Hammond v. McRae, 182 N.C. 747 (1921)

Dec. 29, 1921 · Supreme Court of North Carolina

182 N.C. 747

R. L. HAMMOND v. D. K. McRAE et al., Trustees of LAURINBURG GRADED SCHOOL DISTRICT.

(Filed 29 December, 1921.)

1. Constitutional Law — Schools—Statutes—Election—Majority Vote.

Under the legal presumption that an act passed by the Legislature is valid under the Constitution, an act requiring that the question of bonds be submitted to the voters of a school district, empowering the board of trustees to issue bonds if a majority of the qualified voters at the election to be called for the purpose vote in favor thereof, nothing else appearing, requires for the validity of the bonds, a majority vote of the qualified electors of the district as ascertained by a valid registry, Const., Art. VII, sec. 7.

2. Same — Result of Election.

An issue of bonds for a school district will not be declared invalid because the special act under which they were approved by the voters did not expressly require for their validity that a majority of the qualified voters of the district must vote in their favor, when it appears that such majority, as ascertained from a valid registry, was cast in favor of the issue.

3. Elections— Schools— Timber — Registration—Statutes—Bonds—Taxation.

The failure to keep the registry, for the question of the issuance of bonds in a special school district, open for twenty days, etc., C. S., 5947, does not of itself render invalid the issuance of the bonds accordingly approved, when it appears that the matter was fully known and discussed, opportunity offered every voter to register, there was nothing to show that every elector desiring to vote had not done so, and there was no opposition to the measure manifested.

4. Elections — Schools—Bonds—Floating Debt — Ratification.

Where a special school district has included a floating debt previously incurred for school purposes, in an issuance of bonds for like purposes under an act authorizing the issuance of the bonds, approved by the electors of the district, though this is not for a necessary expense, Const., Art. VII, sec. 7, the validity of the bonds may not be successfully assailed on that account, it being within the legislative authority to validate by ratification the indebtedness thus incurred, and this principle including ratification by the electorate.

5. Constitutional Law — Amendments — Schools — Bonds — Taxation— Equalization.

Where the question of the issuance of school bonds by a special school district has been authorized by statute to be submitted to the electorate of the district, observing the equation between the property and poll tax as formerly required by our Constitution, Art. V, sec. 1, and since the recent amendment of 1920, the proper authorities have submitted the question to the electorate, without observing the equation, this amendment or substitution is self-executing and has the effect of repealing the statutory requirement of equalization, as required by the former organic law; and the action of the proper authorities in eliminating that part of the statutory requirement, does not affect the validity of the issue.

6. Same — Purchasers—Vested Rights.

The substitution of a new section for Art. V, sec. 1, of the State’s Constitution by the amendment of 1920, eliminating the proportion between property and poll tax, does not interfere with the rights theretofore acquired by the purchasers of State or municipal bonds.

7. Constitutional Raw — Taxation—Bonds—Schools—Municipal Corporations — Cities and Towns — Elections.

An act that authorizes the officers of an incorporated city or town within a special school district to submit the question of issuing bonds by the district to its electorate, is not objectionable in not conferring • this authority on the officers of the special district. Woodall v. Oomrs., 176 N. G., 377; Smith v. School Trustees, 141 N. G, 143.

Appeal by plaintiff from Lane, J., at tbe November Term, 1921, of SCOTLAND.

Civil action, beard on case agreed.

Tbe action is to restrain defendant board from issuance and sale of $150,000 of bonds of said district pursuant to an election under cb. 79, Private Laws of 1920. From tbe facts stated in tbe case agreed it appears that under cb. 53, Laws of 1909, tbe Laurinburg Graded School District was established, including tbe town of Laurinburg and two or more adjacent mill villages; that said school was conducted under that and other pertinent legislation, and prior to 1920, tbe defendant board bad incurred or assumed a floating indebtedness to tbe amount of $12,280.33, for tbe following purposes: A note for deficiency in operation of tbe schools during previous years, $1,250; a note for plumbing addition and stoves at East Laurinburg School, $2,339.65; note for plumbing repairs and stoves at old public school building, $2,216.95; note for desks for central building and fire escapes for same, $3,664.85; note for furnishing teachers’ home, $2,808.89 ; and that all of these notes were issued for money borrowed by defendant board for special purposes, and none of tbe indebtedness so evidenced was authorized by a vote of tbe electors of tbe district.

It having become necessary to establish greater educational facilities-for the said school district, the General Assembly, at the Extra Session of 1920, in chapter 79, passed a statute providing that on a petition of the majority of the trustees of the district, the commissioners of the town of Laurinburg should call an election within sixty days from the filing of the petition for the purpose of submitting to the vote of the qualified voters of the said school district the question of “whether the Laurinburg* Graded School District shall issue bonds to the amount of $150,000 for the following purposes: (a) To float the present unbonded indebtedness-of the district; (b) to construct and properly equip a high school building for said district; (c) to remodel and properly equip the present graded school buildings of the district; and (d) to purchase or build and equip a home for the teachers.” The said act containing provision that “if a majority of the qualified voters in said election vote in favor of issuing said bonds, then the board of trustees are empowered to issue the same,” etc. Again, the act provides, in section 4, that “upon the issuing of said bonds by the board of trustees, it shall be the.duty of the-board of commissioners of the town of Laurinburg to levy a special tax sufficient to pay the interest on said bonds and to provide a sinking fund sufficient to discharge the same when they matured, said tax to be levied upon all property and polls within the graded school district, the constitutional equation being observed in levying the tax.”

It is also stated in the case agreed that the registry of voters had for the purpose of said election, the books were kept open only from 1 July to 9 July; that at said election, in addition to the question submitting the bonds, there was submitted also the question of levying a special tax on the property of the district, sufficient to pay the interest on said bonds, and providing a sinking fund, but the question of levying a poll tax"was not submitted. It further appears that at said election, of 251 qualified voters duly registered in the district, there were 235 votes cast for issuing the bonds and levying the tax, one vote cast against the measure, and fifteen of the duly qualified voters did not vote.

It further appears that the defendant board have contracted to sell the said bonds to Stacy & Braun of Toledo, Ohio, at par value, and accrued interest, and it is their purpose to carry out said contract by causing said bonds to be executed and delivered as negotiable obligations of said district.

Upon these, the facts chiefly pertinent, with additional facts found by his Honor in reference to time in which the registration books were kept open, judgment was entered in terms as follows:

“This cause coming on to be heard before Lane, J., as a controversy without action upon an agreed case duly verified and filed in court, and upon the affidavits of O. L. Moore, S. J. Siler, and S. W. Oovington,. wbicb were submitted to tbe court as a part of tbe agreed case, tbe court, in addition to tbe matters set forth in tbe first eleven paragraphs of tbe agreed case wbicb are here found as facts, finds tbe following facts:

“That tbe order of tbe board of commissioners of tbe town of Laurin-burg, calling tbe said election, specified tbe four purposes for wbicb tbe said bonds were to be issued, including that of paying tbe unbonded indebtedness of tbe said school district, as set forth- in tbe act of tbe General Assembly, ratified on 25 August, 1920, and entitled An act to provide for tbe better facilities in tbe Laurinburg Graded School District,’ and that tbe.notice of said order of said board of commissioners, wbicb was duly published in tbe Laurinburg Exchange, contained a full statement of all tbe purposes set forth in, said act of tbe General Assembly, including tbe purpose of paying tbe unbonded indebtedness of tbe said district; that tbe said newspaper is tbe only paper published in tbe said district, and has six hundred subscribers in tbe territory covered by tbe said school district, and that tbe said notice of said election was published in said paper, wbicb is published weekly, for a period of seven weeks next preceding tbe closing of tbe registration of books for tbe said election.

“That at tbe time of tbe opening of tbe said registration books, and at tbe time of tbe said election, tbe purposes for wbicb tbe said bonds were issued were generally known by tbe people of tbe said school district, including tbe purpose of paying tbe unbonded indebtedness of tbe said school district.

“That while tbe registration books for said election were open all electors who presented themselves for registration were duly registered, and'since tbe said books closed no elector presented himself or herself for registration; that no elector in said school district has lost bis vote by reason of tbe failure to strictly comply with tbe law as regards «the time for keeping open tbe books, but that all were registered who deserved to be; that tbe election was fairly held, and tbe people bad a free and full opportunity to express their will upon tbe questions submitted to them; that tbe election and tbe registration were well advertised, and that tbe time for registration and for tbe election, as appointed by tbe law and tbe order of tbe board of commissioners, was well known to tbe people, and tbe right to register was available to all who felt interest enough in tbe election to cast their vote; that there is no evidence of tbe failure of any voter to register, but if there were those who did not register, such failure to register was not due to tbe shortness of tbe time tbe registration' books were open, but to tbe apathy or indifference on tbe part of such voter or voters; that tbe election and tbe purposes for wbicb tbe said bonds were to be issued met with tbe general acquiescence of tbe people, and there was no organized opposition thereto.

“That all acts, conditions, and things required by the Constitution and laws of the State of North Carolina to happen, exist, and be performed precedent to and in the issuance of the said bonds, have happened, exist, and been performed, except the failure to keep the registration books open the full twenty days, as required by law, which failure, the court finds, did not affect the election, and if the said books had been kept open the full twenty days, the result of the election would not have been changed:

“It is therefore, upon the facts, admitted in the agreed case and upon the facts found by the court, adjudged that the failure to keep the registration books open the full twenty days does not affect the validity of the said election or the said bonds; that the said election was a ratification by the people of a moral obligation of the unbonded indebtedness incurred by the trustees of the district in the proper management of the schools of the district; that the said act of the General Assembly, and every part thereof, ratified on 25 August, 1920, is valid and not in violation of the Constitution; that the words in said act, ‘a majority of the qualified voters in said election/ means a majority of the persons qualified to vote in said election.

“It is further adjudged and decreed that the said election was properly held, and is valid, and the bonds issued pursuant thereto are and will be valid and binding obligations of the said school district; that the said trustees have the right and power to sell and deliver the said bonds to the said purchasers, and to use the proceeds therefrom for the purposes set forth in the said act of the General Assembly.

“It is further adjudged and decreed that the said board of commissioners of the town of Laurinburg, under the provisions of the said act of the General Assembly, have the power and authority to levy a special tax sufficient to pay interest and provide a sinking fund upon all property within the school district.

“It is further adjudged and decreed that the plaintiff’s motion for an order restraining the defendants from issuing and delivering the said bonds as binding obligations to the purchasers be and the same is hereby denied, and the costs of the action are ordered taxed against the plaintiff by the clerk.”

From this judgment the plaintiff excepted and appealed, assigning errors.

Walter H. Neal for plaintiff.

E. H. Gibson and Bussell & Weatherspoon for defendants.

HoKe, J.

It is objected to the validity of this bond issue, first, that the act of 1920, under which the election was held, is unconstitutional in that it provides for approval of tbe measure by a majority of those voting at tbe election. In construing Art. YII, sec. 7, of tbe Constitution, wbicb requires tbe approval of a “majority of tbe qualified voters therein,” before any county, city, or town or other municipal corporation can contract a debt or levy a tax, etc., except for necessary expenses, it has been repeatedly held that tbe term “qualified voters therein” means all persons resident in tbe district and qualified to vote there, as evidenced by a valid registry of voters made pursuant to law, and unless a majority of such voters shall approve tbe measure, a majority of those voting will not suffice. Long v. Comrs., 181 N. C., 146; Williams v. Comrs., 176 N. C., 554; Clark v. Statesville, 139 N. C., 490.

In our opinion, however, tbe present statute does not come within tbe inhibition of tbe principle. There is a presumption against an interpretation that will render a law invalid, Black on Interpretation of Laws, p. 89, and tbe present statute clearly permits, if it does not require, tbe construction that a majority of tbe qualified voters of tbe district is intended. Apart from this, our decisions on tbe subject are to tbe effect that although a statute should provide that only a majority of those voting is required, yet if a majority of tbe qualified voters actually approve, this cures tbe defect and tbe election will be upheld. Riggsbee v. Durham, 99 N. C., 341; Wood v. Oxford, 97 N. C., 228. In tbe present case it appears that in a registry showing 251 qualified voters in tbe district, 235 were cast for tbe issuing of tbe bonds and levying an adequate property tax, and with only one vote dissenting, tbe objection is disallowed.

Appellant objects further that tbe registration books were only kept open from tbe first to tbe ninth of July preceding tbe election, whereas, tbe statute, C. S., 5947, provides that tbe books shall remain open for twenty days. It is always better that tbe requirements of tbe law should be observed and it may be that tbe officials charged with this duty should be dealt with for a willful default if this can be established, but in tbe instant case tbe judge, bearing tbe matter on further evidence taken by consent, finds in this connection that tbe matter was fully known and discussed; that opportunity was afforded to every voter to register; that there is no evidence of tbe failure of any voter to register or that any application was made to register after tbe books were closed; that tbe measure was very generally acquiesced in and no organized opposition thereto. On these, and tbe other pertinent findings of tbe court, it has been held that tbe election will not be declared invalid for tbe reason suggested, and, on authority, this exception must also be disallowed. Hill v. Skinner, 169 N. C., 405.

Again, it is insisted that tbe act and election bad thereunder are invalid for tbe reason that tbe law provides for tbe payment of tbe floating indebtedness, consisting chiefly in repairs, improvements, desks, etc., the same not being for necessary expenses, and having heen contracted without a vote of the people of the district. It has been held that a debt of this character may not be regarded as a necessary expense within the meaning of Art. YII, sec. 7, of the Constitution. Williams v. Comrs., 176 N. C., 554; Sprague v. Comrs., 165 N. C., 603. . But there is nothing inherently vicious in this indebtedness; on the contrary, it is shown to be an altogether meritorious claim, expended for the necessary maintenance of the schools, and of which the district is even now enjoying the benefit, and this being clearly an indebtedness which the electors, proceeding under a proper statute, could authorize, we are of opinion that acting under like sanction they may ratify and thus make valid. This has been held with us in reference to legislative measures, Reid v. R. R., 162 N. C., 355, and there are authoritative decisions elsewhere extending the principle to the action of the electorate. Township Board v. Carolan, 182 Ill., 119; McGillivray, Appellant, v. Joint School District, 112 Wis., 254; Baker v. Seattle, 2 Wash., 576; Williams v. Showdy, County Treasurer, 12 Wash., 362.

It is further contended that the election and the proposed bond issue predicated thereon should • not be approved because the authorities, departing from the provisions of the statute under which they acted, have submitted the question only of a property tax, thus ignoring the requirement of the law as originally passed that the tax should be laid also on the poll, and that the constitutional equation between the two should be observed. In. a case at the present term, Proctor v. Comrs., ante, 56, the Court has held that where a municipality is proceeding to act under a certain statute, the requirements of the statute must be observed. But the principle does not apply to the facts presented on this record, for the reason that after the enactment of the law in question and before election held, this portion of the statute requiring a tax upon the poll has been set aside by a constitutional amendment approved by the people in the fall of 1920, and becoming effective on the certificate of. the Governor, on 1 January, 1921. Under Art. Y, sec. 1, of the Constitution as originally adopted, the General Assembly was required to levy a capitation tax on every male inhabitant of the State over twenty-one and under fifty, which shall be equal to the tax on property valued at $300, with the provision that the State and county capitation tax combined shall not exceed $2 per head. In the construction of this section the' Court has held that its provisions, both as to the limitation in amount and the proportion to be observed between the property and the poll,; applied only to the ordinary taxation for State and county purposes, and that under and by virtue of subsequent sections of the article, the question of taxation in cities, towns, and special-tax districts, both as to the, amount and tbe proportion between tbe property and tbe poll, or wbetber there shall be any tax on tbe poll, was in tbe discretion of tbe Legislature, subject to tbe provisions of Article VII, section 7, requiring a vote of tbe people wbetber tbe proposed debt was for other than necessary expenses. Moose v. Comrs., 172 N. C., 419; Perry v. Comrs., 148 N. C., 521; Wingate v. Parker, 136 N. C., 369; Jones v. Comrs., 107 N. C., 248. This, as stated, being tbe original provision of tbe Constitution and tbe authoritative construction of tbe same, and under its operation tbe poll tax having become unduly burdensome by reason of special legislation in certain localities, by an amendment ratified in tbe fall of 1920, tbe section referred to was abrogated, and tbe following substituted in its stead:

“SeotioN 1. Capitation tax; exemptions. Tbe General Assembly may levy a capitation tax on every male inhabitant of tbe State over twenty-one and under fifty years of age, which said tax shall not exceed $2, and cities and towns may levy a capitation tax which shall not exceed $1, but no other capitation tax shall be levied. Commissioners of tbe several counties and of tbe cities and towns may exempt from tbe capitation tax any special case on account of pioverty or infirmity.”

It will thus be noted that tbe requirement as to tbe proportion between tbe poll and property tax is entirely eliminated, and that tbe only poll tax permitted is one by tbe State, which may not exceed $2, and by tbe cities and towns, which may not exceed $1, and that no other poll tax may be imposed.

In so far as a poll tax is concerned, this substituted section of tbe Constitution being, as it is, inhibitive in terms and plain of meaning, is to be considered as self-executing and as to all elections held and liabilities incurred after it became a part of our organic law, has tbe effect of repealing all laws and clauses of laws which impose a poll tax in contravention of its provisions. Kitchin v. Wood,, 154 N. C., 565, and authorities cited. Under tbe clause, therefore, of tbe section, “That no other capitation tax shall be levied,” this school district, composed, as it is, of tbe town of Laurinburg and two or more unincorporated mill villages or settlements, is a special-tax district, and is without power to levy a capitation tax of any amount, and tbe authorities having charge of tbe matter, in proper recognition of this principle, were right in submitting tbe question of tbe property tax alone, and thus providing for tbe interest and sinking fund contemplated and required by tbe law.

It may be well to note that as to all liabilities theretofore incurred, and all bonds theretofore issued under statutes or elections requiring tbe levy of a tax on both property and poll, tbe power and obligation to levy tbe tax on both will continue, for a State, no more by constitutional amendment than by statute, can impair tbe vested rights held by tbe creditor in assurance of bis, debt. Smith v. Comrs., ante, 149, citing, among others, Port of Mobile v. Watson, 116 U. S., 289.

There is no merit in the objection also urged by appellant that the election was held on the order and under the supervision of the municipal authorities of the town of Laurinburg. It has long been recognized that the Legislature has full power to create these taxing districts for special governmental purposes, and in the exercise of this power it is not restricted to towns or counties or other, the ordinary, political subdivisions of the State. Smith v. Trustees, 141 N. C., 143, approved as late as Woodall v. Comrs., 176 N. C., 377, and in many other cases. In application of the principle, the Legislature, in the original act, ch. 53, Laws of 1919, has created a special school district, composed, as stated, of the town of Laurinburg and adjacent territory, and there is no reason why it should not, as it has done in this instance, confer upon the municipal authorities of a town within the district the power to order an election on the petition of the school authorities of the district, and to control and supervise the same. It would seem to be a very satisfactory and efficient method of taking the sense of the voters on the question, and thus obtaining lawful authority to issue the bonds as the statute provides.

¥e are of opinion that the bonds in question will constitute a valid indebtedness of the school district and the judgment dissolving the injunction is

Affirmed.