Summary
In City of Spartanburg v. Leonard, 180 S.C. 491, 186 S.E., 395, this Court laid down the following rule of statutory construction: "In ascertaining Legislature's intent. court is not governed by apparent meaning of words in one clause, sentence, or part of statute, but by consideration of whole act, read in light of conditions and circumstances as they appeared to Legislature and purpose sought to be accomplished."
Summary of this case from Johnson et al. v. Pratt et alOpinion
14310
June 10, 1936.
Before JOHNSON, J., Spartanburg, March, 1936. Affirmed.
Controversy without action between the City of Spartanburg and L.K. Leonard. Decree for the city, and Leonard appeals.
The decree of Judge Johnson is as follows:
This controversy without action is submitted, pursuant to Section 668 of the Code (1932), to the Court of Common Pleas for its determination and judgment. It presents the question of the right of the City of Spartanburg to redeem an outstanding issue of $230,000.00 of 4 per cent. waterworks bonds, issued September 1, 1908, and maturing September 1, 1948. A subordinate question for determination is the sufficiency of the notice of redemption which the City of Spartanburg proposes to give to the bondholders.
After a favorable election, as required by the Constitution, these bonds were issued pursuant to a general statute (Sections 2021 and 2022, Vol. 1, Civ. Code 1902), and a special Act of 1908 (Act Feb. 26, 1908, No. 603, 25 Statutes at Large, p. 1346). The bonds contain a recital that they were issued under both the general statute and the Special Act.
The general statute provides that bonds issued thereunder "shall * * * run for such length of time * * * as the said municipal authorities shall prescribe." Section 2022. The Special Act recites in the preamble that the city council of the City of Spartanburg desires to issue waterworks bonds, payable forty years after date, "with the privilege of redemption after twenty years from their date"; while in the body of the Special Act it is provided that bonds issued thereunder shall be payable forty years from their date, "with the privilege of redemption twenty years from their date." Prior to the issue of the bonds, the city council by ordinance fixed the form of the bonds, and therein prescribed that they should be payable on the 1st day of September, 1948, "with the privilege of redemption on or after the first day of September, 1928." Public advertisement of the sale of the bonds, widely published by the city council prior to their sale, stated that the bonds were payable forty years after their date, "with the privilege of redemption after twenty years from their date." The bonds themselves state that they are payable on the 1st day of September, 1948, "with the privilege of redemption on or after the first day of September, 1928."
The interest is payable semi-annually through Central Hanover Bank Trust Company of New York (formerly Hanover National Bank), and funds are forwarded by the City of Spartanburg semi-annually to that bank to meet interest requirements. By the terms of the bonds, both principal and interest are payable through that bank.
The City of Spartanburg now desires to refund at a lower rate of interest the indebtedness represented by the outstanding bonds, and to that end now seeks to call them for redemption. The defendant is the owner and holder of two bonds of the said issue. There are numerous other bondholders, whose names are unknown to the plaintiff, as the bonds are not registered, and interest is paid to the bondholders through the New York bank. It is assumed that all bondholders deny the right of the City of Spartanburg to redeem the bonds at the present time.
The position taken by the defendant is that, since the Special Act of 1908 provides that the bonds issued thereunder shall carry the privilege of redemption "twenty years from their date," and since they were not redeemed September 1, 1928, their maturity date is irrevocably carried forward to September 1, 1948. The City of Spartanburg takes the position that the bonds are redeemable at any time after September 1, 1928.
The Special Act of 1908, properly construed, authorizes an issue of bonds, redeemable "on or after September 1, 1928." The paramount consideration and the controlling factor in determining the meaning of any statute is the intent of the Legislature in passing it. In ascertaining the intent of the Legislature, the Court is not to be governed by the apparent meaning of words found in one clause, sentence, or part of the Act, but by a consideration of the whole Act, read in the light of conditions and circumstances as they appeared to the Legislature, and the purpose sought to be accomplished. Fulghum v. Bleakley, 177 S.C. 286, 181 S.E., 30. Reference to the preamble of the 1908 Act discloses that the City of Spartanburg had recently voted to acquire a waterworks system for the city, and that the City of Spartanburg desired to issue bonds "with the privilege of redemption after twenty years from their date," with which to pay for the waterworks system. While it is true that the preamble is not a part of the effective portion of the statute, nevertheless the preamble may supply the guide to the meaning of the Act. 25 R.C.L., 1030; Bynum v. Clark, 3 McCord, 298, 15 Am. Dec., 633; Garrick v. Florida Central Railroad Co., 53 S.C. 448, 31 S.E., 334, 69 Am. St. Rep., 874.
By reference to the preamble, which is aptly described by the Supreme Court of the United States in Coosaw Mining Company v. State of South Carolina, 144 U.S. 550, 12 S. Ct., 689, 692, 36 L.Ed., 537, as "a key to open the understanding of a statute," and by considering the circumstances as they appeared to the Legislature at the time the 1908 Act was passed, it becomes quite apparent that the purpose of the Legislature was to effectuate the plan which had been formulated by the City of Spartanburg to buy a waterworks system and to pay for the system with an issue of forty-year bonds, redeemable at any time after twenty years from their date. This purpose, so lucidly expressed in the preamble, floods with light whatever places in the statute might otherwise be dark. The conclusion is inescapable that the Legislature intended to provide in the 1908 Act that the bonds might be redeemed at any time after twenty years from their date, and that the omission of the word "after" in the body of the Act was inadvertently made. The supplying of a word unintentionally omitted in a statute, in order to give effect to the purpose of the Legislature, is entirely legitimate. 25 R.C.L., 975; Continental Oil Co. v. Santa Fe, 25 N.M., 94, 177 P., 742, 3 A.L.R., 404; Commonwealth v. Herald Publishing Company, 128 Ky., 424, 108 S.W. 892, 16 Ann. Cas., 761; Abernethy v. Board of Commissioners, 169 N.C. 631, 86 S.E., 577; Abernathy v. Mitchell, 113 Ga. 127, 38 S.E., 303; Jones v. Mail Exp. Publishing Company, 80 Hun, 368, 30 N.Y.S., 335.
Another well-established rule of statutory construction comes to the aid of the City of Spartanburg in this situation. It is that the construction given to a statute by those charged with the duty of executing it is always entitled to the most respectful consideration and ought not to be overruled without cogent reasons. Read Phosphate Company v. South Carolina Tax Commission, 169 S.C. 314, 168 S.E., 722. In the case of these bonds, it is entirely clear that the city council of the City of Spartanburg, its officials charged with the duty of executing the 1908 Act, construed that Act as authorizing an issue of bonds redeemable at any time after twenty years from their date. Such was the council's plan of finance, as indicated by the preamble of the Act, and such was the council's construction of the Act after its passage. Prior to the issue of the bonds, the council prescribed their form: "With the privilege of redemption on or after the first day of September, 1928." Then the bonds themselves were issued by the city council with the privilege of redemption "on or after the first day of September, 1928." Before the bonds were offered for sale, the city council widely advertised them "with the privilege of redemption twenty years after their date." Applying the rules of statutory construction above set forth, the Act of 1908 should be construed as authorizing bonds redeemable "after" twenty years from their date.
If it should be conceded that the Act of 1908 does not authorize an issue of bonds redeemable "on or after" twenty years from their date, nevertheless the bonds in question were regularly issued under the general Act embodied in the 1902 Code (Sections 2021 and 2022, Vol. 1). The bonds themselves state that they were issued under the general statute and under the Special Act of 1908. The general Act authorizes waterworks bonds, such as those involved in this case, to "run for such length of time * * * as the said municipal authorities shall prescribe." Now the municipal authorities by the ordinance prescribing the form of the bonds, by the provisions of the bonds themselves, and by the notice of sale, have prescribed the length of time these bonds shall run, namely, forty years, "with the privilege of redemption on or after the first day of September, 1928."
I am of the opinion that the City of Spartanburg could avail itself of the provisions of the general Act if it cared to do so, and that the Special Act of 1908 did not operate as a partial repeal of the general statute. It is to be noted that the Special Act of 1908 contains no repealing clause; hence, if there is a partial repeal of the 1902 statute, it must be a repeal by implication. Repeals by implication are not favored. 25 R.C.L., 918; Pearson v. Mills Mfg. Co., 82 S.C. 506, 64 S.E., 407; Matthews Co. v. Atlantic Coast Line Railroad Co., 102 S.C. 494, 86 S.E., 1069. A case strikingly in point is Brice v. McDow, 116 S.C. 324, 108 S.E., 84. In that case there was a general bond Act applying to all school districts within the State, and a later Special Act relating only to the particular issue of bonds sought to be enjoined in that case. The Court held that the bonds could legally be issued under the Special Act, or that they could be legally issued under the general Act, and that the Special Act did not deprive the school district of the benefits of the general statute. It is clear that the two statutes should be construed together, unless they are so inconsistent and repugnant to each other that both cannot possibly stand. In this case, there is no such inconsistency or repugnancy. Both statutes are permissive in their provisions. The City of Spartanburg had the right to issue bonds under either the general statute or the Special Act. Certainly, if the bonds were not authorized by the Special Act of 1908, they are perfectly regular under the general Act embodied in the 1902 Code, and the provision for redemption placed in the bonds by the municipal authorities is valid.
But, if it be adjudged that the Special Act did operate pro tanto as a repeal of the general statute, and that the City of Spartanburg could not avail itself of the provisions of the general statute, then it must be admitted that the bonds as issued either comply sufficiently with the 1908 Act or they do not. If the Legislature by the Act of 1908 intended to give the City of Spartanburg authority to issue bonds with the right of redemption "on or after September 1, 1928," then the bonds conform to that enabling Act, and may unquestionably be redeemed at the present time. But, if the bonds as issued fail substantially to comply with the enabling Act, then the bonds are void. Bolton v. Wharton, 163 S.C. 242, 161 S.E., 454, 86 A.L.R., 1101. If the bonds are void, the bondholders must recover the indebtedness represented by the bonds on the theory of money had and received. Luther v. Wheeler, 73 S.C. 83, 52 S.E., 874, 4 L.R.A. (N.S.), 746, 6 Ann. Cas., 754. If the bonds are void, the indebtedness represented by them is simply money owned by the City of Spartanburg to the extent of the benefit derived from the loan, and the city may stop interest at any time by a tender of the amount of money due.
I think that it would be unjust and inequitable to allow the bondholders now to dispute the right of the City of Spartanburg to redeem the bonds. The advertisement published prior to the sale of the bonds stated that the bonds carried the privilege of redemption "after twenty years from their date." The bonds themselves state that they are redeemable "on or after the first day of September, 1928," None of the bondholders can say that they have been misled or prejudiced to their hurt by a representation made by the City of Spartanburg or any provision of the bonds. The taxpayers of the City of Spartanburg should not be required to pay several thousand dollars for what appears to be an inadvertent omission by the Legislature in the Act of 1908. Every consideration of equity, honesty, and justice bespeaks the right of the City of Spartanburg to call the bonds for redemption.
The sufficiency of the notice which the city proposes to give to the bondholders presents a subordinate question for determination. The bonds are not registered, and the city has no record of the bondholders. By the terms of the bonds, which are bearer bonds, principal and interest are payable through the Central Hanover Bank Trust Company of New York. I am of the opinion that the City of Spartanburg has the right to call the bonds for redemption by giving thirty days' notice in advance of its intention to do so. To insure that the bondholders get proper notice of the city's intention to call the bonds, I am of the opinion that notice should be given at least thirty days in advance by registered mail to the Central Hanover Bank Trust Company of New York, the bank through which the principal and interest are payable, and by giving similar notice to all bondholders known to the City of Spartanburg. An advertisement of similar import should be published at least thirty days in advance of the redemption of the bonds in the Spartanburg Herald, a newspaper of general circulation within the City of Spartanburg, and in the Manufacturers Record and in the Bond Buyer.
Wherefore it is ordered, adjudged, and decreed that the City of Spartanburg has the right to redeem the aforesaid bonds at any time after September 1, 1928.
It is further ordered, adjudged, and decreed, that notice of the redemption of the bonds be given thirty days in advance of their redemption by registered mail to the Central Hanover Bank Trust Company of New York, and to those bondholders known to the City of Spartanburg, and that a notice of the call of the bonds for redemption be published at least thirty days in advance of the redemption in the Spartanburg Herald, in the Manufacturers Record and in the Bond Buyer.
Messrs. Hamer Leonard, for appellant, cite: Holders of municipal bonds charged with notice of provisions thereof: 163 S.C. 242; 161 S.E., 454; 44 S.C. 319; 23 S.E., 141; 51 A.S.R., 819; 12 S.C. 200; 66 S.C. 140; 44 S.E., 569. Right of redemption: 44 C.J., 1223. Construction of statutes: 67 S.C. 312; 2 Bail., 336; 28 S.C. 521; 6 S.E., 321; 169 S.C. 198; 168 S.E., 554; 56 S.C. 173; 34 S.E., 73; 99 S.C. 218; 82 S.E., 1048; 101 S.C. 312; 85 S.E., 774; 154 S.C. 55; 151 S.E., 218.
Messrs. Evans, Galbraith Holcombe, for respondent, cite: Redemption: 177 S.C. 286; 181 S.E., 30; 143 S.C. 104; 141 S.E., 180; 148 S.C. 326; 146 S.E., 92; 16 S.C. 416; 68 S.C. 554; 48 S.E., 4; 1 Ann. Cas., 747; 25 R.C.L., 1030. Construction of statute: 152 Ga. 836; 111 S.E., 379; 8 W. Va., 612; 117 Md., 373; 83 A., 564; 3 McC., 298; 53 S.C. 448; 31 S.E., 334; 144 U.S. 550; 36 L.Ed., 537; 169 S.C. 314; 168 S.E., 722; 95 U.S. 760; 24 L.Ed., 588; 6 L.Ed., 603; 8 L.Ed., 308; 8 L.Ed., 587. Supplying word where omitted from statute: 128 Ky., 424; 108 S.W. 892; 169 N.C. 631; 86 S.E., 577; 144 Wis. 210; 128 N.W., 1063; 91 Va., 68; 20 S.E., 950; 113 Ga. 127; 38 S.E., 303; 35 P., 188; 54 N.E., 967; 133 P., 861; 3 A.L.R., 404; 104 S.C. 342; 88 S.E., 894.
June 10, 1936. The opinion of the Court was delivered by
We have given careful consideration to the questions presented by the appeal in this case, and are satisfied with the conclusions reached and expressed by the Circuit Judge. His well-considered decree, therefore, which will be reported, is affirmed and adopted as the judgment of this Court.
MESSRS. JUSTICES CARTER, BONHAM, BAKER and FISHBURNE concur.