Kuhn v. Department of Treasury

• Decision Date: 02 March 1971
• Docket Number: No. 22,22
• Citation: 183 N.W.2d 796,384 Mich. 378
• Parties: Richard D. KUHN and Bruce E. Duke Contracting Company, a Michigan corporation, Plaintiffs-Appellants, v. DEPARTMENT OF TREASURY, Allison Green, State Treasurer and Clarence W. Lock, Commissioner, Department of Revenue Division of the Department of Treasury, Defendants-Appellees.
• Court: Michigan Supreme Court

Page 796

183 N.W.2d 796

384 Mich. 378

Richard D. KUHN and Bruce E. Duke Contracting Company, a Michigan corporation, Plaintiffs-Appellants, v. DEPARTMENT OF TREASURY, Allison Green, State Treasurer and Clarence W. Lock, Commissioner, Department of Revenue Division of the Department of Treasury, Defendants-Appellees.

No. 22.

Supreme Court of Michigan.

March 2, 1971.

Kuhn & Scupholm, Pontiac, for plaintiffs-appellants.

Frank J. Kelley, Atty. Gen., Robert A. Derengoski, Sol. Gen., William D. Dexter, Asst. Atty. Gen., Lansing, for defendants-appellees.

Before the Entire Bench, except T. G. KAVANAGH, WILLIAMS and SWAINSON, JJ.

T. M. KAVANAGH, Chief Justice.

On July 20, 1967, the Michigan Income Tax Act of 1967, ¹ (hereinafter referred to as 'the Act') was approved by the Governor. The Act was scheduled to take effect on October 1, 1967. ² Plaintiffs (appellants), a Michigan citizen taxpayer and a Michigan corporate taxpayer, filed a complaint in Oakland circuit court on September 13, 1967, requesting a declaratory judgment that the Act is unconstitutional and seeking injunctive relief against its enforcement. The department of the treasury, the state treasurer and the commissioner of the department of revenue were named as defendants (appellees). On October 4, 1967, the Honorable William R. Beasley, Oakland circuit judge, granted defendants' motion for summary judgment, treating it as a motion to dismiss. Following affirmance by the Court of Appeals, ³ plaintiffs was granted leave to appeal here. 382 Mich. 773.

Plaintiffs' first contention ⁴ is that the Act unconstitutionally deprives the individual plaintiff of the right to vote on referendum which he enjoys as a member of the public under Michigan Constitution of 1963, art. 2, § 9. The section reads, in pertinent part, as follows:

'The people reserve to themselves * * * the power to approve or reject laws enacted by the legislature, called the referendum. * * * The power of referendum does not extend to acts * * * to meet deficiencies in state funds and must be invoked in the manner prescribed by law ⁵ within 90 days following the final adjournment of the legislative session at which the law was enacted.'

The first section ⁶ of the Act begins, 'This act is for the purpose of meeting deficiencies in state funds.' Section 498 ⁷ reads, 'This act is expressly declared to be necessary to meet established deficiencies, present and furture, in state funds.' The final section ⁸ provides that the Act shall not take effect

'unless the estimated revenues to be collected therefrom are required to meet deficiencies in state funds resulting from appropriations for the expenses of state government and all state institutions contained in total appropriations enacted into law during the current session of the legislature for the fiscal year ending June 30, 1968.'

Plaintiffs' complaint alleged that there was no deficiency in state funds at the time the Act was enacted. ⁹ They contend, therefore, that the legislature inserted the language regarding meeting deficiencies in state funds into the Act in a devious attempt to avoid the people's constitutional power of referendum in view of the abovequoted restrictions on that power.

We will not concern ourselves with the legislators' motives for inserting the language regarding deficiencies in the Act. As pointed out in C. F. Smith Co. v. Fitzgerald (1935), 270 Mich. 659, at 681, 259 N.W. 352, at 360:

"Courts are not concerned with the motives which actuate the members of the legislative body in enacting a law, but in the results of their action. Bad motives might inspire a law which appeared on its face and proved valid and beneficial, while a bad and invalid law might be, and sometimes is, passed with good intent and the best of motives.' People v. Gibbs (1915), 186 Mich. 127, 134, 152 N.W. 1053, 1055, Ann.Cas.1917B, 830.'

Our review is thus limited to determining whether the phrase 'deficiencies in state funds' in art. 2, § 9 of the 1963 Constitution encompasses future deficiencies--including those virtually or actually certain to occur as a result of present appropriations--or whether the language refers only to actual deficiencies in state funds existing at the time the statute in question was enacted.

We note at the outset that in construing constitutional language we look not for the interpretation which lawyers and legislators, or others well-versed in the subtle shades of meaning of which the English language is capable, might apply. Rather, we adopt the meaning which the ordinary citizens who ratified the Constitution would attach to the words under consideration.

"A Constitution is made for the people and by the people. The interpretation that should be given it is that which reasonable minds, the great mass of the people themselves, would give it; 'for as the Constitution does not derive its force from the convention which framed, but from the people who ratified it, the intent to be arrived at is that of the people, and it is not to be supposed that they have looked for any dark or abstruse meaning in the words employed, But rather that they have accepted them in the sense most obvious to the common understanding, and ratified the instrument in the belief that that was the sense designed to be conveyed.' (Cooley's Constitutional Limitations (6th ed.), 81.)" Michigan Farm Bureau v. Secretary of State (1967), 379 Mich. 387, 391, 151 N.W.2d 797, 799.

Furthermore, under a system of government based on grants of power from the people, constitutional provisions by which the people reserve to themselves a direct legislative voice ought to be liberally construed. ¹⁰ Michigan Farm Bureau v. Secretary of State, Supra; 42 Am.Jur.2d, Initiative and Referendum, § 5. Previous decisions of this Court requiring strict compliance with constitutionally mandated procedures for exercise of the powers of initiative and referendum should not be read as limiting the occasions, upon which those powers may be exercised. See Leininger v. Secretary of State (1947), 316 Mich. 644, 26 N.W.2d 348; Scott v. Secretary of State (1918), 202 Mich. 629, 168 N.W. 709; Thompson v. Secretary of State (1916), 192 Mich. 512, 159 N.W. 65. ¹¹

Applying the above principles of construction to the constitutional provision under consideration, we think the conclusion that 'deficiencies in state funds' refers only to such deficiencies as exist at the time of passage of the Act in question is inescapable. If the drafters of the Constitution wanted the people to more severely restrict the reserved power of referendum, they should have plainly so advised them by inserting 'present or future,' or some such phrase, before 'deficiencies' in art. 2, § 9. We may not stretch the language ratified by the people so as to allow revenue statutes to avoid the possibility of referendum by reference to Anticipated deficiencies, ¹² resulting from future, simultaneous or even previous appropriations. Since defendants have not denied there was no deficiency in state funds when the Act was passed, we hold that the Michigan Income Tax Act of 1967 was subject to referendum.

Accordingly, defendants were not entitled to summary dismissal of plaintiffs' declaratory judgment action prior to 90 days after adjournment of the 1967 legislative session. Although this constitutional deadline for invoking the power of referendum has long since passed, plaintiffs' prayer for relief, relying vaguely on our equity powers, requests that we now 'provide an adequate time for securing the required number of signatures.' To so act and thus allow referendum petition campaigns to go on for years flies in the face of the constitutionally mandated time limit. We quote with approval from the Court of Appeals opinion:

'Under the circumstance that the attorney general was taking the position that the income tax act was not subject to the power of referendum, the plaintiffs were entirely justified in seeking a declaratory judgment as to their right of referendum before going to the trouble and expense of obtaining the large number of signatures required to place the question on the ballot.

'In a case of this kind the moving party is entitled to an expeditious disposition by the courts so that the right of referendum guaranteed by the constitution is not jeopardized. The plaintiffs in this case obtained such an expeditious disposition at the trial court level.

'Their claim of appeal was filed October 19, 1967. No application for emergency consideration by our Court or for by-pass of our Court or for emergency consideration was filed with the Supreme Court.

'There is no provision in the constitution extending the time within which a referendum may be sought by reason of the pendency of litigation and it would be extraordinary for the courts to declare such an extension of time. If the plaintiffs desired to exercise the power of referendum they were obliged to proceed within the time provided by the constitution to obtain signatures. It is not claimed that any such effort was made. We conclude that the time for seeking a referendum on the income tax act has expired.' (15 Mich.App. 364, at 375, 376, 166 N.W.2d 697, at 703.)

We hold plaintiffs' failure to comply with the constitutional requirements within 90 days from the adjournment of the legislature precludes any action at this time by this Court.

Plaintiffs' next contention is that the Act violates Michigan Constitution of 1963, art. 4, § 24, ¹³ because in addition to imposing a tax it appropriates three million dollars to the revenue division of the department of treasury to cover initial expenses of administration and enforcement. ¹⁴ This Court has long and consistently said that art. 4, § 24, and similar 'one object' provisions in earlier constitutions, are to be construed reasonably 'and not in so narrow and technical a sense as unnecessarily to embarrass legislation.' Ryerson v. Utley (1868), 16 Mich. 269, 277, citing People ex rel....