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Hall v. Richards, Governor, et al

Supreme Court of South Carolina
Nov 17, 1930
159 S.C. 34 (S.C. 1930)

Opinion

13029

November 17, 1930.

Before RAMAGE, J., Richland, February, 1930. Affirmed.

Action by S. Augustus Hall in behalf of himself and others against John G. Richards, Governor, and others. From an order sustaining a demurrer to the complaint, the plaintiff appeals.

The demurrer, order sustaining demurrer, and exceptions, directed to be reported, were as follows:

NOTICE OF DEMURRER

To D.W. Robinson, Esq., attorney for plaintiff above named:

Please take notice that the undersigned, as attorneys representing the defendants in the above-entitled action, hereby enter demurrer to all of the allegations set forth in the complaint in this action on the ground that the same do not state facts sufficient to constitute a cause of action against either or all of the defendants above named, and for this purpose, will move on Tuesday, the 21st day of January, 1930, before Hon. C.J. Ramage, presiding Judge of the Fifth Judicial Circuit, at Richland County Courthouse, at 10 o'clock a. m. on said date, or as soon thereafter as counsel can be heard, for an order dismissing the complaint herein on the following grounds:

1. In that the complaint does not state facts sufficient to constitute a cause of action, as no right, claim, or demand is asserted therein showing a remedy to which the plaintiff is entitled.

2. In that the complaint does not allege facts sufficient to constitute a cause of action, because, even if the allegations of the complaint are true that under the existing law, and more particularly under the provisions of Act No. 297, passed by the General Assembly at its 1929 session, approved by the Governor on the 14th day of March, A.D. 1929 (36 St. at Large, page 670), authorizing certain of the defendants in this action, and more particularly the Governor and the State Treasurer, to provide for the sale of certificates of indebtedness as authorized in said Act, that in keeping with such authority, the said officials have made a contract for the making, engraving and delivery of such certificates of indebtedness, and these defendants allege that said contract is legal and proper in every respect.

3. These defendants would show to the Court that the complaint herein does not state facts sufficient to constitute a cause of action on the further ground that it is customary, proper, necessary, and legal in the issuance of bonds, or certificates of indebtedness by the State government or any political subdivisions thereof, for many details to be taken into consideration in working out a proper plan for engraving, issuing, and disposing of such obligations, and it is absolutely necessary, for the proper protection of the State, for discretion to be allowed to such officers in providing the type and kind of obligations to be issued, the type and character of its physical makeup, the size and kind of paper to be used, the manner in which the bonds shall be kept and held for the protection of the State until duly signed, issued, and delivered, and these defendants assert that, not only under the laws of the State of South Carolina, but following that discretion which would always be permitted by the Courts to officials in acting on a transaction such as is referred to in the complaint, that a proper and reasonable discretion was observed by these defendants, and the contract made, as alleged in the complaint, should be approved in every respect as for the best interest of the State of South Carolina, and the complaint in this action should be dismissed.

ORDER SUSTAINING DEMURRER

This suit is brought in behalf of plaintiff as a taxpayer against the Governor, State Treasurer, Joint Committee on Printing, State Highway Commission, and R.L. Bryan Company. The defendants have all filed answers in the cause and thereafter served notice of demurrer in the usual time on the grounds that the complaint does not state facts sufficient to constitute a cause of action.

After full hearing, I am of opinion that the demurrer should be sustained and the complaint dismissed. At the outset, let me state that this proceeding does not involve public printing as contemplated by Sections 46 et seq., of Volume 3, Code of Laws of South Carolina 1922, which sections create the Printing Committee and define its powers and duties. The matter referred to in the complaint involves a technical piece of engraving work, wherein the good name of the State is attached to obligations great in number and which must pass into the commercial world as virtual currency, for they are obligations payable to bearer and will extend over a long period of years, and the protection of the State in a transaction of this kind must have first consideration, as I feel has been given to it in the Act No. 297, passed by the General Assembly of the State of South Carolina, at its 1929 session.

The plaintiff contends and alleges in Paragraph 15 of the complaint that the defendants, the Governor and State Treasurer, had no right or authority to let or award a contract to an engraving company, even to the lowest responsible bidder, and that the contract should have been awarded through the Joint Committee on Printing. The defendants contend in their demurrer that specific authority is granted under the Act No. 297 above mentioned, authorizing the defendants, and more particularly the Governor and State Treasurer, to provide for the engraving and issuing of the certificates of indebtedness referred to in said Act. They further contend that, even if the authority granted in said Act was only remotely referred to therein, that of necessity in a transaction of this character, wide discretion must be allowed by the Courts to the Executive Department of government to properly protect the State in making the contract for this type and kind of work.

The opinion of the Court is that these contentions should be sustained and the complaint dismissed because, after careful study of Sections 46-49, inclusive, of Volume 3, Code of Laws of South Carolina 1922, it does not appear that there is any requirement therein which would bring this particular work within the province of the Committee on Printing, but, even if this were so, it was openly and freely stated by counsel for plaintiff at the hearing that the full Committee on Printing, with one dissenting vote, had approved the contract made as alleged and set forth in the complaint.

But even if there were requirements in the sections of the Code above referred to, the Court feels that Section 21 of Article 3 of the Act No. 297, specifically repeals any inconsistent provisions of law to the extent of such inconsistency, and therefore, the matter here to be considered is covered entirely by the provisions of Act No. 297, known and referred to generally as "The State Bond Act," which authorized specifically the issuance of these certificates of indebtedness under the plans provided for therein.

The plaintiff contends further, that, under Section 14 of Article 3 of the Act of 1929 (36 St. at Large, page 685) the Highway Commission is specifically limited to letting contracts less than $1,000.00 without advertising for same under rules and regulations to be made and published by the State Highway Commission. The Court does not consider this section as referring to the issuance of the certificates of indebtedness. It undoubtedly has reference only to the letting of contracts which affect highway construction or materials and machinery for the Highway Department, there being specific clauses in the bill which refer to the form and manner in the issuing of these obligations.

It is common knowledge, and so argued at the hearing, that the State Highway Commission has requested the Governor and State Treasurer to issue certificates of indebtedness under Article 1 of Act No. 297. In the last paragraph of Section 5 of this Article, we find it provides that the proceeds of a sale of these certificates may be used, among other purposes, "for the purpose of paying expenses incident to the sale of said certificates," and the issuance of these certificates can only be made by the Governor and State Treasurer when called upon by the State Highway Commission to do so.

Bearing this in mind, we find in Section 1 of Article 3 of said Act, the following:

"The certificates of indebtedness and notes shall be issued in such form and denomination and with such provisions as to time, place or places and medium of payment as may be determined by the Governor and the State Treasurer, subject to the provisions of this Act."

In Section 4 of Article 3, it is provided:

"For the purpose of bringing about a successful sale of such certificates of indebtedness and notes issued in anticipation of the sale thereof, the State Highway Commission shall have the power to do all things ordinarily and customarily done in connection with the sale of State or municipal bonds."

As the Highway Commission has called upon the Governor and State Treasurer to issue these certificates of indebtedness under the provisions of Article 1, all of which is common knowledge and admitted before me in argument, it was not only the province of, but necessarily required that the Governor and State Treasurer select the form of bonds, the type and kind of obligation to be issued as to size, weight, and kind of paper and protection to be afforded the State by the firm or corporation engraving such bonds, and many other details "ordinarily" and "customarily" required in connection with a sale of such obligation, and that such officials have carried out this duty and exercised their discretion is unquestioned by the Court. And, in fact, their acts and doings are hereby approved by the Court because the exercise of such a discretion by the Executive Department of the government should not be questioned by the Courts, even though, as alleged in the complaint, the price agreed upon was higher than offers submitted by others than the defendant, R.L. Bryan Company.

The Court is satisfied of this position because of the authority found in the Act No. 297, above mentioned, and because it is necessary for some official department of the government to protect the State in a large financial matter of the kind in question.

The Legislature undoubtedly intended this discretion to be ultimately vested in the Governor and State Treasurer, because from the sections of the Act above quoted, such is the clear interpretation thereof, and the State Highway Commission, as before mentioned, has undoubtedly co-operated towards this end in requesting the Governor and State Treasurer to decide upon the form of such bond and to do all things ordinarily and customarily necessary in connection with such a sale.

The complaint alleges in Paragraph 7 that a notice was sent out to certain engraving companies by the State Treasurer. The Court feels that this was proper in every respect, but such was not required by law, because, if to the officials mentioned in the Act it seemed proper. They could with all propriety have advertised for purchasers of the certificates of indebtedness to make their quotations based on furnishing the certificates of indebtedness ready for signature by the said officials and subject to their approval.

For many other reasons which the Court might cite, a discretion is necessary to be exercised in a transaction of this character. As stated, the Act in question, in the opinion of the Court, granted this power and discretion. And where discretion is granted or presumed to be granted to the Executive Department of the government by legislative enactment, the Court would not attempt to disturb the exercise of that discretion.

In McDowell v. Burnett, 92 S.C. 484, 75 S.E. 873, 878, our Court says:

"The presumption is that the chief Executive, in the exercise of the powers of his great office, acts with a view to the public interest, and therefore the Courts should give effect to his acts to the utmost extent that they are authorized by law."

See, in this connection, Lamar v. Croft, 73 S.C. 412, 53 S.E. 540; Wyse v. Wolfe, Atty. Gen., 129 S.C. 502, 123 S.E. 818; Ekern v. McGovern, 154 Wis. 157, 142 N.W. 595, 46 L.R.A. (N.S.), 796; Hatfield v. Graham, 73 W. Va. 759, 81 S.E. 533, L.R.A., 1915-A, 181, Ann. Cas., 1917-C, 1; Ex parte Williams, 10 Okla. Cr. 344, 136 P., 597, 51 L.R.A. (N.S.), 671; Rice v. Draper, Governor, 207 Mass. 577, 93 N.E. 821, 32 L.R.A. (N.S.), 357.

It must be remembered here that there is no allegation of bad faith. The very fact that the contract made with the R.L. Bryan Company was at a higher price is a compelling reason to believe that there must have been a good and sufficient cause in the minds of the State officials mentioned for making the contract in question. Some of these reasons are actually set forth in the complaint, to wit, a special type of engraving to appear upon the back of the bond and upon the back of the coupon. All these things are necessary when so many bearer evidences of indebtedness of the State are issued and sold to the public.

Recognizing to its fullest that the Executive Department of the government is to be sustained in all acts and doings wherever possible by the Courts, and that, unless clearly in violation of some law, every presumption should be resolved in favor of the Executive Department, the Court is clearly of the opinion that there was power and authority granted to the defendants to make the contract in question, and the same is hereby approved and the complaint ordered dismissed, with costs to the defendant.

EXCEPTIONS

The plaintiff excepts to the ruling and order of Circuit Judge Ramage of February 24, 1930, sustaining the demurrer herein upon the grounds:

1. That the Court erred in holding and ruling "that the demurrer should be sustained and the complaint dismissed," because the demurrer should have been overruled. The Court should have issued an order sustaining the complaint, declaring the contract made by J.H. Scarborough, Treasurer, and John G. Richards, Governor, with R.L. Bryan Company, set forth in the complaint, null and void, because:

(a) The Constitution and the statutes of the State prescribe the manner and method in which, and a committee by which, said contract should have been made. It was not made in such manner and method and was not made or let by the Printing Committee, as prescribed by the Constitution and laws of this State.

(b) No public advertisement for bids was made, and the contract was not let on competitive bids, and was therefore null and void.

2. The Court erred in holding and ruling: "This proceeding does not involve public printing as contemplated by Section 46, et seq., of Volume 3 of the Code of Laws of South Carolina of 1922," in that:

(a) The said statutes and section do prescribe the method and manner in which, not only all printing, but all engraving for the State, or any department thereof, shall be let, contracted for, and done.

(b) There is no other law prescribed for printing and engraving for any department of the State.

3. The Court erred in holding and ruling: "The protection of the State in a transaction of this kind must have first consideration." and in giving the same as a reason for the ruling and holding of the Court, because: The State itself has prescribed in its Constitution and laws how all contracts for printing and engraving shall be let and safeguarded, and this method is certainly more apt to safeguard and protect the State.

4. The Court erred in holding and ruling that in the provisions of Sections 46-49 of Volume 3 of the Code, "it does not appear that there is any requirement therein which would bring this particular work within the province of the Committee on printing, but even if this were so it was openly and freely stated by counsel for plaintiff at the hearing that the full Committee on Printing, with one dissenting vote, had approved the contract made as alleged and set forth in the complaint," in that:

(a) Sections 46-49 cover and embrace by their terms, purpose, and intention "all the Public Printing, Binding, Lithographing, and Engraving for the State or any department of the State Government."

(b) The alleged ratification and approval by the Committee on Printing could have no force and effect because the method in which it must let contracts is specifically prescribed, and its authority limited in regard thereto. This contract was not let in accordance with the express requirements of the statutory laws of the State and the limitations on the power of the Printing Committee.

5. The Court erred in ruling and holding that Section 21 of Article 3 of the Bond Act, 36 St., page 687, repeals or affects the Public Printing Act in anywise, because:

(a) The said section only purports by its language and purpose to repeal "all Acts or parts of Acts inconsistent with this Act," and there is nothing inconsistent with the provisions of the bond Act and the requirements of the general statutes that all engraving shall be contracted for under and by the committee on public printing.

6. That his Honor erred in holding and ruling that the provisions of Article 1, § 5, of the Bond Act, 36 Stat., page 674, providing that the proceeds of the sale of the State Highway certificates shall be used "for the purpose of meeting payments required by this Act to be made to or on behalf of counties or highway districts, or bridge districts, or for the purpose of paying expenses incident to the sale of said certificates of indebtedness or notes, or for the purpose of paying other expenses authorized by this Act to be paid out of such proceeds," is an authority as to letting contracts for engraving the bonds. The section only purports to provide for what purposes the proceeds of sale may be used. It does not refer to the method in which expenses therefor are to be or may be incurred. It does not in any wise conflict with the provisions of law applicable to contracts for engraving.

7. The Court erred in holding and ruling that Article 3, § 1, of the Act, 36 Stat., page 680, contains any authority to the Governor and treasurer to let contracts for the engraving of bonds, because:

(a) By its language, purpose, and intent, the Governor and State Treasurer are authorized to determine the form and denomination.

(b) The denomination of the certificates of indebtedness is prescribed in Section 3 at the page, so that the only denomination which the Governor and Treasurer could prescribe would be as to notes.

(c) The prescribing of the form in no wise includes the printing or engraving thereof. And it further appears from the complaint itself, that the treasurer called on three engraving houses to submit forms, thus abdicating their own duty.

8. That the Court erred in ruling and holding that Article 3, § 4, of the Bond Act, 36 Stat., page 681, contained any authority for the printing or engraving to be let by the Governor and State Treasurer in the language quoted by the Judge, to wit, "for the purpose of bringing about a successful sale of such certificates of indebtedness and notes issued in anticipation of the sale thereof, the State Highway Commission shall have the power to do all things ordinarily and customarily done in connection with the sale of State or municipal bonds," because:

(a) The State Highway Commission did not undertake to let the contract for printing and engraving.

(b) It had no authority to do so.

(c) No contract could be made or let by it for $1,000.00 or more, until after advertisement, as prescribed by Section 14 of Article 3, 36 Stat., page 685.

(d) And the State Highway Commission could not have authorized or approved the letting of any such contract by the Governor and Treasurer.

9. The Court erred in holding and ruling that, as the Governor and State Treasurer were called upon by the highway commission to issue these certificates of indebtedness, "It was not only the province of but necessarily required that the Governor and State Treasurer select the form of bonds, the type and kind of obligation to be issued as to size, weight, and kind of paper, and protection to be afforded the State by the firm or corporation engraving such bonds," etc., in that:

(a) It only required the State Treasurer and the Governor to select the form and denomination with provisions for the time, place, and medium of payment.

(b) It in no wise conflicted with the law of the State as to how the public printing and engraving * * * was to be done.

(c) The State Treasurer and Governor could not afford any more protection to the State than its committee on public printing and engraving, and than the letting of the contract in the manner prescribed by statutory laws.

10. The Court erred in holding and assigning as a reason for sustaining the demurrer: "It is necessary for some official department of the government to protect the State in a large financial matter of the kind in question," because:

(a) The State has prescribed three different official departments, each of which were to act in this case, and each and all of which were to protect the State, to wit: First, the State Highway Commission in calling upon the Governor and State Treasurer to issue the certificates; second, the State Treasurer and the Governor, in prescribing the form, denomination, time, place, and medium of payment; third, the Committee on public printing and engraving, with large experience on this subject, could let the contract for printing and engraving after advertisements and competitive bids.

11. The Court erred in holding that the Legislature intended the discretion to be ultimately vested in the Governor and State Treasurer, not only to decide upon the form of the bonds, but "to do all things ordinarily and customarily necessary in connection with such sales," because there is nothing in the Bond Act to show any purpose or intention to disregard or do away with the safeguards in reference to public printing and engraving prescribed by the Constitution and laws of the State.

12. The Court erred in holding and sustaining the demurrer, because it appears from the complaint, and is undenied that the State Treasurer and Governor let the alleged contract for engraving these bonds without advertising for competitive bids and to the highest one of those who were permitted to make bids on it, contrary to the settled public policy of the State of South Carolina, and the Court should have held such contract null and void.

13. There is no law authorizing the payment of any public funds for or on account of the contract which the Governor and State Treasurer undertook to make with R.L. Bryan Company, mentioned in the complaint, and the payment thereof will violate Article 3, § 30, and Article 17, § 5, of the Constitution of the State and the statutory laws of the State in regard to public printing and engraving and in regard to the expenditure of public moneys.

Messrs. D.W. Robinson and D.W. Robinson, Jr., for appellant, cite: Laws governing public printing: Const. S.C., 1895, Art. 3, Sec. 30; Art. 17, Sec. 3; 3 Civil Code 1922, Sec. 48, Sec. 53; Acts 1929, 386; 21 Stat. 805; 26 Stat. 687. Construction of statutes: 149 S.C. 411; 147 S.E. 444; 154 S.C. 62; 151 S.E. 220; 25 R.C.L. 778; 64 A.L.R. 504; 147 S.C. 439; 145 S.E. 186. Acts published at same session should be construed together: 139 S.C. 113; 137 S.E. 211; 149 S.C. 411; 147 S.E. 444; 154 S.C. 62; 151 S.E. 220; 138 S.C. 378; 136 S.E. 487. Adoption of statutes by reference: 26 Stat. 386; 122 S.C. 165; 115 S.E. 202; 90 S.C. 96; 71 S.E. 356; 82 S.C. 130; 63 S.E. 355. Repeal of statute by implication not favored: 131 S.C. 5; 126 S.E. 747; 48 A.L.R. 1251; 153 N.E. 831; 21 A.L.R. 1402; 25 R.C.L. 918-21; 139 S.E. 764; 128 S.E. 570; 135 S.E. 813; 276 U.S. 272; 82 S.C. 506; 64 S.E. 407; 154 S.C. 62; 151 S.E. 220. Public policy: 112 S.C. 335; 99 S.E. 806; Story, Cont., 5th Ed., Sec. 675; 23 Enc. L. (2nd Ed.), 456; 128 S.C. 226; 122 S.E. 586; 19 S.C. 185; 42 L.R.A. 495; 11 Rich. Eq. 455; 5 S.C. 136. Contract void: 100 S.E. 344; 132 S.C. 372; 128 S.C. 720; 130 S.C. 295; 125 S.E. 568; 81 S.E. 607; 239 U.S. 654. Laws in force are part of the contract: 112 S.C. 547; 100 S.E. 170; 149 S.C. 412; 47 S.E. 444; 119 S.E. 474; 65 S.E. 539; 106 S.C. 471; 91 S.E. 733; 113 S.C. 224; 100 S.E. 893; 145 S.E. 788; 196 N.C. 408. There can be no ratification of illegal or void statute: 2 Page Cont., Sec. 1038; 123 S.C. 447; 139 U.S. 59; Const. 1895, Art. 3, Sec. 30; 102 S.C. 543; 87 S.E. 306.

Messrs. Thomas Lumpkin for the R.L. Bryan Co., respondent, cite: Contract legal: Act 1930, No. 1133, Sec. 47; Act 1930, No. 1049, Sec. 1; Act 1929, No. 297, Art. 3, Sec. 1, Sec. 4. Presumption as to acts of Governor: 92 S.C. 484; 73 S.C. 412; 129 S.C. 502; 46 L.R.A. (N.S.), 796; L.R.A. (N.S.), 1915-A, 181; 15 L.R.A. (N.S.), 671; 32 L.R.A. (N.S.), 357.

Messrs. John M. Daniel, Attorney General, Cordie Page and J. Ivey Humphrey, Assistants, for the other respondents cite: Printing of certificates is not ordinary printing of the state governed by Secs. 46 to 69, 3 Civil Code 1922. Contract let as provided by law: Const. S.C. 1895, Art. 17, Sec. 5.


November 17, 1930. The opinion of the Court was delivered by


This action was brought by the plaintiff, a citizen and taxpayer of Anderson County, against the Governor, the State Treasurer, the Joint Committee on Printing, R.L. Bryan Company, and the State Highway Commission, for the purpose of having declared null and void a contract made by the Governor and the State Treasurer, on behalf of the State, with the Bryan Company, for engraving the certificates of indebtedness proposed to be issued under the State Highway Bond Act (36 Stat. 670), approved March 14, 1929; and for the further purpose of restraining the payment to that company, on account of such contract, of any funds belonging to the State or to the Highway Commission.

The defendants demurred to the complaint upon the ground, with specifications, that it did not state facts sufficient to constitute a cause of action. The matter was heard by his Honor, Judge Ramage, who passed an order sustaining the demurrer and dismissing the complaint, and from that order this appeal is taken.

The appellant contends that the contract for engraving the certificates could be legally let only by the Joint Committee on Printing, upon competitive bids, and to the lowest responsible bidder (Sections 46 to 69 of Code, Vol. 3, 1922), while the position of the respondents is that certain provisions in Sections 1 and 4 of Article 3 of the Bond Act give to the Governor and the State Treasurer authority to let the contract and to award it in the way it was done.

After careful consideration, I am satisfied that the questions presented by the appeal are correctly disposed of by the order of the Circuit Judge, for the reasons therein stated. But, if I should be wrong in this, I think the matter has been set at rest by an Act of the Legislature (Acts of 1930, page 2150), Section 1 of which reads as follows:

"That all Acts or proceedings done and taken by the Governor and the State Treasurer in relation to the sale of $10,000,000.00 State Highway Certificates of Indebtedness of the State of South Carolina, which were awarded and sold by said officers on March 21, 1930, to the highest bidder are hereby ratified and validated, and the Governor and the State Treasurer are hereby authorized to deliver the said State Highway Certificates of Indebtedness in accordance with the terms of said sale."

That the Legislature could pass such an Act is not questioned. The appellant's objections to its validity are disposed of by the decision in Wingfield v. South Carolina Tax Commission, 147 S.C. 116, 144 S.E. 846. The further suggestion that the Act is an attempt to validate merely the actual sale of the bonds is clearly without merit. At the time of the enactment of this statute, the sale had just been negotiated, but the certificates had not been delivered to purchasers, and this suit had already been instituted. It was the evident intention of the Legislature, with these facts in mind, to set fully at rest, by the passage of the Act, any and all questions as to the validity of the bonds. And the language used, "all Acts or proceedings done and taken * * * in relation to the sale," etc., is most apt and appropriate for that purpose. I think the Act, when properly construed, covers, validates, and confirms every step taken by the Governor and the State Treasurer, in the preparation, issuance, and sale of the certificates, including the letting of the contract in question.

The order appealed from is affirmed.

MR. JUSTICE CARTER concurs.


This is an action by the plaintiff, Hall, a citizen and resident of the County of Anderson, on behalf of himself and all others similarly situated, against the Governor, the State Treasurer, the Joint Printing Committee, R.L. Bryan Company, and the State Highway Commission, for the purpose of having declared null and void a contract made by the Governor and Treasurer of the State, on behalf of the State with R.L. Bryan Company for the engraving, printing, and furnishing the State highway bonds ("certificates of indebtedness," they are denominated in the Act), which were proposed to be issued under the $65,000,000 "Bond Act," approved by the Governor March 14, 1929; and for an injunction against the carrying out of said contract and the paying out of any funds to R.L. Bryan Company belonging to the State, or to the Highway Commission, on account thereof.

The action was instituted in the Court of Common Pleas of Richland County, on December 16, 1929. The defendants demurred to the complaint upon the general ground, with specifications, which was heard by his Honor, Judge Ramage, in January, 1930. On February 24th his Honor, Judge Ramage, filed an order sustaining the demurrer, and from it the plaintiff has appealed to this Court.

For the purposes of the demurrer the allegations of the complaint are admitted. After the formal allegations of the respective positions of the defendants and of certain provisions of the Bond Act, 36 Stat. 670, the complaint alleges that the Governor and the State Treasurer assumed to themselves the right to make and let a contract for the engraving of the bonds or certificates of indebtedness without advertising them or letting the same on competitive basis; simply by issuing a circular letter, dated October 25, 1929, addressed to R.L. Bryan Company, Columbia, S.C. and to three engraving companies, two in New York and one in Philadelphia, requesting them to quote prices and submit models for the work by 10:00 o'clock on November 2, 1929; that in response thereto bids and models were received from the New York and Philadelphia companies whose bids ranged from 33 1/2 cents to 46 cents per bond; that those bids were furnished and filed before the time fixed in the letter referred to; that the bid of R.L. Bryan Company was not submitted until November 5; that its bid was 52 cents per bond; that the Governor and State Treasurer thereupon awarded the contract to said company on November 6; that the said R.L. Bryan company was not prepared to and does not itself do engraving work, but simply sublets such contract to some company outside of the State; that the amount of money called for by the contract so let to R.L. Bryan Company is $33,800, an excess of $11,000 over some other of the bids received; that the Governor and State Treasurer had no authority to let such contract, and had no right to award it to the highest bidder, that it had no right to award the contract at all without advertising for competitive bids; that said contract should have been awarded through the Joint Committee on Printing, and that for such reasons the contract entered into by the Governor and State Treasurer with R.L. Bryan Company is illegal, null, and void.

The demurrer of the defendants was based upon the grounds set forth therein which will be reported; it was sustained by his Honor, Judge Ramage, in an order which also will be reported; from it the plaintiff has appealed upon exceptions which too will be reported.

In its last analysis, the only issue in this case is, Did the Governor and State Treasurer have authority to make the contract for engraving the certificates of indebtedness or bonds for the $65,000,000 issue; and did they have authority to let this contract without advertisement and competitive bids?

The plaintiff contends that this issue should be determined in the negative, upon the ground that, under the Constitution and statutes of the State, the contract could only have been let by the Joint Committee on Printing, upon competitive bids upon compliance by it with the statutory provisions relating thereto. The defendants, on the other hand, contend that the Bond Act (36 Stat. 670) has relieved the committee of this duty, and imposed it upon the Governor and Treasurer; and, if not, that the General Assembly by two enactments have ratified the contract under fire.

The position of the plaintiff in limine must be sustained for the reasons which follow, leaving the question to be considered whether effect can be given to the alleged curative statutes as ratifying what had been done.

The question is squarely presented, whether the contract in this case was one authorized by either the general law upon the subject, or by any provision contained in the Bond Act.

Looking then to the statutes upon the subject, we find in Volume 3, Code of 1922, Section 48, the following:

"The Joint Committee on Printing shall have control and supervision of all the Public Printing, Binding, Lithographic, and Engraving for the State or any department of the State Government."

Section 52 (Civ. Code 1922) prescribes the duties of the committee at considerable length and detail, requiring that it publish notice and call for sealed bids and proposals and how the sealed bids and proposals shall be opened and the contract let to the lowest responsible bidder. It further provides:

"The Comptroller, before issuing his warrant for any bill or voucher for binding, engraving, lithographing, printing * * * shall see that the same is duly approved by the Clerk of the Joint Committee on Printing, and shall refuse to issue his warrant for any not so approved, whether such are to be paid from moneys derived, fees, licenses, taxes or otherwise."

Section 53 provides for a bond from the public printer or party to whom the contract is let, which bond is to be approved by the Governor, the Attorney General, and the State Treasurer.

The disregard of these plain statutory regulations has resulted in this condition of affairs: The circumscribing of the bidding to three establishments, one of which, the R.L. Bryan Company, was not, admittedly, prepared to do the work, but manifestly contemplated a subletting of the contract to one which could do it, naturally at a less price than had been contracted for, thereby losing to the State the margin of profit which the Bryan Company would receive; the rejection of a bid at 33 1/2 cents per bond, and letting the contract at 52 cents, a loss of 18 1/2 cents per bond, on 65,000 bonds, $12,025; the absence of a bond for performance of the contract; the State loses the benefit of the experience of the committee and of its secretary who by the terms of the statute must be a practical printer.

His Honor, the Circuit Judge, held: "It does not appear that there is any requirement therein which would bring this particular work within the province of the committee on printing." The learned Judge gives no reason for this conclusion, and we cannot conceive of any; the provisions of the Code are as comprehensive as they could be made and unquestionably and specifically include printing and engraving required by the executive or any other department of the State. The statute is a general one and intended to cover every instance, present or occurring in the future.

The suggestion that the undertaking is a mammoth one, and that the interests of the State and of the purchasers of securities of such a large amount and maturing over a long period of time should be protected does not indicate that the looser method should be adopted, with no safeguard, in preference to the rigid and protective regulations of the statute.

It is contended that the Bond Act virtually repeals the provisions of the Code and bestows upon the Governor and State Treasurer carte blanche to disregard those provisions and proceed as their interpretation of the situation suggested. It is suggested in the order that the handling of this matter was largely in the discretion of the Governor and State Treasurer, and that in so important a matter their discretion should not be hampered or interfered with. It is difficult to find room for the exercise of any discretion in the face of the most positive and mandatory requirements.

The learned Judge in his reasoning finds authority in the Bond Act for the Governor and State Treasurer to let the contract; not only to let the contract, but to let it (in defiance of the statutory provisions which require advertisement and competitive bids) to the highest bidder, as if the State were selling property and not having work done.

We do not find a single suggestion even, in the Bond Act, which tends to authorize the Governor and State Treasurer to let the contract for the engraving of the bonds, much less to impinge upon the duty which by statute was devolved upon the committee.

The question then is presented whether the so-called curative Acts of 1930 have accomplished their design.

The first is a provision in the general appropriation Act of April 5, 1930, to this effect:

"Section 47. Joint Committee on Printing. * * * Provided, further, That the contract awarded to The R.L. Bryan Co. by the Governor and the State Treasurer for furnishing State Highway certificates of indebtedness be, and the same is hereby ratified and confirmed, and the Comptroller General and the State Treasurer be and they are hereby authorized and directed to make payments for said certificates in accordance with said contract." (36 St. at Large, page 1480.)

It is a sufficient answer to this contention to say that the provision is a matter of substantive law, in no wise connected with the subject of appropriations, is not mentioned in the title, and is in violation of the Constitution, Article 3, Section 17, which requires that "every Act or resolution having the force of law shall relate to but one subject, and that shall be expressed in the title."

The second is the Act which reads as follows:

"Section 1. * * * That all Acts or proceedings done and taken by the Governor and the State Treasurer in relation to the sale of $10,000,000.00 State Highway Certificates of Indebtedness of the State of South Carolina, which were awarded and sold by said officers on March 21, 1930, to the highest bidder are hereby ratified and validated, and the Governor and the State Treasurer are hereby authorized to deliver the said State Highway Certificates of Indebtedness in accordance with the terms of said sale." (Act March 28, 1930 [36 Stat. at Large, page 2150].)

Without considering the very serious objections to the validity of this Act suggested by the plaintiff, it is sufficient to say that it clearly appears to be an attempt to validate the proceedings relating to the sale of the bonds entirely foreign from the preparation of the bonds and from the contract attacked in the present proceeding.

Besides, if the defendants desired to obtain any benefit from this post mortem legislation, enacted after the institution of this action, they could have done so only by supplemental pleading.

The Court being equally divided, the judgment of this Court is that the decree or order appealed from be affirmed.


I do not agree with all the conclusions of Mr. Justice Cothran in his dissenting opinion, but I am of opinion that the order of the Circuit Judge should be reversed. The demurrer admitted the facts alleged in the complaint, and that pleading set up, according to my view, a cause of action, which should be heard in the lower Court.


Summaries of

Hall v. Richards, Governor, et al

Supreme Court of South Carolina
Nov 17, 1930
159 S.C. 34 (S.C. 1930)
Case details for

Hall v. Richards, Governor, et al

Case Details

Full title:HALL v. RICHARDS, GOVERNOR, ET AL

Court:Supreme Court of South Carolina

Date published: Nov 17, 1930

Citations

159 S.C. 34 (S.C. 1930)
156 S.E. 12

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