Commissioners of Bladen County v. Boring

"Walkbe, J.,

after stating the case: One question in this case is whether it is governed by the principle stated and applied in Commissioners v. State Treasurer, 174 N. C., 141. We are unable to distinguish the two cases. The following we consider to be a fair statement of the substance of that decision:

First. Under Laws of 1917, ch. 6, sec. 20, providing that townships and road districts created by special act of the General Assembly may avail themselves of the benefits of the chapter, a statute designed to enable the State to lend its aid to road building and maintenance in counties, townships, and road districts upon compliance with the requirements set out, provided that the bond or undertaking filed with the State Treasurer shall be executed by the board or boards of county commissioners of the county or counties in which such township or road district is situated, and under other provisions of the chapter and its general meaning and purpose, whether a loan from the State for the purpose of road building and maintenance be applied for by a county, township, or road district, the bond tendered the State must be that of the county.

*108Second. The Legislature of North Carolina is without power to require a county to give its binding obligation to pay the interest on a loan at 5 per cent for 41 years on the application and vote of a township or road district for the construction and maintenance of the roads •of the township or district, since it is not within the legislative' power to tax one community or local-taxing district for the exclusive benefit of another; hence Laws 1917, ch. 6, sec. 20, so requiring a county is violative of Constitution, Art. I, sec. 17, providing that no person shall be in any manner deprived of his property but by the law of the land.

Third. A State or county, as a rule, may lend its aid or expend its money in the building or maintenance of a public road anywhere within its borders when it is being done for the public benefit or as a part of a State or county system, but no taxing district can be taxed for the ■exclusive benefit of another district.

Fourth. Laws 1917, ch. 6, is designed to enable the State to lend its aid to road building and maintenance in counties, townships, and road •districts, and section 20, requiring the county to give its binding obligation to pay the interest on a loan at 5 per cent for 41 years on the application and vote of a township or road district for the construction .and maintenance of the roads of the township or district, is violative of Constitution, Art. VII, sec. 7, providing that no county, city, town, or ■ other municipal corporation shall contract a debt, pledge its faith, or loan its credit, nor shall any tax be levied or collected by any officers of the same, unless by a vote of the majority of the qualified voters therein.

Fifth. When two constructions of a statute are permissible, the courts, in favor of upholding legislation, should adopt the construction which is in accord with the organic law; but the principle does not justify a •departure from the plain and natural significance of the words employed which the meaning and purpose of the law clearly tend to confirm and support.

Sixth. When the constitutionality of a statute is the question what the statute authorizes, and not what is being presently done under it, furnishes the proper test of validity.

The only difference between that case and this one is merely formal, for there the county was required to issue the bond as its own independent obligation for the township, the county being the principal, while here the county is required to endorse or guarantee the- township bond. In the one case the obligation of the county is primary, in the other it Is secondary. Nevertheless, the county would incur an obligation for the township, contrary to the principle of the Lacy case, that a State •or county, as a rule, may lend its aid or expend' its money in the building or maintenance of a public road anywhere within its borders when it is being done for the public benefit or as a part of a State or county *109system; but no taxing district can be taxed for tbe exclusive benefit of' another district. Under such a provision as that contained in tbe statute, one township would get tbe benefit of road improvement and maintenance within its borders at tbe expense of all tbe other townships and without their consent expressed at an' election. We have frequently held, at least in principle, that where the roads of the different townships or districts are set apart and a scheme is devised whereby they can be plannedj laid out, constructed or improved entirely under the township’s control and management, and without reference either to State or county benefit, it is not within the legislative power to tax one community or local district for the exclusive benefit of another. Harper v. Comrs., 133 N. C., 106; Faison v. Comrs., 171 N. C., 411; Keith v. Lockhart, 111 N. C., 451, and numerous cases in other jurisdictions collected in Commissioners v. State Treasurer, supra, are to the same effect.

“The taxing district through which the tax is to be apportioned must be the district which is to be benefited by its collection and expenditure. The district for the apportionment of the State tax is the State, for a county tax the county, and so on. Subordinate districts may be created for convenience, but the principle is general, and in all subordinate districts the rule must be the same.” Cooley on Taxation (3 ed.), 430.

“The constitutional requirement of uniformity of taxation forbids the imposition of a tax on one municipality, or part of the State, for the purpose of benefiting or-raising money for another.” 31 Cyc., 149.

Taxes should be laid upon those only for whose benefit -they are imposed, and when the burden is laid upon one locality for benefits accruing solely to another it is violative of constitutional guarantees as contained in the Constitution, Art. I, sec. 17, providing that no person shall be deprived of his life, liberty or property but by the law of the land. The clear injustice of any other rule of action is apparent. It is provided in Constitution, Art. VII, see. 7, that no county, city or town, or other municipal corporation, shall contract a debt, pledge its faith or loan its credit, nor shall any tax be levied or collected by any officers of the same, except for the necessary expenses thereof, unless by a vote of a majority of the qualified voters therein. While the construction of public roads is a necessary expense, as has been so often decided, we held in the Lacy case that the establishment of a road system confined to a township or road district, and under its control and for its special benefit, is not a necessary county expense; and even if sanctioned by a majority of the voters of the township or district at an election, the Legislature cannot create any obligation of the county which must be paid by taxation of the entire county when the voters in the latter have not consented thereto, and there is not even a method provided for their doing so.

*110Tbe Court said in Commissioners v. State Treasurer, supra: “A localized road system can in no sense be considered a necessary county expense, and a statute, or that portion of it, certainly, which, undertakes to establish a county liability for its construction and upkeep, is in clear violation of this wholesome constitutional provision, and must be declared invalid.”

This review of the Lacy case, we think, shows unmistakably that this case falls directly within its governing principle. It can make no difference that in the Lacy case the county was a principal, and not a surety or guarantor for the township. In either case the county is made to assume a liability or obligation for the township. And it must be observed that Constitution, Art. VII, sec. 7, refers not only to a debt, but to a pledge of its faith or loan of its credit, and a guaranty is of the latter class. The prohibition of that section was on ground upon which the decision in the Lacy case was based. The language of section 7 of Article VII was purposely given a broad scope so as to include any and every form of indebtedness, legal obligation or liability, for it was seen that the same rule should be provided for all in order to protect the people against discriminating and unjust taxation.

But it is argued that the county may never have to pay, as the “taxable assets” of the township must be fully exhausted before it can be called upon to make good any deficiency. This does not destroy the debt, pledge of its faith, or loan of its credit, or alter in the least the legal character of its undertaking, and it may also be said that the suggestion, if carried out, would lead to the conclusion that if the county will never have to pay, there was no use in requiring its guaranty of the debt, as it would add nothing to the credit of the township or to the salable value of the bonds on the market. The question, therefore, is not whether the county will have to pay, but whether it may have to pay on default of the township. An ordinary guarantor may never be called upon to pay for his principal, because the latter is able himself to j>ay, but this does not alter the character of his liability in law. It is only something incident to the relation he has assumed.

In the Lacy case this contention also was met as follows: “We are not inadvertent to the fact that thus far a tax only on the township applying for the loan is contemplated by the county commissioners; but, as we have seen, the bond to be given fixes an obligation on the county for the entire sum, and the statute provides that if there be default in payment of the 5 per cent interest for thirty days, the entire amount due and all penalties shall ‘at once become due and payable’ and enforced by action. And, as we have said in former decisions, ‘It is no answer to this position that, in the particular case before us, no harm is likely to accrue, or that the power is being exercised in a *111benevolent manner, for wben a statute is being squared to tbe requirement of constitutional provision, it is wbat tbe law authorizes, and not wbat is being presently done under it, tbat furnishes tbe proper test of validity.’ ” But tbe probability of tbe county never having to pay anything not only does not change tbe nature of its obligation, but tbe •suggestion is further answered by tbe fact tbat it is not tbe eventual •amount of tbe liability tbat determines tbe question of its original validity, but solely tbe character of tbe obligation assumed, whether tbe money risk is small or great. "We must bold, therefore, tbat tbe Lacy •case applies, and tbat tbe county has no power to guarantee tbe payment of tbe bonds.

But we are of tbe opinion tbat this conclusion does not affect the validity of tbe township bonds. Tbe guaranty of tbe county was intended to add its credit to tbat of tbe township and increase thereby tbe market value of tbe bonds. It surely was not intended to go beyond this and make tbe guaranty a condition precedent to tbe validity of tbe bonds, or, in other words, tbat tbe power of the township to issue the bonds and tbat of tbe county to guarantee them were inseparably joined together, so tbat tbe one could not exist without tbe other. Tbe guaranty was intended for tbe benefit of tbe township and tbe purchasers of its bonds. If they choose to take tbe bonds without tbe guaranty, we do not see why they cannot legally do so. We think tbe principle of tbe following cases applies: Berry v. Haines, 4 N. C., 311; Darby v. Wilmington, 76 N. C., 133; Cotton Mills v. Waxhaw, 130 N. C., 293; Lowery v. School Trustees, 140 N. C., 42-43.

Where a part of a statute is invalid, tbe remainder, if valid, will be enforced, provided it is complete in itself and capable of being executed in accordance with tbe apparent legislative intent; but if tbe void clause cannot be rejected without causing tbe statute to enact wbat tbe Legislature did not intend, tbe whole of it must fall. 26 A. & E. Enc. of Law (2 ed.), 570; Black on Const. Law, p. 64; Lowery v. School Trustees, supra; Keith v. Lockhart, supra.

“Even in a case where legal provisions may be severed in order -to save, tbe rule applies only wben it is plain tbat tbe Legislature would have enacted tbe legislation with tbe unconstitutional provisions eliminated.” Employers’ Liability Cases, 207 U. S., 463, 501; R. R. v. McKenonill, 203 U. S., 514; Riggsbee v. Durham, 94 N. C., 800; Greene v. Owen, 125 N. C., 212.

Tbe leading or dominant intent in passing this statute was to-authorize tbe issuing of township bonds, which can be done without any ■endorsement of tbe county, and tbe object, if not tbe sole object, to be attained by tbe guaranty was, as we. have said, to increase tbe market value of tbe bonds so tbat they may be sold for an adequate price, or to *112the best advantage. But if this can be done without the endorsement,, and it appears in this case that it can be done, we should not declare-the entire statute to be void. It is stated in the brief of the defendant’s-counsel that he will take the township bonds without the county’s endorsement i-f the county has no power to endorse them.

There can be no doubt upon the question incidentally presented in the case that the county may act as agent for the township in the manner-described in the statute. Jones v. Comrs., 107 N. C., 248, 265; McRackan v. R. R., 168 N. C., 62; Edwards v. Comrs., 170 N. C., 448.

The fact that more than one of the townships has voted for the issue-of bonds, each for itself, can make no difference in the result. They do not even collectively constitute the county in its corporate capacity, but each is acting for itself, and the law is the same as if only one-township had issued bonds, for several of the townships is no more the-same entity as the county than one township would be, not even if they acted in concert, which they cannot do, as it is required by the statute that each township should act for itself by a separate vote, the county being its agent in certain respects.

Our conclusion is that the township bonds are valid, but that the-county cannot endorse them or add its guaranty to them. This modifies the judgment.

The costs of this Court will be taxed against the plaintiff Board of Commissioners of Bladen County.

Modified.