THE LIBRARY OF THE
UNIVERSITY OF
NORTH CAROLINA
THE COLLECTION OF
NORTH CAROLINIANA
CJUO
N87a
v.U2
no. 1-2
1972
UNIVERSITY OF N.C. AT CHAPEL HILL
00033947203
FOR USE ONLY IN
THE NORTH CAROLINA COLLECTION
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in 2011 with funding from
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W\ &dj \~j^
NORTH CAROLINA
VOLUME 42
NUMBER 1
OBERT MORGAN
TTORNEY GENERAL
42 N.C.A.G.-No. 1 Pages 1 through 144
NORTH CAROLINA
ATTORNEY GENERAL
REPORTS
Opinions of the Attorney General
July 1, 1972, through December 31, 1972
MAILING ADDRESS:
P. O. Box 629, Raleigh, N. C. 27602
Jean A. Benoy
James F. Bullock
ROBERT MORGAN
Attorney General
Harry W. McGalliard
Chief Deputy Attorney General
Ralph Moody
Special Counsel
Andrew A. Vanore, Jr.
Robert Bruce White, Jr.
Deputy Attorneys General
Carroll Leggett
Special Assistant Attorney General
H. H. Weaver
Administrative Deputy Attorney General
Myron C. Banks
James L. Blackburn
William F. Briley
Lester Chalmers
H. Al Cole, Jr.
Richard B. Conely
T. Buie Costen
Christine Y. Denson
Raymond W. Dew, Jr.
Sidney S. Eagles, Jr.
Edward L. Eatman, Jr.
Roy Andre Giles, Jr.
Eugene Hafer
Guy A. Hamlin
Claude Harris
Charles M. Hensey
Parks H. Icenhour
Dale P. Johnson
Rafford E. Jones
Assistant
Thomas E. Kane
I. Beverly Lake, Jr.
Richard N. League
Charles A. Lloyd
James E. Magner, Jr.
William W. Melvin
William F. O'Connell
William B. Ray
Millard R. Rich, Jr.
James B. Richmond
Walter E. Ricks, III
Henry Thomas Rosser
Jacob L. Safron
Alfred N. Salley
Howard P. Satisky
Eugene A. Smith
Robert S. Weathers
Robert G. Webb
Thomas B. Wood
Attorneys General
Wade E. Brown, Consultant
Herbert Lamson, Jr., Claims Attorney
Russell G. Walker, Jr., Revisor of Statutes
1U> ,/ - -2-
Ruth G. Bell Edwin Thomas Maddox, Jr.
George W. Boylan Henry E. Poole ltf7'K/'72
Jones P. Byrd M. Ann Reed
Don A. Davis Russell G. Sherrill, III
Ralf Haskell John M. Silverstein
Charles D. Heidgert Edwin M. Speas, Jr.
Howard A. Kramer
Associate Attorneys
TABLE OF CONTENTS
Administration of Estates; Commissions;
Executor; Joint Tenancy with Right
of Survivorship; Joint Bank Accounts 138
Clean Water Bond Act of 1971 (Chapter 909,
1971 Session Laws); Application for
Grants; Construction Begun Before
Adoption of Administrative Rules and
Regulations 16
Counties; Commissioners; Compensation;
Fixing Compensation of County Commissioners
Pursuant to G.S. 153-13 132
Counties; Recreation Districts; Article 28,
Chapter 153 (G.S. 153-368, et seq.) 74
Courts; Clerk of Superior Court; Partition
of Real Property; Authority to Impose
Restrictive Covenants in Deeds in Sale
for Partition of Real Property; G.S. 46-30 1
Courts; District Courts; Juveniles; Criminal
Offenses; Commitments to the Board of
Youth Development When the Juvenile is
Over 16 Years of Age 69
Courts; Juveniles; Probation; Education;
Compulsory Attendance Law 133
Courts; Summons and Process; Nonresidents,
Service of 110
Criminal Law and Procedure; Law Enforcement;
Legality of Law Enforcement Officers
From Out of Jurisdiction Serving as
Undercover Agents in Another Jurisdiction 76
Criminal Law and Procedure; Sentences;
Judgment and Commitment; Correction,
Department of; Prisons and Prisoners 68
Criminal Law and Procedure; Sentencing;
Presentence Report; Use of Prior
Convictions; Probation and Probation
Officers 92
Criminal Law and Procedure; Youthful Offender;
Parole on Conditional Release 83
Education; Colleges and Universities;
Annuity or Retirement Income Contracts
for Faculty Members, Officers and
Employees of State-Supported Institutions
of Higher Learning; G.S. 116-46.2 6
Education; Teachers; Teacher Tenure Act;
G.S. 115-142; Career Teachers 61
Elections; Registration Commissioners; Time
of Appointment 79
Escheats; Hospitals; Applicability of Escheats
Law to Hospital 14
Escheats; Marketing Cooperatives; Applicability
of G.S. 116A-7 12
Escheats; Statutes of Limitations Inapplicable 49
Health; Certificate of Need; Inapplicability
to Facility Already Constructed but
Not Fully Licensed or Used 54
Health; Certificate of Need; Proper Licensing
Agency for Facility Which Combines
Hospitals, Nursing Homes and Rest
Home Care 57
Insurance; Automobile Liability Insurance
Policies; Termination by Rescission;
Legality of 29
Insurance; Automobile Liability Insurance
Policies; Terminations by Cancellation
and Refusal to Renew; Applicability of
48-Month Exclusion 22
Intoxicating Liquors; Beer; Sunday Sales;
County Regulation of; Straw Vote 26
Intoxicating Liquors; Beer and Wine; Sale
of Sweet Wine in City of Monroe;
Chapter 541, Session Laws of 1963;
Enactment of Chapter 18A of the General
Statutes 4
Intoxicating Liquors; Solicitation of Sales;
Authority of State Board to Regulate
Solicitation of Sales of Alcoholic
Beverages, Beer and Wine 51
Intoxicating Liquors; Transportation;
Alcoholic Beverages Being Transported
to ABC Stores; Authority of Local Board
to Transport Beverages 114
Jails; Sheriffs; Duty of Sheriff to Transfer
Prisoners to Adjoining County 127
Licenses and Licensing; Day Care Facilities;
Facility With Morning Kindergarten and
a Lesser Number of Children for All
Day Care 81
Licenses and Licensing; Day Care; Facilities
on Federal Reservations 128
Licenses and Licensing; Day-Care Facilities;
Number of Children for Whom Facility
Licensed 55
Licenses and Licensing; General Contractors;
Installation of Industrial Equipment 45
Licenses and Licensing; Plumbing and Heating
Contractors; Necessity of Obtaining
a License Under the Grandfather Clause
Prior to Engaging in the Business of
Plumbing and Heating Contracting 20
Mental Health; Detention of Inebriates and
Mentally 111 Persons; Authority of
Clerk of Superior Court to Issue
Custody Order to Sheriff 43
Mental Health; Detention of Inebriates and
Mentally 111 Persons; Authority of
Clerk to Order Non-State Operated
Hospitals to Involuntarily Accept Patients 66
Mental Health; Examination and Hospitalization
of Inebriates; Public Drunkenness As
a Criminal Offense 41
Motor Vehicles; Abandoned or Junked Vehicles;
Removal of Abandoned Vehicles from
Private Property 47
Motor Vehicles; Drivers' Licenses; Habitual
Offenders 130
Motor Vehicles; Drivers' Licenses; Limited
Driving Privilege; Driving After License
Revoked; Sufficiency of Warrant 97
Motor Vehicles; Drivers' Licenses; Limited
Driving Privilege; Revocation; Driving
Under the Influence, Second Offense 125
Motor Vehicles; Drivers' Licenses; Reduction
of Points for Successful Completion
of Driver Improvement Clinic; G.S. 20-1 6(c) 84
Motor Vehicles; Drunken Driving; Plea
Bargaining; Careless and Reckless Driving 71
Motor Vehicles; Drunken Driving; "Public
Vehicular Area" 107
Municipalities; Day-Care Centers; No
Authority to Expend Municipal Funds 135
Municipalities; Intoxicating Liquors;
Authority to Regulate Consumption and
Display on Public or City-Owned Property 59
Municipalities; Ordinances; Parking Meters;
City of Raleigh 141
Municipalities; Streets and Highways; Powell
Bill Funds; Expenditure for Sidewalks 91
Municipalities; Streets and Highways; Powell
Bill Funds; Expenditure on State Highway
System Streets 85
Oaths; Attorneys at Law; Who May Swear in
Attorneys to Practice Law; G.S. 84-1,
G.S. 11-7.1 82
Public Contracts; Bidding; Factory-Installed
Electrical Heating and Plumbing
Facilities; Separate Bids Required;
G.S. 143-128 129
Public Officers and Employees; ABC Board
Employees; Not Employees of the
Municipality or County 28
Public Officers and Employees; Conflict of
Interest; Officer Contracting for His
Own Benefit; G.S. 159A-10; G.S. 14-234;
County Commissioner Who is Officer of
Corporation 9
Public Officers and Employees; Double Office
Holding; Member of County Social Services
Board and County School Board 1 1
6
Public Officers and Employees; Highway Patrol;
Liability of Troopers for Medical Services
Rendered to Patients 2
Public Officers and Employees; Private Use
by Physicians of State Facilities 58
Public Officers and Employees; Workmen's
Compensation; State Highway Patrol 136
Social Services; Foster Home Fund;
Noneligibility of Persons Who are 18
or More Years of Age 8
Social Services; Juveniles; Medical Care;
Sufficiency of Consent by County Department
of Social Services 101
Social Services; Juveniles; Probation;
Termination Under Interstate Compact
on Juveniles 117
Social Services; Juveniles; Wards of the
State; Effect of Placement of Custody
by Judge of Juvenile Court 88
State Departments, Institutions and Agencies;
Correction, Department of; Liability
for Hospitalization of Inmates 38
State Departments, Institutions and Agencies;
Eminent Domain; Relocation Assistance 104
State Departments, Institutions and Agencies;
Orthopedic Hospital; Authority to Make
Charges for Treatment, Care and
Maintenance 1 1
1
State Departments, Institutions and Agencies;
Publications; Free Distribution on
Request to Statutory List of Institutions;
G.S. 147-50 94
State Departments, Institutions and Agencies;
Tort Liability; Mental Health; Area
Mental Health Boards; Board Members;
Authority to Sue and be Sued 120
State Departments, Institutions and Agencies;
UNC at Chapel Hill; Public Utilities;
Governor's Commission to Study Sale or
Retention of University-Owned Utilities;
Chapter 723, Session Laws of 1971 122
Taxation; Ad Valorem; Exemptions; Real
Property; Homes for the Aged, Sick and
Infirm; G.S. 105-278(5) 99
Taxation; Gift Tax; Decedent's Estate; Assets
Includable; G.S. 105-108; G.S. 105-109 32
Taxation; Privilege License Tax; Selling
Illuminating Oil or Greases or Benzine,
Naphtha, Gasoline or Like Products;
Automotive Service Stations;
G.S. 105-72 and -89 18
Taxation; Sales Tax; Laundries and Dry Cleaners;
Rug Cleaning Services; G.S. 105-164.4(4) 35
3 July 1972
Subject:
Requested by:
Question:
Courts; Clerk of Superior Court; Partition
of Real Property; Authority to Impose
Restrictive Covenants in Deeds in Sale for
Partition of Real Property; G. S. 46-30
Honorable M. L. Huggins
Clerk of Superior Court
Lincoln County
In a special proceeding before the clerk of
superior court to sell land for partition
among tenants-in-common, may the clerk
authorize commissioners to impose legally
binding restrictive covenants upon the real
estate where the real estate now has no
restrictions on its use and some of the
co-tenants do not consent to the
imposition of restrictive covenants?
In a special proceeding before the clerk of
superior court to sell land for partition
among tenants-in-common, the clerk may
not authorize commissioners to impose
legally binding restrictive covenants upon
the real estate where the real estate now
has no restrictions on its use and some of
the co-tenants do not consent to the
imposition of restrictive covenants.
Your letter of June 21 , 1972 recites that you have entered an order
of sale and have appointed commissioners to carry out the sale of
land in a special proceeding to sell land for partition among
tenants-in-common. The land now has no restrictions on it of any
kind. It may be, you note, that the imposition of covenants limiting
the land to residential purposes and further restricting the kind and
size of residences "would be wise and in the best interests of the
sale." The tenants are unable to agree on the question of voluntary
imposition of restrictions.
Conclusion:
After careful review, we conclude that the clerk of superior court
does not have the authority to impose or approve imposition of
restrictive covenants relating to residential use and size and kind
of residences where the land was previously unencumbered.
No express statutory authority exists to restrict or modify the title
taken by purchasers at such a sale. We construe G. S. 46-30 as
requiring the person making the deed to convey only ". . .such
title and estate in the property as the tenants in common. . .had
therein." To impose or authorize imposition of restrictive covenants
on land heretofore unrestricted, notwithstanding the wisdom of the
restrictions, constitutes a modification of the tenants' title and estate
in the property to be sold. For the clerk or commissioners to do
so would contravene G. S. 46-30.
Supporting this position is the language by Justice Brown in Jordan
v. Faulkner, 168 N. C. 466, 467 (1915): "The deed of the
commissioner, by virtue of the partition proceedings, is in law the
conveyance of all the parties, and vests in the grantee the same
title and rights as would other conveyance equally comprehensive
in terms." (Emphasis added.)
Robert Morgan, Attorney General
Sidney S. Eagles, Jr.,
Assistant Attorney General
5 July 1972
Subject: Public Officers and Employees; Highway
Patrol; Liability of Troopers for Medical
Services Rendered to Patients
Requested by:
Question:
Col. Edwin C. Guy
State Highway Patrol
Is a member of the State Highway Patrol
personally liable for hospital and doctor
charges for necessary medical services
-2-
rendered to a prisoner in his custody
because he secured the medical services for
the prisoner?
Conclusion: A member of the State Highway Patrol is
not personally liable for hospital and
doctor charges for necessary medical
services rendered to a prisoner in his
custody notwithstanding the fact that he
secured the medical services for the
prisoner.
The typical incident described in this inquiry involved two prisoners
who had been injured while resisting a lawful arrest by members
of the State Highway Patrol. After making the arrest, the troopers
then took the prisoners to a local hospital where they received first
aid. One of these troopers was requested to sign the admittance
slips on the prisoners; later, upon refusal of the prisoners to pay
the medical fees incurred, the hospital requested payment from the
arresting troopers.
Ordinarily an express or implied contract is necessary to render one
person liable for hospitalization charges of another. Any such
contract must be construed in view of the language used in the
agreement as well as in light of all the facts and circumstances
involved at the time it was executed. See Bartron Clinic v.
Kallemeyn, 60 S. D. 598, 245 N. W. 393 (1932).
In the situation as described, by virtue of the troopers' position
as law enforcement officers and their custodial responsibility for
the prisoners, other factors enter into the circumstantial background
to be considered in assaying the presence of pecuniary liability. One
factor is the existence, or nonexistence, of any statutory duty to
furnish necessary care for prisoners. Another factor is the basic
responsibility of any peace officer, absent a specific statutory
obligation, to provide humane treatment calculated to protect the
health and welfare of persons within his charge.
Applying these precepts to the situation described, it is clear that
the troopers' purely humanitarian act of seeking medical treatment
for their prisoners was one taken in an official capacity rather than
-3-
one designed to achieve a personal end. As a result, no personal
liability would appear to be incurred thereby.
As to payment of the medical costs, in the event of failure of
payment by the patients and subsequent demand by the hospital,
G. S. 153-53.2 and G. S. 153-53.3 appear to become pertinent as
of the time of arrest. These two sections pertain to all prisoners
"confined or detained" (See G. S. 153-50(6)). Basically they
require that local confinement facilities have suitable plans in
existence for providing emergency medical services and for payment
for those services.
Robert Morgan, Attorney General
William F. O'Connell,
Assistant Attorney General
7 July 1972
Subject: Intoxicating Liquors; Beer and Wine; Sale
of Sweet Wine in City of Monroe;
Chapter 541, Session Laws of 1963;
Enactment of Chapter 18A of the General
Statutes
Requested by: Mr. Koy E. Dawkins
Attorney
Monroe ABC Board
Question:
Conclusion
:
In an earlier Attorney General opinion
(41 N.C.A.G. 100 (1970)), this Office
concluded that sweet wine could not be
sold in the City of Monroe. Does the
recodification of the intoxicating liquor
laws as Chapter 18A of the General
Statutes and the repeal of Chapter 18
affect the outcome of that issue?
No.
-4-
This Office held in an opinion to Mr. John R. Milliken, Monroe
City Attorney, on October 8, 1970 (41 N.C.A.G. 100) that sweet
wine could not be sold in the City of Monroe as provided in G.
S. 18-99 since Chapter 541 of the 1963 Session Laws provides that
the Monroe ABC Board and the operation of the ABC stores in
Monroe will be subject to the provisions of Article 3 of Chapter
18. Although the sale of fortified wine is allowed by the provisions
of former Article 3, Chapter 18, the sale of sweet wine was dealt
with in G. S. 18-99, which was in Article 5 of Chapter 18.
Effective October 1, 1971, the General Assembly recodified the
intoxicating liquor laws into Chapter 18A of the General Statutes
and repealed Chapter 18. The category of sweet wines was abolished
and, under the new General Statutes, wine is classified as either
unfortified or fortified with the dividing line being a 14% alcohol
by volume measure.
G. S. 18A-57 provides:
" § 18A-57. Local acts and local option. - (a) Nothing
in this Chapter shall operate to repeal any of the local
acts of the General Assembly of North Carolina
prohibiting the possession or consumption of
intoxicating liquor within any county, municipality,
or portion thereof, and all such local acts shall
continue in full force and effect and in concurrence
herewith, until repealed or modified.
"(b) Nothing in this Chapter shall require a permit
to be issued for any territory where the sale of malt
beverages or wine (fortified or unfortified) is
prohibited by special legislative act or for any area
where the sale or possession for the purpose of sale
of malt beverages or wine (fortified or unfortified) is
unlawful as a result of a local option election; and
this Chapter shall not repeal any special, public-local,
or private act prohibiting or regulating the sale of these
beverages in any county in this State, or any act
authorizing the board of commissioners of any county
of this State, or the governing body of any
municipality, in its discretion, to prohibit the sale of
-5-
malt beverages or wine (fortified or unfortified)."
Since the local act pursuant to which the ABC store election in
the City of Monroe was held did not permit the sale of sweet wines
but only permitted the sale of fortified wines, the enactment of
Chapter 18A of the General Statutes does not affect our opinion
that the category of sweet wines as they were defined in former
G. S. 18-99 still may not be sold by the Monroe ABC Stores.
Robert Morgan, Attorney General
(Mrs.) Christine Y. Denson,
Assistant Attorney General
10 July 1972
Subject:
Requested by:
Question:
Education; Colleges and Universities;
Annuity or Retirement Income Contracts
for Faculty Members, Officers and
Employees of State-Supported Institutions
of Higher Learning; G. S. 116-46.2
Mr. H. L. Ferguson, Jr.
Vice Chancellor for Business Affairs
University of North Carolina at Greensboro
G. S. 116-46.2 empowers the board of
trustees of any State-supported institution
of higher learning to authorize the financial
officer to enter into annual contracts with
employees of the institution for a
reduction in salary below the total
established salary schedule for the purchase
of annuity or retirement income contracts
for the benefit of the employee.
Is an employee free to determine the
identity of the seller of such an annuity
or retirement contract entered into for the
employee's benefit, or may the institution
make this determination?
Conclusion: G. S. 116-46.2 provides that pursuant to
the contract with the employee, "the
financial officer or agent shall use the funds
derived from the reduction in the salary
... to purchase a non-forfeitable annuity
or retirement income contract for the
benefit of . . . (the employee)." Because
the seller of the annuity or retirement
income contract enters into an agreement
with the institution, not with the
employee, the institution is free to
determine the identity of the seller of such
contract.
G. S. 116-46.2 sets forth the procedure whereby State-supported
institutions of higher learning may purchase annuity or retirement
income contracts for employees of the institution. This statute
establishes two types of contractual relations: (1) A contract
between the employee and the appropriate administrative body of
the institution whereby the employee agrees to have his pay reduced
by a certain amount and the institution agrees to use this money
to purchase a non-forfeitable annuity or retirement income contract;
and (2) a contract between the institution and the seller of the
annuity or retirement income plan under which the employee is
a third party beneficiary.
Because the contract entered into between the institution and the
seller is fully enforceable by the third party beneficiary, and because
the contract may not be materially altered without the beneficiary's
consent, the employee-beneficiary is not being deprived of the
unrestrained use of a part of his salary without his consent should
the institution determine who the seller of the contract will be.
Trust Company v. Processing Company, 242 N. C. 370 (1955); 2
Strong, N. C. Index 2d, Contracts, §14. However, the institution
should, before agreeing with the employee for reduction in pay for
the purchase of an annuity or retirement income contract, advise
the employee of those companies it normally does business with
and, if feasible, allow the employee to choose which company he
-7-
prefers the institution to contract with for his benefit.
This opinion overrules an unpublished, informal opinion issued by
this Office to Mr. Jule McMichael on 20 September 1971 construing
G. S. 115-153.1, which provides for the same type of annuity and
retirement income contracts for public school employees.
Robert Morgan, Attorney General
Andrew A. Vanore, Jr.,
Deputy Attorney General
11 July 1972
Subject:
Requested by:
Question:
Conclusion
:
Social Services; Foster Home Fund;
Noneligibility of Persons Who Are 18 or
More Years of Age
Mr. Clifton Craig
Commissioner
Department of Social Services
May assistance from the State Foster Home
Fund described in G. S. 108-66 lawfully
be granted to persons who are 18 or more
years of age and who live in foster homes?
Assistance from the State Foster Home
Fund described in G. S. 108-66 may not
lawfully be granted to persons who are 18
or more years of age and who live in foster
homes.
G. S. 108-66 makes it clear that the funds provided for therein
are for "needy children". G. S. 48A-2 provides that "A minor is
any person who has not reached the age of 18 years." Therefore,
we do not perceive that persons who are 1 8 or more years of age
can properly be denominated "children". Furthermore, although
G. S. 108-66 speaks of "needy children" rather than "dependent
children", it is deemed significant that G. S. 108-66 providing for
the Foster Home Fund is a part of Article 2 of Chapter 108
wherein, in G. S. 108-24, the adult status of persons who are 18
or more years of age is recognized. G. S. 108-24 is, in pertinent
part, as follows:
"As used in Article 2: . . .(3) 'Dependent child' is
a person under 18 years of age. ..."
Robert Morgan, Attorney General
Robert S. Weathers,
Assistant Attorney General
12 July 1972
Subject:
Requested by:
Question:
Conclusion:
Public Officers and Employees; Conflict of
Interest; Officer Contracting for His Own
Benefit; G. S. 159A-10; G. S. 14-234;
County Commissioner Who Is Officer of
Corporation
Mr. Walter J. Cashwell, Jr.
Scotland County Attorney
May a county pollution abatement and
industrial facilities financing authority lease
a facility, constructed under the provisions
of Chapter 159A, North Carolina General
Statutes, to a corporate lessee to be
subleased to a corporation partly owned by
the lessee when a member of the county
board of commissioners is president of the
corporate sublessee and is also president of
a third corporation which is part owner of
the corporate sublessee?
A lease or sublease of property constructed
by a county pollution abatement and
industrial facilities financing authority
pursuant to the provisions of
Chapter 159A, North Carolina General
Statutes, to a corporation in which a
county commissioner has a direct or
indirect interest would be in contravention
of the express conflict of interest
provisions of G. S. 159A- 10 and may be
in violation of G. S. 14-234.
Inquiry is made whether a conflict of interest would arise under
G. S. 159A-10 if a county pollution abatement and industrial
facilities financing authority leases a facility, constructed with funds
realized from bonds issued by the authority, to a corporation which
will then sublease to a second corporation when it appears:
1. That the corporate sublessee is wholly owned by
the corporate lessee and a third corporation;
2. The lessee is a customer of the sublessee and both
are customers of the third corporation; and
3. A member of the board of county commissioners
is president of both the sublessee and the third
corporation.
G. S. 159A-10 provides, inter alia:
"No officer, member, agent or employee of . . . any
political subdivison or agency thereof shall be
interested either directly or indirectly in any contract
with an authority. ..." {Emphasis added).
The statute prohibits any public official or public employee having
an interest, either direct or indirect, in any contract with a county
pollution abatement and industrial facilities financing authority.
No case has been found which construes the provisions of
G. S. 159A-10. The provisions of that statute appear sufficiently
similar to those of G. S. 14-234, however, that it is possible to
reason by analogy.
-10-
This Office has determined that a conflict of interest would exist
under G. S. 14-234 in the following instances:
1. Contract between a school board and the wholly
owned subsidiary of a parent company in which a
board member had stock. 40 N.C.A.G. 565 (1970).
2. Lease of houses by a municipal housing authority
from a corporation of which the mayor, who
appointed the housing authority, was president and
owner. 40 N.C.A.G. 561 (1969).
3. Purchase of supplies by a town from a corporation
when a town commissioner was part owner, director,
secretary and general manager of a store owned by
the corporation. 41 N.C.A.G. 371 (1971).
In an Opinion appearing in 40 N.C.A.G. 566 (1969), it is said:
"The North Carolina statute is merely declaratory of
the common law which has always been enforced
strictly by the courts to prohibit public officials from
being a party to a contract with the municipality or
in any manner receiving or being in a position to
receive benefits from the body of which he is a
member. The courts will not permit the rule - that
a man cannot serve two masters - to be evaded by
any device or subterfuge. The good faith of the parties
is immaterial. McQuillin, Municipal Corporations,
Vol. 10, §§ 29-97, et seq."
Although in the instant case the lessor is the financing authority,
it is noted that the members of the authority are appointed by
the county governing body. G. S. 159A-4. Considering the
proprietary interests and trade relations that exist among the
corporations, it must be presumed that the lease and sublease are
for the benefit of all.
The county commissioner is a member of a political subdivision
which is empowered to create the financing authority. Since the
-11-
execution of the lease by the financing authority is for the benefit
of the corporations of which the commissioner is president, a
conflict of interest arises under G. S. 159A- 10.
Robert Morgan, Attorney General
Henry T. Rosser,
Assistant Attorney General
17 July 1972
Subject:
Requested by:
Question:
Conclusion:
Escheats; Marketing Cooperatives;
Applicability of G. S. 116A-7
Honorable Edwin Gill
State Treasurer
A cooperative marketing association
engaged only in the marketing of a single
agricultural product for the producers
thereof was exempt from escheating certain
distributions by virtue of G. S. 116-25.
That statute was amended and transferred
to G. S. 116A-7 by the 1971 General
Assembly, effective July 1, 1971. The
association called for a redemption prior to
July 1 , 1 97 1 , of certain equity certificates
issued to its members. Is such an
association required to escheat the value of
such equity certificates called for
redemption but not actually redeemed
upon expiration of three years from the
date of call for redemption?
Under the facts stated, the cooperative
marketing association must escheat the
value of such certificates three years from
the date of call for redemption or other
time when it is determined that those
certificates are unclaimed.
-12-
The inquiry indicates that several years ago the cooperative
marketing association organized for the purpose of marketing one
agricultural product complied with the United States Department
of Agriculture regulation requiring the association's equity capital
| to be owned by current members. In doing so, in July of 1970,
the marketing association called for the redemption of equity
certificates issued in 1923 of which $21,686.44 was then
outstanding. As of June 30, 1971, only $1,673.29 had been retired,
leaving a balance in the 1923 certificates of $20,013.15. Also, in
July of 1970, a call for redemption of the 1924 certificates in the
amount of $41,143.90 was called for and as of June 30, 1971, there
was a balance of $38,025.52. At the time of making the call for
redemption, the association was arguably exempt from the escheat
law provisions in that G. S. 116-25, containing substantially the
same provisions as G. S. 116A-7, provided that that paragraph of
the statute would not apply "to a cooperative marketing association
engaged only in the marketing of a single agricultural product for
the producers thereof."
Subsequently, effective July 1, 1971, the escheats statutes were
recodified and this provision was transferred to G. S. 116A-7 and
that exemption was dropped.
The escheats law as codified in Chapter 116A of the General
Statutes is applicable to any unclaimed or derelict property of
certain specified kinds. Also, there is a "catch-all" provision in
G. S. 116A-4 which covers all other unclaimed personal property
held by any person, firm or corporation. Those equity certificates
in the marketing cooperative association which remain unclaimed
thus fall within the purview of G. S. 11 6A-7 and should be
escheated to the State through the State Treasurer's Office three
years after they are determined to be unclaimed. The call for
redemption is probably a convenient measuring date for a
determination that the shares are unclaimed.
The escheat statute is not being applied retrospectively here but
is being applied to property which is unclaimed as of July 1, 1971,
and subsequently. The inquiry indicates that there was no cut-off
date when such certificates could be redeemed and, indeed, when
they are escheated to the State Treasurer's Office, they will be held
there subject to claim by the party entitled thereto.
-13-
Robert Morgan, Attorney General
(Mrs.) Christine Y. Denson,
Assistant Attorney General
17 July 1972
Subject:
Requested by:
Question:
Conclusion:
Escheats; Hospitals; Applicability of
Escheats Law to Hospital
Mr. Edward E. Hollowell
Attorney
Wake County Hospital System, Inc.
Are the provisions of Chapter 1 1 6A of the
General Statutes regarding escheats
applicable to the various types of hospitals
in North Carolina?
The provisions of Chapter 1 1 6A of the
General Statutes regarding escheats are
applicable to the various types of hospitals
in North Carolina.
The recent inquiry made on behalf of Wake County Hospital System,
Inc., inquires as to the applicability of the escheat law to the various
types of hospitals in the State. The inquiry indicates that there are
four principal types of hospitals in North Carolina:
1
.
County hospital authorities operating hospitals such
as Wayne County Memorial Hospital;
2. Not-for-profit leasing county facilities such as the
Wake County Hospital System, Inc.;
3. Private, not-for-profit hospitals such as Rex
Hospital;
4. For profit hospitals such as Mary Elizabeth Hospital.
Chapter 1 16A of the General Statutes, transferred by Chapter
-14-
135
of the 1971 Session Laws to this codification from provisions in
former Chapter 116 of the General Statutes and now administered
by the State Treasurer's Office, provides for the escheat of property
to the State and the claim by the State to certain types of abandoned
property. The statutes have historically been based on constitutional
provisions (presently Article IX, sec. 10). The 1971 recodification
did not make any substantive changes in the law as far as the
administration with regard to hospitals is concerned except for the
reporting requirements added by G. S. 116A-7.1. While there are
some sections applicable to specifics (see, e.g., G. S. 116A-7(a)
dealing with unclaimed salaries, wages and other compensation),
there is a "catch-all" provision in G. S. 116A-4 which provides in
pertinent part:
"Personal property of every kind, except as is
otherwise provided by this Chapter, ... in the hands
of any person . . . , firm or corporation which shall
not be recovered or claimed by the parties entitled
thereto for three years after the same shall become
due and payable, shall be deemed derelict property,
and shall be paid or delivered to the Escheat Fund
and held without liability for profit or interest until
a just claim therefor shall be preferred by the parties
entitled thereto."
The language of this statute is all-inclusive and makes no distinction
between public and private profit or not-for-profit operations.
Therefore, when any property remains unclaimed for a period of
three years, it should be paid to the State Treasurer's Office along
with the report required by the statute and would be held by the
State Treasurer's Office subject to claim.
Robert Morgan, Attorney General
(Mrs.) Christine Y. Denson,
Assistant Attorney General
•15-
17 July 1972
Subject:
Requested by:
Question:
Conclusion:
Clean Water Bond Act of 1971
(Chapter 909, 1971 Session Laws);
Application for Grants; Construction
Begun Before Adoption of Administrative
Rules and Regulations
Mr. Marshall Staton, Director
Sanitary Engineering Division
State Board of Health
Department of Human Resources
May a unit of local government after
July 1, 1972, but before the adoption by
State administrative agencies of rules,
regulations and procedures for
administering the Clean Water Bond Act of
1971, proceed with the construction of a
project to add to its water supply system
and remain eligible to apply for a grant for
such project from Bond Act funds?
A unit of government which begins
construction of a project to add to its
water supply system after July 1, 1972,
will not be disqualified from making
application for grant under the Clean Water
Bond Act of 1971 (Chapter 909, 1971
|
Session Laws) solely because construction
was begun prior to adoption by State
administrative agencies of rules, regulations
and procedures for administering the Act.
A city and a county have indicated that they find it necessary to
begin construction of certain additions to an existing water supply
system soon after July 1, 1972. Since it does not appear that the
administrative agencies charged with responsibility for administering
the Clean Water Bond Act of 1971 will have completed the
preparation of necessary rules, regulations and administrative
procedures, the local government units will be unable to apply for
-16-
a grant from Bond Act funds at the time they desire to begin
construction. Inquiry is made whether the local units of government
will forfeit their eligibility to apply for such grants if they begin
construction prior to adoption of rules, regulations and procedures
by the administrative agencies.
Section 7(a) of the Clean Water Bond Act of 1971 provides, in
pertinent part:
"Sec. 7. Use of bond proceeds; allocation. - (a) Grants.
(1) Purpose. All monies paid into the Clean Water
Fund . . . shall be used for grants to units of
government for the construction of new or the
improvement or expansion of existing wastewater
treatment works, wastewater collection systems and
water supply systems."
Sec. 7(e) provided, inter alia: "Allocation of grants under the
provisions of this Act, . . . , shall not be made in an aggregate
amount exceeding $30,000,000 in the first fiscal year, beginning
July 1, 1972. . . ." {Emphasis added).
Section 4 of the Act provides for the issuance of $150,000,000
in bonds of the State, subject to a favorable vote of the qualified
voters. The bond election was held May 6, 1972, pursuant to
Section 4, and the bond issue was approved.
The Act provides that it shall be administered by the Department
of Administration, the Board of Water and Air Resources and the
State Board of Health. Section 14 empowers those agencies "...
to adopt, modify and revoke rules of procedure establishing and
amplifying the procedures to be followed in the administration of
this act and regulations interpreting and applying the provisions of
this act."
As shown by Section 7(e), the General Assembly provided that
allocation of grant funds might begin during the fiscal year 1972
- 1973, and thus clearly intended that projects constructed during
this period should be eligible to apply for grants under the Act.
There is no provision of the Act that makes eligibility for grants
contingent upon project construction beginning after the effective
-17-
date of adoption of rules and regulations by the administrative
agencies. Indeed, to have so provided would have been to empower
the administrative agencies to delay construction under the Act for
an indefinite period, since no time was specified in the Act for
adoption of rules and regulations. This would have been obviously
at odds with the purpose and intent of the Act, as expressed in|
Section 7(a), and Section 7(e).
It is concluded that projects upon which construction was begun
prior to the adoption of rules and regulations by the administrative
agencies will not be disqualified for that reason alone from applying
for grants under the Clean Water Bond Act of 1971.
It should be noted, however, that the administrative agencies,
through adoption of rules and regulations under the Act, may
establish the form, method and time for making application for
grants. Local units of government desiring to apply for grant funds
might find that they are precluded unless they procure and closely
follow the rules and regulations when adopted.
Robert Morgan, Attorney General
Henry T. Rosser,
Assistant Attorney General
17 July 1972
Subject: Taxation; Privilege License Tax; Selling
Illuminating Oil or Greases or Benzine,
Naphtha, Gasoline or Like Products;
Automotive Service Stations;
G. S. 6§ 105-72 and 89
Requested by:
Question:
Mr. Nelson W. Taylor
Morehead City Attorney
May a city levy a license tax upon a service
station which sells gasoline, under the
authority of G. S. 105-72?
18-
Conclusion: Yes, but only if (1) all persons, firms or
corporations engaged in the business of
selling illuminating oil or greases or
benzine, naphtha, gasoline or other
products of like kind are similarly taxed
and (2) each taxpayer maintains in the city
an agency, station or warehouse for the
distribution or sale of such products.
The attorney for Morehead City has inquired what the proper
privilege tax should be upon service stations. The answer will depend
largely upon the provisions of the statute under which the taxing
ordinance is drawn. For example, G. S. 105-89 permits counties,
cities and towns to levy a license tax upon "automotive service
stations" not in excess of one-fourth of that levied by the State.
In the case of Morehead City, the tax could not exceed $5.00, since
the State tax is dependent upon municipal population, and the
population of Morehead City would indicate a State tax of $20.00.
However, under the provisions of G. S. 105-72, which is broader
in scope, a city "in which there is located an agency, station or
warehouse for the distribution or sale of such commodities
enumerated in this section" may levy a license tax of $25.00, in
the case of a municipality of less than 10,000 population, upon
"every person, firm or corporation engaged in the business of selling
illuminating oil or greases or benzine, naphtha, gasoline or other
products of like kind." Therefore, it appears that the city could
impose a license tax under G. S. 105-72, but it would have to be
levied upon the entire class of persons, firms and corporations
engaged in the enumerated business, rather than individual members
of the class. For example, if service stations, drug stores, grocery
stores and hardware stores all sell "benzine, naphtha, gasoline or
other products of like kind," it would be discriminatory to single
out only service stations for taxation, under the authority of
G. S. 105-72. Thus, it seems likely that the sale of cigarette lighter
fluid, dry cleaning fluid or portable lantern or stove fuel would bring
a business within the taxable class. By the same token, each taxable
business would have to be found to maintain within the city an
agency, station or warehouse for the distribution or sale of such
products.
-19-
If a city chose to enact ordinances under both G. S. 105-89 and
G. S. 105-72, it is doubtful that a service station could be taxed
under each. It is more likely that the ordinance taxing service
stations as a class, being more specific, would preempt the ordinance
taxing businesses selling petroleum products. In addition, the two
ordinances would clearly raise serious questions of public policy
implicit in double taxation by a single taxing authority. The better
view, we think, would be to apply one but not both ordinances
to a single business.
Robert Morgan, Attorney General
Myron C. Banks,
Assistant Attorney General
17 July 1972
Subject: Licenses and Licensing; Plumbing and
Heating Contractors; Necessity of
Obtaining a License under the Grandfather
Clause Prior to Engaging in the Business of
Plumbing and Heating Contracting
Requested by: Mr. F. O. Bates
Executive Secretary of the State Board of
Examiners of Plumbing and Heating
Contracting
Question: Is an unlicensed person, who has engaged
in, or offered to engage in, the business of
plumbing and heating or air-conditioning
contracting since July 6, 1971, in areas
where Chapter 87 did not previously
apply, in violation of Chapter 87 of the
North Carolina General Statutes as
amended by the 1971 General Assembly?
Conclusion: No. The Amendment to Article 2 of
Chapter 87 was effective on the date of
-20-
ratification, July 6, 1971; however, those
not previously covered have until
December 31, 1972, before they must
secure a license prior to engaging in the
business of plumbing and heating or
air-conditioning contracting without
violation of Article 2, Chapter 87 of the
North Carolina General Statutes.
Prior to amendment by the 1971 General Assembly, Article 2 of
Chapter 87, requiring a license to engage in the business of plumbing
and heating contracting, applied only in cities and towns having a
population of more than 3,500 people. The 1971 General Assembly
amended Article 2 of Chapter 87 to provide that G. S. 87-2 1(c)
shall apply to all those persons, firms and corporations engaging
in the business of plumbing and heating contracting. The effective
date of the amendment was July 6, 1971; however, there was no
saving or transitional clause provision for those not previously
covered by Chapter 87 who were lawfully engaged in the business
of plumbing and heating and air-conditioning contracting prior to
July 6, 1971. The legislature provided, however, at the same time,
a grandfather clause for those who had engaged in the business of
plumbing and heating contracting in areas not previously covered.
G. S. 87-2 1(d) as amended is as follows:
"G. S. 87-21. Definitions; contractors licensed by
Board; examination; posting license, etc.-. . . .(d)
License Granted Without Examination. - Any resident
of North Carolina who was engaged in business as
defined in this Article in any city, town or other area
in which General Statutes 87, Article 2 did not
previously apply, shall receive license without
examination upon submission of an application on
forms provided by the Board, together with reasonable
proof that he was engaged in business as defined and
upon payment of the annual license fee; provided, the
completed application is submitted to the Board on
or before December 31, 1972."
By the express provision of this section, those who engaged in the
business of plumbing and heating contracting in areas where
-21-
Article 2 of Chapter 87 was not applicable have until!
December 21, 1972, to obtain a license without an examination.1
If the Act were interpreted to require a license upon ratification
of those in areas not previously covered by Article 2, Chapter 87
J
approximately 4,300 would have been immediately required toM
obtain a license (a physical impossibility), operate illegally, or
temporarily go out of business until they could comply with the
time-consuming provisions of the grandfather clause as set out in
G. S. 87-21 (d). Certainly, by the enactment of the grandfather
clause at the same time Article 2 of Chapter 87 was amended to
cover all of the areas in North Carolina, the General Assembly has
shown that it was not their intention to declare unlawful or put
out of business those persons, firms or corporations lawfully engaged
in the business of plumbing and heating contracting in areas not
previously covered after July 6, 1971. It is presumed that the
legislature acted in accordance with reason and common sense and
that it did not intend an unjust or absurd result. King v. Baldwin,
276 N. C. 316.
It is the opinion of this Office that those not previously covered
have until December 31, 1972, before they must secure a license
to engage in the business of plumbing and heating and
air-conditioning contracting without violating the provisions of
Article 2 of Chapter 87 of the North Carolina General Statutes.
Robert Morgan, Attorney General
James E. Magner,
Assistant Attorney General
17 July 1972
Subject: Insurance; Automobile Liability Insurance-
Policies; Terminations by Cancellation and
Refusal to Renew; Applicability of
48-Month Exclusion
Requested by: The Honorable Edwin S. Lanier
Commissioner of Insurance
-22-
Question: Under the provisions of G. S. 20-310,
would continuous automobile liability
insurance coverage written voluntarily or
under the North Carolina Automobile
Assigned Risk Plan (old assigned risk plan)
followed by voluntary coverage prior to
January 1, 1972, and continuous coverage
under the North Carolina Automobile
Insurance Plan (new assigned risk plan)
followed by voluntary coverage, count
toward completion of the consecutive
period of coverage of 48 months or longer
set forth in subdivision (g) (3) of the
statute?
Conclusion: No period of continuous automobile
liability insurance coverage prior to
January 1, 1972, written either
voluntarily or under the North Carolina
Automobile Assigned Risk Plan would
count toward the completion of a period
of 48 consecutive months of coverage
necessary to exclude a policy from the
provisions of G. S. 20-310. Nor would
coverage under the North Carolina
Automobile Insurance Plan count toward
completion of the 48-month period.
The Commissioner of Insurance has requested that the Attorney
General render an opinion concerning the financial responsibility
laws pertaining to the termination of insurance policies. Specifically,
the Commissioner desires to know:
(1) Whether continuous automobile liability insurance coverage
under a policy written on a voluntary basis for a period prior to
January 1, 1972, whereby the total coverage was for 48 months
or more would exclude such a policy from the provisions of
G. S. 20-310;
(2) Whether continuous automobile liability insurance coverage
under a policy written on a voluntary basis combined with prior
23-
coverage by the same company under the North Carolina
Automobile Insurance Plan (new assigned risk plan) resulting in total
continuous coverage of 48 months or longer would exclude such
a policy from the provisions of G. S. 20-310;
(3) Whether continuous automobile liability insurance coverage
under a policy written on a voluntary basis combined with prior
coverage by the same company under the North Carolina
Automobile Assigned Risk Plan (old assigned risk plan) resulting in
total continuous coverage of 48 months or longer would exclude
such a policy from the provisions of G. S. 20-310?
G. S. 20-310 (g) in pertinent part reads as follows:
"(g) Nothing in this section shall apply:
* * * *
(3) . . .to any policy which has been written
or written and renewed for a consecutive period
of 48 months or longer."
It is understood that the Commissioner has concluded that
continuous automobile liability coverage written on a voluntary basis
for a period prior to January 1, 1972, will not count toward
completion of the period of continuous coverage for 48 months
or longer referred to in subdivision (g) (3) of the statute. We concur
fully with that opinion.
Session Laws 1971, c. 1205, s. 6, provides:
"Section 4 (codified as G. S. 20-310) of this act shall
become effective on January 1, 1972, but shall apply
only to insurance policies written or renewed after said
date." {Emphasis added.)
This language demonstrates that the undeniable intent of the General
Assembly was that nothing contained in G. S. 20-310 would affect
policies written or renewed before January 1, 1972.
"The fundamental rule of statutory construction, to
-24-
which all other rules are subordinate, is that the court
shall, by all aids available, ascertain and give effect
... to the intention or purpose of the legislature as
expressed in the statute." 82 C.J.S., Statutes, s. 321
(See also Ballard v. Charlotte, 235 N. C. 484,
70 S. E. 2d 575 (1952)).
In support of this position is the purpose of the financial
responsibility act that every motorist maintain continuously proof
of financial responsibility. The statute at hand must be considered
in context with the other provisions of these laws and the purpose
thereof {Perkins v. Insurance Co., 21A N. C. 134,
161 S. E. 2d 536 (1968)) and the obvious purpose of
G. S. 20-310 was to provide to the insured some degree of
continuous liability insurance coverage. It is well settled that "...
in the interpretation of a statute of doubtful meaning, it is proper
to take into consideration its purpose . . . intended to be efficiently
embodied in the enactment." 50 Am. Jur., Statutes, s. 303.
Interpreting G. S. 20-310 in light of its purpose, it becomes clear
that this purpose would be frustrated if coverage prior to
January 1, 1972, were allowed to count toward completion of the
48-month period of continuous coverage necessary to exclude a
policy from the provisions of the statute. Since many persons have
been covered under policies, written, or written and renewed, for
a consecutive period of 48 months or longer, the act would afford
these persons no protection whatsoever. Therefore, the statute would
be ineffective in many cases in abating the particular problem that
it was designed to prevent-unchecked cancellations and refusals to
renew by insurance companies.
Question (2) can be answered by merely referring to the definitional
section of the statute. Under Subsection (a) (1) of G. S. 20-310,
it is stated that "'policy' shall not apply to any policy issued under
the North Carolina Automobile Insurance Plan." Therefore, since
Subdivision (g) (3) applies "to any policy" {emphasis added),
coverage under the North Carolina Automobile Insurance Plan does
not come within the exclusion by definition. Therefore, coverage
under the North Carolina Automobile Insurance Plan will not count
toward completion of the 48-month period set forth in
Subdivision (g) (3) of the statute.
-25-
The result reached in question (1) above is determinative of question
(3). The North Carolina Automobile Insurance Plan replaces the
North Carolina Automobile Assigned Risk Plan with the former
applying to all policies written or renewed after January 1, 1972.
Session Laws 1971, c. 1205, s. 6, provides:
"Section 3 (G. S. 20-279.34) of this act shall become
effective on January 1, 1972, but shall apply only to
insurance policies written or renewed after this date.
The present provisions of G. S. 20-279.34 and the
plan adopted pursuant thereto shall apply to all
insurance policies written or renewed under the North
Carolina Automobile Assigned Risk Plan prior to
January 1, 1972."
Therefore, coverage under the North Carolina Automobile Assigned
Risk Plan would not count toward completion of the period of 48
months of continuous coverage set forth in Subdivision (g) (3) of
the statute.
Robert Morgan, Attorney General
Benjamin H. Baxter, Jr.,
Associate Attorney
17 July 1972
Subject:
Requested by:
Question:
Intoxicating Liquors; Beer; Sunday Sales;
County Regulation of; Straw Vote
Mr. John R. Jenkins, Jr.
Bertie County Attorney
May the Board of Commissioners of Bertie
County call a special election or otherwise
submit to the voters of the county at the
general election to be held on
November 5, 1972, the question of
whether beer shall be sold in Bertie County
on Sundays?
-26-
Conclusion: The Board of County Commissioners may
not submit to the voters of the county the
question of whether beer should be sold
on Sundays in the County absent some
special or general authorizing legislation.
The inquiry indicates that the County Commissioners of Bertie
County wish to submit to the voters of Bertie County the question
of whether they will allow or disallow the Sunday sale of beer in
the County.
G. S. 18A-33(b) allows counties and municipalities in the State to
regulate and prohibit the Sunday sale of beer and/or wine from
1:00 on Sunday until 7:00 a.m. on the following Monday although
excluded from that authority are those establishments having a
permit under Article 3 of Chapter 18A (the so-called
"brown-bagging" establishments).
The section provides that the powers vested in municipalities are
exclusive within the corporate limits and the powers vested in the
county commissioners are exclusive in all parts of the counties not
included within municipal corporate boundaries.
It is axiomatic that the counties have only that authority which
is delegated them by the General Statutes or necessarily implied
by law. 2 Strong, N. C. Index 2d, Counties, §2.
"There is no inherent power in any governmental body
to hold an election for any purpose, and an election
held without affirmative constitutional or statutory
authority is a nullity. ..." 3 Strong, N. C. Index
2d, Elections, §1.
The counties have not been given authority to hold an election in
the nature of a straw vote as to whether they should undertake
to prohibit Sunday sales of beer and/or wine and, therefore, there
is no authority for the Board of County Commissioners of Bertie
County to hold such an election.
This conclusion assumes that there are no local acts on the books
as to Bertie County allowing the County Commissioners to hold
-27-
such straw vote elections since if there are such local acts, that would
be sufficient authority.
Robert Morgan, Attorney General
(Mrs.) Christine Y. Denson,
Assistant Attorney General
20 July 1972
Subject:
Requested by:
Question
:
Conclusion:
Public Officers & Employees; ABC Board
Employees; Not Employees of the
Municipality or County
Mr. W. Charles Cohoon
Chairman
State Board of Alcoholic Control
Are employees of county and city ABC
boards considered as employees of the city
or county?
No.
A county or municipal ABC board is a separate political subdivision
and employees of such boards are not employees of the county,
municipal or State governments. G. S. 18A-16 creates a county
board of alcoholic control in each county that is permitted to engage
in the sale of alcoholic beverages. Local acts authorizing ABC
systems in a municipality create a municipal ABC board and
generally the only authority which the municipality has over such
board is the power to appoint the members of the ABC board. Under
G. S. 18A-16, the board of county commissioners, the county
board of health and the county board of education appoint the
members of the county ABC board. Other than this appointive
power, the county and municipality have no control over the
municipal or county ABC board. G. S. 18A-17 confers certain
powers, authority and duties upon county ABC boards and these
powers, duties and authorities are conferred in local acts upon
-28-
municipal ABC boards. All the powers and duties conferred upon
county boards are subject to the powers conferred upon the State
ABC Board. The State ABC Board, under G. S. 18A-15, is given
control over county and municipal ABC boards in certain areas.
The case of Hunter v. Retirement System, 224 N. C. 359, involved
the question as to whether employees of the New Hanover County
ABC Board were entitled to benefits under the City and County
Retirement System. The Court discussed various sections of
Chapter 18 of the General Statutes, now Chapter 18A of the
General Statutes, and stated that there is no authority whatsoever
vested in the City of Wilmington or County of New Hanover to
control the Alcoholic Beverage Control Board of New Hanover
; County, to determine the number of its employees, to fix their
salaries or to assign their duties or in any way to interfere with
the discretionary powers vested in the State and county boards of
alcoholic beverage control. The Court concluded that the employees
of the Alcoholic Beverage Control Board of New Hanover County
were not employees of the County of New Hanover nor of the City
of Wilmington and were not eligible to the benefits of the retirement
system.
This office has previously concluded that a county or municipal
ABC board was a separate political subdivision of State government
and therefore employees of a county or municipal ABC board were
not employees of the municipality, the county or State government.
Robert Morgan, Attorney General
James F. Bullock,
Deputy Attorney General
20 July 1972
Subject: Insurance; Automobile Liability Insurance
Policies; Termination by Rescission;
Legality of
Requested by: Honorable Edwin S. Lanier
Commissioner of Insurance
-29-
Question: Whether under the financial responsibility
laws, an insurer can rescind a policy of
automobile liability insurance because of
material misrepresentations made by the
insured in an application for a policy
thereby making it void ab initio*!
Conclusion: Where an insured makes material
misrepresentations in an application for a
policy of automobile liability insurance,
the insurer may not rescind the policy
thereby making it void ab initio.
The Commissioner of Insurance has requested that the Attorney
General render an opinion regarding the financial responsibility laws
pertaining to the termination of policies of automobile liability
insurance. Specifically, the Commissioner wishes to know whether
an insurer can terminate such a policy by rescission because of false
and material representations made by the insured in the application
for the policy thus making the policy void ab initio.
The Insurance Department has received information of a termination
by a carrier in the following factual situation:
On February 24, 1972, the insured completed and executed an
application for automobile liability insurance which contained false
statements. Based upon this application, the carrier issued an
automobile liability policy covering the insured. A routine driver's
license check with the North Carolina Department of Motor Vehicles
revealed the misrepresentations. Based upon the misrepresentations,
the carrier voided the policy ab initio and by letter dated
April 20, 1972, gave notice thereof to the insured.
The Financial Responsibility Act was passed by the General
Assembly to provide protection to persons injured or damaged by
the negligent operation of automobiles. Hawley v. Indemnity Ins.
Co. of North America, 257 N. C. 381, 126 S. E. 2d 161 (1962),
and Perkins v. America Mut. Fire Ins. Co., 274 N. C. 134,
161 S. E. 2d 536 (1968). To effect this purpose, the Act was
designed to ensure that operators of motor vehicles maintain
continuous financial responsibility. Crisp v. State Farm Mutual Auto.
Ins. Co., 256 N. C. 408, 124 S. E. 2d 149 (1962). Hence, the
-30-
Act contemplates that termination of automobile insurance policies
shall only be made pursuant to its provisions and only in the specific
cases set out therein. G. S. 20-310. Also, the Act provides that the
operation of a motor vehicle without financial responsibility is a
misdemeanor. G. S. 20-3 13(a).
To allow an insurer to rescind a policy for fraud thus making it
void from its inception is inconsistent with the Financial
Responsibility Act. We recognize that the common law or statutory
right to rescind ab initio for fraud would normally apply to an
insurance contract. However, this common law or statutory right
cannot be reconciled with the financial responsibility laws whose
purpose as stated above is to assure continuous liability coverage.
Teeter v. Allstate Insurance Company, 192 N.Y.S. 2d 610,
9 A.D. 2d 176 (1959). The fact that the Act prescribes penal
sanctions to assure compliance and places the burden upon the
insured to comply therewith is determinative. To allow rescission
to be effective retroactively as of the date of issuance of the policy
would make it impossible for the insured to either procure new
insurance or surrender his license plates prior to the date upon which
the termination of the coverage became effective. The insured would
be retroactively rendered guilty of a misdemeanor for having
operated a vehicle from the date of issuance to the date of rescission
of the policy even though his conduct was lawful at the time. Teeter
v. Allstate Insurance Company, supra. Therefore, we conclude that
such a result could not have been intended by the legislature.
The next question that must be resolved is whether under the Act,
an insurer can terminate a policy due to fraud prospectively. The
word "cancel" "is not used in the statute in its technical insurance
sense but in its colloquial sense, as meaning a termination of coverage
under a policy in any manner prior to the expiration date therein
specified." Teeter v. Allstate Insurance Company, supra. Therefore,
since a termination for fraud is not specified as a reason for
cancellation in G. S. 20-3 10(d), we conclude that a policy of
insurance cannot be terminated in the fact situation described by
the Commissioner.
We are not unmindful of the seemingly hopeless plight of the insurer
in a case such as this. The General Assembly did, however, provide
for a 60-day underwriting period during which time the insurer may
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cancel a policy for any reason. This would seem ample time for
the insurer to discover such fraud and cancel the policy. An insurer
acting diligently can easily secure the driving record of its insured
from the Department of Motor Vehicles and cancel a policy well
within the 60-day underwriting period.
Robert Morgan, Attorney General
Benjamin H. Baxter, Jr.,
Associate Attorney
31 July 1972
Subject: Taxation; Gift Tax; Decedent's Estate;
Assets Includable; G. S. 105-108;
G. S. 105-109
Requested by:
Question:
Conclusion
:
Mr. B. E. Rogers, Director
Inheritance & Gift Tax Division
N. C. Department of Revenue
If a gift tax has not been paid by a
decedent upon the transfer of an asset later
found to be includable in his estate, will
the payment of the gift tax by the
decedent's executor or administrator
constitute an allowable deduction against
his estate for inheritance tax purposes?
Gift taxes paid by an executor and imposed
upon the transfer of assets found to be
includable in a decedent's estate are not
deductions for North Carolina inheritance
tax purposes.
G. S. 105-8 provides, in relevant part:
"In case a tax has been imposed under Schedule G
of the Revenue Act of 1937, or under subsequent acts,
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upon any gift, and thereafter, upon the death of the
donor, the amount thereof is required by any provision
of this Article to be included in the gross estate of
the decedent, then the tax paid with respect to such
gift shall constitute an advance payment of the tax
which would otherwise be chargeable against the
beneficiaries of the estate under the provisions of this
Article, and shall be applied in reduction of said
tax. ..."
G. S. 105-9 provides, in relevant part:
"Deductions -In determining the clear market value of
property taxed under this Article, or schedule, the
following deductions, and no others, shall be allowed:
(1) Taxes accrued and unpaid at the
death of the decedent and unpaid ad
valorem taxes accruing during the
calendar year of death."
In McGill v. Oklahoma Tax Commission, 258 P. 2d 1180
(Okla. 1953), it was held that gifts made in contemplation of death,
and therefore subject under the Federal Estate Tax Act to the
payment of federal estate taxes, were subject to a contingent gift
tax liability that disappeared upon the death of the donor. Upon
his death, the tax on gifts in contemplation of death reappeared
as an estate tax and was not a debt deductible under Oklahoma's
inheritance tax law.
In Smith v. Shaughnessy, 318 U. S. 176, 63 S. Ct. 545,
87 L. Ed. 690, (1943), it was pointed out that where a federal
gift tax is paid on transfers in contemplation of death, it merely
constitutes a "down payment" on the estate tax that is subsequently
imposed on the transfer. As the court expressed it:
"Under the statute the gift tax amounts in some
instances to a security, a form of 'down payment' on
the estate tax which secures the eventual payment on
the latter. It is in no sense double taxation."
318 U. S. 179.
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The California Court of Appeal held in In Re Estate of Gioletti,
24 C.A. 3d 921 (1972) that the amount of federal gift tax that
is paid upon the transfer of property in contemplation of death,
when the property subsequently becomes subject to federal and
State inheritance taxes, and that is credited against the amount of
the federal estate tax, is not deductible from the appraised value
of the property in determining California inheritance tax.
The State of New Jersey has held that a federal gift tax paid on
a gift made in contemplation of ,death is nondeductible from the
appraised value of an estate in computing the state inheritance tax
liability. In Re Estate of Snivels, 105 N. J. Super. 242, 251
A. 2d 771 (1969). In that case, the court said:
"There is no obligation to pay the gift tax as a separate
liability, in the case of gifts made in contemplation
of death, when the same items are included in the
federal estate tax return. Gifts in contemplation of
death are includable as assets of the donor's estate and
subject to federal estate tax and a gift tax paid on
such gifts is a mere credit on account of the calculated
federal estate tax. If the gift tax has not been paid,
the estate simply receives no credit. In the final
analysis, the tax paid, by whatever label is put on it
by the executor, is the federal estate tax."
The federal government denies as a deduction in computing federal
estate taxes any state gift tax paid on a gift in contemplation of
death and subsequently credited to the state inheritance tax. Internal
Revenue Bulletin 1971-31, provides that:
"Since the provisions of section 2053(c)(1)(b) of the
Code preclude the deduction of death taxes, it is
further held that where, under state law, state gift
taxes paid after the donor-decedent's death are
regarded as prepayments of state inheritance taxes,
such payments cannot be deducted from the value of
his gross estate."
Under G. S. 105-8, North Carolina treats any gift tax paid when
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the asset is subsequently included in the decedent's estate as an
"advance payment" of the estate tax. As such, as in other
jurisdictions, it is not in reality or substance a payment of a gift
tax, but a "down payment" of the estate tax and therefore not
a deduction under G. S, 105-9 for "taxes accrued and unpaid at
the death of the decedent." That which is in reality an estate tax
cannot be converted into a deductible gift by the mere mechanics
of filing a gift tax return when the amount of the gift tax is allowed
as a credit against the estate tax. Smith v. Shaughnessy, supra. We
cannot presume that the collective conscience of the legislature
intended to create and sanction a situation whereby those who
choose to transfer their property by will or the laws of intestacy
would incur a greater tax obligation than those who would transfer
in contemplation of death.
Robert Morgan, Attorney General
George W. Boylan,
Associate Attorney
31 July 1972
Subject: Taxation; Sales Tax; Laundries and Dry
Cleaners; Rug Cleaning Services;
G. S. 105-164.4(4)
Requested by: Mr. Eric L. Gooch, Director
Sales & Use Tax Division
N. C. Department of Revenue
Questions: (1) Are the gross receipts from rug cleaning
services conducted on the business premises
of a rug cleaner subject to sales tax?
(2) Are the gross receipts from rug cleaning
services conducted on the premises of the
rug cleaner's customer subject to sales tax?
Conclusions: (1) Yes.
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(2) No.
The Director of the Sales & Use Tax Division, North Carolina
Department of Revenue, has asked that certain provisions of Sales
& Use Tax Regulation 24 be reviewed in the light of
G. S. 105-164.4(4) and the following circumstances:
Taxpayer A, a "rug and floor cleaner", maintains at its place of
business seventeen rug hangers, each of which can accommodate a
rug up to 12' x 12' in size. It picks up rugs, cleans them at its
premises with a portable shampoo machine, and delivers the cleaned
rugs to its customers. Jn addition to this activity, it engages in
cleanup work resulting from fires and smoke damage, including the
cleaning of walls, ceilings and floors. It also cleans rugs and carpets
on the customer's premises.
Taxpayer B may also be characterized as a rug cleaner. In its
building, it has five rug poles, each thirteen feet long and capable
of accommodating rugs up to twelve feet wide. It engages in the
cleaning of rugs at its place of business, using portable rug cleaning
equipment, and also engages in the cleaning of carpets, rugs, walls,
floors and furniture in homes and offices, particularly where there
has been fire and smoke damage.
G. S. 105-164.4(4) imposes a sales tax upon the gross receipts of
"every person, firm or corporation engaged in the business of
operating a pressing club, cleaning plant, hat blocking establishment,
dry cleaning plant, laundry (including wet or damp wash laundries
and businesses known as launderettes or launderalls) or any similar
type business. ..."
As it applies to rug cleaning services, Sales & Use Tax Regulation
24 interprets G. S. 105-164.4(4) in this way:
"(a) The gross receipts derived from the following are
subject to the 3% sales or use tax:
(1) Services rendered by pressing clubs,
cleaning plants, hat blocking
establishments, dry cleaning plants,
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laundries, including wet or damp wash
laundries and businesses known as
launderettes and launderalls, and all
similar type businesses.
(2) The rental of clean linen, towels,
wearing apparel and similar items.
(3) Soliciting cleaning, pressing, hat
blocking and laundry.
(4) Rug cleaning services performed by
persons operating rug cleaning plants or
performed by any of the businesses
named in this Regulation irrespective of
whether the rug cleaning service is
performed on the customer's location or
at the plant. Persons who do not operate
any of the businesses included in this
Regulation and only perform house
cleaning or building maintenance services
and clean rugs at the customer's location
do not come within the provisions of
this Regulation."
Clearly, under Regulation 24, the gross receipts of Taxpayers A and
B, derived from the performance of rug cleaning services, wherever
done, are subject to tax. The question is whether the Regulation
is supported by the law.
Common to each of the businesses taxed under G. S. 105-164.4(4)
is a strong sense of physical location (a "club", a "plant", a
"laundry", an "establishment") indicative of an intent to tax receipts
from business carried on at a business premises. While we feel that
a rug cleaning business bears sufficient similarity to the businesses
more specifically named in the statute to bring it within its terms,
we are of the opinion that the rule of construction which requires
a statute imposing a tax to be strictly construed, against the State
and in favor of the taxpayer, in cases of doubt, militates against
that part of the Regulation which seeks to tax those receipts derived
from services rendered at the customer's home or office.
-37-
In other words, gross receipts derived from rug cleaning services
rendered at the plant or business premises of the rug cleaner are
subject to tax. However, those derived from services rendered at
the customer's premises, in our opinion, would not be. That portion
of Regulation 24 which permits the imposition of the tax in the
latter example is, we believe, in error.
To the extent that it is in conflict with this opinion, the opinion
on the same subject, dated 17 July 1961, is hereby modified.
Robert Morgan, Attorney General
Myron C. Banks,
Assistant Attorney General
1 August 1972
Subject:
Requested by:
Questions:
State Departments, Institutions and
Agencies; Correction, Department of;
Liability for Hospitalization of Inmates
Mr. Martin R. Peterson
Chief of Custody and Security
N. C. Department of Correction
Is the North Carolina Department of
Correction required to pay medical and
hospital expenses for an inmate requiring
hospitalization outside the confines of the
Department of Correction in the following
instances:
(1) An inmate is permitted to leave the
confines of his unit on an authorized
Community Volunteer leave. He escapes
from his sponsor and is injured. The inmate
is picked up immediately by police and
delivered to the hospital for treatment. He
is then turned over to the custody of the
-38-
Department of Correction after being
released from the hospital.
(2) An inmate escapes from the
Department of Correction. He is injured in
a car wreck while being chased by Highway
Patrol or police who take him into custody
and deliver him to a hospital. The
Department of Correction is notified of his
hospitalization and he is returned to the
Department's custody after release from
the hospital.
(3) An inmate, who has escaped from the
Department of Correction, is imprisoned in
another jurisdiction. He is released to the
local sheriff to await arrival of officers
from the North Carolina Department of
Correction to take him into custody. In the
meantime, while being held for North
Carolina on our detainer, it becomes
necessary to hospitalize him. The inmate
is released to the Department's officers as
soon as the hospitalization is terminated.
(4) An inmate escapes from the
Department of Correction and while on
escape has occasion to enter a hospital. He
leaves the hospital prior to being
apprehended by law enforcement officers.
The hospital attempts to bill the North
Carolina Department of Correction because
he is an inmate.
(5) An inmate is granted an extension of
confinement limits pursuant to
G. S. 148-4 in the form of either a home
leave or a Community Volunteer leave and
it becomes necessary that he be
hospitalized. Is the Department of
Correction required to pay his medical and
-39-
hospital expenses if he notifies the unit
granting the extension or if he fails to
notify the unit.
Conclusions: (1) Yes.
(2) Yes.
(3) Yes.
(4) No.
(5) Yes.
"A prisoner may be taken, when necessary, to a medical facility
outside the State prison system." G. S. 148-1 9(a).
In each of the first three fact situations presented, the inmate has
been taken into custody by law enforcement officials on behalf of
the Department of Correction. In the first two cases, the inmate
has escaped, has been apprehended by the police, and then delivered
to a hospital for treatment. The officers would be acting as agents,
at least constructively, for the Department of Correction when
apprehending the inmate. In fact, in North Carolina any citizen has
authority to apprehend an escaped convict and retain him in custody
to be delivered over to the State Department of Correction.
G. S. 148-40. In the third case, the sheriff would also be acting
as an agent for the Department of Correction while maintaining
custody of the inmate, pursuant to a North Carolina detainer,
awaiting officers from this State to take the inmate into custody.
In these cases, the inmate is in the constructive custody of the North
Carolina Department of Correction, and therefore the Department
should pay the medical and hospital expenses incurred.
In the fourth case, the inmate, while on escape, enters and departs
the hospital prior to being apprehended by law enforcement officials.
During this time, the inmate has neither been in the actual nor in
the constructive custody of the North Carolina Department of
Correction. The hospital was not treating the inmate under the
expectation that they were performing services as agents for, or on
behalf of, the Department of Correction. Therefore, the Department
-40-
would not be liable for medical expenses incurred by the inmate
during this period of time.
In the fifth case, when an inmate is granted an extension of his
confinement limits under G. S. 148-4, he is still under the custody
and control of the Department of Correction and therefore the
Department should pay for any hospitalization required.
Robert Morgan, Attorney General
Edward L. Eatman, Jr.,
Assistant Attorney General
1 August 1972
Subject: Mental Health; Examination and
Hospitalization of Inebriates; Public
Drunkenness As a Criminal Offense
Requested by:
Question:
Colonel Edwin C. Guy
Commanding
State Highway Patrol
Under current North Carolina General
Statutes are peace officers authorized to
arrest persons for the offense of public
drunkenness?
Conclusion: Under current North Carolina General
Statutes peace officers are authorized to
arrest persons for the offense of public
drunkenness.
This question has arisen due to an apparent misunderstanding as
to the effect of Article 7, Chapter 122 of the North Carolina
General Statutes. This Article is entitled "Judicial Hospitalization"
and provides procedures for examination of inebriates and mentally
ill persons and admission of these persons to the proper State
hospital (or other institution) for observation and treatment, when
appropriate.
-41-
Due to the nature of the present question, this opinion will be
limited to consideration of individuals falling within the category
of "inebriates." G. S. 122-36(c) defines this term as follows:
"The word 'inebriate' shall mean a person habitually
so addicted to alcoholic drinks or narcotic drugs or
other habit forming drugs as to have lost the power
of self-control and that for his own welfare or the
welfare of others is a proper subject for restraint, care,
and treatment."
In cases involving inebriates, Article 7 requires the clerk of superior
court to take action to secure custody of the individual concerned
in an appropriate fashion, to conduct a hearing on the issue, and
to dismiss the proceedings or to issue an order for hospitalization,
as warranted by the circumstances. However, these proceedings are
precipitated only after receipt by the clerk of an affidavit stating
that the alleged inebriate is in need of observation and admission,
together with a request for examination of the person from "some
reliable person having knowledge of the facts." See G. S. 122-60
through G. S. 122-62. Although an exception may be made to this
rule requiring an affidavit in a situation "when the clerk of the
superior court has other valid knowledge of the facts of the case
to cause" such examination (see G. S. 122-62), a specific order of
the clerk is required in any case before any of the actions authorized
by Article 7 leading to examination and hospitalization can be
taken.
On the other hand, public drunkenness is proscribed by
G. S. 14-335. While subsection (c) provides that chronic alcoholism
can be an affirmative defense available to an individual charged with
public drunkenness, the remainder of this section provides that
public drunkenness is a crime punishable by a fine or imprisonment.
In fact, any doubt that the legislators intended the statutes in
question to be complementary to rather than conflicting with each
other is laid to rest by specific statutory provisions permitting the
trial judge to order the clerk of superior court to institute judicial
hospitalization proceedings under Article 7, where appropriate, in
cases wherein a person has been acquitted of public drunkenness
by reason of chronic alcoholism. See G. S. 14-335(c),
G. S. 122-65.7, and G. S. 122-65.8.
-42-
Since public drunkenness is a criminal offense within this State, ipso
facto, peace officers within North Carolina are authorized to arrest
persons committing this offense.
Robert Morgan, Attorney General
William F. O'Connell,
Assistant Attorney General
1 August 1972
Subject
:
Mental Health; Detention of Inebriates and
Mentally 111 Persons; Authority of Clerk of
Superior Court to Issue Custody Order to
Sheriff
Requested by:
Question
:
Conclusion:
Honorable Ralph L. McSwain
Sheriff
Stanly County
Does the clerk of superior court have the
authority to direct the sheriff to take into
custody a person alleged to be an inebriate
or a mentally ill person?
The clerk of superior court has the
authority to direct the sheriff to take into
custody a person alleged to be an inebriate
or a mentally ill person.
This is one of the multiple questions which have arisen because of
the following provisions of G. S. 122-61, effective July 1, 1972:
"§ 122-61. Detention of persons alleged to be
mentally ill or inebriate and dangerous to themselves
or others.- If the affidavit filed in accordance with
the provisions of G. S. 122-60 states that the alleged
mentally ill person or alleged inebriate is likely to
endanger himself or others, he may be taken into
-43-
custody and detained in his own home, in a private
or general hospital, or in any other suitable facility
as approved by the local health director for such
detention, upon an order of the clerk of the court.
He shall not be detained in a nonmedical facility used
for the detention of individuals charged with or
convicted of penal offenses. The Department of Mental
Health shall make available to the clerk of court such
medical services and transportation necessary to effect
the detention deemed necessary.
The clerk shall expedite the hearing, and, if the alleged
mentally ill person or alleged inebriate is found to be
in need of hospitalization, the clerk shall expedite the
transmission of this information to the proper State
hospital so that the alleged mentally ill person or
alleged inebriate can be admitted without any undue
delay."
In interpreting this new section, it must be recognized that it only
purports to deal with emergency type detention of an inebriate or
mentally ill person, where necessary, prior to a hearing by the clerk
of superior court and prior to expeditious admission to the proper
State hospital if that action is directed. Thus, it must be considered
as a part of the "judicial hospitalization" proceedings and must be
interpreted in conjunction with the other sections included in
Article 7, Chapter 122 of the General Statutes-/. e., G. S. 122-60
through G. S. 122-65.5.
G. S. 122-60 provides that some reliable person having knowledge
of sufficient facts may start proceedings calculated to result in
judicial hospitalization by filing with the clerk of superior court
an affidavit to the effect that the potential patient is in need of
observation or admission in a proper hospital, together with a request
for examination of such individual. G. S. 122-62 then provides that,
upon the clerk's receipt of the affidavit and request (or when the
clerk has other adequate valid knowledge of the facts), he shall direct
two qualified, uninvolved physicians to examine the potential
patient. As a tool available to the clerk for insuring the performance
of the examination, this latter section of the General Statutes
contains the following language: "The clerk is authorized to order
44-
the alleged mentally ill person or inebriate to submit to such
examination, and it shall be the duty of the sheriff or other law
enforcement officer to see that this order is enforced."
The temporary detention authorized by G. S. 1 22-6 1 in cases where
that type of action is necessary in order to avoid danger to the
potential patient or to others is clearly a preliminary part of the
proceedings leading up to the examination required by G. S. 122-62
for the purpose of determining whether an individual should be
judicially hospitalized. This new section does not serve to relieve
the sheriff or any other peace officer from cooperation with and
assistance to the Department of Mental Health in adequately
detaining the individual, nor does it serve to relieve these officials
from their obligations to see that the clerk's orders are enforced.
Therefore, when it is necessary to utilize the services of the sheriff
or other law enforcement officer in order to take the individual
into custody and detain him, as permitted by G. S. 122-61, the
clerk is authorized to issue an order to that effect directly to such
peace officer.
1 August 1972
Subject:
Requested by:
Question:
Robert Morgan, Attorney General
William F. O'Connell,
Assistant Attorney General
Licenses and Licensing; General
Contractors; Installation of Industrial
Equipment
Mr. Jimmy M. Wells, Jr.
Seere tary-Treasurer
N. C. Licensing Board for Contractors
Is a company required to be licensed by
the General Contracting Licensing Board
under the provisions of Chapter 87, in
order to bid on a "turn-key" Peak Shaving
-45-
Facility, consisting of a prefabricated
building, air compressing equipment, gas
blending equipment, and controls inside a
prefabricated building as well as two large
tanks and a self-contained propane
vaporizer outside the building of which the
total general contracting work involved is
estimated to be $10,900 out of the low
bid of $132,700?
Conclusion: The erection of industrial equipment is
specifically exempted from the licensing
requirement of G. S. 87-1 and inasmuch
as the estimated cost of the general
contracting work is less than $30,000, no
general contractor's license is required of
the low bidder.
The facts as indicated in a letter of July 17, 1972, from the
Licensing Board for Contractors are that bids were advertised by
the City of Lexington for a turn-key Peak Shaving Facility consisting
of a prefabricated building and the installation of air compressing
equipment, gas blending equipment, and controls in the building
as well as the installation adjacent to the building of a self-contained
propane vaporizer and two 30,000 gallon water capacity tanks which
will be shop fabricated and placed on concrete foundations at the
site. A piping and pumping station will also be installed.
The engineering consultant retained by the city estimates that out
of the low bid of $132,700, the general contracting work amounts
to a total cost of $10,900 which consists of the erection of a
prefabricated metal building, construction of concrete supports for
the building, concrete supports for water bath vaporizer and base
for propane liquid pump, concrete supports for the two 30,000
gallon tanks, and grading for the tanks and yard piping. The
remainder of the amount bid is attributable to the cost of the
equipment and the cost of installing it.
The provisions of G. S. 87-1, the general contractor's licensing
statute, is applicable to ihe construction of improvements in excess
of $30,000, but it specifically exempts the erection of the industrial
-46-
equipment. The amount included in the bid in excess of $10,900
is attributable to the cost of installing industrial equipment. It is
the opinion of this office that a general contractor's license is not
required to bid on the installation of the facility, as the estimated
cost of the improvements included in the bid for which a general
contractor's license is required is less than $30,000.
Robert Morgan, Attorney General
Eugene A. Smith,
Assistant Attorney General
3 August 1972
Subject:
Requested by:
Question:
Conclusion:
Motor Vehicles; Abandoned or Junked
Vehicles; Removal of Abandoned Vehicles
from Private Property
Chief Thomas M. Dowdy
Kill Devil Hills Police Department
Should city police have unauthorized
vehicles parked in privately owned motel
parking lots towed at request of motel
management?
City police should have unauthorized
vehicles parked in private motel parking
lots towed only if the city has enacted
proper ordinance pursuant to the
provisions of G. S. 160A-303 and the
owner or lessee of the motel has made
request for removal thereof in writing, or
the proper city official has declared such
vehicle to be a health or safety hazard.
G. S. 160A-303 in pertinent part reads:
"§ 160A-303. Removal and disposal of junked and
-47-
abandoned motor vehicles.-(a.) A city may by
ordinance prohibit the abandonment of motor vehicles
on the public streets or on public or private property
within the city, and may enforce any such ordinance
by removing and disposing of junked or abandoned
motor vehicles according to the procedures prescribed
in this section.
(b) A motor vehicle is defined to include all
machines designed or intended to travel over land or
water by self-propulsion or while attached to any
self-propelled vehicle. An abandoned motor vehicle is
one that: . . .
(3) Is left on private property
without the consent of the owner,
occupant, or lessee thereof for
longer than two hours; . . .
(c) Any junked or abandoned motor vehicle
found to be in violation of an ordinance adopted under
this section may be removed to a storage garage or
area, but no such vehicle shall be removed from private
property without the written request of the owner,
lessee, or occupant of the premises unless the council
or a duly authorized city official or employee has
declared it to be a health or safety hazard. The city
may require any person requesting the removal of a
junked or abandoned motor vehicle from private
property to indemnify the city against any loss,
expense, or liability incurred because of the removal,
storage, or sale thereof. ..." {Emphasis added.)
Robert Morgan, Attorney General
William W. Melvin,
Assistant Attorney General
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15 August 1972
Subject: Escheats; Statutes of Limitations
Inapplicable
Requested by: Honorable Edwin Gill
State Treasurer
Question: Does the expiration of any period of a
statute of limitations bar the State from
escheating property?
Conclusion: Statutes of limitations are not applicable
against the State in escheats.
The inquiry indicates that a certain petroleum company (hereinafter
"the Company") has reported unclaimed dividends escheatable under
G. S. 116A-4 and unclaimed salaries and wages escheatable under
G. S. 116A-7(a) but denies that it is liable in escheat because of
the expiration of three years.
The statutes of limitations cited are G. S. 1-52(1) not allowing an
action after three years "upon a contract, obligation or liability
arising out of a contract ..." and G. S. 1-52(2) not allowing an
action after three years "upon a liability created by statute, other
than a penalty or forfeiture. . . ."We think it clear that no contract
between the State and the Company is involved so subdivision (1)
is inapplicable.
Further, it can be argued that escheat is in the nature of a forfeiture
and, therefore, subdivision (2) is inapplicable; but since we conclude
that statutes of limitations are not applicable against the State in
escheats, this argument is unnecessary.
G. S. 1-30 provides:
"The limitations prescribed by law apply to civil
actions brought in the name of the State, or for its
benefit, in the same manner as to actions by or for
the benefit of private parties."
-49-
While this statute was earlier adhered to by the Supreme Court
regardless of the nature of the action (Furman v. Timberlake,
93 N. C. 66 (1885); Tillery v. Lumber Company, 172 N. C. 296,
(1916)), the Court has in more recent cases distinguished between
those functions of government which exercise sovereign power and]
those exercising proprietary functions.
In Guilford County v. Hampton, 224 N. C. 817 (1945), a suit to
recover welfare payments was held to be proprietary, growing out
of a contract, with the statute applicable. City of Charlotte v.
Kavanaugh, 221 N. C. 259 (1942), was a holding to the same effect
regarding special assessments although the Court said the statute
would have been inapplicable if taxes had been involved.
The case of City of Raleigh v. Mechanics and Farmers Bank,
223 N. C. 286 (1943), also dealt with special assessments but the
Court discussed the distinction between sovereign and other exercises
of governmental power. The Court stated:
"While this ancient maxim has lost much of its
vigor by the erosions of time, and by legislative
enactment, it is still regarded as the expression of a
sound principle of government applicable to actions
to enforce the sovereign rights of the State.
Notwithstanding the inclusive provisions of sec. 420
of the Consolidated Statutes that 'the limitations
prescribed by law apply to civil actions brought in the
name of the State, or for its benefit, in the same
manner as to actions by or for the benefit of private
parties' (Threadgill v. Wadesboro, 170 N. C, 641,
87 S. E., 521), it has been uniformly held that no
statute of limitations runs against the State, unless it
is expressly named therein. Wilmington v. Cronly,
122 N. C, 388, 30 S. E., 9; Asheboro v. Morris,
supra. However, where in the statutes affording a
remedy by a municipal corporation for enforcing the
statutory lien of an assessment for public improvement
a limitation of time is imposed upon the exercise of
that power, manifestly the principle expressed in the
quoted maxim is not controlling." (at p. 293)
-50-
This distinction was again made in City of Reidsville v. Burton,
269 N. C. 206 (1967). The Court stated:
"It is also generally held in this State and in
the other States, except as provided otherwise by
constitutional or statutory provisions, that the statute
of limitations may be interposed as a defense to an
action by a municipal corporation to enforce private,
corporate or proprietary rights. Charlotte v.
Kavanaugh, 221 N. C. 259, 20 S. E. 2d 97;
53 C.J.S., Limitation of Actions, § 17(a); 17
McQuillin, Municipal Corporations, § 49.06. See also
34 Am. Jur., Limitation of Actions, § 397." (at
p. 210)
The exercise of the escheat power is unquestionably a sovereign
function. From ancient times, all forfeited and unclaimed property
went to the Crown and that part of common law has been
maintained in North Carolina through Constitutional (now
Article IX, Sec. 10) as well as statutory provisions.
Escheat statutes would have no meaning if the State was barred
after three years since many items, including the dividends reported
by the Company in this case, are not reportable until they remain
unclaimed for three years.
Robert Morgan, Attorney General
(Mrs.) Christine Y. Denson,
Assistant Attorney General
15 August 1972
Subject:
Requested by:
Intoxicating Liquors; Solicitation of Sales;
Authority of State Board to Regulate
Solicitation of Sales of Alcoholic
Beverages, Beer and Wine
Mr. James W. Pierce, Administrator
State Board of Alcoholic Control
-51-
Question: Does the State Board of Alcoholic Control
have authority to restrict the activities of!
salesmen of alcoholic beverages, beer and
wine, to the end that no solicitations may
be made to clubs and individuals?
Conclusion: The State Board of Alcoholic Control does
not have the authority to restrict the
activities of salesmen of beer and wine in
their contact with licensed retail outlets of
beer and wine in this State. The State
Board does have the authority to restrict
the activities of salesmen of alcoholic
beverages, beer and wine and prohibit
solicitations of persons who are not
licensed retail outlets in this State.
This opinion deals with the activities of salesmen employed or acting
as agents for distilleries, breweries, and wineries and those persons
who exercise functions as licensed wholesalers of beer, wine, and
alcoholic beverages (those beverages with an alcoholic content of
over 14%) in this State. It does not deal with the activities of persons
who hold retail licenses in the State.
Under the State scheme of sale of intoxicating liquors in North
Carolina salesmen may make sales of alcoholic beverages only for
supply to the local board of alcoholic control store systems. Sales
to any other person, firm or individual are absolutely prohibited.
The activities of salesmen for breweries and wineries and of salesmen
of licensed wholesalers of beer and wine, however, are much more
broad in that there are many retail outlets for beer and wine in
the State and solicitations of sales from those outlets are not
prohibited. Solicitations of sales of persons not licensed as retail
outlets when the salesmen know that the product is being secured
for the purchase of resale are unlawful since only licensed retailers
may sell beer and wine in this State.
G. S. 18A-10 gives the State Board of Alcoholic Control regulatory
authority over the advertising of intoxicating liquor, which includes
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alcoholic beverages, beer and wine. G. S. 18A-15(3) empowers and
mandates the State Board to fix retail prices of alcoholic beverages
in local stores "at such levels as shall promote the temperate use
of these beverages." Chapter 18A clearly indicates that alcoholic
beverages (that is, beverages with an alcoholic content of more than
14% by volume) shall be tightly controlled in their sales,
transportation and consumption. G. S. 18A-1 provides in part that
the policy of the State is "that the sale, purchase, transportation,
manufacture, and possession of intoxicating liquors shall be
prohibited except as authorized in" Chapter 18A of the General
Statutes.
With the tight restrictions in mind of alcoholic beverages and the
fact that those may only be sold in stores and may be consumed
on very limited premises, it is clear that if as a control measure
the State Board of Alcoholic Control feels that it is necessary to
restrict activities of salesmen of distilleries to contact with the proper
officials with regard to supply of local stores, that is within the
Board's power. Because the restrictions on beer and wine sales are
not as tight with breweries, wineries and wholesalers as well as many
retail outlets for both beer and wine licensed by the State Board,
the State Board's authority with regard to restrictions placed on
salesmen at the brewery-winery level or the wholesale level is not
as broad as it is in the alcoholic beverage area.
The State Board of Alcoholic Control has the authority to prohibit
salesmen employed by distilleries, breweries, wineries or salesmen
employed by wholesalers from promoting the sale of alcoholic
beverages, beer or wine by personal contact and soliciting of sales
in connection with such solicitation of anyone except an authorized
retail outlet in the State.
Robert Morgan, Attorney General
(Mrs.) Christine Y. Denson,
Assistant Attorney General
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15 August 1972
Subject:
Requested by:
Question:
Conclusion:
Health; Certificate of Need; Inapplicability
to Facility Already Constructed but Not
Fully Licensed or Used
Dr. Jacob Koomen
State Health Director
A skilled nursing home was constructed
with approximately 170 beds. These beds
were available for several years as nursing
home beds but subsequently a license was
obtained for approximately 40 to be used
as psychiatric beds under a license issued
by the Department of Mental Health. That
license was dropped but for several years
the facility has been licensed for only
approximately 90 beds and part of the
facility has remained vacant. May the
facility now begin to utilize more than the
licensed number of beds without first
obtaining a certificate of need from the :
State Board of Health?
After obtaining a license, the facility may
begin to utilize more than the licensed
number of beds without first obtaining a
certificate of need from the State Board
of Health.
The inquiry indicates that an existing facility with space for
approximately 170 beds is currently licensed for only 90 and does
not use part of the present facility.
G. S. 90-29 1(b) provides in pertinent part:
"Any existing medical care facility need not
apply for a certificate of need except when the facility
proposes new construction, construction of additional
bed capacity, or the conversion of existing bed
-54-
capacity to a different license category, except
outpatient and emergency services. No certificate of
need shall be required as a pre-condition to issuing
or continuing a license to an existing medical facility
in the absence of new construction, construction of
additional bed capacity or conversion of existing bed
capacity to a different license category for the existing
medical care facility."
Clearly, if the facility were building a new building or a new wing,
a certificate would be required. If the psychiatric beds were presently
licensed or if the other space for beds was operated as a rest home,
a certificate would be required. But the use of additional facilities
already constructed and licensed at one time as nursing home beds
does not require a certificate of need.
Robert Morgan, Attorney General
(Mrs.) Christine Y. Denson,
Assistant Attorney General
15 August 1972
Subject:
Requested by:
Question:
Conclusion:
Licenses and Licensing; Day-Care Facilities;
Number of Children for Whom Facility
Licensed
Mr. John Sokol, Director
Child Day-Care Licensing Board
Assuming a day-care facility has three shifts
of 10 children each during a
twenty-four-hour period, should the
facility be licensed for 10 or 30 children?
The facility should be licensed for 10
children.
The Child Day-Care Licensing Board and mandatory licensing of
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"day-care facilities" are provided for by Article 7 of Chapter 110
of the General Statutes, enacted by Chapter 803 of the 1971 Session
Laws.
G. S. 110-86(2) provides that "day-care" is "any child-care
arrangement under which a Child less than 1 3 years of age receives
care away from his own home by persons other than his parents,
grandparents, guardians or full-time custodians on a regular basis
for more than four hours per day where a payment, fee or grant
is made for care." Subdivision (3) defines "day-care facility" as
"day-care center or child-care arrangement that provides day care
for more than five children and which receives a payment, fee, or
grant for any of the children receiving care, wherever operated, and
whether or not operated for profit, except that the following are
not included: public schools; nonpublic schools, whether or not
accredited by the State Department of Public Instruction, which
regularly and exclusively provide a course of grade school instruction
to children who are of public school age; summer camps having
children in full-time residence; summer day camps; and Bible schools
normally conducted during vacation periods." A license must be
obtained by a day-care facility and certain standards are mandatory.
Standards pertinent to the issue here are those in G. S. 110-91(6)
which requires "no less than 25 square feet of floor space for each
child for which a day-care facility is licensed. " (Emphasis added.)
G. S. 110-91(7) contains specific provisions with regard to
staff-children ratios which must be maintained. Neither of these
standards would have much meaning if in the example given the
figure of 30 children rather than 10 children were used.
Therefore, it is the opinion of this Office that a day-care facility
should be licensed for the maximum number of children on the
premises at any one time.
Robert Morgan, Attorney General
(Mrs.) Christine Y. Denson,
Assistant Attorney General
-56-
29 August 1972
Subject:
Requested by:
Question
:
Conclusion
:
Health; Certificate of Need; Proper
Licensing Agency for Facility Which
Combines Hospitals, Nursing Homes and
Rest Home Care
Mr. William S. Henderson
Deputy Secretary
Department of Human Resources
Who is the proper agency to license and
issue a certificate of need for a facility
which proposes to combine a hospital,
nursing home and rest home?
The North Carolina Medical Care
Commission which licenses hospitals is the
proper agency to license and issue a
certificate of need for a facility which
combines hospital, nursing home and rest
home care.
A unique situation has arisen in one locality of the State where
a new facility is being constructed adjacent to and physically
connected to a hospital already licensed by the Medical Care
Commission. It is proposed that a certain number of beds in the
new facility will be allocated to nursing home care and a certain
number of beds will be licensed as rest home beds. All of this will
be operated by the hospital in conjunction with the hospital
operation.
Article 13A of Chapter 31 of the General Statutes provides for
licensing of hospitals by the Medical Care Commission.
G. S. 130-9(e) provides for the licensing of nursing homes by the
State Board of Health. Section 4 1/2 of Chapter 51 of the 1961
Session Laws provides that such regulation by the State Board of
Health will not be applicable "to any facility operated by, under
the auspices of, or in conjunction with any hospital required to
be licensed by the North Carolina Medical Care Commission."
-57-
G. S. 108-4(10) and G. S. 108-77 authorize the State Department
of Social Services to license rest homes, boarding homes and homes
for the aged in this State. However, G. S. 108-77(d) provides that
such licensing requirement will not apply to any institution which
is "licensed by the State Board of Health under the provisions of
;
G. S. 130-9(e)." Since the Medical Care Commission has authority
not only to license hospitals but to license nursing homes in
connection with hospitals, and since the standards for rest homes
are less strict with regard to skilled care than those of nursing homes,
it seems logical that, in connection with the operation of a hospital,
the Medical Care Commission would have authority to license a rest
home. The operation of the hospital, nursing home and rest home
will be intimately inter-connected with the assumed transfer of j
persons from one category to the other as they progress or regress
in their health status.
It is recommended that the Medical Care Commission adopt
regulations for licensing of nursing homes and rest homes when that
licensing is by the Commission in conjunction with the operation
of a hospital and while these regulations must be independent of
those of the Board of Health and the Department of Social Services, ,
we recommend that the regulations of those two Departments for
those kinds of facilities be used as guidance.
Robert Morgan, Attorney General
(Mrs.) Christine Y. Denson,
Assistant Attorney General
31 August 1972
Subject:
Requested by:
Question:
Public Officers and Employees; Private Use
by Physicians of State Facilities
Mr. Martin R. Peterson
State Department of Correction
Whether space in the facilities of the State
Department of Correction may be used by
-58-
staff physicians for private purposes?
Conclusion: The governing board of the State
Department of Correction may establish
and develop its own policy as to use of
its facilities for private purposes.
The conclusion stated above is based upon an absence of any known
prohibition against such use or specific authority granting such use.
Therefore, in the absence of any statutory or case authority, it would
appear to be a matter of policy of the governing board of the
Department of Correction as to whether it wishes to grant such
use and as to guidelines the board may establish for such use.
Because of the absence of specific authority in this area, it is
suggested that enabling legislation be presented to the 1973 General
Assembly by the Departments engaging in this practice.
Robert Morgan, Attorney General
Raymond W. Dew, Jr.,
Assistant Attorney General
31 August 1972
Subject:
Requested by:
Question:
Conclusion:
Municipalities; Intoxicating Liquors;
Authority to Regulate Consumption and
Display on Public or City-Owned Property
Mr. Carl V. Venters
Jacksonville City Attorney
Do municipalities have the authority to
regulate or prohibit the consumption or
display of intoxicating liquor on any public
alley, road or street or on any city-owned
property within the city limits?
Municipalities have authority to regulate or
-59-
prohibit the consumption or display of
intoxicating liquor on any public alley,
road or street or on any city-owned
property within the city limits.
The inquiry indicates that the City of Jacksonville wishes to adopt
an ordinance prohibiting the consumption or display of intoxicating
liquor as defined in G. S. 18A-2 "on any public alley, road, street
or highway within the City of Jacksonville or on any other property
owned or controlled by the City of Jacksonville."
It has long been held in North Carolina that it is inherently within
the police power of municipalities to regulate intoxicating liquor.
See, for example, Paul v. Washington, 134 N. C. 363,
47 S. E. 793 (1904).
Since the enactment of Chapter 18 of the General Statutes,
recodified as Chapter 18A by the 1971 General Assembly, the
authority of municipalities has been somewhat restricted. In effect,;
a doctrine of preemption by the State has been adopted but it has
been restrictively applied to preempt municipal action only where
the State regulation or prohibition occupies the field. Thus, in Davis
v. Charlotte, 242 N. C. 670, (1955), the Supreme Court in an
opinion by Justice (now Chief Justice) Bobbitt held that a Charlotte
ordinance prohibiting a "car hop" sale of beer on a licensed premises
was invalid. The Court's holding was that "The enforcement of the
ordinance provision is restrained only as to sales made on the private
property, that is, 'the premises' of the plaintiffs." (242 N. C. at
p. 675) Thus, the trial court's order that the ordinance was valid
as to sales on city streets was upheld.
Unless some specific provision of the General Statutes allows the
consumption and/or display of intoxicating liquors on public and
city-owned areas, the city may regulate those areas.
G. S. 18A-2(4) defines intoxicating liquor as including "alcohol,
brandy, whiskey, rum, gin, beer, ale, porter, and wine, and in
addition thereto any spirituous, vinous, malt or fermented beverages,
liquids, and compounds, whether medicated, proprietary, patented,
or not, and by whatever name called, containing one half of one
-60-
percent (1/2 of 1%) or more of alcohol by volume, which are fit
for use for beverage purposes."
As to fortified wine or any other alcoholic beverage with an alcoholic
content of more than 14%, consumption is outlawed on any public
road, street or highway by G. S. 18A-30(5)a. The public display
of such beverages at athletic contests and the consumption on
unauthorized premises are made unlawful by G. S. 18A-30(5)b. and
e. respectively.
G. S. 18A-35(a) provides:
"Except as otherwise provided in this Chapter,
the purchase, transportation, and possession of malt
beverages and unfortified wine by individuals 18 years
of age or older for their own use are permitted without
restriction or regulation."
This does not speak to the question of either consumption or display
of malt beverages and unfortified wine.
We conclude, therefore, that the State has not preempted the area
of consumption or display of intoxicating liquor on public streets
or city-controlled property and this is, therefore, a proper subject
for a municipal ordinance.
Robert Morgan, Attorney General
(Mrs.) Christine Y. Denson,
Assistant Attorney General
5 September 1972
Subject: Education; Teachers; Teacher Tenure Act;
G. S. 115-142; Career Teachers
Requested by: Mr. W. F. Womble
Attorney for the Winston-Salem/Forsyth
County Board of Education
-61-
Question: To what extent, if any, is an otherwise
qualified teacher entitled to credit for
employment prior to July 1, 1972, in
determining that teacher's eligibility for
career teacher status?
Conclusion: Unless, at the end of the last school year
preceding July 1, 1972, the teacher has
had at least four consecutive years'
employment with the school system
considering him for tenure, or unless that
teacher has had at least five consecutive
years' employment with any of the public
school systems of this State; that teacher
is entitled to no credit for his previous
employment in determining his eligibility
for career teacher status.
The 1971 General Assembly completely rewrote G. S. 115-142 in
enacting the Fair Employment Practices and Dismissals Act,
informally referred to as the Teacher Tenure Act. The new Act was
made effective on July 1, 1972. Chapter 883 of the Session Laws
of 1971. It gives teachers certain rights and imposes upon school
boards certain duties, none of which had heretofore existed. Because
new rights are created and new duties imposed, the Act amounts
to a substantial change in this State's substantive law, rather than
in its procedural law. Smith v. Mercer, 276 N.C. 329, 172 S.E. 2d
489 (1970).
The present question arises because of a seeming conflict between
two provisions contained in G. S. 115-142(c). The first provision
of that subsection reads as follows:
"After a teacher has been employed by the same
public school system in this State for a period of three
consecutive years, the board of that system is required
to vote upon that teacher's employment for the next
succeeding year. If a majority of the board votes to
reemploy the teacher, he or she becomes a career
teacher.
"
-62-
The last two sentences of subsection (c) provide:
"All teachers employed by a public school system of
this State at the time this section takes effect who,
at the end of the last school year, will either have
been employed by that school system (or a successor
system if the system has been consolidated) for a total
of four consecutive years or will have been employed
by a public school system of this State for a total
of five consecutive years shall automatically be career
teachers if employed for a second year following
July 1, 1972. All other teachers employed by a public
school system of this State on July 1, 1972, shall be
probationary teachers.
"
The first provision is the general rule and requires three consecutive
years' employment before tenure can be acquired. Four or five years
of experience prior to July 1, 1972, are necessary to meet the
special requirements of the second provision. If the general rule is
applied retroactively, the two provisions conflict. To illustrate the
inconsistency, the inquiry poses an example:
"It would appear from the first sentence that any teacher who has
been employed by the Winston-Salem/Forsyth County school system
for a period of three consecutive years at the end of the 1 972-73
school year would become a career teacher if reemployed for the
'73-'74 school year. On the other hand, it appears from the fifth
sentence of the subsection that only those teachers who have been
employed for a total of four consecutive years in the
Winston-Salem/Forsyth County school system or five consecutive
years in any public school system in the state as of July 1, 1972,
will automatically become career teachers if employed for the
1973-74 school year."
The short answer to the problem is that the inconsistency is only
apparent and technically does not exist at all. What the statute
presents is a general provision, namely that career teacher status
attaches after three consecutive years of employment and
reemployment for the fourth year, and a special provision for
acquiring tenure when the Act initially becomes effective; that is
that those with four years of previous employment in the same
-63-
school system prior to July 1, 1972, or five years' experience
statewide will achieve tenure upon reemployment for the '73-'74
school year. In such situations of apparent conflict, the rule is plain:
"Where there are two provisions in the statute, one of which is
special or particular and the other general, which, if standing alone,
would conflict with the particular provision, the special will be taken
as intended to constitute an exception to the general provision, as
the General Assembly is not to be presumed to have intended a
conflict." Davis v. Granite Corporation, 259 N.C. 672, 676; 131
S.E. 2d 335 (1963). Under that principle, then, the general rule
does not apply when the Act first takes effect. Initially, the special
requirement of four or five years' employment is an exception to
the general rule and must be complied with.
But in the present case, the special provision serves as more than
merely an exception to the general rule that tenure follows three
consecutive years' employment. Here, it also helps to make plain
that the General Assembly intended no credit be given for
employment prior to July 1, 1972, unless the previous employment
amounts to at least four consecutive years with the same school
system or five years statewide. If the statute were read to mean
that employment prior to the effective date was to be counted in
other cases, clear injustice would result.
For example, suppose that at the close of the 1971-72 school year
a teacher has been employed by a particular school system for three
consecutive years. He is reemployed for the year beginning in the
fall of 1972, but does not sign his contract until after July 1, 1972,
the effective date of the Act. If it were assumed that the teacher's
three previous years should count toward tenure, that teacher would
have tenure after signing his contract for the 1972-73 school year.
However, a teacher with four or more years of experience could
not possibly attain career teacher status until one year later under
the specific provision of subsection (c). A construction such as that,
resulting in injustice, will be avoided when the statute is susceptible
to another construction. Little v. Stevens, 267 N.C. 328, 148 S.E.
2d 201 (1966). To avoid such a result, the Act must be construed
to provide that no credit be given for previous experience unless
that experience amounts to at least four or five years as set out.
Whether experience prior to July 1, 1972, is to be looked at in
-64-
awarding tenure is really a question of retroactivity: Is the general
provision that tenure attaches following three consecutive years of
employment to be given retroactive effect for purposes of
accumulating the experience required? The North Carolina Supreme
Court has held that a statute, such as the present one, amounting
to a change in substantive law is to be applied prospectively only.
Smith v. Mercer, supra. In that case, our court quoted with approval
the standard rule on retroactivity as stated in Monroe v. Chase, 76
F. Supp. 278 (D.C. 111., 1947), that a substantive change is not to
be "given a retrospective application in the absence of clear language
that the lawmakers so intended." 276 N.C. at 335.
Under the present statute, there is "clear language" that the
legislature intended that the statute be applied retroactively in only
two specifically named situations. They arise only when the teacher
has had four previous, consecutive years of employment in the same
school system or five years statewide. There is nothing to indicate
that the General Assembly intended a retroactive application in any
other situation. The indication, as shown by the palpable injustice
that would result, is in fact to the contrary. The proper construction
of the statute is, therefore, that it has no retrospective application
except as specifically stated. Thus, previous employment not
amounting to four years with the same school system or five years
within the state will not be counted toward tenure.
There are not yet any North Carolina judicial constructions of the
Act. However, a case from another jurisdiction, Anderson v. Board
of Education, 390 111. 412, 61 N.E. 2d 562 (1945), is instructive.
In that case the Supreme Court of Illinois was confronted with a
tenure statute similar to our own. The court held that a year's
employment contracted for prior to the effective date of the tenure
statute could not count toward fulfilling the required probationary
period preceding an award of tenure. The teacher there argued that
the period of probation should be given retrospective application.
The court denied his claim and said, "We have examined the Teacher
Tenure Law and cannot say that this statute contains 'clear language
that will admit of no other construction' than that the legislature
intended it to be retroactive." 61 N.E. 2d at 571 (citation omitted).
The same construction is applicable to the North Carolina statute.
See also, Falligin v. School Dist., 54 Mont. 177, 169 P. 803 (1917).
-65-
The result is that teachers who have had at least four or five years'
experience, as discussed, will achieve tenure upon reemployment for
the 1973-74 school year. Other teachers, regardless of their previous
experience will receive no credit toward tenure for employment prior
to July 1, 1972, and will not be eligible for tenure before they
are reemployed for the 1975-76 school year.
Robert Morgan, Attorney General
Charles A. Lloyd,
Associate Attorney
7 September 1972
Subject:
Requested by:
Question:
Mental Health; Detention of Inebriates and
Mentally 111 Persons; Authority of Clerk to
Order Non-State Operated Hospitals to
Involuntarily Accept Patients
Dr. Granville G. Tolley
Assistant Commissioner of Mental Health
Is a hospital other than a State hospital
required to accept over its objection an
alleged inebriate or mentally ill person
ordered to be detained under the provisions
of G. S. 122-61?
Conclusion: A hospital other than a State hospital is
not required to accept over its objection
an alleged inebriate or mentally ill person
ordered to be detained under the provisions
of G. S. 122-61.
In haec verba, the section under consideration is as follows:
"§ 122-61. Detention of persons alleged to be
mentally ill or inebriate and dangerous to themselves
or others.-H the affidavit filed in accordance with the
-66-
provisions of G. S. 122-60 states that the alleged
mentally ill person or alleged inebriate is likely to
endanger himself or others, he may be taken into
custody and detained in his own home, in a private
or general hospital, or in any other suitable facility
as approved by the local health director for such
detention, upon an order of the clerk of the court.
He shall not be detained in a nonmedical facility used
for the detention of individuals charged with or
convicted of penal offenses. The Department of Mental
Health shall make available to the clerk of court such
medical services and transportation necessary to effect
the detention deemed necessary.
The clerk shall expedite the hearing, and, if the
alleged mentally ill person or alleged inebriate is found
to be in need of hospitalization, the clerk shall
expedite the transmission of this information to the
proper State hospital so that the alleged mentally ill
person or alleged inebriate can be admitted without
any undue delay."
Literal reading of this statute makes it clear that the clerk of the
superior court is charged with the responsibility for effecting a
detention where necessary and in the manner most suitable for the
alleged inebriate or mentally ill person concerned. This section
delineates the types of places in which these individuals "may" be
detained. It prescribes certain limitations upon the exercise of
discretion by the clerk but contains no language indicating that the
legislature intended to authorize the clerk to force a hospital (other
than one operated by the State of North Carolina) to accept a
patient of this type over its protest.
Deliberate consideration of the ramifications of the types of
situations involved buttresses this conclusion. Obviously, the type
of patient covered by this section presents unusual materiel and
personnel problems for a hospital assuming custody. Adequate
control over and treatment of these patients would require quantities
and kinds of facilities, equipment, and skilled personnel not
necessarily found in every hospital. Further, the very act of assuming
the custody of inebriates and mentally ill persons raises a specter
-67-
of claims of malpractice (spurious or otherwise) and legal actions
against the responsible institution which would cause concern to
the average hospital. In view of the fertile field for litigation, which
this type of treatment provides in the present day and time, it would
be unconscionable, if n