Board of Commissioners v. Assell, Goetz & Moerlein, Inc.

ClaeksoN, J.

The questions of law involved:

If Whether or not, under Public Laws 1927, ch. 81, sec. 8, subsection (j) of the County Finance Act, bonds may be issued by the county commissioners to fund floating indebtedness of the county incurred before 1 July, 1927, for necessary expenses, which will require a tax levy in excess of 15 cents on the $100 valuation of property to pay such bonds.

2. Whether such bonds issued for such purpose, Avithout a vote of the people, is prohibited by chapter 523, Public-Local Laws 1927, entitled “An Act to Regulate the Issuance of Bonds in McDowell County.”

Subsection (j), suprai, is as follows: “Funding or refunding of valid indebtedness incurred before first of July, one thousand nine hundred and twenty-seven, if such indebtedness be payable at the time of the passage of the order authorizing the bonds or be payable within one year thereafter, or, although payable more than one year thereafter, is to be canceled prior to its maturity and simultaneously with the issuance of the funding or refunding bonds, and all debt not evidenced by bonds which was created for necessary expenses of any county and which remains outstanding at the ratification of this act is hereby validated.”

The agreed case shows that the $50,000 deficit was created for necessary expenses and a valid and legal obligation of the county incurred prior to 1 July, 1927. To fund this floating indebtedness by issuing-bonds will require a tax levy in excess of 15 cents on the $100 value of proj>erty.

Const, of N. C., Art. Y, sec. 6, is as follows: “The total of the State and county tax on property shall not exceed fifteen cents on the one hundred dollars value of property, except when the county property tax is levied for a special purpose and Avith the special approval of the General Assembly, which may be done by special or general act: Provided, this limitation shall not apply to taxes levied for the maintenance of public schools of the State for the term required by article nine, section three, of the Constitution: Provided further, the State tax shall not exceed five cents on the one hundred dollars value of property.”

In Herring v. Dixon, 122 N. C., at p. 424, the decisions are summed up as follows: “(1) For necessary expenses, the county commissioners may levy up to the constitutional limitation without a vote of the people or legislative permission. (2) For necessary expenses, the county commissioners may exceed the constitutional limitation by special legislative authority without a vote of the people. Constitution, Art. Y, sec. 6. (3) For other purposes than necessary expenses a tax cannot be levied either within or in excess of the constitutional limitation except *417by a vote of tbe people under special legislative authority. Constitution, Art. VII, sec. 7.” Tate v. Comrs., 122 N. C., 812; Smathers v. Comrs., 125 N. C., at p. 488; Henderson v. Wilmington, 191 N. C., 269.

In R. R. v. Cherokee County, 177 N. C., 86, the language of the.act in controversy “to provide for 'any deficiency in the necessary expenses and revenue of said respective counties.” In R. R. v. Comrs., 178 N. C., p. 449, the language of the act “to meet the current and necessary expenses of the county.” R. R. v. Reid, 187 N. C., p. 320, approves a case cited, the language of the act of the case cited being “to supplement the general county fund.”

The defendant cites some of the above cases to sustain its contention, that the agreed case shows that the proposed bond issue is intended to fund indebtedness created for necessary expenses of the county, and was an accumulated deficit in the general county fund in McDowell County. In other words, the indebtedness proposed to be funded was for ordinary expenses of the county or for necessary county purposes generally spoken of .as current expenses.

The cases cited are to the effect that a county cannot go beyond the 15 cents on the $100 valuation of property for current expenses. There are other necessary expenses of a county other than current, such as roads, bridges, county buildings, county homes for the aged and infirm, etc. Under the Constitution a county can go beyond the limitation for such necessary expenses, “as they are a special purpose and with the special approval of the General Assembly which may be done by special or general act.” (“j,” supra.) The general act, subsection (j) says further, “Funding or refunding of valid indebtedness incurred before 1 July, 1927.”

Under chapter 81, Laws 1927, sec. "2, the act defines “necessary expenses, means the necessary expenses referred to in section 7, Art. VII, of the Constitution of N. C.” That section is as follows: “No county, city or town, or-other municipal corporation shall contract any 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 the majority of the qualified voters therein.” It will be seen that necessary expenses here referred to are not alone current or ordinary expenses of a county, but such as are classed as roads, bridges, etc. R. R. v. Reid, supra; Storm v. Wrightsville Beach, 189 N. C., 679.

The whole matter is carefully considered in R. R. v. Reid, supra. In that case the facts were disputed. The levy was 18 cents on the $100 valuation of property, 3 cents over. Defendant, sheriff and tax col*418lector, wben restraining order was sought by the railroad, contended and set up the fact that the 3 cents was for special necessary expenses, viz., constructing and maintaining bridges and maintaining the borne for the aged and infirm. Although the minutes of the board showed a levy of 18 cents for the general county fund or current expenses, in fact only 15 cents was levied for that purpose and the additional 3 cents for the other necessary special purposes above mentioned. The case was reversed and remanded to the end that the board of commissioners be made parties, and if the minutes were incorrect, and corrected minutes would show that the 3 cents was not for special necessary purposes above mentioned, but the 18 cents was levied for general county purposes or current expenses, the order restraining the collection of the tax in excess of 15 cents should be made permanent.

In the present case the record does not disclose that the $50,000 indebtedness was for current or general county expenses. If it did the bonds to fund same would be invalid, as the levy for such purpose could not exceed, under the constitutional limitation, 15 cents on the $100 valuation of property. The record does show that the proposed bond issue was for necessary expenses of the county and a valid and legal obligation of the county. The subject or subjects of the necessary expense or expenses for special county purposes are not set forth, and nothing else appearing, it is taken for granted that they were for one or more special necessary purposes and funding permissible under Constitution, Art. Y, sec. 6, and the County Finance Act. The special approval has been given by the general act.

In Edwards v. Comrs., 183 N. C., at p. 60, it is said: “But the authorities apparently are uniform in holding that where there is no attempt to legalize prior litigation, or a prior invalid seizure or sale of property, or to interfere with vested rights, a statute enacted to confirm or validate a defective assessment of taxes is not in violation of the organic law, and is, therefore, effective for the purpose intended. This conclusion rests upon the recognized and accepted doctrine that a retrospective law, curing defects in acts that have been done, or authorizing or confirming the exercise of powers, is valid in those cases in which the Legislature originally had authority to confer the power or to authorize the act.” Construction Co. v. Brockenborough, 187 N. C., 65; Holton v. Mocksville, 189 N. C., 144; Storm v. Wrightsville Beach, supra.

The latter part of “j,” supra, says: “And all debt not evidenced by bonds which are created for necessary expenses of any county, and which remains outstanding at the ratification of this act is hereby validated.”

*419Under tbe first proposition in controversy we think tbe tax can be levied and is valid and legal, and a vote of tbe people is not necessary.

Tbe next proposition: Tbe County Finance Act, cb. 81, Public Laws 1927, and tbe local act relating to bond issues in McDowell County, cb. 523, Public-Local Laws 1927, were ratified on tbe same day, 7 March, 1927. Considering them together, we are of tbe opinion that it was tbe intention of tbe General Assembly, and authority is hereby given tbe board of commissioners of McDowell County to issue bonds, without a vote of tbe people, to fund valid indebtedness of tbe county incurred before 1 July, 1927. Tbe act for McDowell County is prospective, not retroactive. In fact it says: “That nothing in this act contained shall prevent tbe board of commissioners of McDowell County . . . from issuing bonds to refund maturing bonds heretofore issued and outstanding,” etc.

“Every reasonable doubt is resolved against a retroactive operation of tbe statute.” Comrs. v. Blue, 190 N. C., at p. 643.

Tbe board of commissioners of McDowell County is attempting to put into effect tbe provisions of tbe County Fiscal Control Act (chapter 146, Public Laws 1927), and to wipe out deficits and make a new start, living within its income.. Tbe purpose of tbe act is set forth in section 24: “It is tbe purpose of this act to provide a uniform system for all counties of tbe State by which tbe fiscal affairs of counties and subdivisions thereof may be regulated, to tbe end that accumulated deficits may be made up and future deficits prevented, either under tbe provisions of this act or under tbe provisions of other laws authorizing tbe funding of debts and deficits, and to tbe end that every county in tbe State may balance its budget and carry out its functions without incurring deficits.” Tbe County Finance Act (chapter 81, Public Laws 1927) provides tbe machinery for funding or refunding valid indebtedness of counties incurred before 1 July, 1927.

Tbe local McDowell County act is prospective, looking to tbe future, but providing fqr funding past valid indebtedness. Tbe issuance of bonds in tbe future, with certain exceptions, are prohibited “unless and until tbe question of tbe issuance thereof is submitted to and authorized by a vote of tbe majority of tbe qualified voters of said county.”

“All acts of tbe same session of tbe Legislature upon tbe same subject-matter are considered as one act, and must be construed together, under tbe doctrine of ‘in pari materia.’” Wilson v. Jordan, 124 N. C., at p. 687. It has been long settled that no court would declare a statute void unless tbe violation of tbe Constitution is so -manifest as to leave no room for reasonable doubt. Tbe philosophy of our system of government is based on tbe consent of tbe governed, subject to constitutional limitations.

*420Construing all tbe acts, both the public and private act for McDowell County together, a wise system is provided for issuing bonds to fund existing valid debts and throwing safeguards around future bond issues and preventing deficits. The purpose is laudable and requires counties to live within their incomes. See Hartsfield v. Craven County, ante, 358. The judgment below is

Affirmed.