Cabe v. . Board of Aldermen , 185 N.C. 158 ( 1923 )

The action is to restrain the defendant board of aldermen of Franklin from diverting $10,000, proceeds of city bonds, now held in the municipal treasury, to other and different purposes from that contemplated and specified when the bonds were issued and sold.

On the hearing it was properly made to appear that under an act of the General Assembly, Public Laws, Extra Session, 1921, ch. 99, the board of aldermen issued and sold the bonds of the town of Franklin in the sum of $10,000 for the purpose of erecting or providing a municipal building for the town, and the proceeds of such bonds are now in the municipal treasury. That when this scheme was entered upon it was the plan and purpose of the municipal government to provide a building for public municipal purposes in conjunction with the county board of commissioners of Macon County, or with the Macon County Memorial Association, and by virtue of the proposed co-operation there was a reasonable assurance that the amount of $10,000 would suffice. That the plans for cooperation with the county and memorial association having miscarried, and it appearing that the $10,000 was insufficient to provide commodious quarters for municipal purposes, and that the amount required would at present be an extravagant and unjustified expenditure, the General Assembly of 1923 passed an act authorizing the board to apply said funds in their discretion to the following purposes:

1. The erection of a municipal building and firehouse as originally planned.

2. The erection of a firehouse.

3. The extension or enlargement of the waterworks system.

4. The extension of the sidewalks and streets of the town.

That pursuant to authority so conferred, the board of aldermen, deeming it inexpedient at present to go on with the municipal building, by formal resolution determined that an amount of said fund not to exceed $5,000 be and same is hereby diverted from the original purpose, and same be used to enlarge and extend the waterworks of the town. That plaintiffs and other citizens and taxpayers of the town being doubtful of the power to divert the funds, instituted the present action to restrain the proposed diversion.

The court, being of opinion that on the facts presented and under the legislative authority conferred, as above stated, the proposed diversion was lawful, so entered judgment that defendants go without day, and plaintiffs, having duly excepted, appealed. The decisions of this State have repeatedly recognized and approved the principle that counties, townships, (160) and other like municipal corporations, and to a large extent cities and towns, are simply agencies of the State constituted for the convenience of local administration in certain portions of the State's territory, and that in the exercise of ordinary governmental functions they are subject to almost unlimited legislative control, the position extending to the imposition and expenditure of taxes raised for ordinary governmental purposes, and where not affected by special constitutional provisions. Trustees v. Webb, 155 N.C. 379; Jones v. Comrs. MadisonCounty, 137 N.C. 579-596; Crocker v. Moore, 140 N.C. 429; Jones v.Comrs., 143 N.C. 59; White v. Comrs., 90 N.C. 441; Mills v. Williams,33 N.C. 558.

In the present instance it appears that the purpose for which these bonds were issued and sold, and that which the proceeds are to be now applied are for ordinary current expenses, not requiring a vote of the people, and the original act contains the provision that the holders of these bonds are in no way required or charged with the duty of seeing to the application of the funds, so that there is no interfering constitutional provision, nor is there any private interest to be considered, the bonds being undoubtedly valid obligations of the town.Hightower v. Raleigh, 150 N.C. 569; Tate v. Comrs., 122 N.C. 812.

True, we have held that without legislative sanction a municipal government may not of its own motion divert governmental funds from the purposes specified by the statutes under which they have been raised.Comrs. v. Comrs., 184 N.C. 463. But here there is a valid statute authorizing the proposed diversion, and no reason occurs to us why it should not be upheld. Authority, too, here and elsewhere, is in full support of the measure. Parker v. Comrs., 178 N.C. 92; Brown v. Comrs.,100 N.C. 92; Long v. Comrs., 76 N.C. 273; Yamhill Co. v. Foster, 53 Oregon 124; 37 Cyc. 1588; 27 A. E. (2 ed.), p. 868.

In the Parker case, supra, it is pointed out that our constitutional provision, Article V, section 7, requiring that "every act of the General Assembly levying a tax shall state the special object to which it shall be applied, and it shall be applied to no other purpose" does not include or extend to taxes levied by counties, etc., for municipal purposes, citingParker v. Comrs., 104 N.C. 166.

There is no error, and the judgment of the Superior Court is

Affirmed.

Holmes v. Fayetteville, 197 N.C. 746; Leonard v. Sink, 198 N.C. 122;Johnson v. Marrow, 228 N.C. 61.