Court Opinion

ID: 6697639
Source: CourtListenerOpinion
Date Created: 2022-07-20 21:58:17.550669+00
Date Added: 2024-06-11T16:01:18.099973
License: Public Domain

Clarkson, J.,
concurring: I concur in the opinion of Mr. Justice Connor.
A unanimous Court made the following order: “This cause is set down fpr oral argument on Wednesday, 15 November, 1933, at ten o’clock, counsel are directed to discuss the applicability of Article VIII, section 1, of the Constitution of North Carolina.”
So, it may be conceded that the only serious question involved on this appeal is whether or not chapter 75, Private Laws of 1933', is constitutional.
Article VIII, section 1, is as follows: “No corporation shall be created nor shall its charter be extended, altered, or amended by special act, except corporations for charitable, educational, penal, or reformatory purposes that are to be and remain under the patronage and control of the State; but the General Assembly shall provide by general laws for the chartering and organization of all corporations and for amending, extending, and forfeiture of all charters, except those above permitted by special act. All such general laws and special acts may be altered from time to time or repealed, and the General Assembly may at any time by special act repeal the charter of any corporation.”
Judge Frizzelle, in the court below held the act constitutional.
In Button v. Phillips, 116 N. C., at p. 504, speaking to the question of declaring an act unconstitutional, this Court said: “While the courts have the power, and it is their duty, in proper cases to declare an act of the Legislature unconstitutional it is a well recognized principle that the courts will not declare that this coordinate branch of the government has exceeded the powers vested in it unless it is plainly and clearly the case. If there, is any reasonable cloubt it will be resolved in favor of the lawful exercise of their powers by the representatives of the people. (Italics ours.) . . . (p. 505) It cannot be said that this act is plainly and clearly unconstitutional. The doubt, if any, must be resolved in favor of the General Assembly.” Hinton v. State Treasurer, 193 N. C., 496 (499).
It has often been decided by this Court that the purpose and spirit of an act must be considered in its construction and its obvious intent *678ascertained and respected. Guano Co. v. Walston, 187 N. C., 667. Spirit and reason of statute should prevail over its letter. Carr v. Little, 188 N. C., 100.
The spirit and reason of the statute, I think, creates the Morehead City Port Commission — an agency of the State — and does not come within the inhibitions of Art. Till, sec. 1, and is not a private or business corporation, and is therefore constitutional. The distinction between public and private corporations is clearly stated in a textbook, unexcelled. 1 Thompson on Oorp., 3d ed., sec. 24 (p. 29-30), in part is as follows: “Another general division of lay corporations is into public and private. This distinction is practical, but not always clear. While it is not within the scope of this work, as observed, to treat of public corporations, yet it is important to show the dividing-line between public and private corporations. The importance of the distinction between the two> is emphasized by the fact that many principles and rules which apply to one have no application to the other. (1) Thus a public corporation is subject to legislative control without any reference to the consent of the persons who control it. (2) A public corporation does not originate in contract, while a private corporation does, and therefore the instrument creating the latter cannot be altered or amended by the law-making power, without the consent of the members who compose it, unless such power is expressly reserved. Public corporations are mere creatures or instrumentalities of the State and are subject to governmental visitation and control. So, the property of a public corporation is not taxable, while that of a private corporation is. (3) A public corporation is, generally, political in its nature, and its object is to carry out a scheme of government, while a private corporation has none of these characteristics. Public corporations, as a rule, are not liable either for the negligence or torts of their officers. Perhaps the only exception to this rule isi in the case of counties, cities and towns, and then only in a limited sense, and in regard to matters involving the exercise of ministerial acts and not governmental functions. The right to create these corporations is vested exclusively in the legislature, subject only to constitutional limitations.”
The above distinction between public and private corporations is supported by numerous authorities and by the decisions of this State.
It is a matter of common knowledge that in the summer of 1916 a great freshet swept away the railroad bridges in the western part of the State. The amendments to the Const., Art. II, sec. 29, and Art. VIII, sec. 1, supra, went into effect 10 January, 1917. In Mills v. Comrs., 175 N. C., 215 (216), it is said by Holce, J.: “On full presentation of facts, the controversy submitted was whether plaintiffs, citizen residents and taxpayers of said county, were entitled to an injunction *679against defendant board, restraining- tbem from tbe proposed issuance and sale of bonds of tbe county to tbe amount of $40,000, pursuant to chapter 575, Public-Local Laws of the General Assembly of 1917, ratified 5 March, 1917, for tbe purpose of rebuilding bridges over tbe Catawba Eiver between Iredell and Catawba counties in conjunction with tbe authorities of tbe latter county, tbe determinative question being whether said act was in violation of tbe recent constitutional amendments prohibiting certain local and special and private legislation on tbe subject, contained chiefly in the Constitution, Art. II, sec. 29, etc. . . . (p. 217.) Shortly after these amendments were ratified, a ease was presented involving tbe question whether, in view of these provisions Lin act authorizing the commissioners of McDowell County to issue bonds for road purposes in North Cove Township, in said county,’ was a valid law. Brown v. Comrs., 173 N. C., 598. The statute was upheld, and it was decided, Associate Justice Brown delivering the opinion, that there was nothing in these amendments which prohibited the Legislature from authorizing county commissioners or other governmental boards to raise money by the issue of bonds or by current taxation to enable them to carry out the necessary measures for the orderly and proper government of their counties, or even more restricted territory. . . . (p. 218-19.) An interpretation of the recent amendments which would destroy or impair legislative power to the extent suggested would he of such serious and threatening consequence that it should not he sanctioned except hy provisions so plain of meaning that no room for a different construction is allowable. We are clearly of opinion that this well considered case of Brown v. Comrs., supra, is fully supported by the authorities cited and is decisive of the questions presented on this record. It is suggested that the legislation in question is in some way in contravention of Article Till, sections 1 ancl I, of the Constitution, the latter section being also one of the recent amendments referred to, but we do not see how either of these sections is in any way involved in the present appeal. While it is not desirable nor ordinarily permissible to decide questions of this nature otherwise than on an issue directly presented (Commissioners v. Lacy, 174 N. C., 141), it may not he improper to suggest that this Article VIII is entitled ‘Corporations other than municipal/ and section 1 would seem clearly to have reference to private or business corporations, and does not refer to public or quasi-public corporations acting as governmental agencies" (Italics mine.) This obiter dictum has been approved in several decisions since rendered.
In Martin County v. Trust Co., 178 N. C., 26 (27), it is said: “This is a controversy submitted without action upon facts agreed, and involves the validity of $150,000 bonds proposed to be issued by the county *680of Martin under authority of Public-Local Laws, 1919, chap. 53, entitled ‘An act to authorize the boards of commissioners of Martin and Bertie counties to build a bridge over the Roanoke River at Williamston, N. C., and for other purposes.’ ”
In sustaining this bond issue and approving the Brown and Mills cases, Glark, G. J., said: “The rule to be deduced from these authorities may be thus summed up: The construction and maintenance of roads and bridges is a matter of general public concern. The whole body of the people of this State is benefited by them. The Legislature may cast the expense of such public works upon the State at large, or upon territory specially and immediately benefited, even though the work may not be within a pari of the total area attached(Italics mine.)
In Dickson v. Brewer, 180 N. C., at p. 406, Allen, J., says: “School districts, incorporated by act of the General Assembly, are public municipal corporations, and as such come under the provisions of Article VII of the Constitution, entitled ‘Municipal corporations.’ (See Smith v. School Trustees, 141 N. C., 150, where the question is fully discussed. Also Williams v. Comrs., 176 N. C., 557), and not under Article VIII, which is entitled ‘Corporations other than municipal,’ and section 1 would seem clearly to have reference to private business or business corporations, and does not refer to public or quasi-public corporations acting as governmental agencies. Mills v. Comrs., 175 N. C., 218.” (Italics mine.)
In Comrs. v. Bank, 181 N. C., 347 (350-1), Clark, C. J., says: “This Court has repeatedly upheld acts incorporating boards of road commissioners, vesting in them the power to issue bonds and giving them full control over the construction, maintenance, laying out, altering and discontinuing of roads and highways. Comrs. v. Comrs., 165 N. C., 632, citing numerous cases, saying, ‘The Legislature has the authority to create a board of road commissioners and vest them with the authority over the roads that the county commissioners had theretofore possessed, quoting Trustees v. Webb, 155 N. C., 383, to the same effect and saying that ‘the jurisdiction of the road commissioners to these matters is subject to regulation, in the discretion of the Legislature.’ ” (Italics mine.)
In Honeycutt v. Comrs., 182 N. C., 319 (320-21), Stacy, J., says: “The act under consideration, among other things, provides as follows: ‘Sec. 3. The road commissioners herein created shall have entire control and management of the public roads and bridges of Stanly County. That it shall be the duty of said board to take charge of working, repairing, maintaining, altering and constructing all roads and bridges of Stanly County now maintained by the county as public roads and bridges and such as may be hereafter built.’ Thus it will be seen that *681the purpose of the act in question was not to authorize the laying out, opening, altering, or discontinuing of any given road or highway, but to provide ways and means by which the general road work of the entire county might be successfully carried on and maintained. The two highway commissions hitherto existing in the county were to be abolished and one new central system established. It has been held with us in a number of cases that acts of this character do not fall within the constitutional prohibition against local or private legislation. Brown v. Convrs., 173 N. C., 598, and cases there cited; Mills v. Comrs., 175 N. C., 215; Martin County v. Trust Co., 178 N. C., 27; Comrs. v. Pruden, 178 N. C., 394; Comrs. v. Bank, 181 N. C., 347, and cases there cited.” But for the old Court, through Justice Brown writing the majority opinion for the Court in the Brown case, supra, giving a liberal interpretation to the Constitutional Amendments, the highway system of the State would have been in quick-sand and perhaps the State Highway System would have never been as now spoken of as the greatest in the nation.
These matters were again passed on by Adams, J., in Coble v. Comrs., 184 N. C., 342 (348-9), where it is said: “We should apply the principle that every presumption is to be indulged in favor of the validity of the statute, that the General Assembly is presumed to have acted with an honest purpose to observe the restrictions and limitations imposed by law, and that legislation will be sustained unless its invalidity is 'clear, complete and unmistakable,’ or unless the nullity of the act is beyond a reasonable doubt,” citing numerous authorities. Comrs. v. Pruden, 178 N. C., 394; S. v. Kelly, 186 N. C., 365; Reed v. Engineering Co., 188 N. C., 39.
In Yarborough v. Park Commission, 196 N. C., 284, there was -a unanimous decision by this Court, Adams, J., writing the opinion for the Court (p. 288), “The defendant is an agency of the State.” (p. 291) “The act is public, not private. A public statute is a universal rule which regards the whole community as distinguished from one which operates only upon particular persons and private concerns. It is usually applicable to all parts of the State, bid the statute will not be deemed •pñvate merely because it extends to particular localities or classes of persons. 25 R. C. L., 763; S. v. Chambers, 93 N. C., 600.” (Italics mine.)
The Great Smoky Mountain National Park Act, where individual and corporation property was taken “for pleasure and sentiment,” was held constitutional as a public purpose in a locality in the northwestern part of the State, Yarborough case, supra (p. 290): “The fund, $2,0.00,000, is vastly inadequate to pay for the lands, which are within *682the scope and contemplation of the act,” and with the knowledge that it was to be turned over to the U. S. Government.
This Park Act was held to be an agency of the State and a public purpose, although the park is in the northwestern corner of the State— some 500 miles from Morehead City. Its purpose is for pleasure, but indirectly to create for that section of the State a “tourist industry.” The present act is to construct, maintain and operate terminal or terminals which will open up' a section of eastern North Carolina, to cheapen freight rates and encourage water commerce in that part of the State.
It has been the dream of a multitude of North Carolinians and they have had a vision for long years to open up for commerce the great water fronts of eastern North Carolina, so that cotton, tobacco and other agricultural products and the products of the textile, furniture and other industries in North Carolina should go to other parts of the nation and to foreign countries through these ports and thus obtain cheaper freight rates and bring back necessary products of other states and of foreign lands. Railroad facilities and hard-surfaced highways to these eastern North Carolina ports are ready for water facilities.
When the present act was passed, what was the purpose and spirit? In construing the act let us get the setting: Morehead City has a population of about 5,000 inhabitants and is on Bogue Sound. It is connected with Beaufort, a city of about 4,500 population, by a $1,000,000 highway bridge across Bogue Sound. From Morehead City to the Atlantic Ocean bar is about 3 miles, with a harbor of 25 to 35 feet of water. The great inland waterway, constructed by the National Government, is 12 feet deep and extends from Boston, Mass., to New York, Philadelphia, Baltimore, Washington, Norfolk, Morehead Oiiy, Wilmington, Charleston, Brunswick, Jacksonville, (contemplated across Florida by a canal) then to Pensacola, Mobile, New Orleans, etc. It has been the south’s dream for 100 years and is being built and surveyed. The Inland Waterway has been completed through North Carolina and is now being carried on down through South Carolina, and the survey is now being completed further south. The canal, it is contemplated, will cross the northern portion of Florida and would cut 21 hours off a boat trip from New York to New Orleans. Morehead City is the terminus of the Atlantic and N. O. R. R. (owned by the State) now leased to the Norfolk and Southern R. R., and runs back into the State. No. 10, the “Main Street” of North Carolina, a hard-surfaced road, runs from Morehead City to Murphy, in Cherokee County — some 500 miles. About 1,500 yachts pass through the inland waterway at Morehead City each year. Across Bogue Sound is Atlantic Beach, one of the finest on the eastern coast of North Carolina. Fishing smacks from New England *683and elsewhere during tbe winter. months come down through the canal and drag their nets in the Atlantic Ocean and it is estimated that 75 per cent of all fish that go to northern markets are caught from the Atlantic off the eastern shores of North Carolina. The potential value of the oyster and fish industry along the eastern shore is unlimited. Morehead City is well adapted for a distributing port for water-borne commerce, except that it has no adequate port or terminal facilities, such as are demanded by the shipping interests, and such as are in keeping with other ports on the South Atlantic seaboard. Not being an industrial center, the city of Morehead depends, in a large measure, for its material and commercial welfare, upon its development as a port. This development is retarded by its present failure to offer adequate port and terminal facilities. Under present conditions, it cannot successfully compete with other South Atlantic ports which have publicly owned facilities of the nature contemplated. Millions upon millions of dollars have been spent on State and municipal terminals. I mention only a few: Norfolk, Ya., Charleston, S. C., Mobile, Ala., New Orleans, La., Houston, Texas, San Diego, Los Angeles and San Francisco, Cal., Portland, Ore., Tacoma and Seattle, Wash., Boston, Mass., Providence, E. I., etc. States and cities everywhere are constructing public ports and facilities for shipping. One port — -that of Portland, Ore.- — has been built 113 miles from the sea; and Los Angeles, Cal., has gone 25 or 30 miles to the sea and built a port, and the port of Houston, Texas, is built 50 miles from the gulf at an expense of more than thirty millions of dollars. To have our ports and waterways improved, the U. S. Government requires public terminals.
The U. S. law on the subject: “Every United Port should own its water front, and this should be controlled by a port authority composed of the business men who have an excellent grasp of the export and import business and who are willing to devote sufficient time to the subject. These should be appointed without regard to political affiliations, and should take the broad view that the port is the property of the people at large, and that the provision of the best facilities will promote quicker ship dispatch, attract more ships, and thus enlarge the commerce of the port; that while the port terminal should be self-supporting, the charges should be adjusted to produce this result; without injury to business and that the growth of the port will mean the growth of the city and increased material prosperity to the individuals of the city and State. Those states which have only one-man ports should in particular exert themselves to develop it along the most modern lines, and the first step in this direction is the appointment of a competent port authority.” And further in the Eiver and Harbor Act of 2 March, 1919, appears the following: “It is hereby declared to be the policy *684of Congress that water terminals are essential to all cities and towns located upon harbors or navigable waterways, and that at least one public terminal should exist, constructed, owned and regulated by the municipality, or other public agency of the State, and open to the use of all upon equal terms, and with the view of carrying out the policy to the fullest possible extent, the Secretary of War is hereby vested with the discretion to withhold, unless the public interest would seriously suffer by delay, moneys appropriated in this act for new projects adopted herein, or for the further improvement of existing projects, if, in his opinion, no water terminals exist 'adequate for the traffic, and open to all on equal terms, or unless satisfactory assurances are received that local or other interests will provide such adequate terminal or terminals.”
Under the present national progressive administration, $400,000 is to be had from a sale of bonds to the Reconstruction Finance Corporation to build the port terminal at Morehead City. The present act, interpreted according to the setting, its spirit and intent, is in every respect an agency of the State and fulfills the requirements of a public corporation, as laid down by Thompson on Corporations, supra. It does not contravene Art. VIII, sec. 1, of the Constitution. Under the Congressional Act above set forth, the port authorities should be composed of “the business men who have an excellent grasp of the export and import business,” etc. The present act, Private Laws, 1933 chap. 75, the one under consideration, requires a board “composed of 5 members, all of whom shall be experienced business men,” etc., to constitute the Port Commission of Morehead City, N. O., these to be selected by the board of commissioners of Morehead City and be residents of the city. Thompson, supra, says: (1) “Thus a public corporation is subject to legislative control without any reference to the consent of the persons who control it.” These five members comprising the Port Commission are subject to legislative control without their consent. (2) “A public corporation does not originate in contract, while a private corporation does, and therefore the instrument creating the latter cannot be altered or amended by the law-making power, without the consent of the members who compose it, unless such power is expressly reserved. Public corporations are mere creatures or instrumentalities of the State and are subject to governmental, visitation and control. So, the property of a public corporation is not taxable, while that of a private corporation is.” The present Port Commission does not originate in contract and its property and bonds issued are exempt from taxation. It has power: “(a) To sue and be sued in the name of the said Port Commission; to acquire by purchase and condemnation, and to hold lands for the purpose of constructing, maintaining or operating the terminal or terminals *685hereinafter referred to, and to make such contracts and to hold such personal property as may be necessary for the exercise of the powers-of the said Port Commission, (b) To charge and collect reasonable and adequate wharfage fees and other fees, tolls or dues for the use of such city terminal or terminals, or for the service rendered in the operation thereof, (c) To develop the port facilities of Morehead City by acquiring by purchase (construction or otherwise), improving, maintaining and operating a city terminal or terminals for said city, upon the water front of said city, including all necessary wharves, piers, bulkheads, slips, docks, sheds, warehouses, elevators, and railroad and steamship facilities, and also necessary lands, rights in lands and water rights, to be used and operated for the following purposes, namely: for the landing, loading and unloading of vessels, for the loading and unloading of railroad cars or other carriers, for the interchange or transfer of goods, merchandise or other property between vessels, railroad cars or other carriers, and for the temporary shelter or storage of goods, merchandise or property carried or about to be carried by such vessels, railroad ears or other carriers, (d) To issue bonds . . . such bonds and/or notes issued for the purpose or purposes above set out may be sold at private sale, for not less than par, to the Eeconstruction Finance Corporation or other governmental agency, with the approval of the board of commissioners of Morehead City, but if such private sale is not so made to said Eeconstruction Finance Corporation or other governmental agency, then the sale shall be made under the provisions of the Municipal Finance Act of the State and with the approval of the Local Government Commission. Bonds and notes issued under this act shall be exempt from all State, county of municipal taxes or assessments, direct or indirect, general or special, and the interest paid on said bonds or notes shall not be subject to taxation as income, nor shall said bonds or notes, or coupons of said bonds, be subject to taxation when constituting part of any bank, trust company or other corporation.” (3) A public corporation is, generally, political in its nature, and its object is to carry out a scheme of government, while a private corporation has none of these characteristics.”
The Port Commission is formed to carry out both the State and the U. S. Government schemes requiring public terminals, and the very language of the present act is to carry out a scheme of government. (4) “Public corporations, as a rule, are not liable either for the negligence or torts of their officers. Perhaps the only exception to this rule is in the case of counties, cities and towns, and then only in a limited sense, and in regard to matters involving the exercise of ministerial acts and not governmental functions.”
*686Like tbe State Highway Commission, an agency of the State, no one is given the right to sue it in tort and no one given the right to sue the present Port Commission in tort.
(5) “The right to create these corporations is vested in the Legislature, subject only to constitutional limitations.” The power over the present port corporation is the Legislature. It is the principal of this agency of the State with plenary power over it.
It cannot be disputed that the Legislature has the right to create the Port Commission and the act “may be altered from time to time or repealed.” Power Co. v. Elizabeth City, 188 N. C., 278 (287). And to show it is a public agency of the State, absolutely under its control, through the Legislature, the act itself says: Sec. 11. “That it is hereby declared to be the policy of the State of North Carolina to promote, encourage and develop water transportation, service, and facilities in connection with the commerce of the United States, and to foster and preserve in full vigor both rail and water transportation, and that More-head City, North Carolina, is hereby declared io be a port io be developed in connection with the interior of the State of North Carolina and other states, and that it is hereby declared and deemed by the State of North Carolina necessary and desirable and in the public interest of the entire State that there shall be established through Morehead City, through connecting water and rail rates in connection with shipping companies and other transportation companies and in accordance with the provisions of the acts of Congress in the United States and the laws of North Carolina. The said Pori Commission shall be regarded as performing an essential governmental function in undertalcing the construction, maintenance and operation of the said terminal or terminals and in carrying out the provisions of this act in relation thereto, and shall be required io pay no taxes or assessment upon any of the properties acquired or used by it for such purposes." (Italics mine.)
If the Great Smoky Mountain National Park (N. C. Park Commission) is an agency of the State in the corner of northwestern North Carolina, so decided by this Court in an unanimous decision, then the act under consideration is a State agency, in the eastern part of North Carolina. In these deflated times, as never before in the history of this nation, is the National Government taking so great an interest in national resources and giving employment in the entire nation and this section. For example: The Great Smoky Mountain National Park development in North Carolina and a connecting road to the Shenandoah National Park in the State of Virginia through North Carolina; the Cape Fear River project, making same navigable from Fayetteville; the Muscle Shoals development and the Norris Dam part of the huge *687Tennessee Talley Authority; river improvement and flood control projects in the Mississippi Yalley; the inland waterway which goes through Morehead City, and which is now being surveyed to cross Florida by canal, and numerous other projects to build up and give employment to millions of people. The U. S. Government is ready to finance this port development to the extent of $400,000, which would give employment to untold needy and be the entering wedge to develop the other cities and towns on the eastern seaboard of North Carolina, where there is no finer water front anywhere in the nation, and give cheaper freight rates; encourage the fish and oyster industry and water-borne commerce. These eastern ports would soon teem with trade, through water commerce and railroads and hard-surfaced roads. The railroad would reawaken with traffic. This beneficent legislation should not be destroyed “unless the nullity of the act is beyond a reasonable doubt.”
The railroads and hard-surfaced State highways now run to a dead end. This progressive legislative enactment tends to unbottle the eastern waters of North Carolina for water-borne commerce and gives new commercial life to the railroads and hard-surfaced State highways.