Court Opinion

ID: 7993226
Source: CourtListenerOpinion
Date Created: 2022-09-09 01:33:42.83751+00
Date Added: 2024-06-11T16:35:27.040735
License: Public Domain

Ethridge, J.,
delivered the opinion of the court.
Bourgeois, the appellee, filed a bill in the chancery court alleging that he is a resident freeholder and taxpayer of Madison county, and that the board of supervisors of said county on the 5th day of June, 1918, passed an order providing for the issuance of eighty thousand dollars Madison county funding 'bonds, *167to be issued under the provisions of chapter 209 of the Laws of 1918, to bear interest at the rate of five and three fourths per cent., to be dated June 1, 1918, and to mature and become payable two thousand dollars each year, on the 1st of June, in each of the years 1919 to 1958, said bonds to be issued for the purpose of refunding eighty thousand dollars of county loan warrants issued under section 384, Code of 1906, on March 4, 1918, and payable January 1, 1919, bearing six per cent, interest; that in accordance with the order of the board notice was published in a newspaper published in said county in the issue of June 7, 1918; that said bonds should be issued at the regular July, 1918, meeting of the said board; and that the said bonds are by the terms of the said order already sold, a copy of said order being made an exhibit to the bill, and reciting an inebtedness of eighty thousand dollars, six per cent, interest, dated and legally issued March 4, 1918, and the county has no money in its several funds from which to pay the same, and recites that C. W. McNear & Co., of Chicago, 111., have made a good and valid offer to refund said eighty thousand dollars loan warrants into a bond issue. It is therefore ordered that the county issue eighty thousand dollars refunding bonds, bearing five and three fourths per cent., payable semiannually, to be dated June 1, 1918, and mature and be payable two thousand dollars per year on the 1st day of June in each year from 1919 to 1958, both inclusive, payable at a named bank in New York City, and that the offer of said McNear & Co. “be, and the same is hereby, accepted.” It also appears from the exhibit of the bill that on the date of June 5, 1918, McNear & Co. made a written offer of purchase at a price of par and accrued interest to date of delivery; and the bill prayed for an injunction against the issuance of said bonds, and an injunction was *168granted by the chancellor, and on hearing made perpetual, from which judgment county appeals here.
Chapter 209 of the Laws of 1918 reads as follows:
“That every municipality and county which has outstanding warrants and other obligations, and insufficient funds in the treasury to pay the same, is hereby empowered and required to at once prepare ’to take up such warrants and other obligations from the proceeds of serial bonds which shall be' issued for that purpose. As to counties, such bonds shall be issued in the manner prescribed in sections 331, 332 and 333 of the Code of 1906', in so far as such sections may be applicable. But such bonds shall ■ be issued, regardless of whether or not such issue shall create a total bonded indebtedness of more than five per cent, of the assessed value of the taxable property of the county. As to municipalities, such bonds shall be issued in the manner prescribed in the Laws of 1914, chapter 147, in so far as the same may be applicable. But such bonds shall be issued regardless of whether or not such issue shall create a total bonded indebtedness of more than ten per cent, of the assessed value of the taxable property of the municipality:
“Provided, also, that no election shall be held on the question of the . . . bonds required in this section, but the issuance of such bonds is hereby declared to be mandatory on all counties and municipalities:
“Provided, that nothing in this section shall be construed to require the payment of disputed debts or obligations.
“Not-to Incur Interest-Bearing Debt, Except, When.
“Sec. 2. That no interest-bearing debt, except as provided in section 1 of this act shall be incurred in any county, municipality or other taxing district, unless authorized by a majority of the electors who shall vote in an election called for that purpose; but shall not prevent either a municipality or a county *169from borrowing money in anticipation of taxes-, as now provided by law.
“Warrants Not to Issue Unless Funds on Hand to Pay Same.
“Sec. 3-. That no warrant shall be issued by any county or municipality unless there is sufficient money in the particular fund from which the allowance is made, to pay such warrant.
“Serial Payment Bonds Only, May be Issued.
“Sec. 4. That no county or municipality shall issue any bonds except on the serial payment plan.
“Penalty on Officials for Violation.
“Sec. 5. For failure to comply with this act any tax payer may institute a suit on the bond of any official who is required to give a bond, and in addition thereto, such official may be punished as for a misdemeanor, and on conviction be fined not more than five hundred dollars.
“Conflicting Laws Repealed.
“Sec. 6. That all laws and parts of laws in conflict with this act be, and the same are hereby repealed.
“Sec. 7. That this act take effect and be in force from and after sixty days after its passage.”
As we construe this law, it was designed and intended to apply to municipality and county warrants and other obligations due and unpaid at the date of the passage of the act, and where insufficient funds were in the treasury to pay the same, and that the act would not apply to warrants or bonds or other obligations lawfully issued which were not due but were to become due in the future. By the provisions of section 2 of the act it is expressly provided “but shall not prevent either a municipality or a county from borrowing money in anticipation of taxes, as now provided by law.”
By reference to section 334, Code of 1906 (section 3707, Hemingway’s Code)', under which the loan war*170rants were issued in this case, it is provided that:
Such warrant “shall be payable on the first day of January next after their issuance. For the payment of such loan the board of supervisors may levy a special tax each year sufficient to pay the amount borrowed that year, with interest, and such loan warrants shall be first paid out of the money collected for taxes for that year.”
It is clear to us that chapter 209 was not intended to require the board of supervisors to issue serial bonds to take up outstanding loan warrants issued during the current year, and which would not mature 'for some months, and for the payment of which the taxes for the current year are pledged. If we were to construe the statute as applying to loan warrants and bonds outstanding which were not due, we would be confronted with the constitutional provision that no law shall be passed which impairs the obligation of the contract. The judgment of the chancellor is affirmed.

Affirmed.