State v. Hackmann

• Decision Date: 15 July 1918
• Docket Number: No. 20652.,20652.
• Citation: 205 S.W. 161,275 Mo. 636
• Parties: STATE ex rel. KELLY et al. v. HACKMANN, State Auditor.
• Court: Missouri Supreme Court

205 S.W. 161

275 Mo. 636

STATE ex rel. KELLY et al. v. HACKMANN, State Auditor.

No. 20652.

Supreme Court of Missouri. In Banc.

July 15, 1918.

Motion for Rehearing Denied August 6, 1918.

Appeal from Circuit Court, Cole County; J. G. Slate, Judge.

Proceedings for mandamus by the State, on the relation of William G. and Henry B. Kelly, partners, doing business as Kelly & Kelly, against George E. Hackmann, as State Auditor. From a judgment quashing the alternative writ, relators appeal. Reversed and remanded, with directions.

Geo. Kingsley and Reed & Harvey, all of Kansas City, for appellants. Frank W. McAllister, Atty. Gen., and John T. Gose, Asst. Atty. Gen., for respondent.

GOODE, Special Judge.

An alternative writ of mandamus was issued June 12, 1917, by the judge of the circuit court of Cole county, commanding the respondent, as State Auditor, to sign and deliver to the relators, Kelly & Kelly, a warrant for $20,000 upon the capitol building fund of the state, or to show cause in term time for refusing. The writ was granted upon a petition containing these averments: The petitioners were partners under the style of Kelly & Kelly; the sum of $20,000 was appropriated to them out of the capitol building fund by the General Assembly at its last session to pay money due petitioners by the state of Missouri; said appropriation was part of the General Appropriation Act and was approved by the Governor; prior to his approval, petitioners agreed with him to reduce their claim to $20,000; petitioners were and are willing to accept the State Auditor's warrant for that sum in satisfaction of the appropriation, had so advised him, and had demanded that he issue a warrant in petitioners' favor in accordance with the terms of the appropriation, but he had refused.

The item of the General Appropriation Act of April 11, 1917, on which this proceeding is based, reads:

"There is hereby appropriated out of the state treasury chargeable to the capitol building fund the sum of twenty-five thousand dollars for the relief of Kelly & Kelly of Kansas City, Missouri, in full payment of their claim against the state of Missouri for the plan submitted to the board of fund commissioners for the sale of state capitol bonds." Sess. Laws of 1917, p. 21, § 59.

That part of the Appropriation Act is the only evidence in this case of an agreement between relators and the state and of what the agreement was.

In his return to the writ the State Auditor set forth ten reasons why he had not issued the warrant in question and should not be compelled to issue it. They were in substance as follows: A denial that the appropriation was to pay money due to the relators from the state, or that there was any money in the capitol building fund to pay a warrant for the appropriation. Averments that the capitol building fund was in the nature of a trust fund, set apart by a vote of the "people for these specific purposes: First, to build a new state capitol second, to furnish and equip it; third, to purchase any additional premises that might be needed as a site for the capitol; that therefore the Legislature was without power to divert any part of the capitol building fund to other purposes. That as the capitol building fund consisted of money derived from a liability contracted by tie state, for the three purposes aforesaid, it could not be appropriated for any other than those purposes, or to repay the debt of the state, without violating section 20 of article 10 of the state Constitution. This section of the state Constitution provides, in effect, against the use of any money arising from a loan, debt, or liability contracted by the state, for any purposes other than that for which the debt was contracted, or to the repayment of the debt. That the appropriation for relators was contrary to the provisions of section 48, art. 4, of the Constitution, which reads:

"The General Assembly shall have no power to grant, or to authorize any county or municipal authority to grant any extra compensation, fee or allowance to a public officer, agent, servant or contractor, after service has been rendered or a contract has been entered into and performed in whole or in part, nor pay nor authorize the payment of any claim hereafter created against the state, or any county or municipality of the state, under any agreement or contract made without express authority of law; and all such unauthorized agreements or contracts shall be null and void."

That the appropriation amounted to a grant to the relators of public money, in violation of the inhibition of section 46, art. 4, of the state Constitution. That the appropriation impaired the obligation of contracts previously made by the state, for the construction and furnishing of the capitol building. And, finally, averments to the effect that the claim of relators for which the appropriation was made did not arise under a contract made with the state capitol commission board, nor was the relators' demand allowed and certified by said board, in conformity to the act creating the board. Sess. Laws 1911, p. 108 et seq.

A replication in the form of a general denial of the return was filed.

At the hearing in the circuit curt, it was admitted there was then in the Capitol building fund $707,844.87; that said fund (i. e., the amount then in it and what had been in it) consisted of the proceeds of the sale of bonds of the state authorized by act of the General Assembly (see Sess. Laws 1911, pp. 416, 417), together with funds placed in it under section 16A of the act of the General Assembly relative to contingent and incidental expenses for years 1915 and 1916 (Sess. Laws 1915, p. 9). It was admitted the additional sum of $27,500 had been transferred to the capitol building fund pursuant to said section 16A (Laws 1915, p. 9), and that $21,000 derived from the rent and sale of buildings on the capitol grounds had been added. There were admissions relative to submitting to popular vote the Act of March 16, 1911 (Sess. Laws 1911, pp. 416, 417). providing for contracting a lit liability of the state through an issue of bonds to a maximum of $3,500,000, to provide means to build a capitol, furnish and equip it, and purchase additional premises for it; that the act of submission was approved March 24, 1911 (Sess. Laws 1911, pp. 250-254); and that the bond issue, for the purposes mentioned, received a two-thirds majority of the voters voting at the election.

Evidence was put in by the respondent to show contracts the state was under for building the capitol and the amount of the state's liability under them; also, that other contracts would be necessary in he future in order to complete, light, and furnish the capitol.

The trial court found that, when the appropriation act was approved and at the time of the hearing, there was enough money in the capitol building fund to pay a warrant for $20,000 in favor of relators, and that, too, without impairing the obligation of any contract in existence when the appropriation was approved or when the cause was heard. The alternative writ was quashed in the circuit court, and relators appealed.

By way of further explanation, we state that the issue of state bonds to construct, furnish, and equip a new capitol building was authorized by an act of the General Assembly approved March 16, 191:. (Sess. Laws 1911, p. 416). That act provided for the contracting of a liability of the state by an issue of bonds, not to exceed $3,500,000, for a submission of this act to a vote of the people as required by section 44, art. 4, of the state Constitution, prescribed the denominations of the bonds, mode of authenticating them, and further provided as follows:

"Said bonds, when so prepared and executed, * * * shall be sold to the best advantage by said board, but for not less than par. The proceeds of said sale or sales shall constitute a fund to be designated as the capitol building fund, and shall be applied exclusively to the building of a new state capitol at the present seat of government of the state, including the furnishing and other equipment of said building and the purchase by the state of additional capitol premises adjoining those now owned by the state." And further that "contract or contracts for expenditures to carry out the purposes of this act in excess of said three and one-half millions of dollars, with interest collected thereon, shall, to the amount of said excess, be illegal and void and forever nonpayable."

An act submitting the foregoing act to a popular vote, was approved March 24, 1911 (Sess. Laws 1911, p. 250).

The proposition mainly relied on by respondent as a defense is that the appropriation to pay the claim of relators violated that clause of the state Constitution quoted above which forbids the General Assembly to pay or authorize the payment of a claim created against the state under any agreement or contract made without express authority of law, and declares all such unauthorized agreements and contracts shall be null and void. The claim of relators is of a kind that could only accrue from a contract, and, whatever may have been the contract out of which the claim arose, it must have been made between the latter and the state acting through the board of fund commissioners, as it is apparent from the recital in the appropriation act that the purpose of the particular item was to pay relators for a plan for the sale of the state capitol bonds, submitted by them to that board. Moreover, if a contract of the kind in question was possible, it could only have been made with the said board, which was the body of officials charged with the task of selling the bonds, by the act that authorized them.

There are two inquiries to be answered in determining whether or not the claim of relators was created against the state under a valid agreement: First, is there proof in the record that an agreement was entered into by the relators with the board of fund...