Lewis v. Beaufort County

107 S.E.2d 77 (1959)

249 N.C. 628

Blake C. LEWIS, a resident and taxpayer of Beaufort County, in his own interest and in the interest of all other residents and taxpayers of Beaufort County, who may make themselves parties to this action, v. BEAUFORT COUNTY, A. D. Swindell, W. A. Magee, Jr., Julian S. Cutler, Alton Cayton and Sam T. Moore, constituting the Board of Commissioners of Beaufort County, the first named being Chairman of the Board of Commissioners, and W. A. Blount, Jr., County Accountant.

No. 20.

Supreme Court of North Carolina.

February 25, 1959.

L. H. Ross, Washington, for defendants, appellants.

L. E. Mercer, Washington, for plaintiff, appellee.

BOBBITT, Justice.

Judge Stevens held that "the issuance of the hospital bonds under the authority of the bond order and said election for the procurement of a site and the erection of buildings for a general hospital in Beaufort County was in every respect regular and valid." The findings of fact show compliance with G.S. § 153-77 et seq.

The proposition approved by the electors on June 4, 1955, as indicated above, and similar provisions in the bond order, indicate plainly that the sole purpose of the bond issue was to acquire a suitable site and to erect and equip a hospital thereon.

The bond order is based on the determination by the Board of Commissioners that "in order to provide an adequate public hospital for the inhabitants of said County, it will be necessary to erect and equip a new building or buildings to be used as a public hospital and acquire a suitable site therefor, and that it will be necessary to expend for such purpose not less than $650,000, in addition to any funds which may be contributed by the Federal Government or any of its agencies or by others."

The project for which the bonds were authorized has been fully completed. To accomplish the sole purpose for which the bonds were authorized, it was not necessary to issue the maximum of $650,000.

The construction of a clinic in Aurora is not a project in lieu of that originally contemplated. Here, no transfer or reallocation *79 of funds from one project to another on account of changed conditions, to accomplish the general purpose of the bond issue, is involved. The proposal to construct the clinic in Aurora is an additional project.

An entirely different question was presented to this Court in Mauldin v. McAden, 234 N.C. 501, 67 S.E.2d 647, and Gore v. Columbus County, 232 N.C. 636, 61 S.E.2d 890, and Feezor v. Siceloff, 232 N.C. 563, 61 S.E.2d 714, and Waldrop v. Hodges, 230 N.C. 370, 53 S.E.2d 263, and Atkins v. McAden, 229 N.C. 752, 51 S.E.2d 484. In those cases, decision turned on whether subsequent findings in the light of changing educational needs warranted the transfer or reallocation of funds from one project to another within the general purpose (school plant facilities) for which the bonds were authorized.

As stated by Barnhill, J. (later C. J.), in Waldrop v. Hodges, supra [230 N.C. 370, 53 S.E.2d 266]: "While the defendants have a limited authority, under certain conditions, to transfer or allocate funds from one project to another, included within the general purpose for which bonds are authorized, the transfer must be to a project included in the general purpose as stated in the bond resolution and notice of election."

In Worley v. Johnston County, 231 N.C. 592, 58 S.E.2d 99, this Court upheld the use of an unexpended surplus of $36,000 (of a hospital bond issue of $275,000) for the erection on the hospital grounds of a building to provide housing for nursing, technical and other hospital service, for use in connection with the main hospital building. Such separate building was considered an integral part of the hospital plant.

In Rider v. Lenoir County, 236 N.C. 620, 73 S.E.2d 913, 915, the electors, approving a bond order, authorized a maximum of $465,000 of hospital bonds. The bond order contained a declaration or representation that "it will be necessary to expend for such purpose not to exceed $465,000 in addition to any funds which may be contributed by the Federal Government or any of its agencies or by other persons or associations." This Court held that the authority conferred contemplated that no more than $465,000 of county funds would be expended for such purpose and that the Board of Commissioners had no authority to appropriate $138,713.80 of unallocated nontax moneys to supplement the proceeds of the $465,000 bond issue.

Here, when the electors authorized the maximum of $650,000 of hospital bonds, the clear import of the words used was that Beaufort County, within the specified limitation, would issue the amount of bonds necessary to obtain funds to accomplish the declared purpose.

As stated by Barnhill, J. (later C. J.), in Parker v. Anson County, 237 N.C. 78, 87, 74 S.E.2d 338, 344: "Fair play demands that defendants keep faith with the electors and use the proceeds for the purposes for which the bonds were authorized, Waldrop v. Hodges, supra, unless some sound and compelling reason is made to appear why the original plan should be modified or one of the projects included therein should be abandoned."

If and when authorized as provided in G.S. § 153-77 et seq., (G.S. § 153-77(d), G.S. § 131-126.18(c)) Beaufort County may issue bonds and use the proceeds thereof for the construction of a clinic in Aurora; but it may not use therefor any part of the proceeds of bonds authorized for a different (completed) project.

In our opinion, Judge Stevens' ruling was correct. Hence, the judgment is affirmed.

Affirmed.

RODMAN, J., took no part in the consideration or decision of this case.