Bryant v. Bd. of Loan Com'rs of N.M.

• Decision Date: 04 December 1922
• Docket Number: No. 2774.,2774.
• Citation: 211 P. 597,28 N.M. 319
• Parties: BRYANTv.BOARD OF LOAN COM'RS OF NEW MEXICO ET AL.
• Court: New Mexico Supreme Court

28 N.M. 319

211 P. 597

BRYANT

v.BOARD OF LOAN COM'RS OF NEW MEXICO ET AL.

No. 2774.

Supreme Court of New Mexico.

Dec. 4, 1922.

Syllabus by the Court.

Chapter 6, Laws 1921, in so far as it authorizes and directs the state board of loan commissioners to issue series C bonds of the state for the purpose of reimbursing the counties of Grand and Santa Fé and the town of Silver City for moneys paid by them, respectively, for interest and principal upon railroad aid bonds heretofore issued by them, and afterwards validated by Congress, is unconstitutional and void because it authorizes a diversion from their original objects and purposes of the proceeds from lands granted by Congress in the Enabling Act and accepted by the people by the provisions of the state Constitution. The act of Congress of June 5, 1920, gives the consent of the government to such diversion of such proceeds, but a constitutional amendment must be had before the same can be effectuated.

Appeal from District Court, Santa Fé County; Ed. Mechem, Judge.

Action by R. G. Bryant against the Board of Loan Commissioners of the State of New Mexico and others. From a judgment for plaintiff, defendants appeal. Affirmed.

Laws 1921, c. 6, in so far as it authorizes and directs the state board of loan commissioners to issue series C bonds of the state for the purpose of reimbursing the counties of Grant and Santa Fé for moneys paid by them respectively for interest and principal, upon railroad aid bonds heretofore issued by them, and afterwards validated by Congress, is unconstitutional and void because it authorizes a diversion from their original objects and purposes of the proceeds from lands granted by Congress in the Enabling Act and accepted by the people by the provisions of the state Constitution. Act Cong. June 5, 1920, gives the consent of the government to such diversion of such proceeds, but a constitutional amendment must be had before it can be effectuated.

W. B. Walton and Percy Wilson, both of Silver City, Harry S. Bowman, Atty. Gen., and C. J. Roberts, of Santa Fé, for appellants.

J. O. Seth, of Santa Fé, for appellee.

PARKER, C. J.

In the year 1880 the county of Santa Fé, in the then territory of New Mexico, issued bonds in the sum of $150,000 in aid of the New Mexico & Southern Pacific Railroad Company. In 1891 Santa Fé county issued refunding bonds in the amount of $262,000 for the purpose of refunding the bonds issued in 1880. In 1887 the bonds of said county were issued in the further amount of $150,000 in aid of the Texas, Santa Fé & Northern Railroad Company, which bonds were refunded in 1892, and refunding bonds were issued in the amount of $172,300 for that purpose. Santa Fé county made payments of interest on these various bonds in the amount of $88,552.

Grant county on June 5, 1883, issued railroad aid bonds in the amount of $60,000, three of which bonds were in 1885 paid and retired. In 1902 this bond issue was refunded in the amount of $57,000. The interest on these bonds was paid by Grant county from time to time, so that at the time of the passage of the act of Congress of June 20, 1910, providing for the admission of New Mexico as a state, there was no unpaid interest on the Grant county railroad aid bonds. After the issuance of said bonds Luna county was carved out of a portion of Grant county, and the debts of the parent county were apportioned in accordance with the taxable property, and Luna county assumed the payment of the appropriate part of the railroad aid bonds, upon which the interest has been paid by Luna county. The same thing occurred when Hidalgo county was carved out of a portion of the remainder of what was originally Grant county, and a like apportionment of debts was made. The town of Silver City issued railroad aid bonds in the amount of $150,000, upon which it has paid the interest as it matured.

These bonds at the time of their issue were all invalid, because they were issued contrary to the restrictions imposed upon the Legislatures of territories by Congress. This condition of affairs was made manifest by a decision of the Supreme Court of the United States in Lewis v. Pima County, 155 U. S. 55, 15 Sup. Ct. 22, 39 L. Ed. 67. This case arose in Arizona, but the Pima county bonds occupied exactly the same legal status as those issued in New Mexico. By act of Congress of January 16, 1897 (29 Stat. L. 487), the bonds issued by Grant and Santa Fé counties and by the town of Silver City were validated, approved, and confirmed, and said counties and town were required to assume and pay the principal and interest on said bonds.

It is thus seen that these counties and this town had saddled upon them a debt which they had no power in the first instance to contract, and which can only be sustained upon the ground that Congress had plenary power over territories, and consequently might, if it saw fit, so provide. This was the condition of affairs at the time of the passage of the act of June 20, 1910 (36 Stat. L. 557; Fed. Stat. Ann. Supp. 1912, p. 356). This is the act authorizing the admission of New Mexico and Arizona as states, and will be hereafter spoken of as the “Enabling Act.” This act made extensive grants of lands to New Mexico for various purposes, and, among other things, made the following provision in section 7 of the act:

“* * * And for the payment of the bonds and accrued interest thereon issued by Grant and Santa Fé counties, New Mexico, which said bonds were validated, approved, and confirmed by act of Congress of January sixteenth, eighteen hundred and ninety-seven (Twenty-Ninth Statutes, page four hundred and eighty-seven), one million acres: Provided, that if there shall remain any of the one million acres of land so granted, or of the proceeds of the sale or lease thereof, or rents, issues, or profits therefrom, after the payment of said debts, such remainder of lands and the proceeds of sales thereof shall be added to and become a part of the permanent school fund of said state, the income therefrom only to be used for the maintenance of the common schools of said state.”

Section 2 of the act provides as follows:

“And said convention shall provide, by an ordinance irrevocable without the consent of the United States and the people of said state--* * *

Third. That the debts and liabilities of said territory of New Mexico and the debts of the counties thereof which shall be valid and subsisting at the time of the passage of this act shall be assumed and paid by said proposed state, and that said state shall, as to all such debts and liabilities, be subrogated to all the rights, including rights of indemnity and reimbursement, existing in favor of said territory or of any of the several counties thereof at the time of the passage of this act: Provided, that nothing in this act shall be construed as validating or in any manner legalizing any territorial, county, municipal, or other bonds, obligations, or evidences of indebtedness of said territory or the counties or municipalities thereof which now are or may be invalid or illegal at the time said proposed state is admitted, nor shall the Legislature of said proposed state pass any law in any manner validating or legalizing the same.

Ninth. That the state and its people consent to all and singular the provisions of this act concerning the lands hereby granted or confirmed to the state, the terms and conditions upon which said grants and confirmations are made, and the means and manner of enforcing such terms and conditions, all in every respect and particular as in this act provided.

All of which ordinance described in this section shall, by proper reference, be made a part of any constitution that shall be formed hereunder, in such terms as shall positively preclude the making by any future constitutional amendment of any change or abrogation of the said ordinance in whole or in part without the consent of Congress.”

The Constitution of the new state, in compliance with the requirement of the Enabling Act, provided in article 21 as follows:

“Sec. 3. The debts and liabilities of the territory of New Mexico and the debts of the counties thereof, which were valid and subsisting on the twentieth day of June, nineteen hundred and ten, are hereby assumed and shall be paid by this state; and this state shall, as to all such debts and liabilities, be subrogated to all the rights, including rights of indemnity and reimbursement, existing in favor of said territory or of any of the several counties thereof on said date. Nothing in this article shall be construed as validating or in any manner legalizing any territorial, county, municipal or other bonds, warrants, obligations, or evidences of indebtedness of, or claims against, said territory or any of the counties or municipalities thereof which now are or may be, at the time this state is admitted, invalid and illegal; nor shall the Legislature of this state pass any law in any manner validating or legalizing the same.”

“Sec. 9. This state and its people consent to all and singular the provisions of the said act of Congress, approved June twentieth, nineteen hundred and ten, concerning the lands by said act granted or confirmed to this state, the terms and conditions upon which said grants and confirmations were made and the means and manner of enforcing such terms and conditions, all in every respect and particular as in said act provided.

Sec. 10. This ordinance is irrevocable without the consent of the United States and the people of this state, and no change or abrogation of this ordinance, in whole or in part, shall be made by any constitutional amendment without the consent of Congress.”

The Constitution in section 4, art. 19, also contains the following provisions:

“When the United States shall consent thereto, the Legislature, by a majority vote of the members in each house, may submit to the people the question of amending any provision of article XXI of this...