Green v. Frazier

• Citation: 176 N.W. 11,44 N.D. 395
• Parties: GREEN et al. v. FRAZIER, Governor, et al.
• Decision Date: 02 January 1920
• Court: North Dakota Supreme Court

44 N.D. 395

176 N.W. 11

GREEN et al.

v.FRAZIER, Governor, et al.^a1

Supreme Court of North Dakota.

Jan. 2, 1920.

Syllabus by the Court.

Where a proposed amendment to the Constitution of the state of North Dakota is, at a regular or special election, duly submitted to the electors for their approval, and a majority of the qualified electors voting at such election vote in favor of it, and it is later duly submitted to the Legislature, and by it agreed to and duly ratified, and it is thereafter approved by the Governor of the state, it duly becomes a part of the Constitution of the state of North Dakota.

It is held the amendment to section 182 and to section 185 of the Constitution of the state of North Dakota (see Laws 1919, pp. 507, 508) each were regularly, lawfully, and in accordance with the provisions of the state Constitution relative to the amendment thereof, duly and legally adopted and are a part of the Constitution of the state of North Dakota.

It is held that the people of this state have the privilege, right, and authority under the principles and prerogative of self-government to adopt such Constitution and such amendments to it as to them may seem right and proper and best calculated to insure their general welfare, security, and prosperity, subject, however, in this respect, to every limitation or restraint imposed upon them by the Constitution of the United States.

It is held that neither of the amendments in question in any manner contravene any of the provisions of the Constitution of the United States, nor are they repugnant to it, nor are any of the laws relative to the construction and ownership of certain state-owned industries and utilities, invalid, void, or unconstitutional under the state Constitution, neither do they contravene any provision of the Constitution of the United States, nor are they within any of the restraints imposed by it upon the several states.

A private business or enterprise is one in which an individual or individuals, an association, copartnership, or private corporation have invested capital, time, attention, labor, and intelligence for the purpose of creating and conducting such business, for the sole purpose that those who make such contributions may, from the conducting and operating of it, make, gain, and acquire a financial profit for their exclusive benefit, improvement, and enjoyment, and exclusively for their own private purposes and use.

A public purpose or public business has for its objective the promotion of the public health, safety, morals, general welfare, security, prosperity, and contentment of all the inhabitants or residents within a given political division, as, for example, a state, the sovereign powers of which are exercised to promote such public purpose or public business.

It is held that the building, owning, and operating of state-owned elevators, flouring mills, and other state industries in question is for a public purpose as defined in paragraph 6, supra. It further appears that every resident and business in the state depends directly or indirectly upon the agricultural productions of the state for financial success, and that approximately 90 per cent. of the wealth of this state is produced from the farms therein and consists mostly of small grains, and, further, that great losses have been, and still are, being suffered by the farmers in marketing such grain outside the state, and that it is the purpose of such state-owned industries to establish a stable and fair market for such products within the state of North Dakota where the producers of farm products within this state may receive the full market value of their products.

The building, owning, and operating of such state-owned industries and utilities being for a public purpose, and the profits from such inuring to all the people of the state, and payable as such into the state treasury for the equal use and benefit of all the people of this state, it is held that such ownership and operation of such industries and utilities constitute a public purpose, to carry out which the state may issue bonds as prescribed by law and may levy a tax on all property of this state not exempt from taxation under the laws of this state or of the United States, for the purpose of paying the principal and interest of such bonds; and that in levying and collecting of such tax there is no violation of either the state Constitution or the Constitution of the United States nor the Fourteenth Amendment.

It is further held that the authorization of the Governor and Industrial Commission to fix the rate of interest, date of maturity, etc., of such bonds is not the delegation of a legislative power or function, but merely the conferring of administrative duties upon them.

The constitutional amendments and laws in question promote home ownership. The state, as such, is made up of units. Those units are represented by homes. The more homes, the more prosperous and secure they are, the more prosperous, secure, and permanent is the state. The state, its integrity, morality, intelligence, prosperity, and permanence, is measured largely by the average of those same virtues in its citizenship, and those virtues are greatly promoted by permanency of home ownership, which the laws in question are intended to establish.

Appeal from District Court, Burleigh County; W. L. Nuessle, Judge.

Action by E. A. Green and others, taxpayers, against Lynn J. Frazier, Governor, William Langer, Attorney General, John N. Hagan, Commissioner of Agriculture and Labor, Obert Olson, State Treasurer, and the Industrial Commission of North Dakota, to restrain defendants from disbursing public funds. From an order sustaining a demurrer to the complaint, plaintiffs appeal. Affirmed, and case remanded.

Harry Lashkowitz, of Fargo, for appellants.

William Langer, Edw. B. Cox, and Albert E. Sheets, Jr., all of Bismarck, and William Lemke, of Fargo (W. S. Lauder, of Wahpeton, S. L. Nuchols, of Mandan, and Frederic A. Pike, of St. Paul, Minn., of counsel), for respondents.

GRACE, J.

This action was commenced by the plaintiffs, in the county of Cass, to procure an injunction to restrain the defendants, each of whom is a state officer of the state of North Dakota, from disbursing certain public funds in the state treasury, aggregating perhaps several hundred thousand dollars, and, further, to restrain the defendants from issuing certain state bonds, and to have declared invalid, null, and void certain amendments of the state Constitution and certain statutes authorizing the disbursing of such money and the execution, sale, and delivery of such bonds. The venue of the action was changed by a proper order to the county at Burleigh.

The plaintiffs are taxpayers of this state, and, as such, bring this action. The decision in this case, in so far as it interprets the provisions of the Constitution and laws of this state, will be binding upon not only these taxpayers, but all others of this state.

[1] At a general election in this state there were ten proposed constitutional amendments to the Constitution of the state of North Dakota legally submitted to the electors for adoption or rejection. Each of them received a majority of the votes cast at such election, and thus they were duly adopted by the electors. They were then duly presented to the Legislature of the state of North Dakota, and, by resolution of the House of Representatives of the state of North Dakota, the Senate concurring, agreed to and declared a part of the Constitution of the state, and each of said amendments was duly adopted, and thus became effective as part of the Constitution of the state of North Dakota.

[2][3][4] The validity of two of such constitutional amendments is challenged by this action, and claimed thereby to be null and void.

Section 182 of the Constitution, prior to its amendment, is as follows:

“The state may, to meet actual deficits or failure in the revenue, or in case of extraordinary emergencies, contract debts, but such debts shall never in the aggregate exceed the sum of two hundred thousand dollars, exclusive of what may be the debt of North Dakota at the time of the adoption of this Constitution.

Every such debt shall be authorized by law for certain purposes to be definitely mentioned therein, and every such law shall provide for levying an annual tax sufficient to pay the interest semiannually, and the principal within 30 years from the passage of such law, and shall specially appropriate the proceeds of such tax to the payment of said principal and interest, and such appropriation shall not be repealed or the tax discontinued until such debt, both principal and interest, shall have been fully paid.

No debt in excess of the limit named shall be incurred except for the purpose of repelling invasion, suppressing insurrection, defending the state in time of war, or to provide for public defense in case of threatened hostilities; but the issuing of new bonds to refund existing indebtedness shall not be construed to be any part or portion of said two hundred thousand dollars.”

As amended, section 182 is as follows:

“The state may issue or guarantee the payment of bonds, providing that all bonds in excess of two million dollars shall be secured by first mortgages upon real estate, in amounts not to exceed one-half of its value; or upon real and personal property of state owned utilities, enterprises or industries in amounts, not exceeding its value, and provided, further, that the state shall not issue or guarantee bonds upon property of state owned utilities, enterprises or industries in excess of ten million dollars.

No future indebtedness shall be incurred by the state unless evidenced by bond issues, which shall be authorized by law, for certain purposes to be clearly defined.

Every law authorizing a bond issue shall provide for levying an annual tax or may make other provisions, sufficient to pay the interest semiannually, and the...