The news & observer. [volume] (Raleigh, N.C.) 1894-current, 1905-10-11
OXF ORD BONDS
Federal Court Will Re-
hear Argument in
November.
Another Phase of Interesting Litiga-
ton Growing Out of Bonds Voted
for Oxford and Coast Line
Railway.

Last March the case of the Union
Bank of Richmond against the oxford
and Coast Line railway was argued in
the United States Circuit Court of
Appeals at Richmond. The history of
this case is most interesting because
Of the nice points of law developed
The following recital is taken from the
Richmond News-Leader:
1.-The legislature of North Carolina
in 1891 chartered the Oxford and
Coast Line railroad. The railroad was
TO connect the town of Oxford with
the Seabord road. The distance was
some four miles. The charter author
lied the town of oxford to issue bonds
To the amount of $4,000 for the pur-
po@e of aiding the road. The people
of the town voted for the proposition
the bonds We're issued. given to the
road. the road was built and the bonds
were sold to the Union Bank of this
city for 95 cents on the dollar In
terest was paid by the city of oxford
when it became due but when the sec
ond payment became due the town
defaulted. Suit was brought TO en-
force the payment.
The constitution of the State pro-
vides that when a bill to make it
valid, is offered in the legislature and
is passed. it has to be read three con-
secutive days. and the record has To
show that this was done. 1t seems
that the record did not show that this
was done in the present case the de-
feet being in the house proceedings,
I he case Went to the Supreme Court
Of the United States which held that
the requirement was right and proper
and sound in every way. That was
supposed to be the end of the matter.
The Union Bank then consulted
Major y. S. Ianier. OF this city, and as
he was a native of Oxford and knew
the people in that town, he made a
trip in behalf of the bank. Return
ing to this city. Major Lanier went to
William l.. Royall and laid all the
facts before him. and Mr.. Royal con-
tended that the railroad could be
made to return the money in spite of
the principle of caveat enptor chat
is. on sale of public securities the
buyer assumes all risk. The case in
the United States Supreme Court III
Meyer VS.. Richards t163 United States
reports, 1867. holds that whether that
principle shall or shall not apply in a
case of a sale of public securities de-
Ponds upon whether the purchaser car
be held TO be charged with notice OF
the defect in the issue of the securi-
ties.
MIR. Royal contended that as the
law under which the bonds were is
sued was perfectly regular upon it
face, and the bonds recited that the
law, that the defect was behind the
face of the law G. e.. in the journal
OF the house, and that a purchaser OF
bonds could not be expected TO look
behind the face of the bonds and the
face of the law. Suit was therefore
brought against the oxford and Coast
Lnie railroad by Major Lanier and
Mr.. Royal in the United States Court
at Raleigh for a return of the pur-
chase money. The plea of limitation
and caveat emptor was made by the
counsel for the railroad. and Judge
Purnell, in December. 1904, held that
the Flea of limitation was not sound
in the matter. holding that the rail
road. however, was not bound to re-
turn the money. The case was then
appealed by Mr.. Royal To the United
States Circuit Court of Appeals and
was argued by Mr.. Royal for the bank
last March before Judges Golf. Pritch-
ard. and BOYD. That court has held
the case from that date until now
and within the mast few days has en-
tered the order calling for reargu-
ment of the case before the court in
this city at the oNvember term