Hanly v. Sims

• Decision Date: 15 March 1911
• Docket Number: 21,573
• Citation: 94 N.E. 401,175 Ind. 356
• Parties: Hanly v. Sims, Secretary of State, et al
• Court: Indiana Supreme Court

94 N.E. 401

175 Ind. 356

Hanly v. Sims, Secretary of State, et al

No. 21,573

Supreme Court of Indiana

March 15, 1911

Original Opinion of December 16, 1910, Reported at: 175 Ind 345.

Jordan J. Myers, C. J.

OPINION

Jordan, J.

Appellant has petitioned for a rehearing, and in support thereof has filed a voluminous brief, which is virtually a reargument of the points which he advanced, and which were considered, at the former hearing. He appears to assume that the legislature, in passing the act in question liquidating the claim of the Vincennes University and authorizing the issuing of bonds in settlement thereof, attempted to evade and disregard the Constitution of the State, and upon this theory he--in part at least--assails the validity of that act. In fact he brushes aside the finding of the legislature of 1907 (Acts 1907 p. 497), by which that body discloses its intent and purpose in enacting the statute, by asserting in his brief that "the finding of the legislature is nothing else than a mere pretext to evade the Constitution." He assails the integrity of the legislative department, imputes bad faith to its action, and virtually asks this court to adopt his view in this respect, and impute to a coordinate branch of the state government bad faith, and a pretext upon its part to evade the Constitution, which each member composing that body had taken a solemn oath to support.

We must indulge all reasonable presumptions in favor of the validity of the act challenged by appellant, and will not presume that the legislative department acted in bad faith, or in any manner endeavored to evade the Constitution in enacting said act. We must presume that the action of the legislature was legitimate, until the contrary is made to appear. If the exercise of the discretion of that body is within the limit of its constitutional authority, we can no more interfere with its discretion than it can encroach on the province of this court, for it is well settled that its discretion is not subject to the control of the judiciary nor within judicial surveillance. Jamieson v. Indiana, etc., Oil Co. (1891), 128 Ind. 555, 28 N.E. 76.

Appellant continues to press his former argument--that we must remember that the act in question does not fall within any of the exceptions of article 10, § 5, of the Constitution. We certainly recognize this fact, and, under the circumstances, our original holding was not and could not have been in any manner based on any of the exceptions of that section. In our former opinion we held that the restrictions in article 10, § 5, supra, were designed to prohibit the State from contracting debts in the future on account of the promotion and construction of public works or improvements. This was the view in respect to the restriction in question entertained by this court in the case of Hovey v. Foster (1889), 118 Ind. 502, 21 N.E. 39, when it had under consideration the same section of the Constitution. In regard thereto the court in that case said: "It is apparent that the purpose with which this provision was framed and adopted was to impose restrictions upon the power of the legislature to authorize debts to be contracted on behalf of the State to an unlimited amount. * * * The evils of an enormous public debt, the legacy of the system of public improvements in which the State had theretofore embarked, were fresh in the minds of the people when the present Constitution was adopted. This was the mischief that was not to be repeated."

By the act under consideration no original debt was contracted by the State. The bonds to be issued were merely in payment of a previous obligation against the State in favor of Vincennes University, which arose long before our present Constitution came into existence; an obligation which the legislature, both before and after the adoption of this document, recognized and acknowledged. That the legislature under the act in controversy neither contracted nor intended to contract any new obligation by issuing the bonds, is made plain by the title to the act. The title discloses that the act proposed is for the issuing of bonds and coupons of the State "for the liquidation and payment of the claim of 'The Board of Trustees for the Vincennes University' against the State, in full and final settlement of said claim and all other demands." Certainly it would be absurd to assert that the legislature proposed to liquidate a debt which at the time did not exist. The term "liquidate" is defined to be the act of settling and adjusting debts, or ascertaining the amounts or balance due. 5 Words and Phrases 4180.

The debts forbidden to be contracted on behalf of the State, under the provisions of article 10, § 5, of the Constitution, were debts to be contracted in the future, and not debts, claims or obligations which existed against the State at the time of the adoption of the Constitution. As there is nothing in said § 5 to manifest any intention that it should have a retrospective effect, it must therefore be construed and held to operate prospectively only. Cooley, Const. Lim. (7th ed.) 97.

That the provisions of our present Constitution must be construed as operating prospectively, is affirmed in State v. Barbee (1851), 3 Ind. 258, and Hand v. Taylor (1853), 4 Ind. 409.

But appellant, upon the viewpoint assumed by him, discredits the finding of the legislature, and denies that there was any semblance of a preexisting claim which that body, in its discretion, had the right or power to liquidate. To sustain his contention he relies upon the decision in the case of State, ex rel., v. Hawes (1887), 112 Ind. 323, 14 N.E. 87. The question there presented was whether a township certificate executed by its trustee without any consideration therefor, and without authority of law, constituted an enforceable obligation against the township. It was held that such certificate was void. The court said: "It is essential to the idea of a debt, that an obligation must have arisen out of a contract, express or implied, in favor of some one occupying the relation of creditor, which entitles the latter to receive a sum of money, which obligation, by possibility, might, or ought to be, enforced against another."

In the later case of Quill v. City of Indianapolis (1890), 124 Ind. 292, 7 L. R. A. 681, 23 N.E. 788, this court, in considering the question as to whether certain street-improvement bonds created an indebtedness against the city of Indianapolis, speaking by Mitchell, J., said: "An indebtedness cannot arise unless there is either a legal, equitable or moral obligation to pay a sum of money to another, who occupies the relation of creditor, and who has a legal or moral right to call upon or constrain the debtor to pay. * * * It is not always essential, in order to the existence of an indebtedness, that there should be an absolute legal right to coerce payment, as in that sense the State could never become indebted. * * * It is, however, essential to the idea of a debt that an obligation should have arisen out of a contract, express or implied, which entitles the holder thereof unconditionally to receive from the promisor a sum of money which the latter is under a legal or moral duty to pay, without regard to any future contingency." This holding in this latter case completely refutes appellant's argument that there was no preexistent debt or claim which the legislature had the right to liquidate.

As the authorities affirm, the preamble in a statute is a prefatory statement or explanation. It purports to state the reason or occasion for making the law to which it is prefixed. It usually discloses the intention of the legislature in enacting the statute. 2 Lewis's Sutherland, Stat. Constr. (2d ed.) § 341. See, also, Smith v. State (1867), 28 Ind. 321.

The preamble of the act in question may be said to contain the finding of facts by the legislature which led up to the passage of the act in controversy. It recites, among other things, that in 1804 the Congress of the United States set apart 23,040 acres of land in the Vincennes land district for a seminary of learning in that district; that in the years of 1806 and 1807 the legislature of the Indiana Territory authorized the board of trustees of the Vincennes University to take and hold this land for the use and maintenance of that institution; that in 1820, and subsequently thereto, the State of Indiana, through its legislature, assumed control and possession of 19,040 acres of this land, and appropriated it to its own use, sold it, and used the proceeds thereof. All of which, as further recited, was held by the Supreme Court of the United States to have been unwarranted and illegal. The same facts as found by the legislature are set up by appellant in his complaint.

Under the facts, and the law applicable thereto, it may be said that an implied legal liability was created against the State in favor of the board of trustees of the university. State v. Mutual Life Ins. Co., ante, 59. Of course such claim or liability was one that could not at the time have been enforced against the State by a suit in court, as the State could not be sued without its consent, secured through its legislative department.

It further appears, however, from the facts alleged by appellant in his complaint, that the legislature, on January 17, 1846 passed an act authorizing the trustees of said university to institute a suit against the State. This suit was instituted by the board of trustees in the Marion Circuit Court, and in 1849 judgment therein was rendered in its favor against the State on the claim. By this judgment the liability of the State--impliedly at least--was affirmed. Another payment in 1895 appears to have been authorized by the State to be...