Comptroller v. Egan

• Decision Date: 16 July 1946
• Citation: 48 A.2d 735,133 Conn. 112
• Parties: DOWE, Comptroller, et al. v. EGAN, Com'r of Labor and Factory Inspection. Factory Inspection.
• Court: Connecticut Supreme Court

133 Conn. 112

48 A.2d 735

DOWE, Comptroller, et al.

v.EGAN, Com'r of Labor and Factory Inspection. Factory Inspection.

Supreme Court of Errors of Connecticut.

July 16, 1946.

COPYRIGHT MATERIAL OMITTED.

Case Reserved from Superior Court, Hartford County; Shea, Judge.

Action for a declaratory judgment by John M. Dowe, Comptroller, Raymond S. Thatcher, comptroller, substituted plaintiff, and others against John J. Egan, Commissioner of Labor and Factory Inspection, to determine whether or not a public act divests the plaintiff of duties imposed upon them by the Constitution, brought to the superior court in Hartford county and reserved by the Court, for the advice of the Supreme Court of Errors.

Judgment in accordance with opinion.

Arthur F. Brown, Asst. Atty. Gen. (William L. Hadden, Atty. Gen., on the brief), for plaintiff.

Harry Silverstone, Asst. Atty. Gen., for defendant.

Before MALTBIE, C. J., and BROWN, JENNINGS, ELLS, and DICKENSON, JJ.

MALTBIE, Chief Justice.

The General Assembly an its 1945 session amended the unemployment compensation law to provide that when the treasurer of the state, as treasurer of the unemployment compensation fund, has, at the direction of the administrator, requisitioned from the unemployment trust fund held by the treasurer of the United States such amount as the administrator deems necessary the treasurer ‘shall deposit such moneys in the benefit account of the unemployment compensation fund,’ and that the benefits provided under the act should be paid ‘from the benefit account by the administrator, who alone shall make withdrawals from such account and who shall make such withdrawals only for the purpose of paying such benefits,’ with a further provision that the administrator should give a bond for the faithful performance of his duties in connection with the benefit account. General Statutes Sup.1945, § 969h. The question presented upon this reservation is whether this method of dispensing benefits from the fund is constitutional. Section 17 of article fourth of the constitution of Connecticut establishes the office of state treasurer and among other things provides: ‘He shall pay no warrant, or order for the disbursement of public money, until the same has been registered in the office of the Controller.’ Section 19 of that article, which establishes the office of ‘Controller of the public accounts,’ provides: ‘He shall adjust and settle all public accounts and demands, except grants and orders of the General Assembly.’ The plaintiffs' claim is that § 969h contravenes these provisions.

The Unemployment Compensation Act provides: ‘There is created in the state treasury a special segregated fund to be known as the employment security administration fund’; it consists of all moneys appropriated by this state or received from the federal government or any of its agencies or from any other source for the purpose of defraying the cost of administering the act; the treasurer is liable ‘on his official bond’ for the faithful performance of his duties with respect to the fund; and expenditures from it are to be made ‘on warrants drawn by the comptroller at the direction of the administrator.’ General Statutes Sup.1941, § 723f(a), (c). The act also provides: ‘There is created in the state treasury a special segregated fund to be known as the unemployment compensation fund, in which there shall be two accounts, namely, the contribution account and the benefit account’; the fund consists of all contributions and moneys or property received for the payment of unemployment compensation benefits; the expenditures from it can be made only for the purpose of paying benefits and certain refunds to contributors provided for in the act; and the state treasurer is ‘liable on his official bond’ for the faithful performance of his duties in connection with this fund. General Statutes Sup.1941, § 724f. Receipts of contributions and other moneys for the fund are to be paid to the treasurer, who is to deposit them in the contribution account; after deducting any money necessary for refunds, the balance is to be paid, on warrants drawn by the comptroller at the direction of the administrator, to the secretary of the treasury of the United States. General Statutes Cum.Sup.1939, § 1344e(b). Then follows the section of the act directly involved in this controversy and from which we have quoted at the beginning of this opinion; we note, however, that, as it originally appeared in the act, this section provided that payments of benefits were to be made ‘on warrants drawn by the state comptroller at the direction of the administrator.’ General Statutes, Cum.Sup.1939, § 1344e(c). If the federal act upon which our law is founded becomes ineffective, the provisions of our law requiring contributions and providing for the payment of benefits are no longer to be operative, and, unless the General Assembly prior to the adjournment of its next regular session shall legislate to the contrary, moneys in the unemployment compensation fund, less expenses of administration, are to be refunded to contributors under regulations adopted by the administrator. General Statutes Cum.Sup.1939, § 1349e(b).

The defendant administrator contends that the unemployment compensation fund is a trust fund, with the implied conclusion that its administration does not fall within the constitutional provisions we have quoted. That it constitutes a trust in the technical meaning of the word would be difficult to maintain; see Town of Winchester v. Cox, 129 Conn. 106, 112, 26 A.2d 592; but that is not the controlling question. It is rather: Did the fund consist of ‘public money,’ and were the demands upon it by beneficiaries ‘public accounts' within the meaning of the constitutional provisions we have quoted?

In Waterbury Savings Bank v. Danaher, 128 Conn. 78, 86, 20 A.2d 455, 459, we said of the Unemployment Compensation Act: ‘In view of the extent of the unemployment problem and the purpose and method of the act to meet it, the enactment is one clearly within the state's police power exercised in pursuance of ‘public * * * governmental purposes.’ * * * Neither the fact that the payments required of employers under it are termed ‘contributions,’ nor that these payments when received are segregated in a separate fund to be applied to the purposes of the act, renders them any the less taxes. That the legislature regarded them as such is indicated by its action in expressly conferring upon the administrator all of the powers of a tax collector to insure their collection (§ 1345e), and as was said by the court of the Arkansas act, ‘that the required payment is referred to in our Act 155 as a ‘contribution’ is of no significance. It is compulsory contribution, and therefore a tax. Buckstaff Bath House Co. v. McKinley, 198 Ark. 91, 99, 127 S.W.2d 802, 806.' Under the act funds for administering it and contributions are to be paid into the state treasury; legal title to the money so collected undoubtedly vests in the state; the faithful performance of the duties of the treasurer with respect to the fund is covered by his ‘official bond,’ that is, the bond ‘conditioned for the faithful performance of his duties' as treasurer ‘other than in connection with the school fund.’ General Statutes, § 75. As the act was originally enacted, money could be withdrawn from either of the special funds created by it only on warrant of the comptroller, and that is still true of money in the administration fund. Money in the treasury of the state may be none the less ‘public money’ because it consists of a special fund which can be used only for a particular purpose, as, e.g., the school fund, perpetually dedicated by the constitution to the support and encouragement of the public schools of the state. Const.Conn. Art. VIII, § 2. Without attempting an all-inclusive definition of the words ‘public money’ as used in our constitution, they certainly include money raised by the state by compulsory process in order to carry out one of its governmental purposes and deposited in the state treasury until properly disbursed; State ex rel. Taylor v. Robinson, 59 Idaho 485, 495, 83 P.2d 983; Tesch v. Board of Deposits, 237 Wis. 527, 531, 297 N.W. 379; Branch v. United States, 12 Ct.Cl. 281, 289; Storen v. Sexton, 209 Ind. 589, 597, 200 N.E. 251, 104 A.L.R. 1359; State ex rel. St. Louis Police Relief Ass'n v. Igoe, 340 Mo. 1166, 1174, 107 S.W.2d 929; and any claim for payment from the fund is a ‘public * * * demand.’ If, indeed, the General Assembly can create a fund so collected, held and disbursed that it would not fall within the words ‘public money’ as used in the constitution, the act before us gives no indication of an intent to do so. The unemployment compensation benefit fund constitutes ‘public money’ as those words are used in the constitution.

After the independence of this country became established, the government of this state was carried on, as it had been before, under the charter of King Charles II granted in 1662. The broad powers given the General Assembly in that charter enabled it largely to shape by statute our form of government. The constitution adopted in 1818 did not create a government but gave to that which had already been established the sanction of the people and, in very general language, formulated its framework. To understand the intent of the instrument it is often necessary to have recourse to the form of government as it had existed before, and did exist at the time of, the adoption of the constitution. See Walkinshaw v. O'Brien, 130 Conn. 122, 127, 32 A.2d 547.

In considering the constitutional provisions we have quoted, our inquiry necessarily starts with the powers and functions of the committee of the pay-table. That committee was established at the April session of the General Assembly in 1775, and its principal function was stated to be ‘to examine, liquidate, adjust, settle and give needful orders for...