Sides v. Cabarrus Memorial Hospital, Inc.
| Decision Date | 14 April 1975 |
| Docket Number | No. 73,73 |
| Citation | 287 N.C. 14,213 S.E.2d 297 |
| Court | North Carolina Supreme Court |
| Parties | Larry Wayne SIDES, Administrator of the Estate of Terry Compton Sides v. CABARRUS MEMORIAL HOSPITAL, INC., et al. |
Hartsell, Hartsell & Mills, P.A., by William L. Mills, Jr. and Fletcher L. Hartsell, Jr., Concord, for defendant appellant.
Byrd, Byrd, Ervin & Blanton by John W. Ervin, Jr., Morganton, N.C. for plaintiff appellee.
Was Cabarrus Memorial Hospital a political subdivision of Cabarrus County or of the State of North Carolina?
Defendant contends it is a separate governmental agency of the State of North Carolina and that exclusive original jurisdiction over the claim is vested solely in the North Carolina Industrial Commission under provisions of the North Carolina Tort Claims Act. G.S. § 143--291 et seq.
In deciding this issue it is necessary to closely examine Chapter 307, 1935 Public-Local and Private Laws. This Act, in pertinent part, provides:
Section 1. That the Board of County Commissioners of Cabarrus County, North Carolina, by a majority vote of said Board, or upon the petition of two hundred voters of said county, shall . . . order an election to be held to determine the will of the people of said county whether there shall be issued and sold bonds . . . and to levy a tax of not exceeding two cents on the one hundred dollar valuation of property, the proceeds of sale of said bonds to be issued to be used in securing lands and erecting or altering buildings and equipping same to be used as a public hospital for said county . . .. The said Board of County Commissioners shall also levy a tax not to exceed two cents on the one hundred dollar valuation of property for the maintenance and upkeep of said hospital. . . . The hospital so erected from the sale of said bonds in addition to other hospitalization funds from other sources shall be known as the 'Cabarrus County Hospital.'
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'Sec. 3. If a majority of the qualified voters shall vote 'For Cabarrus County Hospital,' at any election held under this Act, then the County Commissioners shall issue and sell bonds . . . and shall pay over the proceeds arising therefrom to the Treasurer of Cabarrus County . . . and the taxes which may be levied and collected under this Act shall also be paid to the Treasurer of Cabarrus County, and by said Treasurer kept in two separate accounts, one of said accounts being the hospital interest and sinking fund, and the other account the hospital maintenance fund . . . and it shall be the duty of the Board of Commissioners of Cabarrus County to annually levy and collect as other taxes a special tax not exceeding the limit provided by this Act, sufficient to pay the interest on said bonds, and to provide the necessary sinking fund for the payment of same, and also to afford the necessary maintenance fund as herein provided.
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'Sec. 5. Should a majority of the qualified voters of Cabarrus County, under any election held under this Act, vote 'For Cabarrus County Hospital,' then the County Commissioners shall at once appoint a Board of Trustees, one trustee to come from each and every voting precinct in the county. . . . Upon the first meeting of the Board of Trustees . . . the said Board shall appoint an executive committee composed of seven members from the trustees, all residents of the county. . . .
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We believe this Act makes it clear that the General Assembly never intended Cabarrus Memorial Hospital to be a separate and independent agency of the State of North Carolina. In addition to granting the county the authority to levy a special tax to provide for the operation and maintenance of the hospital and to substantially control its operations through the county board of commissioners, Section 6 of the Act provides specifically that the hospital's executive committee 'shall in general carry out the spirit and intent of this Act in establishing a county public hospital.' (Emphasis supplied.)
Also we note that the formal or informal interpretation of a statute or law by an administrative agency of the executive department is entitled to consideration from the courts, and must be accorded appropriate weight in determining the meaning of the law. See, e.g., 2 Am.Jur.2d Administrative Law § 241 (1962); 7 Strong N.C.Index 2d, Statutes § 5 (1968). Accord, Faizan v. Insurance Co., 254 N.C. 47, 57, 118 S.E.2d 303, 310 (1961).
In this context, the following opinions or rulings by various State and Federal agencies have held Cabarrus Memorial Hospital to be an agency or instrumentality of the county.
(1) In a letter dated 31 March 1966, former Attorney General T. W. Bruton stated:
(Emphasis supplied.)
(2) In a letter dated 22 July 1971, former Attorney General Robert Morgan stated:
(Emphasis supplied.)
(3) In a 'determination letter' dated 23 November 1964, the United States Internal Revenue Service ruled:
'(I)t is the opinion of this office that you are an instrumentality of the County of Cabarrus, a political subdivision of the State of North Carolina, and as such you are not subject to Federal income tax.' (Emphasis supplied.)
(4) In a letter dated 14 April 1971, former North Carolina Commissioner of Revenue, I. L. Clayton, ruled that Cabarrus Memorial Hospital was a 'county-owned and operated hospital' and an 'integral part of the county operation and body politic of the county.' (Emphasis supplied.)
(5) In a letter dated 20 December 1971, the North Carolina Employment Security Commission ruled:
'This Agency concurred in the ruling of the Attorney General That Cabarrus Memorial Hospital is an instrumentality of a political subdivision, Cabarrus County and, therefore, exempt under the Employment Security Law.' (Emphasis supplied.)
We note that at the time defendant's charter was adopted by the General Assembly, there was existing a 'general law' that enabled counties to establish and maintain public hospitals. See Chapter 42, 1913 Public Laws, ratified 3 March 1913, and codified as G.S. § 131--4, et seq. This act was last amended by Chapter 247, 1929 Public Laws, and therefore was codified as presently written on 17 April 1935, the date defendant's charter was adopted by the General Assembly. There is a substantial similarity between G.S. § 131--4 et seq., the general law, and Chapter 307, the special-local law. However, the laws differ in two important areas. (1) Under the 'general law' the county commissioners are authorized to impose a tax of one-fifteenth of one cent ( 1/15 of 1cents) on the dollar ($1.00) of assessed property in such county. This is equivalent to a tax of 6.6cents per $100.00 of assessed property. However, under the 'special law,' the county commissioners are authorized: (a) To levy a tax not exceeding two cents on the one hundred dollar valuation of property to secure the land, to erect the buildings, and to pay the interest on the bonds; and (b) to also levy a tax not to exceed two cents on the one hundred dollar valuation of property to pay for the upkeep and maintenance of the hospital. This is equivalent to a total tax of 4cents per $100.00 of assessed property. (2) Under the 'general law' the hospital board of trustees, after initial appointment, are to be elected at the next general election. However, under the 'special law' there is no provision for the popular election of the hospital's board of trustees.
Based on examination of the public and local acts above cited, including relevant administrative rulings, we hold that Cabarrus Memorial Hospital is an agency of Cabarrus County and not a separate municipal agency of the State of North Carolina. It is clear that this was the intent of the General Assembly. In fact, the only justification we can discern for defendant's creation under the special act was to take advantage of the lower tax rate (4cents per $100 valuation as opposed to 6.6cents per $100 valuation) and to have the county commissioners appoint the hospital board of trustees rather than have them elected.
Having determined that defenda...
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