Johnson v. . Marrow

DenNY, J. The plaintiffs insist the court below committed error in holding they were not the proper officials to institute an action for the custody of the securities involved herein. The plaintiffs are relying on Section 775, The Code (now G. S., 155-18); Hewlett v. Nutt, 79 N. C., 263, and Bray v. Barnard, 109 N. C., 44, 13 S. E., 729. However, in view of the provisions contained in G. S., 153-2 (1), which authorizes a county “To sue and be sued in the name of the County,” we think in the absence of a refusal of the Board of Commissioners to institute such action, it should have been brought on relation of Johnston County or by Johnston County. Where a county is the real party in interest, it must sue and be sued in its name. Lenoir County v. Crabtree, 158 N. C., 357, 74 S. E., 105; Fountain v. Pitt County, 171 N. C., 113, 87 S. E., 990. In the absence of a statute to the contrary, ordinarily the County Treasurer is the proper custodian of all county sinking fund securities, including school sinking funds and securities held for the retirement of term bonds, where the county has assumed the payment of such bonds. G. S., 115-240. However, the Act of the General Assembly referred to above authorizes the Board of Education of Johnston County to keep in its control and *61 custody the securities in question and to hold them for certain purposes, to wit: “For the construction, alteration, repair or addition to the public school buildings of said County, and . . . for no other purpose.” ¥e know of no limitation on the power of-the General Assembly to designate or change the custodian of sinking fund securities, or to direct the expenditure of surplus school funds so long as the authorized expenditure is for a public purpose. If school bonds of Johnston County were outstanding and unpaid for which this sinking fund was created, the General Assembly could not authorize a diversion of the funds. Const, of N. C., Art. II, Sec. 30. But it is admitted by the plaintiffs and the defendants that these securities represent an unencumbered school sinking fund surplus. 'Without the legislative sanction contained in the special statute passed by the General Assembly of 1947, this surplus would belong to the school debt service fund of Johnston County and the Board of Commissioners of Johnston County would have the right to its exclusive control. Cabe v. Alderman, 185 N. C., 158, 116 S. E., 419; Parker v. Commissioners, 178 N. C., 92, 100 S. E., 244. However, this Act in no wise divests the Board of Commissioners of Johnston of the right to use this surplus or so much thereof as may be necessary to meet the full budget requirements of Johnston County for the erection, repair and equipment of school buildings, as provided in G. S., 115-83. And this surplus should be taken into consideration by the Board of Commissioners of Johnston County in the preparation and adoption of future budgets and the levy of taxes therefor, as provided in the “County Fiscal Control Act.” G. S., 153-114 to 153-142. The law does not contemplate or authorize the accumulation of a surplus such as has been created here and the exemption of such surplus from the salutary provisions of the “County Fiscal Control Act.” While it is stated in the preamble of the 1947 Special Act “The funds and securities now on hand should be made available for the purpose of creating a capital reserve fund to be used in making repairs, alterations and additions to the school buildings in said County,” the Act itself directs that the funds shall be used only “For the construction, alteration, repair or addition to the public school buildings of said County.” Moreover, under the terms of the Act, the expenditure of these funds is limited to such expenditures as may be authorized in duly adopted budgets. The Board of Commissioners of Johnston County, and not the Board of Education of Johnston County, is charged with the duty to determine what expenditures shall be made for the erection, repair and equipment of school buildings in said county. G. S., 115-83. And. upon the facts disclosed on this record, Johnston County did have a meritorious cause of action against the defendants at the time this proceeding was insti *62 tuted; but for the reasons stated herein, the plaintiffs are not entitled to a writ of mandamus, and the judgment of the court below is Affirmed.