Styers v. Phillips

178 S.E.2d 583, 277 N.C. 460, 1971 N.C. LEXIS 1048

• Court: Supreme Court of North Carolina
• Decided: January 20, 1971
• Docket: 71
• Status: Published

Opinions

SHARP, Justice.

The ultimate question which this appeal presents is whether the State Board of Education has authority to allocate funds from the General Assembly’s 1970-71 appropriation for the Nine Months School Fund to city and county boards of education for the purpose of transporting urban pupils to and from schools located within the corporate limits of the cities and towns in which they live. This is a question of law, and the answer must be found in the enactments of the General Assembly. D & W Inc. v. Charlotte, 268 N.C. 577, 151 S.E. 2d 241. The term “intra-city transportation” as used herein means the transportation of public school pupils living within the boundaries of any municipality to a school located therein but more than one and one-half miles from the residence of the pupil. G.S. 115-183(4).

Plaintiffs contend, and Judge Bailey held, that the General Assembly had appropriated no money for the purpose of providing urban transportation to pupils living within corporate limits as they were fixed in 1957 and that defendants could not lawfully disburse tax funds for that purpose. Plaintiffs also contend that the State Board has never officially made any allocation of funds for the intra-city transportation of pupils; that the action taken was that of defendants Phillips and Davis. Judge Bailey made a “finding” that there was no evidence before him “that the State Board of Education has authorized the transportation” of urban pupils to any school, and plaintiffs assert that is a finding of fact in accordance with their contention.

Whether there is enough evidence to support a material issue is always a question of law for the court. 7 N. C. Index 2d Trial § 18 (1968). However, “[u]pon an appeal from an order granting or refusing an interlocutory injunction, the findings of fact, as well as the conclusions of law, are reviewable by this Court.” Deal v. Sanitary District, 245 N.C. 74, 76-77, 95 S.E. 2d 362, 364. In a situation such as this, factual findings made by the Judge of the Superior Court are not conclusive upon us. The Supreme Court may review the evidence and make its own findings of fact. Cameron v. Highway Commission, 188 N.C. 84, 123 S.E. 465. Our first task, however, is to determine whether the law authorizes the State Board to make an allocation for the intra-city transportation of public school pupils from the funds appropriated by the General Assembly to the Nine Months School Fund for transportation purposes.

School transportation is governed by Article 22 of Chapter 115 of the General Statutes, which was enacted in 1955. In that year the General Assembly relieved the State Board of Education of all responsibility for the operation of school buses. G.S. 115-181 (a); Huff v. Northampton County Board of Education, 259 N.C. 75, 130 S.E. 2d 26. At the same time it enacted G.S. 115-180 which, in pertinent part, provides: “Each county board of education, and each city board of education is hereby authorized, but is not required, to acquire, own and operate school buses for the transportion of pupils enrolled in the public schools of such county or city administrative unit. ...”

It was specifically provided in G.S. 115-186 (e) that there is no duty upon the State or any county or city “to supply any funds for the transportation of pupils, or any duty to supply funds for the transportation of pupils who live within the corporate limits of the city or town in which is located the public school in which such pupil is enrolled or to which such pupil is assigned, even though transportation to or from such school is furnished to pupils who live outside the limits of such city or town.” Thus, it is quite clear that whether any school board shall operate a bus transportation system is a matter in its sole discretion, and that a city board is not required to transport pupils living in the city and attending schools located therein even though transportation to those same schools is furnished pupils living outside the city.

The only authority and control which the State Board has over the transportation of pupils is that provided in Article 22 of N. C. General Stats., Ch. 115. The Board is required by G.S. 115-181 (d) to adopt safety regulations with reference to the construction, maintenance, and operation of school buses. Upon the request of any city or county board of education, G.S. 115-181 (e) authorizes the State Board to give advice with reference to the establishment of school bus routes, the acquisition and maintenance of buses, and any other question which may arise in connection with the operation of a school bus transportation system.

G.S. 115-181 (f) requires the State Board to allocate “to the respective county and city boards of education (that is those which have elected to operate school buses) all funds appropriated from time to time by the General Assembly for the purpose of providing transportation to the pupils enrolled in the public schools within this State.” The statute requires the allocation to be made on a fair and equitable basis, according to the needs of the respective cornty and city administrative units and so as to provide the most efficient use of such funds. The State Board is instructed to consider the number of pupils to be transported, the length and condition of bus routes, and any other pertinent facts affecting the cost of transportation. The State Board is directed to make the allocations at the beginning of each fiscal year, but it may reserve for future allocation during the fiscal year, as the need therefor shall be found to exist, an amount not to exceed ten percent (10%) of the total funds appropriated for transportation. (All italics are ours.)

After the State Board has allocated the transportation appropriation, G.S. 115-181 (g) directs that the funds “shall be paid over to the respective county and city boards of education in accordance with such allocation in equal monthly installments throughout the regular school year: Provided, however, that upon the request of a county dr city board of education, the State Board of Education may, in its discretion, pay over to the county or city board all or any part of any or all monthly installments prior to the time when the same would otherwise be payable. The respective county and city boards shall use such funds for the purpose of replacing, maintaining, insuring, and operating public school buses and service vehicles in accordance with the provisions of this subchapter, and for no other purpose, but in the making of expenditures for such purposes shall be subject to no control by the State Board of Education.” (Emphasis added.)

In 1957, the General Assembly enacted G.S. 115-190.1, viz.:

“In each and every area of the State where school bus transportation of pupils to and from school is now being provided such school transportation shall not be discontinued by any State or local governmental agency for the sole reason that the corporate limits of any municipality have been extended to include such area since February 6, 1957, and school bus transportation of pupils shall be continued in the same manner and to the same extent as if such area had not been included within the corporate limits of a municipality.”

In 1963 the foregoing section (G.S. 115-190.1) was repealed. At the same time the General Assembly enacted G.S. 115-181.1, which placed “upon the State, the State Board of Education in its use of funds appropriated lay the State for school transportation, and any county or city administrative unit which elects to provide school transportation, the same duty to supply funds for the transportation of pupils who live within the corporate limits' of a municipality in which is located a public school in which such pupils are enrolled or assigned as that required for transportation to or from school of any other pupils residing within the county or city administrative unit.” N.C. Sess. Laws, Ch. 990 (1963).

The effective date of G.S. 115-181.1 was “from and after July 1, 1965.” Prior to that date, by Chapter 1095 of the Session Laws of 1965, effective July 1, 1965, the legislature repealed G.S. 115-181.1 and re-enacted G.S. 115-190.1 in its original form. Thus, legislative approval of the policy of transporting some city children and not others to schools located within the corporate limits (given in 1957) was never actually withdrawn.

In August 1969, a three-judge panel in the U. S. District Court for the Middle District of North Carolina held that G.S. 115-190.1, by denying transportation to urban pupils residing in areas which were within the boundaries of a municipality on 6 February 1957, while providing it for those living in areas annexed by the city after 6 February 1957, violated the equal protection clause of the Constitution of the United States. Sparrow v. Gill, 304 F. Supp. 86. The State accepted this decision as correct and did not appeal to the United States Supreme Court. The Federal District Court enjoined the State from providing funds for the transportation of any pupils within a municipality unless it provided transportation on an equal basis for all pupils residing within the city and living more than one and one-half miles from the school to which they were assigned. The implementation of the federal injunction was stayed until 1 August 1970.

As a result of the decision in Sparrow, a number of school boards had to decide whether to discontinue the transportation of about 41,000 children living in areas which had been annexed by municipalities since 6 February 1957 or to transport approximately 57,000 more. The State Board was faced with the problem of allocating the appropriation for the school year 1970-71, which was inadequate to provide this additional transportation.

For the fiscal year 1970-71, the General Assembly, by Chapters 807 and 1103 of the N. C. Session Laws of 1969, appropriated $465,866,589.00 to the State Board of Education for the Nine Months School Fund. This appropriation, as declared by G.S. 143-23, was for the purpose and objects enumerated in the itemized requirements of the State Board of Education as submitted to the General Assembly by the Director of the Budget and the Advisory Budget Commission (or as amended by the General Assembly). Pursuant to the requirements of the Executive Budget Act (N. C. Gen. Stats. Ch. 143, art. I), the Budget Division of the Department of Administration prepared for the State Board of Education a statement (Budget Advice) of its appropriation and the purposes and objects for which the funds could be used. This Advice (under Purpose 66, Auxiliary Agencies, Line 661, Transportation) allotted $14,410,682.00 of the total Nine Months School Fund Appropriation to bus transportation.

The State Board’s first attempt to meet the crisis created by the decision in Sparrow was to request the Governor as Director of the Budget and the Advisory Budget Commission, in the exercise of authority granted to them by G.S. 143-23, to make a transfer of funds as between objects and items in its budget. Specifically, the State Board requested that it be allowed to transfer $1,796,150.00 appropriated for “lapsed” instructional salaries, retirement, and social security contributions, to Code 66 (transportation).- On 9 June 1970 the Advisory Budget Commission denied this request for a transfer of funds. However, noting that the “Budget of the State Board of Education, Nine Months School Fund, provides more than $15,800,000.00 for School Bus transportation in 1970-71,” the Commission issued the following directive:

“The Governor and the Advisory Budget Commission have authorized the State Board of Education to expend from these funds ($15,800,000.00) the amounts necessary to provide for the transportation of urban school children affected by the recent federal court ruling, from the beginning of the 1970-71 school year until such time as the 1971 General Assembly convenes.

“The Governor at that time will determine if, and in what amount, additional funds will be required to provide for continuation of transportation for urban school children for the remainder of the 1970-71 school year, and he will submit an emergency appropriation bill for this purpose for the consideration of the General Assembly.”

Following the advice received from the Governor and the Advisory Budget Commission, the State Board, which — according to Mr. Davis — had previously thought it could not allocate funds for the intra-city transportation of children residing within municipal limits as they existed in 1957, allocated funds to city boards of education for that purpose.

In a further effort to assist city and city/county boards of education meet the transportation crisis, defendants Phillips and Davis directed the State Board’s division of transportation to request the cooperation of other school administrative units in making available to these boards their discarded buses on a temporary basis. Between June 19 and September 4, 1970, four hundred, seventy-eight (478) of these discarded buses — all of which had been in use during the school year 1969-70 — were transferred from one unit to another. Title, which had been in the name of the unit using the bus (G.S. 115-188 (d)) was lodged in the board which would use the bus during 1970-71. No funds were involved in these transfers.

At the hearing before Judge Bailey, Dr. Phillips testified that, under the allocations made by the State Board, transportation appropriation funds are being and will be spent for intra-city transportation in Winston-Salem and other cities. In consequence of the accelerated use of these funds and the transfer of the discarded school buses, as of 18 September 1970, bus transportation was being provided by 114 boards of education for 111,500 urban pupils assigned to schools' located within 142 municipalities. Mr. Davis estimated that the 1970-71 transportation appropriation would be exhausted by April 1971.

In support of their contention that the legislature has never authorized the expenditure of tax funds for the intra-city transportation of pupils and that such expenditures are contrary to State policy and illegal, plaintiffs rely upon the recitals in N. C. Sess. Laws, Ch. 990 (1963). These recitals are that in June 1963 the State Board was allocating funds for the purpose of providing transportation for five classes of pupils: (1) Those residing outside municipalities and attending schools located outside municipalities; (2) Those residing outside municipalities and attending schools located inside municipalities; (3) Those residing inside municipalities and attending schools located outside municipalities; (4) Those residing in territory annexed by a municipality after 6 February 1957 and attending schools within the same municipality, when transportation was provided in such area prior to annexation; and (5) Those residing in one municipality but attending schools in another. G.S. 115-181.1, had it not been repealed, would have created a sixth classification — city pupils residing within corporate limits as they existed prior to February 1957. Plaintiffs argue that the five classes of pupils enumerated in N. C. Sess. Laws, Ch. 990 (1963) were the only ones for whose benefit the State Board was then allocating the funds appropriated for transportation and that, after the repeal of G.S. 115-181.1, allocations for any other class would be illegal.

This argument overlooks the fact that in providing transportation for class (4) pupils, tax funds had been and were being spent for intra-city transportation with specific legislative sanction. It ignores the clear wording of G.S. 115-180 which, both before and after the advent of G.S. 115-181.1, has continuously authorized a city board of education, without limitation, to transport all pupils residing within the unit. It fails to take into account that the only statutory restriction upon Code 66 funds is that they be used for transportation purposes; that neither the Appropriation Act nor the Budget Advice earmarked transportation funds for the transportation of children with reference to the location of their residence, the location of the school to which they were assigned, or any other criteria. It disregards the mandate in G.S. 115-181 (f) that the State Board shall fairly and equitably allocate to the county and city boards electing to operate transportation systems all funds which the legislature had appropriated for transportation. The 1963 repeal of G.S. 115-186 (e) and the enactment of G.S. 115-181.1, followed in 1965 by the re-enactment of the former and the repeal of the latter before its effective date, cannot becloud the clear wording of G.S. 115-180 and G.S. 115-181 (f).

Plaintiffs argue (1) that in Sparrow the Attorney General took the same position which they take here, that is, that G.S. 115-186 (e) prevents the State Board from allocating funds for the intra-city transportion of students, and (2) that the opinion of the Attorney General “ought to be strongly considered by this Court.” Although the construction of G.S. 115-186 (e) was not before the three-judge court in Sparrow, it did not endorse this interpretation of the statute. If that was the Attorney General’s position in that case, it is not his position in this one. We have considered both and conclude that the second position is correct.

G.S. 115-186 (e) does not forbid either the State Board or local boards to supply funds for the intra-city transportation of pupils. This section merely declares that the transportation of pupils who live outside the city limits in which the school they attend is located does not impose a correlative duty to transport pupils who live within the city and attend the same school. This classification is entirely reasonable, since ordinarily school children can obtain both private and public transportation more easily in the cities than in rural areas. In any event, a statute which merely relieves the city boards of any duty to provide transportation cannot be construed as a prohibition against providing it — especially in the face of G.S. 115-180, which grants to city boards, without limitation, the authority to operate transportation systems.

Plaintiffs further contend that because the legislature has never made an appropriation large enough to provide intra-city transportation and because Code 66 appropriations for the school year 1970-71 were insufficient to provide it for the city boards electing to operate transportation systems, the legislature manifested its intention that no tax funds should be spent for intra-city transportation.

In an effort to show the legislative intent with reference to the 1970-71 appropriation in question, plaintiffs offered the testimony of Mr. Claude Hamrick, a former member of the General Assembly (House of Representatives) from 1961 through 1967. Over defendants’ objection and exception, Judge Bailey permitted Mr. Hamrick to testify that in 1967 he and others introduced a bill in the House which would have re-enacted G.S. 115-181.1 as passed in 1963 and repealed in 1965. This bill and a similar one introduced in the Senate in 1969 died in committees. Over defendants’ objection and exception these bills were admitted in evidence.

In his order Judge Bailey declared that “no finding of fact or conclusion of law herein is based in any manner or particular upon any bills which were introduced in the General Assembly which failed of passage. ...” In their brief, however, plaintiffs refer to the testimony of Mr. Hamrick and to the 1967 and 1969 bills. They contend this evidence shows the legislature’s intention to reject intra-city transportation of pupils and that this Court should consider this evidence even though Judge Bailey did not. Not so. Both Mr. Hamrick’s testimony and the bills were incompetent. The intention of the legislature cannot be shown by the testimony of a member; it must be drawn from the construction of its acts. D & W Inc. v. Charlotte, supra. Furthermore, the rule is that ordinarily the intent of the legislature is indicated by its actions, and not by its failure to act. 50 Am. Jur. Statutes § 326 (1944).

In James v. Young, 77 N.D. 451, 43 N.W. 2d 692, 20 A.L.R. 2d 1086, it was held that the legislature’s failure to pass a bill “cannot be said to indicate any intent on the part of the legislature. A public policy is declared by the action of the legislature, not by its failure to act.” Accord, Reed v. Huston, 24 Idaho 26, 132 p. 109. In Moore v. Board of Freeholders of Mercer County, 76 N.J. Super. 396, 184 A. 2d 748, the defendants argued that the failure of the legislature to pass a bill specifically authorizing a citizen to photocopy public records indicated a denial of the right. The court said, “[W]e decline to attribute any such attitude to the legislature. Defendant’s conclusion can be nothing more than conjecture. Many other reasons for legislative inaction readily suggest themselves.” In United States v. Allen, 179 F. 13 (8th Cir.) the court said, “Courts can find the intent of the legislature only in the acts which are in fact passed, and not in those which are never voted upon in Congress but which are simply proposed in committee.”

We conclude (1) as a matter of law, that the State Board was authorized and directed by G.S. 115-181 (f) to allocate without restriction the funds appropriated for transportation during the school year 1970-71 to the boards of education which had elected to provide school bus transportation; and (2) as a matter of fact, that the State Board did make the allocation which the statute required it to make. Plaintiffs’ contention “that the State Board has not acted in the matter”; that any action taken was that of defendants Phillips and Davis; and that defendants Gill and Lambert have disbursed funds upon the orders of Phillips and Davis is not supported by the evidence. Judge Bailey’s “finding” that “there is no evidence that the State Board of Education has authorized the transportation of these 111,500 pupils to any school” is irrelevant. The State Board does not authorize the transportation of any pupils; it allocates available funds to those boards which elect to operate transportation systems. It is true that plaintiffs introduced no minutes of the State Board. The oral evidence of its secretary and controller, however, tends to show that allocations were made.

Absent evidence to the contrary, it will always be presumed “ ‘that public officials will discharge their duties in good faith and exercise their powers in accord with the spirit and purpose of the law. . . . Every reasonable intendment will be made in support of the presumption.’ ” Huntley v. Potter, 255 N.C. 619, 628, 122 S.E. 2d 681, 686, 687. “[T]he burden is upon the party asserting the contrary to overcome the presumption by competent and substantial evidence.” 6 N. C. Index 2d Public Officers § 8 (1968). Thus, the burden was upon plaintiffs to produce evidence that the State Board had failed to make the allocations required by G.S. 115-181 (f). The case on appeal is totally devoid of any evidence of such a failure and contains no suggestion that State Board minutes were unavailable or nonexistent.

After the decision in Sparrow it was obvious that the funds appropriated for 1970-71 were insufficient to provide nine months transportation for all the units which then elected to operate a transportation system. Unless something was done, the public school education of many thousands of children would be disrupted by a lack of transportation. Acting with the advice and consent of the Governor and the Advisory Budget Commission (which had refused to transfer funds from other objects and items in the State Board’s budget to the purpose of transportation) , the State Board allocated the Code 66 funds on a monthly basis sufficient to provide transportation in all the units electing to provide transportation until the funds were exhausted — about April, 1971.

The final question posed by this appeal is whether the lalw sanctions such an accelerated allocation and expenditure of the transportation appropriation. We hold that it does. G.S. 115-181 (g) expressly provides that the funds allocated for transportation “shall be paid over to the respective county and city boards of education in accordance with such allocation in equal monthly installments throughout the regular school year.” However, it authorizes the State Board, upon request and in its discretion, to “pay over to the county or city board all or any part of any or all monthly installments prior to the time when the same would otherwise be payable.” This is the authority which the State Board has, in effect, been exercising.

The Attorney General argues that authority to authorize the accelerated use of funds is a lesser power included in the authority which G.S. 143-23 gives to the Governor and the Advisory Budget Commission to make transfers or changes as between objects and items in the budget of the State Board of Education. We need not consider this contention in view of the authority which G.S. 115-181 (g) gives to the State Board to accelerate payments to the local units. We note, however, plaintiffs’ concession that “to accelerate the expenditure of money in the sense that the money may be spent for a legitimate purpose at a faster clip May be permissible.” Plaintiffs base their case upon the premise, which we reject, that it is “clearly unlawful” to spend any funds for the intra-city transportation of pupils.

This suit is by three taxpayers to enjoin an allegedly unlawful use of public funds. The appeal presents no question of constitutional law. It is the rule with us that an individual has standing to contest an allegedly illegal diversion of public funds which will injuriously affect his rights individually or as a citizen and taxpayer. Teer v. Jordan, 232 N.C. 48, 59 S.E. 2d 359; Freeman v. Madison County, 217 N.C. 209, 7 S.E. 2d 354; 81 C.J.S. States § 191(b) (1953). Plaintiffs are citizens and residents of Forsyth County, an area in which the Winston-Salem/Forsyth County Board of Education is providing transportation for all pupils residing more than one and a half miles from the school to which they are assigned. Were plaintiffs residents of a county where their children might be deprived of bus transportation on and after 1 April 1971 because the expenditure of funds for intra-city transportation elsewhere had exhausted the transportation appropriation, there could be no doubt of their standing to maintain this action. That, however, is not their situation. Furthermore, were the expenditure of state funds for intra-city transportation to be enjoined, the action would not affect the income tax, sales tax, or any other tax which plaintiffs pay. Nevertheless, for the purpose of decision here, we have assumed, without deciding, that plaintiffs might be adversely affected in some way if funds appropriated for the transportation of public school pupils were illegally diverted.

We have interpreted the law as it has been written. The General Assembly is now in session and, in the light of present conditions, it may determine whether the transportation of more than one hundred thousand school children shall be discontinued before the end of this school year.

The order of Bailey, J. is

Reversed.

Justice Moore did not participate in the consideration or decision of this case.