Pike County v. Rowland

1. Whei’e a board, such as the commissioners of a county, propose to do any deliberative act that will be binding on the absent members, it should be done at a regular stated meeting or a regular adjourned meeting, and if the meeting be special notice is necessary, and it must be personally served, if practicable, upon every member entitled to be present. This rule applies alike to public and private corporations. 2. H., an administrator, signed a writing giving the assent of the stockholders of a bridge company to the sale of the bridge. Held, that as administrator he had the right to control or sell the stock, and his signing the assent was sufficient, as to third persons, whether he then held the stock as administrator or it had vested in him as owner. 3. The true meaning of sect. 8, art. 9, of the Constitution is that no municipality shall create a new debt or increase an existing debt, of more than two per cent, of the assessed property valuation, unless authorized by a public vote. When the debt is less than seven per cent., it is not intended that public officers of municipalities should be deprived of power to make improvements and repairs.of public property'which may become necessary, provided they keep within the limit .of two -per cent, of the valuation.

Error to tbe Court of Common Pleas of Monroe county: Of January Term 1880, No. 66. Covenant by Lafayette Rowland against Pike county to recover interest on several bonds issued by said county. The defendant pleaded non est factum; non infregit conventionem, and want of consideration, with leave, &c., and also filed the following special pleas: 1. That on the 5th day of November 1875, when it is alleged the covenants set forth in the declaration were made, no meeting of the commissioners of the county of Pike was held at which said covenants could be lawfully made. 2. That on said 5th day of November 1875, while one of said commissioners was by reason of intoxication entirely incapacitated for transacting business, he was induced with another of the commissioners to enter the commissioners’ office in the evening and cause the record of the adjournment of the board of commissioners to be falsely and fraudulently altered, and then and there, unlawfully and fraudulently if ever, said covenants were made by said two commissioners. 3. That all the above stated matters were well known to the plaintiff, and that the intoxication of said commissioner and alteration of the minutes were procured by the plaintiff for the purpose of unlawfully and fraudulently obtaining said covenants. 4. That on said 5th day of November 1875, the indebtedness of Pike county exceeded two per cent, of the last assessed valuation of taxable property in said county; and the assent of the electors of said county had not been obtained to the increase of said indebtedness. The special plea was subsequently amended to aver that two of the commissioners met during the day of the 5th of November 1815, and adjourned to the 9th of November, and that the meeting on the evening of the 5th of November, when it is alleged said bonds were issued, was not in pursuance of any adjournment, and without notice to Geyer, one of the commissioners. A change of venue was made to the county of Monroe. At the trial it appeared that by the Act of April 5th 1862, Pamph. L. of 1863, 652, George H. Rowland and others were incorporated under the name of the Lackawaxen Bridge Company •for the purpose of constructing a bridge across the Lackawaxen river in Pike county. The bridge was completed in 1863. In the winter of 1864, an act was passed authorizing the bridge company to sell the bridge to Pike county, and the county commissioners to purchase it and issue county bonds therefor. The act, provided, however, that before said sale could be made, the assent in writing of a majority in number of the stockholders should be given. From the testimony on behalf of plaintiff it appeared that a majority of the stockholders signed the assent to the sale, and that the approval of the court was then obtained. Rowland then had some bonds printed, and went to the commissioners to have them executed, but then ascertained that two of the commissioners, Drake and Geyer, were opposed to the purchase. Shortly thereafter, at the general election, on the 5th of November, new commissioners opposed to the purchase of the bridge were elected. It appeared that on the day of the election, Drake, who wms defeated at the election for re-election, met Rowland and told him that he had a notion to go in for buying the bridge. On the 4th of November Geyer, Drake and Rosecrans, the then old commissioners, were in regular session, and during its session Geyer asked when the next meeting would be held, and was told on the 9th, but that they would adjourn over to the 5th to finish business. Geyer then left before the close of the meeting. Rosecrans and Drake met on the 5th and Rowland went before them, and the two commissioners determined to purchase the bridge. The meeting adjourned until the evening to enable the counsel of the commissioners to prepare the necessary papers, when, the bonds were executed and issued. On the part of the defendant it was shown that A. Hanners, one of the assenting stockholders, claimed to be a stockholder by reason of the following facts: His father had recently died owning some of the stock. He took out letters of administration on his father’s estate, filed an inventory and appraisement of the personal property, including this stock, and in the evening of the same day agreed with his mother and three sisters (two of whom were minors without guardians) to take all the personal property at its appraised value. The stock was never transferred to him on the books of the company, and at the time of signing this assent, and of the subsequent action of the commissioners based upon it, he had filed no account as administrator nor in any public manner charged himself with the stock. He did not sign the assent as administrator but as an individual claiming personally to own the stock. 'Geyer testified that when he left the meeting on November 4th, the understanding was that no further business was to be transacted except the appointment of an assessor, that this was to be done at the meeting of the 5th, and that the meeting of the 4th was to be adjourned to the 9th. The commissioners’ record showed 'that Rosecrans and Drake did meet on the 5th and transacted the particular business agreed upon, and that an adjournment to the 9th instant was then entered. The commissioners’ clerk testified, “ They adjourned to the 9th instant. The record of the adjournment to Tuesday, the 9th instant, was made at that time.” Drake was seen with Rowland several times during the afternoon and evening of the 5th — Drake being in a state of intoxication. He was then heard to declare that he w’as disposed to favor the purchase of the bridge. Later in the evening he, with Rosecrans, the other commissioner, went into the commissioners’ office, caused the record to be altered to show an adjournment to that evening instead of the 9th instant, adopted a resolution to purchase the bridge, executed and delivered $2100 county bonds therefor and adjourned. Geyer, as commissioner, filed his protest at once, and the new board of commissioners refused to recognise the transaction, when this suit was brought by Lafayette Rowland (who still held the bonds, having never distributed them to the stockholders of the bridge company) to recover two years’ interest. The defendant proposed to ask Thrall, one of the defendant’s witnesses: Had -you any conversation with Sol. Drake, one of the county commissioners, prior to night of November 5th 1875, during the day of the 5th, with reference to his (Drake’s) views as to the purchase of the Lackawaxen bridge, what he intended to do, and as to any inducements that had been held out to him by George Rowland or Lafayette Rowland ? “ Objected to and objection sustained.” (1st assignment of error.) Also, to prove by witness that on Friday, November 5th 1875, Sol. Drake said to the witness that he was offered by the plaintiff $500, and a trip to Niagara Falls ánd expenses paid, if he would assent as commissioner to the purchase of the bridge. “ Objected to and objection sustained.” (2d assignment.) The defendant also objected to the admission in evidence of the bonds, on the ground that plaintiff had not shown the assent in writing of a majority of the stockholders of the bridge company. “Objection overruled.” (3d assignment.) The defendant submitted the following points, all of which the court refused, constituting respectively, the 4th, 8th and 9th assignments of error: 1. That if the jury believe from the evidence that, during the forenoon or afternoon of the 5th day of November 1875, the commissioners adjourned to meet on Tuesday, the 9th instant, and that the subsequent meeting on the evening of said 5th day of November, was without notice to Greorge Greyer, one of the commissioners, and without his knowledge, then under the law the commissioners, Rosecrans and Drake, had no power at such meeting to purchase the Lackawaxen bridge and issue bonds therefor, and that the county of Pike is not bound by said action. 2. It appearing from the evidence that the indebtedness of Pike county, on the 5th day of November 1872, exceeded two per centum upon the assessed valuation of the taxable property therein, the commissioners were, by the Constitution and laws of this Commonwealth, at that time prohibited from incurring the additional indebtedness of $2100, and such attempted action of two of said commissioners, and the bonds alleged to have been issued by them could not and did not bind the county of Pike. 3. Lafayette Rowland, the plaintiff, having been treasurer of the county of Pike on the 5th day of November 1875, and during the year 1875, is charged with knowledge of the fact that the indebtedness of the county exceeded two per centum upon the assessed valuation of taxable property in said county at that time, and he cannot recover upon the bonds upon which the suit is founded. The plain tiff ..submitted the following points: 1. That the net amount of indebtedness of Pike county existing at the time of the adoption of the new Constitution and the issuing of the bonds in question, being less than three per centum on the assessed valuation of taxable property, and the n.ew indebtedness created by the purchase of the bridge not exceeding two per centum on such valuation, the issuing of said bonds is not in contravention of the 8th section of the 9th article of the Constitution, or of the Act of 20th April 1874. 2. That the Act of 23d March 1865, providing for the sale of the Lackawaxen bridge, is not repealed by the 8th section of the 9th article of the Constitution, nor by the Act of the 20th of April 1874, nor is the right to carry out the provisions of said act suspended or controlled by the Constitution or the Act of April 20th 1874. 4. That under the Act of March 20th 1874, the commissioners of Pike county had a right to increase the then existing debt, or create a new debt, not exceeding two per centum of the valuation. The court affirmed these points, pro forma (6th, 7th and 13th assignments), and reserved the questions involved therein. In the general charge, the court, inter alia, said: “We charge you that it was not necessary to notify Geyer, the other commissioner, of the meeting on the evening of the 5th, when the bonds were issued, if the other two commissioners were there according to adjournment, or in pursuance of notice to themselves without a previous adjournment.” (5th assignment.) May 31st 1879, verdict for the plaintiff in the sum of $252, subject to the opinion of the court, whether under the following facts, which they find, to wit: That at the time of the adoption of the .present Constitution of this state, and at the time of the purchase of the bridge by the commissioners of Pike county, and for the purchase-money of which the bonds described in the plaintiff’s declaration were given, the indebtedness of said county exceeded two per centum, but did not exceed three per centum upon the assessed valuation of taxable property therein, that the purchase or consideration-money for said bridge did not exceed 2J mills on the dollar of the assessed value of' such taxable property, and ■the commissioners of said county purchased said bridge and issued said bonds on the 5th day of November 1875, under the authority conferred upon them by the Act of Assembly, approved March 23d 1865, entitled “An act for a free bridge over the Lackawaxen river at Lock No. 10, on the Delaware and Hudson Canal,” the plaintiff is entitled to recover. If the court shall be of opinion that under these facts the plaintiff cannot recover, that then they find for the defendant, and judgment to be entered in their favor. The court, Dreher, P. J., entered judgment for the plaintiff on the special verdict (12th assignment), delivering the following opinion:— “ The questions raised upon the special verdict are:— “1. Whether, the indebtedness of a county, the debt of which at the adoption of the present Constitution, exceeded two per centum (but was less than three per centum) upon the assessed value of the taxable property therein, may be increased (the increase being less than two per centum upon such assessed valuation of property) -without the assent of the electors of the county ascertained by a public election. “ 2. Whether the 8th section of article 9, of the new Constitution, and the Act of the 20th of April 1874, Pamph. L. 65, repealed the special Act of Assembly of the 23d of March 1865, Pamph. L. 650, entitled, ‘ An act providing for a free bridge over the Lackawaxen river at Lock No. 10 on the Delaware & Hudson Canal.’ “ The first section of that act authorizes the Lackawaxen Bridge Company to make a conveyance of all their right, title and interest in the bridge, with the contiguous land and all appurtenances and franchises held by them, to the county of Pike. The second section authorizes the commissioners of the county of Pike, with the written approval of the associate judges of the county, to purchase said bridge for cash, or bands bearing interest at the rate of six per centum to be paid annually. “ The 8th section of article 9 of the Constitution is as follows: ‘ The debt of any county, city, borough, township, school district or other municipality or incorporated district, except as herein provided, shall never exceed seven per centum upon the assessed value of the taxable property therein ; nor shall any such municipality or district incur any new debt or increase its indebtedness to an amount exceeding two per centum upon such assessed valuation of the property, without the assent of the electors thereof at a public election, in such manner as shall be provided by law ; but any city, the debt of which now exceeds seven per centum of such assessed valuation, may be authorized by law to increase the same three per centum in the aggregate at any one time upon such valuation.’ “ It is contended by the defendant that the term ‘ new debt ’ has reference to counties not indebted, and that such counties may incur a debt amounting to two per centum upon the assessed valuation, without a vote of the electors assenting thereto, and that the phrase ‘ increase its indebtedness,’ has reference to counties having an existing indebtedness, and that such counties cannot make any increase of such indebtedness if the proposed increased and old indebtedness together exceed two per centum of the assessed valuation, without first obtaining the assent of the electors at an election held for that purpose.' “ I cannot see any such distinction between the- expressions ‘incur any new debt’ and ‘increase its indebtedness.” An existing indebtedness is certainly increased by contracting or incurring a new debt, and a new debt may be incurred by a county or an individual already in debt. Suppose a county with an indebtedness of ten thousand dollars should find it necessary to borrow ten thousand dollars to put up a public building and issue bonds therefor; this borrowed ten thousand dollars would certainly be a new debt. It is no part of the old debt. It might be said that the county had increased its indebtedness to the amount of ten thousand dollars, but certainly it would not be said she had increased her debt to the amount of twenty thousand dollars. “The second clause of the 8th section reads: ‘Nor shall any such municipality or district incur any new debt or increase its indebtedness to an amount exceeding two per centum upon such assessed valuation of property without the assent of the electors thereof at a public election in such manner as shall be provided by law.’ “ Now, according to the argument of the defendant, this clause provides for two classes of counties:— “ 1st. Such as have no debt; and they may incur a debt not exceeding two per centum upon the assessed valuation, without a vote of the electors. “ 2d. Such counties as are in debt; and they may increase such ■ indebtedness if the existing debt with the increase does not exceed two per centum of such assessed valuation, without a vote of the electors. [“ According to the defendant’s theory, there is no place in the second clause of the 8th section for that class of counties having an indebtedness exceeding two per centum of the assessed value of property therein. It would be incorrect to say that a county having an indebtedness equal to or in excess of two per centum may increase that indebtedness, but the indebtedness when increased shall not exceed two per centum. We might as well say that a quantity equal to A. may be increased, but such a quantity when increased must not exceed A. It is not a sufficient answer to this to say that as the maximum limit fixed by the first clause is seven per centum, therefore any county not having reached that limit may increase its indebtedness by a vote of the people. The second clause provides for the vote of the taxpayers to be taken in the cases therein mentioned — that is to say, according to defendant’s argument, where a county has no debt, and .where there is a debt less than two per centum, and it is proposed to increase it so that the debt and the increase will exceed two per centum.] Tenth assignment. [“ I think the county of Pike had the power to purchase the bridge, and issue bonds in payment therefor notwithstanding her indebtedness was in excess of two per centum of the assessed value of taxable property therein, at the time these bonds were issued. Whether these bonds are viewed in the light of a ‘new debt,’ or an increase of an existing indebtedness, I think they are binding upon the county, and judgment is therefore entered upon the special verdict in favor of the plaintiff.] Eleventh assignment. “ In this opinion I have not referred to the Act of 20th April 1874, thinking it unnecessary to do so, as that act is certainly not more restrictive upon the power of a county to contract indebtedness than the Constitution. [If the defendant’s interpretation of the Constitution is correct, I think it very doubtful w'hether the power of the county commissioners to purchase the bridge and issue the bonds under the special act of 23d March 1865, was abrogated by the adoption of the new Constitution.”] Fourteenth assignment. The defendant took this writ and alleged that the court erred as set forth in the above assignments of error.