W. L. Slayton & Co. v. Board of Commissioners

186 N.C. 690

• Court: Supreme Court of North Carolina
• Decided: December 20, 1923
• Status: Published

Opinions

HoKE, J.

The facts in evidence tended to show that on 5 April, 1917, defendants having invited bids for a proposed bond issue of the county of $50,000 for the purpose of building a county home, plaintiff with others submitted their bid and deposited with defendants their certified check for $500 as an evidence of good faith, same to be credited on the price of the bonds in case plaintiff’s bid was accepted and they became the purchasers. That plaintiff’s bid was submitted in writing duly signed by Brace Craven as attorney for plaintiff, and same contained an offer of a premium for said bonds of $1,790, and also a stipulation in terins as follows:

“Prior to taking up and paying for said bonds you are to furnish us with a full and accurate transcript of tbe record, duly certified, of the proceedings leading up to and culminating this issuancfe and delivery of tie bonds, to tie satisfaction of our attorney. Herewith is our certified' check for $500 as evidence of good faith in making this bid, which is to be retained by you and presented for payment as part of the purchase price of the said bonds, provided the same are duly awarded to us on this bid and delivered to us in accordance with the terms thereof at the Northern National Bank in Toledo, Ohio.”

That plaintiff’s being the higher bid, defendants, by formal resolution spread upon the minutes of the board and signed by them, accepted said bid and awarded the bonds to plaintiffs in pursuance of the terms of the same. That the records considered necessary appertaining to the proposed bond issue some time thereafter, about or just before 11 April, were forwarded to plaintiffs at Toledo, Ohio, and on being submitted to their regular bond attorney, W. H.- Roose, he replied by letter of 16 April, asking for further data, and such data being furnished, said attorney, on 30 April, wrote a letter giving his opinion in formal disapproval of said bond issue, and containing among other things the following: '

“It appears from the data now furnished that the above-mentioned bonds are being issued under the so-called inherent right of the county officials to borrow money for necessary expenses. This being true, there is no authority to levy a special tax for the payment of Said bonds, but same would have-to be taken care of out of the general county-purpose tax. It also appears that $105,000 of the outstanding bonded indebtedness of said county has been issued under a local law which authorizes the levy of a special tax to take care of same. This leaves $159,000 of such outstanding bonded indebtedness which must also be taken care of out of the general county-purpose tax.

“It appears from the certificate of the Register of Deeds of Cabarrus County, now submitted, that said county is now levying 47 2/3 cents on the $100 valuation for State and school purposes, 19 cents for county purposes, 30 cents special road, and 8 cents special interest and bridge fund. It therefore appears that there has already been levied in said county for State and county purposes 66 2/3 cents on the $100 valuation, not counting the special tax. This being the maximum amount of taxes which may be levied in any year, it is quite apparent that said county will be unable to levy the additional tax necessary to take care of this new issue of bonds. I am therefore returning to you herewith the transcript submitted without my approving opinion.”

And tbe deposition of W. H. Eoose, in reference to said bonds, and duly put in evidence, is as follows:

“I, W. H. Eoose, of tbe city of Toledo, am a practicing attorney duly, qualified and authorized to practice witbin tbe State of Obio. I bave been a practicing attorney for 35 years and a bond attorney almost exclusively for 20 years, and am still in tbe active practice of law, particularly bond law. I bave my office at Eoom No. 740, Spitzer Building, Toledo, Ohio. On 11 April, 1917, W. L. Slayton & Oo. submitted to me a transcript of tbe record of tbe proceedings of tbe Board of County Commissioners of Cabarrus County, North Carolina, relating to tbe issuance of $50,000 borne bonds, and requesting my opinion as to tbe legality of tbe proceedings leading up to and including tbe issuance of said bonds.

“After a very thorough examination of tbe transcript of tbe record of tbe proceedings of said board relating to tbe issuance of said bonds, I advised W. L. Slayton & Co. that I could not approve said issue of bonds. I am attaching hereto copies of two letters I wrote to W. L. Slayton & Co., which contained my opinion rendered to them regarding the validity and legality of said bonds, tbe first letter dated 16 April, 1917, and now marked ‘Exhibit A,’ and tbe second letter dated 30 April, 1917, and now marked ‘Exhibit B.’ My opinion was made after a very thorough examination of tbe transcript and of tbe statutes and law of tbe State of North Carolina, and in entire good faith, and was based on my conviction that tbe construction of a county home was not a necessary expense as contemplated by section 7 of Article YII of tbe Constitution of North Carolina; and that even though it might be considered a necessary expense, the county was already levying taxes up to its constitutional limit.”

There was also evidence of the good character and capacity of said attorney. Immediately on receipt of this opinion plaintiff notified defendant that they would not proceed further in the proposed purchase, and defendants were compelled to dispose of the bonds at a lower bid and with 'a loss to the county as stated.

It also appeared that defendants had duly tendered the bonds, claiming that there had been a definite contract of purchase at the price, which plaintiffs refused as stated, and some time thereafter, plaintiff having demanded a return of the check, defendants refused compliance, etc., and in suit entered therefor set up a counterclaim for damages incident to plaintiff’s alleged breach of their agreement to buy the bonds.

It has been held by this Court, in cases where the question was directly considered, that where a bid for bonds has been made on condition of approval of the bidder’s attorney as to the legality of the proposed bond issue, such stipulation is a condition precedent to a binding agreement to purchase, and in the absence of bad faith, the position will prevail though the attorney’s opinion prove to be erroneous. Grant v. Board, of Education, 178 N. C., 329; Webb v. Trustees, 143 N. C., 299; City of Rome v. Breed & Co., 21 Ga. App., 805.

In the Webb case, supra, the matter was discussed in a well-considered opinion by our former associate, Mr. Justice Connor, and it was there held as follows:

"Where the plaintiff proposed to purchase certain bonds issued by the defendant, ‘when legally issued to the satisfaction of our attorney,’ which proposition was accepted by the defendant, the approval of the attorney selected to pass upon the validity of the bonds, honestly and fairly expressed, was a condition precedent to the completion of the purchase.

“The correspondence or negotiation leading up to a proposition to purchase bonds is not material, where the proposition made by plaintiff and accepted by defendant was the result of such negotiation, and their relative rights and liabilities must be ascertained and declared upon the plain and unambiguous language found therein.”

And in the subsequent case of Grant v. Board of Education the Court, in upholding this decision, and as pertinent to this inquiry, said: “On these, the pertinent facts of the controversy, the question chiefly presented was fully considered by us in Webb v. Trustees, 143 N. C., 299, and it was there held in effect that when the designated attorney, acting in good faith, has given an adverse opinion as to the validity of the bonds, the bidder was justified in refusing to proceed further, and in such case the conditional deposit is recoverable by the express terms of the agreement, and the position is not affected by the fact that the opinion of the attorney may have been erroneous, unless so arbitrary- and capricious as to permit the inference of bad faith,” citing further authorities: Kinnicent v. Joint School Committee, 165 Wis., 654; U. S. Trust Co. v. Inc. Town of Guthrie, 181 Iowa, 992; City of San Antonio v. Rollins & Sons (Texas), 127 S. W., 1166.

This being the principle as it prevails here, we can'find no valid reason why the cases heretofore cited shall not be regarded as controlling on the facts of this record. It is contended for appellant that by the terms of the condition the attorney is not authorized to pass on the validity of the bonds, but only, and as a matter of form, on the regularity of the procedure leading up to the proposed issue, but this to our minds is not a fair or permissible interpretation of the condition expressed in the bid, and would in effect be to rob the stipulation of all significance. Considering the position of the parties, the purpose had in view, and the more reasonable meaning of the words used, it is clear, we think, that the “full and proper record” is to be furnished to afford tbe attorney reliable data for bis opinion on tbe validity of tbe bonds as a binding municipal obligation enforceable by taxation, and, so considered, tbe opinion of tbe attorney was well witbin tbe purpose and meaning of tbe powers contained in tbe terms of tbe bid. Commissioners of Johnston v. State Treasurer, 174 N. C., 141-145.

It is further insisted tbat tbe stipulation is of no effect because Bruce Craven, Esq., wbo submitted tbe bid for plaintiff before same was accepted, gave definite assurance tbat tbe record and bond issue would be approved by bis principals. A proper perusal of tbe record will disclose, we tbink, tbat tbis statement of Mr. Craven was not intended or received as a contractual modification of tbe written bid submitted by bim, but was ratber by way of retort to tbe charge of an opposing bidder tbat tbe principals represented by Mr. Craven were in tbe habit of avoiding their bid when it suited them to do so, but if tbe evidence is to receive a different interpretation the position-here may not avail tbe defendants because of tbe fact tbat plaintiff’s bid was submitted and thereafter formally accepted in writing, and tbis, tbe express written agreement of tbe parties containing tbe condition of tbe attorney’s approval, may not be varied by a previous or contemporary stipulation in direct modification of tbe written contract between them. Improvement Co. v. Andrews, 176 N. C., 280; Mfg. Co. v. McCormick, 175 N. C., 277; Walker v. Venters, 148 N. C., 388; Bank v. Moore, 138 N. C., 529, citing Meekins v. Newberry, 101 N. C., 18; Ray v. Blackwell, 94 N. C., 10.

In tbe impressive language of tbe present Chief Justice, in Walker v. Venters, supra, “Tbe written word abides.” And in Ray v. Blackwell, supra, Smith, Chief Justice, delivering tbe opinion, said: “It is a settled rule too firmly established in tbe law of .evidence to need a reference to authority in its support that parol evidence will not be beard to contradict or alter tbe terms of a contract put in writing, and all contemporary declarations and understandings are incompetent for tbe purpose.”

Nor is there any evidence tending to show tbat Mr. Craven bad any authority to modify tbe terms of plaintiff’s written bid, or tbat defendants in accepting tbe bid understood or acted in any belief in "such authority. On tbe contrary, tbe only sworn testimony is to tbe effect tbat be was tbe attorney of plaintiff only to submit tbe bid of plaintiff in tbe terms and at tbe price specified, and to show tbat defendants so understood it, they submitted tbe data as to tbe procedure leading up to tbe proposed bond issue, and tbe circumstances attending it, to plaintiff’s bond attorney in Toledo, Ohio.

As we have seen in tbe authorities cited, tbe mere fact tbat tbe attorney has given an erroneous opinion is without significance unless, as stated in one of tbe authorities cited (City of San Antonio v. Rollins, Texas), “The disapproval was fraudulent, capricious, and in bad faith,” and in our opinion such a position cannot for a moment be upheld. True, as pointed, out by appellant, this Court had directly decided, nearly a month before the opinion was submitted, and contrary to the same, that the building of a county home was a necessary county expense, and that a debt therefor could be contracted and taxes laid without a popular vote on the subject, but the facts in evidence do not disclose that the attorney knew of’ this or that he was likely to know of it, and assuredly the circumstances are not such as to permit an inference of fraud on his part concerning it. The opinion referred to, announcing the principle, was rendered at Spring Term, 1917, being filed 14 March of that year. It did not appear in our published Reports until the summer following, long after this transaction. Nor was it published in the S. E. until four or five weeks after it was filed. On the record, therefore, this matter was considered and the written opinion given by the attorney before the Court opinion in question appeared in any accredited publication likely to have come under the observation of the attorney, and the possibility that he might have seen it is entirely too vague to constitute legal evidence on an issue of fraud.

On authority apposite such a charge is not even made in the pleadings with sufficient definiteness to raise an issue of that kind. Galloway v. Goolsby, 176 N. C., 635-639; Best v. Best, 161 N. C., 514; Mottu v. Davis, 151 N. C., 237.

And assuredly there is no evidence to sustain such a charge against a man proved to be an honorable and capable attorney whose opinion shows that he had examined the matter with care and had given an opinion based on our published Reports, and so far as they were then reasonably accessible to him.

We think the charge of his Honor is in accord with the precedents applicable, and the judgment on the verdict is affirmed.

No error.