action, and that one of them appears to have successfully defended a suit in the state of Virginia, which might perhaps be pleaded in estoppel; but the plaintiff argues expressly that the defendant would have his redress against his co-sureties, the Joneses, at least one of whom would apparently have no defense.

The plaintiff also argues that, as neither the principal nor sureties applied the $8,000, it had a right to do so. Undoubtedly, but only to the debts upon which the owners of the money were liable. The plaintiff lays stress upon the fact that the collateral note commences with "we" and speaks of "our," and contends that these words refer exclusively to the company and its liabilities. If this is true, it does not help the plaintiff, as it excludes the idea that the indorsers are parties to the agreement. If they are not parties to the agreement, then they are liable only as indorsers, and their money is liable only for their obligations under that particular indorsement. If, on the contrary, the indorsers are parties to this complicated agreement, then the word "our" refers only to their joint obligations. Again, admitting the contention of the plaintiff that the words "we" and "our," in the collateral note, refer exclusively to the company, we find the said company specifically waiving the benefit of its homestead exemptions. We are not advised as to the nature and extent of a corporate homestead, the existence of which we did not even suspect. In Boyd v. Redd, 120 N. C. 335, 27 S. E. 35, this court held that a statute which gives to a bank a lien on the stock of a stockholder indebted to it is in derogation of common right, and must be strictly construed, and that "the statutory lien on stock is intended only to secure the direct indebtedness which the stockholder creates with the corporation, either as principal or surety, and not any involuntary indebtedness to it caused by the purchase of his liabilities incurred to third parties." This rule is equally applicable to the case at bar. Under this view of the law, we are not required to pass upon the validity of the manyfaced, but essentially one-sided, contract relied upon by the plaintiff; but we cannot be expected to give a latitudinarian construction to an instrument so inequitable upon its face, and which, we are compelled to say, has been used as the cover for an unlawful and oppressive diversion of the funds belonging to an indorser. The judgment is affirmed.

(123 N. C. 586)

WILLIAMS et al. v. MAXWELL. (Supreme Court of North Carolina. Dec. 20, 1898.)

BUILDING AND LOAN ASSOCIATIONS-INSOLVENCY -LIABILITY OF BORROWING MEMBER.

1. A borrowing stockholder, who is an incorporator in an insolvent building and loan association, cannot be allowed the amounts

paid into the association in discharge of his indebtedness, until the amount of defalcation and expenses of winding up the concern are paid.

2. On the insolvency of a building and loan association, a borrowing incorporator should be charged with the amount borrowed, plus 6 per cent. interest, less the whole amount paid to the association, whether as fines, penalties, or weekly dues, plus his pro rata part of the defalcation of the association, to be determined by the pro rata per cent. on the amount of capital (the amount owing the association, in the case of borrowing members) which the incorporators had in the association on the day it went into the hands of the receiver.

Appeal from superior court, Burke county; Starbuck, Judge.

Action by Richard Williams and others against W. C. Maxwell to enjoin a foreclosure sale. From a judgment for defendant, plaintiffs appeal. Affirmed.

I. T. Avery and A. C. Avery, for appellants. Burwell, Walker & Cansler and Osborne, Maxwell & Keerans, for appellee.

FURCHES, J. The North Carolina Building & Loan Association is a corporation, and its place of business is Charlotte, N. C. The plaintiff Richard Williams became the owner of 10 shares of capital stock in said association, of the par value of $100 each, aggregating the sum of $1,000. This made him a stockholder in the association (Strauss v. Association, 117 N. C. 314, 23 S. E. 450), and enabled him to borrow $1,000 from the association, which he did; and he and his wife executed one of the mortgages mentioned in the complaint as security therefor. The plaintiff, having reduced the amount of this indebtedness to the association, was allowed to borrow $250 more, for which he and his wife executed a second mortgage on the same property. Plaintiff from time to time made payments to the association, until this indebtedness was reduced to $676.70, on the 27th of March, 1897, if these amounts should all be applied to said indebtedness, calculating the indebtedness at 6 per cent. interest, and allowing plaintiff credit for all amounts paid by them, and interest thereon at the same rate of per cent., whether the same was called fines, assessments, or what not. The defendant corporation became insolvent; suit was commenced in the superior court of Mecklen burg county to wind up the concern; and on the 27th day of March, 1897, J. W. Keerans and E. T. Cansler were appointed receivers. The mortgages mentioned above were made to W. C. Maxwell, with power to sell upon default. Maxwell was also a stockholder and member of said corporation, and a party to the action to wind up and settle the concern; and, upon the plaintiff's failing to pay said indebtedness, the court made an order directing said Maxwell, trustee, to sell and to foreclose said mortgages. To prevent Maxwell's selling under said mortgages, the plaintiff, on the 17th day of February, 1898, commenced this action in the superior court of Burke county, and obtained a temporary restraining order against

said sale. The plaintiff's motion for injunction was afterwards heard, when the following facts were found and agreed to by the parties: That plaintiff, on the 26th of March, 1890, borrowed $1,000, and on the 2d of October, 1894, borrowed $250; that after allowing plaintiff credit for every dollar paid the defendant association, whether by way of fines or otherwise, and interest thereon at the rate of 6 per cent. (the same rate defendant had charged plaintiff), the balance remaining due from plaintiff, if the whole amount of these payments should be credited on the indebtedness, was $676.70. But the court allowed the receivers to apply $12.50 per share of stock to the loss account, amounting to $125; and, if this be deducted from the amount paid into the concern, the amount still due will be $801.70. The injunction being refused, plaintiff appealed.

These are the facts found by the court, and not disputed on the argument here. Upon this state of facts, there are nothing but questions of law presented, and they have been so frequently and so recently decided by this court that we do not feel disposed to discuss them in this opinion. It was decided in Strauss' Case, 117 N. C. 314, 23 S. E. 450, and 118 N. C. 556, 24 S. E. 116, that each holder of stock on the 27th day of March, 1897 (the day the receivers were appointed), is an incorporator, and liable for his pro rata part of the defalcation and expenses of closing out the concern. It is held in Meares v. Davis, 121 N. C. 192, 28 S. E. 188, that a corporator is not entitled to have the excess paid to him until his part of the deficiency is ascertained and accounted for. And it is held in Meares v. Duncan, 31 S. E. 476, and in Meares v. Butler, 31 S. E. 477, at this term, that, as the incorporators are bound for the defalcation and expenses of winding up the concern, the amounts paid into the association cannot be allowed as a discharge of their indebtedness until this deficiency is paid. This is held in these cases to be so, even where the rights of married women are involved. It is held in Strauss' Case, supra, that the incorporators were liable for their pro rata part of this deficiency, according to their pro rata per cent. upon the amount of capital they had in the association on the day it went into the hands of the receivers. And the capital of the borrowing members was the amount they owed the association at that time. In this case it seems that the shares held by each incorporator were assessed $12.50. We do not think this was a compliance with the rule in Strauss' Case, and may make some difference In the amount due by the plaintiff. But this is a matter that may be corrected by a mathematical calculation, by taking what the assessments amount to, at $12.50 a share, and get the per cent. this would make upon the whole collectible assets of the concern, and apply this per cent. to the plaintiff's indebtedness. We are of the opinion that the remaining amount of plaintiff's indebtedness is the

amount he borrowed, with 6 per cent. Interest, deducting the whole amount the plaintiff has paid the association, after first deducting the proper per cent. therefrom for defalcations and expenses of closing out the concern. In the consideration of this case, in order to put it upon its merits, we have left out of consideration the question of venue. We see no good reason why an injunction should issue, and therefore affirm the judgment of the court be low. Affirmed.

(123 N. C. 547)

COZART v. FLEMING et al. (Supreme Court of North Carolina. Dec. 13. 1898.)

ELECTIONS INJUNCTIONS-QUO WARRANTO.

1. An action to enjoin newly-elected county commissioners, who had not yet qualified, from declaring a public office vacant, and electing a successor, is properly dismissed as premature.

2. Injunction does not lie to restrain county commissioners from declaring a public office vacant because of an apparent tie vote, where it is an attempt, in effect, to try the title to the office by injunction, which is not permissible. 3. The erroneous action of the county commissioners in declaring an office vacant because of an apparent tie vote, and ordering a new election, does not warrant the granting of an injunction to one of the candidates, since the title to the office can be inquired into by quo warranto even after such a new election.

4. Laws 1895, c. 159, § 7, as amended by Laws 1897, c. 185, provides that any judge of the superior or supreme court may issue a rule on any election officer to show cause why he has not performed or shall not perform any specified act or duty required by the election law, or why he shall not perform or execute this act in any specified way, so as to best give effect to the intent and purposes of the election law. Held, that the result of an election as declared by the clerk of the superior court, where made in the manner pointed out by statute, is prima facie correct, and can be questioned only by quo warranto; and hence the clerk, who is functus officio after the dec laration of the result, cannot be ordered by a "mandamus" to recount the vote, where it was a tie between two candidates.

5. Code, § 1872, provides that all officers shall continue in their respective offices until their successors have been duly elected and qualified. An election for sheriff resulted in a tie vote between defendant and relator, who was a candidate for re-election. The relator sued to restrain the clerk of the superior court from ordering a new election, and asked for a recount. Both candidates claim the incorrectness of the count, illegal votes, intimidation, etc., but defendant asked for a new election. Held, that the ordering of a new election was properly enjoined until the correct result of the election already had could be determined according to the issue raised by the pleadings, notwithstanding neither of the candidates is in possession of the office by virtue of the election, which was a necessary averment in quo warranto, which has been abolished (Code, § 603), but is not expressly required in the substituted action to try title to an office.

Montgomery, J., dissenting.

Appeal from superior court, Granville county; Timberlake, Judge.

Action by W. S. Cozart against S. A. Flem

ing and others to enjoin the ordering of a new election. From a decree for plaintiff, defendants appeal. Reversed.

A. W. Graham and J. W. Graham, for appellants. T. T. Hicks, for appellee.

CLARK, J. The clerk of the superior court of Granville county, upon tabulating the returns of the recent election for sheriff of that county, ascertained that there was an equal number of ballots cast for the relator and for his competitor, the defendant Fleming, and was about to proceed to order a new election to be held for that office, as required by the statute, whereupon the relator, who was the sheriff of the county and a candidate for reelection, began this action, on November 15, 1898, against said Fleming, the clerk of the superior court, and the three newly-elected commissioners (who had not then qualified, and could not do so till the first Monday in December), alleging in substance: (1) That the count was incorrect, and that upon a recount of the ballots he would be found to have received a majority, and asking the judge to issue a rule on the clerk to show cause why he should not make such recount and declare the correct result; (2) an itemized statement of Illegal votes counted for his competitor, and legal votes for himself rejected, intimidation, and like matters proper to be inquired into upon a quo warranto; (3) that the clerk had declared his intention to order a new election, averring the needless expense thereof to himself and the county, and asking a restraining order against such proceeding, until the proper result of the election already had was ascertained; (4) that the newly-elected county commissioners would, on their qualification, proceed to declare the office vacant, and elect a successor; and asking a restraining order to prevent such action. The defendant Fleming answered that he himself had, in truth, received a majority of the votes cast, and on a recount should be declared sheriff, denying all the allegations of the complaint as to the items affecting the result, and also on his part setting out an itemized statement of illegal votes cast for his competitor, and legal votes for himself rejected, intimidation, fraud, and other particulars proper in a quo warranto, but at the same time averring his willingness to submit the issue again to the arbitrament of the ballot box, and objecting to the order for a recount. The clerk answered, expressing his willingness to submit to the orders of the court. The newly-elected commissioners, in their answer, aver that they had not qualified, had not determined upon any action as to declaring the office vacant, and asking that the action be dismissed as to them as both premature and without warrant in law. It is well to dismiss this branch of the case here, by saying that their contention was well founded in both particulars. The proceeding as to them was not only premature, but, if it had not been, it would have been, in effect, an at

tempt to try the title to an office by an injunction, which is not permissible. Patterson v. Hubbs, 65 N. C. 119. Besides, if the commissioners had assumed to declare the office vacant, and elect another, there would have been no resultant damage justifying an injunction. The title would still be inquired into by quo warranto. The county commissioners should be dismissed, with their costs. It is proper, however, to add that the failure of a new sheriff to qualify, when it is undetermined who is elected, and no certificate has been issued to him, does not authorize a declaration that the office is vacant. The old sheriff holds over until his successor is declared elected and qualified. Code, § 1872.

The court, in view of the provision in section 7, c. 159, of the election law of 1895 (amended by chapter 185, Laws 1897), that any judge of the superior or supreme court may issue a rule upon any election officer "to show cause why he has not performed or shall not perform any specified act or duty required by the election law, or why he or they shall not perform or execute this act in any specified way, so as to best give effect to the intent and purposes of the election law," issued the rule as prayed, and on its return ordered the clerk to make the recount in the presence of the parties and others. On such recount of the ballots, the clerk reported that the relator had received a majority of eight votes. On a review of the disputed items of this report, the Judge found that the relator had received a majority of two votes, and was entitled to the certificate of election, which he ordered the clerk to issue; and he issued his mandamus to the county commissioners to induct the relator, into office upon giving the bonds and taking the oaths required by law, reserving, however, to the defendant Fleming the right to contest, either in this proceeding, or, at his election, in an action of quo warranto, the correctness of the result as affected by the legality or illegality of ballots rejected and received, and the intimidation and fraud alleged in the pleadings, as to which matters he refused to hear evidence at the hearing in chambers. His honor conceived rightly that the title to the office, so far as dependent upon the reception or rejection of ballots, intimidation, fraud, etc., could only be determined before a judge and jury in a quo warranto; but he erred in thinking that a contest could be maintained over the certificate which conveys only a prima facie title to the office, subject to the declaration of the right in a quo warranto proceeding. If the clerk had refused or failed to tabulate the result in the manner required by law, he could have been compelled by a rule to perform that duty. Moore v. Jones, 76 N. C. 188. But here the clerk had acted, and in the mode pointed out by the statute. His declaration of the result is prima facie correct, and can only be questioned in an action of quo warranto. In Swain v. McRae, 80 N. C. 111, decided at a time when the tabulation was made by a board of canvassers, instead of by

the clerk, as is now the law, it was held that, upon their declaration of the result, the board was functus officio, and could not be ordered by a mandamus to reassemble and recount the vote, the remedy being by a quo warranto. In like manner, in Gatling v. Boone, 98 N. C. 573, 3 S. E. 392, it is held that the declaration of the result of an election by the board of canvassers "conclusively settles prima facie the right of the person so ascertained to be elected to be inducted into and exercise the office," leaving the correctness of the result so declared to be investigated upon a quo warranto. This seems to be generally well settled. Cooley, Const. Lim. (6th Ed.) 784, and cases cited in note 6, among which the following cases hold that, not only a recount cannot be ordered by a court, but if the canvassing board voluntarily recount, and give a second certificate to another, such action is a mere nullity: Bowen v. Hixon, 45 Mo. 340; People v. Robertson, 27 Mich. 116; Opinion of Justices, 117 Mass. 599; State v. Donnewirth, 21 Ohio St. 216. Moore v. Jones, supra, does not differ from these. In that case the board of canvassers, having, without authority of law, gone behind the returns, were ordered to assemble and perform the duty allotted to them of adding up the returns and declaring the result. In law, the board had not acted at all.

The clerk, having declared the result, no longer has any duties in regard thereto which he could exercise either voluntarily or upon the order of a judge. Besides, the clerk did not have the power in the first instance to count the ballots and declare the result, but merely to add up the various precinct returns legally made, and ascertain the result. Section 22 of the act; Moore v. Jones, supra. In Broughton v. Young, 119 N. C. 915, 27 S. E. 277, it was held that the preservation of the ballots is required that "they may be kept as evidence to verify or correct the elec tion returns when impeached, and that on a quo warranto the ballot boxes might be brought into court, and the recount made in the presence of court and jury." But in that case, being in regard to a contested seat in the general assembly, inasmuch as the "trial was not viva voce before that body, but the evidence must be taken before a commission, a recount of the ballots was ordered to be made in the presence of the legislative commission appointed to take evidence, since it could not be contemplated that "the clerks of Cherokee, of Dare, or other counties should attend with their ballot boxes before the general assembly in Raleigh, or before the congressional committee on elections at WashIngton." This was merely to procure evidence to support or impeach the prima facie title of the sitting member, and not for the purpose of authorizing or directing a certificate of election to be issued to the contestant, should a recount show that he had received a majority of votes. The object was solely to procure evidence for the body that was to determine the title, not to compel nor to per

mit the clerk to reverse the declaration of the result already made, or recall the certificate founded thereon. So much of this proceeding as sought to have a recount made by the clerk was without authority of law, and a nullity. If made for the purpose of furnishing evidence, it is not justified by the circumstances, as was the case in Broughton v. Young, supra, since here the boxes could be opened and the recount readily made in the presence of the jury, and, if for the purpose of changing the result already declared by the clerk, he, already having performed that duty in the mode prescribed by law, was functus officio. The law does not contemplate a legal contest over the prima facie certificate. The officer charged with the duty of issuing the certificate settles that matter at his peril if he act corruptly, but conclusively so far as its issuance is concerned.

The only remaining question is whether so much of this action can be sustained as seeks to restrain the holding of a new election till the issue raised by the pleadings is determined,-whether in truth there was a tie vote. If, as formerly (Code, § 2699), upon a tie vote, the county commissioners, promptly and without expense, determined the result, there could be no foundation for such proceeding as we have here. Their declaration of the result must be in favor of one party, and the other, if so minded, could, by a quo warranto, have the correctness of the orig. inal election determined. But under the present statute we have this anomaly: that, unless this proceeding lies, neither Cozart nor Fleming can bring his quo warranto until a new election, since Fleming is not in office, and Cozart is not in by virtue of this election, but merely holding over till his successor is elected and qualified, and no more liable to a quo warranto than if some other person had been the former sheriff, and was holding over under no claim to the office, but merely until the title should be determined between two parties, each of whom claimed the election. Besides, in such election a third person might be elected; and, if the result of the November election can only be contested when one of the two highest candidates at such election is actually inducted into office, there might be no chance to contest at all.

From the averments in the pleadings of both competitors, it is almost impossible to believe (especially in view of the recount, though illegally made) that on a vote of so many thousands there will not be discovered an error of one single ballot in favor of one party or the other, either by inadvertence of the election officers, or the erroneous acceptance or rejection of some ballot, or in some other particular. On the face of the numerous averments to that effect specifically made by both the parties, and the truth of which must be determined notwith standing a new election shall be held, it seems a clear right both to the parties them

selves and to the public as well that the expense of an election shall not be incurred when the chances are almost infinitesimal that its result will not become a nullity upon the trial of the averments made in these pleadings,-averments which would be renewed in a quo warranto against the party successful in such new election, since it can have no validity if either party be shown to have been truly elected in the election already held. It is true that this proceeding is an anomalous one, but it arises upon a condition of things which can very rarely occur. If there is no precedent or statute authorizing it, there is neither precedent nor statute forbidding it. It is one of the occasions when the "reason of the thing" calls upon a court to make a precedent. It is not reasonable that an election should be ordered when both parties make numerous specific averments, the correctness of any one of which on either side (unless exactly balanced by sustaining a similar averment of the other party) will render the new election nugatory. This proceeding is in its essence a quo warranto, brought by one contestant against the other, when neither is in actual possession of the office (under the election), by reason of the fact that upon the declaration of a tie vote, which both seek to impeach, neither can be in possession. They have a right to contest the correctness of the result and have it determined, and the clerk is a proper party. The injunction against his ordering a new election will be continued to the hearing, when the trial of the issues will determine which of the two parties claiming the office was elected; or if, by a marvel, it should happen that no majority is ascertained on either side, then the restraining order will be dissolved, to the end that an election be held; but the re-reference to the ballot box should not be ordered till the plea in bar, set up on each side,-that the people at the ballot box have already declared their will,-is disposed of. This action, notwithstanding its unusual feature of not being against one in possession of office, is in its every essence an "action to try the title or right to an office," since each party asserts his right to the office to which he claims to have been elected; and the action will therefore stand for trial at the first term of Granville superior court. Code, § 616.

The gist of the action is that the relator was elected, and is kept out of office, not by the induction of his competitor, but by an erroneous declaration of a tie vote, which declaration he has a right to contest. Though, for convenience, we still speak of an action of quo warranto, it must be remembered that action has been specifically abolished (Code, § 603), and we have in fact only a civil action, in which the subject-matter is a trial of the title to an office (Id. § 616). Usually, in such actions there is an allegation that the defendant has usurped and is illegally exercising the duties of the office; but

section 616 does not require such averment, and the facts of this case satisfactorily show why it is not alleged here. A new election, if there is any truth whatever in the allegations in the pleadings on either side, would damage the parties, not only by the expense thereof (since the expense of the quo warranto will still have to be undergone), but the candidate defeated in the new election would be put at a serious disadvantage in satisfying a jury that, at the late election in November, he in truth received a majority, however strong the evidence might be. For these reasons, to give the parties an unprejudiced trial to determine the result of the November election, and to save the public and the parties a serious expense, which will probably prove to have been unnecessary, the injunction against ordering a new election should be continued to the hearing. The inJunction in no wise determines the title, but merely preserves the status quo till the title can be determined. Guillotte v. Poincy (La.) 6 South. 507. In granting such injunction there was no error, but in other particulars, as above pointed out, there was error.

Before

MONTGOMERY, J. (dissenting). the adoption of the Code of Civil Procedure, the writ of quo warranto was the only proper remedy provided by our laws to try the title to a public office. Section 362, Code Civ. Proc. (now section 603, Code), abolished the writ of quo warranto. But the "form" of the action only, has been abolished. The remedies obtainable under the old writ may be obtained by civil actions, under the former provisions of title 15, c. 2, Code Civ. Proc. (now chapter 1, tit. 15, Code). Saunders v. Gatling, 81 N. C. 298. It is only under the provisions of that chapter of the Code that the title to a public office can be tried in this state. Section 607 of that chapter of the Code declares that "an action may be brought by the attorney general in the name of the state upon his own information, or upon the complaint of any pri vate party, against the parties offending, in the following cases: (1) When any person shall usurp, intrude into, or unlawfully hold or exercise any public office, civil or military, or any franchise within this state, or any office in a corporation created by the authority of this state; or (2) when any public officer, civil or military, shall have done or suffered an act which by law shall make a forfeiture of his office; or (3) when any association or number of persons shall act within this state as a corporation, without being duly incorporated." There is not, in my opinion, a line written in the Laws of North Carolina which authorizes any suit to be brought to try the title to a public office except the above-quoted section. Section 616, as I construe it, only declares that actions brought under section 607, subd. 1, shall be tried with unusual dispatch, at the next term after summons issued. It is too clear for argument that, upon the face of section 607, before an action can be brought