State ex rel. West Virginia Housing Development Fund v. Waterhouse

Citation158 W.Va. 196,212 S.E.2d 724
Decision Date26 November 1974
Docket NumberNo. 13468,13468
CourtSupreme Court of West Virginia
PartiesSTATE ex rel. WEST VIRGINIA HOUSING DEVELOPMENT FUND, a public corporation, etc. v. John WATERHOUSE, as chairman, etc., West Virginia Housing Development Fund, etc.

Syllabus by the Court

1. 'When the constitutionality of a statute is challenged, every reasonable construction must be resorted to by the courts to sustain its validity and any reasonable doubt must be resolved in favor of the constitutionality of the legislative act in question.' Point 2, Syllabus, State ex rel. Metz v. Bailey, 152 W.Va. 53 (159 S.E.2d 673) (1968).

2. Since the bonds to be issued pursuant to the West Virginia Housing Development Fund Act, W.Va.Code, 1931, Chapter 31, Article 18, as amended, are self-liquidating revenue bonds which provide on their face that the State shall not be liable for the payment thereof, that the faith and credit of the State is not thereby pledged and that they shall not be a debt of the State, such bonds, considering the plan envisioned by the Act, do not create a debt of the State or authorize a pledge of the credit of the State as proscribed by Article X, §§ 4 and 6 of the Constitution of West Virginia.

3. Wherein W.Va.Code, 1931, Chapter 31, Article 18, Section 20b(d), as amended, mandates that the governor shall transfer certain appropriated funds to the state sinking fund commission for deposit in the mortgage finance bond insurance fund to make up any deficiency in that fund, or, if no such appropriated funds are available, that he shall include the amount of such deficiency in the budget of his office to be submitted for appropriation to the next session of the legislature, such statute purports to permit the legislative branch to exercise executive powers and is unconstitutional as violative of Article V, § 1 and Article VI, § 51 of the Constitution of West Virginia.

4. "A statute may contain constitutional and unconstitutional provisions which may be perfectly distinct and separable so that some may stand and others will fall; and if, when the unconstitutional portion of the statute is rejected, the remaining portion reflects the legislative will, is complete in itself, is capable of being executed independently of the rejected portion, and in all other respects is valid, such remaining portion will be upheld and sustained.' Point 6, syllabus, State v. Heston, 137 W.Va. 375 (71 S.E.2d 481).' Point 4, Syllabus, State ex rel. State Building Commission of West Virginia v. Bailey, 151 W.Va. 79 (150 S.E.2d 449) (1966).

5. The 1973 amendments to the Housing Development Fund Act do not constitute an improper delegation of legislative powers in violation of Article VI, § 1 of the West Virginia Constitution.

6. A legislative declaration of purpose, while not conclusive, is entitled not only to respect but to a prima facie acceptance of its correctness.

7. 'A legislative determination of what is a public purpose will not be interfered with by the courts unless the judicial mind conceives it to be without reasonable relation to the public interest.' State ex rel. Appalachian Power Company v. Gainer, 149 W.Va. 740 (143 S.E.2d 351) (1965).

Jackson, Kelly, Holt & O'Farrell, James K. Brown and William F. Dobbs, Jr., Charlotte R. Lane, Charleston, for petitioner.

Petroplus, Bailey, Byrum & Vieweg, George G. Bailey, Wheeling, for respondent.

CAPLAN, Chief Justice:

Invoking the original jurisdiction of this Court, the petitioner, The West Virginia Housing Development Fund, a public corporation, hereinafter sometimes referred to as the Housing Fund, seeks a writ of mandamus to compel the respondent, John Waterhouse, Chairman of the Board of Directors of the aforesaid Housing Development Fund, to execute on behalf of the Fund, certain agreements, mortgage finance bonds and Series C Notes. Although Mr. Waterhouse was authorized, empowered and directed by lawfully adopted resolutions of the members of the Board of Directors of the Fund to execute on behalf of said Fund the agreements and notes alluded to above, he has refused to do so. His refusal is premised on his contention that the 1973 Amendments to the Housing Development Fund Act cause the Act to be unconstitutional.

The Housing Development Fund was created by Chapter 5, Acts of the Legislature, Second Extraordinary Session, 1968. In 1969, this Court declared that such Act was not violative of Article XI, § 1, Article VI, § 1 or Article X, §§ 1 and 6 of the West Virginia Constitution. State ex rel. West Virginia Housing Development Fund v. Copenhaver, 153 W.Va. 636, 171 S.E.2d 545 (1969).

In the 1968 Housing Development Fund Act is was the declared intention of the Legislature to provide for the 'creation and establishment of the West Virginia housing development fund, the corporate purpose of which is to provide temporary financing for development costs, land development and residential housing construction to public and private sponsors of land development for residential housing or residential housing, new or rehabilitated, for sale or rental to persons and families of low and moderate income'. Succinctly stated, the purpose of the Act was to provide help and assistance to the low and moderate income groups in their housing needs. W.Va.Code, 1931, 31-- 18--2(d), as enacted by Chapter 5, Acts of the Legislature, Second Extraordinary Session, 1968, provided:

The legislature hereby finds and declares further that in accomplishing this purpose, the West Virginia housing development fund, created and established by this article, is acting in all respects for the benefit of the people of the State of West Virginia to serve a public purpose in improving and otherwise promoting their health, welfare and prosperity, and that the West Virginia housing development fund, so created and established, is empowered, hereby, to act on behalf of the State of West Virginia and its people in serving this public purpose for the benefit of the general public.

The 1973 amendments to the Housing Development Fund Act, where pertinent to this proceeding, may be summarized as follows:

A. The term 'eligible persons and families' was substituted for the term 'persons and families of low and moderate income.'

B. Included in the newly created category of 'eligible persons and families', in addition to persons and families of low and moderate income and persons who are included because of age or disability, are the following:

1) Persons or families of higher income to the extent the housing development fund shall find and determine, by resolution, that construction of new or rehabilitated residential housing for occupancy by them will cause to be vacated existing sanitary, decent and safe residential housing available at prices or rentals which persons and families of low and moderate income can afford; or

2) Persons and families for whom, as found and determined by the housing development fund by resolution, construction of new or rehabilitated residential housing in some designated area or areas of the State is necessary for the purpose of retaining in, or attracting to, such area or areas qualified manpower resources essential to modern mining, industrial and commercial operations and development in such area or areas.

C. A 1973 amendment of the Act, now designated W.Va.Code, 1931, 31--18--20b, as amended, created a mortgage bond insurance fund which is to be maintained in the state treasury. This insurance fund shall be kept separate and apart from all other moneys and funds of the state and shall constitute a trust fund into and from which moneys shall be paid in relation to the mortgage finance bonds authorized by the amendment. A special bond insurance commitment fee and a special bond insurance premium shall be charged by the Housing Fund on all loans or mortgages made or purchased with the proceeds of sale of mortgage finance bonds and shall ultimately be paid into the state sinking fund for investment as authorized by law.

This 1973 amendment further provides that in the event payments from the mortgage finance bond insurance fund at any time causes the amount therein to be less than the minimum bond insurance requirement such fact shall be certified by the chairman of the Housing Fund to the Governor and 'the governor shall transfer to the state sinking fund commission for deposit in the mortgage finance bond insurance fund from any amounts previously appropriated which are available for such purpose an amount equal to the amount of such deficiency, and if the amount of such deficiency shall not be available from such prior appropriation or shall not have been so transferred, the governor shall include the amount of such deficiency not so transferred in the budget of his office to be submitted for appropriation to the next session of the legislature, and shall cause any amounts appropriated for such purposes to be transferred to the state sinking fund commission for deposit in the mortgage finance bond insurance fund: Provided, that the legislature shall not be required to make any appropriation so requested, and the amount of such deficiencies shall not constitute a debt or liability of the State.' W.Va.Code, 1931, 31--18--20b(d), as amended.

Subsection (e) of the above cited code section provides that subject to any agreement with the holders of outstanding notes or bonds of the Housing Fund, 'any amount or amounts paid by the State into the mortgage finance bond insurance fund pursuant to this section shall be repaid to the State as, when, and to the extent, amounts held in the mortgage finance bond insurance fund at any time or times after any payment by the State into the mortgage finance bond insurance fund shall exceed the minimum bond insurance requirement at such time or times.'

At a regularly called meeting of the Board of Directors of the Housing Development Fund, held on December 11, 1973, the board, with the respondent,...

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