199 S.E. 7 | N.C. | 1938
Reversed.
The plaintiff had reduced to judgment certain tax anticipation notes made by the town of Saluda, and brought this proceeding for a writ ofmandamus to compel the defendants, commissioners of the town, to levy a sufficient tax to pay the judgment.
The complaint alleges that for a period of more than five years the defendants failed and refused to levy any tax to take care of the notes and interest, paying thereon during said time only the sum of $89.85 in August, 1936; that the notes were anticipation notes which the town was authorized to issue against expected collection of taxes for the year in which they were issued, and that plaintiff had secured judgment thereon; that the town had as resources available to pay the judgments: (a) taxes for the year 1936 and prior years uncollected and pledged, $25,000; (b) cash on hand, $1,000; (c) actual value of all property belonging to the city, other than above enumerated, sought to be subjected to additional taxation, $600,000. The complaint further sets out that a large part of the taxes pledged to discharge plaintiff's notes had *237 been collected by defendants and applied to other purposes and diverted to the payment of junior claims; and that defendants have refused to perform their legal duty in the levy of tax sufficient to pay plaintiff's lawful demands.
The defendants admit the validity of plaintiff's judgment and that the commissioners have failed for five years to levy a tax to liquidate the debt. They deny that the financial condition of the town is as stated in the complaint, alleging that the assessed valuation of property in the city for the year 1936 was $525,202, and for the year 1936 approximately $500,000.
As a further defense, defendants allege that the population of Saluda is only 524, and that the income of the inhabitants has been much reduced by reason of the depression; that many summer houses have been abandoned without payment of taxes, and that it has been impossible to collect taxes; that in view of the large outstanding bonded indebtedness of the town, it would be "unfair, unjust, and inequitable" for the writ of mandamus to issue, and defendants "invoke the equitable aid of the court" in requiring that creditors be treated alike.
Parts of the answer not considered pertinent to this opinion are omitted.
By agreement, the case was submitted to the judge without jury, and findings of fact were made.
As to the financial condition of the town, the court finds that it owes $332,470 principal, and that the total value of property in the town subject to taxation for the year 1937 was $436,000 — making the debt 76% of the total property valuation; that the city tax rate is $1.60 on the $100.00 valuation, and the county rate $2.35, making a total of $3.95 per $100.00.
It is found that upon a rate of $1.60 per $100.00, the city collects $7,000 a year, and that the operating expenses are $7,500 a year. It is found that the population is 558; that the citizens are unable to pay any higher rate; that the imposition of further taxes will result in foreclosure; that uncollected taxes amount to $25,000 or $30,000, and that only $5,000 or $6,000 may be ultimately realized from this source.
The judgment concludes:
"Upon the foregoing findings of fact, the court concludes as a matter of law that the remedy sought by the plaintiff does not lie, for that the issuance of a writ of mandamus would result in the assured foreclosure of the property of the citizens of Saluda for the purpose of requiring the payment of its bonded indebtedness in preference to the right of the city to function as a municipality and to supply to its citizens necessary services usually rendered." *238
From early times in this State, and generally elsewhere, mandamus has been recognized as a proper proceeding to compel a levy of tax to pay a judgment against a municipality. Gooch v. Gregory,
In fact, it is often the only remedy, since the property of a municipality necessary to carry on government is not subject to execution.Hardware Co. v. Schools,
Settled authority and precedent in the use of mandamus to enforce a money demand so limit the jurisdiction and discretion of the court as to preclude a favorable consideration of many of the matters urged upon us as equitable defenses in the case at bar, and which seem to have had an influence in the decision of this case in the trial court.
Such proceedings are not proceedings in equity. Walkley v. Muscatine, 6 Wall. (U.S.), 481; Thompson v. Allen County,
Inhibitions against its use will be found to arise more out of the nature of the subjects to which it is applied, and the powers and functions of officers upon which it is intended to operate, rather than anything inherent in the writ. Of course, it will not issue to require a levy of taxes beyond the constitutional or statutory limitations, where such limitations exist; and even within these limits it may be accepted as established law that private right must be subordinated to public necessity in the sense that needs of government, economically administered, have a prior demand on the proceeds of taxation. Cromartie v. Comrs. of Bladen,
We have no definite classification as to the kind of service a municipality may furnish its citizens to the postponement or defeat of its obligations to creditors. In Cromartie v. Comrs. of Bladen, supra, there is more than a suggestion that such classification may not be made arbitrarily, at the pleasure of the commissioners or governing body of the municipality, and in the exercise of an unreviewable discretion. But it is not necessary to decide that matter at this time, however interesting it may be in its relation to the facts in the record.
In passing on plaintiff's right to the writ of mandamus, the Court must be guided by the principles above enunciated, and not by general rules which it might call to its aid in a distinctly equitable proceeding.
It follows that mere amelioration of the burden of taxation is not a proper consideration. The unfortunate condition of the town in that respect might possibly have been foreseen and prevented, since it is difficult to see how a town of 558 inhabitants could incur a bonded debt of $330,000 without the sanction of its citizens at the polls.
Nor have we any discretion to refuse the writ on the ground that it might work a preference of plaintiff's claim over those of other creditors. Whatever preference may ensue upon the issuance of the writ began when plaintiff brought suit on its claim, and may be referred to its more diligent resort to a remedy open to all creditors alike. *240
It does not affirmatively appear in the record or in the findings of fact that in providing for the needs of government the commissioners of the town have reached the limit of their authority to levy taxes, and we think there was error in refusing the writ.
The judgment is
Reversed.