State v. State Highway Commission
| Citation | 296 P. 1033,89 Mont. 205 |
| Decision Date | 21 February 1931 |
| Docket Number | 6832. |
| Parties | STATE ex rel. DIEDERICHS v. STATE HIGHWAY COMMISSION et al. |
| Court | United States State Supreme Court of Montana |
Original proceeding for an injunction by the State, on the relation of George H. Diederichs, against the State Highway Commission and O. S. Warden and others, as members of said Commission and others.
Injunction issued in accordance with opinion.
Howard Toole, of Missoula, and E. G. Toomey, of Helena, for relator.
L. A Foot, Atty. Gen., C. N. Davidson, Asst. Atty. Gen., J. W Speer, of Great Falls, Sidney M. Logan, of Kalispell, George Y. Patten, of Bozeman, and James W. Freeman, of Great Falls, for respondents.
W. T. Pigott, of Helena, amicus curiæ.
In this proceeding the relator seeks an injunction restraining the state highway commission, the Governor, secretary of state and state treasurer from issuing or selling any of the debentures provided for in chapter 1 of the 1931 Session Laws, which is called the
For the purpose of matching funds set apart by the government in order to build federal aid highways, the act authorizes the sale of debentures, to be paid from motor fuels excise taxes, the collection of which is anticipated. It is already provided by statute that all moneys received by the state treasurer from the collections of motor fuels excise taxes are deposited by him in the state highway fund, and, less refunds, shall be expended by the state highway commission "in the construction, reconstruction, betterment, maintenance, administration and engineering on the Federal Highway system of Highways" in this state. See chapters 18 and 19, Session Laws 1927. The anticipated revenues are greatly in excess of the amount of debentures to be sold.
Chapter 1, Session Laws of 1931, authorizes the sale of state highway debentures in the sum of $6,000,000 at the rate of $1,500,000 for each year from 1931 to 1934, inclusive. The proposed debentures bear interest not exceeding 5 per cent. payable semiannually, and are to mature serially at the rate of $858,000 during each of the years 1934 to 1939, inclusive, and $852,000 in the year 1940. To pay the principal and interest the act provides that the excise tax on motor fuels as provided by the Twenty-Second Legislative Assembly shall not be reduced so long as any of the debentures are outstanding and unpaid, and a sufficient sum is set aside each year from the proceeds of this tax to meet the debentures maturing the next succeeding year. Chapter 6 of the Laws of 1931 fixes the excise tax on motor fuels at 5 cents per gallon.
The principal contention made by relater is that chapter 1 attempts to authorize the creation of a debt or liability in excess of $100,000 without submitting the law to the people, as required by section 2 of article 13 of our state Constitution, which provides: "The legislative assembly shall not in any manner create any debt except by law which shall be irrepealable until the indebtedness therein provided for shall have been fully paid or discharged; such law shall specify the purpose to which the funds so raised shall be applied and provide for the levy of a tax sufficient to pay the interest on, and extinguish the principal of such debt within the time limited by such law for the payment thereof; but no debt or liability shall be created which shall singly, or in the aggregate with any existing debt or liability, exceed the sum of one hundred thousand dollars ($100,000) except in case of war, to repeal invasion or suppress insurrection, unless the law authorizing the same shall have been submitted to the people at a general election and shall have received a majority of the votes cast for and against it at such election."
At the threshold we bear in mind that every presumption must be indulged in favor of the constitutionality of the act; every reasonable doubt must be resolved in favor of legislative action. The question for the court's determination is not whether it is possible to condemn but whether it is possible to uphold the act. When two constructions are possible, one which will result in declaring the statute constitutional and the other unconstitutional, the court without hesitation will pronounce in favor of its constitutionality. State v. Brannon, 86 Mont. 200, 283 P. 202, 67 A. L. R. 1020; State ex rel. Stephens v. Keaster, 82 Mont. 126, 266 P. 387, and cases cited.
Nor is it any concern of the court whether the act is expedient, wise, or unwise. State ex rel. Bonner v. Dixon, 59 Mont. 58, 195 P. 841. It is legislative power, not policy, that is drawn in question. And while we are mindful of the presumptions in favor of legislative acts, yet, being bound to support, protect, and defend the Constitution, when an enactment transgresses the constitutional limitations beyond a reasonable doubt, it is our solemn and sworn duty to so declare it. We are mindful, too, that the declarations of Constitutions are placed therein to be obeyed, and are not to be frittered away by construction. Less v. City of Butte, 28 Mont. 27, 72 P. 140, 61 L. R. A. 601, 98 Am. St. Rep. 545. Our duty in this respect remains the same no matter how urgent may be the desire to obtain money with which to carry on the much-needed program of highway construction. As stated by that able jurist, Chief Justice Taney of the United States Supreme Court, in the famous Dred Scott decision (Scott v. Sandford, 19 How. 393, 15 L.Ed. 692): "No change in public opinion on questions of public policy can ever be given any weight in construing the provisions of a constitution where the meaning is clear, for the adoption of a constitution that might be deemed wise at one time and unwise at another would abrogate the judicial character of the court and make it the reflex of the popular opinion or passion of the day." If the act in question authorizes the creation of a debt or liability in excess of $100,000, there are two available methods of accomplishing what the act proposes: One is to amend the Constitution, and the other is to obtain the consent of the people at an election for that purpose.
Whether the act before us, strictly speaking, creates a debt within the purview of this section 2, article 13, a question upon which respective counsel have spent much effort, we think it unnecessary to decide, for in our opinion the act clearly imposes a liability within the contemplation of the section. The framers of the Constitution provided two methods of raising revenue for public purposes: One the taxation system, and the other the license system. State v. Camp Sing, 18 Mont. 128, 44 P. 516, 32 L. R. A. 635, 56 Am. St. Rep. 551. Knowing the tendency of governments to run in debt, to incur liabilities, and thereby to affect the faith and credit of the state in matters of finance, thus imposing additional burdens upon the taxpaying public, the framers of the Constitution placed positive limitations upon the power of the Legislative Assembly to incur a debt or impose a liability upon the state beyond the limit prescribed, without referring the proposition to the electorate for its approval. As to this, the comprehensive language of the section leaves no doubt. The first two sentences employ the word "debt" and refer to debt alone, but the third adds the word "liability," a much broader term than "debt." Liability is a broad term, of large and comprehensive significance. in a broad sense it means an obligation one is bound in law or justice to perform. There are many other definitions. 36 C.J. 1050. The authors of the Constitution used the term advisedly, with a definite purpose. in construing a constitutional provision it is our duty to give meaning to every word, phrase, clause, and sentence therein, if it is possible so to do. So, whether the law authorizing a contract for the sale of these debentures creates a debt, such as is contemplated by the first two sentences of section 2, is not material. It certainly creates a liability, which includes a debt, for the state is expressly obligated not to reduce the excise taxes on motor fuels fixed by the Twenty-Second Legislative Assembly and to cause the tax to be collected and paid to the debenture holders. This is prohibited by the plain terms of the Constitution, unless approved by the people.
The fact that a special fund is created by the imposition of the license or excise tax on motor fuels with which to pay the debentures is of no importance.
Under this contention the Legislature, or the debt-contracting authority, could divide the public revenue into numerous subdivisions, calling one the "road fund," another the "school fund," another the "agricultural fund," another the "public health fund," and others almost without limit. Debts could then be contracted in unlimited amounts and payable in the far distant future, and still be immune from attack as violating constitutional provisions limiting indebtedness provided each debt was made payable out of some one of the specially designated funds into which all of the revenue collected by taxation from the people had been divided. A mere statement of the proposition carries with it, it seems to us, its own refutation. Crick v. Rash, 190 Ky. 820, 229 S.W. 63.
The fund raised from the motor fuels excise tax results from one of the constitutional methods of raising public revenues. State v. Sunburst Ref. Co., 73 Mont. 68, 235 P. 428. They are state funds, and the state has the right to devote the proceeds of this tax to any public purpose it sees fit. Originally the proceeds were paid to the general fund of the state. Chapter 156, Laws 1921. Subsequently, only a part was paid into the general fund. Chapter 150, Laws 1923, and chapter 186, Laws 1925. The proceeds from this tax are...
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