Hunt v. McNair
| Citation | 177 S.E.2d 362,255 S.C. 71 |
| Decision Date | 22 October 1970 |
| Docket Number | No. 19111,19111 |
| Court | United States State Supreme Court of South Carolina |
| Parties | Richard W. HUNT, individually and representing all of the taxpayers of the State of South Carolina, Appellant, v. Robert E. McNAIR, Governor of the State of South Carolina, Grady L. Patterson, Jr., Treasurer of the State of South Carolina, John H. Mills, ComptrollerGeneral of the State of South Carolina, Edgar A. Brown, Chairman of the SenateFinanceCommittee, Robert J. Aycock, Chairman of the Ways and Means Committee of theHouse of Representatives, constituting the Budget and Control Board of theState of South Carolina; Daniel R. McLeod, Attorney General of the State ofSouth Carolina, andBaptist College at Charleston, an eleemosynary South Carolina corporation,Respondents. |
Bryant & Fanning, Orangeburg, for appellant.
Atty. Gen. Daniel R. McLeod and Asst. Atty. Gen. C. Pinckney Roberts, Columbia, and Sinkler, Gibbs & Simons, Charleston, for respondents.
In this action the plaintiff contests the constitutionality of the Educational Facilities Authority Act (), and prays an order enjoining the defendants from proceeding under its authority. The Court of Common Pleas for Charleston County denied the plaintiff relief; the case is before us on exceptions taken to the trial judge's order.
We are satisfied that the decree of the circuit court, together with our addenda, correctly sets forth and disposes of all issues raised by the appellant on this appeal, and the order of the circuit judge shall be reported as the directive of this court. We have eliminated several sentences not necessary to a determination of the issues. We have added to the order the paragraphs indicated in brackets.
At issue here is the constitutionality of the recently enacted Educational Facilities Authority Act which appears as Section 25 of Act No. 349 of 1969 which became effective June 4, 1969 (hereinafter referred to as the Act). This action is brought for a declaratory judgment pursuant to the provisions of Sections 10--2001, et seq., seeking a holding that the Act is unconstitutional and that certain actions taken pursuant thereto by the Defendants herein are invalid and should be enjoined.
In his Complaint the Plaintiff alleges that he is a taxpayer of the State of South Carolina and a resident of Charleston County, whose interest would be adversely affected by the Defendants who constitute the Budget and Control Board of South Carolina, and, therefore, has standing to challenge the validity of the Act and the actions of the Defendants thereunder. It is clear that his contention in this respect is correct. Shillito v. City of Spartanburg, 214 S.C. 11, 51 S.E.2d 95; 52 Am.Jur., Sec. 3, Pg. 3.
It also appears that a justiciable controversy exists.
The returns filed on behalf of the Defendants raise no issues of fact and accordingly it is entirely appropriate that the case be disposed of on the pleadings and on the exhibits which have been presented to me for my consideration.
Under the provisions of the Act the Budget and Control Board of the State of South Carolina (the State Board) acting as the Educational Facilities Authority (the Authority) is authorized to provide financing for institutions of higher learning as defined in the Act by the issuance of revenue bonds payable solely out of the revenues of the Authority derived from the particular project for which they are issued and secured by a mortgage on the project so financed. The Act further provides that revenue bonds may be issued to refund outstanding obligations issued by an institution of higher learning for the cost of a project as defined in the Act.
The Defendant, Baptist College at Charleston, an eleemosynary South Carolina corporation (the College) has petitioned the Authority seeking the preliminary approved of the Authority for the issuance of not exceeding $3,500,000 of revenue bonds pursuant to the said Act for the purpose of (a) paying off outstanding indebtedness of the Baptist College Foundation incurred for the purpose of acquiring certain equipment and trailers utilized as a part of the College's educational plant (the payment for which the College is responsible) in the amount of approximately $275,000; (b) reimbursing in part the College's Current Fund for moneys advanced to the College's Plant Fund used to purchase school equipment and other capital improvements and for the payment of the aforesaid obligation of the Baptist College Foundation; and (c) refunding an outstanding indebtedness of the College in the amount of approximately $2,500,000 represented by the College's first mortgage serial bonds dated July 1, 1966.
The said Petition of the College proposes that the College convey approximately 400 acres of land with the facilities located thereon to the Authority which shall in turn lease the said land and facilities back to the College at a rental which will be sufficient to meet the payment of principal and interest as they become due on the proposed bonds. Such lease will further provide that the College, upon payment of the bonds, shall reacquire the said land and facilities at no cost to the College.
At its meeting held January 16th, 1970 the Authority adopted a Resolution giving preliminary approval to the financing arrangements outlined in the Petition of the College to the Authority subject to approval by the Authority of the final terms and conditions of the proposed financing and of the terms and provisions of the Lease Agreement and Trust Indenture to be used in connection with such financing.
It has been agreed that all conditions imposed by the Educational Facilities Authority Act have been or will be duly met so that squarely at issue is the constitutionality of the Act and the validity of the actions of the Defendants pursuant thereto.
Plaintiff challenges that the Act is invalid on five grounds:
1. The undertaking by the State to finance private educational facilities is not a public purpose for which the State may issue bonds;
2. The Act violates the first sentence of Section 6 of Article X which states '* * * the credit of the State shall not be pledged or loaned for the benefit of any individual, company, association or corporation * * *'.
3. The proposed actions of the Authority would deprive Plaintiff of property without due process of law in violation of the provisions of Section 5 of Article I of the South Carolina Constitution inasmuch as the Authority would expend public funds for the benefit of a private corporation.
4. The Act and the proposed actions of the Authority violate the equal protection clauses of the State and Federal Constitutions inasmuch as certain privileges and immunities are afforded to 'institutions of higher learning' as defined in the Act which are not available to all classes of persons generally nor available to all persons in the field of education generally.
5. The option proposed to be granted to the College to purchase land and facilities at a nominal value violates the public policy of the South Carolina Constitution in violation of Section 31, Article III and Section 5 of Article I inasmuch as it permits a donation of property of the State.
It is further contended by the Plaintiff that the Act is unconstitutional, null and void in the case of the College and other church supported institutions for the reason that the issuance of bonds pursuant to the Act would violate Article XI, Section 9 of the South Carolina Constitution forbidding aid from the State of South Carolina to any college, etc. which is wholly or in part under the direction or control of any church or of any religious or sectarian denomination and for the further reason that said Act violates the first amendment to the United State Constitution and Article I, Section 4 of the South Carolina Constitution which prohibits the making of any law respecting an establishment of religion or prohibiting the free exercise thereof.
I shall dispose of these questions in the order set forth above.
All legislative action should serve a public rather than a private purpose. The Act recites that in order for the people of the State to increase their commerce, welfare and prosperity and improve their health and living conditions it is essential that this and future generations of youths be given the fullest opportunity to learn and to develop their intellectual and mental capacities. The Act takes note that to meet this goal it is essential that institutions for higher learning within the State be provided with appropriate additional means to assist such youth in achieving the required level of learning and development of their intellectual and mental capacities. The true purpose of the Act is to provide a measure of assistance and an alternative method to enable institutions for higher learning in the State to provide the facilities and structures which are sorely needed to accomplish this aim to the public benefit and good of all the people of this State. This purpose is served by the issuance of revenue bonds pursuant to the Act for the purpose of refunding outstanding obligations originally incurred, as in the instant case, for purposes for which bonds can be issued. It is too late to question whether or not the promotion of secular education is a public purpose as it is universally acceptable as a proper public purpose. Everson v. Board of Education, 330 U.S. 1, 7, 9, 67 S.Ct. 504, 507, 508, 91 L.Ed. 711 at 719, 720; Cochran v. Louisiana State Board of Education, 281 U.S. 370, 374, 50 S.Ct. 335, 74 L.Ed. 913. If the general public benefit is the dominant interest served, constitutional demands are not offended, even though the aid inures to the benefit of a private institution.
(The plaintiff's argument that since the proceeds of the bonds are not to be used to construct new educational...
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... ... The Court vacated and remanded, for consideration in the light of Lemon and Tilton, Kervick v. Clayton and Hunt v. McNair, 403 U.S. 945, 91 S.Ct. 2274, 29 L.Ed.2d 854 (1971). Kervick had upheld construction loans under the New Jersey Educational Facilities ... ...
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