Glenn v. Board of County Commissioners

Stacy, C. J.,

after stating the case: The essence of what the defendants propose to do, and the ultimate effect of their proposal is, to issue bonds of Durham County to meet a deficiency of $65,000 in the county operating expense fund, which deficiency, without enumerating the several items composing it, was occasioned by the inability of the county authorities to collect or to realize sufficient taxes out of the maximum constitutional levy for said fund. The remedy suggested in French v. Commissioners, 74 N. C., 692, to meet such a situation (elaborated in later cases) is, either to reduce expenditures, if the taxes cannot be collected, or, if the tax for any of the items going to make up the general levy be required “for a special purpose,” which is also a necessary expense of the county, to apply to the Legislature for its special approval to add an increased levy for such special purpose. Mayo v. Commissioners, 196 N. C., 15; Owens v. Wake County, 195 N. C., 132; Commissioners v. Assell, 194 N. C., 412 (on rehearing, 195 N. C., 719); R. R. v. Reid, 187 N. C., 320; R. R. v. Commissioners, 178 N. C., 449; Davis v. Lenoir, 178 N. C., 668.

The defendants contend that this latter course has been pursued in the instant case, while a contrary view is taken by the plaintiff.

Special approval of the General Assembly is given in section 8 of “The County Finance Act” to the issuance of county bonds and notes for certain purposes designated therein as special. And in section 41 of the same act it is provided that the full faith and credit of the county shall be deemed to be pledged for the punctual payment of the *237bonds and notes issued thereunder, including bonds for which special funds are provided, etc. This section was amended by section 60 of the Local Government Act by adding at the end thereof the following:

“ Nothing in this section shall be construed as authorizing an unlimited tax for the payment of bonds not issued -for a special purpose within the meaning of section six of article five of the Constitution of North Carolina. It is the intention of this act, however, to authorize the issuance of funding and refunding bonds and notes as herein provided in cases where taxes for their payment is limited by the Constitution, as well as in other cases. The General Assembly hereby declares that an emergency exists by reason of the present extraordinary financial condition of the counties of this State, and hereby gives its special approval to the levying of taxes to the fullest extent permitted by the Constitution for the purpose of paying bonds and notes issued hereunder to fund or refund or renew indebtedness now outstanding or incurred before July first, nineteen hundred and thirty-one, and hereby declares that the payment of such bonds and notes constitutes a special purpose.’ ”

The pertinent constitutional provisions on the subject are as follows :

Article Y, section 6: “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 with 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.”

Article VII, section 7: “No county, city, 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 is established by the authoritative decisions interpreting these sections of the Constitution:

1. That within the limitations fixed in Article Y, section 6, the county commissioners of the several counties may levy taxes for the necessary expenses of the county without a vote of the people or special legislative approval. Henderson v. Wilmington, 191 N. C., 269; Commissioners v. Commissioners, 165 N. C., 632; Guire v. Commissioners, 177 N. C., 516; Hargrave v. Commissioners, 168 N. C., 626; Black v. Commis*238sioners, 129 N. C., 121; Herring v. Dixon, 122 N. C., 420; Vaughn v. Commissioners, 111 N. C., 429; Long v. Commissioners, 76 N. C., 273.

“Taxation for State and county purposes combined cannot exceed the constitutional limitation for their necessary expenses and new debts. . . . If what are- often miscalled the 'necessary expenses’ of a county exceed the limitation prescribed by law, the necessity cannot justify the violation of the Constitution.” French v. Commissioners, 74 N. C., 692.

2. That for special purposes and with the special approval of the General Assembly, the county commissioners of the several counties may exceed the limitations in Article Y, section 6, without a vote of the people; provided the special purposes so approved by the General Assembly are for the necessary expenses of the county. R. R. v. Lenoir County, 200 N. C., 494; R. R. v. Cherokee County, 195 N. C., 756; R. R. v. Forbes, 188 N. C., 151; R. R. v. McArtan, 185 N. C., 201; Parvin v. Commissioners, 177 N. C., 508; Pritchard v. Commissioners, 160 N. C., 477; Smathers v. Commissioners, 125 N. C., 480 (defendant’s appeal, 487); Tucker v. Raleigh, 75 N. C., 267; Brodnax v. Groom, 64 N. C., 244.

Speaking to- the subject in McCless v. Meekins, 117 N. C., 35, Montgomery, J., delivering the opinion of the Court, says: “We have already said that the commissioners would have no right to issue bonds without a popular vote unless for necessary expenses. Neither would the Legislature have the power to authorize them to do so. It seems from the perusal of the act that power was intended to be given to the commissioners to issue bonds for any and all indebtedness of 'the county, whether incurred for necessary expenses. or not. This power will not be conferred by the legislative power, for such an attempt would be directly in conflict with Article YII, section 7, of the Constitution. But we see no reason why the commissioners should not be allowed, under the act, to fund the county debt and issue bonds for that part of same which was contracted for necessary expenses, without a popular vote, even if they had not the power given to them expressly under the Constitution and other laws than the act of 1889. An act of the Legislature can be constitutional in part and in part unconstitutional. McCubbins v. Barringer, 61 N. C., 554; Johnson v. Winslow, 63 N. C., 552.”

“Such 'special purposes’ must be of the ordinary purposes of the county, such as that to build a courthouse, a public jail, or an important bridge, as to which it may be deemed necessary to create a special fund” — Merrimon, C. J., in Jones v. Commissioners, 107 N. C., p. 264.

3. That for purposes other than necessary expenses, whether special or other, taxes may not be levied by the commissioners of any county, *239either within or in excess of the limitations fixed by Article Y, section 6, except by a -vote of the people under special legislative authority. Briggs v. Raleigh, 195 N. C., 223; Jones v. New Bern, 184 N. C., 131; Herring v. Dixon, supra; Moose v. Commissioners, 172 N. C., 419; R. R. v. Commissioners, 148 N. C., 220.

4. That a tax “to supplement the general county fund” (R. R. v. Reid, 187 N. C., 320), or “to provide for any deficiency in the necessary expenses and revenue of said respective counties” (R. R. v. Commissioners, 178 N. C., 449), or “for the purpose of taking up a note in bank made by the predecessor board and other current expenses” (R. R. v. Cherokee County, 177 N. C., 86), or to meet “the other current expenses of said county in said years” (Williams v. Commissioners, 119 N. C., 520), or “to borrow money for the necessary expenses of the county and provide for its payment” (Bennett v. Commissioners, 173 N. C., 625), is not for a special purpose within the meaning of the Constitution.

When a debt is originally created for a purpose properly denominated special, which is also a necessary expense of the county, its funding or refunding may be declared a special purpose because of its initial character (Barbour v. Wake County, 197 N. C., 314), but when the debt arises from a deficiency in the general county fund, its funding or refunding would not be “for a special purpose” in the constitutional sense. Its creation comes from a deficiency in the general fund, and nothing else appearing, its funding would be to make up that deficiency. To say that the funding of tax-anticipation notes, given for money borrowed to meet the general expenses of the county, or to supplement the general county fund, may itself be declared a special purpose would be to convert a note given for one purpose into another and special one by the simple expedient of renewing it and changing its name. When a note is given for one purpose, ostensibly its renewal would be for the same purpose. This is the rationale of the decisions on the subject.

Nor does it appear that the Legislature had any different object in view. It says: “Nothing in this section shall be construed as authorizing an unlimited tax for the payment of bonds not issued for a special purpose.” The statute provides that funding and refunding bonds may be issued where taxes for their payment are limited by the Constitution, as well as in other cases. But this is only declaratory of the law as heretofore announced in a number of cases, notably Bennett v. Commissioners, supra, where Hoke, J., speaking for a unanimous Court, says: “True, we have held in this jurisdiction that when county commissioners have power to contract a debt or to provide for valid debts already contracted, they may, in the exercise of good business prudence, issue county bonds in evidence of the obligation, the right of taxation, *240therefore, being restricted to the constitutional limitations as to debts incurred since the same was adopted. Commissioners v. Webb, 148 N. C., 120; McCless v. Meekins, 117 N. C., 34; French v. Commissioners, 74 N. C., 692; Johnston v. Commissioners, 67 N. C., 103.”

The General Assembly further declares that an emergency exists by reason of the present extraordinary financial condition prevailing in the counties of the State and gives its special approval for the levying of taxes “to the fullest extent permitted by the Constitution” for the purpose of paying bonds and notes issued to fund or refund or renew indebtedness of the counties now outstanding or incurred before 1 July, 1931, and declares that the payment of such bonds and notes shall constitute a special purpose. But this does not purport to- convert notes issued for a deficiency in the general county fund into notes for special purposes. If it does, then to this extent the act runs counter to the organic law, for the Legislature is without power to suspend the Constitution even in times of stress. Dixon v. Commissioners, 200 N. C., 215. To hold otherwise would be to permit by indirection that which is prohibited from direct accomplishment. The Constitution is the protector of all the people. It stands as their shield and buckler in fair weather and foul; and in periods of panic and depression, it is to them “as the shadow of a great rock in a weary land, a shelter in the time of storm.” The observations of Reade, J., in R. R. v. Holden, 63 N. C., 410, at p. 418, which were pressed on the argument, are not at variance with this position, but are accordant herewith. When an act of the Legislature is susceptible to two interpretations, one constitutional and the other not, the courts will adopt the former and reject the latter, as the presumption is in favor of its validity. Green v. Asheville, 199 N. C., 516, 154 S. E., 852; Hammond v. McRae, 182 N. C., 747, 110 S. E., 102; Person v. Doughton, 186 N. C., 723, 120 S. E., 481.

It is true, the act provides for funding “indebtedness now outstanding or incurred before 1 July, 1931,” and declares that the payment of such funding bonds and notes shall constitute a special purpose. Interpreted in the light of the Constitution, this means that debts created in prosecuting purposes properly denominated special, which are also necessary expenses of the county, may be funded and taxes levied to pay said funding bonds as “for a special purpose,” while those levied to pay the bonds issued to meet a deficiency in the general county fund, would fall within the limitations of Article Y, section 6. Bennett v. Commissioners, supra; McCless v. Meekins, supra.

The cases of Wolfe v. Mt. Airy, 197 N. C., 450, Hartsfield v. Craven County, 194 N. C., 358, Jones v. Commissioners, 137 N. C., 579, Edwards v. Commissioners, 70 N. C., 571, and Sedberry v. Commissioners, 66 N. C., 486, the last three cited and relied upon by defend*241ants, are not at variance witb anything said herein, nor do- they announce a contrary view. In these cases the right to fund certain valid obligations was upheld, but the question of the limitation of the tax as fixed by the Constitution was not involved. So in the instant case the right of the authorities to fund the present indebtedness is not mooted. This is conceded. The point is: May an unlimited tax be pledged and levied for the payment of said funding bonds? ~W"e think not. Pritchard v. Commissioners, 160 N. C., 476.

As a “special purpose”’for which an unlimited tax may be levied with the special approval of the General Assembly and without a vote of the people must also- be a “necessary expense” of the county, which latter includes both law and fact, and, as used in the Constitution and municipal resolutions, is a matter for judicial, rather than legislative, determination (Henderson v. Wilmington, supra), it follows that what constitutes a special purpose within the meaning of the Constitution, must ultimately be decided by the courts. Storm v. Wrightsville Beach, 189 N. C., 679; Hightower v. Raleigh, 150 N. C., 569; Wharton v. Greensboro, 146 N. C., 356; Fawcett v. Mt. Airy, 134 N. C., 125; Black v. Commissioners, 129 N. C., 121; Long v. Commissioners, 76 N. C., 273.

The expressions “current necessary expenses” and “necessary current operating expenses,” used in the agreed statement of facts, were doubtless induced by similar expressions in some of our opinions, notably Black v. Commissioners, supra, where “current necessary expenses of the county” and “floating indebtedness of the county” were used by the writer of the opinion; but these expressions are neither determinative of the legal question now presented, nor do they furnish a cue to its solution.

We think the instant case falls within the principles stated in the fourth paragraph above, to the effect that, in substance, the effort is to supplement the general county fund, or to provide for a deficiency therein, or to take up a note in bank and other current expenses, or to borrow money for the necessary expenses of the county and provide for its repayment, which we have said was not “for a-special purpose” within the meaning of Article W, section 6, of the Constitution. The judgment is accordingly

Affirmed.