State of Okl. Bldg. Bonds Com'n, Application of

• Decision Date: 15 February 1950
• Docket Number: No. 34512,34512
• Parties: Application of STATE OF OKLAHOMA BLDG. BONDS COMMISSION.
• Court: Oklahoma Supreme Court

Page 934

214 P.2d 934

202 Okla. 454

Application of STATE OF OKLAHOMA BLDG. BONDS COMMISSION.

No. 34512.

Supreme Court of Oklahoma.

Feb. 15, 1950.

Rehearing Denied Feb. 28, 1950.

Syllabus by the Court.

1. In matters of general public interest, matters which directly affect the sovereign rights and powers of the state, the Legislature has power, under Art. 7, sec. 2, Oklahoma Constitution, to confer original jurisdiction upon this court.

2. Record examined and held that State of Oklahoma Building Bonds in the principal amount of $36,000,000, herein submitted for approval, are regular and conform to the provisions of Art. 10, sec. 31, Oklahoma Constitution and H. B. No. 4 of Ex.Sess. of 22nd Legislature, 62 O.S.A. § 57.1 et seq., and are approved.

3. The courts must sustain statutes, if possible, and nullify them only when they are clearly unconstitutional.

4. Section 5(a) of House Bill No. 4 of Extraordinary Session of the 22nd Legislature, 1949, 62 O.S.A. § 57.5(a), granting State Treasurer authority, in the manner therein provided, to invest public monies in his possession, in excess of that needed to meet current expenditures payable therefrom, is not violative of Art. 10, sec. 19, Oklahoma Constitution.

Mac Q. Williamson, Attorney General, Mainard Kennerly, Assistant Attorney General, Wallace E. Robertson, George J. Fagin, Stephen D. Holloway, Special Attorneys, Oklahoma City, for applicant.

V. P. Crowe, Embry, Johnson, Crowe, Tolbert & Shelton, Oklahoma City, for protestant, C. Edgar Honnold.

W. H. Langley, Stilwell, amicus curiae.

DAVISON, Chief Justice.

This is an original proceeding for the approval of the issuance, and the purchase by the State Treasurer of the State of Oklahoma, of State of Oklahoma Building Bonds in the principal amount of $36,000,000, proposed to be issued and so purchased under authority of Art. 10, sec. 31, Oklahoma Constitution and of House Bill No. 4 passed by the Twenty-second Legislature in Extraordinary Session, 62 O.S.A. § 57.1 et seq. The application was filed on behalf of the State of Oklahoma Building Bonds Commission, pursuant to sec. 12 of the Act.

Said Section 31 of Article 10 of the Oklahoma Constitution, adopted by special election September 27, 1949, provides as follows: 'The Legislature of the State of Oklahoma is hereby authorized to enact a law whereby the State may become indebted in an amount not to exceed Thirty-six Million Dollars ($36,000,000.00) for the purpose of constructing, equipping, remodeling and repairing any and all buildings of the State, including those of its educational, recreational, penal and eleemosynary establishments; and such law shall provide that two cents (2cents) of the tax on each package of cigarettes authorized by 68 O.S.1941 Pars. 586 to 586p, as amended and supplemented to the effective date of this Section, or so much of said tax as may be necessary, shall be pledged and used for the sole purpose of paying the interest on such debt as it falls due, and also to pay and discharge the principal of such debt within twenty-five (25) years from the time of the contracting thereof; provided, that if said tax is not sufficient to so pay and discharge said interest and principal, the Legislature shall impose and provide for the collection of an additional tax, other than an ad valorem tax, sufficient to pay and discharge said interest and principal.'

The title of House Bill No. 4 of the Extraordinary Session of the Twenty-second Legislature, which became effective upon approval of the Governor on December 22, 1949, is, 'An Act whereby the State of Oklahoma may become indebted for the purpose of constructing, equipping, remodeling and repairing any and all buildings of the State, including those of its educational, recreational, penal and eleemosynary establishments, as authorized by section 31, article X of the Constitution of Oklahoma; creating the State of Oklahoma Building Bonds Commission and authorizing said Commission to issue, sell and deliver bonds of the State of Oklahoma, representative of such debt; authorizing and requiring the State Treasurer to purchase and sell said bonds under certain conditions prescribed in this act; requiring the Commissioners of the Land Office to purchase said bonds under certain conditions; providing for revenues by which the principal of and interest on such bonds may be retired; authorizing and directing the Oklahoma Tax Commission to pay to the State Treasurer cigarette tax collections for the purpose of creating and maintaining a sinking fund sufficient to pay the principal of and interest on State Building Bonds as such principal and interest come due; and creating a reserve; making provision for call and redemption of said bonds; authorizing and directing said Commission to pledge such revenues to the payment of such principal and interest and to make other appropriate covenants and agreements to effect the purpose of this act; making the bonds nontaxable; authorizing the issuance of interim bonds; authorizing investment of public monies in such bonds, providing for disposal of such investments; authorizing the issuance of refunding bonds and providing procedure therefor; providing for approval of such bonds by the Attorney General of Oklahoma, and authorizing the approval of such bonds by the Supreme Court of Oklahoma under certain limitations and giving said Court original jurisdiction for such purpose; authorizing the investment of the proceeds of such bonds prior to expenditure; making such bonds lawful investments and collateral security for certain funds; prescribing certain details of such bond issue and the duties of certain state officials in connection therewith; creating the 'Building Bond Fund'; expressing legislative intent; providing that the provisions of this act are severable; and declaring an emergency.'

The act need not be here copied in full.

The jurisdiction of this court in the matter is established by Section 12 of the Act. This the Legislature had authority to do by reason of Art. 7, sec. 2, Oklahoma Constitution, which provides, in part, as follows: '* * * and the Supreme Court may exercise such other and further jurisdiction as may be conferred upon it by law.'

In the case of El Reno Wholesale Grocery Co. v. Taylor, County Treasurer, 87 Okl. 140, 209 P. 749, this court held: 'In matters of general public interest, matters which directly affect the sovereign rights and powers of the state, the Legislature has power, under section 2, article 7, to confer original jurisdiction upon this court.'

No objection or protest has been filed attacking the validity of said bonds or the regularity of the steps taken toward their issuance. A careful and thorough examination has been made of the application and exhibits heretofore filed herein and it is found that the proposed bonds offered for approval, and all steps taken as a part of their execution and issuance, are regular and in compliance with the provisions of Art. 10, sec. 31, Oklahoma Constitution and of House Bill No. 4 of the Extraordinary Session of the Twenty-second Legislature. For the reasons stated, said bonds should be approved.

A protest has been filed as to the authority of the State Treasurer to purchase the bonds, wherein it is urged that that part of House Bill No. 4, supra, purporting to grant such authority is violative of Art. 10, sec. 19, Oklahoma Constitution and is, therefore, unconstitutional and of no effect. Said Section 19, Article 10 of the Oklahoma Constitution provides, as follows: 'Every act enacted by the Legislature, and every ordinance and resolution passed by any county, city, town, or municipal board or local legislative body, levying a tax shall specify distinctly the purpose for which said tax is levied, and no tax levied and collected for one purpose shall ever be devoted to another purpose.'

At the outset it is necessary to analyze the situation presented. By the adoption of Section 31, Article 10 of the Constitution, the people of the State of Oklahoma authorized the legislature to enact a law whereby the State might become indebted in an amount not to exceed $36,000,000. The State does become indebted when it issues and sells its bonds, and having become indebted, it has on hand in cash the money paid it as the purchase price of the bonds. This money can...