HANNON V. GRIZZARD. no cause of action against the commissioners, for he would not have been kept out of an office to which he was entitled; for qualification is as essential a condition as an election to the holding of the office, and exercising its appropriate functions. If it be a tort to entertain an inquiry into the constitutional competency of the person elect, and the duty to induct is absolute and unqualified, why would not a cause of action be furnished in denying the alleged right of admission alike in either case? If the power exists to examine into the qualifications of the applicant under any circumstances, the liability cannot be contingent upon the correctness of the conclusion arrived at, resting upon the commissioners in one case, and removed in the other. But it must be remembered, that the public have a right and an interest in having offices and places of trust filled by persons who, under the law, are alone declared competent to discharge their duties. The right of one elected by a vote, to be inducted into office, is in subordination to the Constitution, and he must possess the qualifications it prescribes. The result of the vote is conclusively settled, so far as the action of the commissioners is concerned, by the Canvassing Board when authenticated by their certificate, but the person elected must be competent to occupy the place. The electors select, but they must select one who has the necessary qualifications. Are the commissioners bound in all cases to admit into office persons whom they know to be disqualified, or of which fact they have abundant and satisfactory proof, as of alienage or of conviction and adjudged punishment for an infamous crime, or of non-resi dence, upon peril of personal responsibility for an erroneous judgment? If so, the rule is a harsh measure to be meted out to those public officers in their honest endeavours to do their duty. We do not mean to encourage the assumption of this power, for, exercised indiscriminately, it is liable to great HANNON v. GRIZZARD. abuse and often oppression. It is reasonable to presume, and act upon the presumption, that a person chosen by the electors has the required qualifications, and that he should be permitted to enter upon the office. But in a case where the possession of the necessary qualifications is drawn in question by the protest of a considerable number of the electors, and after an honest and diligent examination of facts, it so appears to the commissioners, (although the evidence was in great doubt, as appears in the opinion in Hannon v. Grizzard, 89 N. C., 115,) it would be manifestly wrong to punish them in damages for an error in judgment. The power to exclude from office one elected to it, because he had not complied with the conditions of admission in producing before the Board the evidence of a settlement of taxes collected under a previous incumbency, was upheld in Lee v. Dunn, 75 N. C., 595, as rightfully exercised. The plaintiff's demand rests upon an alleged illegal assumption of authority to make any inquiry into his constitutional fitness and act upon it, irrespective of the correctness of the conclusion reached. In other words, it denies the right to refuse admission, even if disqualification does exist. This is to assert that one whom the law prohibits to hold office and to discharge its functions, has a right to be admitted, though then liable to be removed, and that it is a remediable wrong in the commissioners to recognize the force of the constitutional interdict in their own action in the premises. The Canvassing Board, as we have said, determine the result of the election; the commissioners induct into office those who have been elected, and who are qualified to hold it. Both conditions, and alike essential in each, underlie the right to take it, and while in a palpable case, the applicant may be denied admission, and no wrong done him, and the like result follows a correct determination of the incapacity, it would be strange to visit with damages, an unintentional error as decided in a subsequent suit. BANK V. THE M'F'G Co. We concur with the Judge, that the action does not lie in this case, though it would if the action of the commissioners had been prompted by malice, and as a means of accomplishing an unlawful end. No error. Affirmed. THE TRADERS NATIONAL BANK OF CHARLOTTE et als. v. THE LAWRENCE M'F'G CO. et als. THE SAME PLAINTIFFS v. THE SAME DEFENDANTS-J. R. HALL'S APPEAL. THE SAME PLAINTIFFS v. THE WOODLAWN M'F'G CO. et als. Reference― Usury-Bonds of Corporations-Registration— Mortgage-Materials-Liens. 1. Where an appeal is taken to this Court from the action of a Judge in passing upon exceptions to the report of a referee, exceptions should be taken and stated in the record to the rulings of the Judge which it is sought to have reviewed, and the case ought not to be sent to this Court to be heard only on the exceptions taken to the ruling of the referee. 2. Where the charter of a corporation allowed it to borrow money on such terms as its directors might determine upon, and to issue bonds or other evidences of indebtedness; It was held, that this provision allowed it to sell its bonds below their face value, and where it did so, the loan was not for that reason usurious. 3. A provision in a charter allowing a corporation to lend money at a usurious rate of interest, does not confer the power on them to do so, but a provision to borrow money at such rate, is not liable to any objection. 4. Where one who knows of a prior unregistered deed of trust or mortgage, procures a mortgage for his own benefit on the same property, which is registered first, he gets the first lien on the property, unless he used fraud to prevent the registration of the mortgage which is first in date. 5. Where a bond secured by a mortgage is surrendered and a new bond taken in its place, the new bond will be secured by the mortgage, unless it appears that an extinguishment of the debt was intended. BANK V. THE M'F'G Co. 6. Two corporations were under the same management, and one of them executed a mortgage on its property to secure a debt, and afterwards this debt was assumed by the other corporation, which executed a mortgage on its property to secure it, and the mortgage on the property of the original debtor corporation was cancelled. After the expiration of some time, the original debtor corporation again assumed the payment of this debt, executed a new mortgage to secure it, and the mortgage on the second corporation was cancelled; It was held, that under the provisions of our registration laws, as against creditors, the cancelled mortgages were inoperative, and the secured creditor could claim no liens or priorities under them. 7. As a general rule in the construction of statutes, a proviso will be considered as a limitation upon the general words preceding, and as excepting something therefrom, but this rule is not absolute, and the meaning of the proviso will be ascertained by the language used in it. 8. The provisions of Bat. Rev., ch. 25, §48, (The Code, §685,) apply to corporations generally, and are not restricted to those only, formed by foreclosures under a deed of trust of an insolvent or expiring corporation. 9. So, where a corporation made a mortgage for the purpose of securing bonds to raise money; It was held, that the debts owing by such corporation at the time the mortgage was executed, were entitled to priority over the bonds secured by the mortgage. 10. The act of 1879, which provides that mortgages executed by corporations on their property or earnings, shall not exempt the property or earnings from executions for the satisfaction of a judgment obtained for labor performed, materials furnished, or for torts committed by such corporation, so far as it relates to labor and materials furnished, is only intended to more effectually secure the lien given by the Constitution and statutes to laborers and material men, and was not intended to create a lien in favor of parties who furnish machinery, &c., to the corporation upon its personal credit. (Simonton v. Lanier, 71 N. C., 498; State v. Matthews, 3 Jones, 451; Hyman v. Devereux, 63 N. C., 624; Kidder v. McIlhenny, 81 N. C., 123: Flemming v. Burgin, 2 Ired. Eq., 534; Mason v. McCormick, 75 N. C., 263; Same Case, 80 N. C., 244: Lanier v. Bell, 81 N. C., 337: cited and approved). These were CIVIL ACTIONS, heard upon exceptions to the report of a referee by Avery, Judge, at Spring Term, 1886, of GASTON Superior Court. BANK V. THE M'F'G Co. The Lawrence Manufacturing Company, created by a special act of the General Assembly, private acts, 1879, ch. 63, a defendant with others in one action, and the Woodlawn Manufacturing Company, formed under the general law contained in Battle's Revisal, ch. 26, sued, with other defendants, in another action, which actions have been consolidated and prosecuted as one, became involved and embar rassed in the prosecution of their business operations, to procure relief from which, the latter company on November 16th, 1879, obtained from the defendant J. W. Fries a loan of $10,000, for which it gave its note, and to secure the same, executed a mortgage deed conveying its corporate property and franchises. The two companies, located near each other in the county of Gaston, and engaged in the same general business of manufacturing, were under the management of the same officers and agencies, and most of the capital stock in each was held by the same owners. In January, 1880, the indebtedness of the borrowing company was assumed by its associate, which substituted its own note therefor, and made to the creditor a similar mortgage of its own property to assure its payment. Thereupon the first note and mortgage were cancelled. On March 30th, 1882, the debt was re-assumed by the Woodlawn Manufacturing Company, which, after making a payment of $2,500 on the debt, gave its note to said J. W. Fries for $7,500 and executed a second mortgage to secure the residue, upon its lands, mill, machinery and all waters and water privileges used in connection therewith; whereupon the note of the second mortgagor company was also surrendered, and its mortgage in like manner cancelled for its exoneration. This mortgage was proved the next day and admitted to registration in Gaston county on the 1st day of April, 1882. |