Anderson v. Baehr, 20068

• Citation: 217 S.E.2d 43,265 S.C. 153
• Decision Date: 21 July 1975
• Docket Number: No. 20068,20068
• Court: United States State Supreme Court of South Carolina
• Parties: James A. ANDERSON, Individually and representing the residents and taxpayers of the City of Spartanburg, Appellant, v. John G. BAEHR, Jr., as Mayor, et al., Respondents.

Page 43

217 S.E.2d 43

265 S.C. 153

James A. ANDERSON, Individually and representing the residents and taxpayers of the City of Spartanburg, Appellant, v. John G. BAEHR, Jr., as Mayor, et al., Respondents.

No. 20068.

Supreme Court of South Carolina.

July 21, 1975.

Matthew A. Henderson, Spartanburg, for appellant.

T. E. Walsh, Gaines & Walsh, Spartanburg, and Theodore B. Guerard, Sinkler, Gibbs, Simons & Guerard, Charleston, for respondents.

MOSS, Chief Justice:

This action is one under the Uniform Declaratory Judgments Act, § 10--2001 Et seq., 1962 Code of Laws, commenced by the plaintiff, who is a resident and taxpayer in the city of Spartanburg, individually and in a representative capacity representing all other persons similarly situated. The defendants are the mayor and concilmen of the city of Spartanburg, and Daniel R. McLeod as Attorney General of the State of South Carolina.

The complaint, contesting the constitutionality of Act No. 1097 (referred to as Ratification No. R 1252) of the General Assembly of 1974, reads as follows:

'The Plaintiff alleges:

'1. The Plaintiff is a resident and taxpayer of the City of Spartanburg, South Carolina and brings this action individually and on behalf of the residents and taxpayers of the City of Spartanburg.

'2. The Defendant, John G. Baehr, Jr., is the duly elected and acting Mayor of the City of Spartanburg; the Defendants, C. Chester Brown, Jr., Jack M. Blasius, Ralph D. Prince, and Hal G. Warlick, Jr., are the duly elected and acting members of the City Council of Spartanburg, and the Defendant Daniel R. McLeod, the duly elected and acting Attorney General of South Carolina.

'3. At its 1974 Session, the South Carolina General Assembly enacted Act bearing ratification number R. 1252 entitled:

'An Act To Authorize The Incorporated Municipalities Of The State To Contract With Persons For The Construction, Operation And Maintenance Of Improvements To Land; To Authorize Incorporated Municipalities To Issue Revenue Bonds Payable Solely From Payments To Be Made By Such Persons; To Prescribe The Terms And Conditions Of Such Revenue Bonds, The Remedies Of Those Who May Acquire Them And The Terms And Conditions Under Which Such Revenue Bonds May Be Issued; To Authorize Incorporated Municipalities To Enter Into Loan Agreements With Respect To The Use Of The Proceeds of Such Bonds And The Repayment Of The Bonds; To Provide That Such Bonds And Any Agreements Made In Connection Therewith Shall Not Constitute An Indebtedness Of Any Incorporated Municipality; To Provide The Purposes For Which The Proceeds From The Sale Of Such Bonds May Be Used And To Provide For Borrowing In Anticipation Of The Issuance Of Such Bonds And The Publication Of A Notice Of The Adoption Of Proceedings Providing For The Issuance Of Such Bonds And A Limited Time Within Which Such Action Can Be Contested.'

which was approved by the Governor of South Carolina on the 26th day of June, 1974; said Act bearing ratification number R. 1252 (Act 1097) is hereinafter referred to as the Bond Act.

'4. The Bond Act undertakes to empower any incorporated municipality in the State acting through its governing body (1) to enter into agreements with any person, firm or corporation providing for the construction, operation and maintenance of buildings or other facilities or improvements on any real estate located within the municipality which the governing body proposes to acquire from the proceeds of bonds to be issued pursuant to the Bond Act after making a determination that the acquisition of such land is necessary in connection with any slum clearance or re-development work (2) to enter into a loan agreement with any such person, firm or corporation by which such person, firm or corporation agrees to pay to the municipality the sums required to meet the payment of principal interest and redemption premium on any bonds issued pursuant to the Bond Act, (3) to issue bonds for the purpose of defraying the costs of acquiring such real estate payable solely out of monies to be derived pursuant to a loan agreement, (4) to lease the real estate acquired with bond proceeds to any person, firm or corporation which has entered into a loan agreement to repay such bonds and such lease may entitle such person, firm or corporation to purchase the real estate at a nominal amount, and (5) to convey the real estate acquired by the bond proceeds to a person, firm or corporation which agrees to repay the bonds issued pursuant to the Bond Act to acquire such real estate.

'5. The Plaintiff is advised and believes the Bond Act is unconstitutional in that (a) it provides for the use of public funds for a private purpose, to wit: the acquisition of real estate to be leased or conveyed to a private person, firm or corporation, in violation of the provisions of the South Carolina Constitution, including without limitation Article X, Section 6; and (b) the issuance of bonds for the purposes authorized by the Bond Act would constitute a taking of Plaintiff's property without due process in violation of the Fourteenth Amendment of the United States Constitution.

'6. The Plaintiff is instituting this action individually and on behalf of all the residents and taxpayers of the City of Spartanburg pursuant to the provisions of the South Carolina Declaratory Judgment Acts (Section 10--2001 Et seq. of the Code of Laws of South Carolina, 1962) in order to contest the constitutionality of the Bond Act.

'7. The Plaintiff is advised and believes that the Defendants Mayor and City Council now propose to exercise the authorizations of the Bond Act and issue bonds of the City of Spartanburg for the purpose of acquiring land within the City of Spartanburg for sale or lease to a private person, firm or corporation.

'Wherefore, Plaintiff prays that the Court take jurisdiction on this matter and, after a hearing, issue its Order:

(a) declaring the Bond Act unconstitutional,

(b) enjoining the Defendants, Mayor and Councilmen from issuing bonds pursuant to the Bond Act, and

(c) granting such other relief as may be just and equitable.'

The factual allegations of the complaint are generally admitted by the mayor and the city councilmen. They deny, however, that the Act is unconstitutional. They specifically allege 'that they propose to issue bonds pursuant to the Bond Act and use the proceeds to acquire a parcel of land in downtown Spartanburg for lease and sale to a 'developer' as such term is defined in the Bond Act.' They pray that the court declare the Bond Act constitutional and issue its order authorizing them (the city) to issue bonds.

The Attorney General filed no answer, asserting that the issues were properly before the court on the pleadings of the other parties.

The matter was heard before the Honorable Wade S. Weatherford, Jr., Judge of the Seventh Judicial Circuit. He issued an order December 7, 1974, holding that the Act was constitutional and that it did not violate any provisions of the Constitution of the United States or of the State of South Carolina. He denied the prayer for an injunction and dismissed the complaint.

The plaintiff-taxpayer has filed seven exceptions, raising basically three issues for this Court. In our view it is not necessary to go beyond the first question:

'Does Act Bearing Ratification No. R--1252 (Act 1097) enacted at the 1974 Session of the South Carolina General Assembly (the Bond Act) violate the provisions of Section 6 of Article X, South Carolina Constitution, limiting the purposes for which the legislature may empower political subdivisions to issue bonds (Exception 1)?'

We are called upon to determine whether the proposed action by the city of Spartanburg serves a proper public purpose. That action admittedly is as follows: The city would acquire land (presumably predominantly slum or blighted) by use of its condemnation authority, if necessary. It would procure a developer interested in improving the property, who would covenant to erect, operate, and maintain thereon buildings or other facilities or improvements not described in the record. The city would then enter into a loan agreement with the developer whereby the city would lease the land to the developer and the developer would agree to pay (and to secure if so required) sums necessary to meet the payment of principal, interest and redemption premium, if any, on bonds which the city would issue for the purpose of defraying the cost of acquiring the land and for the purpose of funding the development in keeping with the terms of a lease or loan agreement. The monies borrowed by the city through the issuance of bonds (and loan to the developer) would be rapid out of monies to be derived by the city from the developer pursuant to a loan and/or lease agreement. In keeping with the Bond Act, the bonds and interest coupons issued thereunder would not be obligations of the city. It is a fair summarization to say that the overall plan...