#### BOARD OF COMMISSIONERS FOR THE COUNTY OF McDOWELL, STATE OF NORTH CAROLINA, v. ASSELL, GOETZ & MOERLEIN, Incorporated.

(Filed 26 October, 1927.)

1. Taxation — Counties — Bonds — Municipal Finance Act — Statutes— Necessary Expenses — Constitutional Law — Elections — Vote of the People.

Under legislative authority a county máy issue bonds to refund its existing floating debt for the necessary county expenses as enumerated in Constitution of North Carolina, Art. VII, sec. 7, in excess of the 15 cents limitation upon the $100 valuation of its taxable property according to Art. V, see. 6, of our Constitution, when coming within the pro*413visions of tile Municipal Finance Act, eh. 81, sec. 8, Public Laws of 1927, and where the record on appeal states that the issuance of the bonds is for necessary county xiurposes, and for taking care of its floating indebtedness, it will be assumed on appeal that the excess over the 15 cents valuation was for necessary county expenses, coming within the provisions of Constitution, Art. VII, sec. 7, not requiring the question of the issuance of the bonds to be submitted to the voters of the county.

2. Statutes — Interpretation — In Paid Materia — Taxation — Counties— Bonds.

A general act of the Legislature relating to the funding of a county indebtedness by the issuance of county bonds, and a public-local law relating especially to a county upon the same subject-matter passed at the same session of the Legislature, and both ratified on the same day, should be construed together as being *in pari materia.*

3. Constitutional Law — Statutes—Interpretation—Courts.

The courts will not declare a statute void as inhibited by the Constitution unless the violation of the Constitution is so manifest as to leave no room for a reasonable doubt.

4. Taxation — Statutes—In Pari Materia — Constitutional Law — Municipal Finanjce Act — Public-Local Laws — Necessaries—Elections—Vote of the People.

It is the declared purpose of the Municipal Finance Act to put the various counties of the State in a position to live within their incomes, and where a county has an existing floating indebtedness incurred for necessary county expenses prior to the date of its passage, and a special statute relating to a particular county alone is intended to be generally interpreted as prospective in its effect, but contains a provision by which a past valid indebtedness may be funded by it by the issuance of its bonds, and the general and local statutes have been passed at the same session of the Legislature and ratified on the same day: *Held,*construing the two statutes *in pari materia*when complied with, it is the legislative intent that the local statute does not take from the county the right to issue bonds for funding its past valid floating indebtedness, and where this expense has been incurred for necessary county expenses within the meaning of our Constitution, Art. VII, sec. 7, the question of the issuance of bonds is not required to be submitted to the voters of the county.

Appeal by defendant from *Moore, J.,*at September Term, 1927, of McDowell.

Affirmed.

This is a controversy witbont action. Tbe facts agreed upon: “That prior to 7 March, 1927, tbe date upon which.the County Finance Act (chapter 81, Public Laws of 1927), was ratified, there was an accumulated deficit in the General County Fund in McDowell County, North Carolina, in the form of floating indebtedness, in the sum of $50,000, all of which was incurred prior to the said date and was on and prior to that date a legal obligation, represented by certain contracts in the form *414of notes executed in the name of McDowell County, which notes were held by various banks and individuals, all of which indebtedness was created for necessary expenses of said county.

“That pursuant to the provisions of the said County Finance Act, at the regular May meeting, 1927, of the board of commissioners of the county of McDowell, an order was introduced looking to the permanent financing of the said floating indebtedness of the said county, notice of which order was published as provided by said chapter, and after publicly hearing and considering the order as introduced, to wit :

“ ‘It is ordered by the board of county commissioners of McDowell County, North Carolina,:

“ ‘Section 1. That negotiable coupon bonds of McDowell County, North Carolina, be issued- in the maximum principal amount of fifty thousand dollars ($50,000), to be known as “Funding Bonds,” for the purpose of funding valid indebtedness for necessary expenses incurred before 1 July, 1927, and payable at time of passage of this order or within one'year thereafter.

“ ‘Sec. 2. That a tax sufficient to pay the principal and the interest of the bonds when due shall be annually levied and collected.

“ ‘Sec. 3. That statement of the county debt has been filed with the clerk, pursuant to the County Finance Act, and is open to public inspection.

“ ‘Sec. 4. That this order shall take effect upon its passage, and shall not be submitted to the voters.’

“The same was read and, upon motion, unanimously passed by the affirmative vote of the members of the said board, and was so declared by the chairman of the said board at a special meeting of the said board held on 17 May, 1927, and thereupon the board passed a resolution authorizing the issuance of funding bonds pursuant to the provisions of the said County Finance Act, in the sum of $50,000, and advertised notice of the sale of said bonds to be held on Tuesday, 7 June, 1927, at which time the defendant, Assell, Goetz & Moerlein, Inc., became the highest and best bidder therefor, at the price of par and accrued interest, for bonds, properly and legally issued, bearing interest at the rate of four and three-quarters per cent per annum, payable semiannually, and maturing as set forth in said resolution, and its bid was unanimously accepted and the bonds ordered to be executed, issued and delivered to the purchaser, together with the approving opinion of a firm of attorneys agreed upon.

“That all matters and things required by the County Finance Act to be done, preliminary and leading up to the actual issuance of the said *415bonds, Lave been done and fully complied witb, and tbe bonds as offered •by tbe plaintiff to tbe defendant are in all respects in tbe form required by and in full compliance witb tbe terms of tbe said act.

“Tbat during tbe session of tbe North Carolina General Assembly of 1927, an act (chapter 532, Public-Local Laws 1927), entitled, 'An act to regulate issue of bonds in McDowell County,’ was passed and ratified 7 March, 1927.

“Tbat tbe necessary expenses of tbe county of McDowell, chargeable to tbe General County fund, for tbe fiscal year beginning 1 July, 1927, will require tbe levy of a tax to tbe constitutional limitation of fifteen cents on tbe hundred dollars valuation of property, or approximately tbat amount, making it impossible tbat tbe said accumulated deficit, as aforesaid, might be made up from a tax levy, and tbe funding of tbe said indebtedness or deficit by tbe issuance of funding bonds, under tbe provisions of tbe County Finance Act, is necessary,-and tbe only avenue open to tbe board of commissioners for tbe county of McDowell, for making up such accumulated deficit, as required by tbe County Fiscal Control Act (chapter 146 of tbe Public-Local Laws of 1927).

“Tbat upon tbe proceedings authorizing tbe issuance of tbe funding bonds being submitted to attorneys for their approving opinion, tbe questions were raised: (a) As to whether chapter 523, Public-Local Laws of 1927, prohibited tbe board of commissioners of McDowell County from issuing funding bonds under tbe terms of tbe County Finance Act (chapter 81, Public Laws 1927), without a vote of tbe people; and (b) as to whether tbe County Finance Act, authorizing tbe levy of a special tax under tbe provisions of section 8 of said act is in conflict witb section 6, of Art. V, of tbe Constitution of North Carolina; tbat is, tbe question was raised as to tbe constitutionality of tbe provision of tbe County Finance Act relating to tbe issuance of funding bonds and tbe levy of a special tax therefor; and, thereupon, tbe defendant refused to take and pay for tbe said bonds in accord with its bid.

“Tbat if tbe plaintiff is authorized and empowered to issue bonds under tbe County Finance Act, as aforesaid, tbe defendant stands ready, able and willing to take and pay fór tbe same.”

Tbe court below held tbat tbe bonds “are valid and legal and are authorized by legal authority, and tbat tbe levy of tbe tax is not prohibited by tbe Constitution of North Carolina.”

*Pless, Winborne, Pless & Proctor for plaintiff.*

*Morgan & Ragland for defendant.*

*416ClaeksoN, J.

The *questions*of law involved:

If Whether or not, under Public Laws 1927, ch. 81, sec. 8, subsection (j) of the County Finance Act, bonds may be issued by the county commissioners to fund floating indebtedness of the county incurred before 1 July, 1927, for necessary expenses, which will require a tax levy in excess of 15 cents on the $100 valuation of property to pay such bonds.

2. Whether such bonds issued for such purpose, Avithout a vote of the people, is prohibited by chapter 523, Public-Local Laws 1927, entitled “An Act to Regulate the Issuance of Bonds in McDowell County.”

Subsection (j), *suprai,*is as follows: “Funding or refunding of valid indebtedness incurred before first of July, one thousand nine hundred and twenty-seven, if such indebtedness be payable at the time of the passage of the order authorizing the bonds or be payable within one year thereafter, or, although payable more than one year thereafter, is to be canceled prior to its maturity and simultaneously with the issuance of the funding or refunding bonds, and all debt not evidenced by bonds which was created for necessary expenses of any county and which remains outstanding at the ratification of this act is hereby validated.”

The agreed case shows that the $50,000 deficit was created for necessary expenses and a valid and legal obligation of the county incurred prior to 1 July, 1927. To fund this floating indebtedness by issuing-bonds will require a tax levy in excess of 15 cents on the $100 value of proj>erty.

Const, of N. C., Art. Y, sec. 6, is as follows: “The total of the State and county tax on property shall not exceed fifteen cents on the one hundred dollars value of property, except when the county property tax is levied for a special purpose and Avith the special approval of the General Assembly, which may be done by special or general act: *Provided,*this limitation shall not apply to taxes levied for the maintenance of public schools of the State for the term required by article nine, section three, of the Constitution: *Provided further,*the State tax shall not exceed five cents on the one hundred dollars value of property.”

In *Herring v. Dixon,*122 N. C., at p. 424, the decisions are summed up as follows: “(1) For necessary expenses, the county commissioners may levy up to the constitutional limitation without a vote of the people or legislative permission. (2) For necessary expenses, the county commissioners may exceed the constitutional limitation by special legislative authority without a vote of the people. Constitution, Art. Y, sec. 6. (3) For other purposes than necessary expenses a tax cannot be levied either within or in excess of the constitutional limitation except *417by a vote of tbe people under special legislative authority. Constitution, Art. VII, sec. 7.” *Tate v. Comrs.,*122 N. C., 812; *Smathers v. Comrs.,*125 N. C., at p. 488; *Henderson v. Wilmington,*191 N. C., 269.

In *R. R. v. Cherokee County,*177 N. C., 86, the language of the.act in controversy “to provide for 'any deficiency in the necessary expenses and revenue of said respective counties.” In *R. R. v. Comrs.,*178 N. C., p. 449, the language of the act “to meet the current and necessary expenses of the county.” *R. R. v. Reid,*187 N. C., p. 320, approves a case cited, the language of the act of the case cited being “to supplement the general county fund.”

The defendant cites some of the above cases to sustain its contention, that the agreed case shows that the proposed bond issue is intended to fund indebtedness created for necessary expenses of the county, and was an accumulated deficit in the general county fund in McDowell County. In other words, the indebtedness proposed to be funded was for ordinary expenses of the county or for necessary county purposes generally spoken of .as *current expenses.*

The cases cited are to the effect that a county cannot go beyond the 15 cents on the $100 valuation of property for current expenses. There are other necessary expenses of a county other than *current,*such as roads, bridges, county buildings, county homes for the aged and infirm, etc. Under the Constitution a county can go beyond the limitation for such necessary expenses, “as they are a special purpose and with the special approval of the General Assembly which may be done by special or general act.” (“j,” *supra.)*The general act, subsection (j) says further, “Funding or refunding of valid indebtedness incurred before 1 July, 1927.”

Under chapter 81, Laws 1927, sec. "2, the act defines “necessary expenses, means the necessary expenses referred to in section 7, Art. VII, of the Constitution of N. C.” That section is as follows: “No county, city or town, or-other municipal corporation shall contract any debt, pledge its faith or loan its credit, nor shall any tax be levied or collected by any officers of the same except for the necessary expenses thereof, unless by a vote of the majority of the qualified voters therein.” It will be seen that necessary expenses here referred to are not alone current or ordinary expenses of a county, but such as are classed as roads, bridges, etc. *R. R. v. Reid, supra; Storm v. Wrightsville Beach,*189 N. C., 679.

The whole matter is carefully considered in *R. R. v. Reid, supra.*In that case the facts were disputed. The levy was 18 cents on the $100 valuation of property, 3 cents over. Defendant, sheriff and tax col*418lector, wben restraining order was sought by the railroad, contended and set up the fact that the 3 cents was for special necessary expenses, viz., constructing and maintaining bridges and maintaining the borne for the aged and infirm. Although the minutes of the board showed a levy of 18 cents for the general county fund or current expenses, in fact only 15 cents was levied for that purpose and the additional 3 cents for the other necessary special purposes above mentioned. The case was reversed and remanded to the end that the board of commissioners be made parties, and if the minutes were incorrect, and corrected minutes would show that the 3 cents was not for special necessary purposes above mentioned, but the 18 cents was levied for general county purposes or current expenses, the order restraining the collection of the tax in excess of 15 cents should be made permanent.

In the present case the record does not disclose that the $50,000 indebtedness was for current or general county expenses. If it did the bonds to fund same would be invalid, as the levy for such purpose could not exceed, under the constitutional limitation, 15 cents on the $100 valuation of property. The record does show that the proposed bond issue was for necessary expenses of the county and a valid and legal obligation of the county. The subject or subjects of the necessary expense or expenses for special county purposes are not set forth, and nothing else appearing, it is taken for granted that they were for one or more special necessary purposes and funding permissible under Constitution, Art. Y, sec. 6, and the County Finance Act. The special approval has been given by the general act.

In *Edwards v. Comrs.,*183 N. C., at p. 60, it is said: “But the authorities apparently are uniform in holding that where there is no attempt to legalize prior litigation, or a prior invalid seizure or sale of property, or to interfere with vested rights, a statute enacted to confirm or validate a defective assessment of taxes is not in violation of the organic law, and is, therefore, effective for the purpose intended. This conclusion rests upon the recognized and accepted doctrine that a retrospective law, curing defects in acts that have been done, or authorizing or confirming the exercise of powers, is valid in those cases in which the Legislature originally had authority to confer the power or to authorize the act.” *Construction Co. v. Brockenborough,*187 N. C., 65; *Holton v. Mocksville,*189 N. C., 144; *Storm v. Wrightsville Beach, supra.*

The latter part of “j,” *supra,*says: “And all debt not evidenced by bonds which are created for necessary expenses of any county, and which remains outstanding at the ratification of this act is hereby validated.”

*419Under tbe first proposition in controversy we think tbe tax can be levied and is valid and legal, and a vote of tbe people is not necessary.

Tbe next proposition: Tbe County Finance Act, cb. 81, Public Laws 1927, and tbe local act relating to bond issues in McDowell County, cb. 523, Public-Local Laws 1927, were ratified on tbe same day, 7 March, 1927. Considering them together, we are of tbe opinion that it was tbe intention of tbe General Assembly, and authority is hereby given tbe board of commissioners of McDowell County to issue bonds, without a vote of tbe people, to fund valid indebtedness of tbe county incurred before 1 July, 1927. Tbe act for McDowell County is prospective, not retroactive. In fact it says: “That nothing in this act contained shall prevent tbe board of commissioners of McDowell County . . . from issuing bonds to refund maturing bonds heretofore issued and outstanding,” etc.

“Every reasonable doubt is resolved against a retroactive operation of tbe statute.” *Comrs. v. Blue,*190 N. C., at p. 643.

Tbe board of commissioners of McDowell County is attempting to put into effect tbe provisions of tbe County Fiscal Control Act (chapter 146, Public Laws 1927), and to wipe out deficits and make a new start, living within its income.. Tbe purpose of tbe act is set forth in section 24: “It is tbe purpose of this act to provide a uniform system for all counties of tbe State by which tbe fiscal affairs of counties and subdivisions thereof may be regulated, to tbe end that accumulated deficits may be made up and future deficits prevented, either under tbe provisions of this act or under tbe provisions of other laws authorizing tbe funding of debts and deficits, and to tbe end that every county in tbe State may balance its budget and carry out its functions without incurring deficits.” Tbe County Finance Act (chapter 81, Public Laws 1927) provides tbe machinery for funding or refunding valid indebtedness of counties incurred before 1 July, 1927.

Tbe local McDowell County act is prospective, looking to tbe future, but providing fqr funding past valid indebtedness. Tbe issuance of bonds in tbe future, with certain exceptions, are prohibited “unless and until tbe question of tbe issuance thereof is submitted to and authorized by a vote of tbe majority of tbe qualified voters of said county.”

“All acts of tbe same session of tbe Legislature upon tbe same subject-matter are considered as one act, and must be construed together, under tbe doctrine of *‘in pari materia.’” Wilson v. Jordan,*124 N. C., at p. 687. It has been long settled that no court would declare a statute void unless tbe violation of tbe Constitution is so -manifest as to leave no room for reasonable doubt. Tbe philosophy of our system of government is based on tbe consent of tbe governed, subject to constitutional limitations.

*420Construing all tbe acts, both the public and private act for McDowell County together, a wise system is provided for issuing bonds to fund existing valid debts and throwing safeguards around future bond issues and preventing deficits. The purpose is laudable and requires counties to live within their incomes. See *Hartsfield v. Craven County, ante,*358. The judgment below is

Affirmed.