Schaaf v. Rural Credits Board
| Citation | 39 S.D. 377,164 N.W. 964 |
| Decision Date | 27 October 1917 |
| Docket Number | 4262 |
| Parties | LESLIE L. SCHAAF, Plaintiff, v. SOUTH DAKOTA RURAL CREDITS BOARD, and Peter Norbeck, C. M. Henry, A. W. Ewert, J. E. Ziebach, and Alfred Zoske, members, Defendants. |
| Court | Supreme Court of South Dakota |
Original Proceedings
#4262--Application denied.
Charles E. Deland
Attorney for Plaintiff.
C. C. Caldwell, Attorney General
Byron S. Payne, Assistant Attorney General
John Sutherland
Attorneys for Defendants.
Opinion filed October 27, 1917
By application for a writ of prohibition plaintiff has assailed the constitutionality of chapters 333 and 334, Laws of 1917. These legislative acts by their terms purport to provide for the establishment and maintenance of a system of rural credits for the loaning of money by the state upon farm lands within this state; authorizing the state to borrow money on its warrants and bonds, secured by the good faith and credit of the state; creating a rural credit board for the management of said rural credit system, and defining the powers and duties thereof; making an appropriation of $200,000 to be used in establishing and maintaining said system; and providing for the issuing and negotiation of bonds for the creation of a rural credits fund from which to maintain such system and make loans upon said lands. The expressed purpose of these acts is to foster and encourage agriculture, dairying, and live stock raising, and the development and improvement of farm lands within this state. It is alleged in the petition and admitted by the defendant that the plaintiff is a taxpayer and owns property upon which he could not procure a loan under said rural credit enactments; that said rural credit board created by said enactments is now about to enter into an agreement to borrow $200,000 on the good faith and credit of the state, and to issue and deliver and sell the bonds of the state of South Dakota in said amount, the proceeds of such bonds to be used in loaning money on farm real estate, and that said board is also threatening and planning to borrow other and larger sums of money for said purpose upon the faith and credit of the state. It is the contention of plaintiff that said legislative enactments are unconstitutional and void, in that they are repugnant to and in contravention of sections 2, 13, 17, and 18, art. 6, and section 2, art. 11 and section 2, art. 13, and that said laws were not passed in conformity with the provisions of article 3, of our state Constitution. Section 2, art. 6, provides that no person shall be deprived of life, liberty, or property without due process of law; section 13 provides that private property shall not be taken for public use without just compensation; section 17 provides that no tax or duty shall be imposed without the consent of the people or their representatives in the Legislature, and all taxation shall be equal and uniform; and section 18 provides that no law shall be passed, granting to any citizen, class of citizens, or corporation privileges or immunities which upon the same terms shall not equally belong to all citizens or corporations. Section 2, art. 11, provides that all taxes shall be uniform on all property, and shall be levied, and collected for public purposes only; and section 2, art. 13, provides that for the purpose of defraying extraordinary expenses and making public improvements, or to meet casual deficits or failure in revenue, the state may contract debt never to exceed with previous debts in the aggregate $100,000, and no greater indebtedness shall be incurred except for the purpose of repelling invasion, suppressing insurrection, or defending the state or the United States in war. But for the amendment to section 1, art. 13, of our state Constitution, adopted by the people of this state at the general, election in November, 1916, we are of the view that the legislative acts in question would be void and in contravention of several of the foregoing mentioned provisions of our state Constitution. Prior to the said amendment of November, 1916, section 1, art. 13, among other things, read as follows:
"Neither the state nor any county, township or municipality shall loan or give its credit or make any donations to or in aid of any individual, association or corporation, except for the necessary support of the poor."
Clearly this provision of the Constitution before its amendment would have prohibited the Legislature from enacting a rural credits law such as is in question here. By the 1916 amendment the people of this state undertook to and did authorize the Legislature, and gave to it power to establish and maintain a rural credit system, the said amendment being as follows.
"That the state or any county or two or more counties jointly may establish and maintain a system of rural credits and thereby loan money and extend credit to the people of this state upon real estate security in such manner and upon such terms and conditions as may be prescribed by general law."
See Laws 1915, c. 233.
This is a broad, sweeping, unconditional, unlimited, and unqualified amendment, which is the last mandate of the people, in whom resides all fundamental lawmaking power, authorizing and empowering the Legislature to establish a rural credits system and prescribe the terms and conditions thereof. Ordinarily the provisions of a state Constitution are limitations upon the plenary power of the state lawmaking body. Under the broad and comprehensive effect of section 1, art. 13, as it existed prior to 1916, a rural credits law, such as the one in question, could not have been legally enacted by our Legislature in the exercise of its plenary power. To expressly give power to the Legislature to enact such a law the said amendment was adopted at the 1916 general election. Under the well-established rules governing the construction of Constitutions, adhered to by the courts of this country, where a power is expressly granted to a legislative body, everything necessary to effect and carry out the object and purposes of the express power thus granted is also, by necessary implication, granted to the Legislature and the executive officers who are intrusted with the duty of administering such power. It therefore necessarily follows that every other provision of the state Constitution in conflict with the express power thus granted, and its substantial fulfillment, are to that extent modified and qualified and made subservient to the purposes of the express power so granted. We are therefore of the opinion that all the provisions of our state Constitution which would otherwise have prohibited the enactment of said rural credits system law have been modified and qualified and made subservient to the express and necessarily implied provisions of the 1916 amendment; that under the provisions of this amendment the Legislature was empowered and authorized to establish and maintain any adequate system of rural credits suitable to the conditions existing in this state, not in conflict with this amendment; that by this amendment the people of this state fully and completely authorized the Legislature to enact any and all laws necessary to establish an adequate and full and complete rural credit system, such as might reasonably be suited to the condition applicable to the state of South Dakota. Approximately there are 49,000,000 acres of land in this state, the greater majority of which is agricultural. About 16,000,000 acres, or one-third thereof, are now in a state of actual cultivation. There is now in this state a mortgage indebtedness upon farm lands of about $25,000,000. It is reasonable to infer that a large portion of this mortgage indebtedness would be the subject of and come under the operation of the rural credit system established under the laws in question. When the Legislature was expressly clothed with power to establish and maintain a system of rural credits, that meant power to establish any adequate system appropriate and sufficient, under the existing conditions and needs of the state, to accomplish the purpose for which the amendment was adopted. It is not for this court to say that some other or better way might have been enacted.
Some contention has been advanced that the necessary funds for making loans under such system might be procured by some system of direct taxation, and without going beyond the limit of $100,000 indebtedness. We are of the view that such contention is untenable, impracticable, and unreasonable, and would not result...
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