Richmond dispatch. [volume] (Richmond, Va.) 1884-1903, 1899-08-20
THE BONDS NOTyALID
c,ncuIT COURT OF APPEALS DE-
cmEs NORTH CAROLINA CASES.
THE COUNTY AND TOWN WIN.
neither the Bonds Issued by st"nly
County for the Yndkin valley Nor
Nv Town OF oxford TO Oxford ana
Coast Line Arc Legal Obligations.

Juaee Con has recently filed in the
United states Circuit Court Of Appeals
mere opinions in two North Carolina
'caeos declaring bonds issued, in one
case by a county and IN tho other by a
Town. toward the building OF railroads
o. he invalid. because the legislative acts
under which the subscriptions were voted
were not constitutional
The decisions are far-reaching In their
effects. and Of great Importance. One
Involves 10000 OF bonds, issued by the
Board Of Commissioners Of stanly coun-
t.. toward the construction Of the
ladhn Valley railroad, and the other
$4,000 Of bonds. issued by the town of
oxford toward the construction OF the
oxford and Coast-Line railroad. The de-
cision In the latter case entails a consd-
cradle loss upon the Union Bank OF
Richmond
The ssanIy County Case.
The case OF the Board of Supervisors
Of Stanly county. n. c.. ct. ais, appel
lants. vs.. W. y. Golfer & Co.. appellees.
was an appeal from the Circuit Court OF
the United States for the Western DIS
trict Of North Carolina. al Charlotte'
The case was argued here in February
before Judges Goff. Morris, and Brawiey'
The Yadkin valley Railroad COMPANY
was chartered by the Legislature OF North
Carolina i'm 1870. and the charter
Amended IN 1881. BY virtue OF the pro-
visions of the amended act. Stanly,
county Of North Carolina, was autho-
r3zed 70 subscribe to the capital stock of
the railroad. and the question being sub
nitted 20 q vote of the people of that
county. a subscription Of 100000 was or
dered. The commissioners Of the county
issued bonds 20 the amount OF 10000,
and delivered them 20 the railroad COM
psuy. These bonds IL IS alleged in the
bill. were placed on the market, and sold
20 bona fide purchasers for value. Each
Of the bonds. on It's face, recites that it
IS one OF a series issued by authority of
an act OF the Assembly Of North Caro-
lima. ratified March g. 1887. and Of sections
1896, 1897. 1895 and 1899, Of the Code
Of North Carolina. and authorized by
majority vote Of the qualified voters Of
Stanly county, at an election regularly
held for that purpose August 10, 1889 and
Issued 20 pay the subscription made by
that county 10 the capital stock OF the
Yadkin Railroad Company. For four sue
cessive years after these bonds were
issued n tax was regularly levied and
collected for the purpose OF paying the
interest due ON them and the coupons
representing the same were duly paid
The tax for the fifth year was also levied
and collected.
STOPPED PAYING THE INTEREST,".
Then the commissioners Of said county
Certain taxpayers Joining with them
instituted proceedings in the Superior
Court Of that county against the Urea
surer Of the same, the object of which
was 10 prevent the application of the
money i'm the hands Of that official, col
Iecied for the purpose of paying the in
terest on said bonds. from berg so APP
piled and also 10 have the boz decreed
invalid The contention Of the plaintiffs
I'm that suit was that all of the bonds ard
coupons were void. and in support OF
such claim they alleged that neither of
the acts Of the assembly referred to-the
act Of 1870. under which the railroad
company was organized. and the amend
mcnt thereof in 1857 under which the SUBJ
scripti0n was alleged 20 have been made
were passed in accordance with the re-
quirements OF Article H. section "A, of
the Constitution OF North Carolina, in
that neither OF said acts, in fact passed
three separate readings in the House of
Representatives Of said State on three
different DAYS: and. also. because that the
yeas and nays were not taken in said
house upon any reading Of either Of said
acts. and for the reason that the yeas
and nays. If taken at all. were not en-
tered upon the journal Of the said house
upon any Of the readings Of said bills.
The Superior Court OF Stanly county.
on the final hearing Of such suit, decreed
that the bonds We're invalid. and made
permanent an Injunction by which said
Treasurer was inhibited from paying the
interest then due on them. subsequently.
on appeal. the Supreme Court of North
Carolina affirmed this ruling. Commits
sioners ct al. VS.. Snuggs, 12l n. c.. S9i; %
:. T., 5S9
CLAIMS OF BONDHOLDERS.
The complainants below. appellees here.
citizens and residents Of the state of
New York. and the owners and holders
NJ a large number of such bonds. amount
Ing to over 900 face value, which they
had purchased IN open market for value
before maturity. being unable TO collect
the interest then due on the same, al
though tax had been levied and coll
iected for that purpose, instituted this
yuit in the Circuit Court OF the United
states for the Western District OF North
FARO ina against the Board Of Commits
1ioners Of said county and such Trea-
furer, for the purpose of securing such
bayment and 20 prevent such Treasurer
Prom using the taxes so i'm his hands for
any other purpose than that for which
Il was collected. Complainants below al
eyed that they so purchased the bonds
IN good faith. and without any notice,
expressed or implied, that they were
otherwise than legal and valid that the
interest then due them and unpaid
amounted to S., $50: that although the said
commissioners had made such levy, and
The same had been collected and was
)hen in the hands Of their Treasurer. that
he refused to pay such interest; that as
laid tax hal been collected for the sole
purpose OF payins that interest. that the
treasurer was In fact a trustee, holding
Che same for the use of and i'm trust for
;he compliments; that said commission
Drs. with others. had instituted such suit
N the Superior Court OF Stanly county
against their Treasurer but that COM
claimants were not nor was any other
~ the bondholders. made a party TO such
Duit and that, therefore. they were not
bound by the decree entered therein; the
PRAYER Of the bill was for an accounting,
Tor an injunction restraining the Urea
mrer from paying out or using said fund
70 IN his hands for any other purpose
han the settlement of said interest cou-
IONS. and for further and general relief.
LOWER COURTS DECISION.
The court below, on reading the veri-
led bin and exhibits filed herewith grant
y = restraining order In substance as
prayed for, and set the application for
Pm Injunction and the Appointment OF u
lscelNer for hearing on day mentioned