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

! legal decision OF the case OF AlOTton, bIlss q
, Co.
CONSOLIDATED DEBT VALID.
II "a no analogy to say that the Legislature
was q body of flliterate mon. The binding
efficacy of an act Is not to I've measured by tht
intcjljgencc of its authors. We hold, there
fore:
That every bond issued under Act OF De
| cember e, 1873, for vouchers and securities
therein enumerated, IL Il valid obligation %
the state, Notwithstanding any defects, irreg
u~iurities and illcguiitics to which the sMrren
are all waived and efrectually cured by thu
act. and it Is vain to say that the Legislature
had no power to do this:
The slate IL &c ii tcfmint or the act estoppet
from questioning the validity Of any bond Is
sued In exchange for any OF the securities
enumerated therein The law of estoppel
whether by matterof record or in PdE appie'
to States as well az TO indlvlauais: ~ tiin ~.
and her mouth rs firmly scaled MS If sht
were an humble person: But not only by tn
terms of the act Is the state estopped, put Sns
is likewise by her otlicr actions preciuded
from denying the obligations OF any part O
! the debt recognized In the Consolidation Acl
US valid, and 1t was with i, view to make TINS
appear that we givca brief statement OF ne.
acts authorizing the issue Of bonds and tht
dulngs Of the Legislature In the Work VI In
vcstigating the states finances.
That a State may be cStoppcd from settlnp
up as IL defence mere irrcsuiarities IN tne -
crcisc OF n power conferred OH its agents, by
its failure to repudiatc promptly such atu
when performed, or to restrain their perform
ance in time to prevent mischief, has Deen
definitely settled by repeated ad1udicatlon; !,
that of Delatield VS.. the state OF Illinois, re-
ported in 2 Hill (N. W l75, % Wendell l92
and sPaiEe 81. lid space permit we woniT
learned opinions delivered In this case. sur
flee II to say, however, that 1t was commended
BY Dclatield, who had purchased from the
agent of the State Of Illinois SjNO,NW OF hel
bonds at less than par. they were required tc
be sold ut plr,) that the conduct Of the Gov.
ernor, auditor and fund commissioners
amounted TO q ratification OF the sale. The
force of this argument gave great concern tG
the learned Judges who tried the cause, and
caused them to hesitate; but they finally &C
cepted tho argument of the counsel tor tit
State and held that these officers were inca
pable of making or of ratifylng such q con
tract; thnt this power rested solely In the lie
gisluture, which body had, with great prompt
ness, taken the, proper steps through the
Had the Legislature Of Illinois withheld &c
ton, or ncauiesced in the sale, and a J0rfiOri
had 1t confirmed the sale, the title or Deia
field would have become good. Or had tht
holder without notice, the liability Of tht
State would have been fixed. From 1868 t.
iS72 the State officials Of South Carolin,
Issued bonds under the various nets or tht
l T. nlIkl plhSIu ~ ~ ~ hh'N
the financial agent. In the management o
these bonds, these officials and the Legislh
ture not only acquiescrd, but the latter body
in the Validating act, declared their Issue
regular and the bonds valid; and, again III ~
Consolidation act, recognized them as valit
. obligations OF the State.
In 1874, shortly after tho funding had beer
commenced, under actl December Y, 1879
the Legislature was Informed by Senate
Dunn's committee that Il large number q
r bonds In the hands OF kimpton had been ny
! pothecated after the time allowed BY law, ant
hence should not be consolidated, and tina
, quite n lumber OF coupons, rendered or apou
to DO rendered for that purpose, were no
valid against the State. The Legislature TOOL
: no measures to preventive consoiluation, ah'
the att%orney-gcncral declined TO interfere.
PAYMENT OF P~REcLUDEs DE-
FENCE.
f In March, 1915, In celebrating upon tn
: address for the removal OF Treasurer Cnrdozo
: who was charged with Issuing COnsolidatfOl
l bonds for tho securities which are n0tU I'm
peachcd on the same grounds for which the,
$ were then nssailed, the whole subject undcr
( went u full investigation before the Legisln
J ture, The address for his removal was re
! iected by the vote OF the wlSest members G
that body, and he was directed to proceed
t consolidate the outstanding bonds and COT
: pons which it Is now alleged should not hay
5 been consolidated. Accordingly he did pro
0 coed, and issued in lieu of such vouchers
: larger number Of Consolidated bonds tina
: had been issued before all holders of thes
. securities being more willing to avail then
= selves OF the act, because they regarded tn
!. result OF this trial us putting all questions vi
I der the act finally at rest. Taxes were promp
i ly levied to pay the interest on the Consoii
= dated debt. and the interest was REGULAR
y = paid up to January J., 1877.
u In Garrett VS.. Van IIorne,7 Ohio sta
. Rep, 39; in Burroughs on Taxation, SCI
n cases, the doctrine is laid down that paymen
: Of interest by taxation on bonds IRREGULAR
= issued precludcs defcncss denying the powe
to Issue.
c Again, the State received and enjoyed til
proceeds OF the sale and hypothecation {
y these bonds now impeachcd. Doubtless nc
= officials and her financial agent did squande
and misappropriete much OF the money thu
raised on bonds, but this is a matter betwee
the State and her officers and agents, an
, cannot and ought not to aftccL the holders 10
value Of her securities.
, The DEMONSTRATION" bonds and stock
, authorized to be consolidated amount
D s ,3S5, 100. consolidated at so per cent; give
s2,G92,55o; From the proceeds OF the bono onn1
. sold soIdcd and So h ~ ~ @' wh shS h" sHeaeds os IN
o whole consolidated Reconstruction debt b
500 SIT 80.
REPUTATION IMPOSSIBLE.
The consideration Of these Consolidatio
= bonds was therefore good and valuable. On
y = the State, retaining the money, be admitte
! TO impeach The bonds? A principal cannC
= repudiate the illegal acts Of his agents and q
\ the same time retain the benefit thereof. Th
> > State canno now deny, nor could she ut an
; pledge or to sell her bonds while holding o
= : to the money raised thereon. An offer 70 n
: = turn this money would DO n condition prect
! dent essential TO any steps to repudiate or I
1 / hasn nev see o sasa d, nor does she nov propos
= to do SO, and hence she must stand by thes
!" sales and pledges. So says the Supreme Cour
Of the United States in Pendleton County vi
Amy, ID Wallace, 287.
The financial agent made a settlement wilt
the State under and by virtue OF an &C
r passed for that purpose, and a balance wa
a struck NC i, In ,, his r fhyS, w showing "nosns over s,sn siSd; %
act Of acquicscence In and approval OF hi
: sales and hypothecation: and II he had an
. stolen oupons,c clipped from bonds or othel
!, settlement.
u BY the Consolidation Act and Its repeate
|; endorsement n full acceptance, a fina
: settlement and adjustment Of all ycxcd qucs
1 lions touching the bOnd debt Of the Stat
of her bestcitizens, was attained with marke
I pccuniary advantages to the State. by thi
|, adjustment the debt was reduced TO al
amount less than existed prior to 1895. q
the morals of the mode OF Its reduction W
I are not to speak, but only of the fact
:. People in and out Of the State were nov
Q freely and confidingly investing In these ne'
securities. The consols were thrown upol
I the market, and the rich and poor, trustees
! charitable Institutions, and men Of all avoca
: tons, purchased them, confiding In the goo,
+ faith OF the State pledged on the face OF eacl
bond, and the strong guarantees OF TN
act. =.
That faith and that contract the law will
not permit the State to violate for any Of tn
Insufficient reasons alleged In tle defence 9
these suits.
The aforesaid acts of acquicscencc, waive
and confirmation, in our judgment, est0p tn
State, and preclude tho defence She now set
up to these suits.
That the Act of December q, 1879, create
q contract between the State and every hOldc
of any OF her securities named In that &C
who has accepted the terms thereof, whereby
in consideration of mutual advantages, a com
position OF their claims was mnde which
that act declares that the bonds and ccrtitl
Gates OF stock therein authorized to be ISSUED
should bear upon their lncc the declaration
that the paymcnt of the interest and the re
! levy of an annual tax OF two mills upon tin
dollar upon the entire taxable property OF tn,
State, which declaration shall be considered
n contract entered into between the State ant
every holirr Of said bonds and stocks"
The 5th Section declares that all coupon
upon the bonds, and the interest orders o
said certificates of stock herein authorized / t.
be issued, shall be received In payment Of nj
taxes due the State during the years in which
they mature, except for taxes levied for TIT
public schools"
NATURE OF THE CONTRACT.
That this legislation constitutes q ~contrac
which the State Is not at liberty to violate Il
set Mt rest by repeated decisions of the Su
! prcnle Court OF the United States.
Tn first Is the case OF the state Of New
Jersey vs.. Wilson, 7 Cranch, l6. In thi
case II Is, us It wns in the case of Fletcher VS.
Donl1 md II, 1ufnr q lnI1 fhnf fhn ia ia