In re State to Issue Bonds to Fund Indebttedness

• Decision Date: 15 November 1912
• Docket Number: Case Number: 4125
• Citation: 33 Okla. 797,127 P. 1065,1912 OK 702
• Parties: In re APPLICATION OF STATE TO ISSUE BONDS TO FUND INDEBTTEDNESS.
• Court: Oklahoma Supreme Court

1912 OK 702

127 P. 1065

33 Okla. 797

In re APPLICATION OF STATE TO ISSUE BONDS TO FUND INDEBTTEDNESS.

Case Number: 4125

Supreme Court of Oklahoma

Decided: November 15, 1912

Syllabus

¶0 1. STATES--Creation of Debt--Constitutional Limitations--Application. The limitations of section 23, art. 10, Williams' Ann. Const. Okla., were not intended to apply to that class of pecuniary obligations arising out of the ordinary necessary current expense of maintaining the state government, and which were in good faith intended to be paid, and were lawfully payable, out of the current yearly revenues and other resources of the state, for the fiscal year within which such obligations were incurred.

2. STATUTES--Repeal--Implication. The law does not favor repeals by implication; and where a subsequent statute deals fully with part of the subjects embraced within a former one, but makes no mention of other subjects fully provided for in the former statute, such subjects not mentioned in the later act are not repealed by implication.

3. STATES--Indebtedness--Refund--Statutes--Repeal. Sections 372 to 381, inclusive, Comp. Laws 1909, furnish authority and procedure for refunding the outstanding legal warrant indebtedness of the state, and said sections, in so far as they relate to refunding state indebtedness, were not repealed by implication by the subsequent enactment of sections 408 to 421, inclusive, Comp. Laws 1909.

4. SAME--Fiscal Management--Deficiencies--Constitutional Provisions. The provisions of section 3, art. 10, Williams' Ann. Const. Okla., for paying deficiencies, which may arise during any fiscal year, where the ordinary current expenses of the state exceed its income from current taxation and other resources, is not exclusive.

5. SAME--Warrants--Refunding--Bonds. Section 377, art. 1, c. 8, Comp. Laws 1909, governs the time and manner of payment of bonds of the state issued for the purpose of refunding the character of warrants involved in this suit.

Carmichael and Harrison, Special Justices, dissenting.

Chas. West, Atty. Gen., for petitioners. Wright & Blinn, for protestants.

BREWER, SPECIAL JUSTICE.

¶1 This is a proceeding brought in the district court of Oklahoma county by the state, through the Governor, Secretary of State, and the State Treasurer, for the purpose of refunding certain outstanding state warrants, alleged to be legal and valid, aggregating an amount somewhat in excess of $ 2,000,000. These warrants, it is made appear, were issued from time to time, principally during the fiscal year ending June 30, 1911, in payment of the ordinary current expenses of maintaining the state government, and pursuant to valid legislative appropriations of the current revenues of the state, for which provision had been made by a levy of a tax, which, in addition to revenue derived from other sources, was believed to be sufficient to meet the appropriations against which the warrants were drawn. It is alleged that the state has no funds with which to pay these warrants, and desires to fund the same by issuing its negotiable bonds, pursuant to law, and that its plan of refunding is agreeable to the holders and owners of the warrants. At the hearing certain citizens of the state filed protests raising the following legal questions: (1) That to issue funding bonds in excess of $ 400,000 would be in violation of section 23, art. 10, of the Constitution. (2) That article 7, Comp. Laws 1909, containing sections 408 to 421, inclusive, is a general act and repeals article 1, c. 8, Comp. Laws 1909, containing sections 372 to 381, inclusive, and therefore there is no lawful authority to fund or bond the indebtedness. (3) That section 3, art. 10, of the Constitution, and certain legislative enactments, provide for the payment of these warrants by the levy of a tax. (4) That to issue said bonds for a serial period as proposed in this proceeding would be in violation of section 4, of article 10 of the Constitution. (5) Revenue levied and collected for defraying expenses of state government for the fiscal year ending June 30, 1911, cannot be applied to the payment of indebtedness accruing in a previous fiscal year. The protests were treated as a demurrer in the court below and were sustained, and the right to refund the said warrant indebtedness was denied, to reverse which action and holding of the court this proceeding in error was commenced. Whether the issuance of the proposed bonds is in violation of the section of the Constitution invoked depends upon whether or not issuing warrants or the incurring of obligations for the payment of the ordinary current expenses of maintaining the state government against legislative appropriations therefor, and within the estimated amount of the current revenues of the state, provided for the year in which the warrants are issued, is the creation of an indebtedness within the meaning of that section. Section 23, art. 10, Williams' Ann. Const. Okla., is as follows:

"The state may, to meet casual deficits or failure in revenues, or for expenses not provided for, contract debts; but such debts, direct and contingent, singly or in the aggregate, shall not, at any time, exceed four hundred thousand dollars, and the moneys arising from the loans creating such debts shall be applied to the purpose for which they were obtained or to repay the debts so contracted, and to no other purpose whatever."

¶2 Section 24 of the same chapter empowers the state to contract debts to repel invasion, etc., and section 25 provides that:

"Except the debts specified in section twenty-three and twenty-four of this article, no debts shall be hereafter contracted by or on behalf of this state, unless such debt shall be authorized by law for some work or object, to be distinctly specified therein; and such law shall impose and provide for the collection of a direct annual tax to pay, and sufficient to pay, the interest on such debt as it falls due and also to pay and discharge the principal of such debt within twenty-five years from the time of the contracting thereof. No such law shall take effect until it shall, at a general election, have been submitted to the people and have a majority of all the votes cast for and against it at such election. On the final passage of such bill in either House of the Legislature, the question shall be taken by yeas and nays to be duly entered on the journals thereof, and shall be: 'Shall this bill pass, and ought the same receive the sanction of the people.'"

¶3 The contention made here by those opposing the issuance of bonds, boldly stated, and stripped of its verbiage, is in its legitimate effect that all the outstanding warrants of the state, no matter for what purpose issued, in excess of the limit named in section 23, art. 10, are void, and that, therefore, the state, not owing them, cannot issue bonds to pay them, as that would be the creation of a debt in violation of said limitation. If the state does not owe them already, or rather the sums they represent, then the contention is sound. On the other hand, if these warrants were issued legally, under the authority of other provisions of the Constitution, and laws in harmony with such provisions, and at the time of issue did not impinge upon that section--that is, if they were legal, and represented valid obligations in their inception, not inimical to that section, and the mere fact that, without fraud, and contrary to the reasonable provisions made by the officers for revenue, and contrary to their honest expectations, a failure of the anticipated and provided revenue prevents their payment--then can it be said that section 23, not operative at the time of their issue, becomes operative now, and makes that now invalid which when issued was valid? The language of section 23, read alone, and without considering other sections of the Constitution, is capable of such a sweeping construction. But it is a fundamental rule of construction that, to determine the meaning and scope of one provision of an act, it must be read in the light of, and with due regard for, other provisions of the act. A provision, however, is not always held to mean what its exact letter may imply where to so hold would be unreasonable or bring about an absurd result or would render nugatory other provisions. The old illustration of blood-letting in the streets is familiar to every lawyer. A statute provided that prisoners who escaped from jail should be hanged, but, when the prison caught fire and the prisoners escaped, the court did not sentence them to be hanged, and said that it was unreasonable that a man "should be hanged because he would not stay and be burnt." It is well to remember that the state was created by the people to perform for them certain functions, and the necessity for the performance of these functions is the sole and only object of the creation of the state. The Constitution provides for a Governor and the various other administrative officers of the state and prescribes the salaries they shall receive; for a legislative department, fixing the compensation of the legislators. It provides for a judicial system, stipulating the salary of the judges. These departments and co-ordinate branches of government are impotent in the performance of the various duties made mandatory by the Constitution, and necessary for the protection and well-being of the people, without other necessary subordinate officers, and the equipment and facilities needed in performing their required duties. It acknowledges it a duty to care for and maintain the insane and feeble-minded, and that the convicted criminals shall be restrained from going at large and preying upon and terrorizing society. It also provides for a free public school system, including higher education, and for the establishment and support of institutions for the care and education, of the deaf, dumb, and blind. The maintenance of these things is absolutely necessary under any humane and...