« ForrigeFortsett »
$50,000, for legal services, and there was surrendered to Costello the note which he owed the company. There was no secrecy about these items, and it is manifest from the findings and the evidence that they constituted no inducement to the contract. Whether Gage can be compelled to pay to the Cobre Company the money received by him we need not decide. Its receipt by him did not make the whole contract fraudulent. It did not take from the stockholders the power to sell their stock, nor from the directors of the company the power to control the litigation in which the company was involved, to abandon that litigation or to compromise it. In the exercise of their power they could have done those things directly. It was a matter of form and procedure that it was done in the manner provided by the contract of December 12.
It is deceptive to call or regard the action of the directors as a transfer of the property of the corporation without consideration or for an inadequate consideration. The company had only a right to purchase the property, the conditions of which it had not fulfilled. It claimed legal excuse and brought suits against Greene, but that it had legal excuse was disputed, and seems to have been doubted by all who were interested in the property but the plaintiffs. A jury in Texas had decided against the excuse; and the court in Arizona has also done so. ;
. That the latter was subsequent to the contract of December 12 does not militate against it as proof of good faith of the settlement.
This view of the merits of the case renders it unnecessary to pass upon the contention of the defendants that a court of equity has no inherent power, in the absence of statutory authority, to appoint a receiver upon the application of a private person under the circumstances presented by the complaint.
There are assignments of error upon the rulings of the trial court on the admissions of testimony, oral and documentary, which we do not think call for discussion. It is enough to say that they are not well taken.
There is also an assignment of error upon the refusal of the Supreme Court to make certain findings of fact. We think the findings made substantially cover those proposed, certainly to the extent necessary to the case as we have considered it.
GRAHAM, COUNTY AUDITOR FOR GREENWOOD
COUNTY, v. FOLSOM.
ERROR TO THE CIRCUIT COURT OF THE UNITED STATES FOR THE
DISTRICT OF SOUTH CAROLINA.
No. 108. Argued December 8, 1905.-Decided January 8, 1906.
The power of the State to alter or destroy its municipal corporations is not,
so far as the impairment of the obligation clause of the Federal Constitution is concerned, greater than the power to repeal its legislation; and the alteration or destruction of subordinate governmental divisions is not the proper exercise of legislative power when it impairs the obliga
tions of contracts previously entered into. Courts cannot permit themselves to be deceived; and while they will not
inquire too closely into the motives of the State they will not ignore the effect of its action, and will not permit the obligation of a contract to be impaired by the abolition or change of the boundaries of a municipality. Where a tax has been provided for and there are officers to collect it the court will direct those officers to lay the tax and collect it from the property within the boundaries of the territory that constituted the
municipality A suit to compel county officers to levy and collect a tax on property
within the county to pay bonds of a municipality is not, under the circumstances of this case, a suit against the State, either because those officers are also state officers, or because the bonds were issued under legislative authority
The facts are stated in the opinion.
Mr. F. Barron Grier and Mr. Joseph A. McCullough, with whom Mr. J. B. Parks was on the brief, for plaintiffs in error.
Mr. R. E. L. Mountcastle and Mr. H. J. Haynsworth for de fendants in error.
MR. JUSTICE MCKENNA delivered the opinion of the court.
This writ of error brings up for review the judgment of the Circuit Court in mandamus, requiring plaintiffs in error to assess and collect taxes to pay a judgment recovered by defendant in error against Township Ninety-six, for certain bonds issued by it in aid of the Greenville and Port Royal Railroad Company. In Folsom v. Ninety Six, 159 U. S. 611, the bonds were declared valid obligations of the township. In accordance with the opinion in that case judgment was entered in favor of the suing bondholders. Defendants in error are owners of that judgment. The legislation which authorized the issue of the bonds is recited in Folsom v. Ninety Six, and need not be repeated at length. We may say, however, that the act incorporating the railroad empowered townships interested in its construction to subscribe for its capital stock such sum as the majority of the voters, voting at an election held for that purpose, might authorize, and it was provided (section 9) that “the county auditor or other officers discharging such duties, or the city or town treasurer, as the case may be, shall be authorized and required to assess annually upon the property of said county, city, town or township such per centum as may be necessary to pay said interest of said sum of money subscribed, which shall be known and styled in the tax book as said railroad tax, which shall be collected by the treasurer under the same regulations as are provided by law for the collection of taxes in any of the counties, cities, towns or townships so subscribing." 19 Stat. S. Car. (1885) 237, 240.
In 1895 South Carolina adopted a new constitution, by which it was provided that the several townships of the State, with names and boundaries as then established, should continue, with power, however, in the legislature, to form other townships or change the boundaries of those established. Art. VII.
This section, by an amendment finally adopted in 1903, was made inapplicable to certain townships, including Ninety-six. It was provided that “the corporate existence of the said townships be, and the same is, hereby destroyed, and all offices in said townships are abolished and all corporate agents removed.” 24 Stat. S. Car. (1903) 3.
At the time of the execution of the bonds Township Ninetysix was situated in Abbeville County, and in 1896 the county of Greenwood was organized out of portions of Abbeville and Edgefield Counties, and Township Ninety-six was included in Greenwood County.
The officers of the latter county refused to assess and collect the taxes, contending that they are not officers of the county, but officers of the State, appointed by the Governor of the State, and are termed county officers because assigned to duty in that county, but cannot exercise any function of those offices except as authorized by the laws of the State, and that they have been forbidden by an act of the general assembly of the State to assess or collect taxes for the payment of subscriptions by townships to the building of roads which have not been buiit. 23 Stat. S. Car. (1899) 78.
Against this defence defendants in error invoke the contract clause of the Constitution of the United States.
As we have seen, the validity of the bonds was decided in Folsom v. Ninety Six, supra; in other words, they were decided to be the contracts of the township, and that the acts which authorized their issue constituted their obligation. In this the court announced and applied the principle of many cases which are too familiar to need especial citation.
Plaintiffs in error yield to the case of Folsom v. Ninety Six, but contend that it is open to inquiry what officers, under the act authorizing the bonds, were the corporate agents or officers of the township, and, answering the inquiry, say the county commissioners were such agents and officers, not the county auditor and county treasurer, and that, it is contended, the Circuit Court has so decided. The distinction that plaintiffs
contend for, based on the opinion of the court, is merely verbal. The court distinguished the duties of the commissioners from those of the auditor and treasurer, and expressed with emphasis the continuing duty of the latter. The court said: “If the contention that the legislature had the right to destroy the corporate existence of the township be true, we are nevertheless confronted with the fact that the instrumentalities and means employed by the legislature, in this instance, for the purpose of enforcing the collection of a tax, are still unimpaired.'
The purpose of the court, therefore, was to point out the temporary duties of the commissioners and to emphasize the permanent duties of the auditor and treasurer as instrumentalities of the law, with a continuing power to give its remedy and protection to the bonds, “independent of the existence of the township.” And there can be do doubt about this from the words of the statute.
It is further contended that the action of the court in issuing the writ disregarded article IX of the constitution of 1868, entitled “Finance and Taxation." Section 8 of the article provides “That the corporate authorities of counties, townships, school districts, cities, towns and villages may be vested with power to assess and collect taxes for corporate purposes.
And the further limitation of the power of municipal corporations to levy and assess taxes, expressed in section 6, article X, of the constitution of 1895, to wit, “For educational purposes, to build and repair public roads, buildings and bridges, to maintain and support prisoners, to pay jurors, county officers, and for litigation, quarantine and court expenses, and for ordinary county purposes, to support paupers and pay past indebtedness.'
The argument is that "the 'corporate authorities' of the county cannot be vested with power to assess and collect a tax for township purposes, nor vice versa. That power can only be delegated to the authorities of the body contracting or about to contract the debt." And this argument, it is con