United States Court of Appeals Fourth Circuit
United States Court of Appeals Fourth Circuit
United States Court of Appeals Fourth Circuit
2d 890
In their original complaint, the plaintiffs sought to enjoin the sale. The District
Court, after a hearing, concluded that the plaintiffs were not entitled to the
relief sought, but deferred entry of a decree dismissing the suit until 30 days
after the sale of the pool to give the plaintiffs an opportunity to show 'that the
sale was not bona fide in the sense that there was collusion between the
defendants and the successful bidder regardint the future use of the pool * * *.'
D.C.M.D.N.C., 1958, 162 F.Supp. 549, 558.
This opinion of the District Court was filed on May 23, 1958. Shortly
thereafter, on June 3, 1958, the pool was sold at public auction to the high
bidder, the Greensboro Pool Corporation, for $85,000. Two days later, the City
Council adopted a resolution accepting the bid and approving the sale.
Plaintiffs then filed their supplemental complaint charging that the sale was not
bona fide.
The chief reason asserted in support of the charge that the sale was not bona
fide was that a person instrumental in organizing the corporation to which the
pool was sold, Dr. R. M. Taliaferro, was a city official. This and other
allegations attacking the genuineness of the sale require a close scrutiny of the
transaction to determine whether it was bona fide or a mere sham or subterfuge
to continue a policy of segregation in respect to facilities actually maintained by
the City. It is true that De. Taliaferro as a member of the Parks and Recreation
Commission did actively oppose the plaintiffs' demand and recommend sale of
the pool, and that he was later instrumental in organizing the corporation which
ultimately purchased it from the City. However, he was a member of a nineman commission which serves in an advisory capacity only, legal authority
being in the City Council of which he was not a member.
The question to be determined is whether, apart from motives, the sale was real
or only a pretense. After reviewing all the circumstances cited by the plaintiffs,
the District Judge found
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'that the plaintiffs have failed to sustain the burden of showing that the sale was
not bona fide, or that the City of Greensboro has any agreement of any kind
with the Greensboro Pool Corporation relating to the future ownership, use or
operation of the pool.' 175 F.Supp. 476, 480.
Upon examination of the record, we cannot say that this finding is clearly
erroneous. If it should appear at any time hereafter that the City openly or
secretly assists in the operation of this racially restricted pool by any form of
subvention or other favorable treatment, the plaintiffs would be entitled to an
injunction.
At the oral argument, plaintiffs cited 14-234 of the General Statutes of North
Carolina.1 This statute has indeed been interpreted by the Supreme Court of
North Carolina to prevent recovery under a contract or even on quantum meruit
for the insulation of the County Home and the County Courthouse by a
contractor who was Chairman of the Board of County Commissioners.2 From
this it does not follow, however, that a contract of sale becomes void because
the purchasing corporation was organized through the efforts of a person who
has a merely advisory relationship to a municipal corporation. 3
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Affirmed.
See State v. Weddell, 1910, 153 N.C. 587, 68 S.E. 897, where the statute was
held not to apply to an official having greater authority than Dr. Taliaferro in
this case. In a supplemental memorandum, plaintiffs also cited Snipes v.
Winston, 1900, 126 N.C. 374, 35 S.E. 610 and State v. Williams, 1910, 153
N.C. 595, 68 S.E. 900, both of which are distinguishable