Nantahala Power & Light Co. v. Clay County
| Decision Date | 15 June 1938 |
| Docket Number | 18. |
| Citation | 197 S.E. 603,213 N.C. 698 |
| Parties | NANTAHALA POWER & LIGHT CO. v. CLAY COUNTY et al. |
| Court | North Carolina Supreme Court |
Appeal from Superior Court, Clay County; S. J. Ervin, Jr., Judge.
Action by the Nantahala Power & Light Company against Clay County and others to recover ad valorem taxes alleged to have been assessed illegally and paid under protest. From a judgment plaintiff and defendants appeal.
Judgment on plaintiff's appeal modified, and, as modified affirmed, and judgment on defendants' appeal affirmed.
Levy for Special Purposes.
A county tax levy for upkeep of county buildings, county courthouse, county home, poor and paupers and incidental purposes was not for "special purpose" within Constitution authorizing unlimited taxation for special purpose with special approval of General Assembly, and being indivisible was void where it did not appear what the incidental purposes were nor what part of levy was for incidental purposes. Code 1935, § 1297, subd. 8 1/2; Const art. 5, § 6.
Generally if statute contains invalid or unconstitutional provisions, the part which is unaffected by those provisions, or which can stand without them, must remain.
Action for recovery of ad valorem taxes alleged to have been assessed illegally, and paid under protest.
The parties waived a trial by jury and by consent agreed that court should hear the evidence, find the facts and render judgment in accordance therewith.
The court made findings of fact substantially as follows: On August 30, 1936, the defendant, Clay County, through its duly authorized Board of Commissioners, levied a tax for the year 1936 at the rate of $1.90 on the $100 property valuation, made up of sixteen separate items. The purpose and amount of the first twelve aggregating sixty-seven cents are involved in this action. They are as follows: (1) County Commissioners' pay, expense, and board, County courthouse and grounds, and County Attorney's fees five cents; (2) tax listing expense four cents; (3) expense of holding elections three cents; (4) Sheriff's salary and expense of office ten cents; (5) Register of Deed's salary and expense of office five cents; (6) Clerk Superior Court salary and expense of office five cents; (7) County Accountant's salary five cents; (8) County Farm Agent's salary four cents; (9) upkeep County buildings, courthouse, county home, poor and paupers, and incidental purposes five cents; (10) holding courts, expense of jail and jail prisoners fifteen cents; (11) miscellaneous expense of County government not otherwise set forth two cents; and (12) emergency tax for distribution to each of above funds four cents.
Plaintiff listed for taxation for said year real and personal property of assessed valuation of $149,397, the tax on which at the above rate of $1.90 amounts to $2,838.55. Prior to the levy and assessment of taxes for the year 1936, on June 30, 1936, and in order that it might receive a discount of three per cent of the taxes, allowed for anticipatory payment, plaintiff paid $2,183.16 less discount to the County Accountant, who was duly authorized agent of said county. Receipt therefor contains recital that payment is "to apply on its taxes levied by Clay County, North Carolina, for the current year 1936", and that "it is understood that when levy shall have been fixed then an adjustment of any excess or deficiency in this amount shall be made between the parties hereto". After the levy as aforesaid, and on September 30, 1936, plaintiff paid to proper office of Clay County the balance of the tax levied upon the property of plaintiff as aforesaid for the year 1936, to-wit, $655.39. At the time of this payment, plaintiff notified defendants that the payment then being made, and the anticipatory payment, were made under protest for that the twelve items of the tax levy hereinabove specified contravene the provisions of Art. 5, Sec. 6, of the Constitution of North Carolina, and are void. In the written protest plaintiff sets forth that the first payment having been made prior to the tax levy, there was no opportunity to determine whether or not the levies would be legal or illegal, and, hence, it makes protest at the first opportunity. On October 29, 1936, pursuant to and in accordance with the terms of Code 1935, § 7880 (194) and § 7979, plaintiff demanded of defendants the refund of $776.86, the amount paid by it on account of alleged excessive, unconstitutional and void levy of fifty-two cents of the sixty-seven cents total of the twelve items in controversy. Plaintiff instituted this action on April 5, 1937, for the avowed purpose of recovering the sum demanded as above stated upon the grounds specified.
Plaintiff offered evidence tending to show that written notice was served upon defendants to produce evidence of the approval of the Director of Local Government to levy tax under Code 1935, § 1297, subd. 8 3/4, and requested the court to find, upon failure of defendants to produce such evidence, that no such approval was obtained. The court, however, finds as a fact that the Board of Commissioners of Clay County secured the approval of said Director. The court states that this finding is made "solely upon the basis of the presumption of the regularity of the acts of public officers, and such other presumptions as the law raises in such cases". Plaintiff excepts.
None of the taxes contested by the plaintiff were authorized by any vote of the people of Clay County.
Upon these findings of fact, and the contentions of the parties, the court below concluded as matters of law in substance that:
(1) In so far as the taxes assessed and collected exceed fifteen cents on the $100 valuation, the Board of Commissioners of Clay County purported and undertook to levy such taxes under the provisions of Chapter 7 of Public Laws of 1923, of Chapter 441 of Public Laws of 1931 and Chapter 330 of Public Laws of 1935 as embodied in Subdivisions 8 1/2 and 8 3/4 of Code 1935, § 1297, of Chapter 41, Public-Local Laws of 1935, and of Sec. 6 of Chapter 146 of Public Laws of 1927, and that the said statutes are a constitutional exercise of the legislative power under Art. 5, Sec. 6 and Art. 7, Sec. 7 of the Constitution of North Carolina. Exception by plaintiff.
(2) The purpose for which each of the items of the tax levy declared to be valid is a necessary expense within the meaning of Art. 7, Sec. 7 of the North Carolina Constitution. Exception by plaintiff as to Item 8.
(3) As to the rate per $100 property valuation for each purpose, the court held that: (a) The levies specified in Items 4, 5, 6 and 11, being made under the provisions of Art. 5, Sec. 6 of the Constitution, were not for special purposes, and are valid only to the extent of the fifteen cents constitutional limitation, and are invalid to the extent of the excess-seven cents.
(b) The levy specified in Item 12, under the authority of Sec. 6 of Chapter 146 of Public Laws of 1927, is invalid for that the statute does not authorize the imposition of the tax.
(c) The levy specified in Item 3, being made under the provisions of Subsection (6) of Sec. 1 of Chapter 41 of Public-Local Laws of 1935 authorizing a levy "for election expenses, two cents", is "for a special purpose" with "special approval" of the General Assembly under the provisions of Art. 5, Sec. 6 of the Constitution and is valid to the extent of two cents, but invalid as to the one cent excess in rate. Plaintiff excepts to that part of this ruling declaring valid the two cents rate.
(d) The levies specified in Items 1, 2, 7 and 8, being made under Subsections (2, 3, 4 and 5) of Sec. 1 of Chapter 41 of Public-Local Laws of 1935 are for special purposes with the special approval of the General Assembly and are within statutory limitations, and within the purview of Art. 5, Sec. 6 of the Constitution, and valid. Exception by plaintiffs.
(e) The levy specified in Item 9, under the authority of provisions of the acts of legislature embodied in Subsection 8 1/2 of Code 1935, § 1297, is for a special purpose with the special approval of the General Assembly, and is within the statutory limitation, and within the purview of Art. 5, Sec. 6 of the Constitution, and valid. Exception by plaintiff.
(f) The levy specified in Item 10, under the combined authority of Code 1935, § 1297 (8 3/4) for five cents of the rate, and Subsection (1), Sec. 1, Chapter 41, Public-Local Laws 1935, for ten cents, is for special purpose and with the special approval of the General Assembly, and is within the statutory limitation and within the purview of Art. 5, Sec. 6 of the Constitution. Exception by plaintiff.
(4) Pursuant to the above rulings on the validity of rates for tax purposes, the tax assessed against defendant is invalid to the extent of twelve cents on the $100 valuation, or $179.28. Exceptions by plaintiff and by defendants.
(5) The anticipatory payment June 30, 1936, was not paid under protest within the meaning of the statute relating thereto, Code 1935, § 7880 (194), but that the payment of September 30, 1936, was in strict compliance therewith. Exception by plaintiff.
From judgment in accordance with such rulings, the plaintiff and the defendants appealed to the Supreme Court and assign error.
Black & Whitaker, of Bryson City, for plaintiff.
J. D. Mallonee and J. D. Mallonee, Jr., both of Murphy, and T. C. Gray, of Hayesville, for defendants.
Plaintiff's appeal: The State Constitution provides the fundamental authority for, and prescribes the limitation upon, the levying of county taxes.
Article 7, Section 7, reads in part: "* * * No county, city town, or other municipal corporation shall contract any debt, pledge its faith or loan its credit, nor shall any tax be...
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