Jones v. . Commissioners

CONNOR and MONTGOMERY, JJ., dissenting. The plaintiff, as receiver of the Western Carolina Bank, is the owner of eighteen coupon bonds of Madison County, aggregating $21,000, issued by the county of Madison by virtue of an act of the General Assembly of North Carolina, entitled "An act to settle the indebtedness of Madison County," ratified March 7, 1887, ch. 398, Laws 1887. They were issued to pay the necessary expenses of said county. The interest upon said bonds is payable as stated therein, and they mature and become due in the year 1907. In addition to said bonds the plaintiff is the owner of a certain warrant of indebtedness duly issued by said county for the sum of $5,155.16, which represents interest due and unpaid upon said bonds up to and including June 1, 1901, but upon this warrant of obligation there are certain credits, as stated in the findings of fact embraced in the judgment of his Honor. There is likewise interest due and owing to the plaintiff upon the coupons yet attached to said bonds and upon said warrant, as stated in said judgment and findings of fact of the Court below.

Under Public Laws, 1903, ch. 283, entitled, "An act to liquidate and settle the outstanding indebtedness of Madison County and to authorize the issue of a series of bonds for the purpose of paying off the bonds, floating debts and other claims now outstanding against the county of Madison, contracted for the necessary expenses of said county," (220) it is claimed by the plaintiff that it became the duty of the defendants, the Board of Commissioners of Madison County, to issue certain bonds not to exceed the amount of $75,000, with which, or the proceeds of which, to refund and pay off and discharge said bonds and certain other indebtedness of the county of Madison therein mentioned.

The plaintiff, and those under whom he derived his title to said bonds and other indebtedness against the county of Madison at various times demanded of the Board of Commissioners of Madison County that they issue said bonds as provided by said act of 1903; and at a meeting of said board held April 20, 1903, it was resolved by the same that said bonds be issued to an amount sufficient to pay off said indebtedness of said county, not to exceed $75,000; but at a subsequent meeting of said board held on or about the first Monday in May, 1903, the said board revoked its order of April 20, 1903, and then refused, has since refused and still refuses to issue said bonds; whereupon the plaintiff again made demand upon said board that they issue said bonds and in all things comply with the provisions of said act of 1903. Said board again refused to issue said bonds for the reasons stated in their exceptions filed to the judgment; whereupon this proceeding was instituted by the plaintiff against the defendants for the purpose of compelling them, by mandamus, to issue said bonds and in other respects comply with the provisions of said act of 1903. Upon the hearing of this case before his Honor the judge of the Superior Court, it was adjudged that the plaintiff was entitled to the relief demanded in his complaint. The defendants duly excepted to said judgment and appealed. (221) CLARK, C. J.

The first exception is that the summons was returnable before the judge at chambers, when the action being for a money demand should have been returnable before the court at term. But if that be conceded, yet, as held in Ewbank v. Turner, 134 N.C. 77, whether an action is returnable before the judge at chambers or at term or before the clerk, it is all before the same court, and if brought before the wrong department the remedy is the same as when action is brought in the wrong county. There is no defect of jurisdiction but an error as to venue merely, and the remedy is for the Court, either ex meromotu or on motion, to transfer the case to the proper docket. The defendant, not having made such motion, has waived his objection. Here the summons is returnable at chambers, but on a day during the term of court. Authorizing an action to be brought before the judge at chambers is simply intended as a convenient practice in cases where no jury is required in order to expedite a decision. If it turns out that there are issues of fact requiring a jury, there is nothing to be gained to any one by dismissing the action. It should simply be transferred to the docket at term time for trial. It would seem, moreover, that this action was properly made returnable at chambers. The amount is determined, and it is not sought to recover judgment therefor. The relief asked is a mandamus, not against the treasurer to pay any money, but to compel the county commissioners to issue bonds. Ducker v. Venable, 126 N.C. 447; R. R. v. Jenkins, 68 N.C. 503.

A better founded exception is that the act, Laws 1903, chapter 289, is not mandatory. The preamble recites that the county has an outstanding bonded indebtedness of $21,000 bearing six per cent interest, and the county will be unable to pay the same at maturity, and that it is to the best interest of the taxpayers that the bonds shall be renewed before maturity at a lower rate of interest, and also that the floating indebtedness of the county, incurred for necessary (222) expenses, should be funded by issuing a new series of bonds to cover the entire indebtedness of the county, and it is thereupon provided by section 1 that the board of commissioners are "authorized and empowered" to issue not exceeding $75,000 in bonds bearing five per cent interest. Section 3 "authorizes the commissioners to lay an annual special tax to meet the interest and principal. By section 8 of the county commissioners are "authorized, empowered and directed" to audit and ascertain and adjust the amount of the floating debt, and no bonds to be issued for any part of said debt unless two (of the three) commissioners shall pass upon and allow the same. Section 10 "authorizes" the county commissioners to retire the outstanding bonds by selling so many of the bonds issued under this act as may be necessary. Section 19 provides, "If the bonds authorized by this actare issued," the board of county commissioners shall levy a sufficient tax to pay the principal and interest, as already stated in section 3.

It would be a singular proceeding, and without precedent, we believe, in this State, if the Legislature should assume to know the wishes and interests of the people of any county better than the county commissioners elected by them to administer county business, and should peremptorily command the commissioners to issue bonds to fund a floating indebtedness, and in advance of the maturity of the bonded debt should order it refunded by new bonds for a time and at a rate fixed by the General Assembly. The long-settled custom has been to authorize and empower the local legislature, the board of county commissioners, to take such steps as may be necessary to fund or refund the debts, with certain limitations upon the rate of interest and duration of the bonds to be issued. Certainly, if the Legislature can order a county to issue bonds, it could as easily fix the interest at one figure as another. (223) If the Legislature had this power, a casual majority could practically confiscate all property in any county by directing the issue, by counties named in the respective acts, of large amounts of bonds and at an excessively high rate of interest, regardless of the wishes of the taxpayers of such county. Unlike state bonds issued by legislative authority, action could be brought in the courts on county bonds thus required to be issued by legislative authority and payment coerced. The assumption of a power so unprecedented, so contrary to the spirit of local self-government, and so liable to abuse, should be carefully scrutinized by the courts. We are relieved, however, in this case of the necessity of passing upon the power of the General Assembly to compel a county to issue bonds against its will, for it will be seen from the above extracts from the statute that the Legislature clearly intended no more than to authorize and empower the county commissioners to issue "not exceeding seventy-five thousand dollars." It is for the courts, not the General Assembly, to order the payment of debts, whether by counties or individuals. The courts certainly could not compel the issuance of these bonds unless the Legislature has both ordered the county peremptorily to issue the bonds and had authority so to do.

In Tate v. Comrs., 122 N.C. 812, the Court, speaking of counties, says: "They are but agencies of the State government. . . . They are subject to legislative authority which can direct them to do as a duty all such duties as they can empower them to do." The Court was there speaking of counties in respect to their governmental functions, as to which the counties are merely agencies of the State government and can be abolished, created or changed at the legislative will. The making of public roads is a public governmental function, and it was held that the Legislature could either empower or order the (224) making of these roads, in which the people of the State generally have an interest, and direct that the county shall lay a tax to pay for the construction of the road. But so far as the counties are business agencies of the people of a locality, whether county or municipality, the State cannot interefere [interfere] to make them create a debt or contract, or extend it (as here), or change the terms of the contract or authorize its violation. This distinction in the double function of counties and municipalities as governmental agencies on the one hand, in respect to which they cannot be sued and as to which they are subject to legislative control, and on the other hand their liability as business agencies of the people of the locality, as to which hence they can be sued and the Legislature has no power to control nor to create or relieve from liability, has been drawn in many cases. See McIlhenny v. Wilmington,127 N.C. 146, 50 L.R.A., 470; and cases there cited. The Constitution, Art. V, sec. 6, uses the words "with the special approval of the General Assembly," and not "by special command of the General Assembly."

The plaintiff relies upon an expression in section 11 of chapter 289, Laws 1903, that if any creditor shall desire to exchange his bonds or other evidence of indebtedness "for one or more of the bonds hereby authorized," it shall be the duty of the commissioners to make such exchange at par. But construed with the context, this means no more than the expression in section 19 of the act, "If the bonds authorized by this act are issued" the board of commissioners shall levy a tax, etc.

If the general Assembly has power to order a county to issue bonds, those acquainted with practical legislation and "senatorial courtesy" know that this important power will be in effect placed in the hands solely of those who for the moment represent the county in the General Assembly, and at a time when they will have small opportunity to consult the wishes and interests of their constituents, and when, (225) on the other hand, the agents and attorneys of those who desire to receive the bonds will be not only present in person but very ready with their arguments and advice. It is true the Legislature can abolish counties at will (Mills v. Williams, 33 N.C. 558), and repeal municipal charters, so far as counties and municipalities are governmental agencies, but so far as they are business agencies of the people of the locality to create indebtedness the Legislature cannot impair the obligation of the contract. Can the Legislature then compel the creation of a contract by a county by ordering the issue of bonds for thirty years, when the people thereof may prefer a shorter or longer term, and may be able to secure a lower rate of interest. Whether the Legislature has the constitutional power to take such a departure from precedent and can itself order the issuance of bonds, instead of authorizing and empowering the county commissioners to do so (subject to the restraining power of the court if an excessive amount or an excessive interest is contemplated, a restraint which would not attach to an issue made by legislative command), is happily a matter not before us, for the General Assembly in this statute has explicitly and clearly, and in the usual form, merely authorized and empowered the board of county commissioners to issue "not exceeding $75,000" to fund the floating indebtedness (the amount thereof to be ascertained by the commissioners) and to refund the bonded indebtedness which will mature in 1907. The General Assembly has not attempted to force the hands of the defendant board of county commissioners. It is true that the county commissioners, at a called session of April 20, being advised by counsel that the act was mandatory and that they had no discretion, did resolve to issue said bonds, but no action was taken thereon which conferred upon the creditors any vested rights, and at the first (226) regular meeting immediately thereafter on the first Monday in May, the board being then of opinion that the act merely "authorized and empowered" them to issue bonds, the order was revoked for reasons which they must have deemed good and sufficient, but which are unknown to us. The mandamus was improvidently granted.

Reversed.