Cathcart v. City of Columbia

• Decision Date: 29 July 1933
• Docket Number: 13679.
• Citation: 170 S.E. 435,170 S.C. 362
• Parties: CATHCART v. CITY OF COLUMBIA et al.
• Court: South Carolina Supreme Court

170 S.E. 435

170 S.C. 362

CATHCART v. CITY OF COLUMBIA et al.

No. 13679.

Supreme Court of South Carolina

July 29, 1933

Original suit for injunction by James A. Cathcart as a citizen and taxpayer of the City of Columbia, County of Richland, and State of South Carolina, against the City of Columbia, and others.

Injunction refused, and complaint dismissed.

C. T Graydon, of Columbia, for plaintiff.

Robinson & Robinson and Paul A. Cooper, all of Columbia, and Reed Hoyt & Washburn, of New York City, for defendants.

STABLER Justice.

The plaintiff, a citizen and taxpayer of the city of Columbia instituted these proceedings in the original jurisdiction of the court for the purpose of having declared unconstitutional two acts, No. 366 (38 St. at Large, p. 295) and No. 465 (38 St. at Large, p. 411), passed by the Legislature at its 1933 session.

The following is disclosed by the pleadings and agreed statement of facts: The city of Columbia desires and proposes to erect a municipal stadium, without its corporate limits, on lands to be donated for that purpose by certain interested citizens. For the accomplishment of the proposal, two plans are suggested, the first of which is as follows: Under the provisions of Act No. 366, the city would form a business corporation, to be known as the "Columbia Stadium Company." All the stock of this company would be owned by the city which, in order to obtain the necessary funds for the erection of the stadium, might have the corporation obtain a loan, by the issuance of notes or bonds, to be secured by an assignment of the revenues of the project and by mortgage of the real estate and improvements. As an alternative plan, the city, under the revenue bond act, No. 465, would borrow the money itself for the erection of the stadium and issue for such loan its revenue bonds, payable solely out of the revenues derived from the stadium project according to the terms of the act. The plaintiff attacks the constitutionality of both acts on several grounds, assails both of the proposed plans for the erection of the stadium, and asks for injunctive relief.

After the case had been submitted to the court, we were advised by counsel for the defendants that the city had abandoned its proposed plan for the erection of a stadium under Act No. 366. The questions, therefore, raised by plaintiff with regard to the constitutionality of that act have become academic and will not be considered.

The main question presented for determination is whether Act No. 465 violates section 7 of article 8 and section 5 of article 10 of the Constitution.

We quote here that portion of section 7 which, it is contended, the statute contravenes: "No city or town in this State shall hereafter incur any bonded debt which, including existing bonded indebtedness, shall exceed eight per centrum of the assessed value of the taxable property therein, and no such debt shall be created without submitting the question as to the creation thereof to the qualified electors of such city or town. *** That such cities and towns shall on the issuing of such bonds create a sinking fund for the redemption thereof at maturity."

And so much of Section 5: "The bonded debt of any county, township, school district, municipal corporation or political division or subdivision of this State shall never exceed eight per centum of the assessed value of all the taxable property therein. *** And wherever there shall be several political divisions or municipal corporations covering or extending over the territory, or portions thereof, possessing a power to levy a tax or contract a debt, then each of such political divisions or municipal corporations shall so exercise its power to increase its debt under the foregoing eight per cent limitation that the aggregate debt over and upon any territory of this State shall never exceed fifteen per centrum of the value of all taxable property in such territory as valued for taxation by the State."

Section 1 of the act provides: "That any county, township, city or incorporated town of the State of South Carolina is authorized to purchase or construct a waterworks system *** golf courses and stadiums. ***" And (section 7) "for the purpose of defraying the cost of purchasing, constructing *** or repairing any such system or project, any borrower may borrow money and issue its negotiable serial bonds. ***" And (section 33) "this act shall be construed as authorizing the issuance of such bonds provided for herein without submitting the proposition for the approval of same to the voters of the borrower. ***" It is conceded by counsel for defendants that the 8 per cent. and 15 per cent. limitations will be exceeded in certain areas if the indebtedness proposed under the act comes within these constitutional limitations; and that the act, therefore, would violate these two sections of the Constitution if the bonded indebtedness proposed to be created thereby is a bonded debt of the borrower in the constitutional sense.

An inspection of the act discloses that the bonds proposed to be issued under it for the purposes therein named do not carry the general credit of the borrower; and that under no circumstances could the borrower, the city in this case, be made to answer for any such obligations. Section 7 expressly provides that "the principal of and interest upon such bonds shall be payable solely from the revenue derived from the operation of the system or project for the purchase, construction *** or repair of which the same are issued. ***" And that "no bond or coupon issued pursuant to this act shall constitute an indebtedness of such borrower within the meaning of any State constitutional provision or statutory limitation. ***"

As stated in Winston v. City of Spokane, 12 Wash. 524, 41 P. 888, 889, cited with approval in Briggs v. Greenville County, 137 S.C. 288, 135 S.E. 153: "The only obligation assumed on the part of the city is to pay out of the special fund, and it is in no manner otherwise liable to the beneficiaries under the contract. The general credit of the city is in no manner pledged, except for the performance of its duty in the creation of such special fund."

An extended discussion of the question is unnecessary. But see Lillard v. Melton, 103 S.C. 10, 87 S.E. 421; Brownlee v. Brock, 107 S.C. 230, 92 S.E. 477; McIntyre v. Rogers, 123 S.C. 334, 116 S.E. 277; Barnwell v. Matthews, 132 S.C. 314, 128 S.E. 712; Sullivan v. City Council, 133 S.C. 189, 133 S.E. 340; Briggs v. Greenville County, supra; Evans v. Beattie, 137 S.C. 496, 135 S.E. 538, 557; State ex rel. Richards v. Moore, 152 S.C. 455, 150 S.E. 269; In re California Toll Bridge, 212 Cal. 298, 298 P. 485; Bates v. State Bridge Commission, 109 W.Va. 186, 153 S.E. 305; Kasch v. Miller, 104 Ohio St. 281, 135 N.E. 813; Alabama State Bridge Corp. v. Smith, 217 Ala. 311, 116 So. 695; Maffit v. City of Decatur, 322 Ill. 82, 152 N.E. 602; Ward v. City of Chicago, 342 Ill. 167, 173 N.E. 810.

Upon careful consideration, we are of opinion that the cited portions of the act are not violative of the sections of the Constitution above quoted in any particular therein named.

Nor do we find any merit in the contention that the statute (section 35), in making the Attorney General "Ex-officio bond commissioner of the State," and in requiring him to perform certain duties in connection with the issuance of the bonds, contravenes section 24 of article 4 of the Constitution.

It was held in Evans v. Beattie, supra, that the coastal highway act, which required state officials to perform duties in connection with the highway district thereby created, was not in violation of the Constitution. The court said: "Under article 4, § 24, the duties of the state officers therein directed to be elected are required to be specified by law; that is, by action of the General Assembly. They of course may be added to as the General Assembly may from time to time prescribe."

Section 35-A of the statute before us provides that "all bonds authorized pursuant to the provisions of this Act shall be subject to the approval of the Sinking Fund Commission of the State of South Carolina and no bonds issued under the provisions of this Act shall be valid without the certificate of approval of the Sinking Fund Commission." It is argued that this is an unconstitutional delegation of legislative power.

In State ex rel. Port Royal Min. Company v. Hagood, 30 S.C. 519, 9 S.E. 686, 688, 3 L. R. A. 841, it is held that an act authorizing the state board of agriculture "to grant or refuse" licenses to mine phosphate rock "as the said board may, in its discretion, deem best for the interests of the state," etc., was not an unconstitutional delegation of legislative power to the board. The court said: "It is undoubtedly true that legislative power cannot be delegated; but it is not always easy to say what is and what is not legislative power, in the sense of the principle. The legislature is only in session for a short period of each year, and during the recess cannot attend to what might be called the business affairs of the state. From the necessity of the case, as well as the character of the business itself, that must be performed by agents appointed for that purpose, such as the railroad commission, regents of the lunatic asylum, the state board of canvassers of elections, 'sinking fund commission,' etc. The numerous authorities cited in the argument show conclusively that, while it is necessary that the law itself should be full and complete as it comes from the proper lawmaking body, it may be, indeed must be, left to agents in one form or another to perform acts of executive administration which are in no sense legislative."

In State ex rel. Richards v. Moore, supra, this...