United States v. North Carolina
This was an action of debt, brought in this court on November 5, 1889, by the United States against the state of North Carolina, Upon 147 bonds under the seal of the state, signed by the governor, and countersigned by the public treasurer, for $1,000 each, payable in 30 years from date, with interest at the yearly rate of 6 per cent., alleged in the declaration to be payable half-yearly until payment of the principal,-19 of the bonds dated January 1, 1854, and payable January 1, 1884, and 7 bonds dated January 1, 1855, and payable January 1, 1885, issued under the statutes of North Carolina of January 27, 1849, and December 22 and 25, 1852; and the remaining 121 bonds, dated April 1, 1855, and payable April 1, 1885, issued under the statute of North Carolina of February 14, 1885, and all these bonds, differing only in date of execution and in day of payment, being in the following form: 'It is hereby certified that the state of North Carolina justly owes to the North Carolina Railroad Company or bearer one thousand dollars, redeemable in good and lawful money of the United States at the Bank of the Republic, in the city of New York, on the first day of January, 1884, with interest thereon at the rate of six per cent. per annum, payable half-yearly at the said bank on the first days of January and July of each year, from the date of this bond and until the principal be paid, on surrendering the proper coupons hereto annexed. In witness whereof, the governor of the said state, in virtue of the power conferred by law, hath signed this bond, and caused the great seal of the state to be hereto affixed, and her public treasurer hath countersigned the same, this first day of January, 1854.' The material provisions of the statutes under which the bonds were issued are copied in the margin. 

The declaration alleged that, at the dates when the bonds became payable, payment of the principal was demanded by the United States, and refused by the state of North Carolina. The state of North Carolina pleaded payment of the principal sums of the bonds after they became payable, together with all interest accrued thereon to the days when they became payable. The United States moved for judgment as by nil dicit, because the plea did not answer so much of their demand as was for interest after the bonds became payable. The case was submitted to the decision of the court upon a case stated, signed by the attorney general of the United States, and by the attorney general of North Carolina, as follows: 'The parties to the above-entitled case stipulate that, upon the issue joined, the facts are that payment of the bonds was demanded and refused at the several times in the years 1884 and 1885 in the declaration alleged; but subsequently, upon or about the 2d day of October, 1889, all coupons upon the bonds were paid, and that, besides, $147,000 was paid upon account of whatever might then remain due upon the bonds; the United States then contending that, because of interest at six per cent. per annum, which at that time had accrued upon the principal of the bonds since their maturity, such payment left still unpaid upon the debt the sum of $41,280, while the state then contended that no interest had accrued upon the principal of the bonds after their maturity, and therefore that such payment was in full of such debt. The parties submit to the court that in case, as matter of law, the principal of said bonds did so bear interest after maturity, judgment is to be entered for the plaintiff for $41,280, but that, if it did not so bear interest, judgment is to be entered for the defendant." Atty. Gen. Miller, S. F. Phillips, J. G. Zachry, and F. D. McKennery, for plaintiff.

T. F. Davidson, Atty. Gen., (N. C.,) and S. G. Ryan, for defendant.

Mr. Justice GRAY, after stating the facts as above, delivered the opinion of the court. 

Notes

'Sec. 36. That whenever it shall appear to the board of internal im-

provements of this state, by a certificate under the seal of said company, signed by their treasurer and countersigned by their president, that one-third have been subscribed for and taken, and that at least five hundred thousand dollars of said stock has been actually paid into the hands of said treasurer of said company, the said board of internal improvements shall be, and they are hereby, authorized and required to subscribe, on behalf of the state, for stock in said company to the amount of two millions of dollars to the capital stock of said company; and the subscription shall be paid in the the following manner, to-wit: The one-fourth part as soon as the said company shall commence work, and one-fourth thereof every six months thereafter, until the whole subscription in behalf of the state shall be paid: provided, the treasurer and president of said company shall, before they receive the aforesaid installments, satisfactorily assure the board of internal improvements, by their certificates under the seal of said company, that an amount of the private subscription has been paid in equal proportion to the stock subscribed by the state.

Sec. 37. That if, in case the present legislature shall not provide the necessary and ample means to pay the aforesaid installments on the stock subscribed for on behalf of the state, as provided for in the thirty-sixth section of this act, and in that event, the board of internal improvements aforesaid shall and they are hereby authorized and empowered to borrow, on the credit of the state, not exceeding two millions of dollars, as the same may be needed by the requirements of this act.

Sec. 38. That if, in case it shall become necessary to borrow the money by this act authorized, the public treasurer shall issue the necessary certificates, signed by himself and countersigned by the comptroller, in sums not less than one thousand dollars each, pledging the state for the payment of the sum therein mentioned, with interest thereon at the rate of interest not exceeding six per cent. per annum, payable semi-annually at such times and places as the treasurer may appoint, the principal of which certificates shall be redeemable at the end of thirty years from the time the same are issued; but no greater amount of such certificates shall be issued at any one time than may be sufficient to meet the installment required to be paid by the state at that time.

Sec. 39. That the comptroller shall register the said certificates at large, in a book to be by him kept for that purpose, at the time he countersigns the same.'

'Sec. 41. That, as a security for the redemption of said certificates of debt, the public faith of the state of North Carolina is hereby pledged to the holders thereof; and, in addition thereto, all the stock held by the state in the North Carolina Railroad Company, hereby created, shall be, and the same is hereby, pledged for that purpose; and any dividends of profits which may from time to time be deciared on the stock held by the state

as aforesaid shall be applied to h e payment of the interest accruing on said certificates. But, until such dividends of profit may be declared, it shall be the duty of the treasurer, and he is hereby authorized and directed, to pay all such interest, as the same may accrue, out of any moneys in the treasury not otherwise appropriated.

Sec. 42. That the certificates of debt hereby authorized to be issued shall be transferable by the holders thereof, their agents or attorneys properly constituted, in a book to be kept by the public treasurer for that purpose; and in every instance where a transfer is made the outstanding certificate shall be surrendered and given up to the public treasurer, and by him canceled, and a new one, for the same amount, issued in its place to the person to whom the same is transferred.' Laws N. C. 1848-49, pp. 153-155.

The Act of Dec. 22, 1852, c. 10, entitled 'An act to regulate the form of bonds issued by the state,' contains the following provisions: 'Section 1. That all certificates hereafter to be issued for any money to be borrowed for the state by virtue of any act now in force authorizing the same, or of any act which may be hereafter passed for that purpose, shall be signed by the governor and countersigned by the public treasurer, and sealed with the great seal of the state, and shall be made payable to _ or bearer; and the principal shall be made payable by the state at a day named in the certificate or bond; and coupons of interest, in such form as may be prescribed by the public treasurer, and to be attached to the certificate, and the certificates and coupons attached thereto, shall be made payable at such bank or place in the city of New York as he, the public treasurer, may think proper, or at the office of the public treasurer at Raleigh, if preferred by the purchaser: provided, however, that no such certificate shall be issued for a less sum than one thousand dollars, and no certificate shall be sold for a less sum than par value.

Sec. 2. That it shall be the duty of the public treasurer to enter in a book, to be kept for that purpose, a memorandum of each bond or certificate issued by virtue of this act, the numbers, date of issue, when and where payable, to whom issued, or to whom sold, and at what premium, if any, the same was sold by him.' Laws N. C. 1852, pp. 45, 46.

By the Act of Dec. 27, 1852, c. 9, entitled 'An act to increase the revenue of the state by the sale of its bonds,' 'it shall be the duty of the public treasurer to have coupons attached to all the bonds of the state hereafter sold by him.' Laws N. C. 1852, p. 45.

The Act of Feb. 14, 1885, c. 32, entitled 'An act for the completion of the North Carolina Railroad,' contains the following:

'Section 1. That the public treasurer is authorized and instructed to subscribe in behalf of the state for ten thousand additional shares of capital

stock in the North Carolina Railroad Company, and that he make payment for said stock by issuing and making sale of the bonds of the state under the same provisions, regulations, and restrictions prescribed for the sale of the bonds heretofore issued and sold to pay the state's original subscription in the stock of said company; and the same pledges and securities are hereby given for the faithful payment and redemption of the certificates of debt now authorized that were given for those issued under the direction of said act; provided, nevertheless, that the whole amount of principal money of such bonds or certificates of debt shall not exceed the sum of one million of dollars.' Laws N. C. 1854-55, p. 64.
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