Court Opinion

ID: 4003750
Source: CourtListenerOpinion
Date Created: 2016-07-06 11:05:04.673179+00
Date Added: 2024-06-11T14:19:03.987934
License: Public Domain

The majority opinion states that the questions arising herein fall into three main points: "(1) Are the plaintiffs below entitled to maintain this suit; (2) has the county court legal authority to purchase and operate the bridge in question; and (3) if the power exists was the exercise thereof in this case tainted with such constructive or other fraud as will warrant us in voiding the sale and purchase *Page 348 
under investigation?" I shall endeavor to follow this outline in my note of dissent.
As to the first point, suffice it to say that I agree with the majority of the Court.
Coming to a discussion of the second point the following language appears in the majority opinion: "If, as the law was at the time Chapter 27 was enacted, the county court had no authority to purchase and operate a toll bridge, then to give the Act any effect whatever, we must hold that former acts have been superseded to the extent that they prevented the exercise of the power granted by the new statute." Chapter 27 did not, as I view it, take the place of any existing statute, but only gave to county courts and municipalities powers which they had not possessed prior to its enactment. This clearly appears from language appearing in the majority opinion subsequent to the sentence just quoted.
It is my belief that the provisions of Section 2, Chapter 27, Acts 2nd Ex. Sess. 1933, are clearly reconcilable with the prior enactment (Ch. 40, Ex. Sess., 1933) granting to the state road commissioner control and authority over the primary and secondary roads of this state, for the reason that a privately owned toll bridge by its very nature is not a part of such road system although physically it may constitute a link or connecting part thereof. I do not agree with the statement of the majority opinion that existing laws are superseded by Chapter 27 to the extent of the addition of a power not existing prior to its enactment. Consistent with the principles just stated, I agree with the conclusions stated in the majority opinion, but I do not agree with the reasons given therefor.
The majority opinion refers to the case of Board of Education
v. County Court, 104 W. Va. 80, 138 S.E. 761, as illustrative of "an extreme case of inadequate price" citing the same to show "the reluctance of courts to hold fraudulent transactions involving discretion as to the price at which property is purchased or sold." In that case, the County Court of Wood County sold the capital stock in the Parkersburg-Ohio Bridge Company at an alleged inadequate price. (See the majority opinion for its discussion *Page 349 
of that case and conclusions derived therefrom). In my mind, the Wood County case shows that this Court stands ready to scrutinize carefully such transactions and to protect citizens and taxpayers in matters involving the purchase and sale of property, in which the public has an interest, rather than an inclination to gloss over an irregular course of conduct by a county court, the result of which is to use money collected from the travelling public to purchase a bridge at a price approximately twice its replacement value. To that extent, I believe the case last cited to be misapplied by the majority opinion.
As to the third point, I am of the opinion that the circuit court was correct in finding that the action of the county court was constructively fraudulent.
The majority opinion takes up separately the following questions: (a) The haste in which the transaction was consummated; (b) the failure of the county court to consult its legal adviser, the prosecuting attorney, as to the legal aspects of the purchase of the bridge; and (c) the price and terms agreed upon, answering each contention of appellees in turn. In the determination of whether the conduct of a public body or a public official amounts to constructive fraud, I do not believe that the various factors which together compose the conduct of such body or official should be dealt with separately. It may be true that any one of the various considerations discussed in the able opinion prepared by Judge Fox scrutinized alone would not sustain the charge of constructive fraud, however, their composite result in my opinion is controlling and when thus examined it is plain that the sum total of their effect tends to injure the public interest and violates a confidence and a trust. I am of the opinion that all of the series of events and acts which constitute a course of conduct should be examined and appraised as a whole. Moore v. Gregory, 146 Va. 504, 131 S.E. 692;Hulings v. Lumber Co., 38 W. Va. 351, 18 S.E. 620.
As stated in Leader Pub. Co. v. Trust Co., 182 Ind. 651,108 N.E. 121, 124: "Constructive fraud, or legal fraud, arises by acts or course of conduct which, if sanctioned by law, would, either in the particular case or in common experience, *Page 350 
secure an unconscionable advantage, irrespective of the existence of evidence of actual intent to defraud. * * * Fraud in law is what the law condemns, from all the facts and circumstances surrounding a transaction and is synonymous with constructive fraud." So, to use the language of the Indiana case, just referred to, it is the series of acts or course of conduct and all the facts and circumstances surrounding the transaction here involved that I have considered in determining that the existence of constructive fraud has been shown here.
I agree with the majority of the Court in its conclusion that the manner in which the meeting of the board of directors was held for the purpose of preparing the offer to be submitted to the county court on the following day should have no bearing upon the decision herein. My disagreement with the majority's conclusion begins with the presentation of the offer.
The majority opinion asks: "Should the county court have taken the matter under consideration, given it publicity and invited public discussion and advice?" While not impressed with the last portions of the question propounded, I do believe that full consideration of the matter should have been undertaken by the county court and that the thirty minute executive session could not have afforded that consideration, an integral part of which certainly was the seeking of advice from the prosecuting attorney. Should not some further information have been sought in regard to the present value, replacement value and cost of repairs and future income? A matter of this magnitude requires that there should be a careful, searching investigation of all the facts, and due deliberation thereon, — especially is this true where the financial interest of the public is involved and there is a fiduciary relationship existing as between the County Court of Cabell County and the taxpayers, citizens and the travelling public generally. The members of the county court are not expert in the intricacies of the law and the difficult problems of structural engineering. The majority opinion recites that the county court was justified in purchasing without delay by the considerations that the *Page 351 
bridge is located almost wholly in Cabell County, that local effort and capital built it, that its object is the promotion of Huntington, which is the magnet for the use of the bridge, and pride in the ownership of a traffic artery so that future control would not be in the State of Ohio Are these valid reasons? It may be that they should be so regarded in the marts of trade and in the market place, but they have no place in the agencies of government and the deliberations of a body controlling the fiscal policies of a county.
Regardless of the demands of provincialism and the so-called necessities of expediency the stark fact remains that the travelling public is called upon to pay almost twice the actual replacement cost of the bridge. There is an attempt to justify this unusual conduct on the ground that future income constitutes an important element of value. The income from the bridge comes entirely from tolls, and while I readily concede that the right to take tolls for the use of the bridge has a substantial value and should be given fullest consideration in arriving at a sales price, yet a value of approximately $1,000,000.00 seems to be entirely too high. Future income is uncertain and of such a speculative nature that value based thereon can not, with justice, be accorded such weight.
The majority opinion states, in effect, that there is one value for rate-making purposes and another value for the purpose of condemnation or purchase. Since the entire income is derived from tolls, I fail to see any reason for this distinction. The value for rate-making purposes controls the income to be derived from the bridge. Since almost one-half the purchase price is based on future income, it is only logical to say that the value for rate-making purposes is a true basis — at least in this instance — for appraising the bridge property in so far as the purchase price is in excess of the value of tangible property.
The amount paid for the bridge is controlling in this controversy. Low or high tolls only determine the time of payment and not the amount. To my mind it is wholly illogical to attempt to justify the high price paid by saying that high tolls will make the bridge free in a short time, *Page 352 
or low tolls will react to the benefit of the public over a longer period. In any event, the travelling public will be required to pay two million dollars, for a property which can be replaced for $1,143,400.00, to use the highest estimate appearing in the record.
The offer made by Somerville is accepted as being of evidentiary value. No inquiry is made as to the capacity of the offerer to make his offer good. The fact that Somerville is connected with a bank is mentioned in the majority opinion — this connection alone is not sufficient to establish thebona fides of the offer made by him nor does it show his capacity to carry out the terms thereof.
In Davis v. Bridge Commission, cited in the majority opinion, this Court said: "The allegations of secret purchase at $325,000.00 of an antiquated and inconvenient bridge costing only $42,000 a quarter of a century ago, and upon which $55,000 must be spent for immediate repairs, when a modern, adequate and convenient structure could be built for $160,000.00, make a sufficient charge of constructive fraud." As to the annual average of $60,000.00 in tolls, the Court said: "the imposition of excessive tolls by a public utility does not add to the real worth of its property". I do not assert that excessiveness of price stands out as clearly in the case at bar as in the Davis
case, but it is merely a question of degree and I believe that the sound, moral principal enunciated in the Davis case applies with equal force to the facts established in this case. Although it may be said that the statements quoted from theDavis case are mere dicta, who can gainsay that they meet the highest requirements of morality, diligence, forethought, sound public policy and correct business principles in dealing with public finances. I believe that the majority opinion does violence to these principles.
What of the weight to be accorded a finding of fact by a trial chancellor upon conflicting facts adduced before him? Should this principle, long established in this and other jurisdictions, be ignored in this case? "The findings of fact of the trial chancellor will not be disturbed on appeal unless at variance with undisputed evidence or contrary to the plain preponderance of the whole evidence." *Page 353 Hatten v. Hatten, 110 W. Va. 208, 157 S.E. 582. See Board ofCommissioners v. Mining Co., 122 W. Va. 442, 9 S.E.2d 813
for a late enunciation of this rule.
Finally, I wish to refer to what I term, the "apologetic attitude" of the majority opinion, in its discussion of the activities of the County Court of Cabell County surrounding this bridge purchase. The keynote of this "apologetic attitude" is sounded with this sentence: "It is apparent that agreements involving public interests of the magnitude of those being considered are not ordinarily entered into under conditions such as those surrounding the execution of the sale and purchase under attack." Further, it is said that this was not an ordinary transaction. In my opinion, this shows a disposition to relax the ordinarily stringent rules and principles surrounding the activities of public bodies possessed of fiduciary character. Why should any excuses be made for the actions of such public bodies, unless the purpose be to cover some illegal act? I look with abhorrence upon such elastic — and I say elastic because any transaction is capable of being labeled as out of the ordinary — treatment of the rules governing the acts of public bodies while the public is blissfully unaware that their interests are so subverted.
For the reasons herein stated I would affirm the decree of the trial court.