Raintree Corp. v. City of Charlotte , 49 N.C. App. 391 ( 1980 )

HEDRICK, Judge.

We note at the outset that this is a declaratory judgment proceeding wherein the court entered a judgment that not only declared the rights of the parties under the contract, but also entered a monetary judgment for plaintiff. While neither party has raised the question of the propriety of a monetary judgment in a declaratory judgment proceeding, we deem it proper to point out that G.S. § 1-259 provides that upon petition and notice, the court can grant further relief “whenever necessary or proper” in a declaratory judgment proceeding, and such relief can be a judgment for money. 22 Am. Jur. 2d, Declaratory Judgments § 100; 26 C.J.S. Declaratory Judgments § 162. Since defendant stipulated as to the exact amount of the “tapping privilege fees” collected by defendant, and to the precise total amount of accumulated interest on the payments made under protest, and did not object to the procedure of entering a judgment for money in the declaratory judgment proceeding, we hold that defendant waived the requirement of G.S. § 1-259 that it be served with a petition and notice before the court would have authority to grant further relief.

By his first assignment of error, defendant argues that the trial court’s determination that the contract did not permit the city to charge plaintiff with a “tapping privilege fee” is not supported by the record. We disagree. The findings of the trial court are conclusive and binding on appeal when supported by competent evidence. Seders v. Powell, 298 N.C. 453, 259 S.E. 2d 544 (1979); Williams v. Pilot Life Insurance Co., 288 N.C. 338, 218 S.E. 2d 368 (1975).

The stipulations made by the parties in the present case establish that the contract was to be subject to the then-existing water and sewer policy as it related to the payment of sewer connection fees, and not to the payment of any “tapping privilege fee.” The stipulations further demonstrate that the “tapping privilege fee” was not instituted until a different water and sewer policy was adopted in 1975. Based on these stipulations, the trial court could find by competent evidence that the contract did not allow for “tapping privilege fees” to be assessed against plaintiff. This assignment of error is merit-less.

Defendant next argues by his second and fourth assignments of error that the trial court’s interpretation of the contract has the “primary effect of limiting the County’s (and City’s) authority to set fees vis a vis Raintree Corp.”, and that therefore the contract in the present case is ultra vires, and cannot be enforced by plaintiff. We do not agree. G.S. § 153-284, as it was at the time the contract was entered, provided in pertinent part as follows:

The board of commissioners of any county is hereby authorized to:

(1) Acquire, lease as lessor or lessee, construct, reconstruct, improve, extend, enlarge, equip, repair, maintain and operate any ... sanitary sewerage system or parts thereof, either within or without the boundaries of the county, ... and

(2) To make and enter into all contracts and agreements necessary or incidental to the execution of the powers herein provided, including the contracting or otherwise providing for the leasing, repairing, maintaining and operating of any such system or systems or parts thereof.

G.S. § 153-286, as it was at the time the contract was entered, provided in pertinent part as follows:

The board of commissioners of any county may fix, and may revise from time to time, rents, rates, fees, and charges for the use of and for the services furnished or to be furnished by any such [sanitary sewerage] system or systems. ...

Although there is no question that a county or municipality has the power to enter contracts, if the county or municipality enters a contract which restricts it in the performance of its governmental function or in the exercise of its legislative authority, such a contract is ultra vires and is of no legal effect. Bessemer Improvement Co. v. City of Greensboro, 247 N.C. 549, 101 S.E. 2d 336 (1958); Madry v. Town of Scotland Neck, 214 N.C. 461, 199 S.E. 618 (1938); Rockingham Square Shopping Center, Inc. v. Town of Madison, 45 N.C. App. 249, 262 S.E. 2d 705 (1980).

In the present case, the trial judge’s interpretation of the contract does not restrict the county or the city in the exercise of its legislative authority, since defendant chose in its discretion not to subject developers in situations simitar to plain tiff to the assessment of “tapping privilege fees.” In the water and sewer policy adopted by defendant on 19 May 1975, the following appears under a section entitled “Special Considerations”: “F. ... Subdivisions developed solely with developer funds and donated to the city without cost are not subject to tapping privilege fees. ...” The parties stipulated, and the court found, that the Ervin Company, plaintiffs predecessor in interest, constructed “at its sole expense” all the necessary sewerage facilities on its property, and that defendant is now the owner and operator of those facilities. Furthermore, the contract in question indicated that upon completion of the facilities, the county’s ownership of them was “automatic,” and no provision was made for any compensation to plaintiff. We therefore hold that the contract in question was not ultra vires, and was enforceable as interpreted by the trial judge. These assignments of error are without merit.

Defendant next contends, based upon his fifth, sixth, and seventh assignments of error, that the trial judge erred “in awarding interest in the amount of $1,799.81 to Raintree Corp.” Essentially, defendant argues that pre-judgment interest is not recoverable on monetary judgments in declaratory judgment proceedings, that the facts of the case do not justify an award of such interest, and that there are no findings or conclusions setting forth the grounds for the award of such interest. We disagree. While we have found no cases in this jurisdiction directly dealing with an award of interest as part of supplemental relief in a declaratory judgment proceeding, other jurisdictions have allowed such an award. See, e.g., National Fire Insurance Co. of Hartford v. Board of Public Instruction of Madison County, Florida, 239 F. 2d 370 (5th Cir. 1956); Fairchild Stratos Corp. v. Siegler Corp., 225 F. Supp. 135 (D.C. Md. 1963); New Haven Water Co. v. City of New Haven, 40 A. 2d 763, 131 Conn. 456 (1944). Also, since the North Carolina Declaratory Judgment Act is to be liberally construed, G.S. § 1-264; York v. Newman, 2 N.C. App. 484, 163 S.E. 2d 282 (1968), we are reluctant to disapprove of the trial judge’s grant of supplemental relief in this case. Moreover, there are many analogous situations under North Carolina law in which a party can recover pre-judgment interest on moneys found to have been paid to and improperly held by another party, the most notable examples being actions for money had and received, see Dean v. Mattox, 250 N.C. 246, 108 S.E. 2d 541 (1959), and action by taxpayers seeking refunds for property taxes that are found to be unlawful, see G.S. § 105-381(d). Since, under the circumstances of this case, plaintiff has made the “tapping privilege fee” payments under protest, and defendant does not have authority to collect such sums, we hold that the court properly awarded pre-judgment interest.

We further hold that the stipulations, and the findings and conclusions based on those stipulations, support the award of interest. These assignments of error have no merit.

Affirmed.

Judges Martin (Robert M.) and Martin (Harry C.) concur.