Lillard v. Melton

[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] December 17, 1915. The opinion of the Court, en banc, was delivered by This is an action to enjoin the defendants from issuing bonds under an act, entitled "An act to authorize and provide for the issue of bonds by Richland county for permanent highway improvement, and to provide for the expenditure of the same, and for vehicle licenses and a property tax to pay the same, the total issue not to exceed one and one-quarter million dollars." 29 Stat. 493.

The constitutionality of the act is assailed upon numerous grounds, some of which have been so fully considered in previous decisions of the Court, in passing upon the constitutionality of other statutes, as to preclude the necessity of an extended consideration of them in this opinion.

It is urged that the provision of the act which penalizes the failure to report a vehicle subject to payment of the license tax imposed is obnoxious to the requirement of the Constitution that every act shall relate to but one subject which shall be expressed in its title. In many cases, it has been held, in view of the purpose of this provision of the Constitution, that it should have a liberal construction, so as not to defeat or embarrass legislation by compelling separate enactments on every phase of a general subject of legislation or with regard to every matter incident thereto or promotive thereof. When the general subject is expressed in the title, any details of legislation which provide the means, methods, or instrumentalities which are intended to facilitate the accomplishment of the general purpose, and are germane to it, may be embraced in the body of the act without violating this provision of the Constitution.State v. O'Day, 74 S.C. 449, 54 S.E. 607; Aycock-LittleCo. v. Ry., 76 S.C. 331, 57 S.E. 27; Johnson v. Commissioners,97 S.C. 212, 81 S.E. 502.

The act provides that "the commission shall serve for a term of three years, or until the provisions of this act are completely carried out." It is contended that this violates the provision of the Constitution (art. I, sec. 11), which declares that "the terms of all officers shall be for some specified period," etc. The term is for a specified period of three years. The words "or until," etc., are not to be construed as extending the term beyond that period without reappointment, but merely as restricting it to the completion of the work, if completed within that time. If an extension of the term beyond three years had been intended, the word "and" would have been used instead of "or." But, we must not be understood as holding that, even if an extension of the term beyond three years had been intended, it would violate the Constitution in this particular. In State v. Bowden, 92 S.C. 400, 75 S.E. 866, the Courten banc said: "It would be most unreasonable to impute to the constitutional convention a purpose to give to the expression ``some specified period' a meaning so narrow as to prohibit any legislative provision against the inconvenience arising from vacancies in public office, which would occur if the encumbent could not be allowed to hold until the appointment or election and qualification of his successor." Besides, in the event suggested, the question would arise, whether appointment for a period of time necessary to complete a specified work is not for a "specified period," within the meaning of the Constitution; and, also, if it were not, whether the extension would nullify the whole act, or only the appointment for the illegal excess. 29 Cyc. 1396. But the construction given renders the consideration of these questions unnecessary.

It is provided in section 5 of the act that all laborers to be employed in the construction of the work contemplated therein, with an exception in favor of officers, superintendents and skilled mechanics who cannot be obtained in the county, shall be actual residents of the county. It is contended that this provision is in contravention of section 5, article I of the State Constitution and the fourteenth amendment to the Federal Constitution. The objection is clearly untenable. There is an absence of any penalty to enforce this provision, thereby indicating a legislative intent to make the same purely suggestive or directory. Conceding, however, that the provision was mandatory, the objection could not be sustained, as no citizen of one county has the legal right to demand that he shall be employed upon the public works of another, and, certainly, the legislature, in directing the use or disposition of the public property or funds of the State or county, raised by taxation upon the people of either, has the power to limit the benefits to be derived therefrom to the residents of either. Such is plainly the conclusion reached by the U.S. Supreme Court in the case of Truax v. Raich, 239 U.S. 33, 36 Sup. Ct. Rep. 7, which is cited by the appellant.

The next question involves the validity of the provision for a license fee on all resident owners of vehicles, which is graduated according to horse power. It is urged that this is in violation of the equality and uniformity clause of the Constitution.

It is generally held that such provisions are applicable only to a property tax. Cool. Con. Lim. 713, 21 A. E. Ency. Law (2d ed.) 802, 803. It is also evident that the license fee referred to is not in any sense a property tax, although such a tax is provided in the act to meet a deficiency in, or failure of, the license fee. The contention can not be sustained that the license fee is designated a property tax in the title, since both kinds of taxes are mentioned in the title, and, in conformity therewith, both are provided for in the body of the act.

The vehicle licenses imposed is obviously a tax upon the right to use the improved highways of the county for the purpose of raising revenue to pay the interest on the bonds and provide a sinking fund for the redemption thereof at maturity. No provision in the Constitution can be found prohibiting the legislature from imposing such a license. That it has the inherent power, in the absence of constitutional inhibition, to impose such a tax directly, or to authorize its imposition by a municipal corporation, either for the purpose of raising revenue, or as a police regulation, is conclusively established by the authorities. Hill v. Abbeville,59 S.C. 426, 38 S.E. 11; Cooley's Con. Lim. 712, 713; 3 Dill. Mun. Corp. 1164; 4 Id. 1407; Fort Smith v. Scruggs,70 Ark. 541, 69 S.W. 438; Harder's Storage Co. v. Chicago,235 Ill. 70, 85 N.E. 245, 14 A. E. Ann. Cas. 536.

In his work on Taxation, at p. 5, Judge Cooley thus states his conclusion: "Everything to which the legislative power extends may be the subject of taxation, whether it be person or property, or possession, franchise or privilege, or occupation or right. Nothing but express constitutional limitation upon legislative authority can exclude anything to which the authority extends from the grasp of the taxing power, if the legislature, in its discretion, shall at any time select it for revenue purposes." The right to levy such a tax is also strongly stated in the case of Harder's StorageCompany v. Chicago, supra, at p. 87, 85 N.E. 245, 14 A. E. Ann. Cas. 536, as follows: "The law is well settled that the owner of vehicles used upon the public streets and highways may be required to pay anad valorem tax upon such vehicles as property, and also may be required to pay a tax upon the right or privilege, of using such vehicles in his business — that is, an occupation tax. The subject of the ad valorem taxation is property. The subject of the other taxation is a right or privilege — an entirely distinct and different thing. * * * The question which is now to be considered is whether or not, in addition to the ad valorem tax on vehicles, as property, and a license tax on the right to pursue an occupation in which vehicles may be used, there may be imposed also a license tax upon the right or privilege of using vehiclesupon the public streets and highways. * * * The taxes which complainant in the case at bar must pay are levied upon three separate and distinct subjects: (1) An ad valorem tax on its vehicles, as property; (2) an occupation tax or license on the privilege of carrying on business as a carter or public teamster; and (3) a license tax on the privilege of using its vehicles on the public streets. Taxation upon each of these three different subjects is not double or triple taxation simply because one person may have to pay two or all of the three taxes, since it is not the person who is taxed, but his property and his privileges. One person may avail himself of a half dozen or more different privileges, for each of which he may be required to pay a tax or license fee."

Having determined the nature of the license fee imposed, it remains to be ascertained if the method of apportionment prescribed in the act is violative of the clauses of the Constitution referred to. The apportionment on a basis of horse power has a direct and natural relation to the privilege granted — the use of the highway, and since the license relates to all persons in a class, and operates uniformly upon all therein, there is no unlawful discrimination. Hill v. Abbeville,supra; Cowart v. City Council, 67 S.C. 35,45 S.E. 122; Cooley's Con. Lim. 713.

The objection that there is an unjust discrimination in the provision which imposes upon resident vehicles a license while those of other counties and States may temporarily use the highways without incurring liability for the payment thereof, is wholly without merit. The right to tax the residents of a municipality for the maintenance of roads and streets, without the imposition of such a tax upon nonresident who use such highways temporarily, has never been questioned or denied in any jurisdiction of which we are aware. On the contrary, the right to impose such a license or tax is generally recognized. 3 Dillon Mun. Corp. 1166; Tomlinson v. Indianapolis, 144 Ind. 145,43 N.E. 9, 36 L.R.A. 413n.

The act is also assailed on the ground that the authority to levy the vehicle licenses and taxes therein provided has been delegated to the county auditor, while this power can only be exercised by the legislature under section 5, article X of the Constitution. It is clear that the legislature did not attempt a delegation of power, as the most casual observation of the enactment will disclose. It makes a direct imposition which is a fully authorized exercise of legislative power under the cases of Southern Railway v. Kay, 62 S.C. 28, 39 S.E. 785, and Dickson v.Burckmyer, 67 S.C. 526, 46 S.E. 343.

The next question presented is whether the present bonded indebtedness of the city of Columbia, including its proportionate part of the bonded indebtedness of certain other political divisions extending over the same territory, when added to its share of the issue directed in the act exceeds the fifteen per cent. limitation fixed by section 5, article X of the Constitution, as the maximum amount of bonded indebtedness which can be placed on any political subdivision in the State.

It is conceded that the taxable property of Richland county is $22,731.712, and that two-thirds of this is within the corporate limits of the city of Columbia, namely, $15,081,534. Fifteen per cent. of this amount is $2,262,230.10, which amount the bonded debt of the city cannot exceed. It is likewise conceded that the sum of $1,195,800 is properly chargeable against the city in an estimate of its bonded debt, leaving a margin of $1,066,430.10. The sole question is whether certain other items of indebtedness are a part of its bonded debt, to wit, new waterworks bonds aggregating $390,000; old waterworks bonds (20 Stat. 967), in the sum of $75,000; outstanding guaranteed interest on Columbia Canal bonds (19 Stat. 1090, 1097), amounting to $42,000; a contingent liability on certain paving assessments sold and guaranteed under legislative enactment (28 Stat. 585), for $90,000, and certain outstanding notes amounting to $263,064.64.

It will not be questioned that the purpose of the waterworks bonds, old and new, is within the contemplation of those amendments to the Constitution (23 Stat. 616, and27 Stat. 13), which provide that the limitation in section 7, article VIII, and section 5, article X of the Constitution, shall not apply to an issue where the proceeds are applied solely for the purchase, establishment and maintenance of waterworks plants and other stated public utilities. Under these amendments and the case of Seegers v. Gibbes,72 S.C. 532, 52 S.E. 586, and Bethea v. Dillon, 91 S.C. 413,74 S.E. 983, these bonds must be excluded in a calculation of the bonded debt of the municipality, so far as this limitation is concerned. Likewise, the liability of the city on the guarantee of the paving assessments and the interest on the canal bonds constitute but a contingent obligation and must be excluded.

In determining whether the notes in question should be regarded as a part of the bonded debt of the city, it will be necessary to ascertain if such obligations are properly comprehended within the meaning of these words in a constitutional sense. Evidently, the limitation was not intended to embrace every form of liability, for it is obvious that if this had been the purpose the word "bonded" would not have been used to describe the character of the debts, which are subject to the limitation. It is quite significant that in dealing with the subject of an increase of the public debt of the State (section 11, article X), the Constitution forbids the creation of "any further debt or obligation, either by the loan of the credit of the State, by guaranty, indorsement or otherwise," while in the provisions relating to the debt of certain municipalities the words "bonded debt" are used. It follows, naturally, that in the use of the words "bonded debt" and "bonded indebtedness," in the sections prescribing the eight and fifteen per cent. limitations, the framers had in mind the same kind of obligation that these words are used to designate in section 7, article VIII. So, whatever may be the nature of the debt included within the words "bonded debt," in the latter section, as applicable to the limitation, this section expressly provides that "no such debt" shall be created without a submission of the question to the vote of the electors. Therefore, only such obligations as are thus created are properly referable to the "bonded debt" of a city or town. Any other construction would strike out of these sections the qualifying word "bonded," and its ordinary and natural meaning, in which it must be presumed that it was used.

But it is contended that the case of Duncan v. Charleston,60 S.C. 532, 39 S.E. 265, is conclusive of the view that such notes must be reckoned as a part of the city's bonded indebtedness. Upon examination, it will be found that such was not the decision of this Court in that case. It is quite true that the lamented Mr. Chief Justice Pope, who delivered the opinion, declared that an obligation of the city of Charleston, under its corporate seal, was a part of its bonded indebtedness, but he rested the invalidity of the contract upon other grounds also, and the other Justices only concurred in the result. It follows, then, that the only effect of the decision was to sustain the illegality of the contract. In the subsequent case of Luther, v. Wheeler, 73 S.C. 89,52 S.E. 874, 6 A. E. Ann. Cas. 754, 4 L.R.A. (N.S.) 746n, the question was not involved, but suggested by Mr. Justice Woods, who delivered the opinion, and the intimation was entirely against the soundness of such a view. The question, therefore, has not been heretofore determined by the Court. There is no pretense that these notes were issued in compliance with the constitutional requirement, essential to the validity of a "bonded debt," and they must be excluded therefrom.

The language of section 1 of the act is mandatory as to the issuance of the bonds by the commission therein created for permanent highway improvement. The only discretion vested in the commission is as to the denomination, times and amounts of the issue not to exceed a maximum amount. It is contended that the legislature has no such power under the Constitution as it has attempted to exercise in this enactment without a submission of the question of issuance to the qualified electors of the county in the manner provided for such elections.

Section 6, article X of the Constitution, provides that the General Assembly shall not have power to authorize any county or township to "levy a tax or issue bonds" for any purpose except for certain purposes therein specified, among which is "to build and repair public roads, buildings and bridges." Certainly, under this provision, it is within the power of the legislature to authorize a county "to levy a tax or issue bonds" to "build and repair public roads." Unless this conclusion necessarily follows, the position must be taken that a provision prohibiting the doing of an act except for a certain purpose does not imply the right to do it forthat purpose, which is contrary to all reason. In the case of Southern Railway v. Kay. supra, the Court held that it was within the power of the legislature to make a direct levy of a tax "for road purposes" in one of the counties. If this be true, it should not be open to serious controversy that under this section of the Constitution it would have the same right to make a direct bond issue for this purpose. It will be observed that the two powers, namely, to "levy a tax" and "issue bonds" are coupled together in this section. No distinction is recognized and both are applicable to the purposes therein stated. Whatever purpose therein mentioned can be made the subject of a tax levy can also be made the subject of a bond issue; whatever power is given, or limitation imposed, on the one clearly exists with regard to the other.

Considerable stress is laid upon the case of State v. Neely,30 S.C. 587, 9 S.E. 664, 3 L.R.A. 672, as an authority denying such legislative power. A careful examination of that case will show, however, that it rather sustains the right. Mr. Chief Justice McIver, delivering the opinion of the Court, in a reference to the case of State v. Whitesides,30 S.C. 579, 9 S.E. 661, 3 L.R.A. 777n, does say that the latter case was not to be regarded as an authority for the imposition of a tax directly by the legislature without the consent of the people of the particular locality to be affected thereby. In the Neely case, however, it must be observed that the action sought to compel the application of certain funds to the payment of a coupon on a bond issue in aid of a railroad. It was, no doubt, in recognition of this fact, and an important distinction based thereon, that the learned Chief Justice, immediately after the observation above referred to, was careful to declare: "Except for governmentalpurposes proper, we do not think that the legislature has the power to impose a tax upon the people of any particular locality or territorial subdivision of the State without their consent," p. 604. (Italics added.) Certainly, it will not for an instant be argued that the issuing of bonds for "permanent highway improvement," the object of the act, is not for a "governmental purpose."

It is, therefore, clear that this objection cannot be sustained, unless some provision of the Constitution is invoked which either directly, or by necessary implication, denies such legislative power. An examination of the instrument as a whole will disclose that only in twelve instances did its framers expressly provide for a referendum to the qualified electors. In their consideration of the subject of finance and taxation, the limitations and safeguards which their wisdom deemed necessary to be embodied in the organic law of the State, they denied the power to increase the public debt of the State (section 11, article X), and of a city or town, to incur any bonded debt, except upon a submission of the question to the qualified electors. Yet no such restriction can be found in the instrument with regard to an issue of bonds by a county. Is not this omission significant? Assuming, for the sake of argument, that this omission was merely an instance of casus omissus, it is certainly not within the power of the Court to supply the deficiency. State v.Hagood, 13 S.C. 46; Bray v. City Council, 62 S.C. 57,39 S.E. 810; State v. Jones, 99 S.C. 218, 82 S.E. 1048. It is likewise settled beyond controversy that under the distribution of power that obtains in our governmental system, the Court is not to be concerned with the political policy of the legislative department so long as it does not assume the form of enactments affecting the rights of person and property in a manner repugnant to the fundamental law. Neither is the Court at liberty in the determination of the question to be controlled by any unexpressed spirit or public policy supposed to underlie and pervade the instrument. It is generally recognized that the public policy of a State must be ascertained from its Constitution and statutes, and only in the absence of declarations in these can such policy be determined by judicial decisions. Cooley's Con. Lim. 239, 240; 6 A. E. Ency. Law 293; Sharpless v. Mayor (Pa.), 59 Am. Dec. 759.

It is urged, however, that if the legislature is left wholly unrestricted in its power to impose such debts upon the counties, it would be easy to evade the prohibition against the increase of the public debt of the State, except upon submission to the qualified electors, by placing such debts upon the counties as units of the State. An answer to the objection is found in the limitation (section 5, article X), which prohibits the total bonded debt over any part of the territory of the State from exceeding fifteen per cent. of the total taxable property therein.

The consideration of this question, however, need not be further prolonged, as it was squarely before the Court, and determined adversely to the contention of appellant in the case of Carrison v. Kershaw County, 83 S.C. 88,64 S.E. 1018. In disposing of the question the Court, at page 20, says: "While article X, section 11 of the Constitution, forbids an increase of the public debt of the State, without submitting the question to the qualified electors, and while article VIII, section 7, forbids any city or town from creating a bonded debt, without submitting the question to the qualified electors of the city or town, we find no such restriction on the power of the legislature, with respect to the issuance of bonds by a county. In the absence of such restriction thepower of the legislature in the matter is plenary." (Italics added.) Thus, in forceful language, the Court, speaking through Mr. Chief Justice Jones, reaches a conclusion which unquestionably embodies the constitutional intent, a disregard of which would be utterly subversive of those plain and reasonable rules which must be recognized as a proper guide in judicial construction. This case and the one at bar are entirely irreconcilable in reason and principle, if the objection urged should be sustained. To attempt such a reconciliation upon the grounds urged would force the adoption of a distinction whose application to the determination of grave constitutional questions would be extremely unfortunate. For, it would be necessary to hold that a power, which is clearly discretionary, vested in the legislature by the Constitution to authorize a county to levy a tax or issue a bond, must be a denial of the power in the legislature to do so directly, which is contrary to the conclusion announced in Southern Railway v. Kay, supra, and Dickson v. Burckmyer,supra.

Since the decision in the case of Carrison v. KershawCounty, supra, the legislature, evidently viewing the solemn adjudication of this Court as a determination of its powers in such cases, has enacted a great many measures providing for bond issues without the prerequisite of a submission of the question to a vote of the electors. A contrary conclusion at this time would, indeed, be unfortunate in its effect upon the valuable rights which have been acquired in good faith and in reliance upon that decision. Cooley's Cons. Lim., pp. 81, 82. When a principle is once adopted and declared by the Courts, the people have a right to regard it as just declaration of the law and to regulate their actions and contracts thereby. Id., pp. 83, 84. There should never be a disturbance of the same, except upon urgent reasons and a clear manifestation of error. Id. 84.

It is further contended that the act is repugnant to the Constitution in that the authority to issue said bonds should have been vested in the corporate authorities of the county.

An examination of article VII of the Constitution, relating to counties and county government, will not show a single provision with regard to the creation of a constitutional office, or any attempt whatever to define or create a corporate authority, or to establish a uniform or definite form of county government. In this particular the present Constitution differs materially from that of 1868 (section 19, article IV). It, therefore, follows that it is entirely within the legislative power to create or change such offices and the duties of such officers at will. 4 Dillon Munic. Corp. 1372; Mechem on Pub. Officers, 465; Throop on Pub. Officers, 19, 20; Fooshe v. McDonald, 82 S.C. 22, 63 S.E. 3. As a result, an examination of the statutes with regard to county government and the corporate authorities thereof, their powers and duties, will disclose that widely different policies are adopted in the different counties. If the issuing of bonds for the permanent improvement of public highways, a provision for the payment of the interest thereon, their redemption and a method of expenditure are within the corporate purposes of a county, and there can be no question about this, then that person, board or commissioner, whatever may be the form, is the corporate authority under the Constitution that is empowered by the legislative will to act in the premises. One act of the General Assembly is no more potent than another. The commission created under this act derives its authority from the same source as the board of county commissioners, and if the General Assembly could have abolished the board in this act, which was done in the case of Fooshe v. McDonald,supra, and transferred every duty and power to the commission, certainly it would have the authority in the absence of any constitutional inhibition to vest it with the powers given. The commissioners are merely the agents of the legislature for the purposes of the act.

It is contended that the corporate authorities are vested with power and control over the public highways of the county as a local affair under the definite policy of the State, and in devolving such powers upon a commission charged with the mandatory duty of issuing said bonds, the act denies the right of local self-government. As we have already shown that the commission constitutes the corporate authorities of the county for the purposes of the act, it is only necessary to inquire whether the failure to vest in them a discretionary power is violative of the principle.

In 1 Dill. Munic. Corp., section 98, the author, discussing this question, says: "It must now be conceded that the great weight of authority denies in toto the existence, in the absence of special constitutional provisions of any inherentright of local self-government which is beyond legislativecontrol. The Supreme Court of the United States has declared that a "municipal corporation, in the exercise of all its duties, including those most strictly local or internal, is but a department of the State. The legislature may give it all the powers such a being is capable of receiving, making it a miniature State within its locality; or it may strip it of every power, leaving it a corporation in name only; and it may create and recreate these changes as often as it chooses, or it may itself exercise directly within the locality any or all the powers usually committed to a municipality * * * The people are the recognized source of all authority, State and municipal; and to this authority it must come at last."

In the case of Laramie v. Albany Co., 92 U.S. 312, the Court says: "Such corporations are the mere creatures of the legislative will; and, inasmuch as all their powers are derived from that source, it follows that those powers may be enlarged, modified, or diminished at any time, without their consent, or even without notice. They are but subdivisions of the State, deriving even their existence from the legislature. Their officers are nothing more than local agents of the State; and their powers may be revoked or enlarged, and their acts may be set aside or confirmed at the pleasure of the paramount authority, so long as private rights are not thereby violated." It is, therefore, evident that the act is not subject to this objection.

All other questions raised by the exceptions to which no special reference has been made, have been duly considered and overruled.

The judgment of the Circuit Court is affirmed.

MESSRS. JUSTICES HYDRICK and GAGE, and CIRCUIT JUDGES PRINCE, DeVORE, SEASE, BOWMAN, MOORE and RICE concur in the opinion delivered by JUDGE SMITH.