Henderson v. City of Wilmington

191 N.C. 269

• Court: Supreme Court of North Carolina
• Decided: March 3, 1926
• Status: Published

Opinions

Adams, J.

The Constitution, Art. VII, sec. 7, provides: “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.” The necessity of a rigid observance of this provision has been pointed out and reiterated in our decisions and emphasized by special legislative enactment. O. S., 2691. In analyzing and construing this section in its relation to the sixth section of Article 5, the Court has held: (1) That for necessary expenses tbe municipal authorities may levy a tax up to the constitutional limitation without a vote of the people and without legislative permission; (2) that for necessary expenses they may exceed the constitutional limitation by legislative authority, without a vote of the people; (3) that for purposes other than necessary expenses a tax cannot be levied either within or in excess of the constitutional limitation except by a vote of the people under special legislative authority. Herring v. Dixon, 122 N. C., 420; Tate v. Comrs., 122 N. C., 812.

The qualified voters of the city have had no opportunity to express their will on the far-reaching question of building docks to be used in “shipping, both foreign and coastwise,” and there is no pretense that the indicated tax will be within the constitutional limitation. Therefore the bonds can be issued and the tax levied, if at all, only upon the principle stated in the second class, — that is, that the bonds are authorized by the Legislature and are to be issued for a necessary expense of the city. It is provided by statute that any city shall have the right to acquire, establish and operate waterworks, electric lighting systems, gas systems, schools, libraries, cemeteries, market-houses, wharves, play or recreation grounds, athletic grounds, parks, abattoirs, sewer systems, garbage and sewage disposal plants, auditoriums or places of amusement or entertainment, armories, rest rooms, a system of public charities, etc., and that reasonable appropriations for these purposes shall be “subject to the provisions of the Constitution of the State.” C. S., 2832. That is, if the purpose involves a necessary expense, as, for example, a market-house or a municipal lighting system, the assent of the qualified voters is not essential; but if the purpose does not involve a necessary expense, as, for instance, a hospital or place of amusement, the will of the voters must be ascertained. It is also provided that for certain of these purposes land may be acquired by purchase or condemnation. C. S., 2791, 2792; Laws 1917, ch. 136, subch. 4, sec. 1; Laws 1919, ch. 262.

The constitutionality of these acts is not in question. The Legislature has not said that the purposes enumerated involve a necessary expense (although some, but not all, do) ; for this is a question of law. Since the appropriations are “subject to the provisions of the Constitution” they must conform to the Constitution; and for this reason there is no conflict between the statute and the organic law.

The bonds are to be issued for the purpose of constructing “public municipal docks and terminals.” Neither the word “docks” nor the word “terminals” appears in the statute we have cited; and “wharves,” which is found in the statute, does not appear in the ordinance. But we make no point on the technical distinction between a “dock,” a “wharf” and a “terminal”; we grant for tbe present purpose only that “wharves” may be treated as synonymous with or at least as including “docks and terminals.” It will be conceded, we presume, that a municipality may not engage in the business of erecting wharves or docks unless expressly authorized by its charter or by statute. This principle is elementary. If the statute (C. S., 2832) authorizes the defendants to acquire, establish, or operate a wharf, it also prescribes a definite constitutional limitation under which the authority may be exercised; and if the statute had not prescribed it, the Constitution has. This limitation is “a vote of the majority of the qualified voters” in the city, unless the construction of the proposed wharf or dock is a necessary municipal expense. Whether it is a necessary expense within the meaning of the Constitution is the question to be determined.

With the mere utility of the enterprise we are not concerned. Whether “shipping, foreign and coastwise” would expand commerce is alien to the principle we are considering. The convenience, the benefit to be conferred upon a particular class, the insufficiency of present facilities, and a want of opportunity for commercial or industrial competition — these and similar premises are not factors that can control or even contribute to our solution of the present controversy. We are dealing exclusively with a question of law, with the legal formalities necessary to pledging the faith of the city by issuing bonds for the contemplated purpose; and as these formalities are mandatory they may not be disregarded or ignored.

It is admitted, % we understand, that the term “necessary expense” includes law and fact, and, as used in the Constitution and in contracts purporting to incur municipal indebtedness, that it involves matters, not for legislative, but for judicial determination. Storm v. Wrightsville Beach, 189 N. C., 679; Black v. Comrs., 129 N. C., 121; Mayo v. Comrs., 122 N. C., 5, overruled on another point in Fawcett v. Mt. Airy, 134 N. C., 125. This is recognized by the Legislature in its statutory definition of “necessary expenses” as the necessary expenses referred to in Art. VII, sec. 7, of the Constitution. 3 0. S., 2919. Also in the provision: “If a bond ordinance provides for the issuance of bonds for a purpose other than the payment of necessary expenses of the municipality, the approval of a majority of the qualified voters of the municipality as required by the Constitution of North Carolina, shall be necessary in order to make the ordinance operative.” 3 C. S., 2948. It is plain, then, that neither the finding of the defendants (as stated in the fourth section of their ordinance) that the expenses to be defrayed are necessary expenses, nor the rule, adopted by the United States Board of Engineers requiring municipalities to make adequate provision for utilizing docks and other terminal facilities, nor yet any executory provision in the deed of the United States shipping board Emergency Fleet Corporation can have the least bearing or influence upon our interpretation of the constitutional provision.

In defining “necessary expense” we derive practically no aid from the cases decided in other States. ¥e have examined a large number of such cases apj>arently related to the subject and in each one we have found some fact or feature or constitutional or statutory provision antagonistic to or at variance with the section under consideration. "We must rely upon our own decisions.

In Wilson v. Board of Aldermen, 74 N. C., 748, 759, Rodman, J., said that it would be difficult, if not impossible, to draw a precise line between what are and what are not the necessary expenses of the government of a city; and in Fawcett v. Mt. Airy, 134 N. C., 125, Montgomery, J., remarked that it would be almost impossible to state in legal phraseology the meaning of the words “necessary expense” as applied to the wants of a city or town government. The definition given in Jones v. Comrs., 137 N. C., 579, 599, indicates less restraint and less doubt. There it is said by Solee, J., “They (necessary expenses) involve and include the support of the aged and infirm, 'the laying out and repair of public highways, the construction of bridges, the maintenance of the public peace and administration of public justice — expenses to enable the county to carry on the work for which it was organized and given a portion of the State’s sovereignty.” In a subsequent decision the same writer observes that the term more especially refers to the ordinary and usual expenditures reasonably required to enable a county properly to perform its duties as a part of the State government. Keith v. Lockhart, 171 N. C., 451, 456. This feature is again stressed in Ketchie v. Hedrick, 186 N. C., 392, in which the late Chief Justice Clark said: “But all these cases extending the meaning of the words, “necessary expenses,” were due to the enlarged scope of governmental expenses, causing a broader vision and very proper growth in "the recognized needs and requirements of municipal government. They were not based upon any idea that “necessary expenses” would take in matters which were not required as necessary governmental, expenses.”

By virtue of this interpretation it has been held that among necessary expenses may be classed those incurred by a city or town for streets, lights, water, sewerage, a fire department, an electric fire-alarm, an incinerator, a municipal building, a markethouse, a jail or guard-house, and jetties for the protection of a village bordering on the water; and among expenses not necessary may be grouped those for schools and schoolhouses (see, however, Collie v. Comrs., 145 N. C., 170), hospitals, rights of way for railroads, and manufacturing, industrial, and commercial enterprises. Storm v. Wrightsville Beach, supra; and cases cited; Brown v. R. R., 188 N. C., 52; Ketchie v. Hedrick, supra; Armstrong v. Comrs., 185 N. C., 405; Williams v. Comrs., 176 N. C., 554; Stephens Co. v. Charlotte, 172 N. C., 564; Keith v. Lockhart, supra; Sprague v. Comrs., 165 N. C., 603.

Tbe cases declaring certain expenses to have been “necessary” refer to some phase of municipal government. Tbis Court, so far as we are advised, bas given no decision to tbe contrary. Hartsfield v. New Bern, 186 N. C., 136, is not in conflict witb tbis position. There tbe question of levying a tax or pledging tbe credit of tbe city did not arise. Article YII, sec. 7, of tbe Constitution was not construed or discussed; it was not referred to in tbe opinion. In that case tbe plaintiffs sought to enjoin tbe city of New Bern from acquiring an easement in a strip of land about twenty feet in width extending from tbe tracks of tbe Atlantic and North Carolina Bailroad to Union Point; and they based their suit upon tbe allegation that tbe act of tbe Legislature giving tbe city tbe right of eminent domain was a private act passed without tbe preliminary notice of thirty days and without evidence of three several readings on three different days. Const., Art. II, secs. 12, 14. Upon tbis question tbe appeal was prosecuted; not upon that of levying a tax or pledging tbe credit of tbe city. Tbe reference in tbe reported case to municipal wharves as “public necessities” appears incidentally in tbe preliminary statement. It is not a part of tbe opinion; so it cannot be accepted as a precedent or as tbe expression of tbe Court. Tbe controversy bad reference to tbe exercise under legislative grant of tbe city’s alleged right to condemn tbe plaintiffs’ land to enable a railroad built principally by tbe State and certain counties, including Craven, to extend its track to tbe water front.

In Scales v. Winston-Salem, 189 N. C., 469, tbe plaintiff asked damages for personal injury alleged to bave resulted from tbe negligent construction of an incinerator. In pointing out tbe distinction between acts done for tbe private benefit of tbe city and those done in tbe performance of a governmental power, we quoted from tbe opinion in Moffitt v. Asheville, 103 N. C., 237, 254, in which Avery, J., said: “Tbe grading of streets, tbe cleansing of sewers, and keeping in safe condition wharves from which tbe corporation derives a profit are corporate duties.” In Moffitt’s case and in Scales’ case, tbe question was that of tbe defendant’s liability for negligence; neither bas anything to do witb Art. YII, sec. 7, of tbe Constitution. There are many “corporate duties” which are utterly remote from those relating to necessary expenses. Tbe duty of keeping a wharf in safe condition after tbe city bas lawfully established or acquired it is altogether separate. and distinct from obedience to tbe mandate that a wharf shall not be established or acquired by pledging tbe city’s credit or levying a tax without tbe assent of tbe qualified voters. In Adams v. Durham, 189 N. C., 232, it was held that the building of an auditorium for the convenience of the city, while not a necessary expense, was a public purpose, and that the city authorities could use money already on hand in the erection of such building. Chief Jmtice Rohe remarked that Art. VII, sec. 7, did not apply because the expenditure would impose no further liability and would require no further taxation. Suppose the city of 'Wilmington had in its treasury money enough to construct the proposed docks and with this money should build them and use them for a'profit; or, suppose the qualified voters should approve the sale of the bonds and the levy of a special tax and out of the proceeds the city should build the docks and use them for a profit; in either event it would be incumbent upon the city to keep the docks in repair and a negligent failure to perform this “corporate duty” would lay the foundation of a suit in damages, as in case of failure to perform any similar corporate duty whether the “purpose” did or did not originally involve necessary expense. This principle is not new: it is upheld in a number of our decisions. Fisher v. New Bern, 140 N. C., 506; Harrington v. Wadesboro, 153 N. C., 437; Terrell v. Washington, 158 N. C., 281; Woodie v. North Wilkesboro, 159 N. 0., 353; Harrington v. Greenville, ibid., 632.

But none of these cases decides the specific question under review. The decisions heretofore rendered by the Court make the test of a “necessary expense” the purpose for which the expense is to be incurred. If the purpose is the maintenance of the public peace or the administration, of justice; if it partakes of a governmental nature or purports to be an exercise by the city of a portion of the State’s delegated sovereignty; if, in brief, it involves a necessary governmental expense — in these cases the expense required to effect the purpose is “necessary” within the meaning of Art. VII, sec. 7, and the power to incur such expense is not dependent on the will of the qualified voters. Now, for what purpose are the bonds to be issued and the tax levied? As previously indicated, to build docks and terminals “to be used for the purpose of shipping, both foreign and coastwise.” Ordinance, see. 1. This is primarily a business venture; and as such it is unrelated to the administration of justice or to any governmental function; it does not involve a “necessary expense.” The power to tax is restricted; and the Constitution has wisely ordained that a municipal corporation shall not without the assent of a majority of the qualified voters levy a tax in aid of an enterprise of this character. The proposed undertaking is local. If it were an enterprise upon which the whole State had embarked a different question might arise; for the Court has held that the restrictions contained in Art. VII, sec. 7, are confined to local measures and do not include those which affect the entire commonwealth. Bank v. Lacy, 183 N. C., 373; Lovelace v. Pratt, 187 N. C., 686.

The defendant reminds us, as suggested in Storm v. Wrightsville Beach, supra, that we should “look for better moral and material conditions and governmental machinery to provide them.” We may also admit the force of the statement that “the luxuries of one generation have become the necessities of another.” Swindell v. Belhaven, 173 N. C., 2. Nor are we inadvertent to the cases, long since overruled, in which it was held that expenses incurred for lights and water were not “necessary.” Mayo v. Comrs., supra; Thrift v. Elizabeth City, 122 N. C., 31. But we must not lose sight of the fact that each of these progressive changes was governmental in its nature. Upon the same principle conditions are conceivable in which the establishment of a wharf might be deemed to involve a necessary expense; but in this case such conditions do not appear.

The proposed bonds are not required as a necessary governmental expense and cannot be issued under the ordinance adopted by the defendants. The judgment is

Affirmed.