State v. Clausen

• Decision Date: 23 April 1925
• Docket Number: 19205.
• Citation: 134 Wash. 196,235 P. 364
• Court: Washington Supreme Court
• Parties: STATE ex rel. STATE CAPITOL COMMITTEE v. CLAUSEN, State Auditor.

235 P. 364

134 Wash. 196

STATE ex rel. STATE CAPITOL COMMITTEE v. CLAUSEN, State Auditor.

No. 19205.

Supreme Court of Washington

April 23, 1925

Department 2.

Original proceeding by the State, on the relation of the State Capitol Committee, against C. W. Clausen as State Auditor, to compel respondent to execute bond and attach seal thereto. Relief granted on condition.

John H Dunbar and R. G. Sharpe, both of Olympia, for relator.

Oakley & Thompson, of Tacoma, for respondent.

BRIDGES, J.

As everybody knows, the United States' government, by section 12 of the Enabling Act, gave to the state 50 sections of land 'for the purpose of erecting public buildings at the capitol of said states for legislative, executive, and judicial purposes,' and that by section 17 of the same act it gave to the state, 'for public buildings at the state capitol, in addition to the grant hereinbefore made for that purpose, one hundred thousand acres. * * *' By appropriate legislative action, the state accepted the gift and bound itself to carry into effect its purposes. Section 1, art. 16, of the state Constitution touches the question for it provides that----

'All the public lands granted to the state are held in trust for all the people, and none of such lands, nor any * * * interest therein, shall ever be disposed of unless the full market value of the estate or interest disposed of, to be ascertained in such manner as may be provided by law, be paid or safely secured to the state. * * *'

From time to time small portions of the grants mentioned have been sold, but for the most part they remain intact in the state. Inasmuch as these lands have been greatly increasing in value, it seems to have been the policy of the state to withhold them from sale for the present, and, with this thought in mind, the Legislature in 1917 provided for a one-half mill property tax to raise money for capitol building purposes. Sections 7916, Rem. Comp. Stat. et seq. That act also provided that the moneys raised in the manner aforesaid----

'shall be charged against the land grant for capitol purposes to the state from the general government, and as moneys are derived from the sale, lease or other disposition of said land grant, the advancements hereby provided for shall be repaid to the general fund of the state: Provided that no moneys received from such sale, lease or disposition shall be returned to the state treasury until all warrants, bonds or other outstanding obligations against the capitol building fund shall have been paid.' Section 7917, Rem. Comp. Stat.

As the law now stands, all moneys for capitol building purposes whether raised by taxation or arising from the sale or lease of capitol land grants, are to be paid into the state treasury and credited to a fund known as the capitol building construction fund. A somewhat recent appraisal by the state, of the undisposed of capitol lands, shows them to have a present value of considerably more than $11,000,000.

At the 1925 session of the Legislature, chapter 27 with reference to capitol building bonds was enacted. Section 1 provides that----

'The state capitol committee may, in its discretion, issue coupons or registered bonds of the state of Washington in an amount not exceeding four million dollars ($4,000,000). * * * Both principal and interest to be payable only from the capital building construction fund from revenues hereafter raised from leases and contracts of sale heretofore made and from leases and sales hereafter to be made, of lands, timber and other products from the surface, or beneath the surface, of the lands granted to the state of Washington by the United States, pursuant to an act of Congress approved February 22, 1889, for capitol building purposes.'

The act fixes the interest which the bonds shall draw and the price at which they shall be sold, and provides that they shall not run longer than 20 years from their date, and that interest shall be payable semiannually, and that all funds from the sale of the bonds shall be paid into the capitol building construction fund. It is further provided that 'the state treasurer may, and, he is hereby authorized to, invest surplus cash in the accident fund in said bonds at par, at such rate of interest, not exceeding five per cent.,' as may be agreed upon. The bonds are to be signed by the Governor and state auditor, and shall be under the seal of the state. Section 5 of the act is to the effect that----

'There is hereby appropriated out of the capitol building construction fund the sum of four million dollars ($4,000,000) to be expended by the state capitol committee in the completion of the construction of the administration and legislative buildings now under construction in the state capitol group, according to the plans adopted by said capitol committee, and the purchase of fixtures, mechanical and electrical devices for said administration and legislative building and the acquisition by purchase and/or condemnation of property heretofore authorized by law to be acquired, and for the erection of a memorial heretofore authorized by law and for improving and laying out the capitol grounds.'

Section 6 reads thus:

'This act is concurrent with other legislation with reference to raising revenue to construct capitol buildings and is not to be construed as repealing or limiting any existing provisions of law with reference thereto.'

This leaves in force the act providing for the one-half mill levy. The state capitol committee on March 7, 1925, at a regular metting, adopted a resolution to issue bonds under the act in the amount of $500,000, bearing interest at 4 1/2 per cent. per annum. This resolution embodied a form of the bond proposed. At this meeting the state treasurer offered to purchase the entire issue of bonds for the accident fund. The committee then accepted the treasurer's bid. One of the bonds was executed by the Governor, and a request was made of the state auditor to execute it also and attach the seal of the state. This he refused to do, claiming that the legislative act of 1925 was unconstitutional and void. This proceeding was instituted for the purpose of compelling the state auditor to execute the bond and attach the seal thereto.

Respondent contends that the 1925 legislative act is void for the following reasons:

(1) Because it creates a debt without a vote of the people, contrary to the provisions of section 3, art. 8, of the state Constitution.

(2) Because there is in force a legislative act providing for a one-half mill property tax to raise funds for capitol building purposes, and that, because those funds and any others raised by the lease or sale of the granted lands are required to be kept in the capitol building fund, the payment of interest on the bonds in question would be, at least in part, paid from moneys raised by taxation, which would be in effect the creation of a debt.

(3) Because it violates section 4 of article 8 of the state Constitution with reference to appropriations by the Legislature of moneys out of the state treasury.

(4) Because the proposed form of the bond is unauthorized by any provision of law.

In the early portion of his brief the respondent also attacks the law on the ground that it has the effect of mortgaging the capitol building lands in violation of the Enabling Act. Later, however, in his brief and in the oral argument he withdraws this contention, conceding, in substance, that the law does not violate any provision of the Enabling Act. Under these circumstances, it will be unnecessary for us to discuss that question or to say anything further concerning it than that an examination of the Enabling Act convinces us that the 1925 law in no wise entrenches upon or violates it.

1. Will these bonds, if issued, create a debt in violation of the provisions of section 3, art. 8 of the state Constitution? Our answer is, 'No.' Section 1 of article 8 of the Constitution provides that the state may, to meet casual deficiencies or failure of revenue or for expenses not provided for, contract debts which shall not at any time exceed $400,000. Section 2 of the same article is unimportant in this connection. Section 3 provides:

'Except the debt specified in sections one and two of this article, no debt shall hereafter be contracted by or on behalf of this state, unless such debt shall be authorized by law for some single work or object to be distinctly specified therein, which law shall provide ways and means, exclusive of loans, for the payment of the interest on such debt as it falls due, and also to pay and discharge the principal of such debt within twenty years from the time of the contracting thereof. No such law shall take effect, until it shall, at a general election, have been submitted to the people,'

--and be approved by them. It has been held that under grants such as those here the state becomes the absolute owner of the title to the lands, and that the United States has parted with all control over them. State of Alabama v. Schmidt, 232 U.S. 168, 34 S.Ct. 301, 58 L.Ed. 555; Louisiana v. Joyce Co. (C. C. A.) 261 F. 128. Although the state owns the lands, it holds them in trust for a particular purpose, or, as was said in Alabama v. Schmidt, supra:

'The gift to the state is absolute, although, no doubt, as said in Cooper v. Roberts, 18 How. 173, 182, 'there is a sacred obligation imposed on its public faith.''

The state owns these lands in its fiduciary or representative and not in its proprietary capacity.

The legislative act under discussion expressly provides that the principal and interest of the bonds authorized shall be payable only from revenues hereafter received from the lease and sale of the granted lands. In no possible way is the credit of the...