Horner v. Chamber of Commerce of City of Burlington

• Decision Date: 01 March 1950
• Docket Number: No. 737,737
• Citation: 231 N.C. 440,57 S.E.2d 789
• Court: North Carolina Supreme Court
• Parties: HORNER, v. CHAMBER OF COMMERCE OF CITY OF BURLINGTON, Inc. et al.

Page 789

57 S.E.2d 789

231 N.C. 440

HORNER, v. CHAMBER OF COMMERCE OF CITY OF BURLINGTON, Inc. et al.

No. 737

Supreme Court of North Carolina.

March 1, 1950

William R. Dalton, Jr., Burlington, for plaintiff, appellant.

Cooper, Sanders & Holt, and W. D. Madry, Burlington, for defendants, appellees.

ERVIN, Justice.

The appeal presents the single question as to whether the complaint discloses any cause of action in favor of the plaintiff. Hence, it calls for the application of the established rule that 'when the objection is made that the complaint fails to state a cause of action, a liberal construction will be placed upon the pleading, with a view to sustaining it; and if in any portion of the pleading, or to any extent, it presents facts sufficient to constitute a cause of action, or if facts sufficient for that purpose can be fairly gathered from it, the pleading will be sustained, however inartificially it may have been drawn, or however uncertain, defective, or redundant may be its statements, and the complaint is not demurrable unless it is wholly insufficient.' McIntosh: North Carolina Practice and Procedure in Civil Cases, section 443.

A municipality is a creature of the State. It has 'the powers prescribed by statute, and those necessarily implied by law, and no other.' G. S. § 160-1. In consequence, a city or town cannot make a rightful outlay of its tax revenues unless the outlay is explicitly or implicitly authorized by a statute conforming to the Constitution. Moreover, the constitutional power to make appropriations of money out of the treasury of a municipality must be measured by the same criterions as those by which it is raised by taxation and put into such treasury. Green v. Kitchin, 229 N.C. 450, 50 S.E.2d 545.

It is clear that the plaintiff undertakes to challenge the legality of the expenditure in suit on these alternative grounds: (1) That the outlay was not authorized by statute, and consequently was unlawful; and (2) that it was not for a public purpose within the meaning of Article V, Section 3, of the Constitution, and by reason thereof was unconstitutional even if there were legislative sanction for it.

The defendants insist that the complaint falls short of the plaintiff's undertaking; that it fails to state facts sufficient to constitute a cause of action; and that consequently the judgment of the trial court sustaining the demurrer and dismissing the case should be affirmed.

The defendants lay hold upon the allegation of paragraph ten of the complaint that 'the tax levy, the appropriation, and the expenditures, gifts and donations, above described, are and were purported to have been made under the provisions of Chapter 158 of the General Statutes of North Carolina,' and advance this argument to support their position: That this specific portion of paragraph ten of the complaint is a factual averment in which the plaintiff alleges that the tax money in suit was expended by the Chamber of Commerce under the direction and control of the governing body of Burlington for the objects mentioned in G. S. § 158-1; that these objects constitute public purposes as a matter of constitutional law under Article V, Section 3, of the Constitution; and that it thus appears on the face of the complaint that the expenditure in question was made pursuant to a statute, i. e., Chapter 158 of the General Statutes, enacted in conformity to the Constitution, and by reason thereof the complaint states no cause of action.

G.S. § 158-1 provides that the governing body of any city, whose qualified voters have approved Chapter 158 of the General Statutes in an appropriate election, may annually set apart and appropriate from the funds derived annually from the general taxes levied and collected in the city an amount not less than one-fortieth of one per cent, nor more than one-tenth of one per cent, upon the assessed value of all real and personal property taxable in the city, which funds shall be used and expended under the direction and control of the governing body of the city, under such rules and regulations or through such agencies as they shall prescribe, for the purpose of aiding and encouraging the location of manufacturing enterprises, making industrial surveys and locating industrial and commercial plants in or near the city; encouraging the building of railroads thereto, and for such other purposes as will, in the discretion of the governing body of the city increase the population, taxable property, agricultural industries and business prospects of the city.

When the allegations of the complaint are analyzed in the light of the provisions of G. S. § 158-1, it becomes plain that the defendants put an erroneous construction upon a single allegation of paragraph ten of the complaint; that they insist that such erroneous construction of that single allegation nullifies the other averments of the complaint diametrically contradicting it; and that they come in that way to their conclusion that the complaint is wholly insufficient.

As has been pointed out, the defendants base their contention that the complaint is fatally defective upon the premise that the selected allegation of paragraph ten of the complaint constitutes a factual averment on the part of plaintiff that the tax money in suit was expended by the Chamber of Commerce under the direction and control of the governing body of Burlington for the purposes specified in G.S. 158-1. This premise is insupportable. This being true, the argument based on it is without validity.

The unsoundness of the position of the defendants becomes obvious when we disregard the allegations of the complaint which state legal conclusions rather than facts, and by-pass for the moment the portion of paragraph ten designated...