City of Montpelier v. Benjamin Gates

• Citation: 170 A. 473,106 Vt. 116
• Parties: CITY OF MONTPELIER v. BENJAMIN GATES ET AL
• Decision Date: 13 May 1933
• Court: Vermont Supreme Court

170 A. 473

106 Vt. 116

CITY OF MONTPELIER v. BENJAMIN GATES ET AL

Supreme Court of Vermont

May 13, 1933

November Term, 1933.

Mandamus---Demurrer Construed as Motion---States---Authority Necessary for Expenditure of State Funds---Application of Section 27 Chapter II, State Constitution---Act of Legislature Authorizing Proper Officers To Pay Claim as Appropriation---Money Appropriated and Ascertainment of Amount---Constitutional Appropriation---G. L. 540---Income and Franchise Tax Act---Acts 1931, No. 17, Part I 48---Effect of Sum Being "Covered" into Treasury---Effect of Payment Not Being Made Before Expiration of Biennial Period for Which Appropriation Made, When Sums Became Due During Period in Manner Provided by Statute---Acts 1931, No. 19, 4, 65, and Acts 1933, No. 29, 72, as Not Affecting Municipality's Right To Recover under Income and Franchise Tax Act---Right of State To Compensate Towns for Burdens Put on Them for Its Benefit---Taxation---Validity of Plan Adopted To Equalize Burdens of Towns by Change in Law Not Necessarily Affected Because Better Method Could Have Been Chosen---Validity of Act Providing for Certain Refunds to Municipalities When Not Palpably Arbitrary, but Resting upon Difference That Bears Just Relation To Purpose To Be Served---Effect of Changed Conditions on Legis- lation Valid When Passed---Statutes---Constitutionality of Law Affording Advantage To Certain Groups of Towns---Sufficiency of Interest of Fiscal Officers of State To Raise Constitutional Questions as to Validity---Effect of Unconstitutional Statute---Right of State Auditor and State Treasurer, in Action of Mandamus To Compel Compliance with Statute Appropriating Money, To Question Constitutionality of Statute.

1. In case where petition for mandamus, to compel fiscal officers of State to pay petitioners and certain interveners their respective claims under Income and Franchise Tax Act of 1931 was both answered and demurred to, held that, in view of importance of case to State and its officers, demurrer would be construed as motion, and merits of controversy disposed of without regard to technical sufficiency of pleadings.

2. Authority of law is indispensably necessary to expenditure of State funds.

3. Section 27, Chapter II, State Constitution, providing that "no money shall be drawn out of the treasury, unless first appropriated by an act of the legislature," held not to be, and not intended to be, restriction of power of Legislature over public revenue, all that is essential being that Legislature, by valid enactment, shall assign to particular use sum of money from public revenues, no particular form of expression or technical words being required.

4. Act of Legislature authorizing proper officers to pay certain claim amounts to an appropriation.

5. Money need not be in treasury at time appropriation is made nor is it necessary that exact sum be stated by Legislature.

6. Legislature may make an appropriation to cover claim amount of which is to be ascertained in manner specified in act.

7. When Legislature, referring to claim that State should pay, authorizes auditor to draw his order on State treasurer for its payment, constitutional appropriation has been made.

8. G. L. 540, providing that "unexpended balances" shall be covered into treasury on first day of July of each year, held not to affect right of municipality to recover from State sum equal to excess of amount received from intangible taxes in 1930 over amount paid that year for State taxes, upon certificates issued by commissioner of taxes as provided by Income and Franchise Tax Act (Acts 1931, No. 17, part I, 48).

9. When sum is "covered" into treasury, it ceases to be "earmarked" for payment of specific claim, and becomes available for payment of any just debt against State for which appropriation has been made and which is not payable out of particular fund, but remains equally available for payment of claim for which it was originally appropriated, if funds are in hand when auditor's order reaches treasurer.

10. Legislative appropriation in 1931 for biennial period then beginning "to each city and town" of sum equivalent to excess of amount received by it from intangible taxes in 1930 over amount paid in 1930 for State taxes, payments to be made upon certificates issued by commissioner of taxes (Acts 1931, No. 17, part I, 48), held not to have lapsed June 30, 1933, upon expiration of biennial period, where sums due municipality were ascertained by commissioner of taxes and his certificate issued during biennium for which appropriation was made, though auditor or treasurer or both failed to respond to demand made legal by certificate until that period has expired.

11. Municipality's right to recover from State, under appropriation made by Income and Franchise Tax Act (Acts 1931, No. 17, part I, 48), excess of amount received by municipality from intangible taxes in 1930 over amount paid in 1930 for State taxes, upon certificate issued by commissioner of taxes, where such certificate was issued during biennial period for which appropriation was made, though auditor or treasurer or both failed to respond to demand for payment during such period, held not affected by Acts 1931, No. 19, 4, providing that sums "hereinafter appropriated" should be available only during fiscal years ending June 30, 1932, and June 30, 1933, respectively, nor by section 65 of last-mentioned act, since it refers only to what had been done before its passage, nor by Acts of 1933, No. 29, 72, in view of the provision of section 71 of same act.

12. State may properly compensate towns for burden put upon them for its benefit.

13. That better method might have been chosen by Legislature to accomplish its purpose to equalize burden resulting from change in previous law, by reimbursing municipalities to extent of excess of amount received in 1930 from intangible taxes over amount paid that year for State taxes, than to have chosen the year 1930 as the basis of such refund, did not invalidate the plan adopted.

14. Acts 1931, No. 17, part I, 48, appropriating to municipalities excess of amount received by municipalities from intangible taxes in 1930 over amount paid in 1930 for State taxes, held to be free from constitutional objections, since it is not palpably arbitrary, but rests upon difference that bears just relation to purpose to be served.

15. Act of Legislature, valid when passed, remains so as long as it remains on books, changed conditions having no retroactive effect on its validity.

16. Law according advantage to certain group of towns is not unconstitutional, provided advantage is equally available to every town eligible to group, and providing grouping is based upon reasonable classification.

17. Where fiscal officer of State, not ministerial or subordinate, will, under his oath of office, violate his duty or otherwise render himself liable by performance of act enjoined upon him by statute, if invalid, he is sufficiently interested to enable him to raise question of validity of statute in mandamus proceeding to compel him to comply therewith.

18. Unconstitutional statute is mere nullity that confers no rights, imposes no duties, and affords no protection.

19. State auditor and State treasurer as custodians and conservators of public funds, which they are forbidden to disburse except as Legislature appropriates them, their sworn duty being to execute their respective offices "according to law," held to have right in mandamus proceedings against them to compel compliance with statute appropriating for municipalities excess of amounts received from intangible taxes in 1930 over amounts paid for State taxes in 1930, to question constitionality of statute

PETITION for mandamus to compel State auditor and State treasurer to comply with Acts 1931, No. 17, part I, /n 48, appropriating for municipalities excess of amounts received from intangible taxes in 1930 over amounts paid for State taxes in 1930. Demurrer and answer. Heard on pleadings at the November Term, 1933, Supreme Court, Washington County. The opinion states the facts.

Judgment that the prayer of the petition be granted, without costs, and that a mandate issue forthwith directing the auditor of accounts to draw orders on the State treasurer for the several amounts due to the petitioners as shown by the certificates of the commissioner of taxes, and directing the State treasurer to pay the same, when presented, out of any funds in hand not otherwise assigned.

George L. Hunt, City attorney, for the petitioner.

Lawrence C. Jones, Attorney General (H. H. Blanchard and James Brownlee, of counsel) for the petitionees.

Present: POWERS, C. J., SLACK, MOULTON, THOMPSON, and GRAHAM, JJ.

OPINION

POWERS

This is a petition for a writ of mandamus to compel the fiscal officers of the State to pay to the petitioner and certain interveners their respective claims under section 48, part I, of the Income and Franchise Tax Act of 1931, Acts 1931, No. 17, part I, § 48. The petition is answered and demurred to. In view of the importance of the case to the State and its officers, and the facts being conceded, the demurrer will be construed as a motion, Clement v. Graham, 78 Vt. 290, 306, 63 A. 146, Ann. Cas. 1913E, 1208, and the merits of the controversy disposed of without regard to the technical sufficiency of the pleadings.

As is shown in Town of Brandon v. Harvey, 105 Vt 435, 168 A. 708, 710, prior to the passage of the act above referred to, the towns of the State were enjoying the benefit of whatever revenue was derived from the taxation of intangibles, but were required to pay to the State certain State taxes assessed by law. But by the Act of 1931, a radical change was made in the State's taxing...