The news & observer. [volume] (Raleigh, N.C.) 1894-current, 1903-04-15

now prosecuted, solely by the owners of
the bonds and coupons.
1--WE insist that the same thing can,
with equal propriety be said of the
pleadings and testimony in this case.
"Of course, the scheme is not so trans
parent as in those cases, because. APP
parently, it was there thought that the
legal title to the bonds was alone neces-
sary to entitle the State of New 'Hamp-
shire to maintain the suit; just as, in
this case, it seems to be supposed that
all that is necessary to enable State to
maintains such suit-and that it was so
decided in those cases-iS that she should
be the actual owner of the bonds; where
as, in our view, the principle established
by those cases is that. by no scheme or
contrlvance, can a suit be commenced
or prosecuted which, in effect. is suit
by individuals against a State. And
such this suit clearly appears to be-
eve submit that it is not necessary
that the donee-the State of South Da-
kota-should be shown to have partici-
pated consciously in this wicked scheme
although the only persons by whom the
truth of the matter could be shown are
either dead or shield themselves behind
the privilege of attorney and client, Gov
ernor Herreid and Mr.. Burke evidently
being kept in the dark, as they could
not so hide-it is sufficient that she, be-
ing a mere volunteer should become the
passive instrument Of the bondholders in
carrying out their scheme
eve respectfully insist that the suit
was commenced. and is prosecuted, solely
for the benefit of the private bondholders
and in the event of recovery they are
the sole beneficiaries, after deducting, of
course, the expenses of the suit includ-
ing the fee to South Dakota. We can not
believe that the prohibitions of the Flew
enth Amenrment can so easily be multi
fed"
On the merits Of the question the State
of North Carolina contended First
That these bonds were disposed of con-
trary to the provisions of the enabling
statute (Chapter 22S Acts 1854 $50 and
are, therefore. illegal and uncolectable.
"Second-That the provisions of the law
(Chapter LOG, Acts 1S86-'67 authorizing
the second mortgage upon the stock of
the State for the security of the afore-
said bonds was not complied with. and
hence there Is no valid mortgage securing
the said bonds, or any Of them.
mo one, however unacquainted with
, the strenuous efforts and manifold sac
rifices which the State of North Carolina
made to secure connection between the
eastern seaboard and the transmontane
sections of the State. can read the char
ter of the Western North Carolina Rail-
road and the other acts with reference
thereto, printed in the record, without
seeing that it was the chief purpose of
| the State to secure the building OF this
railroad as speedily and with as little
outlay as possible. To accomplish this,
| it was evidently thought best to make
the donation to the Western North Caro-
lima Railroad in cash, and not in bonds,
I, and hence 1t was provided that the pub
lie Treasurer should advertise in one
or more newspapers and invite sealed
proposals for such amount OF the bonds
as might be necessary to sell at one
time, but in no event were the bonds
| to be sold for less than their par value
| If they brought more than par, the sur
plus was to be turned into the State
Treasury
1.-THE evidence OF DR.. Battle (record,
pages So, S4) shows that advertisement
was made; that no sealed proposals for
| the bonds were received: that the bonds
we're not sold at all, but that they We're
turned over to the railroad company, and
that the railroad company gave receipts
for them. (See record, page SD And
the railroad company sold the bonds
through brokers at prices ranging from
| twenty three to sixty seven per cent of
their face value. This testimony OF DR..
Battle. Treasurer of the State at the
time, is corroborated by that of DR.. j.
| J. Mott, at one time President of the
Western North Carolina Railroad, who
sold a portion of these bonds.
1--WE do not think that it would require
argument to show that the method of dis
posing of the bonds was contrary to the
provisions Of the statute, because they
were not sold by sealed proposals and
| for par: indeed, they were not sold at all,
and. as between the State and the rail-
lroad company, the first taker, were Illegal
and void
| AS these bonds were issued and dis
posed of contrary to the provisions OF
the enabling statute. they were Illegal,
and this fact, together with the admitted
| fact that complainant received the bonds
as a donation. and after maturity, casts
the burden of proof upon her to show
that some of her predecessors in title
were innocent purchasers for value. and
this we submit she has not done"
AS to the second contention on the mer-
Tits sit is clear that the statute contem-