Court Opinion

ID: 6696814
Source: CourtListenerOpinion
Date Created: 2022-07-20 21:54:09.788684+00
Date Added: 2024-06-11T16:01:16.574224
License: Public Domain

Olaeic, C. J.,
dissenting: This is an action against the Board of Commissioners of Cabarrus County to recover possession of a certified check for $500 deposited with the defendants as-evidence of good faith in making a bid for $50,000 county home bonds issued by the county. Plaintiffs subsequently refused to take said bonds, which defendants were compelled to sell at a loss of $3,790, and defendants set up a counterclaim for said amount of loss and $200 attorney’s fees in finding another purchaser and effecting a sale to other parties, and retained said cheek to be applied on such counterclaim.
*697Tbe defendants advertised for sale $50,000 of bonds of tbe county of Cabarrus, issued for tbe building of a county borne, reserving tbe right to reject any and all bids. Tbe plaintiffs filed tbe following offer:
“5 Aprilj 1917. Board of Commissioners of Cabarrus: We offer you a premium of $1,790 in addition to par value, free blank bonds, and our attorney’s fee and accrued interest, for your $50,000, 5 per cent county borne bonds, advertised for sale tbis day, interest payable semiannually and maturing $2,000 a year beginning at tbe end of tbe second year after date of bonds.
“Prior to taking up and paying for tbe bonds you are to furnish us with full and accurate transcript of tbe record, duly certified, of tbe proceedings leading up to and culminating in tbis issuance and delivery of bonds, to tbe satisfaction of our attorneys.
“Herewith is our certified check for $500 as evidence of good faith in making tbis bid, which is to be retained by you and presented for payment as part of tbe purchase price of tbe said bonds, provided tbe same are duly awarded to us on this bid, and delivered to us in ac-' cordance to tbe terms thereof, at tbe Northern National Bank in Toledo, Ohio.
“If any proposition shall be entertained by you in connection with paying interest on deferred payments on said bonds or on your bank balance from tbe proceeds thereof, we will equal any such proposition in addition to the above offer. Bruce Craven, Attorney for W. L. Slay-ton & Co.”
Out of 10 or 15 bidders tbe plaintiff’s bid was tbe highest; but before said bid was accepted by defendants, Bruce Craven, attorney for W. L. Slayton & Co., made a statement in explanation of bis bid.
Tbe defendants then- asked tbe witness, L. A. Weddington, chairman board of commissioners, “State whether or not prior to tbe acceptance of tbe price offered by W. L. Slayton & Co. that Mr. Craven, their attorney, agreed to accept these bonds without any question as to tbe opinion of tbe attorney?” Tbe answer to tbis question was objected to. Objection sustained, and defendants excepted. Tbe witness would have testified and did, in tbe absence of tbe jury, testify as follows: “After tbe bids were all opened and tbe different prices compared, Mr. Craven’s bid was the highest, and immediately afterwards one or two of tbe other bond buyers, one especially, told that Mr. Craven bad been buying bonds at numbers of places for tbis same concern, Slay-ton & Co., and bad been refusing to accept them; and they got into a regular melee, took quite a time to get them separated and quieted down. Then tbe suggestion was made to throw these bonds into an auction and sell them to tbe highest bidder. • Craven objected, saying *698tbat be was tbe bigbest bidder and felt tbat be was entitled to tbe bonds; and after consideration tbe county commissioners agreed tbat tbe advertisement was tbat tbe bonds would be awarded to tbe bigbest bidder; and when they said be would not pay for tbem, be. would not take tbem, Craven assured us, guaranteed tbat tbe bonds would be accepted without an attorney’s opinion other than bis own.”
“Q. I ask you if be (Craven) didn’t state at tbe time tbat be knew the whole situation and be would guarantee tbe acceptance? A. Yes, sir.
■“Q. Some statement was made tbat Mr. Craven bad been buying bonds and not taking tbem; be and this party got into a fight? A. Craven told him be was a liar.
“Q. It was a kind of mix-up ? A. Yes.
“Q. "What was said by Mr. Craven in response to this other fellow? A. He appealed to tbe board of county commissioners. This man who bad raised a row with him was tbe next bigbest bidder. After we got tbem settled down, some of tbe other bond buyers wanted to throw tbe bonds into an auction sale and let tbe bigbest bidder have tbem, and Craven appealed to tbe board tbat be came here at expense to buy tbe bonds and be was tbe bigbest bidder and didn’t think it was treating him right to turn him down, which tbe board considered tbe fact after bis saying tbat be guaranteed tbat be would take tbe bonds.
“Q. I ask you. if you don’t know it to be a fact tbat you and your board did not change one word or syllable of tbat written contract tbat Eruce Craven submitted? A. I have no knowledge of it, it never was authorized.
“Q. There wasn’t any new auction? A. No, sir.
“Q. No verbal bidding by anybody? A. No, sir.
“Q. Tbe only thing is, you claim tbat after this fellow charged him tbat be was in tbe habit of getting tbem and would not pay for tbem, be-called tbe fellow a liar and claimed be would, and said be would take tbe bonds whether they were good or not? A. He claimed so. He said ‘on no other opinion than bis own.’
“Q. You didn’t make him change bis bid? A. No; it was not changed in bis written contract. It may have been changed by Mr. Craven and tbe clerk to tbe board. Tbe minutes were written up in bis presence while tbe board was in session.
“Q. After tbe bids were all opened tbe board retired to themselves? A. Yes, sir.
“Q. They bad declined to accept any of tbe written bids until they came back and Mr. Craven made this proposition? A. Yes, sir.
“Q. I ask you if be didn’t state at tbe time tbat be knew these bonds were valid and all right and be would accept tbem? A. Yes, sir.”
*699J. F. Harris testified for defendant: “I was register of deeds and clerk to tbe board of commissioners in tbe year 1917. As clerk to tbe board of commissioners it was my duty to keep tbe minutes of tbe board of commissioners. I have a record of tbe minutes of tbe board in reference to tbe proposal of Bruce Craven. Tbis is tbe record of it, dated 5 April, 1917:
“ ‘Besolution. Whereas W. L. Slayton & Co., of Toledo, Obio, are tbe bigbest and best bidders for tbe $50,000 county borne bonds to be issued by Cabarrus County, dated 5 April, 1917, bearing interest at 5 per cent, payable semiannually, to mature as specified in tbeir bid, bearing date of 5 April, 1917: Now, therefore, be it resolved, that tbe said bonds be and tbe same are hereby awarded to said W. L. Slayton & Co., and tbe chairman and clerk are hereby authorized and directed to execute said bonds, and when executed to deliver tbe same to tbe said W. L. Slayton & Co. on compliance with tbe terms of tbeir said bid on file in tbe office of tbe clerk, which bid is as follows:
“ ‘We offer you a premium of $1,790 in addition to par value, free blank bonds, and our attorney’s fees and accrued interest, for your $50,000, 5 per cent county home bonds, advertised for sale tbis day, interest payable semiannually and maturing $2,000 a year, beginning with tbe end of tbe second year after date of tbe bonds.
“ ‘Prior to taking up and paying for tbe bonds, you are to furnish us with a full and accurate transcript of tbe record, duly certified, of tbe proceedings leading up to and culminating in tbis issuance and delivery of bonds, to tbe satisfaction of our attorneys.
“ ‘Herewith is our certified check for $500 as evidence of good faith in making tbis bid, which is to be retained by you and presented for payment as part of tbe purchase price of tbe said bonds, provided tbe same are duly awarded to us on tbis bid, and delivered to us in accordance to tbe terms thereof, at tbe Northern National Bank in Toledo, Obio.
“ ‘If any proposition shall be entertained by you in connection with paying interest on deferred payments on tbe said bonds, or on your bank balance from tbe proceeds thereof, we will equal any such proposition in addition to tbe above offer. (Signed) Bruce Craven, Attorney for W. L. Slayton & Co.’
“As register of deeds and clerk to tbe board, I furnished W. L. Slay-ton & Co. ‘with a full and accurate transcript duly certified’ by me. I gave them every information they asked me for; everything they wrote me concerning it I answered and mailed it to them. They never complained that I failed to do so. Tes, I think W. L. Slayton & Co. sent me tbe blank bonds to be executed. As well as I remember, those *700bonds did come to us and we executed tbem and furnished the resolution and everything, and shipped them.”
The court erred in excluding the above evidence of what occurred and of the guarantee by the attorney of the plaintiffs. On the next day after this transaction war was declared, and the bonds went down in price. On 19 April, 1917, "W. L- Slayton & Go. wrote a letter to the plaintiffs in which they stated that certain questions had been raised as to the legality of the above bonds and as soon as that was established they would then proceed with printing the same.
The court erred in excluding the above testimony and in instructing the jury if they believed the evidence to accept the issues in favor of the plaintiff.
The language of the written bid cannot be construed -to mean the legality of the bonds must be passed upon by their attorney. It is “not so nominated in the bond.” The stipulation in the bid was “prior to taking up and paying for the bonds, you are to furnish us with a full and accurate transcript of the record, duly certified, of the proceedings leading up to and culminating in this issuance and delivery of bonds, to the satisfaction of our attorneys.” This stipulation means simply that the transcript of the record must be furnished to the satisfaction of their attorneys. This, according to the evidence, was done. The testimony of the register of deeds is that he sent plaintiffs a full and accurate transcript of the record and “gave them every information they asked for.”
There is no statement in the bid that the attorneys of the buyers were to pass conclusively upon the legality of the bonds before accepting them. It is Gertainly not so stated in their offer, and it would be preposterous to accept such a bid which would put every advantage in the hands of the bond buyers to reject bonds at any time should the market go down, and would violate the age-old maxim that no man can be a judge in his own ease. See Grant v. Board of Education, 178 N. C., at p. 333. The true test is whether the bonds were legal and valid, and that is a matter for the courts and not for the purchaser at the highest bid to decide.
The testimony offered and rejected was that Craven, the accredited attorney of the plaintiffs representing them in person on this occasion, when the other bidders said that his clients would not pay for them and would not take them, “Craven assured us that he would guarantee that the bonds would be accepted without an attorney’s opinion other than his own.” This evidence explains what attorney would pass on them and does not contradict the bid, and this evidence should have been admitted as an essential part of the res gestee, and the court should subsequently pass upon its binding power on the plaintiffs. He was *701undoubtedly the plaintiff’s attorney. He signed tbe bid which they had authorized him to make — “Bruce Craven, Attorney for "W. L. Slay-ton & Co.” In the letter written by Slayton & Co. on 19 April they stated, “When these bonds were offered for sale on 5 April by your county, our representative and attorney for your State, Bruce Craven, submitted a bid.” This evidence, which was improperly excluded, did not contradict the written bid but explains and elucidates the bid by telling what attorney would pass upon the transcript of the record. Johnston v. McRary, 50 N. C., 369.
Exception 3 is as follows: “Q. You may state whether or not the county commissioners would have awarded these bonds to Slayton & Co. if there had been no other offer or proposition by Bruce Craven, attorney for W. L. Slayton & Co.?” Witness was chairman of the county commissioners, and his answer would have been, “They would not.” The court erred in excluding the answer to this question because, if Craven had not said the bonds would be accepted without an attorney’s opinion other than his own, the bonds would not have been awarded to the plaintiff.
There was further error set out in exceptions 4, 5, and 6, as follows: “The court charges you that if you believe all this evidence it would be your duty to answer the first issue ‘Yes,’ which reads, ‘Is the plaintiff the owner and entitled to the possession of the certified check in controversy as sued on in this action ?’ ”
If there was any evidence to the contrary, then the court erred in this instruction. As already stated, there was nothing in the written offer which says the bonds were bought subject to their legality, “To be determined by their attorneys.” If that construction be placed upon said bid then Bruce Craven, whom the plaintiffs stated in their letter had authority to file said bid as attorney for W. L. Slayton & Co., told the defendants that said bonds would be passed upon by him as their attorney, and he has never yet given an opinion that the bonds were not legal. In fact there was neither then nor at any time any real doubt as to the validity of said bonds, for the legality of this very class of bonds had already been passed upon on 14 March, 1917, in the case of Comrs. v. Spitzer, 173 N. C., 147. If the attorney (Eoose) had erroneous doubts, it did not invalidate the sale. Clearly the plaintiffs rejected their purchase of the bonds, which has cost the taxpayers of Cabarrus some $4,000, because, owing to the declaration of war the very next day, April 6, there was a slump in the price of bonds.
The county and other municipal officers in marketing bonds have always been at a disadvantage in dealing with bond buyers who by combination among themselves, or otherwise, have full opportunity to “chill the bidding,” but it has never been held in our courts that the *702highest bidder under a bid made by the admitted attorney of the bidder, who expressly stated at the time that he was authorized to make the bid, and who in a letter of 17 April by his clients was expressly admitted by them to have been authorized to make such bid, should be afterwards at liberty to reject such bid because, the market having-fallen, another attorney of theirs then expressed a doubt as to the legality of the bonds. That is a matter which they should have investigated before making the bid, and if a doubt should subsequently arise it was a matter which should have been decided by the courts.
The phrase in the written bid requiring, as this does, that a certified record of the proceedings under which the bonds were issued should be submitted to the purchaser (which was done on this occasion), could not give the .bidder the right to decide for himself as to the legality of the bonds, but would merely enable the purchaser to present any doubt as to the validity of the bonds to the courts. Otherwise the public are absolutely at the mercy of such bidders.
It may be noted that Mr. Craven not only stated unqualifiedly that he made the bid as attorney for the plaintiffs and deposited their $500 check by their authority as evidence of good faith, and at the session of the commissioners, when the bonds were awarded to his clients, un-qualifiedly asserted that such bonds would be subject only to his approval as their attorney, and proved his good faith by entering into a personal difficulty to prove the integrity of his clients, but those clients subsequently in a letter of 17 April asserted that he was “their attorney for the State of North Carolina,” and that never at any time since has Mr. Craven, by word or deed, thrown any doubt upon his assertion that he was duly authorized to buy said bonds, and he has given no indication since that he was not so authorized. Indeed it seems to be clear beyond question that the whole trouble arose solely because of the slump in the price of bonds which took place the next day upon the declaration of war. The purchasers, who had deposited $500 as evidence of their good faith, are now seeking to retract their bid, though the validity of such class of bonds had already been decided in this Court in the case above cited, Comrs. v. Spitzer, 173 N. O., 147, upon the very point upon which Attorney Roose expressed his doubt, and the identical bonds have since been sold, though at a loss, not caused by their invalidity, but owing to the war.
There has been nothing in the conduct of Craven, whom the plaintiff admitted to be their attorney for this State, to indicate that he has not acted in entirely good faith. It is the plaintiffs themselves, alone, who afterwards sought to withdraw their bid to the loss of many thousands of dollars to the taxpayers of Cabarrus and in bad faith to them and to the county commissioners, who, in reliance upon their good *703faith as the' highest bidder, lost the opportunity to sell the bonds to the next highest bidder or at public auction as the other bond buyers offered to do on that day'.
There was error by the presiding judge in refusing the testimony of the county commissioners, as set out in the record, as to the transaction, and also in taking the case from the jury by instructing them to return a verdict in favor of the plaintiff if they believed the evidence. Men who deal with the Government, whether National, State or county, should learn that they must do so in the utmost good faith. There can be no possible question in this case that Craven made the bid for his clients with the fullest authority and in the utmost good faith, and he had done nothing to throw doubt upon this proposition or to indicate that he has repudiated his action. "Whatever the motive of the plaintiffs in cancelling their bids, in regard to which there can be slight doubt, they had no right to do so. If they had any doubts about the validity of the bonds (as to which they should have satisfied themselves before making the bid), at least the legality of the bonds should have been tested before the courts. They could not decide the case in their own favor and to the loss of the other side. The cancellation upon the ex parte opinion of another of their attorneys is without excuse.
Even if the plaintiffs had the right to cancel their bid upon the opinion of another attorney than Mr. Craven, this Court had already decided more than a month before this occurrence, in Gomrs, v. Spitzer, supra, that this very class of bonds was valid and, at the least, the good faith of that other attorney of the plaintiffs, who gave an opinion which served as an excuse to the plaintiffs to cancel their order when the bonds went down in price, should have been submitted to the jury upon all the evidence.
In protection to the taxpayers of North Carolina, whose rights have been so often sacrificed in such cases, the jury should have been allowed at least to have passed on the good faith of the plaintiffs in refusing to accept these bonds at a cost to the taxpayers of the county of Cabar-rus of so many thousands of dollars. The counterclaim should have been submitted to the jury as well as the plaintiff’s claim for return of the $500 which was deposited as a guarantee of the good faith which they have not proven to any jury, and hence are not entitled to recover.
The County Commissioners of Cabarrus heretofore saved their county and people from a heavy loss unjustly attempted to be imposed on them (as this Court held) in Mfg. Co. v. Comrs., 183 N. C., 553.