Upchurch v. City of Raleigh

Denny, J. The complaint does not allege any irregularities in the legal procedures followed by the defendant in connection with the adoption of the bond ordinances involved, the publication of such ordinances, the ordinance calling for the bond election on 23 February 1960, or in the conduct of such election. The plaintiff alleges the series of bonds approved at the election held on 23 February 1960 are not valid and legal obligations of the City of Raleigh because the bond ordinances, the publication of notice thereof and the ballots did not disclose that the proceeds to be derived therefrom were to be used for the construction of water and sewer lines in areas to be annexed within the corporate limits of the City of Raleigh, pursuant to G.S. 160-453.17. The question posed for determination is simply this: May the proceeds from water and sewer bonds duly authorized by the voters of a municipality or any portion of such funds, be expended within areas annexed to the City after the date of such election when neither the bond ordinances nor the ballots used in said election disclosed an intent on the part of the municipality to so use such proceeds? There is no contention that there was any irregularity in the authorization of the bonds approved by the voters of the City of Raleigh on 23 February 1960, provided the proceeds therefrom are expended for water and sewer lines within the corporate limits of Raleigh as such corporate limits existed on 23 February 1960. Even so, the defendant notified the citizens and taxpayers of the City of Raleigh when it published, as it was required by law to do, its Notice of Intent to annex certain areas, and further stated therein that it intended to use certain of the proceeds of the water and sewer bond issues to be voted on at the 23 February 1960 election, and gave the estimated amounts that would be expended for the construction of water and sewer lines in the areas designated therein. Therefore, the question for determination is limited to that posed hereinabove. In order for a municipality, having a population of 5,000 or more persons, to comply with the provisions of Chapter 1009 of the 1959 Session Laws of North Carolina, it must follow the procedure outlined in the annexation statutes, G.S. 160-453.13 et seq. Section (e), subsection (3) of G.S. 160-453.17, provides that when a municipality passes its annexation ordinance pursuant to its Notice of Intent it must make, “A specific finding that on the effective date of annexation the municipality will have funds appropriated in sufficient amount to finance construction of any major trunk water mains and sewer outfalls found necessary in the report required by § 160-453.15 [680] to extend the basic water and/or sewer system of the municipality into the area to be annexed, or that on the effective date of annexation the municipality will have authority to issue bonds in an amount sufficient to finance such construction. If authority to issue such bonds must be secured from the electorate of the municipality prior to the effective date of annexation, then the effective date of annexation shall be no earlier than the day following the statement of the successful result of the bond election.” It is provided in section (f) of G.S. 160-453.17: “From and after the effective date of the annexation ordinance, the territory andi its citizens and property shall be subject to all debts, laws, ordinances and regulations in force in such municipality and shall be entitled to the same privileges and benefits as other parts of such municipality. The defendant City of Raleigh in its charter as set forth in Chapter 1184 of the Session Laws of 1949, has been given the express authority in section 22, subsection (65), as follows: “To acquire, provide, construct, establish, maintain and operate a system of waterworks and a system of sewerage for the city and the citizens thereof, and to protect, control, and regulate the same by such adequate rules and regulations as may be deemed appropriate and expedient by the city counsel; and to extend the systems of waterworks and/or sewerage beyond the corporate limits; * * *” Moreover, all municipalities in North Carolina have been given the right to extend water and sewer facilities beyond the corporate limits of the municipality. G.S. 160-255 (1959 Cumulative Supplement). The 1959 Annexation Act does not purport to require or authorize the expenditure of any funds in an area to be annexed when such proposed annexation is made subject to a favorable result in a bond election for funds with which to construct water and sewer lines in such area, until after the effective date of such annexation. However, we have been unable to find; any requirement in the municipal Finance Act or any other statute which requires the bond ordinance or the ballot to specify in what area the funds are to be used if such funds are to be used in connection with an annexation plan pursuant to the 1959 Annexation Act. It appears that the defendant has complied with G.S. 160-379 (b) (1), G.S. 160-379 (d), and all other pertinent statutes in connection with the authorization of the issuance of the bonds involved herein. It will be noted that G.S. 160-379 (b) (1) 'provides: “What Ordinance Must Show. ■ — ■ The ordinance shall state: (1) In brief and general terms the purpose for which the bonds are to be issued, [681] * * and G.S. 160-379 (d) provides: “Need Not Specify Location of Improvement. — In stating the purpose of a bond issue, a bond ordinance need not specify the location of any improvement or property, or the kind of pavement or other material to be used in the construction or reconstruction of streets, highways, sidewalks, curbs, or gutters, or the kind of construction or reconstruction to be adopted for any building, for which the bonds are to be issued. A description in a bond ordinance of a property or improvement substantially in the language employed in § 160-382 of this subchapter to describe such a property or improvement, shall be a sufficiently definite statement of the purpose for which the bonds authorized by the ordinance are to be issued.” In Thomasson v. Smith, 249 N.C. 84, 105 S.E. 2d 416, the annexation procedure and the authorization of bonds to be issued pursuant thereto were set out in Chapter 802 of the Session Laws of 1957, which provided, that in the event of a favorable election result on the question of annexation, the City of Charlotte was then authorized to call an election to determine whether or not the citizens of Charlotte would approve the issuance of approximately $4,500,000 worth of water and sewer bonds for the purpose of constructing water and sewer lines into the area to be annexed before the effective date of the annexation. Therefore, the intent to so use such proceeds was incorporated in the bond ordinance and on the ballot. The general law, however, as heretofore pointed out, does not require such information to be incorporated in the bond ordinance or to be set forth on the ballot. The statute requires the effective date of the annexation to be at least one day after the favorable result of the bond election, where the proceeds from the bond issue or issues are to be used in connection with the annexation plan. However, the effective date of an annexation may be fixed for any date within twelve months from the date of the adoption of the annexation ordinance. Subsection (4) of section (e), G.S. 160-453.17. In the instant case, it was stated in the oral argument before this Court that the areas described in the Notice of Intent to annex have been annexed by the City of Raleigh and that the effective date of such annexation was 31 March 1960. Furthermore, it has been made to appear that the Notice of Intent to annex these areas was published in the manner required by law. There is no question raised in this action with respect to the validity of the annexation of the areas by the City of Raleigh pursuant to the provisions' of our 1959 Annexation Act, this action having been instituted prior to the adoption of the annexation ordinance. [682] The plaintiff seeks, however, to restrain the issuance of the bonds authorized on 23 February 1960 in order to prevent the expenditures planned in the construction of water and sewer lines into the annexed areas for the reasons heretofore stated. It is a matter of common knowledge that the City of Raleigh has heretofore issued and has outstanding many millions of dollars in bonds covering the cost of the construction of paved streets, sidewalks, waterworks, and sewer systems, not one dollar of which was expended for street paving or the construction of sidewalks in the annexed areas, and but little if any of the proceeds from water and sewer bonds heretofore issued by the City of Raleigh have been expended for water or sewer lines in the annexed areas. However, the citizens, firms and corporations located within these annexed areas will be required in the future to pay their full share of the taxes necessary for the payment of the interest on these outstanding bonds and for the payment of the principal on such bonds as they fall due. Dunn v. Tew, 219 N.C. 286, 13 S.E. 2d 536; Thomasson v. Smith, supra. Unquestionably, it was this fact that led the General Assembly to require a municipality to make provision for the extension of water and sewer lines into such annexed areas before permitting the proposed annexation or annexations to be made pursuant to the 1959 Annexation Act. In our opinion, the court below properly sustained the demurrers interposed by the defendant. The second question posed on this appeal is whether or not the court below committed error in refusing to continue the hearing on the demurrers, calendared on the Motion Docket of the Superior Court of Wake County for hearing 28 March 1960, in order to give the plaintiff time to file an emended complaint or an amendment to his complaint. We are not inadvertent to the provisions of G.S. 1-161. Neither are we unmindful of the provisions of G.S. 1-129, which provide: “If a demurrer is filed the plaintiff may be allowed to amend. If plaintiff fail to amend within five days after notice, the parties may agree to a time and place of hearing the same before some judge of the superior court, and upon such agreement it shall be the duty of the clerk of the superior court forthwith to send the complaint and demurrer to the judge holding the courts of the district, or to the resident judge of the district, who shall hear and pass upon the demurrer: Provided, if there be no agreement between the parties as to the time and place of hearing the same before the judge of the superior court, then it shall be the duty of the clerk of the superior court to [683] send the complaint and demurrer to the judge holding the next term of the superior court in the county where the action is pending, who shall hear and pass upon the demurrer at that term of the court. * * The plaintiff not having amended his complaint within five days after the demurrer was filed on 16 March 1960, on which date his attorneys accepted service of a copy of the written demurrer, the defendant had the right to have the demurrer ruled upon after the lapse of five days therefrom. Therefore, the ruling of the court below in declining to continue the hearing on the demurrers interposed by the defendant will be upheld without prejudice to the right of the plaintiff to apply for leave to amend, as provided in G.S. 1-131. The judgment of the court below is Affirmed.