Red Springs Hotel Co. v. Town of Red Springs

• Decision Date: 22 November 1911
• Citation: 72 S.E. 837,157 N.C. 137
• Parties: RED SPRINGS HOTEL CO. v. TOWN OF RED SPRINGS et al.
• Court: North Carolina Supreme Court

72 S.E. 837

157 N.C. 137

RED SPRINGS HOTEL CO. v. TOWN OF RED SPRINGS et al.

Supreme Court of North Carolina

November 22, 1911

Appeal from Superior Court, Robeson County; Carter, Judge.

Action by the Red Springs Hotel Company against the Town of Red Springs and others, to enjoin a bond issue. Judgment for defendants, and plaintiff appeals. Affirmed.

That the special tax rate prescribed by Priv.Acts 1911, c. 170 for the payment of municipal bonds authorized thereby, would be insufficient to pay the annual interest on the bonds, and to provide a sinking fund therefor, did not invalidate the issue.

That Priv.Acts 1911, c. 170, authorizing a city to issue bonds for sewerage and waterworks, left the division of the proceeds of the sale of the bonds between the two works to the discretion of the municipal authorities was not a valid objection to the validity of the bonds.

This is a controversy, without action, submitted to the court under the provisions of section 803 of the Revisal of 1905.

The board of commissioners of the town of Red Springs having declared by resolution that a system of waterworks and sewerage was an absolute and imperative public necessity for the town, an act was duly introduced in the Legislature of North Carolina, session of 1911, authorizing said town to issue bonds to the amount of $35,000, bearing interest at a rate not exceeding 6 per cent., and maturing not later than 30 years from date of issue, and authorizing the levy of a special tax of 35 cents on the $100 valuation of property and $1.05 on each taxable poll, to pay interest and provide a sinking fund for the retirement of said bonds at maturity. This act was passed by the General Assembly of North Carolina, and appears as chapter 170, Private Acts of North Carolina, session of 1911. A board of public works for the town of Red Springs was created by said act to handle the funds and to perform certain other duties therein specified.

The board of public works of said town first advertised the issue at 5 1/2 per cent. interest, and bonds bearing interest at this rate were advertised and sold. The purchaser failed to comply with his bid, and thereupon bonds bearing interest at 6 per cent. have been advertised and contracted to be sold. It is admitted that, unless the defendants are restrained they will proceed to sell the bonds and levy the special tax, as provided by said act of 1911.

The plaintiff is a corporation owning property in the town, and brought this action to restrain the issue of the bonds and the collection of the tax.

The cause was heard before his honor, Judge Frank Carter, at November term, 1911, of the superior court of Robeson county, and from a judgment in favor of the defendants the plaintiff excepted and appealed to this court.

McIntyre, Lawrence & Proctor, for appellant.

McLean, Varser & McLean, for appellees.

BROWN J.

The plaintiff bases its claim for injunctive relief upon five propositions:

(1) That chapter 170 of the Private Acts of North Carolina, session of 1911, was not enacted by the General Assembly in accordance with the provisions of the Constitution of North Carolina; and hence the town of Red Springs has no legal authority to issue said bonds, or to collect any tax whatever on account thereof. This contention cannot be sustained. A transcript of the entries upon the journals of both houses of the General Assembly are set out in the record, and show that the ayes and noes were duly called and entered, and the bill enacted into law in strict accordance with the Constitution.

(2) That the town of Red Springs has no power to issue said bonds or to collect any tax whatever on account thereof, for that said bonds were not authorized by a vote of the qualified voters. The purpose of the bonds is to secure for the municipality a system of waterworks and sewerage. This is declared by the Legislature in the preamble to the act to be a necessary expense, as well as by the municipal authorities. The question has also been repeatedly decided by this court adversely to plaintiff's contention. Fawcett v. Mt. Airy, 134 N.C. 125, 45 S.E. 1029, 63 L. R. A. 870, 101 Am. St. Rep. 825; Davis v. Fremont, 135 N.C. 538, 47 S.E. 671; Hightower v. Raleigh, 150 N.C. 569, 65 S.E. 279; Water Co. v. Trustees, 151 N.C. 175, 65 S.E. 927; Bradshaw v. High Point, 151 N.C. 517, 66 S.E. 601; Underwood v. Asheboro, 152 N.C. 641, 68 S.E. 147.

(3) That chapter 170 of the Private Acts of North Carolina session 1911, does not definitely fix the rate of interest to be borne by said bonds, but leaves the rate of interest to the discretion of the board of commissioners and board of public works of said town; and...