Hyams v. Carroll
Decision Date | 13 August 1928 |
Docket Number | (No. 12492.) |
Citation | 144 S.E. 153 |
Court | South Carolina Supreme Court |
Parties | HYAMS. v. CARROLL et al. |
Controversy submitted without action by W. P. Hyams, Jr., as petitioner, opposed by T. W. Carroll and others. Petition granted.
J. N. Nathans, of Charleston, for petitioner.
Geo. H. Moffett, of Charleston, for respondents.
This is a controversy submitted without action, under section 675 of the Code of Civil Procedure. The petitioner, a resident taxpayer of the city of Charleston, seeks an injunction to restrain the respondents, the commissioners of public works of said city, from issuing $300,000 of the notes of the commission, the proceeds of which are proposed to be used in the construction of the necessary means for the transportation of water from Edisto river to Goose Creek basin, the present water basin for the city's waterworks system.
Under section 4432, vol. 3, Code of 1922, the commission has full control and management of the waterworks system of the city, with power to require and exact payment of such rates, tolls, and charges as they may establish for the use of water. It is provided by said section that the commission shall have no power to incur any indebtedness without the concurrence of the city council. The waterworks system is owned and stands in the name of the city.
In the years 1926 and 1927, on account of light rainfall, the supply of water for the waterworks system was so limited that the commissioners of public works decided, for the protection of the public, that a connection should be made with the Edisto river, and a water supply obtained from there to augment the supply created by the present water basin of the system, which connection would assure for all time an adequate supply of water. The city of Charleston having no available funds to meet this cost, the commissioners of public works determined to finance the cost by borrowing on notes of the commission; said notes maturing over a period of five years, the payment of the same, both principal and interest, to be made out of the net revenues of the operation of the system, which revenues, according to the present income, would be amply sufficient to take care of the notes, both principal and interest, and, in order to protect the holders of the notes, the commissioners of public works agreed that the water rate during the period that the notes were outstanding would not be reduced. Accordingly application was made to city council of Charleston for authority to incur this indebtedness, and the following resolution was adopted by city council, concurring in the incurring of this indebtedness:
"It is resolved that city council of Charleston, S. C., hereby concurs in the commissioners of public works for the city of Charleston incurring an indebtedness of not exceeding three hundred thousand ($300,000.00) dollars for the purpose of making the necessary outlay for transporting water from the Edisto river to the Goose Creek basin."
Thereupon resolutions were adopted by commissioners of public works of the city of Charleston, S. C, providing for the issuance by the commission of its notes in the sum of $300,000, maturing $55,000 on April 1, 1929; $57,000 on April 1, 1930; $60,000 on April 1, 1931; $63,000 on April 1, 1932; and $65,000 on April 1, 1933; said notes to bear the lowest rate of interest at the highest price offered by bidders; that as security for said notes the net revenues of the operations of the waterworks system were to be pledged, and the pledge of the commissioners of public works was to be given to the purchasers of said notes that the water rate would not be reduced during the time that said notes remained unpaid; that said notes were offered for sale, but all bids rejected, and are about to be again offered for sale, and will be issued and sold unless restrained by the court.
The petitioner avers that the issuance of said notes will be illegal for the following reasons:
The creation of the corporate body styled "Board of Commissioners of Public Works" is directly connected with, a part and parcel of, sections 4430, 4431, and 4432, vol. 3, Code of Laws, which provide for the construction and operation of waterworks by mu nicipalities and an election upon the question Of issuing bonds. At the election upon this question, the elector votes for the members of the board, as well as upon the issuing of bonds. The board is charged with the duty of disbursing the proceeds of the bonds thus voted. If the vote upon the bonds should fail, the election of the board would necessarily be a nullity, showing how intimately related to each other are the two propositions. If the election should result in favor of the bonds, the board elected, and later an additional supplemental issue should be carried at a subsequent election, doubtless to prevent confusion the board formerly elected would be charged with its disbursement. In other words, the board is limited to the disbursement of the proceeds of the bonds voted, unless a subsequent issue is voted by the municipal voters. It follows, therefore, that the board has no authority to increase the original issue of bonds, or, what is the same thing, negotiable promissory notes signed by it.
We think that the opinions of Justices Woods and Hydrick, concurring in the result of the case of Union v. Commissioners, 91 S. C. 248, 74 S. E. 496, are conclusive upon the proposition that, under the statute and the Constitution, the board of commissioners of public works are but agents of the municipality, and as such have no authority to incur any indebtedness other than that incidental to the operation and maintenance of the waterworks constructed out of the proceeds of the bonds voted, and even that incidental indebtedness is subject to the concurrence of the city council. The city could not issue the notes without compliance with section 4430, and certainly its agent could not enjoy greater powers than the principal.
The judgment of this court is that the prayer of the petition be granted. The petitioner may apply to this court for a formal order of injunction in conformity with this opinion.
WATTS, C. J. (dissenting). This matter is before the court on an agreed statement of facts in a controversy without action, under section 675, volume 1, of the Code of 1922, wherein the petitioner seeks an injunction to restrain the commissioners of public works of the city of Charleston from issuing $300,000 of its notes, the proceeds to be used for construction necessary to transport water from Edisto river to Goose Creek basin, which is the present water basin for the city of Charleston waterworks system.
The statement of facts shows: That the petitioner is a resident, taxpayer, and water consumer of and in the city of Charleston, and the respondents are the duly qualified and existing commissioners of public works of the city of Charleston, and as such, un-der section 4432 of volume 3, Civil Code of South Carolina of 1922, have full control...
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