Proctor v. Hunt, Civil 3338

• Decision Date: 26 February 1934
• Docket Number: Civil 3338
• Parties: B. D. PROCTOR, Appellant, v. GEO. W. P. HUNT, MIT SIMMS and ANA FROHMILLER, Appellees
• Court: Arizona Supreme Court

29 P.2d 1058

43 Ariz. 198

B. D. PROCTOR, Appellant, v. GEO. W. P. HUNT, MIT SIMMS and ANA FROHMILLER, Appellees

Civil No. 3338

Supreme Court of Arizona

February 26, 1934

APPEAL from a judgment of the Superior Court of the County of Maricopa. Henry C. Kelly, Judge. Judgment affirmed in part and reversed in part, with directions.

Mr. Wm C. Fields, for Appellant.

Messrs Baker & Whitney and Mr. Lawrence L. Howe, for Appellee Hunt.

Mr Arthur T. La Prade, Attorney General, and Mr. Charles L Strouss, Assistant Attorney General, for Appellees Simms and Frohmiller.

OPINION

LOCKWOOD, J.

This is an action brought by B. D. Proctor, hereinafter called plaintiff, against George W. P. Hunt, Mit Simms and Ana Frohmiller, at the time of filing this action being Governor, treasurer and auditor of the state of Arizona, whom we shall designate hereafter by the titles of their offices, under the provisions of section 105, Revised Code 1928, which reads as follows:

"§ 105. Officers and persons liable. Whenever any person whose duty it is to approve, audit, allow, or pay, claims or demands upon the state, shall approve, audit, allow or pay or consent to, or connive at, the approving, auditing, allowing, or paying of, any claim or demand against the state not authorized by law, such person, and the party in whose favor such claim or demand was made, shall be liable for any money thereby procured, and twenty per cent additional thereon, and legal interest upon such payment from the date thereof."

The complaint, after pleading the formal matters necessary as conditions precedent to the filing of such a suit, sets up thirty different causes of action, each describing a separate claim against the state, and alleging that the Governor formally and in writing allowed and approved of each of said claims; that thereafter the auditor issued her warrants upon the treasurer for the amounts set forth therein, and that the treasurer thereafter paid to the payees designated in the warrants the amount set forth therein. It states in substance that none of these claims were for a public purpose, but on the contrary were for expenditures made for personal and private use, with the exception of three items which were for the payment of certain salaries, and as to these it is alleged that the services, as set forth in the claim, were never performed.

The defendants demurred separately to the complaint on the ground that it did not state a cause of action as against any of them, which demurrers were by the court sustained, and, plaintiff electing to stand on his complaint, judgment was rendered against him, and this appeal was taken. We must, of course, under the record as it stands, assume that the allegations of the complaint are true, and determine the appeal upon that theory.

The question before us is whether or not the defendants, or any of them, are liable under section 105, supra, for their acts in approving, auditing, allowing or paying the said claims, or any of them. In order to determine this, we think it better first to discuss the general principles of law in regard to the expenditure of public moneys, applying to the facts as pleaded, and then to apply the principles, as we have determined them, to the allegations of the complaint.

It is, of course, axiomatic that money raised by public taxation is to be collected for public purposes only, and can only legally be spent for such purposes and not for the private or personal benefit of any individual. Sections 1 and 7, article 9, Constitution of Arizona. It is equally axiomatic that public money may not be spent, even for public purposes, unless somebody, authorized by the Constitution and the law to do so, has made an appropriation therefor. Section 5, article 9, Constitution of Arizona. Under our system of government, these appropriations may only be made by the direct authorization of the people, through the Constitution or an initiated act, or by an act of the legislature, which has plenary power over the expenditures of public money, except as restricted by the terms of the Constitution. This legislative power may be exercised directly, as in the various appropriation bills made by the legislature from time to time, or indirectly, through the establishment of subordinate municipal corporations, such as counties, cities, school districts and the like, and the authorizing of them to spend certain portions of the public money, but in the end all appropriations are based upon the affirmative act, either of the people or of the legislature.

In this case we need consider only direct appropriations made by the legislature, for it is only by virtue of these that it is claimed the action of the officers in question was justified. The first step toward the payment of money is an appropriation therefor. This may be made by the legislature through the means of either the general appropriation bill, or a special one. In the present instance it is claimed that the appropriation, which defendants contend authorized the expenditure of the money in question, is found in chapter 104, Session Laws of 1929, being the general appropriation bill adopted by the legislature at its regular session in 1929, section 1, subdivision 28, of which reads as follows:

"Subdivision 28. Governor. For the office of the Governor: . . . For the fiscal year beginning July 1, 1930, and ending June 30, 1931:

For Salaries

$ 25,500.00

For Operation

7,500.00

For Travel

2,000.00

For Capital Investment

475.00

For Repairs and Replacements

185.00

For Rewards

1,000.00

Contingent Use

5,000.00

Total Appropriation

$ 41,660.00"

Sections 2 and 4 of chapter 104, supra, read as follows:

"Section 2. The appropriations herein made are subject to the provisions of the State Financial Code in force July 1, 1922, as amended in 1928 Revised Statutes."

"Section 4. All claims for moneys appropriated or the disposition of which is provided for by the provisions of this act, shall be itemized and accompanied by proper vouchers and each claim shall be audited by the state auditor, who shall reject any voucher or claim or any part thereof, the money for which has not been previously appropriated by law. All said claims shall be verified and the forms of said claims and the verification thereof, shall be prescribed by the state auditor. The state auditor is hereby authorized and directed to draw his warrant upon the proper fund for the amount audited by him and the state treasurer is hereby authorized and directed to pay said warrant out of the fund upon which it is drawn, provided, that all claims for moneys appropriated by this act, shall be fully itemized and that no items shall be grouped under the word 'incidentals' or other general term covering more than one item; should any such items be grouped under the head of 'incidentals' or other general term the state auditor is hereby authorized and directed to reject such claim until it is properly itemized."

The state Financial Code appears in the Revised Code of 1928 as article 2 of chapter 60 thereof (section 2614 et seq.). Section 2619, Revised Code of 1928, being part of said Code, reads as follows:

"§ 2619. Presentation, approval and payment of claims. All claims against the state for an obligation authorized, required or permitted to be incurred by any state officer or agency, and not payable out of any special fund, or in a special manner, shall be paid only in the following manner: The claimant shall present an itemized claim, sworn to by him and approved by the head official of each office or state agency under which the obligation was incurred, or by some other officer thereof, if expressly authorized to approve; then presented to the state auditor and, if approved by him, he shall draw his warrant therefor on the state treasurer, who shall pay the same when countersigned by the governor and only out of the appropriation made therefor."

Section 28, Revised Code of 1928, defines the general duties of the auditor, and is in the following language:

"§ 28. Auditing of claims; other duties. The auditor shall: 1. Audit, adjust and settle the amount of claims against the state payable out of funds of the state, except only such claims as may be expressly required by law to be audited and settled by some other officer, and investigate any claim presented. If such an investigation discloses that all or any portion of any claim is not for an actual public purpose, connected with the activities of the office, board, commission, or department where the claim originated, he shall refuse to draw a warrant, except for such amount of each claim as appears to be for an actual public purpose. He shall state his reasons for rejection to the originating office, and a warrant shall not be drawn therefor until a new claim, fully itemized, stating specifically the actual public purpose of, and the necessity for each particular item or amount of expenditure referred to in the auditor's statement of reasons, is presented to the auditor properly verified by the oath of the person making the expenditure, and again approved for audit and warrant by the officer, board, commission, or department which in the first instance audited the rejected claim. If such verified claim is not filed, or if re-filed, if it does not then appear that a public purpose is in fact involved respecting the claim thereof, the auditor shall have power to again reject the claim, and report the fact of such rejection to the governor, and no warrant shall be drawn thereon, unless the governor specifically approves the claim in whole or in part."

We are of the opinion that, construing all of...