State ex rel. Linde v. Taylor

• Decision Date: 05 February 1916
• Docket Number: 1915
• Citation: 156 N.W. 561,33 N.D. 76
• Court: North Dakota Supreme Court

156 N.W. 561

33 N.D. 76

STATE OF NORTH DAKOTA EX REL. HENRY J. LINDE, Attorney General, and B. V. Moore, Relator, v. W. C. TAYLOR, Commissioner of Insurance of the State of North Dakota, and as Such Commissioner, John Steen, State Treasurer of the State of North Dakota, and as Such Treasurer, and J. G. Johnson, State Examiner of the State of North Dakota, and as Such Examiner

No. 1915

Supreme Court of North Dakota

February 5, 1916

Original proceedings in this court by the State on the relation of B. V. Moore, for the issuance of a writ prohibiting and enjoining the Commissioner of Insurance State Treasurer, and State Examiner from establishing and operating a state bonding fund, as required by chapter 62 Laws of 1915.

Writ denied.

Lawrence & Murphy, for plaintiffs.

The act contains an unwarranted delegation of judicial power to the state examiner and to the commissioner of insurance. State ex rel. Miller v. Taylor, 27 N.D. 77, 145 N.W 428.

This is a proceeding not in rem, but in personal. The only way to secure personal service is to make such service personal. In such cases where personal rights and obligations of parties are to be determined personal service within the state, or a voluntary appearance in the cause, is essential to jurisdiction. D'Arcy v. Ketchum, 11 How. 174, 13 L.Ed. 652; Webster v. Reid, 11 How. 437, 13 L.Ed. 761; Cooper v. Reynolds, 10 Wall. 316, 19 L.Ed. 932; Pennoyer v. Neff, 95 U.S. 714, 24 L.Ed. 565; St. Clair v. Cox, 106 U.S. 353, 27 L.Ed. 223, 1 S.Ct. 354; Pana v. Bowler, 107 U.S. 529, 27 L.Ed. 424, 2 S.Ct. 704; Hart v. Sansom, 110 U.S. 151, 28 L.Ed. 101, 3 S.Ct. 586; Grover & B. Sewing Mach. Co. v. Radcliffe, 137 U.S. 294, 34 L.Ed. 671, 11 S.Ct. 92; Wilson v. Seligman, 144 U.S. 41, 36 L.Ed. 338, 12 S.Ct. 541; McGehee, Due Process of Law, 89, 90; State ex rel. Miller v. Taylor, 27 N.D. 77, 145 N.W. 430; Galpin v. Page, 18 Wall. 350, 21 L.Ed. 959; Hovey v. Elliott, 167 U.S. 409, 42 L.Ed. 215, 17 S.Ct. 841.

In actions in personam of a strictly judicial character, and proceeding according to the common law, service of summons by publication, on resident defendants, who are within the state and can be found in state, is not "due process of law." Bardwell v. Collins (Bardwell v. Anderson), 44 Minn. 97, 9 L.R.A. 154, 20 Am. St. Rep. 547, 46 N.W. 315; Moredock v. Kirby, 118 F. 186; Bear Lake County v. Budge, 9 Idaho 703, 108 Am. St. Rep. 179, 75 P. 614.

Under the police power of the state, the legislature cannot authorize a public officer to bring a suit to settle private rights to the use of water or the priority of such rights. Bear Lake County v. Budge, supra; Brown v. Levee Comrs. 50 Miss. 468.

The act is unlawful, discriminating, and contains arbitrary classifications. It amounts to special legislation. State ex rel. McKell v. Robins, 71 Ohio St. 273, 69 L.R.A. 427, 73 N.E. 470, 2 Ann. Cas. 485; Vermont Loan & T. Co. v. Whithed, 2 N.D. 82, 49 N.W. 318.

No moneys can be drawn from the state treasury with, first, an appropriation for the purpose, and, second, only upon allowance of the claim with and by the state auditing board. The act in question is void in that provision is not made for either of these things to be done. Const. § 186.

The act constitutes a legislative interference with local and municipal affairs. The legislature is supreme only in matters of purely legislative concern. The economic affairs of local municipalities is another matter entirely, likened unto the personal concerns of the individual. Conlin v. San Francisco, 99 Cal. 17, 21 L.R.A. 474, 37 Am. St. Rep. 17, 33 P. 753; Lund v. Chippewa County, 93 Wis. 640, 34 L.R.A. 131, 67 N.W. 927; People ex rel. LeRoy v. Hurlbut, 24 Mich. 44, 9 Am. Rep. 103; Oakley v. Aspinwall, 3 N.Y. 568.

The act violates various provisions of the state Constitution with reference to taxation and the expenditure of moneys raised by taxation. Const. §§ 175, 176, 179; People ex rel. Twitchell v. Blodgett, 13 Mich. 139.

Every tax raised must not only be for a public purpose, but it must be for a local public purpose and expended in the district in which it was raised. Taxes are thus reciprocal in their nature. Weeks v. Milwaukee, 10 Wis. 243; Ryerson v. Utley, 16 Mich. 269; Merrick v. Amherst, 12 Allen, 504; Wells v. Weston, 22 Mo. 384, 66 Am. Dec. 627; Covington v. Southgate, 15 B. Mon. 491; Morford v. Unger, 8 Iowa 82; Stetson v. Kempton, 13 Mass. 272, 7 Am. Dec. 145; People v. Albany, 11 Wend. 539, 27 Am. Dec. 95; Parsons v. Goshen, 11 Pick. 396; Anthony v. Adams, 1 Met. 284; Weismer v. Douglas, 64 N.Y. 99, 21 Am. Rep. 586.

It is the essence of taxation that it should compel the discharge of a burden by those upon whom it rests. 1 Desty, Taxn. 285, 287; Farris v. Vannier, 6 Dak. 186, 3 L.R.A. 713, 42 N.W. 31.

The act is wrong, because it provides for a tax to create a fund for future distribution. State ex rel. Owen v. Donald, 160 Wis. 21, 151 N.W. 331.

The state cannot engage in private business. The purpose of the formation of government is to govern; but the state cannot arrogate to itself, the rights of the people. Citizens' Sav. & L. Asso. v. Topeka, 20 Wall. 661, 22 L.Ed. 461; Ex parte Merryman, Taney, 246, Fed. Cas. No. 9487; Re Pacific R. Commission, 32 F. 254; 3 Adam Smith, Wealth of Nations, 545; 1 Kent, Com. p. 450; Herman v. State, 8 Ind. 548; State ex rel. Coleman v. Kelly, 71 Kan. 811, 70 L.R.A. 450, 81 P. 457, 6 Ann. Cas. 298; Butchers' Benev. Asso. v. Crescent City L. S. L. & S. H. Co. 16 Wall. 111, 21 L.Ed. 420; McCullough v. Brown, 41 S.C. 220, 23 L.R.A. 410, 19 S.E. 458; State ex rel. George v. Aiken, 42 S.C. 222, 26 L.R.A. 357, 20 S.E. 221; Rippe v. Becker, 56 Minn. 100, 22 L.R.A. 857, 57 N.W. 331; State ex rel. Monnett v. Guilbert, 56 Ohio St. 575, 38 L.R.A. 524, 60 Am. St. Rep. 756, 47 N.E. 551; State ex rel. Toledo v. Lynch, 88 Ohio St. 71, 48 L.R.A.(N.S.) 720, 102 N.E. 673, Ann. Cas. 1914D, 949.

No municipality is a "trading corporation." Such corporations are invested with public trusts of governmental and administrative character. Nashville v. Ray, 19 Wall. 476, 22 L.Ed. 169; Elliott, Constitutional Debates, N.D. 438; Winspear v. District Twp. 37 Iowa 544; Thomas v. Taylor, 42 Miss. 706, 2 Am. Rep. 625.

Henry J. Linde, Attorney General, Francis J. Murphy, and H. R. Bitzing, Assistant Attorneys General, for defendants.

The amount to be paid each year for additional help made necessary by the extra work of the offices named, is unconditionally limited to a fixed sum, and is in no sense uncertain or speculative, and cures the defect in the former law, of which complaint was made and sustained. Act of 1915, § 14; State ex rel. Miller v. Taylor, 27 N.D. 77, 145 N.W. 425.

Where there is no constitutional limitation in a state Constitution against the doing of certain acts, the people, through the legislature, have a right to do such acts. State ex rel. Board of Regents v. Ekern, 159 Wis. 319, 150 N.W. 506.

OPINION

CHRISTIANSON, J.

This is an original proceeding in this court against the commissioner of insurance, state treasurer, and state examiner to prevent them from putting into operation chapter 62 of the Session Laws of 1915, on the ground that this act is unconstitutional.

This act establishes a state bonding fund for the purpose of bonding such county, city, village, school district, and township officers as are, or may hereafter be required by law, to furnish official bonds; provides the form of bond, the amount of premiums to be paid, and fixes the maximum amount of any bond to be written at $ 50,000; and prescribes certain duties to be performed by the commissioner of insurance, state treasurer, and state examiner in the organization and operation of such state bonding fund.

The relator is a qualified elector, freeholder, and taxpayer in the city of Fargo, Cass county, in this state, and a stockholder in the Dakota Trust Company, a corporation organized under the laws of this state, and since December, 1908, engaged in the business of issuing surety and indemnity bonds (among others), to state, county, city, and school district officers in this state. The relator asserts that the act in question is unconstitutional for the following ten reasons:--"

I. The act contains an unwarranted delegation of judicial power to the state examiner and to the commissioner of insurance. II. If the act does not contain a specific and unwarranted delegation of judicial power as stated, it is then void as a matter of public policy in that no provision is made for the payment of losses, except by litigation and the use of the courts of the state in every instance before money can be withdrawn from the state treasury.

III. The act contains an unwarranted delegation of legislative power to the commissioner of insurance and to the state auditing board in the determination of the amount of public moneys to be used for particular purposes.

IV. If the act does not contain a specific delegation of unwarranted legislative power as referred to in the preceding proposition, then the act is wholly ineffective, inoperative, and impossible of performance because of lack of means and funds to conduct the same without devoting thereto other public moneys.

V. The act deprives citizens of the state of the constitutional right of due process of law in requiring the appointment of an attorney in fact upon whom service of judicial process may be made.

VI. The act contains wrongful and unlawful discrimination and arbitrary classifications.

VII. The act is void in that it provides for a withdrawal of moneys from the state treasury without appropriation, presentation of, or allowance of, a claim filed with the state auditing board.

VIII. The act constitutes a legislative interference with local and municipal affairs.

IX....