Court Opinion

ID: 9587833
Source: CourtListenerOpinion
Date Created: 2023-08-21 23:26:49.177596+00
Date Added: 2024-06-11T13:38:46.425421
License: Public Domain

Spratley, J.,
dissenting in part.
I cannot subscribe to that portion of the majority opinion in the case of County of York v. City of Williamsburg, Record No. 5608, which holds that the city should assume 3.078% of $1,250,000.00 school bonds issued by the county of York on August 8, 1961, more than one year after these proceedings were instituted.
The record shows that at the date of the final order of the trial court, May 15, 1962, only the sum of $422,129.00 of the proceeds of the said bond issue had been expended, or pledged to be expended. The remaining $827,871.00 was then deposited in a bank to the credit of the county, presumably bearing interest at the current rate. It can be used for improvements in the remainder of the county, as proposed in the bond issue, or to curtail the indebtedness created by the issue. If expended in the county,, it will furnish to that extent additional security to the bondholders. If left on deposit, it may produce a greater return than the interest charged on the bonds, considering that current interest rates on municipal securities are generally lower than rates paid by many banks on saving accounts.
At any rate, the bank deposit is an asset of the county sufficient to pay an equal amount of the indebtedness created by tbe bond issue, or an offset of liabilities to an equal extent.
Neither the annexed area nor the city will share in any portion of the balance on deposit. None of it will be expended in the annexed area lost to the county by annexation. Neither the city nor the annexed area will get any benefit therefrom.
The facts show that the issue of the bonds after these proceedings were begun was a questionable act. Although an issue of bonds under a like situation is not specifically prohibited by statute, there is a statute which directs that an annexation court “in making its decision, shall balance the equities in the case,” Code, § 15-152.12, in requiring the annexing city to assume “a just proportion of any existing debt of the county or any district therein.” Code, §15-152.12 (b).
Under a somewhat similar situation, we held in County of Fairfax v. Alexandria, (1951) 193 Va. 82, 94, 68 S. E. 2d 101, that the an*751nexing city should be required to assume only that portion of an existing bonded indebtedness of the county which remains after the exclusion of expenditures proposed to be made in the area annexed; but which for some reason have not become necessary, and also the exclusion of certain revenues collected by the county in the area about to be annexed.
Also, see Norfolk County v. Portsmouth, (1919) 124 Va. 639, 98 S. E. 755, where we said:
“* * * (jqt Would be inequitable to hold that that portion of the county and its people embraced in the annexation aforesaid must carry with them a part of the burden of such indebtedness, when they cannot carry with them the benefit of any part of the security therefor in which they formerly had an interest.”
It seems to me inequitable and unjust to burden the residents of the annexed area and the city with a portion of an indebtedness from which they will receive no benefit; while the county retains the proceeds for further development of the county, or as a possible investment.
At most, I think the city of Williamsburg should be required to assume only 3.078% of the sum of $422,129.00, the amount expended, or pledged to be expended, at the time of the final order of the trial court.
Any other conclusion will be a violation of the letter and spirit of Code, § 15-152.12; and, perhaps, an invitation to a county when a portion of its territory is sought in an annexation proceeding, to immediately issue bonds in an amount calculated to deter a city or town from prosecuting an annexation proceeding.
I am otherwise in accord with the reasoning and conclusion of the majority opinion in the County of York case.
I’Anson, J., joins in this dissent.