Thomson v. Harnett County

Clarkson, J.

The facts: Under and by virtue of the provisions of chapter 427 of the Public-Local Laws of 1913, each and every one of the townships of Harnett County from time to time issued township road bonds by vote of the people, and expended the proceeds of the said road bonds upon the improvement and development of the public roads of the county lying within the respective townships, the said bonds being in the total sum of $430,000. None of the principal of the said bonds has been paid, except $3,000 of the bonds of Buckhorn Township, and the remainder of the said principal remains due and unpaid, and no provision has been made by the respective townships for the payment of the said principal sum.

Section 17 of the act provides that the township road commissions to be set up in the event of a favorable vote in each township shall “succeed to and have all of the rights, powers, and duties, not inconsistent with the provisions of this act, now conferred by law upon the township board of supervisors.” The act does not deprive the board of county commissioners of their general right to aid in the improvement of the public roads of the county.

Chapter 293 of the Public-Local Laws of 1925, substituted for the existing several agencies of township road commissions, one commission for the entire county, and vested in this county highway commission the control of the roads then being maintained and improved by the several townships, and that act, in section 13, expressly declared, with reference to the outstanding township bonds: “The proceeds of said bonds are hereby declared and found to have been expended for the necessary improvement of the public roads of Harnett County.” The county commissioners were, in that act, authorized, in their discretion (section 13), “to purchase or assume the payment of any and all of the road bonds of the several townships heretofore issued and outstanding.” This discretion, however, was never exercised.

By chapter 342 of the Public-Local Laws of 1935, after reciting in detail the outstanding township road bond issues, it was declared: “The proceeds of the said bonds were used for the purpose of the neces*665sary improvement of public roads constituting a part of tbe general road system of tbe county, and tbe entire county received direct benefit from tbe said expenditures, and tbe county as a whole was relieved of an expenditure wbicb otherwise would have fallen upon tbe whole county.”

Tbe several townships of Harnett County issued road bonds between 1 October, 1914, and 1 July, 1921. These bonds constitute obligations of tbe respective townships. Tbe proceeds thereof were spent in tbe respective townships for improving roads therein wbicb tbe General Assembly has declared constitute “a part of tbe general road system of tbe county.” Some of these township road bonds are now in default.

Chapter 342, Eublic-Local Laws 1935, supra — “An act to authorize refunding bonds for tbe county of Harnett for tbe retirement of township road bonds in said county,” provides that tbe township bonds are in all respects validated; that Harnett County is authorized to issue full faith and credit bonds of tbe county bearing interest not exceeding 4% per annum and maturing serially over not to exceed thirty years, and to levy and collect annually upon tbe entire taxable property of tbe county such tax as may be necessary, in addition to other sources of revenue provided in tbe act to pay interest and principal on tbe county bonds as tbe same may become due. Tbe act declares that tbe county bonds and tax are for meeting a necessary expense of tbe county, and provides that with tbe consent of tbe Local Government Commission as to each transaction, tbe Board of Commissioners may exchange tbe bonds authorized by tbe act for township bonds, or, after their sale at not less than par, may use tbe proceeds for tbe exclusive purpose of purchasing township bonds of tbe issues described in tbe preambles, all upon such terms as may be agreed upon with tbe holders of township bonds, but not more than par for par; that tbe township bonds so “acquired” shall remain valid obligations of tbe respective townships, and shall be deposited in tbe sinking fund for tbe county bonds and held for tbe purpose of paying tbe county bonds; that tbe board shall be required to levy and collect annually in each township a tax sufficient to pay at least 6% interest annually on tbe township bonds now outstanding and unpaid; that proportion of tbe collections from this tax wbicb represents .the proportion of tbe total outstanding township bonds wbicb are held in tbe sinking fund, shall be paid to tbe sinking fund; and that such tax and payments are to continue in each township until collections from such township are sufficient to retire an amount of tbe county bonds equal to tbe amount of bonds of such township acquired by tbe sinking fund.

Under tbe authority of tbe above act, tbe board of commissioners for tbe county of Harnett has adopted a resolution providing for tbe issuance of $427,000 Harnett County Township Eoad Eefunding Bonds. *666This resolution describes the township bonds to be acquired by purchase or exchange for the county bonds authorized. The county accountant is directed to negotiate and enter into agreements with the holders of the township bond's, subject to the approval of the board of commissioners of Harnett County, on the most advantageous terms available to the county, for the acquisition of such bonds.

The act is challenged by the plaintiff upon the grounds: First, that it is the taking of the plaintiff taxpayer’s property other than by the the law of the land; second, that it is an authorization of a county tax for other than a county purpose; third, that it is not for a necessary expense; and fourth, that it violates Article VII, sec. 9, of the Constitution, by levying a tax on the community or taxing district for the exclusive benefit of another.

Plaintiff says the questions present are: “(1) Does chapter 342, Public-Local Laws of North Carolina, 1935, violate Article I, sec. 17, of the North Carolina Constitution, which prohibits the taking of plaintiff’s property other than by law of the land? (2) Does the act violate Article V, sec. 6, of the North Carolina Constitution, which prohibits the levy of a county tax for other than a county purpose? (3) Does the act violate Article VII, sec. 7, of the North Carolina Constitution, which prohibits a county from contracting a debt and levying a tax for other than a necessary expense of the county without a vote of the majority of the qualified voters therein? (4) Does the act violate Article VII, sec. 9, of the North Carolina Constitution, by granting the power to tax one community or district for the exclusive benefit of another?” We do not think the contentions of plaintiff can be sustained.

The first question: The township units are pledged now to pay the principal and 6% interest on its present bonds. The county issue under the act in controversy is in the aggregate sum of $427,000, and is for the amount of all the township units, and the issue is restricted to be sold or exchanged at 4% to aid these units. We cannot see how there can be any possibility of a deficit under the new issuance of bonds of 4% when the township units are pledged to pay 6%. It is an easy method of financing the township unit bonds and does not deprive plaintiff of his property. It does not impinge the Constitution “but by the law of the land.”

The second question: Under Article V, sec. 6, in Brooks v. Avery County, 206 N. C., 840, it is held: “A county has authority to issue funding and refunding bonds with the approval of the Local Government Commission to take up valid, outstanding indebtedness of the county which was incurred for necessary county expenses. Article V, sec. 6.”

*667We think, under the facts and circumstances of this case, the bonds are for a county purpose. It may be noted that the county roads were taken over by the State for maintenance and improvement, and are now maintained and improved by the State. Public Laws 1931, ch. 145.

In Hill v. Comrs., 190 N. C., 123, it is held: “A public-local law authorizing the commissioners of a county to take over a specified highway within the county, constituting one of the principal highways within the county, connecting two important State highways, transferring to the said commissioners the bridges of the various townships for their care and supervision, is not violative of Article II, sec. 29, of our Constitution against direct legislation by local, private, or special act, nor the taking of property without the due process of law, Article I, sec. 17; nor the pledging of the county’s faith or credit without the approval of the voters, etc., Article VII, see. 7; nor against the uniformity rule, Art. VII, sec. 9.”

The third question: It has been held by this Court that roads are necessary expenses. Citing a wealth of authorities, it is said in Barbour v. Wake County, 197 N. C., 314 (317): “It has been held in this jurisdiction that the construction and repair of bridges and roads are necessary expenses. To contract a debt for such purposes, a vote of the majority of the qualified voters of a county is not a prerequisite.”

The fourth question: The plaintiff contends that “The act violates Article VII, sec. 9, of the North Carolina Constitution, by granting the power to tax one community or local taxing district for the exclusive benefit of another.” Commissioners v. Lacy, 174 N. C., 141; Ellis v. Greene, 191 N. C., 761 (766).

Constitution of North Carolina, Article VII, sec. 2, is as follows: “It shall be the duty of the commissioners to exercise a general supervision and control of the penal and charitable institutions, schools, roads, bridges, levying of taxes and finances of the county, as may be prescribed by law. The register of deeds shall be, ex officio, clerk of the board of commissioners.” The General Assembly can, “as may be prescribed by law,” give almost unlimited power to the counties to carry out this provision of the Constitution.

The act in controversy does not in any way impair the obligation of the township bonds. These bonds are valid obligations of the townships. Under Article VII, sec. 2, of the Constitution, above quoted, the commissioners of a county have the duty to exercise a general supervision and control of the roads and levying of taxes as prescribed by law in reference to roads. By legislative authority all these roads were taken over by the county and the act of 1935 declared that the entire county received direct benefit from the expenditures in the townships, and the county as a whole was relieved of an expenditure which otherwise would have fallen upon the whole county.

*668In Reeves v. Buncombe County, 204 N. C., 45 (47), Brogden, J., writing the opinion for the Court, distinguishes Commissioners v. Lacy, supra, and Ellis v. Greene, supra, and says: “The record discloses that the proceeds of both bond issues were spent upon roads and bridges in Black Mountain Township, 'which said roads and bridges were later taken over by the county of Buncombe as a part of the highway system of said county, and later taken over by the State Highway Commission, and are now under the control of same.’ Manifestly, the facts so established disclose that the project was not one of local or township benefit, supervision, and control, but such expenditure was made (quoting from Comrs. v. Lacy, supra) 'for the public benefit or a part of the State or county system.’ Hence, the law impresses upon the bond issues the character and quality of a county-wide obligation.”

Our Constitution is not static — it is elastic to meet changing conditions. It must be liberally construed, as was done in the Beeves case, supra. The act in controversy cannot injure plaintiff, but is an aid to the townships to meet changed conditions. A county is subject to almost unlimited legislative control in the exercise of ordinary governmental functions, it being but an agency of the State. Day v. Commissioners, 191 N. C., 780.

For the reasons given, the judgment of the court below is

Affirmed.