State ex rel. Veeder v. State Board of Education

• Decision Date: 24 May 1934
• Docket Number: 7276.
• Citation: 33 P.2d 516,97 Mont. 121
• Parties: STATE ex rel. VEEDER v. STATE BOARD OF EDUCATION et al.
• Court: Montana Supreme Court

33 P.2d 516

97 Mont. 121

STATE ex rel. VEEDER v. STATE BOARD OF EDUCATION et al.

No. 7276.

Supreme Court of Montana

May 24, 1934

Original proceeding by the State on the relation of William Veeder for an injunction against the State Board of Education of the State of Montana and others.

Writ of injunction denied, and proceeding dismissed.

James C. Garlington, of Missoula, for relator.

Raymond T. Nagle, Atty. Gen., and Howard Toole, of Missoula, for respondents.

MATTHEWS Justice.

The relator, William Veeder, as a taxpayer and student at the University of Montana, seeks to enjoin the state board of education and the members thereof from proceeding with their perfected plan to erect and maintain a students' union building at the State University in the city of Missoula.

Relator's petition alleges that the respondents are threatening to, and unless restrained will, incur debts, obligations, and liabilities against the state, the University, and the student body, contrary to the Constitution and laws of Montana; it sets forth the plan and the authority under which the board intends to finance, erect, equip, and operate the building. On the filing of the petition an order was issued out of this court commanding the above-named respondents to show cause why a writ of injunction should not issue. The respondents filed an answer admitting the facts alleged, and joining issue only as to the questions of law presented. Briefs were filed and oral argument had, and the matter is now before us for determination.

From the record we find the following facts: In November last the Governor called a special session of the Legislature to enact laws to meet emergencies arising out of the depression, and particularly to enable this state to take advantage of the benefits afforded by the "National Industrial Recovery Act," which permits the advance of federal funds for the construction of public works (48 Stat. 195). Chapter 10 of the Laws of the Extraordinary Session of 1933-34 empowered the state board of education to erect student union buildings at the several educational institutions under its control and authorized it to finance such projects in conformity with the federal act, or otherwise, but expressly prohibited the board's creating any debt or obligation against the state, and declared that "all such obligations including principal and interest, shall be payable solely from funds derived from the operation of the *** buildings and from the income derived from student fees or from gifts or bequests made to the respective institutions *** for students' union building purposes." Section 4. Declaring the existence of an emergency, the Legislature provided that the act should take effect immediately upon its passage and approval.

It appears that the University is without adequate auditorium facilities, and that a students' union building has long been desired at Missoula. The State University has always exacted from the students matriculation, registration and certain other fees, and, in 1929, the student body voted to increase the students' fees to $1 a quarter for the purpose of creating a fund with which to erect such a building. This fee has been collected each year and impounded in a special fund for that purpose.

Acting under the provisions of chapter 10, above, the state board perfected a plan, approved by the federal government, for the erection of a suitable building at Missoula which will house an auditorium, students' store, dance hall, office space and other accommodations, to be rented to student groups and others. Classes in dramatic art and perhaps other subjects will be conducted within the building. The erection of this building is to be financed by a loan of $240,000 from the federal government, for which the board will issue bonds amortized over a period of thirty years, and a grant by the government of $60,000.

To provide in part for the upkeep of the building, the payment of the interest, and the creation of a sinking fund for the retirement of the bonds at maturity, the board by resolution fixed a student union building fee of $5 per student per year, to be paid as a condition precedent to enrollment by each applicant for admission to the University, and declared that such fee shall never be decreased so long as any of the bonds are outstanding. By a "loan agreement" with the federal government, the proceeds of this fee charge, with the special fund on hand, and all of the rents, revenues, and income from the building, when completed, are pledged for the payment of the principal and interest on the bonds, and thereby the board binds itself to fix, maintain, and collect fees and rentals for the facilities afforded, "which shall provide revenues sufficient at all times: (a) to pay the current reasonable expenses of operation, maintenance and repair of the building, including insurance," and (b) "to establish and maintain a special fund, which *** will be sufficient for the payment of the interest *** and to maintain an adequate reserve."

These funds must be deposited and maintained in the office of the state treasurer, and a sufficient amount for necessary expenses is to be placed in the "Operating and Maintenance Fund," and "after making all payments into the Operating and Maintenance Fund *** the remaining gross revenues received in each fiscal year shall be *** paid into the sinking fund until the amount so set aside *** in each fiscal year shall equal one hundred ten per cent. of the aggregate amount of principal and interest upon the bonds becoming due" each year. Any excess shall be held as a reserve for contingencies.

The agreed estimated revenues from the students' union building fees, and rents and income from the building, will be $16,600; the amount necessary annually for the payment of principal and interest on the bonds, or paid into the "sinking fund," $11,500, so that there will be available for the operating and maintenance fund and reserve, $5,100.

While the board has agreed to fix and maintain fees and rents at a level to supply the needs of both funds "at all times," by resolution it has declared that "if the revenues of the building in any year shall not be sufficient to make the payments here-above required to be made, *** the board will pay the expense of furnishing heat, light, power and water from other funds under the control of the board."

The cost of the building will be $300,000, of which $167,000, approximately, will be spent for materials, and $123,000 for labor; this latter amount, we are told, will furnish about 175,000 man hours of labor, exclusive of labor going into the preparation of materials, plans, and specifications. Under the provisions of chapter 10, "Montana labor shall be given preference," and the wages of the men employed shall not be less than prescribed by the federal government for such work.

The first question, logically, for determination is that raised by relator's allegations to the effect that no emergency existed at the time chapter 10 was enacted, and that the period for reference to the vote of the people has not expired, and that he is circulating a petition for a referendum of the act.

In so far as applicable here, section 1 of article 5 of our Constitution provides that: "The people reserve to themselves power *** to approve or reject at the polls, any act of the legislative assembly, except as to laws necessary for the immediate preservation of the public peace, health, or safety." It will be noted that this provision vests no power in the Legislature, but merely excepts from the reserved power of the people those laws which are, in fact, necessary for the immediate preservation of the public peace, health, and safety, and the question as to whether a particular law falls within the reservation or the exception is a question of fact to be determined as are other facts, that is, by the court on the showing made. In determining this question, the court may look to the act, the history of the legislation, contemporaneous declarations of the Legislature, and the evil to be remedied; and, in case of doubt, it should be resolved in favor of the people.

This exemption was not intended to extend further than to matters arising out of some unforeseen menace, calamity, accident, sudden emergency, extraordinary occurrence, or unprecedented climatic condition, rendering immediate action imperative. State ex rel. Goodman v. Stewart, 57 Mont. 144, 187 P. 641.

Aside from common knowledge, in the record before us we find evidence of the great and sudden economic depression which set in throughout the country in the late fall of 1929 and had abated but little at the time this act was passed; of the desperate plight of the millions of unemployed, of which we have out thousands; of the words of the President of the United States, calling attention to the great emergency necessitating the passage of the National Industrial Recovery Act, and the words of our Governor in calling the special session for the purpose of enacting this and other laws, that:

"Whereas, The nationwide economic depression has created a serious emergency in this state, due to the widespread unemployment and consequent indigence and dependence of a large portion of the people of the state; and

Whereas Great distress exists within the state of Montana, and many citizens are without employment, without means of support and unable to care for themselves and their families; and Whereas, The Congress of the United States has enacted *** the 'National Industrial Recovery Act' which permits the advance of federal funds for the construction of public works in the several states; and Whereas, It is necessary that the Legislative Assembly of the state enact legislation whereby the...