Hinton v. Lacy

• Decision Date: 06 April 1927
• Docket Number: 249.
• Citation: 137 S.E. 669,193 N.C. 496
• Parties: HINTON v. LACY, State Treasurer, et al.
• Court: North Carolina Supreme Court

137 S.E. 669

193 N.C. 496

HINTON v. LACY, State Treasurer, et al.

No. 249.

Supreme Court of North Carolina

April 6, 1927

Appeal from Superior Court, Wake County; Devin, Judge.

Action by R. S. Hinton, on behalf of himself and other taxpayers of the State, against B. R. Lacy, as State Treasurer, and others, as members of the Board of Advisors, created by Pub Laws 1925, c. 155, and another. Judgment for defendants, and plaintiff appeals. Affirmed.

This action was brought to restrain the defendants from acting under, and carrying out the provisions of, chapter 155 Public Laws of 1925, known as the World War Veterans' Loan Act. The act provides for the issuance of $2,000,000 in bonds by the state of North Carolina, and the use of this sum in making loans to veterans of the World War, the loans not to be in excess of $3,000 to any one person, and not to exceed 75 per cent. of the appraised value of the real estate offered as security. The proposition was submitted under the terms of the act to the electors of the state at the general election held on November 2, 1926, and was carried for the issuance of the said bonds by a majority of 39,867 of the votes cast on the proposal.

The plaintiff brings this action to restrain the issuance of the bonds. He alleges that the act authorizing the bonds is unconstitutional and void, for that taxes and public revenues can be levied only for public purposes; for that it violates article 1, § 17, of the Constitution, which provides that no person shall be deprived of his property except by the law of the land; for that it is class legislation, and confers privileges and emoluments upon a set of men not in consideration of public services, in violation of article 1 § 7 of the Constitution; and for that it violates the spirit of article 1, § 26, and article 12, § 1, of the Constitution; and for the reason that the act does not specifically declare that the full faith, credit, and taxing power of the state are pledged to the payment of the principal and interest of the bonds, and the board of advisors is without power or authority to resolve that each bond shall recite upon its face that the full faith, credit, and taxing power of the state are pledged to the payment of the principal and interest thereof. The other necessary facts and contentions will be stated in the opinion.

Payment to federal soldier is "public purpose" of state and hence state loan act to such soldiers was valid (World War Veterans' Loan Act).

Bunn & Arendell, of Raleigh, for appellant.

Dennis G. Brummitt, Atty. Gen., Frank Nash, Asst. Atty. Gen., and John H. Manning, of Raleigh, for appellees.

CLARKSON J.

The Legislature of 1923 passed an act, known as the "World War Veterans' Loan Act." Public Laws 1923, c. 190. The purpose of the act was to make loans to provide urban and rural homes upon favorable terms for veterans who served with the military or naval forces of the United States in the recent war with Germany and the other Central Powers. To carry out the provisions of the act the question of contracting a $2,000,000 bonded indebtedness of the state of North Carolina was submitted to a vote of the people of the state at the general election in 1924. The vote for the bonded indebtedness was 143,015 against 62,261--a majority of 80,754 of the votes cast. The question arose as to whether the act as submitted required a majority of the qualified electors or a majority of the votes cast on the proposal. This court, in Patterson v. Everett, 189 N.C. 828, 126 S.E. 427, under the interpretation given to the act, decided that the authority to issue the bonds had to be approved by a majority of the qualified electors of the state, and not of the votes cast. It was conceded that this was not done, and the bonds therefore, if issued, would not be valid and binding obligations of the state. The decision states that "the parties having requested a decision in this case, during the present session of the Legislature, to the end that further action may be had upon the subject, if found necessary," etc. The decision was rendered February 25, 1925.

In consequence, the Legislature of 1925, then in session, again submitted the proposition to the people of the state--qualified electors--at the November, 1926, election. The proposal submitted required a majority of the votes cast; the adoption was by a majority of 39,867.

The ideals of the two acts are practically the same. We have under consideration in this case, therefore, a proposition which has received the calm, deliberate approval of two General Assemblies, was passed by both in accordance with the constitutional requirements, and has been calmly and deliberately considered by the people of this commonwealth in two general elections, and in both of these elections the people have sanctioned this measure by an overwhelming majority of those voting on the proposal submitted.

Section 2 of the act (Public Laws 1925, c. 155), says:

"The purpose of this act is, in recognition of military service, for the encouragement of patriotism, and to promote the ownership of homes, to provide a means by which soldiers, sailors, marines and others who served with the armed forces of the United States in the recent World War against the Central Powers may acquire urban homes or farms upon favorable terms."

At a Congress of the representatives of the freemen of the state of North Carolina assembled at Halifax, on December 17, A. D. 1776, a declaration of rights was read three times, and ratified in open Congress, and on December 18, A. D. 1776, the first state Constitution was ratified in the same manner, and "the declaration of rights is hereby declared to be part of the Constitution of this state, and ought never to be violated on any pretense whatsoever." Section 44. This state, on November 21, 1789, ratified the Constitution of the United States. At Newbern, November term, 1787, in Bayard v. Singleton, 1 N.C. 5, an act of the General Assembly of 1785 was declared unconstitutional and void--"stand as abrogated and without any effect." This power has since consistently been recognized in this state.

Speaking to the subject, this court in State v. Knight, 169 N.C. 352, 85 S.E. 428, L. R. A. 1915F, 898, Ann. Cas. 1917D, 517, said:

"Between these cases that are cited, running from the first volume of our reports to the 160th, covering a period of one hundred and twenty-five years, there could be cited fifty or more cases in which acts of the General Assembly have been declared unconstitutional, and we find no judicial opinion to the contrary."

In Sutton v. Phillips, 116 N.C. 504, 21 S.E. 968, speaking to the question, this court said:

"While the courts have the power, and it is their duty, in proper cases to declare an act of the Legislature unconstitutional it is a well-recognized principle that the courts will not declare that this co-ordinate branch of the government has exceeded the powers vested in it unless it is plainly and clearly the case. If there is any reasonable doubt it will be resolved in favor of the lawful exercise of their powers by the representatives of the people. [ [Italics ours.] *** [Page 505.] It cannot be said that this act is plainly and clearly unconstitutional. The doubt, if any, must be resolved in favor of the General Assembly." State v. Baskerville, 141 N.C. 818, 53 S.E. 742; In re Watson, 157 N.C. 349, 72 S.E. 1049; State v. Knight, 169 N.C. at 352, 85 S.E. 418, L. R. A. 1915F, 898, Ann. Cas. 1917D, 517; Faison v. Comm'rs, 171 N.C. 415 88 S.E. 761; State v. Perley, 173 N.C. 790, 92 S.E. 504; Railroad v. Cherokee County, 177 N.C. 88, 97 S.E. 758; Coble v. Comm'rs, 184 N.C. 342, 114 S.E. 487; State v. Kelly, 186 N.C. 377, 119 S.E. 755; Railroad v. Forbes, 188 N.C. 155, 124 S.E. 132.

Every presumption is in favor of the constitutionality of an act of the Legislature, and, without the clearest showing to the contrary, it should be sustained. It is to be presumed that the law-making body were mindful of their oaths, and acted with integrity and honest purpose to keep within the constitutional limitations and restrictions. The breach of the Constitution must be so manifest as to leave no room for reasonable doubt.

Mr. Banks Arendell, an ex-service World War veteran (Lieutenant, who went overseas), representing plaintiff, in an able argument and brief, contends:

1. "The purpose of the act is not a public purpose, and violates a fundamental principle, and also article 1, § 17, of the Constitution. The act violates article 1, § 7, of the Constitution. Privileges granted are not in consideration of public service."

Const. art. 1, § 17, is as follows:

"No person ought to be taken, imprisoned, or disseized of his freehold, liberties or privileges, or outlawed or exiled, or in any manner deprived of his life, liberty or property, but by the law of the land."

Compare Const. U.S. Amend. 14, § 1--due process clause.

The principle laid down in Comm'rs v. State Treasurer, 174 N.C. 146, 93 S.E. 484, 2 A. L. R. 726, is cited:

"It is a fundamental principle in the law of taxation that taxes may only be levied for public purposes and for the benefit of the public on whom they are imposed, and to lay these burdens upon one district for benefits appertaining solely to another is in clear violation of established principles of right and contrary to the express provisions of our Constitution, art. 1, § 17, which forbids that any person shall be disseized of his freehold, liberties and privileges or in any manner deprived of his life, liberty or property but by the law of the land."

This principle has been reiterated in Ellis v. Greene, 191 N.C. 765, 133 S.E. 395.

The question is also presented by plaintiff: Is payment to a federal soldier a...