Fort Mill times. [volume] (Fort Mill, S.C.) 1892-current, 1907-10-03
THE BOND CASE.
Decided Against fhe State Treas
urer on Last Friday.
BY A COURT EN- BANG.

Must BE Exchanged for Certificates
When Offered by Those Who Hold
Them-Suits Will be. Brought
BY very close decision the judi
ary of South Carolina, sitting en-
banc, decided that the State treasurer
should issue certificates of stock for
bonds taken from the treasurer's Of
flee by clerk after being offered for
cancellation and placed upon the
market. The decision means that
Attorney General Lyon will at once
have to commence suit against the
State -traasurers who employed the
clerk in question. About $4,000 in
principal and interest is at stake and
the action of the court is far reaching
and regarded as very important in
financial circles.
| Some three years ago one of the
clerks in the State Treasurer's Office
was arrested charged with misappro-
priating State funds and bonds. 1t
was discovered that bonds offered for
cancellation and exchange for certifi-
Gates had not been cancelled, but
again placed upon the market.
Last April one of the bonds. owned
by Edward Ehrlich of Columbia, was
offered for exchange for certificate,
which is not negotiable unless en-
dorsed. The exchange was refused
by the State treasurer, on the advice
of Attorney General Lyon, and in
July the interest was refused.
Suit was at once brought, mandam-
us proceedings, to compel the State
treasurer to recognize the stock. The
supreme court being equally divided
on the matter it was decided to call
an enbanc session of the judiciary of
the State. constitutional questions be-
ing involved.
Friday questions were argued be-
fore the entire court, with the eX-
ception of Judge Aldrich, who is i'll
and unable to attend. For the State
appeared Attorney General Lyon and
j. William Thurman of Edgefeld and
Mr.. w. T. Aycock of Columbia ap-
peared for the petitioner.
The opinion of the court is written
by Associate Justice Jones and is
concurred in by Justice Woods and
Circuit Judges Watts, Gage, Dantz-
Ter, Memminger and Wilson. After
stating the facts the opinion says:
The Courts Decision.
mo marks to indicate cancellation
were ever placed upon said bond, al
though the statute expressly declared
that such surrendered bond shall i'm
mediately upon such surrender be
cancelled and filed by the State treas
urer with the permanent records of
his Office. 1t is admitted that relator
is a bona fide holder for value before
maturity and without notice. The
general rule of law is that a thief
of personal property can not convey
to a purchaser, however innocent,
any title to the stolen property as
against the real owner. But from
the highest considerations of public
policy the law eXcepts from the rule
negotiable instruments acquired in
good faith before maturity and with
out notice and makes the title of such
holder good against the world"
The opinion goes on to say that
"the State bond cases. 2 S. c., show
that a coupon bond of the State. valid
in its inception. is negotiable Sc
curity paper incurs the same respon-
sibilities which attach to individuals
or corporations in such cases. There
is no question that the bond in ques-
ton was not valid when originally
put in circulation, and it being ad-
mitted that relator is a bona fide
holder thereof at this time, his title
can in no wise be affected by the sur
render of the bond to the treasurer
by some antecedent holder and the
subsequent theft by means of which
it was again put in circulation. The
method which the State had adopted
to take such bond out of circulation
by cancellation was not complied
with by those intrusted by the State
with that duty. The direction to can
Gel bonds was designed to prevent
the very possibility which has hap
pened and the failure of the State
officers to comply can not be treated
as a circumstance of no consequence,
for the absence Of marks of cancella-
tion make it possible for the theft
to put the bond in circulation"
The Dissenting Opinion.
The dissenting opinion is by JUS
tice r. b. Gary. and is concurred in
by Chief Justice Pope and Judges
Klough, Prince and Hydrick
After reviewing the history of the
case he says that the first question
is in the right of mandamus OF the
petitioner. Bringing us the case OF
Lord VS.. Treasurer, the court held
that "mandamus will only to enforce
a ministerial duty not a dis
creatlonary duty. The opinion then
says that when a bond is surrendered
and a certificate of stock issued in
exchange, 1t loses its legal effect as a
subsisting obligation of the State.
Cancellation was not a condition pre-
lcedent upon which the validity of the
certificate of stockk which was to be
Issued In exchange depended and
such requirement was required sim