Sing v. City of Charlotte

• Decision Date: 02 February 1938
• Docket Number: 541.
• Citation: Sing v. City of Charlotte, 213 N.C. 60, 195 S.E. 271 (N.C. 1938)
• Parties: SING v. CITY OF CHARLOTTE et al.
• Court: North Carolina Supreme Court

195 S.E. 271

213 N.C. 60

SING v. CITY OF CHARLOTTE et al.

No. 541.

Supreme Court of North Carolina

February 2, 1938

Appeal from Superior Court, Mecklenburg County; Wilson Warlick Judge.

Action by R. L. Sing, on behalf of himself and other taxpayers of the City of Charlotte who may desire to join with him against the City of Charlotte and others, for injunction against appropriating funds and levying taxes for operation maintenance, and improvement of a municipal airport without a vote of the majority of the qualified voters of the city. From an adverse judgment, the defendants appeal.

Affirmed.

CLARKSON J., dissenting in part.

Action for injunction against appropriating funds and levying taxes for operation, maintenance, and improvement of municipal airport without a vote of the majority of the qualified voters.

The plaintiff is a resident and taxpayer of the defendant City of Charlotte, a municipal corporation, of which the codefendants are and constitute the governing body.

By consent of parties, a jury trial being waived, the court below finds pertinent facts substantially as follows: At an election held in the City of Charlotte on November 3, 1936, the issuance of $50,000 in bonds of said city for the purpose of purchasing a tract of land for a municipal airport, and the levying of a sufficient tax on taxable property therein to pay the principal of and interest on said bonds, were approved by a vote of the majority of the qualified voters in said city. Thereafter the governing body of the city purchased approximately 450 acres of land outside of, but near, the limits of the city. The airport constructed thereon with federal government funds was completed and turned over to the city about June 1, 1937, for maintenance and operation.

An airport commission of three was appointed under authority of an Act of the General Assembly of 1937, with power to appoint a manager for said airport and to fix his compensation to be paid from the proceeds derived from the operation of the airport, and to establish and collect fees, tolls, and charges from those using said airport and its facilities, and to deposit all proceeds from the said airport from any source in separate account to be known as the "airport fund," of which the treasurer of the city is the treasurer. Disbursements from said fund are authorized to be made on warrant signed by the treasurer, mayor, city manager, and chairman of the Airport Commission. The Airport Commission is given authority to employ an assistant manager and such other employees as they may deem necessary for the proper maintenance and operation of the airport.

In the budget for the fiscal year beginning July 1, 1937, the governing body of and for the city set up and appropriated, and levied taxes to raise, respectively, both (1) the sum of $25 to be expended toward the maintenance of the municipal airport, and (2) a sum, the amount of which is not shown in the record on appeal, but in excess of $5,000, and stated by counsel to be $20,000, as a contingent fund.

Thereafter, on November 3, 1937, the governing body of the city passed an ordinance in which there appears in part the following: "Whereas, the said Commission has been unable to derive sufficient revenue for the operation, maintenance and upkeep of the said airport in a proper and adequate manner; and, Whereas, additional hangar facilities are needed at said airport. Now, Therefore Be It Ordained By the City Council in regular session that $5,000 be, and the same hereby is appropriated from the contingent fund of the City and transferred to the airport fund to be used in the operating cost, maintenance and further improvement of the facilities of said airport, said fund to be disbursed in accordance with the provisions of the legislative act authorizing said airport commission, and known as chapter 559 of the Private Laws of 1937."

The court below further finds as a fact: "That the $5,000 referred to in the pleadings transferred from the contingent fund to the airport fund was money derived from taxation and was not an unappropriated surplus fund derived from other sources."

Upon these findings of fact the court below concluded as a matter of law that the City of Charlotte is without authority to appropriate and expend (1) the sum of $25 set out in the budget for the purpose of operating and maintaining a municipal airport, and (2) the sum of $5,000 for that purpose under the provisions of an ordinance by the governing body, "without the question being submitted to and approved by a majority of the qualified voters. Article 7, section 7, of the North Carolina Constitution."

Thereupon judgment was entered enjoining and restraining the defendants, and each of them, from expending any sum for the construction, operation, and maintenance of the municipal airport until the question of levying of such taxes has been submitted to and approved by a majority of the qualified voters of said City of Charlotte. The defendant appealed therefrom to the Supreme Court, and assigned error.

Basil M. Boyd, of Charlotte, for appellants.

J. L. Delaney, of Charlotte, for appellee.

WINBORNE Justice.

Two questions arise on this appeal: (1) Are the operation, maintenance, and improvement of a municipally owned airport necessary expenses within the meaning of article 7, section 7, of the Constitution of North Carolina? (2) Can the governing body of a municipality make an appropriation and levy a tax for a contingent fund, and, when the tax money is collected, transfer it to, and use it for, a purpose for which such body is without authority to levy a tax?

Both questions are answered in the negative. The action of the city council as the governing body of the City of Charlotte in making the appropriations and tax levies is violative of the provisions of both article 7, section 7, of the State Constitution, and the County Fiscal Control Act applicable to cities and towns.

First. "No county, city, town, or other municipal corporation shall contract any debt, pledge its faith or loan its credit, nor shall any tax be levied or collected by any officers of the same except for the necessary expenses thereof, unless by a vote of the majority of the qualified voters therein." Article 7, section 7, of the Constitution of North Carolina; C.S. § 2691.

In the recent case of Palmer v. Haywood County, 212 N.C. 284, 193 S.E. 668, 669, it is said:

"What are necessary expenses is a question for judicial determination. The judicial decisions in this state uniformly so hold. "'The courts determine what class of expenditures made or to be made by a municipal corporation come under the definition of 'necessary expenses.' The governing authorities of the municipal corporations are vested with the power to determine when they are needed." * * * That is to say, the courts determine whether a given project is a necessary expense of a municipality, but the governing authorities of the municipality determine in their discretion whether such given project is necessary or needed in the designated locality.' Starmount Co. v. Hamilton Lakes, 205 N.C. 514, 171 S.E. 909; Black v. Com'rs, 129 N.C. 121, 39 S.E. 818; Fawcett v. Mt. Airy, 134 N.C. 125, 45 S.E. 1029, 63 L.R.A. 870, 101 Am.St.Rep. 825; Storm v. Wrightsville Beach, 189 N.C. 679, 681, 128 S.E. 17; Henderson v. Wilmington, 191 N.C. 269, 132 S.E. 25, 29.

In defining 'necessary expense' it is said in Henderson v. Wilmington, supra; 'We derive practically no aid from the cases decided in other states. * * * We must rely upon our own decisions.' Then, after reviewing numerous cases dealing with the subject of 'necessary expense,' 191 N.C. 269, at page 278, 132 S.E. 25, 30, Adams, J., said: 'The cases declaring certain expenses to have been "necessary" refer to some phase of municipal government. This court, so far as we are advised, has given no decision to the contrary.' Then, continues 191 N.C. 269, at page 279, 132 S.E. 25, 30: 'The decisions heretofore rendered by the court make the test of a "necessary expense" the purpose for which the expense is to be incurred. If the purpose is the maintenance of the public peace or the administration of justice, if it partakes of a governmental nature or purports to be an exercise by the city of a portion of the state's delegated sovereignty, if, in brief, it involves a necessary governmental expense."'

When thus tested, an airport is not a necessary governmental expense.

The subject of the authority to levy taxes has been discussed in numerous cases. The law is well settled and may be summed up: (1) "For necessary expenses. The municipal authorities may levy up to the constitutional limitation without a vote of the people and without legislative permission." (2) "For necessary expenses, they may exceed the constitutional limitation by special legislative authority without a vote of the people. Constitution, art. 5, § 6." (3) "For purposes other than necessary expenses a tax cannot be levied within or in excess of the constitutional limitation except by a vote of the people under special legislative authority." Palmer v. Haywood County, 212 N.C. 284, 193 S.E. 668, 670; Walker v. Faison, 202 N.C. 694, 163 S.E. 875; Glenn v. Com'rs, 201 N.C. 233, 159 S.E. 439; Burleson v. Board of Aldermen, 200 N.C. 30, 156 S.E. 241; Greene County v. R. R., 197 N.C. 419, 149 S.E. 397; Board of Com'rs v. Assell, 194 N.C. 412, 140 S.E. 34; Henderson v. Wilmington, 191 N.C. 269, 132 S.E. 25; Herring v. Dixon, 122 N.C. 420, 29 S.E. 368.

Not being a necessary expense, the levy of a tax directly or indirectly to be expended for the purpose of the operation maintenance, and improvement of a municipal airport without a vote of a majority of the qualified voters is violative of article...