Rutledge v. Greater Greenville Sewer Dist.

• Decision Date: 24 March 1927
• Docket Number: 12183.
• Parties: RUTLEDGE v. GREATER GREENVILLE SEWER DIST. et al.
• Court: South Carolina Supreme Court

137 S.E. 597

139 S.C. 188

RUTLEDGE v. GREATER GREENVILLE SEWER DIST. et al.

No. 12183.

Supreme Court of South Carolina

March 24, 1927

Appeal from Common Pleas Circuit Court of Greenville County; J. W De Vore, Judge.

Suit by James R. Rutledge against the Greater Greenville Sewer District and others, Commissioners thereof. Decree for defendants, and plaintiff appeals. Affirmed.

The following is the lower court's decree:

This action was brought by a taxpayer of Greater Greenville sewer district to restrain defendants, as commissioners of said district, from issuing and selling $3,000,000 bonds for the purpose of "establishing, extending, enlarging and maintaining sewer systems and sewer lines" therein. The return admits the allegations of fact contained in the complaint, but denies the conclusions of law and sets forth additional allegations of fact and law. No traverse was filed to the return, and the allegations of fact therein contained are, therefore, admitted. This being true, the controversy is exclusively one of law in which the constitutionality of certain acts of the General Assembly hereinafter specifically referred to is assailed.

"Greater Greenville sewer district" is made by those acts a body politic and corporate embracing the territory known as "Greenville school district" and "Parker school district." The territory embraced in Greenville school district is coincident with the territory embraced in the city of Greenville with a small area in addition which has been added to that district since it was originally created. Parker school district embraces the mill communities adjacent to the city of Greenville and lying west of it. The population of Greenville school district and Parker school district is approximately 30,000 each, making the aggregate population of Greater Greenville sewer district approximately 60,000. All of the raw sewerage from this territory empties in Reedy river, which runs through the city of Greenville contaminating the waters of the stream to such an extent that a suit is now pending to enjoin the city of Greenville from depositing raw sewerage in the stream and for damages. In order to remedy this situation, the acts creating Greater Greenville sewer district were passed and bonds were authorized to be issued for the purpose of installing trunk lines to carry the sewerage of Parker school district and Greenville school district to a sewerage disposal plant below the city of Greenville, where it is to be chemically treated and the water returned to Reedy river in a pure state. This plant will obviate the unsanitary situation existing, and will adequately dispose of the sewerage in this large territory.

Upon the passage of the acts, the question of the issuance of the bonds was submitted to a vote of the people of Greater Greenville sewer district and a majority voted in favor of the issuance of the bonds.

The acts which are assailed are attached in full to the complaint as exhibits, and are in effect as follows:

(a) Act approved March 30, 1925, 34 Statutes, 744, creating Greater Greenville sewer district as a body politic and corporate, defining the area embraced therein, providing for the selection of a sewer commission and defining their powers and duties.

(b) Act approved March 23, 1926, 34 Statutes, 1537, amending act approved March 30, 1925, and extending and defining the powers and duties of the commission provided for in the original act.

(c) Act approved March 23, 1926, 34 Statutes, 1540 authorizing an election upon the issue of bonds by Greater Greenville sewer district to the amount of $3,000,000, and providing for said issue.

The validity of these acts is assailed upon the following grounds:

(1) That if bonds to the amount authorized were issued the bonded indebtedness of the district will exceed 8 per cent of the assessed valuation of the property therein in violation of section 5, art. 10, of the Constitution of South Carolina.

(2) That if bonds to the amount authorized are issued the bonded indebtedness of the district together with the bonded indebtedness of the school districts embraced therein will exceed 15 per cent. of the assessed valuation of the property included in said sewer district.

(3) That if the said bonds are not a part of the bonded indebtedness of said district as contemplated by section 5 art. 10, of the Constitution, that the bonds proposed to be issued will not be negotiable instruments of the said district.

(4) That if the court should hold that Greater Greenville sewer district is a body politic charged with the municipal duty of providing a sewerage system, and under the proviso of section 7 of article 8 of the Constitution of South Carolina is not subject to the constitutional debt limit provided in said section and in section 5 of article 10, that then the said acts are unconstitutional because they authorize the levy of taxes by a body politic other than a county, township, school district, city, town, or village in violation of section 5 of article 10 of said Constitution.

(5) That if the said bonds are not part of the bonded indebtedness as contemplated by section 5 of article 10 and section 7 of article 8 of the Constitution of South Carolina because said acts provide in reality for a local assessment upon the freeholders based upon special benefits derived from a local improvement, that said acts are unconstitutional because no provision is made for a hearing of the property owners as to the amount and validity of the assessment and there is no legislative determination of the benefits such as might render such a hearing unnecessary, in violation of section 5 of article 1 of the Constitution of South Carolina.

The questions raised, which will be considered in the order in which they have been presented, are to be resolved "in the light of the familiar and well-settled general rule that every presumption must be indulged in favor of the constitutionality of an act of the Legislature, and that courts 'should not declare a statute unconstitutional unless the invalidity is manifest beyond a reasonable doubt."' Battle v. Willcox, 128 S.C. 500, 122 S.E. 516; Poulnot v. Cantwell, 129 S.C. 171, 176, 123 S.E. 651.

1 and 2. Will the bonds if issued violate the provisions of section 5, art. 10, of the Constitution of South Carolina, being in excess of the limits therein provided?

The decision in this question is greatly simplified by the decision of the Supreme Court in the case of Evans v. Beattie, 137 S.C. 496, 135 S.E. 538, the authorities generally being so carefully considered and reviewed that it is unnecessary to reconsider them. There an action was brought to enjoin the board of Coastal highway commissioners from carrying out the provisions of the act approved March 12, 1926 (34 Statutes 1492), commonly known as the Coastal Highway Act. By the provisions of that act several counties in the state of South Carolina were united into a highway district for the purpose of building hard-surface highways extending through those counties. The act, among other things, created six counties into a political subdivision of the state making the inhabitants thereof a body politic and corporate under the name of the Coastal highway district, provided for the appointment of a board of highway commissioners, authorized the execution of certain agreements, authorized the commissioners to issue negotiable bonds of the district in an amount specified therein, provided for "The levy of an annual ad valorem tax upon all taxable property in the district sufficient to pay the principal and interest upon bonds issued under the act, as such principal and interest become due." Section 11. The act further provided for the levy of a tax by the Comptroller General to be collected by the county treasurers of the several counties of the district and paid to the state treasurer to be applied to the payment of the principal and interest on the bonds as they became due, and that the gasoline tax be applied also to the payment of the principal and interest on the bonds, and further that all bonds and notes issued under the act should be "'direct and general obligations of said district, payable primarily from said property tax, which however, shall be reduced as hereinbefore provided."' Section 11 (c).

The objection was made that the act was in violation of article 10, § 5, of the State Constitution, which provides a limitation upon the bonded debt of certain subdivisions of the political subdivision of the state.

In passing upon the objections to the act, the court held by a unanimous decision, citing in support thereof cases from the United States Supreme Court, the Supreme Court of South Carolina and of other states, that the obligations were not a part of the bonded indebtedness of the district within the meaning of section 5 of article 10 of the Constitution, but were obligations of the district to be paid by a special assessment upon the property owners therein made because of special benefits to be received by them by reason of the use of the proceeds of the sale of the bonds for improvements made in the district.

In the decision of this particular question the court said in the case of Evans v. Beattie, supra: "It is specifically held in the case of Jackson v. Breeland, 103 S.C. 184, 88 S.E. 128, as has been hereinbefore stated, that the power of the General Assembly to create special tax districts for local improvements, is not derived from article 10, section 5, of the Constitution, and is not affected thereby. This is in line with the current of authorities upon the subject."

In the case at bar it is obvious from the statement of facts hereinbefore made that all the property within Greater Greenville Sewer District will be beneficially...