Gill v. City of Charlotte , 213 N.C. 160 ( 1938 )

Barnhill, J.

There is a controversy between the parties to this action as to the amount by which the bonded indebtedness of the city of Charlotte was reduced during the preceding fiscal year ending 30 June, 1937. The court below, upon a consideration of the cause, concluded that the amount of the reduction was $441,631.34, which was the amount contended for by the defendant. The plaintiff contends that the net reduction was $241,646.41. It is unnecessary for us to review the findings of the court below in this respect or to determine the exact amount of the reduction of the bonded indebtedness of the defendant city during the preceding fiscal year. For the purpose of determining the legal question presented to us we may accept the amount claimed by the defendant. In the event bonds approved by the people at an election called and held for that purpose and issued by the city of Charlotte are to be included in determining the debt contracting power of the governing authorities of the defendant, under the restrictions imposed by Art. Y, sec. 4, of the Constitution, then the proposed bonds exceed the permitted limitation and cannot be issued without a vote of the people. This question has heretofore been determined by this Court in Hallyburton v. Board of Education, ante, 9, in which it is said: “So that now, local units may create debts and issue their bonds for necessary expenses without a vote of the people and without special approval of the Legislature: Provided, that by so doing, taxes in excess of the limitations provided in Art. Y, sec. 6, are not required; and provided further, that the total amount of such bonds and such other bonds as may have been issued during that particular fiscal year do not exceed two-thirds of the total amount by which the public debt of the unit was decreased during tbe preceding fiscal year. Sucb local unit may exceed tbe constitutional limitation on tbe taxing power by legislative authority without tbe approval of tbe voters, provided tbe total amount of bonds issued by sucb unit during any fiscal year does not exceed two-thirds of tbe amount by which tbe debt of tbe unit was decreased during tbe preceding fiscal year. In determining tbe total amount of bonds issued during any fiscal year all bonds so issued, whether approved by a vote of tbe people or not, must be included: except bonds issued to fund or refund a valid existing debt; tax anticipation notes issued in an amount not exceeding fifty per centum of tbe taxes for tbe fiscal year; bonds to supply a casual deficit, and bonds issued to suppress riots or insurrections, or to repel invasions, which need not be taken in consideration in arriving at sucb total.” This decision is controlling. The city of Charlotte having, during tbe present fiscal year, issued bonds in excess of two-thirds of the amount by which its bonded indebtedness was reduced during tbe preceding fiscal year, tbe governing authorities of said city are without authority to issue any bonds during tbe present fiscal year, except for one or more of tbe four purposes enumerated in tbe amendment, without a vote of tbe people.

Tbe governing authorities of local units have never bad authority to issue bonds without a vote of tbe people except for necessary expenses. Tbe purpose of Art. Y, sec. 4, of tbe Constitution, as it presently exists, therefore, is to limit tbe authority of tbe governing boards of local units in tbe exercise of tbe power they have heretofore possessed to issue bonds for necessary expenses without first submitting tbe question to a vote of tbe people of tbe unit, and to give assurance to tbe people of sucb units that tbe bonded indebtedness of tbe unit shall not be increased beyond tbe limits prescribed in tbe amendment until and unless they approve sucb bonds.

There was error in tbe judgment below. Tbe plaintiff is entitled to a permanent injunction.

Reversed.