State v. Eagleson

• Decision Date: 11 June 1919
• Citation: 32 Idaho 276,181 P. 934
• Parties: STATE OF IDAHO on the Relation of ROY L. BLACK, Attorney General, Plaintiff, v. JOHN W. EAGLESON, Treasurer of the State of Idaho, Defendant
• Court: Idaho Supreme Court

181 P. 934

32 Idaho 276

STATE OF IDAHO on the Relation of ROY L. BLACK, Attorney General, Plaintiff, v. JOHN W. EAGLESON, Treasurer of the State of Idaho, Defendant

Supreme Court of Idaho

June 11, 1919

CONSTITUTIONAL LAW-PUBLIC DEBTS-TREASURY NOTES.

The issuance and sale of treasury notes, in conformity to Sess Laws 1919, chap. 94, does not incur an indebtedness within the meaning of art. 8, sec. 1, of the constitution of Idaho.

Original application for writ of mandate. Alternative writ issued and demurrer to answer sustained.

Demurrer sustained.

Roy L Black, Attorney General, Dean Driscoll and Alfred F. Stone, Assistants, for Plaintiff.

The indebtedness contemplated in art. 8, sec. 1, of the constitution is indebtedness or liabilities in excess of the revenue provided for the fiscal year or previously provided, as distinguished from obligations to pay money from taxes already levied or in process of collection. (36 Cyc. 884; Stein v. Morrison, 9 Idaho 426, 75 P. 246; State v. Medbery, 7 Ohio St. 522; Feil v. City of Coeur d' Alene, 23 Idaho 32, 129 P. 643, 43 L. R. A., N. S., 1095; State v. McCauley, 15 Cal. 429; People v. Pacheco, 27 Cal. 175; State ex rel. Ash v. Parkinson, 5 Nev. 15; In re State Warrants, 6 S.D. 518, 55 Am. St. 852, 62 N.W. 101; In re Incurring of State Debts, 19 R. I. 610, 37 A. 14; Rhea v. Newman, 153 Ky. 604, 156 S.W. 154, 44 L. R. A., N. S., 989; Rowley v. Clarke, 162 Iowa 732, 144 N.W. 908; Re Opinion of the Judges, 38 S.D. 635, 162 N.W. 536; Bryan v. Menefee, 21 Okla. 1, 95 P. 471.)

The words "debt" and "liability," as used in art. 8, sec. 1, of the constitution do not include the ordinary expenses of state government. (Rhea v. Newman, 153 Ky. 604, 156 S.W. 154, 44 L. R. A., N. S., 989; State v. Donahey, 93 Ohio St. 414, 113 N.E. 263; State ex rel. Ash v. Parkinson, 5 Nev. 15-27.)

Frank Martin and I. N. Sullivan, for Defendant.

In People ex rel. v. Johnson, 6 Cal. 499, the court holds that article 8 of the provisions of the California constitution, which is similar to the provisions of sec. 8 of the Idaho constitution, except as to the amount of the indebtedness, expressly prohibits the legislature from creating a debt in any way which in the aggregate, with previous debts and liabilities of the state, exceeds the sum of $ 300,000, except for certain purposes mentioned therein. To the same effect is Nougues v. Douglass, 7 Cal. 65.

Those two cases were decided in 1856 and 1857. It appears that the supreme court of California in the decision of those cases held that the current expenses of the state were included in the "debts and liabilities" referred to in said article 8.

MORGAN, C. J. Rice and Budge, JJ., concur.

OPINION

MORGAN, C. J.

Relator states in his application for a writ of mandate that he is attorney general and the defendant is treasurer of the state of Idaho; that the state board of examiners, on April 30, 1919, by resolution regularly adopted, ordered and directed the issuance and sale of treasury notes of the par value of one million two hundred and fifty thousand dollars, as authorized by Sess. Laws 1919, chap. 94, p. 346; that there is outstanding in taxes levied for 1919, for general state purposes, payable into the general fund of the state treasury, in 1920, the sum of two million dollars in addition to the revenue accruing thereto from sources other than taxation; that there are no treasury notes of the character mentioned in said chap. 94, for 1919, issued or outstanding and that the defendant has failed and refused, and still fails and refuses, to perform the duties devolving upon him as treasurer in making sale of said notes.

Sec. 1 of chap. 94, above cited, is as follows: "That for the purpose of anticipating the revenue to accrue in the general fund of the State of Idaho from taxes levied for the current biennium and thereby advancing the time of payment of the outstanding claims and charges against the said general fund, together with accruing charges, claims and appropriations against said fund, a loan for the use and benefit, and in the name of, the State of Idaho, in the principal sum of Three Million Dollars, lawful money of the United States of America, is hereby authorized and directed, the proceeds of which said loan shall be deposited in the treasury of the State of Idaho in the general fund therein and shall be subject to the appropriations now made or hereafter to be made from or against said general fund and to disposition in like manner as all other moneys accumulating in said fund."

The chapter under consideration authorizes the state board of examiners to order the sale of such amounts of treasury notes as it may deem best, provided it shall not order, nor permit to be sold, during the year 1919 an amount of the total par value, plus interest to date of maturity, exceeding the total tax levy in that year for general state purposes payable into the treasury in 1920, and during 1920 it shall not order nor permit to be sold an amount exceeding, in like manner, the taxes levied in that year for general state purposes payable into the treasury in 1921. It is further provided that upon the adoption by the state board of examiners of a resolution directing the sale of notes the treasurer shall perform certain acts, in the law specified, looking to the sale thereof. The purpose of this action is to procure the performance of these acts.

The defendant answered, in effect, that if treasury notes be issued as prayed for, the indebtedness thereby created will together with the bonded indebtedness of the state now outstanding, be in excess of the amount permitted by art. 8, sec. 1, of the constitution...