Roach v. City of Columbia

• Decision Date: 30 April 1934
• Docket Number: 13836.
• Citation: 174 S.E. 461,172 S.C. 478
• Parties: ROACH v. CITY OF COLUMBIA et al.
• Court: South Carolina Supreme Court

174 S.E. 461

172 S.C. 478

ROACH v. CITY OF COLUMBIA et al.

No. 13836.

Supreme Court of South Carolina

April 30, 1934

Suit by T. B. Roach, as a citizen and taxpayer of the city of Columbia, County of Richland, against the City of Columbia and others, to enjoin defendants from issuing and selling city waterworks and sewer system revenue bonds.

Injunction refused and petition dismissed.

C. T Graydon, of Columbia, for plaintiff.

Paul A Cooper, of Columbia, for defendants.

STABLER Justice.

The city of Columbia, relying upon an act of the General Assembly of May 8, 1933, referred to as the Revenue Bond Act (38 St at Large p. 411), proposes to issue and sell $812,000 of waterworks and sewer system revenue bonds, Series B, of the city of Columbia, for the purpose, as stated in ordinances adopted by the city authorizing the issuance of the bonds, of "improving, enlarging and extending the existing waterworks system and the existing sewer system of the City of Columbia by the construction of additional water supply mains to be connected with the existing waterworks system and by the construction of sanitary sewers, in accordance with plans to be prepared and approved by the City Council." The plaintiff, a resident and taxpayer of Columbia, seeks in this proceeding to enjoin the defendants from taking such action for the reasons, as alleged in his petition, that the bonds, when issued, will constitute a "bonded debt" of the city within the meaning of section 7 of article 8 of the Constitution; and that the city, in any event, is without authority to pledge the revenues of the waterworks system to pay a bonded debt incurred for the purpose of improving and enlarging the sewer system.

The defendants concede that the plans prepared by the city engineer disclose that about 10 per cent. of the money to be raised by the issuance of the bonds is to be spent in constructing water supply mains and equipment and the balance in constructing sanitary sewers. The ordinance provides that the bonds shall not constitute an indebtedness of the city, but shall be payable solely from the revenues derived from the operation of its waterworks system, there being no revenues from the operation of the sanitary sewerage system.

The question for our consideration is whether the bonds proposed to be issued and sold will constitute a "bonded debt" of the city within the meaning of section 7 of article 8 and section 5 of article 10 of the Constitution. It is conceded, if we answer in the affirmative, that the city is without power to issue and sell them, as their issuance would increase its bonded debt beyond the constitutional limitation.

In Cathcart v. City of Columbia, 170 S.C. 362, 170 S.E. 435, 438, the Revenue Bond Act of 1933 was declared constitutional. In that case the court held that existing revenues of the waterworks system could, without violating the debt provisions of section 7 of article 8 and of section 5 of article 10 of the Constitution, be pledged as security for a loan evidenced by revenue bonds for the purpose of enlarging and extending such system. The following language was used in the opinion:

"The question presented, succinctly stated, is whether the pledging of existing revenues for the repayment of obligations created for the purpose of enlarging or extending the waterworks system makes the loan a debt within the constitutional sense. * * *

We have given to the question here raised and stated our very careful consideration, and are of opinion, and so hold, that it should be answered in the negative."

The conclusion reached in the Cathcart Case, although there are decisions to the contrary, is supported we think by the weight of authority. See Maffit v. City of Decatur, 322 Ill. 82, 152 N.E. 602; Ward v. City of Chicago, 342 Ill. 167, 173 N.E. 810; Underwood v. Fairbanks, Morse & Co. (...