State v. McGraw

• Decision Date: 10 September 1895
• Citation: 41 P. 893,12 Wash. 541
• Parties: STATE EX REL. JONES, ATTORNEY GENERAL, v. MCGRAW, GOVERNOR, ET AL.
• Court: Washington Supreme Court

41 P. 893

12 Wash. 541

STATE EX REL. JONES, ATTORNEY GENERAL, v. MCGRAW, GOVERNOR, ET AL.

Supreme Court of Washington

September 10, 1895

Application on relation of W. C. Jones, attorney general, against John H McGraw, governor, and others, for a writ of mandamus to compel the defendants to issue bonds.Denied.

Hoyt C.J., dissenting.

James A. Haight, for plaintiff.

F. C Owings, for defendants.

GORDON J.

This is an application for a writ of mandate commanding the respondents, as the state board of finance, to issue bonds of the state to an amount aggregating upward of $1,500,000, and to cause the same to be sold, for the purpose of funding the outstanding warrants drawn on the general, military, and tide-land funds, pursuant to the act of the legislature approved March 22, 1895, entitled "An act relating to the fiscal affairs of the state of Washington, and declaring an emergency," which act, among other things, provides:

"Section 1.There is hereby created a fund in the treasury of the state known as the 'Loan and Interest Fund.'There is hereby created a board, consisting of the governor, state auditor and state treasurer, known as the 'State Board of Finance.' ***

"Sec. 2.*** Said board shall proceed to fund the outstanding warrants on the general, military and tide land funds of the state by the issue of bonds payable solely out of said 'loan and interest fund.'Said bonds shall bear interest at a rate not to exceed four per cent. per annum and shall run twenty years, save that five per cent. of said bonds shall be redeemed annually, said interest and redemption payments to be made out of said 'loan and interest fund.'Said board shall publish notice of the sale of said bonds in four cities of said state once a week for three consecutive weeks.Said bonds shall be sold after notice as hereinafter provided upon sealed bids to the highest bidder.*** Provided, that said bonds shall not be sold for less than par, and the board shall have the right to reject all bids."

The constitutionality of this enactment is assailed upon many grounds, only one of which, however, need be noticed, as its determination disposes of the case.Section 1, art. 8, of the stateconstitution is as follows: "Section 1.The state may, to meet casual deficits or failures in revenues, or for expenses not provided for, contract debts, but such debts direct and contingent, singly or in the aggregate, shall not at any time exceed four hundred thousand dollars ($400,000) and the moneys arising from the loans creating such debts shall be applied to the purpose for which they were obtained, or to repay the debts so contracted, and to no other purpose whatever."Sections 2and3 of the same article of the constitution provide for the incurring of additional indebtedness for the purpose of repelling invasion, suppressing insurrection, and other purposes therein enumerated.But it is conceded that these latter sections in no wise affect the subject-matter involved in this proceeding.It will be observed that the authority conferred upon the respondents by the act in question is to issue and sell said bonds, after notice, to the highest bidder; and, conceding that it is fairly to be inferred from the act that the funds realized from such sale shall be applied to the payment and discharge of the present indebtedness of the state, it is apparent that after said bonds are sold, and until the proceeds thereof are so applied, the indebtedness of the state would be increased upward of $1,500,000, or to an amount beyond the limit of indebtedness as fixed by the constitution.Nor is it, in our opinion, a sufficient answer to say that it must be presumed that the officers intrusted to carry out the provisions of this act will fully discharge their duties, and that the present indebtedness of the state will be extinguished by the proceeds of the bonds, and ultimately the indebtedness of the state be reduced to its present limit.The prohibition in the constitution is that "such debts, *** singly or in the aggregate, shall not at any time exceed four hundred thousand dollars," and constitutes an "impassable barrier" to the creation of any indebtedness in excess thereof for any period of time, however brief, or for any purpose, however worthy.The constitution of the state of Iowa(article 11, § 3) provides that "no county or other political or municipal corporation shall be allowed to become indebted in any manner, or for any purpose, to an amount in the aggregate exceeding five per centum on the value of the taxable property within such county or...