recognizing use of generally permissive terms in a statute “will be construed as mandatory, and the execution of the power may be insisted upon as a duty” where it “provides for the doing of some act which is required by justice or public duty, as where it invests a public body, municipality, or officer with power and authority to take some action which concerns the public interests or the rights of individuals” and referencing cases “in which the term ‘may’ and ‘authorized and empowered’ and ‘authorized’ are respectively held to be imperative”
How later courts described this case
- recognizing use of generally permissive terms in a statute “will be construed as mandatory, and the execution of the power may be insisted upon as a duty” where it “provides for the doing of some act which is required by justice or public duty, as where it invests a public body, municipality, or officer with power and authority to take some action which concerns the public interests or the rights of individuals” and referencing cases “in which the term ‘may’ and ‘authorized and empowered’ and ‘authorized’ are respectively held to be imperative”
- "In the exercise of ordinary governmental functions, [counties] are simply agencies of the state, constituted for the convenience of local administration in certain portions of the state’s territory; and, in the exercise of such functions, they are subject to almost unlimited legislative control, except where this power is restricted by constitutional provisions.”
Written by the judges who cited it.
The opinion
*604 Clark, C. J.,
dissenting. This case was decided in 135 N. C., 218 , and it is not shown that any authority or fact has been overlooked. Clark’s Code (3 Ed.), p. 945, and numerous cases there cited. As this is the first instance in the books, in which it has ever been held that the courts can compel a county to issue bonds upon a statute which merely “authorizes” it to issue them, it is well to scrutinize an innovation which must inevitably lead to startling results in the future.
It is the province of the courts to direct payment of indebtedness either by issuing execution or by a mandamus to levy a tax ivhen the Legislature has authorized a tax, or the indebtedness, which the municipality has created. But no Court has issued an order that the debt of a county shall be funded. When the statute authorizes a debt, the expression “may levy a tax” has been construed “shall” because the enforcement of payment is a judicial function and the courts will order the debtor to do what he may do to effect payment. This is the purport without exception of every case cited by the Court in which “may” has been construed “shall.” But issuing bonds is not payment. It is an act which can only be made effectual by mutual agreement between the creditor and the debtor and is in fact an agreement not to pay for a specified time. The Court can no more order bonds to be issued than it can compel the creditor to accept them. Neither is it in the scope of judicial power in the absence of an agreement between the parties. Nor is it a legislative function to order a municipality to issue bonds, thereby deferring payment, any more than it is to command immediate payment.
A brief consideration will show that the Legislature in this act has done no more than “empower and authorize” the county to issue bonds — that is, if the county and the creditors should so agree, otherwise the issuing bonds *605 would be a vain thing. In section 1 the board of commissioners are “authorized and empowered” — not directed — to issue bonds. Section 8 “authorizes, empowers and directs” them to audit, ascertain and adjust the amount of the floating debt, thus showing that the General Assembly knew when it could add the word “direct” and when it could not. Section 19 places the legislative intention beyond the possibility of doubt by providing: “If the bonds hereby authorized by this act are issued.” What is the meaning of this expression if the act were a direct and imperative order that the county should issue the bonds ?
That the General Assembly knew and intended a difference between the permissive authority to issue bonds and the imperative “shall” is shown by the use of the latter word, in sections 10 and 11 in providing that the bonds “shall not be issued except at par value” — thus restricting the permission which is given in section 1 to issue bonds. Also in section 4 in providing a form it says the bonds “shall be signed by the chairman”; section 5, “the treasurer shall keep a separate account”; section 6, the “commissioners shall keep an account”; section 15, “the treasurer shall pay the interest” — all these, coupled with the words “bonds hereby authorized,” thus meaning clearly what is expressly said in section 19, “if the bonds hereby authorized are issued.”
The General Assembly thus knew the difference between “authorizes and empowers” and the words “shall” and “direct” and used each in its appropriate place. It could only “authorize” the debtor to issue the bonds, and did so. It could restrict that authority by imperative requirements as to the methods of doing so and other details and as to those matters used the words “shall” and “direct.”
For certain purposes counties and other municipal corporations are governmental, and in those respects being a branch *606 of the State government, can be changed, or abolished by legislation, and cannot be sued except by legislative permission. McIl henny v. Wilmington, 127 N. C., 149 , and cases cited. But as regards indebtedness incurred, they are business corporations, not government, else they could not be sued. Hence the Legislature can neither release the indebtedness nor defer nor order payment — the latter being a judicial function. It belongs neither to the Legislature nor to the judiciary to order bonds to be issued, since neither could order any other debtor to issue bonds. As to indebtedness, the jurisdiction is the same as over other debtors, neither more nor less. The Legislature may “authorize and empower” municipalities to issue bonds and, as we have seen, that is all it has done in this case. It would be a sad and deplorable result if the General Assembly should attempt to order and command in matters affecting a local indebtedness which it cannot command the people of any locality to create. Not having such power, it cannot order the people of any locality to change the form of its indebtedness nor defer its payment to a future day by directing the issue of bonds. It may “empower” them to create an indebtedness, provided (in proper cases) there is a vote of the people to that end. It may authorize the issuing of bonds, it may restrict such permission by imperative provisions as to details and circumstances under which authorization may be used. The courts alone can direct payment. Even the courts cannot order issuance of bonds, for that would be to forbid payment for the duration of the bonds, and might fix a different rate of interest, both in violation of the contract between the parties. When the statute provides “the county commissioners ‘may’ issue license to sell liquor” the Court has always held that this was discretionary with the commissioners. Even if the word' “shall” is used there is a discretion which the courts null not control by mandamus. *607 Barnes v. Commissioners, 135 N. C., 27 . Yet that is a governmental matter as to which the Legislature could substitute “shall.” As to municipal indebtedness the Legislature can neither order payment (which is a judicial power) nor direct the issuance of bonds, which is a matter of agreement between every debtor and his creditor. The time when to be paid, the rate of interest and the like are parts of the contract and cannot be changed, against the will of either party, by legislative enactment.
The only two cases in the books in which any Court has issued a mandamus to a municipality to issue bonds are Commissioners v. People, 5 Neb., 127 , in which the statute provides that said “commissioners are hereby authorized and required” to issue said bonds, and President v. Board, 45 Ala., 399 , in which also the statute “hereby requires” that the municipality shall issue the bonds. Neither is authority for such action by the Court when the statute, as in this case, neither “requires” nor “directs” but merely “authorizes and empowers” the county commissioners to issue bonds, and the last-named case is severely criticised by Judge Cooley in his work on Taxation, Vol. 2, p. 1312 (3 Ed.), citing many apposite cases (p. 1307, note) that the State cannot make a contract for a municipality.
The Constitution, Art. VII, sec. 7, provides that “no county, city, town or other municipal corporation shall contract any debt, pledge its faith or loan its credit, nor shall any tax be levied, or collected by any officers of the same, except for the necessary expenses thereof, unless by a vote of the majority of the qualified voters therein.” It is true that here there is a debt already contracted, but it is not yet due, and there is certainly no contract that the county shall pay interest thereon for thirty years, a sum largely more than the principal, at a rate not agreed to by the debtor who is debarred by the issue of bonds from paying the principal *608 at an earlier date. Is it possible that the courts can force any debtor to make a new contract, issuing bonds for a debt not yet due or for script not reduced to judgment, without a vote of the people authorizing such contract? The issue of bonds is a solemn contract. The time and rate of interest are both matters to be agreed upon. The State cannot make a contract for the county, and the expression “authorize and empower” should not be held to effect such end.
Nowhere in the Constitution appears any authority to require or order a county or city to issue bonds. But Article V, sec. 6, restricts taxation levied by county commissioners so that it shall not exceed double the State tax “unless with the special approval of the General Assembly.” Here is the source and authority of the numerous acts passed by each Legislature since “authorizing and empowering”— never in any instance directing or requiring — the issue of bonds by counties and the levy of taxes to pay them. The measure must come from the will of the county, the General Assembly giving its approval. Thus speaks the Constitution, recognizing the right of the people of each locality to speak for themselves. So far as the past contract is concerned, the debt already created by the county, with such approval, the courts can enforce its collection. But neither the General Assembly nor the Court can invade the principle of. self-government by ordering the county to create a new debt by issuing bonds, to which the county has not given its assent.
Nothing is better settled than that when the courts have construed the meaning of certain words or a phrase, then if the Legislature shall thereafter use those words, it is conclusively presumed that the intention of the Legislature must be taken to be in the import of the words, previously judicially construed — otherwise it would have used other words, of course. Since the phrase “authorized and em *609 powered” was construed by this Court to be permissive and not mandatory (Jones v. Commissioners, 135 N. C., 218 ) the General Assembly of 1905 has met. If it had been the intention of that body to make the statute mandatory, it would have amended the statute by adding appropriate words to express such intent. On the contrary, the General Assembly (1905, chap. 132) passed another act upon the same subject entitled “An act to authorize the Board of Commissioners of Madison County to issue bonds, etc.,” and in section 1 thereof it is again provided that said board are hereby “authorized and empowered” — not required nor directed — to issue said bonds. The General Assembly knowing the Court had construed those words to be permissive and not mandatory, and as conferring only the “special approval of the General Assembly” (Constitution, Art. V, sec. 6), thus expressed its will that the statute should be permissive only. It thus also added the weight of its legislative construction to that of the Court as to the meaning of the Act of 1903. It is' fair to conclude from the omission to add mandatory words, that if they were inserted by the draftsman, they were stricken out, or at least that the bill could not have been enacted in a mandatory form. That the General Assembly acted intelligently and with full knowledge that the statute was not mandatory, is shown by the fact the same Legislature (1905) passed two other statutes in regard to Madison County which it saw fit to make mandatory, and used appropriate words to express such intent. In chapter 240 it provided for levying a tax to build an iron bridge in Madison County. In section 1 of said act the board of county commissioners are “authorized, empowered and directed” to build such bridge and “shall levy a tax,” etc. Again by chapter 262 it is provided that said county of Madison “shall levy a special road tax * * * to be *610 specially applied on the public roads of the county in the purchase of blasting and bridge material.” These two acts, requiring the building of public bridges and roads and the levy of taxes for that purpose, were governmental and have been held to be therefore matters within the scope of the legislative authority to command to be done. Tate v. Commissioners, 122 N. C., 812 , cited in Jones v. Commissioners, 135 N. C., at pp. 223, 224, where the distinction is drawn.
It is different, however, .as to issuing thirty-year bonds, whatever the previous consideration, for that is not imposing a governmental duty and directing the levy of taxes to' discharge it, but it would be a legislative requirement that the county make a contract, without its consent, and which yet would be subject to enforcement in the courts.
The General Assembly of 1903 (chapter 289) understood clearly this fundamental distinction between imposing a governmental duty and requiring the county, as a financial agency of its people, to make a contract, and therefore said chapter 289, Laws 1903, merely “authorizes and empowers” the county commissioners to issue new bonds for the former bonds which will not be due till 1907. And the General Assembly of 1905, knowing that this Court had held those words to be permissive and not mandatory, enacted a new statute upon the same subject, using the same words, and presumably only because it had the guarantee of a decision of this Court that the words could not be construed except as permissive authority.