DISSENTING OPINION. Under chapter 768, Local Private Laws of Mississippi 1928, the board of supervisors of Marion county was authorized to issue bonds not to exceed $150,000, for the purpose of constructing public roads therein, and to aid in the construction of federal-aid roads in said county, bearing interest at not more than 6 per cent., payable semiannually, as follows: $10,000 in 1929; $5,000 in 1930; $10,000 in 1931; $10,000 in 1932; $15,000 in 1933; $30,000 in 1934; $35,000 in 1935; and $35,000 in 1936; and to make a special levy of taxes annually for the purpose of paying said bonds at maturity, with the interest due thereon.
No question is raised as to the validity of the issuance of the bonds. The board of supervisors, under said law, issued the bonds, and in the order issuing same, pledged itself to levy annual taxes to pay same. The statute gave the board authority to levy taxes to pay the bonds therein provided for, and the board obligated itself to levy taxes annually to pay same when due, and these acts constituted a contract, binding upon the board of supervisors making the order, and its successors in office, during the life of the bonds, which was an important part of the inducement to buyers to take said bonds, and warranted them to expect that each year there would be a levy sufficient to raise enough money to pay the bonds.
The board of supervisors sold the bonds to a Memphis, Tenn., bank, and made them payable at the Hanover National Bank in New York City, N.Y. One Ralph May, now deceased, bought from the Memphis bank $10,000 in bonds, payable in 1932, and on its due date May caused same to be sent to the New York bank for payment, but payment was there refused, as there were no funds with it for the purpose of paying same. *Page 24 Thereupon May tendered these bonds to the board of supervisors of Marion county, Miss., for payment; but there payment was refused for the reason that the board had not made the tax levy for the year 1931. The board entered, as a part of its order, the recital on its minutes that: "Whereas, at the time of the maturity of the said notes, to wit, March 15, 1932, there were no funds on hand in the county depository which could be lawfully used for the payment of the principal of said notes, nor for the payment of any of said series of Marion county road notes maturing in the year 1932, nor has there since been, nor is there now, such funds on hand to pay and redeem said series of notes so maturing on March 15, 1932, and or on February 15, 1932." It then recited that the board did, on December 7, 1931, issue refunding bonds in the sum of $35,000, and had exchanged these refunding bonds with the holders of bonds with the exception of the claimant, May.
Thereafter the bank, as May's administrator, filed suit in the federal court for the Southern District of Mississippi against Marion county for said amount, and had execution issued, which was returned nulla bona. Thereafter the bank, by leave of the court, filed a petition for mandamus to compel the board to make a tax levy to raise funds to pay the $10,000 of bonds and in response thereto the board levied a tax in 1934 sufficient to pay the bonds with interest. The declaration alleged, and the demurrer admits, that the bank, as the administrator of May, was obliged to spend $1,500 in employing attorneys to secure payment of the bonds, and that this was a reasonable attorney's fee. The demurrer to the declaration was sustained.
There were attached to the declaration, as exhibits, the bonds, the proceedings allowing their issuance, etc., the order showing nonpayment, the declaration and judgment in the federal court, the writ of mandamus and the return thereon, and numerous other documents to show the proceedings bearing upon the matter. *Page 25
It would seem that the question presented is the liability of the members of the board of supervisors of Marion county for the expense of collecting these bonds.
It will be seen that the special act giving the board of supervisors of Marion county the power to levy taxes for the payment of the bonds at the same time as taxes for other purposes were levied, and the general law covering the year 1931, chapter 122, Laws 1930, fixing the county tax levy in the various counties, do not impose any limit on the tax-levying power of the board as to these bonds. Section 1, fixing the levy, reads as follows: "The boards of supervisors of the various counties may fix a tax rate for all purposes, exclusive of the county anddistrict road taxes and bridge taxes, common school taxes,agricultural high school taxes, and other school taxes, intereston bonds, and sinking funds at a rate not exceeding six mills on the dollar for the year 1930 and not in excess of six mills on the dollar for the year 1931. Provided, however, that counties having an assessed valuation of less than Four Million Dollars may fix a tax rate for all purposes exclusive of county and district road taxes and bridge taxes, agricultural high school taxes and other school taxes, interest on bonds, and sinking funds at a rate not in excess of eight mills for each of said years." This section is applicable here.
Section 3227 of the Code of 1930 provides and directs that county taxes shall be levied at the October meeting of the board of supervisors; "but, if the board of supervisors of any county shall not levy the county taxes at that time, the board may levy the same at any other regular adjourned, or special meeting." (Emphasis supplied.) As the taxes required to meet the notes or bonds maturing March 15, 1932, were not levied at either the October or subsequent meetings of the board in 1931, the board was authorized and required to do so at the January, 1932, meeting; and although certain persons first became members at that time, these were under duty to make the proper levy — that is to say, the board *Page 26 should have done so at that time. The new members of the board were under duty at this first meeting to find out the status of county affairs and county obligations, and what had been done to meet maturing obligations; and if no taxes had been levied, as required by law and by contract, to pay these maturing obligations, to insist upon levying the proper taxes. The authority to levy taxes at subsequent meetings applied to every tax required by law to be levied; and if through oversight any tax had been omitted, then to make the proper levy. It is, of course, the policy of the law to have the county obligations met at maturity, or at the earliest time provided by law for that to be done. For failure to perform this duty, each member became liable, under the statute referred to.
In order to solve the question here presented, it is necessary to construe all the statutes in pari materia, and from the entire legislation upon the subject, determine the policy of the law. See Mississippi Digest, "Statutes," 225; Miss.-So. Digest, Statutes, section 225; Dec. Dig. "Statutes," 225; 59 C.J. 1042, section 620. The Special Local and Private Act referred to must be construed in connection with chapter 152, Code of 1930, and section 247 of said Code. See Greaves v. Hinds County, 166 Miss. 89,145 So. 900, 59 C.J. 1056, section 623. From a careful reading and analysis of these statutes it seems to be manifest that the legislative purpose was to compel counties and other subdivisions of the state to make their bonds payable, part each year, so as to have a complete liquidation of their indebtedness, and thus maintain the public credit by issuing refunding bonds only after bona fide methods have been complied with, and failed to secure sufficient revenue to pay the debts.
By section 5980, Code 1930, it is provided that no county or municipality shall issue any bonds except on the serial plan. Section 5982 provides how counties and districts may issue bonds. Section 5983 provides for *Page 27 elections to be held to determine whether the people want such a bond issue. Section 5984 provides the conditions upon which bonds may be issued should the election result in favor of the issue, and provides that maturities shall not be longer than twenty-five years, with not less than one-fiftieth of the total issue to mature each year during the first five years, and not less than one twenty-fifth of the total issue during the succeeding ten-year period of the life of the bonds; the remainder to be divided into approximately equal payments, one payment to mature each year of the remaining life of the bonds.
Section 5985 provides that the proceeds of the bonds shall be used for no other purpose than the one set forth in the original resolution of the board of supervisors, and any officer diverting or assisting to divert any such fund to any other purpose than the one set forth originally in said resolution of the board of supervisors, shall be guilty of a misdemeanor and punished accordingly, and shall "be liable both personally and on his official bond for such diversion, and suit may be brought by any taxpayer interested." Section 5986 provides a limitation on the amount of bond issues. Section 5987 provides for the lending of the sinking fund when accumulated.
Section 5989 provides for the validation of bonds, and section 5990 provides as follows: "Whenever any county, road district, consolidated school district, rural school district, or other taxing districts controlled by the board of supervisors which has heretofore issued, or shall hereafter issue bonds or other obligations of which principal and interest shall be payable at some bank or trust company, or at some office other than the county treasury it shall be the duty of the clerk of the board of supervisors on the allowance of said board to issue a warrant against the proper fund for the amount of principal and interest due and to forward exchange to the paying agent, said exchange to be sufficient in amount to *Page 28 pay said principal and interest and a reasonable fee to said paying agent for handling same, said fee not to exceed one-quarter of one per cent. of the amount of coupons paid and one-eighth of one per cent. of the amount of bonds paid. Said exchange shall be forwarded in time to reach the paying agent at least five days prior to the date on which said principal and interest shall become due, and the receipt of the paying agent for said remittance shall be sufficient voucher in the hands of said clerk for said remittance until the bonds or coupons shall have been paid and cancelled and returned to said clerk."
Section 5991 provides that boards of supervisors shall make allowances at regular meetings held at least thirty days before said bonds and coupons become due, and section 5993 provides as follows: "For failure or refusal to comply with the foregoing provisions any official charged with any duties hereunder shall be liable on his official bond to any holder of any bond or coupon for any and all expenses incident to the collection of same, and for all damages which may have accrued on account of the failure to pay same promptly at the place of payment at maturity."
The original of this section, section 4, chapter 233, Laws of 1920, was in force when the notes or bonds were issued, and when the special act (chapter 768, Loc. Priv. Laws 1928) was passed; and the bond issue was controlled by this provision. This chapter, then, certainly applied to all bonds or indebtedness issued, and under its very terms was so applicable — it was not a provision in any particular scheme, but applied to all issues whatsoever. The board of supervisors is a continuing body, and although its members change from time to time, the board does not; and the acts of the board in 1928, pledging the full faith and credit of the county, bound all boards to carry out that pledge. It was certainly made under authority of law. This section was enacted with full knowledge of the general *Page 29 statute on the liability of officers (section 2903, Code 1930) and was intended to give a more comprehensive liability and create a personal liability on each officer and his bond for failure to perform these particular duties.
From these sections the conclusion seems to be inescapable that the public policy is that all debts incurred by counties and municipalities and other taxing districts shall be promptly paid at maturity; and in order to prevent boards of supervisors from neglecting to pay such obligations, thus impairing the credit of the county or other taxing district, and to insure bondholders from being put to great expense in collecting bonds when there is default in payment, the members of the board of supervisors who are responsible for such default shall be liable on their bonds.
In this connection it must be remembered that this state has greatly suffered in its credit from the repudiation of bonds nearly a century ago. It has also suffered from the fact that in years past sinking funds were not provided to take care of maturing bonds, and frequently it has been necessary to raise funds by issuing new bonds. Aware of the propensity of public authorities to incur debt to meet a situation deemed to be advantageous, and then fail to provide sufficient funds to repay such debt, and in order to discourage the issuance of bonds without adequate provision for their being paid during the enjoyment of the benefit, the Legislature, in 1918, by chapter 209, enacted a plan for the serial payment of bonds, and prohibited the issuance of other kinds. The issuance of refunding bonds, as provided for in section 5977, Code of 1930, is only to be resorted to when serial methods have been tried out in good faith, and insufficient funds have been raised. When this section is considered in connection with the policies above outlined, it is manifest that the Legislature intended to give no option to boards of supervisors to issue refunding bonds, instead of making tax levies. Under this *Page 30 section there is to be no election by the voters, and no limit as to the amount necessary. It is clear that the Legislature did not intend to permit boards of supervisors to issue bonds, and not levy taxes to pay them; and then to issue refunding bonds to take care of them.
Boards of supervisors in issuing bonds, and the people in voting for their issuance, must bear in mind that bonds must be paid, and that conditions might change — but that changing conditions do not free them from duties imposed by law.
If the board, in the case at bar, had levied a tax in good faith, on honest judgment, to pay the obligations, and if, through stress of conditions, all the money had not been collected, there might be reason, sufficient in law, to issue refunding bonds, and reason to hold that there was no personal liability on the board of supervisors, since they had made an honest, intelligent effort to comply with the law, and had failed.
The public too often forgets that depressions affect men of wealth and financial institutions, as well as ordinary people; but whether that be true or not, it is important that confidence and faith be maintained, and that obligations be promptly paid when due. The evil sought to be circumvented is well illustrated by the facts of this case. The bond issue payable during the first years is much less than that of the later years, and the burden grows as the years pass. The board must have figured that there would be a great increase in property values, and a decrease in public expenditures.
The Legislature in the past few years has made an honest, consistent effort to maintain the public credit and guard against future repudiations. The piling up of debts without providing for their payment when due, by taxes levied and collected for that purpose, during the life of the bonds, will lead inevitably to insolvency and repudiation a disaster to be avoided at all hazards. The act of the board here involved, and its sanction by this court, I fear will have an unfortunate effect upon *Page 31 the credit and financial standing of the state and its subdivisions.
I think there is liability upon the board of supervisors of Marion county, and that the demurrer should have been overruled, and such judgment rendered against the persons officially responsible, and against their bondsmen, as would be disclosed upon a hearing of the matter upon its merits.