Schureman v. State Highway Commission, No. 2
| Court | Supreme Court of Michigan |
| Writing for the Court | O'HARA; DETHMERS, KELLY, SOURIS, SMITH and ADAMS, JJ., concurred with O'HARA; KAVANAGH, C.J., and BLACK |
| Citation | 141 N.W.2d 62,377 Mich. 609 |
| Docket Number | No. 2 |
| Decision Date | 01 January 1966 |
| Parties | Jeptha W. SCHUREMAN, Plaintiff and Appellant, v. STATE HIGHWAY COMMISSION, a Michigan public body, Ardale W. Ferguson, Charles H. Hewitt, Wallace D. Nunn and Richard F. Vanderveen, jointly, and severally, Defendants and Appellees. , |
Page 62
v.
STATE HIGHWAY COMMISSION, a Michigan public body, Ardale W.
Ferguson, Charles H. Hewitt, Wallace D. Nunn and
Richard F. Vanderveen, jointly, and
severally, Defendants and Appellees.
[377 Mich. 610] Matheny, Schureman & Frakes, by John C. Frakes, Detroit, for plaintiff and appellant.
Frank J. Kelley, Atty. Gen., Robert A. Derengoski, Sol. Gen., Louis J. Caruso, Asst. Atty. Gen., Lansing, for State Highway Commission.
Before the Entire Bench.
[377 Mich. 611] O'HARA, Justice.
The precise question presented by this case is whether Art. 9, § 15, of the Michigan Constitution of 1963 applies only to general obligation bonds of this State or to its revenue bonds and special obligation bonds as well.
The involved section provides:
'Sec. 15. The state may borrow money for specific purposes in amounts as may be provided by acts of the legislature adopted by a vote of two-thirds of the members elected to and serving in each house, and approved by a majority of the electors voting thereon at any general election. The question submitted to the electors shall state the amount to be borrowed, the specific purpose to which the funds shall be devoted, and the method of repayment.'
The bonds here involved are designated 'State of Michigan, Detroit Expressway Bonds, Series IV.' The bonds, by their terms, are to be paid from the Motor Vehicle Highway Fund, the source of which is the proceeds of taxes imposed by State law upon gasoline and other motor fuels and upon motor vehicles registered in the State of Michigan.
Under the settled law of this State, while the Constitution of 1908 was in effect, revenue bonds were not subject to the constitutional borrowing limitations imposed upon
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general obligation bonds. See State Highway Commissioner v. Detroit City Controller, 331 Mich. 337, pp. 348--349, 49 N.W.2d 318, p. 325:'At the outset, it has long been settled that revenue bonds issued by the state do not fall within the scope of sections 10 and 11, * * * (of the Constitution of 1908).'
Revenue bonds and special obligation bonds share an essential distinction from general obligation bonds. The credit of the State is pledged for the payment of general obligation bonds. It is not for revenue bonds and special obligation bonds. Special [377 Mich. 612] obligation bonds are retired from special tax revenues earmarked for that purpose. Revenue bonds are retired from the proceeds of the operation of the public structure or enterprise supporting their issuance.
The bonds here involved are special obligation bonds. Appellant contends that the quoted constitutional provision applies to them. If so, they are unconstitutionally issued since no prior legislative approval thereof was obtained, nor was their issuance submitted to the electorate for approval.
Appellees contend the constitutional limitation applies only to general obligation bonds pledging the...
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Request for Advisory Opinion on Constitutionality of 1986 PA 281, In re, Docket No. 80210
...from the proceeds of the operation of the public structure or enterprise supporting their issuance." Schureman v. State Hwy. Comm., 377 Mich. 609, 611-612, 141 N.W.2d 62 The question, then, is whether tax increment bonds, as described in Sec. 14 of the act, are more like general obligation ......
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City of Gaylord v. Beckett, No. 1
...bonds have been regularly held not to be pledges of the State's credit. See the recent case of Schureman v. State Highway Commissioner, 377 Mich. 609, 611, 141 N.W.2d 62; Pinsky, State Constitutional Limitations on Public Industrial Financing: An Historical and Economic Approach, 111 Penn.L......
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American Nat. Bank and Trust Co. v. Indiana Dept. of Highways, No. 582S203
...v. Commonwealth ex rel. Unemployment Comp. Comm., (1947) 305 Ky. 289, 203 S.W.2d 35; Schureman v. State Highway Commission, (1966) 377 Mich. 609, 141 N.W.2d 62; Naftalin v. King, (1960) 257 Minn. 498, 102 N.W.2d 301; State ex rel. Dragstedt v. State Board of Education, (1936) 103 Mont. 336,......
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Advisory Opinion on Constitutionality of 1982 PA 47, Docket No. 69345
...specific purpose to which the funds shall be devoted, and the method of repayment." The Court held in Schureman v. State Highway Comm., 377 Mich. 609, 141 N.W.2d 62 (1966), that art. 9, Sec. 15 applied only to general obligation bonds of the 3 For the text of Const.1963, art. 9, Sec. 15, se......
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Request for Advisory Opinion on Constitutionality of 1986 PA 281, In re, Docket No. 80210
...from the proceeds of the operation of the public structure or enterprise supporting their issuance." Schureman v. State Hwy. Comm., 377 Mich. 609, 611-612, 141 N.W.2d 62 The question, then, is whether tax increment bonds, as described in Sec. 14 of the act, are more like general obligation ......
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City of Gaylord v. Beckett, No. 1
...bonds have been regularly held not to be pledges of the State's credit. See the recent case of Schureman v. State Highway Commissioner, 377 Mich. 609, 611, 141 N.W.2d 62; Pinsky, State Constitutional Limitations on Public Industrial Financing: An Historical and Economic Approach, 111 Penn.L......
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American Nat. Bank and Trust Co. v. Indiana Dept. of Highways, No. 582S203
...v. Commonwealth ex rel. Unemployment Comp. Comm., (1947) 305 Ky. 289, 203 S.W.2d 35; Schureman v. State Highway Commission, (1966) 377 Mich. 609, 141 N.W.2d 62; Naftalin v. King, (1960) 257 Minn. 498, 102 N.W.2d 301; State ex rel. Dragstedt v. State Board of Education, (1936) 103 Mont. 336,......
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Advisory Opinion on Constitutionality of 1982 PA 47, Docket No. 69345
...specific purpose to which the funds shall be devoted, and the method of repayment." The Court held in Schureman v. State Highway Comm., 377 Mich. 609, 141 N.W.2d 62 (1966), that art. 9, Sec. 15 applied only to general obligation bonds of the 3 For the text of Const.1963, art. 9, Sec. 15, se......