Rowe v. Stanley County

• Citation: 219 N.W. 122,52 S.D. 516
• Decision Date: 11 April 1928
• Docket Number: 6641,6651
• Parties: FRED S. ROWE, Plaintiff and respondent, v. STANLEY COUNTY et al, Defendants and Appellants.
• Court: South Dakota Supreme Court

52 S.D. 516

219 N.W. 122

FRED S. ROWE, Plaintiff and respondent, v. STANLEY COUNTY et al,

Defendants and Appellants.

South Dakota Supreme Court

Appeal from Circuit Court, Stanley County, SD

Hon. John F. Hughes, Judge

File No. 6641-6651—Reversed

Harry R. Homer, Pierre, SD

Attorneys for Appellant.

F. W. Lambert, State’s Attorney, Ft. Pierre, SD

Buell F. Jones, Attorney General

Benj. D. Mintener, Assistant Attorney General, Pierre, SD

Attorneys for Respondents.

Ambrose Tighe, St. Paul, Minn.

W. W. Soule, Ed L. Grantham, Rapid City, SD

Amici Curiae

Opinion filed April 11, 1928

BROWN, J.

This action is brought to restrain the defendant county commissioners from issuing bonds to fund the floating indebtedness of the county, under the provisions of chapter 79 of the Laws of 1927, the County Budget Law. The complaint alleges that the law is unconstitutional in that: First, it embraces more than one subject, viz., the general management of a county’s fiscal affairs, the securing of temporary loans by the pledge of delinquent taxes, and the issuing of bonds to pay a county floating indebtedness; second, that the issuing of bonds is not expressed in the title, and that it provides for the payment of county debts not audited or allowed by the county commissioners, which subject is not embraced in the title. The complaint further alleges, if the law is constitutional, defendants have no authority to issue bonds unless 40 per cent of all resident freeholders of the county have petitioned therefor, nor except in connection with and at the time of preparing the provisional county budget in July, 1928.

The defendants demurred to the complaint on the ground that it does not state facts sufficient to constitute a cause of action.

The court sustained the demurrer except as to the allegation that the commissioners intend to issue bonds at their meeting in January, 1928, and to that part of the complaint, the demurrer was overruled on the ground that, under the provisions of the County Budget Law, the commissioners had no authority to issue bonds except at the time of preparing the provisional budget for 1929, between the 1st and 15th days of July.

Plaintiff appeals from that part of the order overruling his demurrer, and defendants appeal from that part sustaining the demurrer as to the time at which the commissioners may issue bonds.

The demurrer is single, a unity, and it cannot be sustained in part and overruled in part. Various reasons may be advanced for sustaining or overruling it, and the court may deem some of those reasons well founded and others not, but its decision must either sustain or overrule the demurrer as a whole. The trial court concluded that the claim of unconstitutionality of the Budget Law as a reason for the demurrer could not be sustained, but concluded that under the law the commissioners had no authority to issue bonds prior to their meeting in July, 1928, and for that reason overruled the demurrer. This must be deemed an overruling of the demurrer as a whole. In other words, a holding that the complaint did state facts sufficient to constitute a cause of action because it showed on its face that the defendants proposed to issue bonds in January, while the court held that they had no authority to do so until July. Thus the plaintiff Rowe had nothing to appeal from, and his appeal is dismissed without costs to either party, and defendants will be treated as appellants and plaintiff as respondent in the single appeal from the order of the court considered as overruling the demurrer as a whole.

The title of the act reads as follows:

“An act entitled, an act regulating the fiscal management of, fixing the fiscal year for, and controlling and regulating the raising of revenue and the expenditure thereof during each fiscal year by all counties and their institutions and agencies, and for the approval and adoption of annual budgets of expenditures to be made for all purposes during each fiscal year; providing for temporary loans secured by delinquent taxes and the creation of the delinquent tax fund; prescribing the manner of paying claims filed after the expiration of the fiscal year; providing for the raising of revenue, in addition to budget estimates and appropriations, by taxation; providing for the payment of warrant indebtedness outstanding at the close of the fiscal year ending December 31, 1927.”

Respondent’s brief refers us to 4 Ency. Brit. 75o, for an account of the origin and nature of the budget system of financing, and there we find this definition:

“Budget, … the name applied to an account of the ways and means by which the income and expenditure for a definite period are to be balanced, generally by a finance minister for his state, or by analogy to smaller bodies.”

The budget system is a system “by which income and expenditure for a definite period are to be balanced.” It is obvious at once that in South Dakota there can be no county budget law in this sense while there is an outstanding warrant indebtedness, for R. C., § 6973, provides that all county warrants must be paid in the order of their presentation; section 6975 provides that where there are no funds for the payment of such warrants on presentation, the treasurer shall register the warrants, indorsed, “Not paid for want of funds”; and section 6976 provides that all registered warrants shall be paid in the order of their registration. It is thus seen that as soon as the income provided for by the budget comes into the hands of the county treasurer, he must pay it out on the outstanding warrants in the order of their registration, instead of applying it on the expenditures provided in the budget, and so the budget system is at once “knocked into a cocked hat” by the priority of the outstanding warrants. It is thus plain that the budget system in the true sense is unattainable where there is an outstanding floating indebtedness, which, like county warrants under the statutes of this state, must be paid in the order of their presentation. Some provision for doing away with the floating debt is a necessary preliminary to, or part of, a county budget system in South Dakota.

Section 19 of the County Budget Law provides that the floating indebtedness of the county may be taken care of in either of two ways; one by issuing bonds, the other by levying taxes, to raise the money needed to pay such floating debt. Respondent contends that because the title of the act does not specifically mention the “word bond or bonds,” the issue of bonds to procure money to pay outstanding warrant indebtedness is unconstitutional as being a subject not expressed in the title of the act. Among other things expressed in the title is provision “for the payment of warrant indebtedness outstanding at the close of the fiscal year ending December 31, 1927.” Delivery of money is the mode of ultimate payment. R. C., § 756. Two ways in which governing bodies usually get money are by taxation and by borrowing, and it is customary to issue bonds for borrowed money. The issuing of bonds to raise money to pay the outstanding warrant indebtedness of a county had been...