Enterprise Real Estate Co. v. City Council , 107 S.C. 492 ( 1917 )

July 13, 1917. The opinion of the Court was delivered by This cause has been just submitted, and the public exigencies demand a prompt decision of it. It arises out of the alleged purchase by the city of Charleston for $1,360,000 of the waterworks of the Charleston Light Water Company; and the pending issuance of bonds to pay that price, and an additional issuance of $140,000 of bonds to repair and extend the works. The plaintiff sued to enjoin the issuance of the bonds. The city demurred to the complaint. The Circuit Court sustained the demurrer, and dismissed the complaint.

There is no suggestion, and there is no room for any such, that the procedure of the city government prevising the bond issue was in any essential part irregular. The only suggestion of any infirmity therein is in section 7 of the ordinance, which makes provision for a sinking fund. That issue will be last considered, for it rests in the last exception.

In one other respect, too, the action of the city government is challenged, and that is because the city submitted to the electors at the same instant the question of purchase and the question of a bond issue to pay the purchase price. That issue is raised by the third exception, and it, too, will be considered in due course. The real attack, if indeed there be such, is directed against the infirmity of the statute law relevant to the case.

There are, in fact, but four exceptions, for the first exception does not at all intimate what act of the legislature is void, or wherein it is void. Let the exceptions be reported. They make these four issues, to wit:

(1) Do the Constitution and statutes empower a city to purchase waterworks?

(2) Do the Constitution and statutes require and sufficiently indicate the procedure for an election upon the question of a purchase?

(3) Do the Constitution and statutes prohibit a contemporaneous election on the question of a purchase and the question of a bond issue?

(4) Does the section of the ordinance of the city which provides for a sinking fund meet the requirements of the Constitution and the statutes?

The decision of these questions depends largely upon the right adjustment of the several parts of the Constitution, the one to the other.

There is hardly even room for construction, and there is little need for the citation of authority; it is chiefly a task in mosaic.

The three parts of the Constitution to be thus joined are section 13 of the article on the "Right of Suffrage," and sections 7 and 5 of the article on "Municipal Corporations and Police Regulations." For simplicity of statement we shall refer to these as sections 13, 7 and 5 of the Constitution, without any mention of the article. The statute involved is largely section 3015 of the Code of Laws and the amendments thereof at 29 Stats. 53 and 939.

There is no room to question a city's power to purchase a waterworks plant; section 5 of the Constitution in express words creates the power. The language is: "Cities may acquire by * * * purchase * * * waterworks systems. * * *"

Section 3015 of the Code of Laws was enacted to carry out that provision of the Constitution. The Constitution and the statute together, even though the statute does not use the word "purchase," warrant a city to purchase waterworks; and that without the amendment at 29 Stats. 53.Dick v. Scarborough, 73 S.C. 150, 53 S.E. 86.

The appellant suggests in the next place that, while the statute is full as to the procedure to issue bonds, it does not prescribe how the city must proceed to hold an election on the question of a purchase; and that is the burden of appellant's argument.

Sections 5, 7 and 13 of the Constitution, when read together, leave no reasonable doubt about that matter. Abbreviated so as to contain only the relevant matter, they read thus:

Article 8, section 5, of the Constitution:

"Cities * * * may acquire by * * * purchase * * * waterworks systems. * * *

"No such * * * purchase shall be made except upon a majority vote of the electors in said city. * * *

"Who are qualified to vote on the bonded indebtedness of said city. * * *"

Article 8, section 7:

"No such (bonded) debt shall be created without submitting the question as to the creation thereof, to the qualified electors of such city * * * as provided in this Constitution. (Article II, sec. 13); * * * a majority of such electors voting on the question shall be in favor of creating such * * * bonded debt. * * * Such cities * * * shall on theissuing of such bond create a sinking fund, for the redemption thereof at maturity. * * *"

Article II, sec. 13:

"In authorizing a special election in any * * * city, * * * for the purpose of bonding the same, the General Assembly shall prescribe * * * a petition from a majority of the freeholders of said city * * * and at such elections all electors of such city * * * shall * * * vote, and * * * a majority of those voting * * * shall be necessary to authorize theissue of said bonds."

The first of said sections expresses three subjects, to wit: It confers the right to purchase; it limits the right to a majority vote of the electors of the city; it by necessary implication prescribes the way in which that majority shall be ascertained, that is to say, as electors vote on a bonded indebtedness.

The next of said sections deals only generally with bonded indebtedness, and that because a city can generally only pay for waterworks with its bonds. It provides that a bonded debt shall not be created before submission to the qualified electors, "as provided in this Constitution." The last of said three sections is that part just above referred to "as provided in this Constitution." It enjoins upon the General Assembly the duty to lay down a procedure in special elections for the issuance of municipal bonds.

The General Assembly enacted, pursuant to that injunction, section 3015 of the Code of Laws and the other cognate provisions to be found in article VII of the chapter 48 of the Code. So that these enactments spring directly out of sec. 13, and remotely, but just as really, out of sections 7 and 5 of the Constitution; and they constitute the procedure to be had by a city on the question of a purchase, as well as on a question of payment of the purchase price.

But the appellants say, even though there was legal warrant to submit to the electors the question of purchase, yet that question ought to have been submitted in time before the election on a question of payment. A sufficient answer to that is that the Constitution does not make any such requirement. All it does say is that no purchase shall be made except upon a majority vote of the electors. We venture to think the "common sense" of the subject is the contrary of that suggested by the appellant. The subjects of purchase and of purchase price are woven together; no sensible man buys before he knows the price, and whether the price shall be paid in cash or credit.

The city government fully and plainly submitted to the electors at the same instant three questions: (1) Will you buy the works for the price of $1,360,00, payable in 4 1/2 per cent. bonds? (2) Will you issue and pay the price in particularly described bonds? (3) Will you issue other named bonds for extension and repair? The issues were so plain "that he may run that readeth it."

On the third issue, closely akin to that just considered we have already intimated an opinion which we reaffirm, that an election on the question of a purchase and an election on the question of a bond issue to pay the purchase price may be held cotemporaneously; indeed, the two ought in the nature of the case to be held at the same time. Paris v. Greenville, 105 S.C. 180, 89 S.E. 669.

Last of all is the validity of the ordinance which provides for a sinking fund. All the Constitution provides is this: "Such cities * * * shall on the issuing of such bonds create a sinking fund for the redemption thereof at maturity." Section 7.

All the statute provides is this:

"The city council is authorized to assess, levy and collect * * * a sufficient annual tax * * * to raise the sum of at least one-fortieth part of the entire bonded debt as a sinking fund," etc. Section 3018.

The ordinance provides:

"If necessary there shall be assessed, levied and collected annually a sufficient annual tax upon the taxable property of the city of Charleston to raise the sum of one-fortieth part of the principal amount of said bonds as a sinking fund (which is hereby created), in aid of the retirement and payment of said bonds."

Any italics in these quotations have been supplied.

The alleged infirmity in the ordinance lies only in the use of the two words "if necessary." We think the exception is hypercritical. The city ought not to collect by taxation more than will be necessary to pay the bonds when they fall due. The ordinance by implication directs the collection of as much as shall be necessary for that purpose. The challenged words, at most, are but surplusage. The ordinance is a sufficient compliance with the law. Cleveland v. Spartanburg,54 S.C. 83, 31 S.E. 871; Hebert v. Griffith,99 S.C. 1, 82 S.E. 986.

Our judgment is the decree of the Circuit Court is right, and it is affirmed.