Lewis v. Brady

• Decision Date: 12 November 1909
• Citation: 104 P. 900,17 Idaho 251
• Parties: M. E. LEWIS, GERTRUDE L. HAYS, O. E. MCCUTCHEON, E. S. SWEET, and E. H. MOFFETT, as the Regents of the University of Idaho, Plaintiffs, v. JAMES H. BRADY, Governor, C. A. HASTINGS, Treasurer, ROBERT LANSDON, Secretary of State, and DANIEL MCDOUGALL, Attorney General of the State of Idaho, Defendants
• Court: Idaho Supreme Court

104 P. 900

17 Idaho 251

M. E. LEWIS, GERTRUDE L. HAYS, O. E. MCCUTCHEON, E. S. SWEET, and E. H. MOFFETT, as the Regents of the University of Idaho, Plaintiffs, v. JAMES H. BRADY, Governor, C. A. HASTINGS, Treasurer, ROBERT LANSDON, Secretary of State, and DANIEL MCDOUGALL, Attorney General of the State of Idaho, Defendants

Supreme Court of Idaho

November 12, 1909

CONSTITUTIONAL LAW-CONSTITUTIONAL DEBT LIMITATION - ASSESSED VALUATION OF THE STATE-SECTION 1, ART. 8, OF THE CONSTITUTION.

1. The words "debt" and "liability," as used in section 1, art. 8, of the constitution, are not employed in a technical sense, but have special reference to the basic warrant and legislative authority on which a state contract must rest and on which alone a public debt must find its sanction in order to obligate the state to pay.

2. Under the provisions of sec. 1, art. 8, of the constitution the basis for computation by the legislature in creating public indebtedness is "the assessed value of the taxable property of the state," and this is a present standard for the guidance of the legislature, and has reference to existing facts and conditions at the time the legislature acts on such legislation.

3. Under the provisions of sec. 1, art. 8, of the constitution the legislature in the passage of an act creating public indebtedness must be governed by the assessed value of the taxable property of the state as the same has been ascertained and then exists, and such legislation cannot anticipate the future and leave the ascertainment of the assessed valuation to the future acts of ministerial and executive officers.

(Syllabus by the court.)

Original action by the board of regents of the State University against the governor, state treasurer, secretary of state, and attorney general, to compel the issuance and sale of certain state bonds as authorized by an act, entitled "An act providing for the issuance and sale of state bonds in the aggregate sum of seventy-three thousand dollars ($ 73,000), and appropriating the proceeds thereof to the University of Idaho for completing the main or administration building, the central heating plant, for the purchase of lands, and for other equipment and improvements, and authorizing the levy of an annual ad valorem tax for providing a sinking fund for the payment of such bonds at maturity and the interest thereon," approved March 17, 1909. Demurrer to the complaint and petition sustained and action dismissed.

Demurrer sustained, and action dismissed.

Richards & Haga, for Petitioners.

To create a debt in the sense used in sec. 1, art. 8, Idaho constitution, the state must enter into an obligation to pay. This obligation cannot be entered into so that a debt may be thereby created until the legislature authorizes the creation of a debt and the proper officers prepare and execute the bonds and the same have been sold and delivered. (In re Contracting of State Debt by Loan, 21 Colo. 399, 41 P. 1111.)

A statute passed to take effect at a future day must be understood as speaking from the time it goes into operation and not from the time of passage. Before that time, no rights may be acquired under it, and no one is bound to regulate his conduct according to its terms; it is equivalent to a legislative declaration that the statute shall have no effect until the designated day. (Santa Cruz Water Co. v. Kron, 74 Cal. 222, 15 P. 772; Rice v. Ruddiman, 10 Mich. 125; Brown v. State (Wis.), 119 N.W. 338; Whittaker v. Mutual L. Ins. Co., 133 Mo.App. 664, 114 S.W. 53; James v. State University (Ky.), 114 S.W. 767.) Sec. 22, art. 3 of the constitution clearly leaves it to the discretion of the legislature to determine the date when an act shall go into effect. (Shoshone County v. Thompson, 11 Idaho 141, 81 P. 73.)

The legislature has the right to say when the debt authorized shall become an obligation of the state, and if at that time the constitutional limit is not exceeded, the issue authorized is valid. (James v. State University (Ky.), 114 S.W. 767.)

D. C. McDougall, Attorney General, and J. H. Peterson, Assistant, for Defendants.

Where the word "assessed value" or "assessment" is used, and is made a basis for calculation, it is the assessment which is completed, fixed and final. (Gray, Limitations of Taxing Power, p. 1115; Culbertson v. City of Fulton, 127 Ill. 30, 18 N.E. 781; Prickett v. City of Marceline, 65 F. 469; Board of Commrs. v. Standley, 24 Colo. 1, 49 P. 23; Abbott, Mun. Corp., p. 347.)

While the debt was not complete and consummated until the issuing of the bonds, it nevertheless was an obligation or liability immediately the act was placed on the statute books. (Law v. People, 87 Ill. 385; Johnson v. Co. Commrs., 27 Minn. 64, 6 N.W. 411; Johnson v. Co. Commrs., 93 Minn. 290, 101 N.W. 181; Kuchli v. Minneapolis, 58 Minn. 418, 49 Am. St. 523, 59 N.W. 1088; Beard v. Hopkinsville, 95 Ky. 239, 44 Am. St. 222, 24 S.W. 872, 23 L. R. A. 402, and note; Burlington Water Co. v. Woodward, 49 Iowa 58; Prince v. City of Quincy, 128 Ill. 443, 21 N.E. 768.)

The court should apply a strict rule of construction in determining whether or not the legislature had a right to assume the indebtedness contended for in this act. (1 Abbott, Mun. Corp., p. 324.)

"Acts inconsistent with the spirit of the constitution are as much prohibited by its terms as are acts specifically enumerated and forbidden therein." (McDonald v. Doust, 11 Idaho 14, 81 P. 60, 69 L. R. A. 220.)

AILSHIE, J. Sullivan, C. J., and Stewart, J., concur.

OPINION

AILSHIE, J.

This is an original application for a writ of mandate. It is prosecuted by the board of regents of the State University against the governor, secretary of state, attorney general, and treasurer of the state of Idaho, officers composing a board for the purpose of the issuance and sale of certain bonds of the state of Idaho to be known as "University of Idaho Rebuilding and Equipment Bonds of 1909, Series A."

It is alleged that under the provisions of an act of the legislature approved March 17, 1909 (1909 Sess. Laws, p. 407), entitled "An act providing for the issuance and sale of state bonds in the aggregate sum of seventy-three thousand dollars ($ 73,000), and appropriating the proceeds thereof to the University of Idaho for completing the main or administration building, the central heating plant, for the purchase of lands, and for other equipment and improvements, and authorizing the levy of an annual ad valorem tax for providing a sinking fund for the payment of such bonds at maturity and the interest thereon," the defendants are empowered and directed to issue and sell thirty bonds of the state of Idaho of the par value of $ 1,000 each, payable in two years after date of their issuance, and bearing interest at a rate not to exceed six per cent per annum, the receipts from such sale to be available for the use of the State University as specified and designated in the act.

An examination of the act itself discloses that it authorizes the issuance and sale of bonds in the aggregate amount of $ 73,000, that the first $ 30,000 of the issue should be made on September 1, 1909, and the remainder of $ 43,000 should be made on September 1, 1910. The reason which prompted the legislature to defer the issuance of these bonds was that at the time of the passage of this act the state indebtedness was within about $ 1,300 of the constitutional limit, as prescribed by sec. 1, art. 8, of the state constitution. The purpose of deferring the issuance of these bonds is very clearly and forcibly indicated by a proviso added to sec. 2 of the act. It reads as follows:

"Provided, always, that in the issue of the bonds provided for by this act the constitutional limit of state indebtedness be not exceeded, and that the retirement of outstanding bonds, or the increase of the assessed valuation of the state, or both, occurring between the date of the passage of this act and the dates of issuance of said bonds, be sufficient to bring the issues of bonds provided for in this act within the constitutional limit of state indebtedness."

It is alleged in the petition that the state treasurer, and the other state officers acting in conjunction with him, decline and refuse to issue and negotiate the bonds provided to be issued on September 1, 1909, and the petitioners pray that a writ of mandate issue against them, requiring and compelling them to proceed in conformity with the act of March 17, 1909, and issue and negotiate $ 30,000 worth of bonds.

Defendants demurred to the petition, and among other grounds alleged that the act of March 17, 1909, which purports to authorize and direct the issuance of these bonds, is unconstitutional and void as being in violation of sec. 1, art. 8, of the state constitution. The portion of that section involved in this case reads as follows: "The legislature shall not in any manner...