Nash v. Board of Commissioners

Stacy, C. J. Even if it be conceded that the proposed refunding-bonds would be subject to the discretionary power of the General Assembly hereafter to exempt certain residential property from taxation, because issued after the adoption of the 1936 constitutional amendment on the subject, which is not so conceded in view of the provisions of the Local Government Act and the ordinance authorizing the issuance of said bonds, still it is not perceived wherein this would in any wise affect the validity of said bonds; only their marketability, perhaps. It is recognized that the bonds now outstanding, which defendants seek to refund, could not be adversely affected by any act of assembly under the constitutional change, “for a State, no more by constitutional amendment than by statute, can impair the vested rights held by the creditor in assurance of his debt.” Hammond v. McRae, 182 N. C., 747, 110 S. E., 102; Smith v. Comrs., ibid, 149, 108 S. E., 443; Burney v. Comrs., 184 N. C., 274, 114 S. E., 298; Board of Ed. v. Bray, ibid, 484, 115 S. E., 47. It is likewise well established that the laws in force at the time and place of the making of contracts enter into and become integral parts thereof as much so as if they had been expressly incorporated therein. Eckard v. Ins. Co., 210 N. C., 130, 185 S. E., 671; Headen v. Ins. Co., 206 N. C., 270, 172 S. E., 349; Bateman v. Sterrett, 201 N. C., 59, 159 S. E., 14; Trust Co. v. Hudson, 200 N. C., 688, 158 S. E., 244; House v. Parker, 181 N. C., 40, 106 S. E., 136; Mfg. Co. v. Holladay, 178 N. C., 417, 100 S. E., 567; Hill v. Kessler, 63 N. C., 437. It is provided by the Local Government Act, chap. 60, Public Laws, 1931, as amended by chap. 258, Public Laws, 1933, and chap. 356, Public Laws, 1935, that in refunding, funding, or renewing indebtedness incurred prior to 1 July, 1933, the ordinance or resolution adopted by any local unit, authorizing the issuance of bonds for such purpose, may con *304 tain provision whereby the holders or purchasers of said bonds “shall be subrogated to all the rights and powers of the holders of such indebtedness,” which said provision “shall have the force of contract between the unit and the holders of said bonds.” Michie’s N. C. Code of 1935, sec. 2492 (50) b. Such a provision was incorporated in the ordinance authorizing issuance of the bonds here sought to be enjoined; hence the provision, having the sanction of law, will enter into and become an integral part of the bonds when issued, with contractual force and effect, which may not be impaired by subsequent legislation, as was held by the court below. Hammond v. McRae, supra; Eckard v. Ins. Co., supra; Headen v. Ins. Co., supra; Long v. St. John, 170 So. (Fla.), 317. It is the contention of the plaintiff, however, that while the refunding of a subsisting indebtedness may not create any new or additional debt or extinguish the original obligation (Blanton v. Comrs., 101 N. C., 532, 8 S. E., 162), still the refunding bonds would represent a different contract evidencing the indebtedness. Fleming v. Turner, 122 Fla., 200, 165 So., 353; S. v. Milam, 113 Fla., 491, 153 So., 100. In other words, he says that while the retirement of the 6% bonds with refunding bonds bearing lower rates of interest would not extinguish the original indebtedness, nevertheless the indebtedness would then be evidenced by a new and different contract or obligation, entered into after the adoption of the 1936 constitutional amendment and therefore subject to its provisions, nothing else appearing. Klein v. Kinkead, 16 Nev., 194; Hicks v. Greene County, 200 N. C., 73, 156 S. E., 164. Plaintiff further points out that the proposition is not to exchange the old bonds for new ones. Folks v. County of Marion, 121 Fla., 17, 163 So., 298. Conceding, for the sake of argument, that plaintiff’s contention apparently has the merit of soundness, it is not perceived, upon the record facts, wherein the judgment entered below runs counter to the position stated. The General Assembly as yet has taken no action under authority of the amendment in question, which is only permissive in terms and not self-executing. The power of exemption, to the extent therein mentioned, is exercisable, in whole or in part, or not at all, as the General Assembly, in its wisdom, shall determine. Hospital v. Rowan County, 205 N. C., 8, 169 S. E., 805; Laita v. Jenkins, 200 N. C., 255, 156 S. E., 857. Further, the laws in force at the time of the issuance of the proposed refunding bonds provide that the holders thereof, when so assured by ordinance or resolution, as they are here, shall be subro-gated to all the rights and powers of the holders of the indebtedness so refunded, which assurance has the force of a contract provision. Michie’s Code, supra. Moreover, it is observed that the plaintiff, being the owner of a residence in St. Pauls, without more, would be benefited, rather than in *305 jured, by any action of the General Assembly, even under bis own interpretation of the laws applicable. His prayer for injunction was properly denied on the facts presently appearing of record. Newman v. Comrs. of Vance, 208 N. C., 675, 182 S. E., 453. Affirmed.