Power Oil Company v. Cochran

• Decision Date: 10 January 1941
• Docket Number: 31068
• Citation: 295 N.W. 805,138 Neb. 827
• Parties: POWER OIL COMPANY ET AL., APPELLEES, v. R. L. COCHRAN ET AL., APPELLANTS
• Court: Nebraska Supreme Court

295 N.W. 805

138 Neb. 827

POWER OIL COMPANY ET AL., APPELLEES, v. R. L. COCHRAN ET AL., APPELLANTS

No. 31068

Supreme Court of Nebraska

January 10, 1941

APPEAL from the district court for Lancaster county: JOHN L. POLK JUDGE. Affirmed in part and reversed in part.

AFFIRMED IN PART AND REVERSED IN PART.

Syllabus by the Court.

1. An inspection fee which is in an amount reasonably necessary to defray the expense of inspection is proper and will not be disturbed.

2. If inspection fees are in excess of an amount reasonably necessary to defray the expense of inspections and due proper and timely challenge is made, it is required of the courts that they hold the excess over the then amount reasonably necessary to defray the expense of inspection unconstitutional, null and void.

3. After the expiration of each biennium and the first fiscal quarter after the next regular session of the legislature, all excesses of inspection fees over and above costs of inspection lapse and cannot be spent or used for any purpose except by appropriation of the legislature.

4. After the expiration of the six-year period from July 1, 1933, to June 30, 1939, it was beyond the power of the courts to determine directly the question of the excessiveness of inspection fees for that period, the excess fee, if any, for that period having lapsed could not be spent or used for any purpose except by appropriation of the legislature.

5. The state and all of its various supported departments and agencies operate on a biennial basis requiring estimates and legislative appropriations for their requirements.

6. Following the enactment of Legislative Bill 331 (Laws 1939, ch. 85, Comp.St. Supp.1939, sec. 66-320), it became the duty of the chief of the bureau of motor fuels to make estimates of the probable income from inspection fees and also an estimate of the cost of necessary equipment, facilities and operations expense for proper, necessary and sufficient inspection.

7. The legislature having entrusted the function of determining the program for inspection of refined petroleum products to the division of motor fuels, the only subject for determination by the courts is the question of whether or not in the light of the program outlined the inspection fees provided by statute are reasonably necessary to defray the expense of inspection. If they are reasonably necessary, they will not be disturbed.

8. Whether or not the legislature acted wisely in reposing these broad powers in the division of motor fuels is not a matter for judicial determination. The courts are not arbiters of legislative wisdom, but function as a check upon unauthorized and unconstitutional assumptions of power.

9. In case of a statute fixing the amount of inspection fees, such legislation should be construed prospectively unless the statute itself clearly indicates that it shall be construed retrospectively.

10. Evidence examined and held that the difference between estimated income from inspection fees after July 1, 1939, and estimated cost of inspection is not shown to be unreasonable.

11. Evidence examined and held that no evidentiary basis appears from which the reasonable cost of inspection after July 1, 1939, can be ascertained or reasonably estimated.

12. The bureau of dairies, foods and drugs being a legal and proper agency of state government and entitled to appropriations for its support out of revenues of state and the sum of $97,198.60 appropriated to it under Legislative Bill 521 (Laws 1939, ch. 133) having been appropriated from lapsed funds accumulated from inspection of refined petroleum products, the action of the legislature was a valid and constitutional act.

13. The power resides in the legislature of this state to make expenditures for advertising, which advertising is for the public benefit.

14. The legislature, subject only to the initiative and referendum, and constitutional inhibitions, and provided that legislation is for a public purpose, has an unlimited field within which to legislate.

15. Held that the act creating the Nebraska Advertising Commission and the appropriation for its use is not unconstitutional, the purposes contemplated by the act not being inhibited by the Constitution and they being in the interest of the public welfare.

16. Section 20-2231, Comp.St.1929, which provides that no bond for costs, appeal or supersedeas shall be required of the state, state officer, state board, state commission, head of any state department, agent or employee of the state, in any proceedings or court action in which said state officer, board, commission, head of department, agent or employee is a party litigant in its or his official capacity, was applicable in the appeal of the defendants from the district court.

17. In cases where the statute makes no provision for a supersedeas as a matter of right, the court may in its discretion allow a supersedeas upon conditions which it may affix.

Appeal from District Court, Lancaster County; Polk, Judge.

Action by the Power Oil Company and others against R. L. Cochran, Governor of the state of Nebraska, and others, to have Laws 1933, c. 116, § 3, and Laws 1939, c. 130, and c. 133, § 38, declared unconstitutional and for an injunction and an accounting. From the decree, defendants appeal and plaintiffs cross-appeal.

Decree affirmed in part and in part reversed and remanded.

Walter R. Johnson, Attorney General, and Clarence S. Beck, for appellants.

George I. Craven, contra.

Kennedy, Holland, De Lacy & Svoboda, amici curiae.

Heard before SIMMONS, C. J., ROSE, EBERLY, PAINE, MESSMORE and YEAGER, JJ., and ELDRED, District Judge.

OPINION

YEAGER, J.

This is a case wherein Power Oil Company, a corporation, a dealer in, and importer of, refined petroleum products in the state of Nebraska, and 92 other such dealers similarly situated, joined in the institution of this action in the district court for Lancaster county, Nebraska, against R. L. Cochran, governor, and a member of the Nebraska Advertising Commission; Louis Buchholz, director of the department of agriculture and inspection; John A. Ainlay, chief of the department of motor fuels, secretary and a member of the Nebraska Advertising Commission; John Havekost, state treasurer; Ray C. Johnson, auditor of public accounts; Grove Porter, Frank Bell, Jr., Harry Miller, Wade Martin, and Keith Neville, members of the Nebraska Advertising Commission; the department of agriculture and inspection, and the Nebraska Advertising Commission. The action is for the benefit of the plaintiffs and all others similarly situated in the state of Nebraska.

The purposes of the action, briefly stated, are (1) to have declared unconstitutional, null and void section 3 of House Roll 388 (Laws 1933, ch. 116, Comp. St. Supp. 1939, sec. 66-303), being the section of the statute providing for inspection fees for inspection and testing of motor or vehicle fuels, gasoline, kerosene, and other products of petroleum manufactured, sold or offered for sale in this state for illumination, heating, cleaning and power purposes, hereinafter referred to as refined petroleum products; (2) to have Legislative Bill 471 (Laws 1939, ch. 130), being the so-called State Advertising Law, declared unconstitutional, null and void; (3) to have section 38 of Legislative Bill 521 (Laws 1939, ch. 133) declared unconstitutional, being a part of a general appropriation bill wherein $ 97,198.60 was appropriated to the bureau of dairies, foods and drugs from excess fees in the refined petroleum products inspection fund, which fees had accumulated as an unexpended balance for the biennium beginning in 1937 and ending in 1939; (4) to enjoin and prevent the defendants from collecting inspection fees fixed by said section 3 of House Roll 388, or, in the alternative, that they be enjoined from collecting fees in excess of 0.7 cents per 50-gallon barrel, the statutory fee being 1 1/2 cents per 50-gallon barrel; (5) to enjoin the defendants from enforcing any part of section 3 of Legislative Bill 471, being the section providing the appropriation of $ 50,000 for the Nebraska Advertising Commission; and (6) that an accounting be had of all fees collected under said section 3 of House Roll 388, and that the court devise a plan whereby the plaintiffs and all others similarly situated could present and make proof of claims against the claimed excess in the fund accumulated from inspection fees provided for by the act; that the claims be apportioned and that no further fees be collected until future fees of the plaintiffs at the rate of 0.7 cents per 50-gallon barrel should equal the claimed excess fees in the fund and that thereafter the inspection fee should be collected but not exceed 0.7 cents per 50-gallon barrel.

The case was tried to the court and at the conclusion of the trial the court found that said section 3 of House Roll 388 was not unconstitutional in toto, but that the collection of inspection fees thereunder in excess of 0.7 cents per 50-gallon barrel was unconstitutional, null and void, and enjoined collection of fees in excess of such rate that said Legislative Bill 471 was not unconstitutional, null and void; that said Legislative Bill 521 was not unconstitutional, null and void; that an injunction to enjoin the enforcement of any part of section 3 of said Legislative Bill 471 should not be granted; and that an accounting of the fees collected under section 3 of House Roll 388 and the other relief prayed for in connection therewith should be denied. From the parts of the decree which are favorable to plaintiffs the defendants have appealed and from those that are in favor of defendants the plaintiffs have cross-appealed. And incidentally on order of the district court, duly...