Sparling v. Refunding Board, s. 3496, 3504, 3505, 3512.

• Decision Date: 30 April 1934
• Docket Number: Nos. 3496, 3504, 3505, 3512.,s. 3496, 3504, 3505, 3512.
• Citation: 71 S.W.2d 182
• Parties: SPARLING v. REFUNDING BOARD et al. DENISON v. WISEMAN, Commissioner of Revenue. RODGERS et al. v. SAME. CHICAGO, R. I. & P. RY. CO. et al. v. SAME.
• Court: Arkansas Supreme Court

71 S.W.2d 182

SPARLING v. REFUNDING BOARD et al.

DENISON v. WISEMAN, Commissioner of Revenue.

RODGERS et al. v. SAME.

CHICAGO, R. I. & P. RY. CO. et al. v. SAME.

Nos. 3496, 3504, 3505, 3512.

Supreme Court of Arkansas.

April 30, 1934.

Rehearing Denied May 28, 1934.

Appeal from Pulaski Chancery Court; Frank H. Dodge, Chancellor.

Suits by Forrest M. Sparling against the Refunding Board of Arkansas and others, by Walter H. Denison against Earl R. Wiseman, Commissioner of Revenue, by H. N. Rodgers & Son and others against Earl R. Wiseman, Commissioner of Revenue, and by Chicago, Rock Island and Pacific Railway Company and others against Earl R. Wiseman, Commissioner of Internal Revenue, and others. From decrees for defendants, the plaintiffs separately appeal, all appeals being heard together.

Decrees in all cases affirmed.

Barber & Henry, of Little Rock, Daggett & Daggett, of Marianna, E. L. Westbrooke, of Jonesboro, R. E. Wiley, of Little Rock, and Thos. S. Buzbee, of Little Rock, for appellants.

Hal L. Norwood, Atty. Gen., Trieber & Lasley, of Little Rock, and Walter L. Pope, of Pocahontas, for appellees.

McHANEY, Justice.

While separate appeals have been taken in these several cases and separate briefs filed, except in the Denison and Rodgers cases, which were consolidated and briefed together, we are treating them as one case for the purpose of this opinion, since the same or similar questions are involved in all of them. The Sparling case, No. 3496, brings into question the constitutionality of Act No. 11 of the first Extraordinary Session of the General Assembly of 1934, which act was approved February 12, 1934, as a whole and as to certain sections thereof. The other appeals question the right of the state lawfully to levy and collect a tax on gasoline sold or used in this state for agricultural and industrial purposes. In other words that only such gasoline as may be used in propelling motor vehicles over the highways of this state may be lawfully taxed. Further contentions are that "even though the Act (Act No. 11) be held to apply to and impose a tax on gasoline bought or sold within the State, regardless of the character of use, such holding would not necessarily impose a tax on gasoline bought without, transported within, and thereafter used" for agricultural and industrial purposes; that said act does not impose a tax on gasoline except such as may be used in motor vehicles on the highways; and that, if it does, it contravenes section 5 of article 16 of the Constitution of this state. The chancery court sustained a demurrer to the complaint in each case, and judgments of dismissal were entered.

Turning now to a consideration of the attack made on the constitutionality of the act in the Sparling case, we find a number of grounds argued in support of the allegations of the complaint seeking to enjoin the "Refunding Board" from proceeding under the act. Section 1 thereof creates a "Refunding Board" composed of the Governor, Lieutenant Governor, treasurer of state, secretary of state, state auditor, Attorney General, and state bank commissioner. It is argued that this section contravenes section 6 of article 19 of the Constitution, which provides: "No person shall hold or perform the duties of more than one office in the same department of the government at the same time, except as expressly directed or permitted by this Constitution." And further that it violates section 10 of article 5, which provides: "No Senator or Representative shall, during the time for which he shall have been elected, be appointed or elected to any civil office under this State." A sufficient answer to the first part of this contention is that the members of the refunding board are not holding or performing the duties of more than one office, membership on said board not being an additional office, but only additional duties imposed by the act on the holders of the respective offices. A sufficient answer to the second part of this contention is that the Lieutenant Governor is neither a Senator nor a Representative. By express provision of section 1 of Amendment No. 6 to the Constitution, the Lieutenant Governor is an executive officer, a member of the executive department of state. Section 5 of Amendment No. 6 provides that he shall be president of the Senate, and may vote in case of a tie, but this does not make him a Senator. Moreover, the creation of this board was not the creation of a new office, nor are its members new officers. As heretofore stated, new duties are imposed on existing executive officers. The executive state officers are now members of various boards and have, for a long period of time, served thereon, such as the state board of election commissioners, state burning board, state printing board, etc., and many others in the past which have been abolished. See Bruce v. Matlock, 86 Ark. 555, 111 S. W. 990; Russell v. Cone, 168 Ark. 989, 272 S. W. 678.

The second contention is that section 22 of the act is violative of section 5, article 16, of the Constitution. This will be considered later in this opinion in connection with the Denison and other cases.

It is next contended that section 51 of the act is violative of section 1, article 5, of the Constitution, which provides that "the legislative powers of this State shall be vested in a General Assembly, which shall consist of the Senate and House of Representatives." Section 51 of the act provides that when the net revenue credited to the state highway fund in any fiscal year shall exceed $10,000,000 and the refunding board finds that a reduction of the tax on gasoline during the succeeding year could be made without reducing the net revenue below that sum, said board may, "in its discretion," determine the amount of possible reduction, and make an order to that effect, not to exceed one-half of 1 cent a gallon. It is said this is a delegation of legislative power, because it vests a discretion in the board. This is not a delegation of legislative power, as we have many times held. In Harrington v. White, 131 Ark. 291, 199 S. W. 92, 94, this court quoted with approval from Cincinnati, etc., Rd. Co. v. Commissioners, 1 Ohio St. 77, as follows: "The true distinction * * * is, between the delegation of power to make the law, which necessarily involves the discretion as to what it shall be, and conferring an authority or discretion as to its execution, to be exercised under and in pursuance of the law. The first cannot be done; to the latter no valid objection can be made." And in State v. Martin & Lipe, 134 Ark. 420, 204 S. W. 622, 624, it was said: "It is a well-established rule of law that legislative bodies have no right to delegate the lawmaking power to executive officers or administrative boards, but it is settled in this state that the Legislature may delegate `the power to determine some fact or state of things upon which the law makes, or intends to make, its own action depend.' Boyd v. Bryant, 35 Ark. 69, 37 Am. Rep. 6." Many other cases might be cited to the same effect. Section 51 therefore does not delegate a legislative function, but confers authority or discretion as to its execution to be exercised under and in pursuance of its provisions.

Other contentions are that the act is void because section 55 gives the Governor the power within 30 days after its approval to direct the board not to issue any bonds, in other words to suspend the act, in violation of section 12 of article 2 of the Constitution; that it attempts to suspend the statute of limitations with respect to actions on road improvement district bonds; that the bill for the act was not properly passed in both Houses; that the exchange of direct state obligations for those of road improvement districts is violative of section 1 of article 16 of the Constitution; and that the tax on gasoline may not be used to pay road district bonds. We have carefully considered all these questions and find them without substantial merit. To discuss them in detail would unduly extend this opinion. However, it may be said that the Governor has not suspended the act and that the 30 days' time for doing so has elapsed; that limitation of actions is subject to control by the Legislature; that the records of both Houses, of which we take judicial notice, show the act was properly passed; and that the payment of road district bonds with state bonds is not violative of section 1 of article 16 of the Constitution. Tapley v. Futrell, 187 Ark. 844, 62 S.W.(2d) 32; Jobe v. Urquhart, 102 Ark. 470, 143 S. W. 121, Ann. Cas. 1914A, 351; Hays v. McDaniel, State Treasurer, 130 Ark. 52, 196 S. W. 934; Bush v. Martineau, 174 Ark. 214, 295 S. W. 9.

We now come to a consideration of the points raised and argued on the other appeals. In the Denison and Rodgers cases the gasoline sought to be taxed was purchased in Tennessee in large quantities, shipped into Arkansas, and stored in tanks adjacent to the levees which they were engaged in constructing, and was to be used in such construction work. No part of it was to be used in propelling motor vehicles over the highways. In the Lowden et al. case, the trustees in bankruptcy of three railroad companies — the Rock Island, the Missouri Pacific, and the Frisco — seek to enjoin the commissioner of revenue from collecting the tax on gasoline used in propelling motor cars over their respective railroads. The contentions of all these appellants are substantially the same.

Prior to the passage of the "Refunding Act" (Act No. 11, now under consideration), such gasoline as was used by these appellants for purposes other than use on the state's highways was not taxable. In actual practice, except where bond was given, the tax on gasoline used for agricultural, industrial, domestic, railroad, levee, counties, cities, towns, and miscellaneous purposes was paid by the consumer, but the state refunded such tax on refund claims properly made and filed. During the calendar...