Martin v. North Carolina Housing Corp.

Decision Date31 July 1970
Docket NumberNo. 10,10
PartiesPerry MARTIN, on behalf of himself and all others of the same or like class v. NORTH CAROLINA HOUSING CORPORATION, a body politic and corporate, and WilliamL. Turner, Director of the Department of Administration for the State of NorthCarolina, G. Andrew Jones, Jr., State Budget Officer for the State of NorthCarolina,and George S. Lambert, State Disbursing Officer for the State of NorthCarolina.
CourtNorth Carolina Supreme Court

Johnson & Gamble, Raleigh, for plaintiff appellee.

Atty. Gen. Robert Morgan, Deputy Atty. Gen. Harry W. McGalliard and Staff Atty. James L. Blackburn, Raleigh, for defendant appellants.

BOBBITT, Chief Justice.

'(U)nder our Constitution, the General Assembly, so far as that instrument is concerned, is possessed of full legislative powers unless restrained by express constitutional provision or necessary implication therefrom.' Hoke, J. (later C.J.), in Thomas v. Sanderlin, 173 N.C. 329, 332, 91 S.E. 1028, 1029. Absent such constitutional restraint, questions as to public policy are for legislative determination. Reid v. Norfolk Southern R.R., 162 N.C. 355, 358, 78 S.E. 306, 307. When the constitutionality of a statute is challenged, 'every presumption is to be indulged in favor of its validity.' Stacy, C.J., in State v. Lueders, 214 N.C. 558, 561, 200 S.E. 22, 24. And, ordinarily, this Court will not undertake to determine whether a statute is unconstitutional except with reference to a ground on which it is attacked and definitely drawn Whether the public policy and program established by the 1969 Act is wise or unwise is for determination by the General Assembly. State Education Assistance Authority v. Bank, 276 N.C. 576, 592, 174 S.E.2d 551, 559. Our function is to determine whether any portion thereof which plaintiff, as a general taxpayer, may challenge, is unconstitutional on any ground asserted by him. Nicholson v. State Education Assistance Authority, 275 N.C. 439, 168 S.E.2d 401.

into focus by the attacker's pleadings. Hudson v. Atlantic Coast Line R.R., 242 N.C. 650, 667, 89 S.E.2d 441, 453; G I Surplus Store, Inc. v. Hunter, 257 N.C. 206, 211, 125 S.E.2d 764, 768.

Section 18 of the 1969 Act authorized the Corporation 'to accept such moneys as may be appropriated from time to time by the General Assembly for effectuating its corporate purposes including, without limitation, the payment of the initial expenses of administration and operation and the establishment of a reserve or contingency fund to be available for the payment of the principal of and the interest on any bonds or notes of the Corporation.' The General Assembly appropriated 'out of the General Fund of the State' to the Corporation 'the sum of five hundred thousand dollars ($500,000.00) for the biennium commencing July 1, 1969.' Chapter 1162, Session Laws of 1969. Portions of this appropriation have been used and are being used for the payment of the initial expenses of administration and operation of the Corporation.

QUESTIONS I and VI

Questions I and VI present essentially the same question, namely, whether the 1969 Act and the Corporation's activities pursuant thereto are for a PUBLIC PURPOSE.

Article V, § 3, of the Constitution of North Carolina provides: 'This power of taxation shall be exercised in a just and equitable manner, For public purposes only, and shall never be surrendered, suspended, or contracted away.' (Our italics.) 'The power to appropriate money From the public treasury is no greater than the power to levy the tax which put the money in the treasury.' Mitchell v. North Carolina Industrial Development Financing Authority, 273 N.C. 137, 143, 159 S.E.2d 745, 749--750.

Plaintiff asserts the 1969 Act is unconstitutional as violative of Article V, § 3, of the Constitution of North Carolina, and of Article I, § 17, of the Constitution of North Carolina, and of Section 1 of the Fourteenth Amendment to the Constitution of the United States, and is void because the purpose for which the Corporation was created is not a public purpose. If so, plaintiff, as taxpayer, may maintain this action to restrain defendants from paying to the Corporation and the Corporation from using the $500,000.00 appropriated out of the General Fund for the biennium commencing July 1, 1969. Mitchell v. North Carolina Industrial Development Financing Authority, supra; McIntyre v. Clarkson, 254 N.C. 510, 513, 119 S.E.2d 888, 890; Dennis v. City of Raleigh, 253 N.C. 400, 116 S.E.2d 923.

Was the Corporation established for a public purpose? If so, 'the means of executing the project are for the General Assembly, and the General Assembly alone, to determine.' Redevelopment Commission of Greensboro v. Security National Bank, 252 N.C. 595, 606, 114 S.E.2d 686, 696.

'A slide-rule definition to determine public purpose for all time cannot be formulated; the concept expands with the population, economy, scientific knowledge, and changing conditions. As people are brought closer together in congested areas, the public welfare requires governmental operation of facilities which were once considered exclusively private enterprises, Fawcett v. Mt. Airy, 134 N.C. 125, 45 S.E. 1092, and necessitates the expenditure of tax funds for purposes which, it an earlier day, were not classified as public. Keeter v. Town of Lake Lure, 264 N.C. 252, 141 A legislative declaration which asserts in general terms that the statute under consideration is enacted for a public purpose, although entitled to great weight, is not conclusive. When the facts are determined, what is a public purpose is a question of law for the court. Redevelopment Commission of Greensboro v. Security National Bank, supra, 252 N.C. at 603, 114 S.E.2d 694.

S.E.2d 634. Often public and private interests are so co-mingled that it is difficult to determine which predominates. It is clear, however, that for a use to be public its benefits must be in common and not for particular persons, interests, or estates; the ultimate net gain or advantage must be the public's as contradistinguished from that of an individual or private entity. Briggs v. City of Raleigh, 195 N.C. 223, 141 S.E. 597.' Sharp, J., in Mitchell v. North Carolina Industrial Development Financing Authority, supra, 273 N.C. at 144, 159 S.E.2d at 750.

In its enactment of the 1969 Act, the General Assembly went far beyond a mere declaration as to public purpose. It made and set forth in Section 2 thereof its factual findings as to the conditions upon which it based its declaration as to public purpose, Viz.:

1. '(A)s a result of the spread of slum conditions and blight to formerly sound urban and rural neighborhoods and as a result of actions involving highways, public facilities and urban renewal activities there exists in the State of North Carolina a serious shortage of decent, safe and sanitary residential housing available at low prices or rentals to persons and families of lower income. This shortage is severe in certain urban areas of the State, is especially critical in the rural areas, and is inimical to the health, safety, welfare and prosperity of all residents of the State and to the sound growth of North Carolina communities.'

2. '(P)rivate enterprise and investment have not been able to produce, without assistance, the needed construction of decent, safe and sanitary residential housing at low prices or rentals which persons and families of lower income can afford, or to achieve the urgently needed rehabilitation of much of the present lower income housing. It is imperative that the supply of residential housing for persons and families of lower income affected by the spread of slum conditions and blight and for persons and families of lower income displaced by public actions or natural disaster be increased; and that private enterprise and investment be encouraged to sponsor, build and rehabilitate residential housing for such persons and families, to help prevent the recurrence of slum conditions and blight and assist in their permanent elimination throughout North Carolina.'

3. '(I)n accomplishing this purpose, the North Carolina Housing Corporation, a public agency and an instrumentality of the State, is acting in all respects for the benefit of the people of the State in the performance of essential public functions and serves a public purpose in improving and otherwise promoting their health, welfare and prosperity, and that the North Carolina Housing Corporation is empowered to act on behalf of the State of North Carolina and its people in serving this public purpose for the benefit of the general public.'

'If the constitutionality of a statute * * * depends on the existence or nonexistence of certain facts and circumstances, the existence of such facts and circumstances will generally be presumed for the purpose of giving validity to the statute, * * * if such a state of facts can reasonably be presumed to exist, and if any such facts may be reasonably conceived in the mind of the court. This rule does not apply if the evidence is to the contrary, or if facts judicially known or proved, compel otherwise.' 16 C.J.S. Constitutional Law § 100b, pp. 454--455. Accord: 16 Am.Jur.2d Constitutional Law § 143.

In Velishka v. City of Nashua, 99 N.H. 161, 106 A.2d 571, 44 A.L.R.2d 1406, the

Supreme Court of New Hampshire sustained the constitutionality of the Urban Development Law of that State. After stating the legislative findings and declarations of necessity relating to the elimination of blighted areas and the advancement of redevelopment projects, Chief Justice Kenison states: 'These legislative findings and declarations have no magical quality to make valid that which is invalid but they are entitled to weight in construing the statute and in determining whether the statute promotes a public purpose under the Constitution.' Accord: Redevelopment Commission of Greensboro v. Security National Bank, supra, 252 N.C. at 611, ...

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