27 S.E.2d 829 | W. Va. | 1943
Lead Opinion
This is a proceeding under Code,
The special bond election in question was held under the provisions of Article 1 of Chapter 13 of the Code. The order of the county court calling the election was entered on the 4th day of May, 1943. The election was held on June 4, 1943, the result thereof, after a recount of the votes was had, was declared on June 16, 1943, and shortly thereafter the question of the approval of the issue was submitted, under the statute, to the Acting Attorney General, and the issue was approved by him on July 20, 1943. In the meantime, the petitioner herein, and in the same capacity, had instituted a suit in equity in the Circuit Court of Raleigh County, against the County Court of Raleigh County, a corporation, in which he attempted to contest said election, on the grounds of alleged fraud and irregularities in the conduct of the same, and for other reasons not definitely stated; and seeking an injunction *234 against the county court from further proceeding with the said election, and from issuing the bonds claimed to have been authorized thereby. Information as to the pendency of this suit, in the form of a letter written by counsel, was communicated to the Acting Attorney General; but whether a copy of the bill filed therein was actually furnished him, in advance of his action, is not clear.
The petition before us sets up four grounds upon which we are asked to reverse the action of the Acting Attorney General in approving the bonds; first, that the statement contained in the order calling the special election with reference to the indebtedness of the county, bonded and otherwise, was false, and operated to mislead the voters; second, that the actual purpose of the issue was to acquire land and construct an airport and landing field thereon, and that Code,
We consider the first ground mentioned as one of primary importance, and determinative of the main question we are called upon to decide. As stated above, the special election was called and held under the provisions of Article 1, Chapter 13, of the Code. The assessed value of all taxable property in Raleigh County for the then current year was $55,467,069.00, and the outstanding bonded indebtedness of the county, consisting entirely of district road bonds was, as of the date when the election was called, the sum of $780,500.00. Therefore, no question *235
arises as to the proposed new issue creating a bonded indebtedness in excess of that permitted under Section 8, Article 10 of the Constitution, or under Code,
Code,
On the basis of the statement contained in this certificate of the County Clerk, the ingenious argument is made that, inasmuch as all of these funds belong to Raleigh County, there was, in fact, no overdraft; that an overdraft must represent indebtedness; and that a county cannot be indebted to itself. We cannot agree with this contention. The money in the hands of the various sinking funds was the property of the magisterial districts issuing the bonds, for the retirement of which the sinking funds were created. When the county court appropriated these funds, and used them in paying drafts drawn on the county *237 fund, that fund owed the various magisterial districts the sums of money used by the Sheriff in paying these drafts, to the same extent as the county would have been indebted to the holders of the drafts had they not been paid. In any way we look at the matter we inevitably come to this conclusion. Indebtedness of a county, through an overdraft in its county fund, cannot be wiped out by any such legal legerdemain. Therefore, on May 4, 1943, the county court was indebted, on account of this overdraft, in the sum of $178,083.65, less any amount which may have been paid thereon; and the extreme limit of any such payment, according to the Clerk's certificate was $100,000.00. We call attention to the fact that it is not stated that this overdraft had been reduced by that sum, the certificate merely saying that "moneys were accumulated and available * * * to be replaced in said surpluses * * * to the amount of approximately $100,000.00."
That the overdraft in question was not a current expense, is too clear for argument. In the first place it was money spent in years prior to the fiscal year 1942-1943 and no part thereof expended in that year. In the second place, it was indebtedness illegally created, in violation of the provisions of Section 26, Chapter
We now have before us, as did the Acting Attorney General, the true facts. They are entirely different from those stated in the court order calling the special election. In that order it was stated that, aside from the $780,500.00 district road bonds, the county was not indebted except for current obligations. That statement was obviously untrue *238 for the reason that it is clear, from the statement of the State Tax Commissioner, and that of the County Clerk, that, as of July 1, 1942, the overdraft in the county fund was $178,083.65, which, in no aspect of the case could have been reduced below $78,083.65 at the date the election was called. In this connection, counsel for the respondents take the position that the record does not show that any part of the overdraft existed at the time the election was called, which the available revenues within the current fiscal year would not cover. We think the Clerk's certificate which is most favorable to the respondent, clearly indicates that at least $78,083.65 of the overdraft remained unpaid when the election was called, and, as stated above, we do not think the certificate of the Clerk shows an actual reduction of the overdraft at that time. We think it may be safely assumed that if this overdraft had been paid, as of the date the election was called, or could be paid out of current revenues, the Clerk's certificate would have so stated.
The incorrect statement as to the county indebtedness, contained in the county court's order calling the special election, cannot be defended in principle. The pertinent statute required that the voters of the county be correctly advised as to all existing indebtedness, bonded and otherwise, and we think this requirement is mandatory, and calls for the utmost good faith in its compliance, on the part of the county court. Mistakes can some times be overlooked; but, in this case, the officials of Raleigh County, having charge of its finances, had in their possession all the records necessary to disclose the actual indebtedness of the county, could have made a true and correct statement thereof, and failed to do so. No reasonable explanation is advanced why the existence of this large overdraft in the county fund was concealed from the voters; and no good reason is advanced why we should overlook such concealment, or say that, notwithstanding this glaring failure to state the true facts, what was done was a substantial compliance with the statute. *239
According to the papers considered by the Acting Attorney General, and now presented to us, the true status of the financial affairs of Raleigh County at the time the election was called was approximately this: The outstanding district road bonds aggregated the sum of $780,500.00, and there had been collected in the districts, and paid into the sinking fund of the State, to be used for their retirement as they matured, the sum of $195,329.42. According to the Clerk's certificate of July 6, 1943, approximately $100,000.00 had been accumulated with which to replace in the sinking fund in the hands of the Sheriff, and the county fund owed the sinking fund the remainder of the overdraft which had been paid out of these surpluses amounting to at least $78,083.65; so that, apparently, the aggregate of the sinking funds in the hands of the Sinking Fund Commission of the State, and the Sheriff of Raleigh County, was approximately $373,413.07. Of course, this sum had not been applied on the bonded indebtedness, and that indebtedness was still outstanding; but that indebtedness did not loom so large, when the county had available funds out of which practically one-half thereof could be paid; and so, giving full credit as against the bonded indebtedness for the sinking funds, the districts would only have been required to collect $407,086.93 in taxes, in order to have a fund available sufficient to liquidate the bonds in full. If we add to this balance of bonded indebtedness, considering the accumulated sinking funds, the full amount of the overdraft in the county fund as of July 1, 1942, we have the sum of $585,170.58 as the total of the amount the county and districts would have to pay, as against the $780,500.00 of bonded indebtedness stated in the county court order calling the election; and of course the first mentioned sum would be reduced by whatever amount had been paid on the overdraft as of May 4, 1943. These figures are reached on the assumption, apparently followed by all parties to this controversy, that the aggregate of the outstanding bonds is $780,500.00, and that no account had been taken *240 of the sinking funds which had been accumulated for their payment.
This leads to the suggestion that, while the order of the county court calling the special election did not correctly state the financial status of the county, the truth is that, had that status been correctly presented, it would have appeared in a light more favorable to the county than that incorrectly stated in the court's order. If the total indebtedness of the county, including the whole of the overdraft as of July 1, 1942, and taking into consideration the available sinking funds, was only $585,107.58, that was a picture more favorable to the county than the statement made that the bonded indebtedness alone was $780,500.00. And if the overdraft had been reduced the picture would have been still brighter. If we assume that the voters were influenced, in casting their ballots on the bond issue proposal, by the amount of existing indebtedness, it may be contended that the smaller the existing indebtedness the more likely they were to vote to increase it. This raises a question of whether we can say that the misrepresentation, made in the county court's order, affected the result of the election, and was intended to, and did, operate in favor of the proposed bonds; and the further question of whether we shall permit the misconduct of county officials to thwart the will of the people in voting for these bonds, assuming, for the purposes of this case, that a sufficient number of such voters actually voted for the bonds. It may be plausibly contended that a true statement of the financial condition of Raleigh County would have tended to increase the number of votes cast in favor of the bond issue. But on the other hand a disclosure of the fact that the county court had permitted an overdraft in the county fund in a very large amount to accumulate might have had the effect to defeat the bonds. These are only matters of speculation.
But when everything is said that can be said in favor of the theory that the misrepresentation practiced by the county court, with respect to Raleigh County's indebtedness, *241
did not in fact bring about a result different from that which would have been reached had the truth been told, we are still confronted with the fact that the requirements of Code,
What we have said disposes of the main question, but, other questions being raised, they are entitled to consideration.
The second objection raised to the action of the Acting Attorney General is based upon the alleged failure of the county court to specify the amount of money proposed to be used for the different purposes which the court had in mind. The purpose the county court had in mind, as appears from its order calling the election was to "establish, acquire and construct an airport * * *"; and to submit to the voters the question of issuing bonds, the proceeds from the sale of which were to be used "for the acquisition and construction of said airport or landing field"; and "the purpose for which the proceeds of bonds hereinafter *243 described are to be expended are to acquire and construct an airport or landing field in and for Raleigh County, West Virginia, and in Shady Springs District thereof, at what is commonly known as the Penman site, which is located approximately one mile north of the junction of the Grandview and Penman County Roads leading to Beckley."
We think the language used refers to one project or purpose, and is not a case coming within the requirements of Code,
The third objection to the Acting Attorney General's ruling is based on the contention that the action of the county court, in calling the bond election in question, was in some way due to the activity of the Chamber of Commerce of the City of Beckley and others, and some financial assurance against loss to the county court should a proposed bond issue be defeated. We do not approve the practice of public bodies accepting financial assurances in such circumstances, but, aside from this, if this organization, and others interested in the project, attempted, *244
in a proper way, to influence the county court in this matter such attempt should not be allowed to invalidate a bond issue voted by the people. A county court may, on its own initiative, submit the question of issuing bonds to the voters of a taxing unit over which it has control; and, where petitioned to do so by a stipulated percentage of the legal voters, is required to do so. Code,
The fourth point of objection relates to the pending suit in equity seeking to contest the election, and to enjoin the issuance and sale of the bonds. In view of our holding, the questions involved in that suit would appear to be moot. Therefore, we do not deem it necessary to discuss this feature of the case except to say this: Even if we were to hold, that, on the papers presented to the Acting Attorney General, his action in sustaining the bonds should be upheld, such action on our part would not be permitted to have the effect of ousting the Circuit Court of Raleigh County of its jurisdiction to finally hear and determine the matter set up in the pending litigation. The provisions of Code,
We are of the opinion that the issue of bonds in question is invalid, and the ruling of the Acting Attorney General is therefore reversed.
Ruling of Acting Attorney General reversed.
Dissenting Opinion
I would deny the prayer of the petition and hold the bond issue valid.
The majority opinion holds the bond issue invalid on the sole ground that the statement of the existing overdraft in the county fund was not made and published in the order calling the election. The statutory provision requiring a statement of the indebtedness of the political subdivision to be set forth in the order calling a special election to authorize a bond issue is mandatory. McGuire v. City of Philadelphia,
The order as published by the County Court of Raleigh County stated that the bonded indebtedness was $780,500, being the aggregate amount of bonds issued on behalf of the magisterial districts of the county. A magisterial district is not a legal or corporate entity, and, being merely a territorial division for the election of certain officers, bonded indebtedness incurred in the name of such district is a debt of the county in which it is located. Neale v. County Court,
For the purpose of determining whether the constitutional limitation of indebtedness will be exceeded, assets *247
devoted to payment of outstanding bonded indebtedness and in the hands of the proper officer, board or fiscal body may, within certain limitations, be deducted from the amount of outstanding bonded indebtedness. Brook v. Philadelphia,
It seems to me that the holding of the majority when fully analyzed nullifies an election for the failure of the *248 county court to segregate its bonded indebtedness from its overdraft indebtedness and correctly itemize the same in its order calling the special election, and that the rule of substantial compliance with the statute was overlooked. "It is a canon of election law that an election is not to be set aside for a mere informality or irregularity which cannot be said in any manner to have affected the result of the election. Courts are anxious rather to sustain than to deny the popular will." Dillon on Municipal Corporations, 5th Ed. Section 374. See McQuillin Municipal Corporations, Second Ed. Sections 430 and 2361.
The objections to the bond issue do not go to the constitutional and statutory power of the County Court of Raleigh County to issue the bonds, but only to the manner in which that power was exercised. It is in conflict with the weight of authority to invalidate a bond issue after a special election has been held authorizing the same, where the action of a fiscal body is within its power and jurisdiction and substantially complies with the statute. In this case the invalidity of the bond issue is grounded on a technical failure to comply with the letter of the legislative enactment.
For the reasons above mentioned, I respectfully dissent.