Mims v. McNair
| Decision Date | 07 January 1969 |
| Docket Number | No. 18855,18855 |
| Court | South Carolina Supreme Court |
| Parties | O. Gerald MIMS and E. Roy Stone, Jr., individually, and representing the taxpayers of the State of South Carolina, Plaintiffs-Appellants, v. Robert E. McNAIR, Grady L. Patterson, Henry Mills, Edgar A. Brown, and Robert James Aycock, constituting the State Budget and Control Board of South Carolina; and Daniel R. McLeod, as Attorney General of the State of South Carolina, Defendants-Respondents, and Lawrence S. Graham, Hughey Long Cockrell, Malcolm C. Amick, and Robert Bedenbaugh, Intervening Petitioners. |
Clinch Heyward Belser, Columbia, Edward P. Riley, Greenville, for appellants.
Daniel R. McLeod, Atty. Gen., Columbia, Sinkler, Gibbs & Simons, Charleston, for respondents.
This action was instituted pursuant to the Uniform Declaratory Judgments Act by the plaintiffs individually and representing taxpayers of the State of South Carolina. The plaintiffs seek to enjoin the issuance of any State Capital Improvement Bonds pursuant to the authorization of legislation enacted at the 1968 session of the General Assembly. Several taxpayers, referred to as Intervening Petitioners, were made parties to the litigation and participated in the trial of the issues at the circuit court level. The Intervening Petitioners have not appealed.
The appeal on behalf of the plaintiffs-appellants is based on nineteen exceptions challenging rulings of the circuit judge. This court, pursuant to our rule, granted the petition of the plaintiffs-appellants for permission to attack previous decisions of this court, to-wit:
State ex rel. Richards v. Moorer, 152 S.C. 455, 150 S.E. 269 (1929); Williamson v. Richards, 158 S.C. 534, 155 S.E. 890 (1930); State ex rel. Crawford v. Stevens, 173 S.C. 149, 175 S.E. 213 (1934); Crawford v. Johnston, 177 S.C. 399, 181 S.E. 476 (1935); State ex rel. Coleman v. Lewis, 181 S.C. 10, 186 S.E. 625 (1936); Arthur v. Johnston, 185 S.C. 324, 194 S.E. 151 (1937); Crouch v. Benet, 198 S.C. 185, 17 S.E.2d 320 (1941); State ex rel. Roddey v. Byrnes, 219 S.C. 485, 66 S.E.2d 33 (1951); Arthur v. Byrnes, 224 S.C. 51, 77 S.E.2d 311 (1953).
After considering the petition and the arguments, both written and oral, in support of the petition, we conclude that an overruling or modification of these cases is not warranted.
We are satisfied that the decree of the Honorable John Grimball correctly sets forth and disposes of all questions raised by the plaintiffs-appellants on this appeal and the order of the circuit court shall be reported herewith as the opinion of this court.
The Order of Judge GRIMBALL follows:
At its 1968 Session the General Assembly enacted legislation bearing Ratification Number R--1518 entitled 'An Act to Provide for the Issuance by the State of South Carolina of State Capital Improvement Bonds; to Prescribe the Conditions Under Which Such Bonds May be Issued; to Make Provision for the Payment Thereof; and to Amend Act No. 487 of 1965 Relating to Student and Faculty Revenue Bonds of South Carolina State College so as to Increase the Amount Which may Be Issued,' approved June 24, 1968 (the Bond Act). The Bond Act purports to authorize the issuance of not exceeding Seventy Million Dollars ($70,000,000) of State Capital Improvement Bonds for the purposes specified therein; and further provides that these bonds will be secured by the full faith, credit and taxing power of the State of South Carolina. The Bond Act further provides that in addition there shall be pledged to the payment of such bonds all revenues that the State shall from time to time realize from the tax imposed by Chapter 5, Title 65, Code of Laws of South Carolina, 1962, now or hereafter amended (State Income Tax). The principal attack made by the Plaintiffs is based on their contention that the Bond Act violates the provisions of Article X, Section 11 of the South Carolina Constitution which prohibits the creation of any debt by the State unless the question of the creation thereof is first submitted to the qualified electors of the State at a General Election and favorably voted on by at least two-thirds of the qualified electors of the State voting on the question.
The Plaintiffs are residents and taxpayers of the State of South Carolina and bring this action individually and represent all other taxpayers primarily to enjoin the issuance of any State Capital Improvement Bonds and, failing in that, to obtain a judicial construction of certain provisions of the Bond Act relating to the amount of State funds which can be invested therein.
In their Complaint the Plaintiffs allege that although they bring this suit in a representative capacity representing all other persons similarly situate, they nevertheless want to advise the public generally of the institution of this litigation and to provide any other person who is so minded an opportunity to intervene herein and raise any other question regarding the constitutionality or implementation of the Bond Act. As a consequence, and on motion of the Plaintiffs this Court issued its Order dated July 25, 1968 for the publication of an appropriate notice advising the public of the institution of this action and of their right to intervene within 20 days after such publication. The Notice was duly published on July 29, 1968 in three newspapers, viz., The Charleston S.C. News & Courier, the Columbia, S.C. The State, and the Greenville, S.C. The Greenville News. Pursuant to this invitation application was made by the Intervening Petitioners, Lawrence S. Graham, Hughey Long Cockrell, Malcolm C. Amick, and Robert Bedenbaugh, and by Order of this Court dated August 21, 1968 they were authorized to intervene in this action with leave to make such motions, file supplementary pleadings and take such other action as they deem advisable within twenty (20) days thereafter. No other persons have sought to intervene herein and the Intervening Petitioners have filed their Supplemental Complaint alleging the same constitutional objections as set forth in the Plaintiffs' Complaint, together with one additional objection.
The Defendants include the members of the State Budget and Control Board of South Carolina, which is a body authorized under the Bond Act to issue State Capital Improvement Bonds, and Daniel R. McLeod, as Attorney General of the State of South Carolina. The Defendants, members of the State Board have filed an Answer generally admitting the factual allegations of the Complaint and alleging more specifically the amount of bonds which they propose to issue and the purposes for which they will be issued. Attached to the Answer are several Exhibits, including a schedule showing the receipts actually received from the State Income Tax each year, beginning with the year 1959 and an estimate of receipts to be received from the State Income Tax each year hereafter through the year 1989. The Defendants have also answered the Supplemental Complaint of the Intervening Petitioners and that Answer is substantially in the same form as the Answer to the original Complaint.
This matter now comes before me on motion of the Intervening Petitioners for an Order to strike certain allegations of the Complaint with the result that the Intervening Petitioners will replace the original Plaintiffs as the Plaintiffs in this action representing the taxpayers of the State of South Carolina, and for an Order of Reference, and further, upon motion of the Defendants for a Judgment on the pleadings sustaining the constitutionality of the Bond Act and confirming the right of the Defendants to issue State Capital Improvement Bonds in accordance with the provisions, and subject to the limitations of the Bond Act upon the ground that the pleadings herein disclose all the facts necessary to entitle the Defendants to Judgment and present no material issue of fact. These matters were fully argued before me in the Richland County Courtroom on Saturday, October 5, 1968, at which time counsel for all parties appeared and were heard.
The Intervening Petitioners advance no grounds for their motions to replace the original Plaintiffs as representing the taxpayers of South Carolina and for a reference and none appears to the Court. In any event, the Intervening Petitioners are now parties to this action, and they are now in a position to raise all issues which they think should be raised for the protection of themselves and the other taxpayers of the State of South Carolina. An examination of their Supplemental Complaint shows that the Intervening Petitioners have adopted the many constitutional objections urged by the Plaintiffs, and have added one additional objection. However, the Intervening Petitioners raise no issue regarding the investment of State funds in State Capital Improvement Bonds as has been raised by the Plaintiffs.
With regard to the Defendants' Motion for a judgment on the pleadings, it is apparently conceded by all parties that there are no material issues of fact and this is a proper case for disposition by the Court on the pleadings. At the hearing there was no opposition made to the Court's undertaking to dispose of the matter in this fashion.
The Special Fund Doctrine was first enunciated in the case of State ex rel. Richards v. Moorer, 152 S.C. 455, 150 S.E. 269. This Doctrine, adhered to in numerous subsequent decisions, was restated in the case of Arthur v. Byrnes, 224 S.C. 51, 77 S.E.2d 311, as follows:
'It is now well settled that the General Assembly may authorize the issuance of general obligations of the State without submitting the question as to the creation of such debt to the qualified electors as required by Section 11, Article 10, where such obligations are secured by the pledge of a fund established or set aside which is reasonably sufficient to pay such obligations without resorting to the levy of a property...
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