State v. State Board of Examiners

• Decision Date: 29 June 1925
• Docket Number: 5740.
• Citation: 238 P. 316,74 Mont. 1
• Parties: STATE ex rel. v. STATE BOARD OF EXAMINERS et al. TOOMEY
• Court: Montana Supreme Court

238 P. 316

74 Mont. 1

STATE ex rel. TOOMEY v. STATE BOARD OF EXAMINERS et al.

No. 5740.

Supreme Court of Montana

June 29, 1925

Suit by the State, on the relation of E. G. Toomey, to enjoin the State Board of Examiners and members thereof from executing statute. Suit dismissed.

E. G Toomey, of Helena, pro se.

L. A Foot, Atty. Gen., and A. H. Angstman, Asst. Atty. Gen., for respondents.

MATTHEWS J.

This is a taxpayer's suit to enjoin the state board of examiners and the members thereof from carrying into execution the provisions of chapter 176, Laws of 1925. The petition alleges that the act is unconstitutional, but that, nevertheless unless restrained, the board will proceed thereunder. On the filing of the petition an order to show cause was duly issued, and in response thereto the board demurred to the petition upon the ground that the same does not state facts sufficient to constitute a cause of action or to entitle the relator to the relief sought.

The purpose of the act in question is expressed in its preamble, to wit: "It appearing that there are now outstanding and unpaid valid warrants, chargeable against the general fund of the state, * * * in excess of three million seven hundred and fifty thousand dollars, * * * bearing interest at the rate of 6 per cent. per annum," and that there is no money in the said fund to pay the warrants, and it further "appearing that said warrants can be refunded * * * at a much lower rate of interest" and a large saving made to the state, it is proposed to issue and sell state treasury notes for the amount of $3,750,000, these notes to bear interest at a rate not to exceed four and one-half per cent. per annum.

Section 1 authorizes the state board of examiners to issue and sell the treasury notes referred to, and provides that the proceeds therefrom shall be deposited in the general fund, and shall be used exclusively for the payment of the outstanding warrants mentioned.

Section 2 provides for the issuance of these treasury notes in series, and in such denominations as may be determined by the board, and shall become due and payable as follows:

"Series A-$1,000,000.00 January 15, 1926.

Series B-$1,250,000.00 July 15, 1926.

Series C-$1,500,000.00 January 15, 1927."

Section 3 empowers the board to prescribe the form of the notes, and that "each series shall bear upon its face the words: 'refunding treasury notes of the state of Montana,"' signed by the members of the board and bearing the great seal of the state of Montana, and shall have interest coupons attached, the first coupons to be payable July 15, 1925.

Section 4:

"The treasury notes provided for in this act shall be disposed of by the state board of examiners in such manner as they shall deem for the best interests of the state for the carrying out of the purposes and provisions of this act; provided, that no treasury note shall be disposed of for less than par value and accrued interest to date of sale."

Section 5 provides that the notes shall be payable to bearer at the office of the state treasurer, and entitled to payment in the order of their presentation, provided that the board may provide for payment at some bank or trust company in New York, to be selected by the board.

Section 6:

"For the purpose of paying said treasury notes, as the same become due and of paying interest maturing thereon, there is hereby created in the treasury of the state of Montana a special fund to be known as the 'treasury note redemption fund,' and so much of the moneys accruing to the general fund in the treasury of the state of Montana as will equal the amount of said treasury notes and interest coupons issued and outstanding, and due at any interest paying period are hereby apportioned to, set apart to, and shall be paid into and transferred to said treasury note redemption fund, and the said treasury note redemption fund and all moneys accruing, or to accrue therein are hereby appropriated exclusively to and for the payment of such treasury notes and the interest thereon; provided, that apportionments to said treasury note redemption fund shall be made semiannually and only in such amounts and at such times as shall be necessary to meet each semiannual charge."

Section 7 authorizes the state treasurer, on maturity, to pay these treasury notes on presentation at his office, or at the bank designated by the board, in the order of their presentation and out of the "treasury note redemption fund."

Section 8 makes a special appropriation for the payment of the expense of carrying out the provisions of the act.

This act is attacked upon constitutional grounds, and, in the consideration of the questions raised, it must be borne in mind that we are passing upon the validity of the acts of a co-ordinate branch of the state government, and that-

"In exercising this high authority, the judges claim no judicial supremacy; they are only the administrators of the public will. If an act of the Legislature is held void, it is not because the judges have any control over the legislative power, but because the act is forbidden by the Constitution, and because the will of the people, which is therein declared, is paramount to that of their representatives expressed in any law." Lindsay v. Commissioners, 2 Bay (S. C.) 38.

"Nevertheless, in declaring a law unconstitutional, a court must necessarily cover the same ground which has already been covered by the legislative department in deciding upon the propriety of enacting the law, and they must indirectly overrule the decision of that co-ordinate department. The task is therefore a delicate one, and only entered upon with reluctance and hesitation." Cooley on Constitutional Limitations, p. 226.

For these reasons courts have held generally, and the rule is declared by this court, that-

"The constitutionality of a legislative enactment is prima facie presumed, and every intendment is in favor of upholding it unless it appears unconstitutional beyond a reasonable doubt." State ex rel. Bonner v. Dixon, 59 Mont. 58, 195 P. 841; State ex rel. Peyton v. Cunningham, 39 Mont. 197, 103 P. 497, 18 Ann. Cas. 705; Spratt v. Helena P. T. Co., 37 Mont. 60, 94 P. 631.

"The fundamental purpose of construing a constitutional provision is to give effect to the intent of its framers and of the people who adopted it." 12 C.J. 907.

To this end the construction should not be technical, but the provision under consideration should be liberally construed to determine its primary purpose. State ex rel. Harrington v. Kenney, 10 Mont. 410, 25 P. 1022.

With these principles in mind, we will take up the questions presented in the order in which they are argued by relator.

1. Relator contends that the act violates section 34 of article 5 of our Constitution, which reads as follows:

"No money shall be paid out of the treasury except upon appropriations made by law, and on warrant drawn by the proper officer in pursuance thereof, except interest on the public debt."

(a) It is first suggested, but not seriously urged, that there was no appropriation made.

The word "appropriation" is defined by Webster as "the act of setting apart or assigning to a particular use or person: * * * the application to a special use or purpose * * * as of money to carry out some public object," which definition has received the sanction of this court. State ex rel. Rotwitt v. Hickman, 9 Mont. 370, 24 P. 740, 8 L. R. A. 403. This setting apart or designation of the purpose for which public money may be used must be "made by law." This provision, however, does not require the introduction in the Legislature of an appropriation bill, but the act may be accomplished in any manner receiving the sanction of the law. State ex rel. Rotwitt v. Hickman, above; State ex rel. Buck v. Hickman, 10 Mont. 497, 26 P. 383; State ex rel. Journal Pub. Co. v. Kenney, 9 Mont. 389, 24 P. 96; State ex rel. Palmer v. Hickman, 11 Mont. 541, 29 P. 92.

Section 6 of the act, as hereinbefore quoted, requires a transfer of a sufficient amount to meet the principle and interest payments as they fall due, from the general fund to the "treasury note redemption fund," and then declares that all of the money so diverted is "appropriated" to the payment of these treasury notes. While there is no direct appropriation from the general fund, the act is sufficient to meet the requirement of this provision.

(b) After an appropriation has been made, the money appropriated can only be paid out on "a warrant by the proper officer in pursuance thereof." Relator contends that this inhibition requires that all warrants must be drawn by the state auditor, and that, as this act does not provide for action by that official, it is violative of the section quoted. However, a warrant is merely "an order by which one of competent authority authorizes another to pay a particular sum of money." State v. Fenly, 18 Mo. 445; National Bank v. Greenlaw, 134 Cal. 673, 66 P. 963; Shawnee County v. Carter, 2 Kan. 115. The terms "warrant" and "order" are synonymous. State v. Woods, 112 La. 617, 36 So. 626.

We find no provision in the Constitution requiring that all state warrants be issued by the state auditor, and no statutory provision to that effect. The Constitution (section 1, article 7) provides for a state auditor, and, had its framers intended to declare that all state warrants shall be issued by this particular officer, they would have experienced no trouble in so framing this provision. By the use of the phrase "the proper officer" they evidently intended that, at some future time, special funds in the treasury might be handled through some other office than that of the auditor, and warrants or orders issued by such other "proper officer."

In the...