Gipson v. Ingram
| Citation | 223 S.W.2d 595,215 Ark. 812 |
| Decision Date | 17 October 1949 |
| Docket Number | 4-8982 |
| Parties | Gipson v. Ingram |
| Court | Arkansas Supreme Court |
Appeal from Pulaski Chancery Court; Frank H. Dodge, Chancellor.
Affirmed in Part and Reversed in Part.
Kenneth C. Coffelt, for appellant.
W W. Sharp, H. S. Yocum, Ike Murry, Attorney General, and Arnold Adams, Assistant Attorney General, for appellee.
Rose Dobyns, Meek & House, Amici Curiae.
Ed. F McFaddin, Justice. Leflar, J., disqualified and not participating. Griffin Smith, Chief Justice, dissenting.
Ed. F. McFaddin, Justice.
This is the so-called "Cash Fund" case. Appellant (plaintiff below) filed proceedings in the Chancery Court, claiming relief as a citizen and taxpayer. The defendants (appellees here) were: the State Comptroller, L. R. Beasley, and other persons as the board members in charge of various state agencies and institutions and their disbursing agents. Some of the institutions are: the University of Arkansas, Henderson State Teachers College, the State Hospital for Nervous Diseases and the State Tuberculosis Sanitorium. [1] We will refer to the State Comptroller as such, and to all the other defendants as "state agencies and institutions."
Plaintiff's pleadings allege: (1) that each of the said state agencies and institutions has a cash fund derived from various sources; (2) that all such cash funds are public money and should be deposited immediately in the state treasury and expended only after appropriation acts by the Legislature; (3) that the state agencies and institutions are expending these cash funds as the governing boards see fit, and without legislative appropriation; (4) that the State Comptroller is auditing and not officially disapproving expenditures from the cash funds by the state agencies and institutions, and that the State Comptroller should be restrained from approving vouchers for payment from said cash funds; [2] and (5) that some portions of the said cash funds of some of the state agencies and institutions are being used to supplement the salaries paid employees, so that such employees are in fact receiving compensation greater than the amount fixed by the Legislature.
The prayers of the plaintiff's pleadings were:
". . . that the Court enjoin temporarily and permanently the defendants, and each of them, from appropriating, paying out or in any manner depleting any of such funds herein referred to now in their possession, or that may come into their possession in the future, which have not been appropriated for a specific purpose by an Act of the Arkansas Legislature; and that this Court issue a mandatory injunction against the defendants, and each of them, requiring them to deposit any and all of such funds now in their possession or under their control, or that may come into their possession or under their control, in the treasury of the State of Arkansas; that the State Comptroller, L. R. Beasley, be restrained from approving for payment any voucher of any kind or character whatsoever against any fund of any of the State institutions herein named, known as 'cash funds' or funds which have not been previously appropriated by the Arkansas Legislature for specific purposes; that the order of the Court herein apply not only to the defendants herein named, but to their successors in office; that defendants, and each of them, be restrained temporarily and permanently from in any manner paying out or in any manner causing to be paid out any of such funds named in this cause for salaries of any officer or employee of any of the institutions or agencies named in this cause, which salaries have not previously been fixed and appropriated by the Legislature, and for any and all other proper relief to which the complainant herein may be entitled in equity."
Answers filed by some of the defendants alleged the corporate status of the state agencies and institutions represented by them, while other answers denied every material allegation of the plaintiff's pleadings. All answers prayed that the proceedings be dismissed. The case was heard on oral evidence, to which we will hereinafter refer. The Chancery Court entered a decree dismissing the complaint; and there is this appeal challenging the correctness of that decree.
There is only one allegation that anything is being done in violation of what the Legislature has permitted, and that allegation is that some portions of the cash funds are being used to supplement the salaries of certain employees, so that such employees are receiving compensation greater than the amounts fixed by the Legislature. This allegation will be discussed in topic II, infra. All the other allegations involve the question, whether the Legislature has proceeded in a constitutional manner. That will be discussed in Topic I, infra.
I. The Constitutional Question. Appellant cites Art. V, § 29 of the Constitution: "No money shall be drawn from the treasury except in pursuance of specific appropriations made by law, the purpose of which shall be distinctly stated in the bill, and the maximum amount which may be drawn shall be specified in dollars and cents; and no appropriations shall be for a longer period than two years."; and, also, Art. XVI, § 12: "No money shall be paid out of the treasury until the same shall have been appropriated by law, and then only in accordance with said appropriation." The constitutional provisions, as above quoted, refer to "the treasury." The case of Straub v. Gordon, 27 Ark. 625 [3] holds that "the treasury" means the state treasury. So the constitutional language "no money shall be paid out of (drawn from) the treasury . . ." necessarily refers only to money that has reached the state treasury, and does not refer to money held elsewhere.
Appellant urges that all the money received by the various state agencies and institutions [4] should be paid into the state treasury, and that the Legislature is without power to authorize otherwise. It is shown by the proof that many, if not all, of the state agencies and institutions involved in this suit have cash funds -- derived from such sources as students' fees, sale of farm produce, dormitory charges, etc. -- held by said institutions and agencies either under express legislative permission or under circumstances known to the Legislature and not prohibited by it. It was also shown that no part of the cash funds of any of the state agencies and institutions is derived from taxes, but, rather, from the operation of such state agencies and institutions. So, for purposes of this topic "cash funds" are those received by the state agencies and institutions from sources other than taxes, as the term "taxes" is ordinarily used. The question is, whether the Constitution of Arkansas requires that all such cash funds be deposited into the state treasury. If it does, then the appellant is correct on this point; if it does not, then he is in error. In determining the answer to the posed question, we emphasize that the Legislature, as the supreme law-making body, possesses all legislative powers except those expressly or impliedly prohibited by the Constitution. State v. Ashley, 1 Ark. 513; Straub v. Gordon, 27 Ark. 625; Bush v. Martineau, 174 Ark. 214, 295 S.W. 9. [5] So we examine the Constitution to see if the Legislature is prohibited from allowing the state agencies and institutions to have and disburse cash funds.
It will be observed that both in Art. V, § 29 and Art. XVI, § 12, as previously copied, it is required that no money shall be drawn from the treasury until the same shall have been duly appropriated. There is no language in our present Constitution which requires that all of the public money shall be paid into the state treasury. Such a provision exists in the Constitutions of some States, but not in our present Constitution. For instance, in the Arkansas Constitution of 1868 there was a provision (Art. X, § 17) which read: "The general assembly shall tax all privileges, . . . and the amount thus raised shall be paid into the treasury." [6] Likewise, the 1875 Constitution of Missouri provides in Art. IV, § 43: "All revenue collected and all moneys received by the State from any source whatsoever shall go into the treasury, . . ." In the 1902 Constitution of Virginia, § 186, there is this language:
It will be observed that in the quoted provisions from these Constitutions there is the requirement of deposit into the treasury. But when these Constitutions are compared with the present Arkansas Constitution (of 1874), it is clear that our present Constitution requires only that money in the treasury shall not be removed except by legislative appropriation. There is no requirement in the present Arkansas Constitution that all public money shall be paid into the state treasury. The absence of such a provision from our present Constitution appears to have been a studied and deliberate omission. Certainly, such omission leaves the Legislature of this State free to provide that public money derived as in this case may be deposited as cash funds, for use by the state agencies and institutions.
To buttress the conclusion reached, we point out that Art. VI § 22 of our present Constitution provides that the State Treasurer: ". . . shall perform such duties as may be prescribed by law." Thus the Constitution clearly empowers the Legislature to decide whether the State Treasurer shall be required to receive all state funds. This Art. VI, § 22 of our present Constitution was so worded in light of the fact then existing that the ...
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