The opinion of the court was delivered by: Oxner, Justice.
This action stems from the merger of the Town of Eau Claire and the City of Columbia. A declaratory judgment is sought with respect to the right of the City of Columbia, as it existed prior to the merger, to issue further revenue bonds on a parity with those now outstanding for the purpose of enlarging and improving its water and sewer facilities. Involved is the question of whether the consolidation of the two municipalities resulted in the merger of their municipally owned utility systems.
The following is a summary of the facts stated in the complaint:
"The form of government now in effect for the City of Columbia shall be the form of government for the consolidated city.
"Identical water rates will prevail throughout the consolidated city, it being understood that the rate shall be sufficient to meet all present and future revenue bond covenants existing in Columbia and Eau Claire.
"The City of Columbia, South Carolina (the enlarged City), shall assume and will assume all of the outstanding bonded indebtedness of Eau Claire, South Carolina, as well as any and all other outstanding obligations, claims and causes of action of whatsoever kind or nature justly due and owing by Eau Claire, South Carolina.
"All of the assets, choses in action, property, real or personal and any other property or right of any nature or kind possessed by Eau Claire, South Carolina, shall be vested in and become the property of the enlarged The City of Columbia, South Carolina."
In 1949, the City of Columbia issued $2,000,000 of Waterworks and Sewer Refunding and Improvement revenue bonds, of which $1,475,000 are now outstanding. In the resolution authorizing these bonds the city reserved the right to issue from time to time thereafter, subject to certain stated conditions, additional revenue bonds on a parity with those then being issued. Availing itself of this parity provision, the City of Columbia in 1953 issued bonds in the amount of $2,000,000, payable from the revenues of its utility system, of which $1,670,000 are now outstanding. In 1954 there was a further issue of $1,500,000, of which $1,450,000 are now outstanding. All of these bonds, as above stated, are of equal rank.
In the resolution of the City Council of Columbia declaring the Eau Claire territory annexed to and a part of said city, it was provided that the waterworks and sewer system of Eau Claire "shall be operated and maintained as a separate system for so long a time as any" of its revenue bonds shall remain outstanding, but upon payment of all of said bonds "that said system shall be combined and merged into the Waterworks and Sewer System of the City of Columbia, as part and parcel thereof." Accordingly, since the annexation the revenues from the Eau Claire territory have been segregated from those derived elsewhere and there had been charged to same a proportionate share of the cost of operation and maintenance. Identical water rates have been maintained in the two areas.
"1. The merger of the Cities of Columbia and Eau Claire has been accomplished without merging or consolidating the two utility systems of the two respective municipalities.
"2. The holders of the revenue bonds issued by the City of Eau Claire, payable from the revenues of its utility system, have no claim to any revenues derived from the operation of the utility system operated by the ...