People ex rel. Capron v. Nelson
| Decision Date | 30 April 1931 |
| Docket Number | No. 20864.,20864. |
| Citation | 344 Ill. 46,176 N.E. 59 |
| Parties | PEOPLE ex rel. CAPRON v. NELSON, Auditor of Public Accounts. |
| Court | Illinois Supreme Court |
OPINION TEXT STARTS HERE
Original petition by the People, on the relation of Hazen S. Capron, against Oscar Nelson, Auditor of Public Accounts, for mandamus.
Writ awarded.
Sveinbjorn Johnson, of Urbana (Dryer & Brown, of Hillsboro, of counsel), for petitioner.
Oscar E. Carlstrom, Atty. Gen. (B. L. Catron, of Springfield, of counsel), for defendant.
This is an original petition for mandamus filed by leave of court on behalf of the petitioner, Hazen S. Capron, as a citizen and taxpayer and as treasurer of the board of trustees of the University of Illinois, by which a writ is sought directing defendant, as auditor of public accounts, to register certain tax anticipation notes issued under authority of an act entitled ‘An act in relation to the anticipation of taxes levied by the State of Illinois,’ approved and in force April 13, 1931. The auditor of public accounts has demurred to the petition, and the facts alleged in said petition are to be taken as true. They are as follows:
A large portion of the taxes levied and extended for state purposes for the year 1929 are, by reason of delay in collection, still uncollected, and have not been paid into the state treasury. These uncollected taxes amount to several million dollars. The relator, as treasurer of the board of trustees of the University of Illinois, states in his petition that, by reason of the delay in collection of state revenues, there will exist in the University of Illinois fund on July 1 a deficit of approximately $1,100,000, that said fund is now depleted, and has been since the 1st of April, 1931, and contains no money with which to meet the ordinary expenses of the university, and that by May 1 there will be a deficit in that fund of $440,000. To meet this situation, and a similar situation in other expense funds of the state, the General Assembly enacted the following act, which by reason of an emergency clause contained therein became on its passage and approval, and now is, if valid, in full force and effect. This act is as follows:
‘Sec. 1. If at any time prior to July 1, 1933, the moneys in any fund in the State treasury defined by law become or are about to become insufficient to meet expenses of the State payable from such fund, and taxes have theretofore been levied by the General Assembly payable into such fund in the State treasury, and the Governor, the Treasurer and the Auditor of Public Accounts have computed the rate per cent required for such levy, and such rate has been certified to the several county clerks, the Governor, the Treasurer and the Auditor of Public Accounts are authorized to provide moneys in such fund by the issuance and sale from time to time of notes drawn against and in anticipation of such taxes.
‘Sec. 2. Notes so issued shall be sold to the highest responsible bidder after such advertisement as shall be directed by the Governor, the Treasurer and the Auditor of Public Accounts. The proceeds of such sale shall, in each case, be paid into the particular fund in the State treasury into which the taxes against and in anticipation of which such notes are issued, are required by law to be paid.
‘Sec. 3. Notes so issued in anticipation of taxes levied shall not be in excess of seventy-five per cent of the taxes so levied and not received into the State treasury. They shall bear interest at a rate to be fixed by the Governor, the Treasurer and the Auditor of Public Accounts but not to exceed six per cent. The denomination and form of these notes shall be fixed by the officers named. They shall be numbered and each shall bear the signatures of these officers, and shall be registered by the Auditor of Public Accounts in a book kept for that purpose. The notes shall state the particular State tax against and in anticipation of which they are issued and that the notes are payable, both principal and interest, solely from said tax when collected and not otherwise.
‘Sec. 4. Notes issued under this act shall be a pledge of so much of the taxes against which they were issued and shall be payable only out of and from the proceeds of such taxes and such taxes when received shall first be used for payment of the notes and interest thereon.
‘Sec. 5. The following named sums, or so much thereof as may be necessary, are appropriated to the Treasurer from the several funds stated but only from moneys received and held in such funds from taxes against and in anticipation of which notes have been issued in accordance with this act, for the purpose of paying the principal and interest of such notes:
From the general revenue fund ..... $15,500,000
From the University of Illinois fund ..... 3,500,000
From the common school fund ..... 13,000,000
From the waterway bond fund ..... 1,700,000
From the soldiers' compensation bond interest and retirement fund ..... 5,500,000
‘Sec. 6. These appropriations herein made are subject to the provisions of ‘An act in relation to State finance,’ approved June 10, 1919, as amended.
Pursuant to the provisions of the act, the Governor, the auditor of public accounts, and the state treasurer, on the 14th day of April, 1931, convened, as required by the act, and found that the University of Illinois fund in the state treasury is insufficient to meet ordinary and contingent expenses of the university, and further found that the state taxes for the year 1929 had theretofore been levied by the General Assembly, that the Governor, the state treasurer, and the auditor of public accounts had duly computed the rate required for the levy of such tax, which rate had been certified to the several county clerks and by them extended against the taxable property, and that the sum of $1,535,540 of such fund so levied and extended had not been paid into the state treasury. The Governor, the auditor of public accounts and the state treasurer, to provide funds to meet the deficiency in the University of Illinois fund, as required by this act, issued a certificate authorizing the issuance and sale of notes against and in anticipation of such taxes. Section 1 of this certificate and authorization is as follows:
The certificate of the Governor, auditor of public accounts and state treasurer also prescribed the form of tax anticipation note to be used, which form is in compliance with said act. It also directs that the taxes to be paid into the University of Illinois fund shall be pledged for the payment of the tax anticipation notes, and that such taxes, when paid in, shall first be used for the payment of those notes. This certificate also provided for the sale of the notes to the highest responsible bidders, as required by the act.
Pursuant to the finding of the certificate, the Governor, treasurer, and auditor issued one of the tax anticipation notes as a part of the total issue of $440,000 against the taxes to be paid into the University of Illinois fund, which note is in the sum of $25,000, and is in form and substance as required by the act and as provided in said certificate. These officials signed this note on april 14, 1931. The relator avers that the defendant, as auditor of public accounts, has refused to register such note or any tax anticipation note which might be issued under authority of said act and certificate. These notes so prepared and issued by the said officials are in anticipation of the taxes for the year 1929 already levied and extended and to be paid into the University of Illinois fund, but not as yet received into the state treasury.
The petition alleges that an emergency exists, in that the moneys in the University of Illinois fund have become insufficient to meet the expenses of the university payable from such fund, and that such emergency is within the meaning and purpose of the said act. The defendant has demurred to the petition, and raises the question of the validity of the act.
It is argued by the Attorney General that this act provides for the creation of a debt, against the prohibition of section 18 of article 4 of the Constitution. That section, so far as applicable here, is as follows: ‘Each general assembly shall provide for all the appropriations necessary for the ordinary and contingent expenses of...
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