Huntley v. Potter , 255 N.C. 619 ( 1961 )

122 S.E.2d 681 (1961) 255 N.C. 619

G. W. HUNTLEY, Jr., et al., Petitioners,
v.
W. H. POTTER, Mayor, William Davis, D. C. Farrior, W. R. Hamilton, Math Chaplain, Bertie Brooks, Commissioners of the Town of Beaufort, and The Town of Beaufort, a municipal corporation of the State of North Carolina, Respondents.

No. 101.

Supreme Court of North Carolina.

November 22, 1961.

Gene C. Smith, Beaufort, for petitioners, appellants.

C. R. Wheatly, Jr., and Thomas S. Bennett, Beaufort, for respondents, appellees.

MOORE, Justice.

Petitioners contend that the report, prepared by the municipality pursuant to G.S. § 160-453.3, which was made a part of the annexation ordinance, is insufficient on its face (1) to show that the area to be annexed is "developed for urban purposes," (2) to show that the municipality plans to extend major municipal services, including sewerage, fire protection and street maintenance, to the area to be annexed "on substantially the same basis and in the same manner as such services are provided" within the town, and (3) to show that adequate provision has been made for financing service extensions. Petitioners further contend that it was incumbent on the municipality, and the municipality failed, to offer evidence at the review hearing in superior court that it is able to carry out its plans with respect to extension of services and that the plans comply with statutory requirements. In short, petitioners contend that the municipality, as a condition precedent to the right to annex, must file a report showing on its face strict compliance with statutory requirements, and that upon review in superior court has the burden of sustaining the regularity, adequacy, veracity and validity of the report and annexation ordinance by competent evidence. Petitioners point out that the municipality offered no evidence in support of the record and procedures except some testimony with respect to sewerage systems in Tracts One and Two, and they insist that the municipality has failed to carry the burden of proof and that the annexation ordinance should have been declared null and void. Thus, at the threshold we are confronted with the question: Who has the burden of proof in a superior court review of annexation records and procedures?

"A municipal corporation or its corporate authorities have no power to extend its boundaries otherwise than provided for by legislative enactment or constitutional provision. Such power may be validly delegated to municipal corporations by the legislature, and when so conferred must be exercised in strict accord with the statute conferring it." 37 Am.Jur., Municipal Corporations, § 24, pp. 640-1. See Anno: 64 A.L.R., Municipal Boundaries—Power to Extend, pp. 1341-1354. "The only discretion given to the governing boards of * * * municipalities is the permissive or discretionary right to use this new method of annexation (Art. 36, Subchapter VI, Chapter 160, General Statutes of North Carolina) provided such boards conform to the procedure and meet the requirements set out in the Act as a condition precedent to the right to annex." (Parentheses added.) In re Annexation Ordinances, 253 N.C. 637, 647, 117 S.E.2d 795, 802. In the procedures established by the Act, including the report of plans for extending services and the annexation ordinance, the governing board must comply with and conform to statutory provisions and requirements, and the record of the annexation proceedings must show prima facie complete and substantial compliance. Substantial compliance means compliance with the essential requirements of the Act. People ex rel. Peterson v. Omen, 290 Ill. 59, 124 N.E. 860, 863. If the record of annexation proceedings on its face fails to show substantial compliance with any essential provision of the Act, the superior court upon review must remand to the governing board for amendment with respect to such noncompliance. G.S. § 160-453.6(f), (g). The court itself is without authority to amend the report, ordinance or other part of the record. This is true even if evidence is presented which justifies amendment. "The annexation of territory to a municipal corporation is a legislative function which may not be delegated to a court. * * *" 37 Am.Jur., Municipal Corporations, § 25, p. 641.

However, where an appeal is taken from the annexation ordinance and a petition has been filed, pursuant to G.S. § 160-453.6, requesting review of annexation proceedings, and where such proceedings show prima facie that there has been substantial compliance with the essential provisions of the Act, the burden is upon petitioners to show by competent evidence failure on the part of the municipality to meet requirements of G.S. § 160-453.3 or G.S. § 160-453.4 as a matter of fact, or irregularity in proceedings which materially prejudice the substantive rights of petitioners. The burden is upon petitioners in such case by reason of the presumption "that public officials will discharge their duties in good faith and exercise their powers in accord with the spirit and purpose of the law." J. A. Jones Construction Co. v. Local Union 755 etc. Electrical Workers Union, 246 N. C. 481, 488, 98 S.E.2d 852, 857. Accord: In re Housing Authority, 233 N.C. 649, 656, 65 S.E.2d 761; Kirby v. Stokes County Board of Education, 230 N.C. 619, 627, 55 S.E.2d 322. "* * * (I)t is, as a general rule, presumed that a public official properly and regularly discharges his duties, or performs acts required by law, in accordance with the law and the authority conferred on him, and that he will not do any act contrary to his official duty or omit to do anything which such duty may require." 31 C.J.S. Evidence § 146, pp. 800-802. "The presumption * * * applies in favor of the acts of * * * a city council * * *." ibid., p. 812. "It is * * * presumed, as an element of the general rule, that a public officer, in discharge of his official duties, * * * acts fairly, impartially, and in good faith, and in the exercise of sound judgment or discretion, for the purpose of promoting the public good and protecting the public interest." ibid., pp. 804-806. "The presumption of regularity of official acts is rebuttable by affirmative evidence of irregularity or failure to perform duty, but the burden of producing such evidence rests on him who asserts unlawful or irregular conduct. The presumption, however, prevails until it is overcome by * * * evidence to the contrary * * *. Every reasonable intendment will be made in support of the presumption * * *." ibid., pp. 808-9.

Petitioners except to the court's finding of fact 7 and assert that the annexation ordinance contains no specific findings that the area to be annexed is developed for urban purposes. We agree. The report of plans for extending services states: "* * * the area to be annexed is in the process of being developed for urban purposes and, as such, more than 60% of same is in use for residential, commercial, industrial, institutional or governmental purposes, and that at least 60% of the total acreage, not counting the acreage used on the aforementioned date for commercial, industrial, governmental or institutional purposes, consists of lots and tracts five (5) acres or less in size." This statement is repeated almost verbatim in the annexation ordinance, and there is no other finding in the record as to whether or not the area to be annexed is developed for urban purposes. The statement is a general conclusion couched in the wording of the statutory definition of "area developed for urban purposes," as set out in G.S. § 160-453.4(c). It merely adopts the definition as the only showing relative to the nature of the area. The Act requires that the annexation ordinance contain "specific findings that the area to be annexed meets the requirements of section 160-453.4." (Emphasis added.) See G.S. § 160-453.5(e) (1). It is provided in G.S. § 160-453.10 that: "In determining degree of land subdivision for purposes of meeting the requirements of § 160-453.4, the municipality shall use methods calculated to provide reasonably accurate results. In determining whether the standards set forth in § 160-453.4 have been met in appeal to the superior court under § 160-453.6, the reviewing court shall accept the estimates of the municipality: * * * (2) As to degree of land subdivision, if the estimates are based on an actual survey, or on county tax maps or records, or on aerial photographs, or on some other reasonably reliable source, unless the petitioners on appeal show that such estimates are in error in the amount of five per cent (5%) or more." The ordinance in the instant case makes no reference to the method used by the municipality in making its calculations. Nor does it state what the percentages of development actually are. The map appearing in the record does not show on what lots or tracts buildings or other establishments are located. "Used for residential purposes" means any lot or tract of five acres or less in size on which is constructed a habitable dwelling unit. G.S. § 160-453.9(2). Furthermore, the map shows no acreage computations. There are no specific findings and no showing on the face of the record to support the general conclusion stated. Therefore, the record on its face fails to show substantial compliance with statutory requirements that there be specific findings that the area to be annexed is developed for urban purposes. Because of such failure the annexation ordinance should have been remanded to the governing board for compliance and, if necessary, amendment of boundaries. G.S. § 160-453.6(g) (2).

Petitioners except to the following portion of the court's finding of fact 8: "* * * the plans for extending municipal services to the to-be annexed area embraces each major municipal service performed within the respondent municipality at the time of the annexation except sewerage and * * *, with the exception of sewerage, the plans for extending said services are ample, sufficient and complete." Petitioners insist that the plans for extension of fire protection, street maintenance and sewerage to the area to be annexed do not provide for such extensions "on substantially the same basis and in the same manner as such services are provided" within the municipality, and, further, that the report and ordinance do not "set forth the method under which the municipality plans to finance extension of these services into the area to be annexed."

We have in our statement of facts briefly summarized the plans for these extensions of services. These plans are set out in the record fully and in detail. Costs are itemized and provision made for needed revenues from current tax collections. As to financing, and extension of fire protection and street maintenance the report and ordinance show prima facie substantial compliance with the requirements of the Act. But petitioners contend they have offered evidence which shows the insufficiency of these plans and proposals. The only evidence offered by petitioners, other than the rebuttal evidence referred to in our statement of facts, is the petition for review. It was admitted in evidence as an affidavit over the objection of respondents. The admissibility of the petition as evidence is not before us on this appeal. It is apparent, however, that the court did not consider it of sufficient weight to overcome the prima facie showing of the report and annexation ordinance. In the making of the challenged finding of fact we perceive no error.

In findings of fact 8 and 9 the court states: "* * * the plans for extending sewerage lines into the to-be annexed area are not shown in the report setting forth plans as to services and, in fact, the report does not consider the extension of sewerage outfalls necessary for reasons as contained therein; * * * the Court finds that certain portions of said area are already served as to sewage facilities on a basis equivalent to that already in existence in the respondent municipality and that said areas are as follows:" Here Tracts Nos. One and Two are specifically described. As already indicated, they are small portions of the total area the municipality desires to annex. The court concluded that the municipality had fully complied with the requirements of the Act with reference to Tracts One and Two, affirmed the ordinance with respect to these tracts, decreed that they be annexed to and become a part of the town of Beaufort as of the date of the judgment, June 21, 1961. As to the remainder of the area to be annexed the ordinance was remanded to the governing board of the municipality for "an amendment to its report for plans as to services as to sewerage facilities. * * *"

The appellants herein reside in tracts One and Two and except to the court's conclusion that the municipality has fully complied with the requirements of the Act with respect to these tracts. Appellants contend that there is no showing in the report and ordinance, or otherwise, that the town plans to purchase the private sewerage systems in tracts One and Two, or has plans for financing the purchase of these systems, but that "it is incumbent on a municipality to purchase sewer systems taken into the municipal area as set forth in Jackson v. City of Gastonia, 246 N.C. 404, 98 S.E.2d 444, and Charlotte Lumber & Mfg. Co. v. City of Charlotte, 242 N.C. 189, 87 S.E.2d 204."

In the report the municipality proposes to "maintain all sewerage systems in use," and states: "* * * (I)n the event that the present privately owned sewerage system in a portion of the annexed area is taken over by the municipality following annexation * * * an effort by arbitration to determine the value of this system shall be effected and * * * payment shall be made to those parties who are the true owners of said system, if their ownership is established."

The Gastonia and Charlotte cases relied on by appellants have no application to the actual situation here presented. In the Gastonia case it was stipulated that the City of Gastonia had "taken over, used and controlled * * * water and sewer lines to the same extent as if said lines had been installed by the defendant (City) originally." [98 S.E.2d 447] It was held that plaintiffs were entitled to recover on quantum meruit. In the Charlotte case the City contracted orally to purchase plaintiff's sewer line when the area was annexed. This Court declared that plaintiff was entitled to recover on quantum meruit even though the contract was void because not in writing.

Where a private owner installs water or sewer lines at a time when there is a City ordinance which provides that such lines shall become the property of the City if the territory served thereby is annexed, the private owner may not recover therefor by reason of a subsequent annexation of the territory and a taking over of the lines by the City. Spaugh v. City of Winston-Salem, 234 N.C. 708, 68 S.E.2d 838. Where there is a contract and agreement between the private owner of water or sewer lines and a City, the rights of the parties are to be determined, upon annexation, by the terms of the contract. Styers v. City of Gastonia, 252 N.C. 572, 114 S.E.2d 348; Honey Properties, Inc v. City of Gastonia, 252 N.C. 567, 114 S.E.2d 344.

Where there is no contract or municipal ordinance involved and the territory served by private water or sewer lines is annexed to a municipality, the owner of the lines may not recover the value thereof from the municipality unless it appropriates them and controls them as proprietor. The bare extension of the city limits does not amount to a wrongful taking or appropriation of the lines. Maintenance as a voluntary act on the part of the city does not amount to a taking of the property. Farr v. City of Asheville, 205 N.C. 82, 170 S.E. 125.

In the instant case the town of Beaufort proposed, as an extension of service, to maintain the sewerage systems in question. Its report recognizes that they are privately owned, and declares that payment will be made if they should be taken over by the municipality and if the identity of the owners can be determined. There is no proposal to appropriate the systems as a part of the extension of services, and the Act does not require that they be purchased. Furthermore, there is no requirement that a municipality duplicate services, in an area to be annexed, which are already available in the area. The town of Beaufort proposes at some future time to install a modern system, according to current standards of health and sanitation, and it is logical to conclude that there is no present intention to acquire the ownership of these gravity outfall systems, even though they are of the same type as those presently owned by the town. Appellants' exceptions are not well taken.

However, there remains the question as to whether or not the court below had the authority to carve out and order annexed portions of the area which the ordinance purported to incorporate within the limits of the town, and remand the ordinance as to the remainder. The acts of the court are judicial in nature; the adoption of an ordinance by the governing body of a municipality is a legislative act. Certainly, in the absence of statutory directive, the court cannot divide the territory, annex a part and refuse to annex the remainder. The court may enter such judgments as are outlined in G.S. § 160-453.6 (g)

There are two provisions of the statute which permit the court to divide an area and order an annexation of a portion. G.S. § 160-453.6(e) provides that, pending the outcome of review, the court may make an order staying the operation of the annexation ordinance, and in the stay order "may permit annexation of any part of the area * * * concerning which no question for review has been raised." In the record on this appeal there is an order which stays the operation of the ordinance as to the entire area pending review. So this provision of the statute has no application to the division made in the review judgment. It is provided in G.S. § 160-453.6(h) that any party to the review proceedings may appeal to the Supreme Court, and "that the superior court may, with the agreement of the municipality, permit annexation to be effective with respect to any part of the area concerning which no appeal is being made * * *." There was an appeal to Supreme Court with respect to tracts One and Two, and therefore the order annexing these tracts as a portion only of the area was improper. Furthermore, there is no showing that it was done "with the agreement of the municipality." The ordinance should have been remanded with respect to the entire area.

This cause is remanded to the superior court with direction that it enter a judgment remanding the annexation ordinance to the governing board of the town of Beaufort (1) for specific findings that the area to be annexed is developed for urban purposes, as required by the Act, (2) for plans for extension of sewerage to the area to be annexed, and (3) for amendment of the boundaries of the area to be annexed, if such is necessary in making the area comply with G.S. § 160-453.4, or if necessary in meeting the requirements for extending sewerage, but in no event to add territory to the area as originally described, G.S. § 160-453.6(g) (2); all subject to action by the governing board within three months, as provided in G.S. § 160-453.6(g).

Error and remanded.