Cudd v. Calvert

The opinion of the Court was delivered by Mr. Chief Justice McIver. By an act approved 8th June, 1877, 16 Stat., 272, it was declared, amongst other things, in section 1, “that for the purpose of constructing a railroad from the town of Spartanburg to the North Carolina line, in the direction of Rutherfordton, N. C, a company may be formed with a capital stock of not more than $500,000, to be known as the Spartanburg and Rutherford Railroad Company,” &c. By the 2d section, commissioners were appointed to open books of subscription for the purpose of raising the capital stock of said company. By the 3d section, it is provided that when the sum of $10,000 shall have been subscribed to the said capital stock, the company may be organized. By the 9th section, the companj'’ is authorized “to unite and consolidate with any other railroad now built, or hereafter to be built, in this State or in the State of North Carolina,” &c. On the 9th of February, 1882, an act was approved, entitled “An act to amend an [470] act entitled ‘An act to incorporate ■ the Spartanburg and Rutherfordton Railroad,’ approved June 8th, 1877, by reducing the shares to $50 per share, and authorizing cities, towns and counties to subscribe to the capital stock of said company.” (17 Stat., 934.) By the 2d section of said act, it is declared that “It shall and may be lawful for any city, town or county interested in the construction of said road to subscribe to its capital stock such sum as a majority of their voters may authorize, the * * * proper authorities of such city * * * to subscribe, which subscription shall be made in seven per cent, coupon bond's * * * said bonds to be made payable in equal instalments of sixteen, twenty, twenty-four and twenty-eight years after the date thereof, * * It will be observed that this act purports to amend an act to incorporate the Spartanburg and Rutherfordton Railroad, and we are unable to find that any such act was ever passed, though we do find that an act had been passed, as set out above, incorporating the Spartanburg and Rutherford — not Rutherfordton — Railroad Company. But as we do not propose, at this stage of the case, to- make any point as to this variation in the title of the company whose charter it was proposed to amend, we shall assume, for the purpose of the present inquiry, that the legislature intended, by the act of 9th of February, 1882, to- amend the charter of the Spartanburg and Rutherford Railroad Company, the incorporation of which w^as authorized by the act of 8th of June, 1877, above cited. In the act of 1880 — 17 Stat., 434 — incorporating the city of Spartanburg, it is provided: “That the bonded debt of said city shall in no way be increased without an act of the General Assembly authorizing the same, and without the consent of two-thirds of the qualified electors of said city being first had by an election for that purpose,” and the same provision is carried into the act, approved 4th of January, 1894 — 21 Stat., 686— amending said charter. At some time — prior to- the 2d of October, 1882 — a petition, without date, was presented to the city council of Spartanburg, in these words: “We, the [471] 'undersigned citizens of the city of Spartanburg, S. C., being desirous of forming a railroad connection with the town of Rutherfordton, N. C., respectfully request- that it be submitted to the voters of said city to subscribe by an ad valorem tax the sum of $25,000, to be expended in the construction of a railroad between the points above indicated.” Upon receipt of such petition, the mayor of said city, on the 2d day of October, 1882, issued his order, directing an election to be held on the 16th of November, 1882, for the purpose of determining the question whether such subscription to said railroad should be made. Accordingly an election was held at the time appointed, and on the 1st day of December, 1882, the managers of said election made their return, showing that the result was in favor of such subscription by a majority of 319 votes. This return was received by the city council, who declared the result of the election to be in favor of subscription. No further action appears to have been taken by the city council upon the subject until 2d day of July, 1898, when they passed an ordinance, a copy of which is set out as an addendum to the “Case,” which should be incorporated by the Reporter in his report of this case — which ordinance provided for the issue of bonds of the city of Spartanburg to the amount of $25,000, to “be delivered to the proper authorities of the Spartanburg and Rutherfordton Railroad Company.” In the meantime, however, the Constitutional Convention, which assembled in the year 1895, passed an ordinance providing, amongst other things: “That nothing in the Consitution ordained and established by the people of South Carolina, now in Convention assembled, shall prohibit the General Assembly * * * from enacting such laws as may be necessary to validate and carry into effect the subscription by the city of Spartanburg to the capital stock of the Spartanburg and Rutherfordton Railroad Company, heretofore voted for and authorized by the qualified voters of the city of Spartanburg, and validate and authorize the issue of the bonds of said city in payment of the same.” (Con. [472] 1895, p. 107.) In pursuance of this ordinance, as it is' claimed by the city council of Spartanburg (but whether such claim is well founded, is one of the questions in this case), the General Assembly passed an act, approved 25th of February, 1896 — 22 Stat., 316 — entitled “An act to validate and confirm certain acts of the Spartanburg and Rutherfordton Railroad Company, and the subscription of the city of Spartanburg to the capital stock thereof, and to authorize bonds of said city to be issued in payment of said subscription.” The special provisions of this act need not now be more particularly referred to. On the......day of July, 1898, the plaintiffs, as taxpayers in the city of Spartanburg, on behalf of themselves and all other taxpayers in said city, commenced this action, for the sole purpose of restraining and enjoining the city council of Spartanburg from issuing the bonds as provided for in the ordinance of said city council above referred to. The grounds upon which the plaintiffs base their claim for an injunction are fully set out in their complaint, which should be incorporated in the report of this case. Very soon after the action was commenced, the plaintiffs applied for and obtained from his Honor, Judge Townsend, an order, bearing date 25th of July, 1898, restraining and enjoining the defendants from issuing said bonds until the further order of the Court. After the answer was filed, the defendants gave notice of a motion, to be made before Judge ToAvnsend on the 12th of August, 1898, “on the pleadings and whole record herein, including the affidavit hereto attached, and such affidavits as we may hereafter serve, for an order dissolving the preliminary injunction herein, and for such other and further relief as may be proper,” upon the grounds stated in said notice. This motion came on to- be heard by Judge Townsend on the 16th of August, 1898, as we infer from a statement made in his decree, and on the 15th of September, 1898, he rendered his decision dissolving the temporary injunction previously granted. From this plaintiffs appeal upon the several [473] grounds set out in the record, which, under the view we take of the case, need not be specifically stated here. 1 From an examination of the decree of Judge Townsend, it is very manifest that he considered and passed Upon the whole case, just as if it had been heard by him, regularly, upon the merits. For this reason, a copy of the decree should be incorporated in the report of this case. It seems to us that where, as in this case, the action is brought solely for the purpose of obtaining an injunction, and where, if the facts alleged in the complaint are found to be true, a proper case for injunction would be presented, it is error to dissolve a temporary injunction upon a mere motion, heard upon affidavits, as that would deprive the plaintiff of his legal right to have the facts determined in the mode prescribed by law, instead of by affidavits — a most unsatisfactory mode of eliciting truth. Indeed, the practical result, in a case like this, would be to dismiss the complaint upon a mere motion, heard upon affidavits, without any opportunity being afforded the plaintiff to have the facts upon which he bases his claim for relief determined in the mode prescribed by law. For if in this case the injunction should be dissolved, there would be nothing to prevent the issue of the bonds before the case could be heard on its merits, and if the bonds passed into the hands of innocent holders without notice, as they might and probably would do, then the controversy would become absolutely useless. If, therefore, the facts alleged in the complaint can be established upon a trial on the merits, where the witnesses can be subjected to examination and cross-examination, then we do not think it can be denied that the plaintiffs would be entitled to the injunction prayed for. The authorities cited by appellants in their argument sustain the view we have taken. 2 Flight on Inj., 3d edit., secs. 1509, 1511 and 1512; Seabrook v. Mostowitz, 51 S. C., 433. Exceptions 13, 15 and 21, raising this point, must be sustained. [473] It is contended, however, in the argument here, that the question which we have been considering was not made be [474] fore the Circuit Judge, and, therefore, cannot be raised here. In the first place, we remark that the record before us does not show that such question was not raised before the Circuit Judge. True, it does not appear to have been considered in the decree of the Circuit Judge; but it frequently happens that the Circuit Judge does not, in rendering his1 judgment, consider or rather pass upon all the points raised by counsel, as he may overlook some, or disregard others, as in his judgment not pertinent to the case in hand. But aside from this, appellants, certainly, could not know, before the decree was filed, that the Circuit Judge would go into a consideration of the whole case, just as if it had 'been heard on the merits; and, therefore, the only mode by which the question could be brought before this Court was by the exceptions taken to the decree. It is very different from a case in which an appeal is based upon exceptions imputing error in the omission to charge certain propositions, where there has been no request to charge such propositions. Indeed, in a case like the present, we do not see how this Court could ascertain what 'points had been made below, unless we had the whole argument on Circuit before us, or the fact is made to appear by admissions of counsel, which is not the case here. 3 4 This would be conclusive of the question before us; but perhaps we should notice the effect of the ordinance of the Constitutional Convention, and of the act of 1896, above referred to, as it seems to be argued that the facts in this case are concluded by such ordinance and act. As to the ordinance, it is very manifest that its only purpose and effect was to relieve the General Assembly from any restraints imposed upon that body by the provisions of the Constitution of 1895, with respect to the subject referred to in the ordinance. The practical effect and manifest object of the ordinance was simply to authorize the General Assembly, if a subscription to the capital stock of the Spartanburg and Rutherfordton Railroad Company, which had been authorized by a vote of the qualified electors of [475] said city, had been made, to validate the same, and authorize the issue of bonds in payment of such subscription. But it does not declare, or purport to declare, that the General Assembly shall have power to legislate facts into existence, which never did exist. As to the act of 1896, which defendants claim was passed in pursuance of said ordinance, it undertakes to recite in its preamble certain facts, and in the body of the act the existence of the facts thus recited are assumed, and upon such assumed facts (which it had no power to do, Cooley on Const. Lim., 2d edit., 96), it proceeds to declare “that the election heretofore held in the city of Spartanburg upon the question of the subscription by the said city of the sum of $25,000 to the capital stock of the Spartanburg and Rutherfordton Railroad Company, is hereby declared to have been legally held, and the subscription then made by sáid city to the capital stock of said railroad company be and the same is hereby validated and confirmed, and declared to be a binding subscription by said city, and the proper officers of said city are hereby authorized and required to issue bonds in payment of said subscription,” &c. If the facts, as recited in the preamble and body of this act, be true, then it is difficult to conceive any necessity for any validating act. Indeed, we do not see how the act of 1896 can be regarded as a validating act in any proper sense of those terms. The scope and purpose of a validating act is to perfect some transaction which, from some irregularity or informality, is not complete, or to confirm a contract creating a moral obligation, but which from some irregularity or informality lacks the force and effect of a legal obligation. A striking example is where a municipal corporation enters into a contract which, at the time, it had no power to make. If the contract be such an one as the legislature might originally have authorized, then it may be validated and confirmed by subsequent legislation (Cooley on Const. Lim., 2d edit., 379). But if no such contract has, in point of fact, ever been made, then it is altogether beyond the scope of validating legislation to declare [476] that such contract has been made, and require its performance. In such a case there is nothing to validate. The act of 1896 cannot, therefore, be regarded as an act passed in pursuance of the authority conferred upon the General Assembly by the ordinance of the Convention above referred to. Under this view of the case, we have not deemed it necessary. or even proper, at this stage of the case, to consider any of the other questions presented by the exceptions, as such questions should and must be first determined in a regular trial upon the merits. The judgment of this Court is, that the order of the Circuit Judge dissolving the injunction be reversed upon the grounds stated, and that the case be remanded to the Circuit Court for trial on the merits, and that in the meantime the injunction heretofore granted be continued until the further order of the Court.