
, private PERSONS"
Under the law of commercial papers or ne
gOtinble instrumen Is We are at q loss to per-
ceive how these Consolidation bonds are OBJ
noxlors to any Of the dcfcnccs alleged against
them by the State. If they were issued by
competent authority, being. negotiable In
cent holders for value before maturity nnd
without notice, exempt from inquiry Into the
circumstances under which they were put In
circulation. City OF Lexington VS.. Butler, i
Were they issued BY competent authority
Did the treasurer who Issued them have
authority TO do so and bind the State there.
by II so, their validity cannot be question,
n1 Tho nI1rpI1nsor iS not hound tn lpnk f1r
} thcr than to ascertain this fact. He need
trace the title no further than the act elm
towering and directing the treasurer TO Issue
them.
In tho Floyd acceptance cases the United
States escaped the payment OF the accepted
drafts solely upon the ground that Floyd had
no authority TO bind the Government BY tho
acccptanccs. The Court says: "lsecurring tc
the written law MS the conclusive source o.
such authority, We may confidently assert
thu there Is no express authority to any OIL.
Ger OF the Government to draw or accept bills
Of exchange"
THE BONDS WERE PROPERLY ISSUED.
Bu how Is 1t In tho case Of these Console
dation bonds? The treasurer Is not only al
thorized TO issue the bonds In lieu Of certain
designated securities upon their surrender
but Is commanded TO do so under severe pen.
allies for refusal. This authority Is clear and
explicit, and is all that q purchaser OF n Con.
solldation bond would desire to sec In lnves
fighting the title OF a bond.
4 The bonds enumerated In Schedule 5 Of the
report OF the Bon Commission, andacknowl
edged to be valid, were issued by the same
agents, under the same law, and by the same
authority MS those In Schedule o, which are
alleged to be invalid, and the same officer Of
the State, under the snlne law, Is continuing
the work of constellation. Should the pur'
chaser of Consolidation bonds see tit. how
ever, to go further in his investigation of title
and examine the records Of the treasury, he
will there find that the bonds he intends to
purchase were duly and regularly issued IN
exchange for vouchers expressly named In
the act MS proper TO be exchanged. No higher
proof of the validity OF the bonds could be
with the utmost confidence in its safety.
But It Is commended for the Stale that, al
though this he true, yet the securities ex.
changed IRE no securities ut oil, though
named in the net; that they were really not
binding on the State, and should not have
exchange for Consolidation bonds. 1t Is o
too ate to raise this objection. The State Is
estopped by the act. With great pains and
accuracy the Legislature designated the Sc.
~curitics to re consolidated, and percmptOrily
commanded the treasurer to issue bonds In
exchange therefor. This action, 1t must be
remembered, was taken In the face Of the OBJ.
jections against the securities 10 be funded
which are now so ~strcnuouSly urged. The
act leaves 10 the treasurer no discretion or
oDtion, but Is mandatory, and imposes on that
officer duties purely ministerial. SO 1t cannot
now be objected that any Of these bonds were
issued without authority or by an improper
exercise Of authority.
II BONDS UN1MpEAcHABLs.
An improper exercise OF authority could
only occur in knowingly receiving in ex-
change for Consolidation bonds vouchers not
Included In the net. II upon examining the
mi la f1nNS fhn gnpprtffpC fnpflnraI IN bo