
    TOWN OF LUMBERTON v. JOHN NUVEEN & CO.
    (Filed 9 April, 1907).
    1. Towns — Bond Issue — Certain Interest Rate — Commissioners— Discretion. — An issue of bonds by a town in pursuance of a private act, 1905, chapter 334, authorizing the issue, “to bear interest at a rate not exceeding six per cent, per annum,” is valid as to the certainty of the interest rate when, under the act itself and under the notice of sale, the town commissioners were vested with full power to fix the rate of interest, not exceeding the rate aforesaid, and the records show that the rate was fixed at five and one-half per cent., in the discretion of the commissioners.
    2. Same — Maturity.—When it appears from the act under which the bonds are issued, and the notice of sale sent in pursuance thereof, that the date of the maturity of the bonds to be issued by the town was to be fixed by the town commissioners not longer than thirty years, and redeemable at the option of the town at the end of twenty c-years, a discretion is given to the commissioners to fix the date of maturity, subject to the limit of thirty years.
    3. Towns — Bond Issue — Provision for Interest and Sinking Fund— Tax Rate — Limitation—Special Tax — Validity.—When it appears that the tax rate of a town has not reached the limitation contained in the provision of the act -under which the bonds are issued, and, subject to such limitation, the commissioners shall levy a special tax sufficient to provide for the interest and a sinking fund, and that, if the tax levied during any one year should prove insufficient, an additional tax shall be levied, the issue will not be held invalid for a failure to provide for payment of interest and for a sinking fund.
    4. Towns — Bond Issue — One or Two Boxes — Commissioners— Discretion. — When it appears that the provisions relating to the issuance of bonds by a town for the purposes of water-works and sewerage “may be voted on in separate boxes,” and qualifying words, “but in such ease,” immediately follow, indicating that the proposition could be voted on in one box, making certain requirements as to ballots in the event of two boxes, it is left to the discretion of the commissioners as to whether one or two boxes shall be used.
    5. Towns — Bond Issue — Act—Purchasers Bound with Notice. — Purchasers of bonds issued under the in’ovisions of a legislative act are fixed with knowledge of its terms and conditions .
    
      CONTROVERSY without aotion, beard by Webb, at April Term, 1907, of RobesoN Superior Court. Erom judgment rendered the defendant appealed.
    
      McIntyre & Lawrence for plaintiff.
    
      McLecm, McLean & McGormick for defendant.
   Brown, J.

Tbis proceeding is brought to determine tbe legality of an issue of bonds to the amount of $25,000, issued by tbe town of Lumberton, N. C., and wbicb tbe defendants contracted to purchase. The defendants contest the validity of the bond issue upon tbe following grounds, as appears from briefs of counsel for both parties to tbe controversy:

1. Eor that tbe petition and notice of election do not set forth with certainty tbe rate of interest nor tbe time of maturity, as is provided by sections 1 and 2 of chapter 834, Private Acts of 1905, under wbicb tbe bonds have been issued.

2. Eor that tbe rate of tax to be levied and collected to pay interest and to provide a sinking fund for the redemption of tbe bonds at maturity, as set forth in tbe petition and notice of election, and as levied by tbe Board of Commissioners of tbe town, is insufficient, not enough funds being provided wherewith to pay interest and principal at maturity.

3. Eor that water-works and sewerage are two distinct and separate objects, and bonds for the extension of water-works and sewerage could not be voted upon on one form of ballot and in one ballot-box, as was done, where the act provides that each object must be voted for separately upon different ballots and in different boxes.

As to tbe first objection, we find that tbe notice required by the Act of 1905, referred to, contains these words: “The said bonds, if issued, to bear interest .at a rate not exceeding-six per cent, per annum, payable annually.” A majority of tbe qualified voters, under the terms of said act, enacted in strict conformity to the Constitution, authorized the issue of the bonds upon a six per cent, interest basis. The commissioners are vested with full power to fix the rate of interest, provided it does not exceed six per cent. This is not only true under the terms of the notice, but section 1 of the act expressly confers such discretion. The record shows that the bonds are to bear interest at five and a half per cent.

As to the time of maturity, both the notice and the act authorize the issue of bonds maturing at a date not longer than thirty years, and redeemable at the option of the town at the end of twenty years. The language of section 1 of the act gives to the commissioners a discretion as to the time of payment, subject to the thirty-year limit Bank v. Ayer, 24 Ind. App., 212; Catron v. County, 106 Mo., 659; Baker v. Seattle, 2 Wash., 576; Turpin v. County, 48 S. W., 1085; Cullen v. Water Co., 113 Cal., 503; Manufacturing Co. v. Elizabeth, 42 N. J. Law, 249.

It is contended that the rate of taxation levied by the plaintiff’s commissioners in their order will be insufficient to pay the annual interest and to provide a sinking fund. This cannot invalidate the legality of the bond issue. The act provides that the commissioners shall levy a special tax sufficient to provide for the interest and sinking fund, and, if the tax levied during any one year should prove to be’insufficient, they can be compelled to levy an additional tax, subject, of course, to the limitations contained in the proviso to section 4 of the act. The defendants are, of course, held to have had knowledge of the terms of the act when they contracted to purchase bonds issued under its authority. It appears that the rate levied is not.up to the limit yet, and we are led to believe that there is a probability that in the future -it may be safely lowered, judging from the glowing terms in which the learned counsel for the plaintiff, in their brief, refer to their prosperous town, viz.: “Tbe Court will take judicial notice of tbe fact that our towns and cities are growing rapidly— especially tbe town of Lumberton, that great center of trade and industry.” We cannot take judicial notice tbat Lum-berton is “tbat greater center of trade and industry,” to tbe extent of basing our judgment as to tbe sufficiency of tbe tax levy upon wbat tbe future may bold in store for its thrifty population. Wbat we do bold is- tbat, if it is insufficient, tbe bondholder can compel an increased levy within tbe terms and limitations of the act.

It is also contended tbat tbe propositions relating to waterworks and sewerage should have been voted on in separate boxes, in order to comply with tbe terms of tbe act. We do not deem it necessary to determine tbe question, so elaborately presented in tbe briefs, as to whether water-works and sewerage are one and tbe same thing, as understood in tbe town of Lumberton, or are two distinct objects and kinds of municipal improvement. We bold tbat tbe language of tbe act is not mandatory, and whether one or two boxes were used is immaterial so far as it affects tbe validity of tbe bonds. Tbe words “may be voted on in separate boxes” are shown by tbe context to leave tbe manner of voting to tbe sound discretion of tbe commissioners. The qualifying words, “but in such case,” immediately following, indicate plainly tbat tbe propositions could be voted on in one box; but, in case two boxes were used, certain requirements are made as to ballots. In fact, tbe whole of section 2 plainly imports tbat it was within tbe discretion of tbe commissioners to provide only one box for the vote upon water and sewerage.

Upon a review of the whole record, we are of opinion tbat tbe bonds constitute a valid obligation of tbe town of Lum-berton, and tbat, under tbe terms of their contract, tbe defendants are compellable to accept and pay for tbe same.

Tbe judgment of the Superior Court is

Affirmed.  