Court Opinion

ID: 9808426
Source: CourtListenerOpinion
Date Created: 2023-08-31 20:37:54.347278+00
Date Added: 2024-06-11T12:12:20.139607
License: Public Domain

Connor, J.,
dissenting. The only respect in which this case differs from Bank v. Comrs., in which I have expressed my views, is that the plaintiff’s claim consists of certain bonds, with the coupons representing accrued and past-due interest thereon, issued by the defendants pursuant to the provisions of the Act of 1887 and maturing 1907. It is 1’ecited in the preamble to the Act of 1903, and admitted in the record, that these bonds were issued for an indebtedness incurred for necessary expenses. The liability of the county of Madison for them because of the consideration is settled by this Court in Smathers v. Comrs., 125 N. C., 480. It is contended that the Act of 1903 is invalid in so far as it directs the issuance of new bonds to run thirty years, carrying interest at five per cent., to redeem unmatured bonds. If I am correct in the conclusion reached in respect to the power of the General Assembly to direct the payment of county indebtedness incurred for necessary expenses, I cannot perceive why,-if in its judgment the best interest of the State, in respect to that portion thereof set off for governmental purposes as Madison County, will be promoted by funding its debt, rapidly approaching maturity, and for which it is evident no other provision has been made at a lower rate'of interest, it may not so direct. In the establishment *227of the county, as pointed out by Pearson, C. J., in Mills v. Williams, 33 N. C., 558, there is no contract — “no party of the second part.” I do not care to repeat what I have said in Bank v. Comrs. The distinction between contracts of private persons or corporations and public agencies is clearly pointed out in Railroad Co. v. Nebraska, 175 U. S., 57. On Page 72 Mr. Justice Shiras says: “Usually where a contract not contrary to public policy has been entered into between parties competent to contract, it is not within the power of either party to withdraw from its terms without the consent of the other; and the obligation of such a contract is constitutionally protected from hostile legislation. When, however, the respective parties are not private persons dealing with matters and things with which the public has no concern, but are persons or corporations whose rights and powers were created for public purposes by legislative acts, and when the subject-matter of the contract is one which affects the safety and welfare of the public, other principles apply. Contracts of the latter description are held to be within the -supervising power and control of the Legislature when exercised to protect the public safety, health and morals. That clause of the Federal Constitution which protects contracts from legislative action cannot in every case be successfully invoked.” See also, Williams v. Eggleston, 170 U. S., 304. In New Orleans v. Water Co., 142 U. S., 79, it is said that a corporation created for purposes of government is to be governed according to the law of the land, and may be controlled, its constitution altered and amended by the government in such manner as the public interests may require. “Such legislative interference cannot be said to impair the contract by which the corporation was formed, because there is in reality but one party to it, the trustees or governors of the corporation being merely the trustees for the public, the cesiuis que trust of the founda*228tion.” Mr. Tucker, discussing tbis question, says: “These charters are based upon no contract with the people, but created by the political authority for its convenience and for motives of public policy. The relation between the sovereignty and the municipality is not contractual, but is one of delegation by a principal to an agent.” Tucker Com. on Const., 833. For a very able discussion of this subject, see Sharswood, in Philadelphia v. Fox, 64 Pa. St., 169. When therefore the State established Madison County with its territorial limit, and conferred upon the inhabitants certain governmental powers, and imposed corresponding duties, it in no manner parted with its rights through the Legislature to exercise that constitutional governmental dominion and control which is essential to the carrying out of its general policy. It could not abrogate or ever put in abeyance this power, or the exercise of it, without to that extent parting with its sovereignty. This the State never can do in respect to any of its political agencies. TÍiey are always subject to legislative control. Mial v. Ellington, 134 N. C., 131. If the contention of the defendant is correct, and the State occupies the status towards the county which is contended for, it would be difficult to justify the appropriation of money from the public treasury to counties for the aid and support of public schools, the sending at the charge of the people of the State of convicts into counties for opening highways and other internal improvements. If each county may assert its own will in respect to assuming the burdens and providing for the costs imposed upon it as an integral part of the State by the General Assembly — as for instance, making provision for holding the courts at the appointed times, or having a jail, or providing or maintaining a home for the poor' — it would be impossible to carry on our governmental system, the wisdom of which has been vindicated by long experience. As is said by Merrimon, J., in White v. *229Comrs., 90 N. C., 437, 47 Am. Rep., 534: “The leading and principal purpose in establishing them is to effectuate the political organization and civil administration of the State in respect to its general purposes and policy which requires local direction, supervision and control, such as matters of local finance, education, provision for the poor, the establishment and maintenance of highways and bridges, and, in a large measure, the administration of justice. They constitute a distinguishing feature in our free system of government.” They have been termed “an involuntary civil division of the State created by statute to aid in the administration of the government.”
An interesting and instructive discussion may be found in Smith Modern Law of Municipal Corporations, section 1, 65.
The Legislature finding the condition of Madison County in respect to its indebtedness such that some provision was necessary to enable it to meet its past-due interest and the approaching maturity of the principal, together with its floating debt, enacted the statute of 1903. No injustice is done the tax payers of the county. The interest at six per cent, on the bonds is overdue and compounding. The credit of the county must soon be seriously impaired. The course pursued is that which all prudent business men, corporations and governments adopt. The debt is funded at a lower rate of interest by a bond issue extending through the usual period for such bonds. An examination of our statutes for the past ten years will show that the rate of interest and time fixed for maturity are the same as that of a large majority of the county bond issues authorized. The acts passed at the session of 1903 providing bond issues for other counties are of the same character in these two respects, and include several of the wealthiest counties in' the State. The creditors of course cannot be compelled to surrender a six per cent, bond maturing in 1907 for a five per cent, bond running *230thirty years, but as they elect to do so it is difficult to see how auy injustice is done the tax payers. It will be observed that the treasurer is not permitted to sell the bonds at less than par, and while the election is given the creditor to take the new bonds in exchange for the old ones, I cannot see why, if the bonds can be sold at more than par, he can complain if his bond be paid him in cash. I think that the judgment below should be affirmed.
I have not discussed the question presented in the record and briefs that the commissioners, having met and adopted a resolution directing the bonds to be issued, have no power to rescind this action, that the power in the nature of a trust once exercised was extinct. This view is not advanced as an estoppel. While from the view which I take of the case 'it is not necessary to decide the question, there is in my opinion much force in it.
MONTGOMERY, J., concurs in the dissenting opinion.