Hager, Auditor, v. Kentucky Children's Home Society

• Decision Date: 07 December 1904
• Citation: 119 Ky. 235
• Parties: Hager, Auditor, v. Kentucky Children's Home Society.
• Court: Kentucky Court of Appeals

Page 235

119 Ky. 235

Hager, Auditor, v. Kentucky Children's Home Society.

Court of Appeals of Kentucky.

December 7, 1904.

APPEAL FROM FRANKLIN CIRCUIT COURT — JOHN D. CARROLL, SPECIAL JUDGE.

FROM THE JUDGMENT THE AUDITOR APPEALS. AFFIRMED.

N. B. HAYS, ATTORNEY-GENERAL, ATTORNEY FOR APPELLANT.

J. H. HAZELRIGG AND W. S. PRYOR, ATTORNEYS FOR APPELLEE.

OPINION OF THE COURT BY JUDGE O'REAR — AFFIRMING.

This appeal involves the constitutionality of the act of General Assembly approved February 20, 1904 (Acts 1904, p. 33, c. 7), appropriating $15,000 annually to the Kentucky Children's Home Society, a private corporation organized under the laws of this State for purely charitable purposes. The articles of incorporation of the society show that it is conducted solely to seek out destitute children and provide for them homes where they will be under the supervision of the institution during their dependent minority. The constitutionality of the act is assailed on several grounds, which will be taken up in order.

That the care of the indigent poor is a purely public charity is not really questioned by the attorney general. Christ commended it as a public privilege, whilst every civilized people upon the earth now regard it as a public duty. That great evasive question propounded in the adjustment of the first social relation of men, "Am I my brother's keeper?" is answered emphatically in the affirmative upon the consciences of this era of civilization, when speaking of the destitute and helpless. In this State, from its earliest history, it has been treated, as it had been in Virginia and England before us, as a public charge imposed as a matter of rightful exercise of governmental power upon the State, or such subdivisions of it as legislation might provide. It was borne by taxation, in one form or another, applied to such subjects and under such conditions as addressed themselves to the lawmaking branch as being the most expedient. Whatever errors may have been committed so far in its exercise, it is doubted if any has occurred on the side of its having been more liberal than just. The care of the insane, the special education of the deaf and dumb, the blind, and of the feeble minded, are particular applications of this general doctrine. They are all well provided for by the statute laws of this State, and have been for many years. Separate institutions, especially fitted and officered for the appropriate service in each are established and maintained at the public expense by taxation levied upon all the taxable property in the State. The care of the indigent poor generally is given over to the counties (section 3933, Ky. St., 1903) and cities of the Commonwealth. Sections 3058, 3290, 3490, Ky. St., 1903. Instead of this being an exclusive delegation by the State of this governmental function, it is its exercise by the State in the limited manner indicated by the several statutes, by the use of local government subdivisions. But the State is not precluded by these several provisions from exercising some part of the same power in some other proper way. It would scarcely be argued that, because legislation had been adopted making it the duty of the counties of the State to provide for their pauper citizens, the State itself could not take on any part of that burden.

The Constitution provides that taxes shall be levied for public purposes only, and forbids the donation or loaning by the State of its credit to any individual or corporation. Sections 171-177, Const. That the purpose of the appropriation in this case is a public one is too clear, in our opinion, to require more extended argument. Obviously appropriations of money out of the treasury must be measured by the same test as that by which it is raised by taxation and put into the treasury. If taxes could not be imposed for a purpose, money already in the treasury could not be appropriated to that purpose.

The purpose being a public one, for which the State might have levied a tax and applied it, the question immediately recurs, can the State apply it otherwise than through its own officers? At this point section 177 of the Constitution is invoked by the attorney general. That section reads: "The credit of the Commonwealth shall not be given, pledged, or loaned to any individual, company, corporation or association, municipality, or political sub-division of the State; nor shall the Commonwealth become an owner or stockholder in, nor make donation to, any company, association or corporation; nor shall the Commonwealth construct a railroad or other highway." There was a time when the State was allowed to subscribe, and did subscribe, to the capital stock of various quasi public improvement companies, and loaned or gave its credit to such. It was to prevent a repetition of that practice by the State that the section was enacted. It was to keep the State out of partnership enterprises, or even the doing solely on its own behalf of that class of public works — the building of highways and railroads. The State can not now loan or give its credit to any person or corporation for any purpose — public or otherwise. But this does not mean at all that the State can not buy and pay for what it needs to enable it to discharge its governmental duties. Nor does it mean that the State can not employ the services of a person or corporation to do a lawful act which it has the right to have done, and to pay for it. For example, the State may provide for the mobilization of the militia at a given point. It may hire a railroad corporation to transport them, and some other person to provision them, and may pay for these services. This is in no sense donating or lending the State's credit to the railroad company or to the caterer. Yet the State is not bound to avail itself of their services, but it may do it. If it does, the transaction in no wise involves section 177 of the Constitution, though it does section 171; i. e., the purpose for which the State's money is paid out must be a public purpose. That is the only inquiry, other than that, has the Legislature enacted the statute allowing the thing to be done? When the Legislature is authorized to do a thing generally, and no particular method is prescribed, it may pursue its own course in the means adapted to the accomplishment of the purpose. For example, it is admittedly a public purpose for the State to support at the public expense its pauper lunatics and idiots. It might have kept them all in its own institutions. It might have compelled the counties to keep one class, as it did for a while, or to keep either class or both. But it employs its own institutions in the care of the former, and hires individuals at so much per year for each pauper idiot kept, to care for the latter. Cooley, in his work on Taxation (2d Ed.) p. 125, lays it down that the State, in its care for such dependent objects, might not only do it by an establishment of its own institutions for the purpose, "but," be says, "private institutions might undoubtedly be aided with public funds, in consideration of services to be rendered to the public, and expenses to be incurred by them in assisting and relieving the same necessitous and dependent classes."

In 1899 a terrific cyclone struck the city of New Richmond, Wis., devastating its homes and business houses, killing outright a great many people, seriously injuring a great many others, killing large numbers of animals, and causing widespread disaster, want, and distress. The conditions were such that, but for immediate relief beyond the reduced powers of the city and its inhabitants to meet disease and pestilence, in addition to the other woes occasioned by the storm, would in every probability have followed. The city incurred a heavy debt to meet the critical emergency — one, in view of the severe visitation upon it, it could ill afford to bear alone. The State Legislature voted an appropriation to defray and thus carry in part this burden. Its payment was resisted on the ground that the State had not the right to tax all its inhabitants for the benefit of those of New Richmond alone. The Supreme Court of Wisconsin upheld the appropriation (State of Wisconsin ex rel. City of New Richmond v. Davidson, 88 N. W., 596, 90 N. W., 1067, 58 L. R. A., 739) on the ground that it was for a public purpose. The court said: "The State at large was concerned in the objects of the appropriation in question, and if the Legislature had been in session June 12, 1899, it might legitimately have appropriated the amount mentioned for the object in question. This being so, it follows that the Legislature had the power to pass the act in question to reimburse the city for such expenditures." The court admitted that, unless the purpose was a public one, there was no power under the Constitution to appropriate the State's money to do it, no matter how laudable it may have been.

The Legislature of Missouri appropriated $50,000 to the St. Louis Insane Asylum, an institution owned and conducted by the city of St. Louis alone; the appropriation being "for the support of the indigent insane in the insane asylum in the city of St. Louis, who belong to the State outside of the city of St. Louis." The payment of the appropriation was resisted on the grounds that it was not for a public purpose; that the State had otherwise provided for the care of its indigent insane; that the Constitution of Missouri expressly prohibited such appropriations in the following provision: "The General Assembly shall have no power to make any grant, or to authorize the making of any grant of public money or thing of value to any individual, association of individuals, municipal or other corporation whatever." The Supreme Court of Missouri upheld the appropriation. State ex rel. City of St. Louis v. Seibert, State Auditor, 123 Mo., 424, 24 S. W., 750, 27 S. W., 624. The court reasoned thus, in part: "The insane of the State being proper objects...