Opinion ID: 1318394
Heading Depth: 2
Heading Rank: 2

Heading: millage 1974-75 contract

Text: The parties contracted for the year 1974-1975 upon the basis that ... the District shall cause to be levied for the calendar year 1974, a 40 mill ad valorem tax on the assessed value of all real and personal property located within the District ... The Charleston County Auditor ultimately imposed only 39 mills. The City argues it should have been paid an additional $24,168.00 under the contract. The trial court held that the contract was ultra vires because NCD did not have the authority to bind or circumscribe the discretion of the independent governmental body (i.e., the General Assembly) or officers (i.e., the Charleston County Auditor) in fixing the ad valorem millage rate to be assessed on behalf of NCD. We agree with the trial court. It is a fundamental rule of contract construction that the law existing at the time and place of making of a contract is a part of the contract. Ayres v. Crowley , 205 S.C. 51, 30 S.E. (2d) 785 1944; 4 Williston, Contracts , § 615 at 597 (3rd ed. 1961). This rule applies in the area of governmental contracts. See e.g. Colorado Investment Services v. City of Westminster , 636 P. (2d) 1316 (1981); and 10 McQuillin, Municipal Corporations , 29.118 at 539 (3d ed. 1981). A person who contracts with a municipality is charged with the knowledge of its limitations and restrictions in making contracts. See Seaboard Airline Railway v. McFadden , 156 S.C. 147, 152 S.E. 809 (1930); Colorado Investment Services v. City of Westminster, supra; 10 McQuillin, Municipal Corporations , § 29.04 at 207 (3d. ed. 1981). Neither a municipal corporation nor a special purpose district can, in any manner, bind itself by any contract which is beyond the scope of its powers. G. Curtis Martin Investment Trust v. Clay , 274 S.C. 608, 266 S.E. (2d) 82 (1980); 10 McQuillin, Municipal Corporations , § 29.04 at 208 (3d ed. 1981). The City contends the trial court misinterprets the Contract. The parties did not contract to impose a 40 mill levy but only to pay a sum of money, and that the reference to millage in the contract was merely a measuring tool. We are not persuaded. The contract clearly and unambiguously required NCD to levy a 40 mill ad valorem tax. NCD did not have ultimate authority to determine the ad valorem tax millage assessed and therefore, could not be bound by a figure over which it had no control. The General Assembly had authorized the County to Auditor to determine the appropriate millage to be assessed and the auditor's determination is binding. The City concedes that it could not compel the General Assembly to authorize ad valorem taxes in an amount equal to 40 mills. But, the City argues that the General Assembly authorized NCD sufficient funds to carry out its functions, and therefore, NCD must discharge its contract obligations. NCD paid the City what was finally determined by the County Auditor as the appropriate millage to be assessed. NCD does not have the power or authority to levy beyond that rate. The City was aware of the budgetary process and NCD's lack of control over the ultimate amount of millage and it is not entitled to any additional sum.