Brumley v. Baxter

Devin, J.

The taxpayers’ suit to restrain the proposed donation by the City of Charlotte of valuable real property for the purpose of providing recreational facilities for persons who are now serving in the armed forces of the United States, or who have served in the war recently ended, presents questions of (1) the power of the General Assembly to authorize the gift, and (2) the power of the city to execute the deed, (3) in the form proposed.

At the outset it may be said that there seems to be no constitutional limitation upon the power of the General Assembly to create a corporation for a public purpose. Art. VIII, sec. 1; Dickson v. Brewer, 180 N. C., 403, 104 S. E., 887; Webb v. Port Commission, 205 N. C., 663, 172 S. E., 377; Wells v. Housing Authority, 213 N. C., 744, 197 S. E., 693. The legislative power both as to the State and to political and administrative subdivisions thereof is restrained only by the limitations imposed by the State Constitution or that of the United States.

For the protection of the rights of individuals and to preserve the interest of the public from encroachment it is provided by Art. I, sec. 7, of the North Carolina Constitution that “no man or set of men are entitled to exclusive or separate emoluments or privileges from the community but in consideration of public services.” And in Art. I, sec. 2, it is declared that “all government of right originates from the people, is founded upon their will only, and is instituted solely for the good of the whole.” And this is supplemented by the provision of Art. VII, sec. 7, which prohibits a city or other municipal corporation from contracting debts or levying taxes, except for the necessary expenses thereof, “unless by a vote of the majority of the qualified voters therein.”

Manifestly, the State cannot authorize the City of Charlotte to donate its property, or to grant privileges to one class of citizens not to be enjoyed by all, except in consideration of public services. In Brown v. Commissioners, 223 N. C., 744, 28 S. E. (2d), 104, it was said the Legislature may not “lawfully authorize a municipal corporation to pay gifts or gratuities out of public funds.”

Are the services rendered by citizens called out to defend their country in time of war to be regarded as “public services” within the meaning of Art. I, sec. 7, of the Constitution? It was so held in Hinton v. State Treasurer, 193 N. C., 496, 137 S. E., 669. See also People v. Westchester Co. National Bank, 231 N. Y., 465. While the services which have been rendered and are now being rendered by those for whom the facilities' of the Veterans’ Recreation Center are to be provided were primarily rendered to the United States, they were also rendered to an extent to each community constituting a component part of a common country. Local units, members of the National Guard and National Guard Reserve were incorporated into the armed forces of the United States, together with those called under the selective draft. Arver v. U. S., 245 U. S., 366. “The service was public, the consideration is implied.” Hinton v. State Treasurer, supra. In that case it was said, “Since the dawn of civilization the nations of the earth have always recognized an obligation to those of its citizens who bore arms in their defense. This obligation has been fulfilled in many ways. Appropriate recognition of it has always served to encourage patriotism and the promotion of the public welfare.” “Services rendered in sucb a cause must necessarily be a public service.” State v. Clausen, 113 Wash., 570. The weight of authority in other states where the question of the validity of donations to service men following World War I was considered supports this view. See cases cited in the Hinton case, supra, and in People v. Westchester Co. Bank, supra. In the last cited case the Court construed a clause in the New York Constitution similar to ours, but which does not include the words “but in consideration of public services,” as prohibiting an issue of bonds by the state to provide a bonus for veterans of World War I, Judges Cardoza and Pound dissenting. See also R. R. v. Forles, 188 N. C., 151, 124 S. E., 132.

The General Assembly has declared that it is in the public interest that adequate recreational facilities be provided in populous cities for those now serving in or who have recently been discharged from the armed forces of our country, and the City of Charlotte has found the lack of such facilities there and that in the public interest they are needed in that city. While not controlling, these findings and declarations are persuasive. Martin v. Raleigh, 208 N. C., 369, 180 S. E., 786. It may be noted that from the area embraced in the Charlotte Center alone 19,000 persons have been called or have entered into the service of their country in this war, and that 2,000 have returned. The presence of a rapidly increasing number of soldiers and veterans who come to this territory, whether temporarily or for permanent residence, presents a problem in public service which it is thought may be solved in part by •the creation of the facilities proposed.

In Hinton v. State Treasurer, supra, it was held that a statute setting aside a fund and creating an administrative agency to make loans for the purpose of enabling veterans of World War I to purchase homes was within the legislative power, unrestrained by Art. I, sec. 7. In Bridges v. Charlotte, 221 N. C., 472, 20 S. E. (2d), 825, it was declared that payments from the retirement fund to teachers after they had ceased to serve were not offensive to Art. I, sec. 7, of the Constitution, in that they were regarded as in the nature of delayed compensation for public services rendered, or delayed payments of salary. In Martin v. Raleigh, 208 N. C., 369, 180 S. E., 786, an appropriation by the City of Raleigh for the hospitalization of the indigent sick and afflicted of the city was upheld; and the creation of a Port Commission as a State agency was held to be for a public purpose and the Act declared not offensive to the Constitution. Well v. Port Commission, 205 N. C., 663, 172 S. E., 377. So also the creation of a Housing Commission was held to be for a public purpose and the use of municipal property in connection therewith -approved, the purpose of the Act being to promote health, sanitation and good order. Wells v. Housing Authority, 213 N. C., 744, 197 S. E., 693.

The power of a city to make appropriation for a public purpose was expressed by Chief Justice Stacy in Briggs v. Raleigh, 195 N. C., 223, 141 S. E., 597, in these words: “The primary role of municipal government is that of a protector of rights and not a giver of gifts, but if the end in view be a public municipal one, it is the general holding that a city may aid by donation in proper instances, as well as by other means of assistance.”

The power of cities to dedicate real property for use as recreation centers and for other recreational purposes is expressly conferred by G. S., 160-156, and the exercise of this power was held by this Court to be in the public interest and for a public purpose. Atkins v. Durham, 210 N. C., 295, 186 S. E., 330; White v. Charlotte, 209 N. C., 573 (575), 183 S. E., 730. In the Atkins case, supra, the issuance of bonds for the acquisition of land for public parks and playgrounds in the City of Durham was upheld as a necessary expense.

The constitutional limitation contained in Art. I, sec. 7, has been frequently invoked by this Court to strike down legislation conferring special privileges not in consideration of public service. Simonton v. Lanier, 71 N. C., 498; Ketchie v. Hedrick, 186 N. C., 392, 119 S. E., 767; Power Co. v. Elizabeth City, 188 N. C., 278, 124 S. E., 611; S. v. Fowler, 193 N. C., 290, 136 S. E., 709; Plott v. Ferguson, 202 N. C., 446, 163 S. E., 688; Little v. Miles, 204 N. C., 646, 169 S. E., 220; Edgerton v. Hood, Comr. of Banks, 205 N. C., 816, 172 S. E., 481; Cowan v. Trust Co., 211 N. C., 18, 188 S. E., 812; S. v. Warren, 211 N. C., 75, 189 S. E., 108; Realty Co. v. Boren, 211 N. C., 446, 190 S. E., 733; S. v. Dixon, 215 N. C., 161, 1 S. E. (2d), 520; S. v. Harris, 216 N. C., 746, 28 S. E. (2d), 104. But where the motivation is for a public purpose and in the public interest, and does not confer exclusive privilege legislation has been upheld. Hudson v. Greensboro, 185 N. C., 502, 117 S. E., 629; Briggs v. Raleigh, 195 N. C., 223, 141 S. E., 597; S. v. Sasseen, 206 N. C., 644, 175 S. E., 142; Newman v. Comrs. of Vance County, 208 N. C., 675, 182 S. E., 453; Loan Corp. v. Trust Co., 210 N. C., 29, 185 S. E., 482; Allen v. Carr, 210 N. C., 513, 187 S. E., 809; S. v. Lawrence, 213 N. C., 674, 197 S. E., 586; Lilly & Co. v. Saunders, 216 N. C., 163, 4 S. E. (2d), 528.

"We-conclude that the objection to the validity of the Act authorizing the creation of the Charlotte Veterans’ Recreational Center cannot be ■sustained. To justify declaring void an Act of the General Assembly, its unconstitutionality must clearly appear. Reasonable doubts are to be resolved in favor of its validity. S. v. Brockwell, 209 N. C., 209, 183 S. E., 378.

2. Has the city power even with legislative authority to convey valuable real property without monetary consideration for a public purpose which is at the same time not a necessary purpose ? It is admitted here that the property proposed to be conveyed was derived from the sale of other property which had been owned by the city for many years, and that it is not now used or presently needed for municipal purposes, and that this property may be regarded as equivalent to surplus funds in the treasury. Under the principle announced in Adams v. Durham, 189 N. C., 232, 126 S. E., 611, and Goswick v. Durham, 211 N. C., 687, 191 S. E., 728, and Turner v. Reidsville, 224 N. C., 42, the city would have power to appropriate surplus funds for a public purpose though it be not one which may be classified as a necessary purpose or expense. Holmes v. Fayetteville, 197 N. C., 740, 150 S. E., 624; Nash v. Monroe, 198 N. C., 306, 151 S. E., 634; Mewhorn v. Kinston, 199 N. C., 72, 154 S. E., 76; Burleson v. Board of Aldermen of Spruce Pine, 200 N. C., 30, 156 S. E., 241. A limitation upon this principle, however, was pointed out in Sing v. Charlotte, 213 N. C., 60, 195 S. E., 271. In that case it was held that funds in the city treasury derived from taxation, though labeled “contingent fund,” could not be used for a public purpose which was not a necessary expense, without a vote of the people. The distinction between the Sing case, supra, and the Adams case, supra, was that in the latter no question of taxation or credit was involved. The purchase of property from surplus funds was within the power of the city (Goswick v. Durham, 211 N. C., 687, 191 S. E., 728), and the power to sell real property owned by the city in order to use the proceeds for the acquisition of other property for public use was upheld in Harris v. Durham, 185 N. C., 572, 117 S. E., 801.

3. However, we think the city should be restrained from executing deed for the city’s property upon the terms proposed.

While the making of provision for veterans’ recreational facilities, where the need therefor has been declared by the City Council, in accord with the enabling Act of the General Assembly, may, under the circumstances here disclosed, come within the category of a public purpose and in the public interest, this should not be understood as affording the sole criterion for the disposition of the city’s property upon the terms proposed. The public purpose so declared may constitute authority for the dedication of real property not presently required for other municipal purposes to be used in carrying out the purposes for which the Veterans’ Beereational Authority was created, so long as the need continues, under the control of the city, with provision for reversion of the property or its equivalent in the event the purpose of the grant should cease and the property be no longer required or used therefor. But the Act under which the Veterans’ Eecreational Center was created may not be held to authorize the city to make an absolute grant of its property upon such terms that in the event the grantee determines the public purpose has failed, or tbe recreational facilities placed thereon for veterans are not being sufficiently used, the grantee may dispose of the property in its discretion and apply the proceeds to such charity as it may elect. Under the charter of the city (Public-Local Laws 1939, ch. 366), as well as general law (G. S., 160-229, 160-282), the powers of the city within respect .to hospitals and provisions for indigent sick are to be exercised by the City Council. Discretionary exercise of these powers may not be delegated. Murphy v. Greensboro, 190 N. C., 268 (277), 129 S. E., 614; Bowles v. Graded School, 211 N. C., 36, 188 S. E., 615. The purpose contemplated by the Act and the Resolution of the City Council to provide recreational facilities for veterans is necessarily of limited duration, and the ultimate disposition of the property would be placed beyond the control of the city. It is a sound principle of municipal law that a city may exercise only such powers as are expressly granted, necessarily implied or essential to its purposes. Asheville v. Herbert, 190 N. C., 732, 130 S. E., 861; Madry v. Scotland Neck, 214 N. C., 461, 199 S. E., 618.

It must be held that the execution of the deed upon the terms proposed is beyond the power of the city and in excess of authority conferred by the Act, and that the motion for restraining order should have been allowed.

The provisions in the statute expressly authorizing conveyance of the property by deed would seem to supersede, for the public purpose therein declared, the city’s charter provision that sale of city property he at auction. The statute declares that in so far as its provisions are inconsistent with any other law the provisions of the Act shall be controlling. R. R. v. Gaston County, 200 N. C., 780, 158 S. E., 481; Kirkman v. Stoker, 201 N. C., 11, 158 S. E., 551; Asheville v. Herbert, 190 N. C., 732, 130 S. E., 861.

There was error in denying plaintiff’s motion for a restraining order as prayed.

Error.