J. O. STYERS, R. C. PFAFF AND ROBERT G. SCHULTZ v. CRAIG PHILLIPS, SUPERINTENDENT OF PUBLIC EDUCATION OF NORTH CAROLINA; A. C. DAVIS, CONTROLLER, STATE BOARD OF EDUCATION; EDWIN GILL, TREASURER OF NORTH CAROLINA; AND GEORGE S. LAMBERT, STATE DISBURSING OFFICER
No. 71
IN THE SUPREME COURT OF NORTH CAROLINA
(Filed 20 January 1971)
277 N.C. 460
The term “intra-city transportation” means the transportation of public school pupils living within the boundaries of any municipality to a school located therein but more than one and one-half miles from the residence of the pupil.
2. Trial § 18- sufficiency of evidence to support material issue question for court
Whether there is enough evidence to support a material issue is always a question for the court.
3. Appeal and Error § 58 -review of injunctive proceeding - power of Supreme Court to find facts
Upon appeal from an order granting or refusing an interlocutory injunction, the Supreme Court is not bound by the findings of fact of the trial court but may review the evidence and make its own findings of fact.
4. Schools § 16- school buses - State Board of Education
The State Board of Education has been relieved of all responsibility for the operation of school buses by
5. Schools § 16- bus transportation discretion of local board
Whether any school board shall operate a bus transportation system is a matter in its sole discretion.
6. Schools § 16- transportation of rural pupils to urban schools - transportation of urban pupils to same schools
A city school board is not required to transport pupils living in the city and attending schools located therein even though transportation to those same schools is furnished pupils living outside the city.
7. Schools § 16- school bus transportation - allocation of funds by State Board - location of pupils’ residences
Plaintiffs’ contention that it would be illegal for the State Board of Education to allocate funds for the transportation of any class of pupils other than the five classes enumerated in Ch. 990, Session Laws of 1969, held without merit.
8. Schools § 16- intra-city transportation of pupils -
9. Schools § 16; Statutes § 5- legislative intent - testimony by legislator - legislative bills which failed to pass
Neither testimony by a former member of the legislature nor bills which were introduced in the legislature and died in committee were competent to show the legislature‘s intention in making an appropriation for transportation of public school pupils, since the intention of the legislature cannot be shown by the testimony of a member nor ordinarily by its failure to act.
10. Schools § 16- intra-city transportation of school pupils allocation by State Board of Education
The State Board of Education had authority under
11. Schools § 16- transportation of urban pupils - authorization by State Board - irrelevancy of court‘s finding
In this action to restrain the expenditure of State tax funds for the intra-city transportation of public school pupils, purported finding by the trial court that “there is no evidence that the State Board of Education has authorized the transportation” of urban pupils to any school is irrelevant, since the State Board does not authorize the transportation of any pupils, but only allocates funds to those boards which elect to operate transportation systems.
12. Public Officers § 8- official acts - presumption of regularity
Absent evidence to the contrary, it is presumed that public officials have discharged their duties in good faith and have exercised their powers in accord with the spirit and purpose of the law, the burden being on the party asserting the contrary to overcome the presumption with competent and substantial evidence.
13. Schools § 16; Public Officers § 8- failure of State Board officially to allocate school bus funds - burden of proof - failure of proof
Plaintiffs had the burden of proving their contention that the State Board of Education has never officially made any allocation of funds for the intra-city transportation of pupils, and the contention is without merit where the case on appeal is devoid of any evidence of such failure and contains no suggestion that State Board minutes were unavailable or nonexistent.
14. Schools § 16- acceleration of use of school bus funds - authority of State Board
The State Board of Education had authority under
15. State § 4- illegal diversion of public funds - standing of individual to enjoin
An individual has standing to contest an allegedly illegal diversion of public funds which will injuriously affect his rights individually or as a citizen and taxpayer.
16. Schools §§ 5, 16; State § 4- expenditures for intra-city transportation of pupils - taxpayer suit to enjoin - standing to maintain action
In this action by three taxpayers to enjoin the expenditure of state funds for the intra-city transportation of public school pupils, the Supreme Court has assumed, without deciding, that plaintiffs might be adversely affected in some way if funds appropriated for the transportation of public school pupils were illegally diverted and that plaintiffs have standing to maintain the action.
Justice MOORE did not participate in the consideration or decision of this case.
Justice HIGGINS concurring in result.
Justice LAKE dissenting.
APPEAL by defendants from Bailey, J., September 1970 Session of WAKE, transferred for initial appellate review by the Supreme Court under an order entered pursuant to
Plaintiffs are three residents of Forsyth County who pay income taxes, “as well as other State taxes,” to the State of North Carolina. Defendants are Dr. Craig Phillips, Superintendent of Public Instruction of North Carolina, ex officio member of the State Board of Education (State Board) and its secretary; A. C. Davis, Controller of the State Board; Edwin Gill, State Treasurer; and George S. Lambert, State Disbursing Officer.
In their complaint, filed 3 September 1970, plaintiffs allege: (1) Defendants are spending tax funds which the State “collected from these plaintiffs” for the transportation of pupils living in Winston-Salem and other cities and towns of North Carolina to and from public schools located within their respective municipalities. The expenditure of tax funds for this purpose is unauthorized by law and therefore illegal. (2) Defendants Phillips and Davis have supplied discarded school buses gratuitously to city boards of education for the transportation of urban
Answering the complaint, defendants deny that they have spent, or plan to spend, tax funds for any unauthorized purpose. They aver that the General Assembly has authorized the State Board to allocate to the respective county and city boards of education all funds which it appropriates for the purpose of providing transportation to pupils enrolled in the State‘s public schools. Defendants also deny that they have transferred any school buses to city boards of education.
Defendants moved to dismiss the action because, inter alia, plaintiffs lack standing to maintain the suit.
On 21 September 1970, Judge Bailey heard plaintiffs’ motion for a preliminary injunction pending the final trial. Both plaintiffs and defendants offered evidence. On 24 September 1970, Judge Bailey issued a preliminary injunction to become effective on 6 October 1970 and to remain in force until the further order of the court. His order restrained defendants, their agents, and all others receiving notice of the injunction, from “expending, disbursing and making available for spending tax funds of the State” for the intra-city transportation of public school pupils in any of the municipalities of the State. The order did not restrain defendants from supplying discarded school buses for the transportation of urban pupils to schools within the city limits.
Defendants appealed from Judge Bailey‘s order and, on 30 September 1970, petitioned this Court to stay the operation of the injunction pending the appeal. Plaintiffs, by answer, opposed the requested stay. A majority of the Court being of the opinion that the preliminary injunction should be suspended pending the hearing of defendants’ appeal and the decision thereon, on 5 October 1970 an order was issued staying its opera-
Smith, Anderson, Dorsett, Blount and Ragsdale and Hatfield, Allman and Hall for plaintiff appellees.
Robert Morgan, Attorney General; Ralph Moody, Deputy Attorney General; and Andrew A. Vanore, Jr., Assistant Attorney General for defendant appellants.
SHARP, Justice.
[1, 10] The ultimate question which this appeal presents is whether the State Board of Education has authority to allocate funds from the General Assembly‘s 1970-71 appropriation for the Nine Months School Fund to city and county boards of education for the purpose of transporting urban pupils to and from schools located within the corporate limits of the cities and towns in which they live. This is a question of law, and the answer must be found in the enactments of the General Assembly. D & W Inc. v. Charlotte, 268 N.C. 577, 151 S.E. 2d 241. The term “intra-city transportation” as used herein means the transportation of public school pupils living within the boundaries of any municipality to a school located therein but more than one and one-half miles from the residence of the pupil.
Plaintiffs contend, and Judge Bailey held, that the General Assembly had appropriated no money for the purpose of providing urban transportation to pupils living within corporate limits as they were fixed in 1957 and that defendants could not lawfully disburse tax funds for that purpose. Plaintiffs also contend that the State Board has never officially made any allocation of funds for the intra-city transportation of pupils; that the action taken was that of defendants Phillips and Davis. Judge Bailey made a “finding” that there was no evidence before him “that the State Board of Education has authorized the transportation” of urban pupils to any school, and plaintiffs assert that is a finding of fact in accordance with their contention.
[2, 3] Whether there is enough evidence to support a material issue is always a question of law for the court. 7 N. C. Index 2d Trial § 18 (1968). However, “[u]pon an appeal from an order granting or refusing an interlocutory injunction, the findings
[4] School transportation is governed by Article 22 of Chapter 115 of the General Statutes, which was enacted in 1955. In that year the General Assembly relieved the State Board of Education of all responsibility for the operation of school buses.
[5, 6] It was specifically provided in
The only authority and control which the State Board has over the transportation of pupils is that provided in Article 22 of N. C. General Stats., Ch. 115. The Board is required by
After the State Board has allocated the transportation appropriation,
“In each and every area of the State where school bus transportation of pupils to and from school is now being provided such school transportation shall not be discontinued by any State or local governmental agency for the sole reason that the corporate limits of any municipality have been extended to include such area since February 6, 1957, and school bus transportation of pupils shall be continued in the same manner and to the same extent as if such area had not been included within the corporate limits of a municipality.”
In 1963 the foregoing section (
The effective date of
In August 1969, a three-judge panel in the U. S. District Court for the Middle District of North Carolina held that
As a result of the decision in Sparrow, a number of school boards had to decide whether to discontinue the transportation of about 41,000 children living in areas which had been annexed by municipalities since 6 February 1957 or to transport approximately 57,000 more. The State Board was faced with the problem of allocating the appropriation for the school year 1970-71, which was inadequate to provide this additional transportation.
For the fiscal year 1970-71, the General Assembly, by Chapters 807 and 1103 of the N. C. Session Laws of 1969, appropriated $465,366,589.00 to the State Board of Education for the Nine Months School Fund. This appropriation, as declared by
The State Board‘s first attempt to meet the crisis created by the decision in Sparrow was to request the Governor as Director of the Budget and the Advisory Budget Commission, in the exercise of authority granted to them by
“The Governor and the Advisory Budget Commission have authorized the State Board of Education to expend from these funds ($15,800,000.00) the amounts necessary to provide for the transportation of urban school children affected by the recent federal court ruling, from the beginning of the 1970-71 school year until such time as the 1971 General Assembly convenes.
“The Governor at that time will determine if, and in what amount, additional funds will be required to provide for continuation of transportation for urban school children for the remainder of the 1970-71 school year, and he will submit an emergency appropriation bill for this purpose for the consideration of the General Assembly.”
Following the advice received from the Governor and the Advisory Budget Commission, the State Board, which-according to Mr. Davis-had previously thought it could not allocate funds for the intra-city transportation of children residing within municipal limits as they existed in 1957, allocated funds to city boards of education for that purpose.
In a further effort to assist city and city/county boards of education meet the transportation crisis, defendants Phillips and Davis directed the State Board‘s division of transportation to request the cooperation of other school administrative units in making available to these boards their discarded buses on a temporary basis. Between June 19 and September 4, 1970, four hundred, seventy-eight (478) of these discarded buses-all of which had been in use during the school year 1969-70-were transferred from one unit to another. Title, which had been in the name of the unit using the bus (
At the hearing before Judge Bailey, Dr. Phillips testified that, under the allocations made by the State Board, transportation appropriation funds are being and will be spent for intra-city transportation in Winston-Salem and other cities. In consequence of the accelerated use of these funds and the transfer of the discarded school buses, as of 18 September 1970, bus transportation
[7] In support of their contention that the legislature has never authorized the expenditure of tax funds for the intra-city transportation of pupils and that such expenditures are contrary to State policy and illegal, plaintiffs rely upon the recitals in N. C. Sess. Laws, Ch. 990 (1963). These recitals are that in June 1963 the State Board was allocating funds for the purpose of providing transportation for five classes of pupils: (1) Those residing outside municipalities and attending schools located outside municipalities; (2) Those residing outside municipalities and attending schools located inside municipalities; (3) Those residing inside municipalities and attending schools located outside municipalities; (4) Those residing in territory annexed by a municipality after 6 February 1957 and attending schools within the same municipality, when transportation was provided in such area prior to annexation; and (5) Those residing in one municipality but attending schools in another.
This argument overlooks the fact that in providing transportation for class (4) pupils, tax funds had been and were being spent for intra-city transportation with specific legislative sanction. It ignores the clear wording of
Plaintiffs argue (1) that in Sparrow the Attorney General took the same position which they take here, that is, that
[8]
Plaintiffs further contend that because the legislature has never made an appropriation large enough to provide intra-city transportation and because Code 66 appropriations for the school year 1970-71 were insufficient to provide it for the city boards electing to operate transportation systems, the legislature manifested its intention that no tax funds should be spent for intra-city transportation.
In his order Judge Bailey declared that “no finding of fact or conclusion of law herein is based in any manner or particular upon any bills which were introduced in the General Assembly which failed of passage. . . .” In their brief, however, plaintiffs refer to the testimony of Mr. Hamrick and to the 1967 and 1969 bills. They contend this evidence shows the legislature‘s intention to reject intra-city transportation of pupils and that this Court should consider this evidence even though Judge Bailey did not. Not so. Both Mr. Hamrick‘s testimony and the bills were incompetent. The intention of the legislature cannot be shown by the testimony of a member; it must be drawn from the construction of its acts. D & W Inc. v. Charlotte, supra. Furthermore, the rule is that ordinarily the intent of the legislature is indicated by its actions, and not by its failure to act. 50 Am. Jur. Statutes § 326 (1944).
In James v. Young, 77 N.D. 451, 43 N.W. 2d 692, 20 A.L.R. 2d 1086, it was held that the legislature‘s failure to pass a bill “cannot be said to indicate any intent on the part of the legislature. A public policy is declared by the action of the legislature, not by its failure to act.” Accord, Reed v. Huston, 24 Idaho 26, 132 p. 109. In Moore v. Board of Freeholders of Mercer County, 76 N.J. Super. 396, 184 A. 2d 748, the defendants argued that the failure of the legislature to pass a bill specifically authorizing a citizen to photocopy public records indicated a denial of the right. The court said, “[W]e decline to attribute any such attitude to the legislature. Defendant‘s conclusion can be nothing more than conjecture. Many other reasons for legislative inaction readily suggest themselves.” In United States v. Allen, 179 F. 13 (8th Cir.) the court said, “Courts can find the intent of the legislature only in the acts which are in fact passed, and
[10, 11] We conclude (1) as a matter of law, that the State Board was authorized and directed by
[12, 13] Absent evidence to the contrary, it will always be presumed “that public officials will discharge their duties in good faith and exercise their powers in accord with the spirit and purpose of the law. . . . Every reasonable intendment will be made in support of the presumption.” Huntley v. Potter, 255 N.C. 619, 628, 122 S.E. 2d 681, 686, 687. “[T]he burden is upon the party asserting the contrary to overcome the presumption by competent and substantial evidence.” 6 N. C. Index 2d Public Officers § 8 (1968). Thus, the burden was upon plaintiffs to produce evidence that the State Board had failed to make the allocations required by
After the decision in Sparrow it was obvious that the funds appropriated for 1970-71 were insufficient to provide nine months transportation for all the units which then elected to operate a transportation system. Unless something was done, the public school education of many thousands of children would be
[14] The final question posed by this appeal is whether the law sanctions such an accelerated allocation and expenditure of the transportation appropriation. We hold that it does.
The Attorney General argues that authority to authorize the accelerated use of funds is a lesser power included in the authority which
[15, 16] This suit is by three taxpayers to enjoin an allegedly unlawful use of public funds. The appeal presents no question of constitutional law. It is the rule with us that an individual has standing to contest an allegedly illegal diversion of public funds which will injuriously affect his rights individually or as a citizen and taxpayer. Teer v. Jordan, 232 N.C. 48, 59 S.E. 2d 359; Freeman v. Madison County, 217 N.C. 209, 7 S.E. 2d 354; 81
We have interpreted the law as it has been written. The General Assembly is now in session and, in the light of present conditions, it may determine whether the transportation of more than one hundred thousand school children shall be discontinued before the end of this school year.
The order of Bailey, J. is
Reversed.
Justice MOORE did not participate in the consideration or decision of this case.
Justice HIGGINS concurring in result:
The plaintiffs, as individuals, brought this action in the Superior Court of Wake County against Dr. Phillips, State Superintendent of Public Instruction, ex officio member of the State Board of Education, A. C. Davis, Controller, State Board of Education, Edwin Gill, Treasurer of North Carolina, and George S. Lambert, State Disbursing Officer, seeking to restrain their official acts relating to the expenditure of State funds for transporting (by bus) pupils in Winston-Salem and other cities and towns to and from schools located within their respective cities.
In the case of Insurance Company v. Unemployment Compensation Commission, 217 N.C. 495, 8 S.E. 2d 619, the plaintiff brought suit against the members of the Unemployment Compensation Commission of North Carolina. The court said: “An action against a commission or board created by statute as an agency of the State where the interest or rights of the State are directly affected is in fact an action against the State.” In Schloss v. Highway Commission, 230 N.C. 489, 53 S.E. 2d 517, the court said: “That the sovereign may not be sued, either in its own courts or elsewhere, without its consent, is an established principle of jurisprudence in all civilized nations. (Citing many authorities). In the absence of consent or waiver, this immunity against suit is absolute and unqualified.” In the case of Insurance Company v. Gold, Commissioner, 254 N.C. 168, 118 S.E. 2d 792, this court said: “‘An action against a commission or board created by statute as an agency of the State where the interest or rights of the State are directly affected is in fact an action against the State. . . .’ The State is immune from suit unless and until it has expressly consented to be sued. It is for the General Assembly to determine when and under what circumstances the State may be sued.” See also Electric Company v. Turner 275 N.C. 493, 168 S.E. 2d 385.
I think this action should have been dismissed on the ground the plaintiffs failed to show the State had given its consent to be sued.
Justice LAKE dissenting:
Proceeds of State tax levies, appropriated by the General Assembly for one purpose, may not lawfully be disbursed by State officers for a different purpose. Constitution of North Carolina,
The State Board is required by
Clearly, this statute contemplates that the Legislature will make an appropriation for transportation deemed by it sufficient to run the buses through the entire school year and that the appropriated funds will be allocated to that end. Thus, we must assume that the appropriation made by the General Assembly of 1969, for the 1970-71 school year, was intended by it to provide bus transportation throughout the entire school year for rural children attending schools in Dare and Cherokee Counties, and in other rural areas, as well as for children then contemplated as potential school bus riders in Winston-Salem, Charlotte and other cities. It is not contended that the appropriation actually made by the General Assembly of 1969 was not adequate for this purpose.
But for the decision of the Federal Court in Sparrow v. Gill, 304 F. Supp. 86, correctly summarized in the majority
Sparrow v. Gill, supra, has no effect upon the proper construction of the Appropriations Act of 1969. If it would have been unlawful for the State Board to have allocated, and for the defendants to have disbursed, the appropriation made for the year 1969-70 as the State Board has attempted to do, and as the defendants propose to do, with the appropriation for the year 1970-71, then the allocation and the proposed disbursement now before us was and will be unlawful. The majority opinion states that it was the opinion of the State Board‘s officers prior to August 1970 that it could not lawfully allocate the appropriation so as to provide funds for transporting children living in portions of the city not annexed since 1957. It is my view that those officers were right then and are in error now.
I agree with the majority that, upon this record, we must assume that the State Board, at the beginning of the 1970-71 fiscal year made an allocation of the total fund appropriated by the 1969 General Assembly for transportation of school children, which allocation, if lawful, would justify the proposed disbursements. The State Board did so by adding many thousands of city children to the bus riders contemplated by the 1969 General Assembly when it made the appropriation for the entire State for the entire school year. In so doing, the State Board necessarily took from the children of Dare, Cherokee, and other rural areas, the opportunity to ride to school after April first in order to provide for the new city bus passengers the opportunity to ride up to that date.
Of course, in so doing, the State Board acted in the hope that the 1971 General Assembly will appropriate additional funds sufficient to enable all the children to ride buses to and from school throughout the school year. There is no duty imposed by law upon the 1971 General Assembly to do so. At the time Judge Bailey was required to act and now, when we are re-
The majority opinion is clearly correct in saying that each city board may determine for itself, free from any control by the State Board, or other State agency, whether it will or will not operate school buses.
I do not find in the provision of
At first glance,
If, on the other hand, the State Board, in allocating the appropriation made by the 1969 General Assembly, could not lawfully take into account the children who live in the parts of the city other than those annexed since 1957, which children the city board has now elected to transport, in deference to the decision of the Federal Court, and so the disputed disbursements are enjoined, these are the possibilities: (1) The county boards will operate their buses throughout the entire school year, and (2) the city boards’ buses will (a) stop operating when the lawfully allocated funds are exhausted, or (b) will be operated thereafter by local funds, or (c) the 1971 General Assembly will make a further appropriation to enable these buses to operate.
Judge Bailey‘s order restrained the defendants from “making available for spending” by city boards any “tax funds of the State” for transportation of children living in the city to public schools within the city. This goes too far. A disbursement to a city board pursuant to a re-allocation, taking into account only those city pupils living in areas annexed to the city since 1957, would clearly be within the right and duty of the defendants, if the remaining transportation needs of the city board are met with local funds. It would not run counter to the decision of the Federal Court in Sparrow v. Gill, supra.
The Sparrow case dealt with the right of children living in an older part of the city to ride a public school bus, so long as other children living in areas annexed to the city since 1957 are provided such transportation. It was not concerned with how the cost was to be divided between the State and the city, nor with whether all city school buses were to operate for all or only a part of the school year. It recognized that the Constitution of the United States does not forbid a State to distinguish, in this matter, between urban and rural children. Thus, if the
Does
Nothing else appearing,
The Governor‘s Budget Message to the 1969 General Assembly expressly requested an appropriation for transportation sufficient to include the cost of busing children living in areas of the city other than those annexed since 1957. This, of course, was prior to the decision in Sparrow v. Gill, supra. This was what is known as a B-Budget request; i.e., an appropriation in addition to that deemed sufficient to continue former busing practices. Specifically, the Governor said to the 1969 General Assembly in this message:
“Further, public school bus transportation should be extended to include urban and suburban children. As long as the State assumes responsibility for school transportation, with all taxpayers supporting it, this service should not be limited to rural children who live more than one and one-half miles from the school.”
A bill to put this recommendation into effect, Senate Bill No. 91, was introduced in the General Assembly of 1969. It specifically directed the State Board to take into consideration, in allocating the appropriation for school bus transportation, all
Only the A-Budget provision for public school transportation was approved and enacted by the General Assembly of 1969. That is, the appropriation, the allocation of which we now have before us, was made by a General Assembly, which was specifically requested to appropriate money for transportation of city children not theretofore considered by the State Board in making allocations and said, “No.”
I can find no basis for doubt that the 1969 General Assembly intended for its appropriation to be divided among the county and city boards without taking into account the desire of any city board, under pressure of a Federal Court decision or otherwise, to transport city children residing in parts of the city not annexed since 1957. That being true, the allocation for the fiscal year 1970-71 made by the State Board is unlawful and will not authorize disbursement of State funds by the defendants. The State Board should make a re-allocation of the appropriation made by the 1969 General Assembly and disbursements heretofore made to the respective county and city boards should be charged against such new allocations.
I also dissent from the holding of the majority opinion that the admission in evidence of bills introduced in the 1967 and 1969 Sessions of the General Assembly was error. Our decision in D & W, Inc., v. Charlotte, 268 N.C. 577, 151 S.E. 2d 241, does not support the majority‘s position in this case. There we were concerned with an affidavit of a member of the Legislature offered in evidence to show what the Legislature intended by a statute which it enacted. Of course, as we there held, that is not competent. Here the evidence shows the Legislature‘s action,
It is true that the defeat of a bill making an action mandatory does not necessarily show an intent to prohibit such action voluntarily undertaken, nor does it necessarily show an intent to exclude such voluntary action from the benefit of an appropriation made by another act of the Legislature. Whether or not rejection of proposed legislation, either on the floor or in committee, is a valuable indication of what the Legislature intended by the statute which it enacted, depends on the nature of the rejected proposal and its relation in time and content to the enacted statute. A contemporaneous rejection of a proposal to appropriate for a specified purpose clearly indicates an intent to omit such purpose from the appropriation made. The majority‘s sweeping declaration that the Legislature‘s inaction or refusal to act does not show the proper construction to be placed on what it did enact is too broad.
The refusal of the 1969 General Assembly to accept the Governor‘s recommendation and B-Budget request for an appropriation to do what the State Board has undertaken to approve is certainly a part of the legislative history of the very appropriation we are considering. In my opinion, it is most persuasive. With the wisdom or lack of wisdom of this legislative decision, we may not properly concern ourselves in this case, nor may we properly construe its action by conjecture as to what it would have done if it had been given the wisdom to foresee what the Federal Court was later to decide in Sparrow v. Gill, supra.
I would, therefore, modify and affirm Judge Bailey‘s order.