Teer v. Jordan

Annotate this Case

59 S.E.2d 359 (1950)

232 N.C. 48

TEER v. JORDAN et al.

No. 458.

Supreme Court of North Carolina.

May 3, 1950.

*361 Ross & Ross, Lillington, Brooke, McLendon, Brim & Holderness, Greensboro, W. P. Farthing, Durham, and J. C. B. Ehringhaus, Jr., Raleigh, for plaintiff-appellant.

Harry McMullan, Attorney General, John R. Jordan, Jr., Member of Staff, W. T. Joyner and W. T. Joyner, Jr., R. Brookes Peters, General Counsel, State Highway and Public Works Commission, and Kenneth F. Wooten, Jr., and E. O. Brogden, Jr. Members of Staff, Raleigh, for defendants-appellees.

DEVIN, Justice.

The court below in ruling in favor of the defendants on the ultimate issue of law raised by the pleadings inferentially disposed of two questions which apparently were not pressed on the hearing in the Superior Court, namely, the capacity of the plaintiff to maintain this suit for the purposes declared, and to maintain it against these defendants who compose an agency *362 of the State constituted for governmental purposes. However, we are not disposed to deny the right of an individual who is one of those for whose benefit the law was enacted to be heard on allegations of an illegal diversion of public funds which may in some degree injuriously affect his rights as a citizen, taxpayer, and user of secondary public roads. It is conceivable that, under the allegations contained in plaintiff's complaint, the expenditure from the equalization or stabilization fund for the purchase of machinery for use in constructing or improving secondary roads in other counties might result in the diminution of the amount allocated under the Act to the county of his residence. While the activities of governmental agencies engaged in public service imposed by law ought not to be stayed or hindered merely at the suit of an individual who does not agree with the policy or discretion of those charged with responsibility, the right of a citizen and taxpayer to maintain an action in the courts to restrain the unlawful use of public funds to his injury cannot be denied. State v. Scott, 182 N.C. 865, 109 S.E. 789; Hinton v. Lacy, 193 N.C. 496, 137 S.E. 669; Freeman v. Board of Commissioners, 217 N.C. 209, 212, 7 S.E.2d 354; Shaw v. Liggett & Myers Tobacco Co., 226 N.C. 477, 38 S.E.2d 313. Nor are the doors of the courts closed to suits against the individual members of a Commission which has been by law constituted an agency or arm of the State. Immunity of the State to suit by an individual, except when consent thereto has been expressly given, does not extend to the individuals who in disregard of law invade or threaten to invade the personal or property rights of a citizen even though they assume to act under the authority of the State. Schloss v. State Highway & Public Works Commission, 230 N.C. 489, 53 S.E.2d 517; Pue v. Hood, 222 N.C. 310, 22 S.E.2d 896; Prudential Insurance Co. of America v. Powell, 217 N.C. 495, 8 S.E.2d 619; Vinson v. O'Berry, 209 N.C. 287, 183 S.E. 423; Carpenter v. Atlanta & C. A. L. R. Co., 184 N.C. 400, 114 S.E. 693; White Eagle Oil & Refining Co. v. Gunderson, 48 S.D. 608, 205 N.W. 614, 43 A.L.R. 397. Counsel for plaintiff in their brief have cited a number of decisions from other jurisdictions in support of this principle.

This brings us to the consideration of the principal question upon which a ruling is sought. Did the action of the defendants in carrying out the resolution adopted by the State Highway and Public Works Commission to use a portion of the funds derived from the issuance of the County Road Bonds for the purpose of purchasing road building machinery and equipment to be used on a rental basis as outlined, constitute such an illegal diversion of specific public funds from the statutory purpose as to warrant the interposition of a court of equity to restrain?

It was not controverted that under the general statutes creating and regulating the activities of the State Highway and Public Works Commission for the ordinary work of paving, improving and maintaining the public roads of the State, the Commission is authorized to purchase machinery, collect materials, employ labor and supervise the work by its own force. It was likewise conceded that under the Act of 1949 the proceeds of the $200,000,000 bond issue constituted a separate fund devoted exclusively to the construction of secondary roads as distinguished from primary roads, and that the funds so devised could not lawfully be used for maintenance.

It was urged by the plaintiff that the purpose of the bond issue was to provide a "State Secondary Road Fund" to defray the cost of construction of secondary roads, and not a fund to be used for the purchase of machinery and equipment, of which presumably the Commission now has an adequate supply; that the use of the words "construction or improvement" in the statute, when considered in connection with the dominant purpose of the Act, manifests the legislative intent that the funds be used exclusively for construction; and that the provision permitting the setting up of an equalization fund out of the proceeds of the bond issue should not be held to authorize the diversion of this fund or its depletion for other purposes than the construction of secondary roads, and that the purpose of *363 the establishment of an equalization fund was to relieve hardship cases as between the several counties and not for an overall purchase of machinery.

While the law will not justify the use of the proceeds of a state or municipal bond issue for purposes other than those specified in the Act authorizing the issue, as was held in Waldrop v. Hodges, 230 N.C. 370, 53 S.E.2d 263, it does not follow that immaterial or temporary changes consistent with the general purpose of the legislative act should be interpreted as unlawful diversions of public funds. Atkins v. McAden, 229 N.C. 752, 51 S.E.2d 484; Worley v. Johnston County, 231 N.C. 592, 58 S.E.2d 99.

There is no requirement that the work contemplated by the Act of 1949 must be let to contract. If deemed wise, in the interest of expedition or economy, the Commission lawfully may proceed to the construction or improvement of secondary roads by the use of its own materials, equipment and engineering supervision. The extensive work the General Assembly has authorized and the people have approved has been placed under the control of the State Highway and Public Works Commission for execution. Manifestly many matters of detail must be left to the sound discretion and informed judgment of this Commission, and, unless some substantial departure from the legislative purpose has been shown, a court of equity will not intervene. As said by Justice Holmes in Missouri K. & T. Ry. Co. of Texas v. May, 194 U.S. 267, 24 S. Ct. 638, 639, 48 L. Ed. 971, "Some play must be allowed for the joints of the machine." The good faith of the defendants was conceded.

The court below found that the plan proposed by the defendants for handling the purchase and use of road building machinery in the several counties, as set forth in their answer, was not in violation of Chapter 1250, Session Laws 1949. This apparently resolved the question into a matter of bookkeeping, subject to the supervisory authority conferred by law and applicable to these funds. The possibility of injury to the plaintiff's personal or property rights, which he alleged might be caused by the action of the defendants, seems to have been eliminated or rendered too remote to justify the intervention of equity. We see no compelling reason for the issuance of the restraining order prayed for. It was incumbent upon the plaintiff to make out a prima facie case of irreparable injury entitling him to equitable relief by injunction. 30 C.J.S., Equity, ยง 39, p. 362; 28 A. J. 242, 352. This he has failed to do. The court below ruled correctly in declining to issue the restraining order.

Since it appears that the sole remedy sought was the issuance of a restraining order, and that no material issues of fact arise on the pleadings, the judgment of dismissal of plaintiff's case will be upheld. Cox v. City of Kinston, 217 N.C. 391, 398, 8 S.E.2d 252.

Judgment affirmed.