Streit v. Lujan

• Decision Date: 14 December 1931
• Docket Number: No. 3726.,3726.
• Citation: 6 P.2d 205,35 N.M. 672
• Parties: STREITv.LUJAN, State Comptroller, et al.
• Court: New Mexico Supreme Court

35 N.M. 672

6 P.2d 205

STREIT

v.LUJAN, State Comptroller, et al.

No. 3726.

Supreme Court of New Mexico.

Dec. 14, 1931.

Syllabus by the Court.

1. Laws 1929, c. 1, Sp. Sess. (1929 Comp. § 64-1101 et seq.), and debentures issued thereunder, constitute a contract pledging proceeds of gasoline excise taxes so far as necessary to enable state treasurer to set aside amounts specified for payment of interest and principal, but contemplate surpluses in effect released from pledge and subject to legislative disposition.

2. Laws 1931, c. 31, refunding gasoline excise taxes to those using gasoline otherwise than on highways, construed as authorizing refunds only out of proceeds of excises not necessary to enable state treasurer to set aside amounts specified by Laws 1929, c. 1, Sp. Sess., for payment of interest and principal of debentures issued thereunder, and, as so construed, held not to impair obligations of contract between state and debenture holders, nor repugnant to N. M. Const. art. 9, § 16.

3. Holder of debenture issued under Laws 1929, c. 1, Sp. Sess., suing to enjoin refunds from treasury under Laws 1931, c. 31, as impairing obligations of contract, cannot be heard to urge invalidity of the attempted appropriation under N. M. Const. art. 4, § 30, or that emergency clause appearing in approved act was not adopted by two-thirds vote of each House, as required by N. M. Const. art. 4, § 23.

Appeal from District Court, Santa Fé County; Otero, Judge.

Suit by George W. Streit, doing business under the name of G. W. Streit & Company, against J. M. Lujan, State Comptroller of the State of New Mexico, and others. From a final judgment dismissing the suit, plaintiff appeals.

Affirmed and cause remanded.

Act providing for refund of gasoline excise taxes held not repugnant to constitutional provision prohibiting decrease of annual revenues pledged for payment of state highway debentures. Comp.St.1929, § 64-1101 et seq.; Laws 1931, c. 31; Const. art. 9, § 16.

Charles Fahy, of Santa Fé, for appellant.

E. K. Neumann, Atty. Gen., Carl A. Hatch, of Clovis, and Sam G. Bratton, of Albuquerque, for appellees.Rodey & Dailey, of Albuquerque, amici curiæ.

WATSON, J.

Laws 1931, c. 31, makes provision for the refunding of gasoline excise taxes upon proper showing that the gasoline had been purchased for use and used otherwise than in motor vehicles operated or intended to be operated upon the highways. The present suit challenges the constitutionality of that act and seeks to enjoin state officials from complying with its provisions. The trial court sustained a demurrer to the complaint and entered final judgment dismissing it. Plaintiff has appealed.

Appellant claims to be the owner of a state highway debenture with attached coupons. It is dated July 1, 1930; matures July 1, 1938; is in the principal sum of $1,000; bears interest at 5 per cent. payable semi-annually; specifies that it is payable only from the proceeds of the collection of the 5-cent excise taxes upon the use or sale of gasoline, the motor vehicle registration fees, and property taxes “to the extent to which it is now provided by law the proceeds of the collection of such fees and taxes shall be covered into the state road fund and as provided by the terms of” Laws 1929, c. 1, Special Session; recites that it is one of a series of 250, issued in conformity with the provisions of the act just mentioned, to anticipate the collection of the proceeds of the taxes just enumerated; and provides that: “Pursuant to the provisions of said Act of the Legislature of New Mexico, the issue and sale of this debenture constitutes an irrevocable contract between the State and the owner thereof that said fees and taxes at the rate now provided by law shall not be reduced so long as this debenture remains outstanding and unpaid, and that the State will cause said fees and taxes to be promptly collected and sufficient thereof set aside and applied to pay this debenture and interest according to the terms thereof.”

Laws 1929, c. 1, Special Session (1929 Comp. § 64-1101 et seq.), authorized the state highway commission to anticipate the proceeds of the collection of any or all of the revenues enumerated in the debenture “to the extent to which it is now provided by law that the proceeds of the collection of such fees and taxes shall be covered into the state road fund, and the same are not otherwise pledged by the issuance and sale of bonds or debentures heretofore sold and now outstanding.” Section 1 (1929 Comp. § 64-1101). Section 2 (1929 Comp. § 64-1102) provides: “The treasurer of the state of New Mexico shall keep a correct record of all such debentures issued, and from the proceeds of the taxes or fees pledged to pay the same under the authority hereof, he shall first set aside each month in a separate fund, a sufficient sum to pay the interest accruing each month on said debentures, and during the twelve months next preceding the maturity of each series of such debentures he shall set aside from said proceeds sufficient money to provide for the payment of the principal thereof at maturity.” Section 5 (1929 Comp. § 64-1105) provides: “The issue and sale of said debentures shall constitute an irrevocable contract between the state of New Mexico and the owner of any of said debentures, that the fees and taxes pledged for payment thereof, at the rate now provided by law shall not be reduced so long as any of said debentures remain outstanding and unpaid, and that the state will cause said taxes and fees to be promptly collected and sufficient thereof set aside and applied to pay said debentures and interest according to the terms thereof.”

At the time of the adoption of this act, it was provided by law that all of the proceeds of the gasoline sales excise tax not necessary to pay the principal and interest of outstanding debentures “shall be paid into the state treasury and covered into the State Road Fund to be used for maintenance, construction and improvement of state highways and to meet the provisions of the Federal Aid Road Law.” Laws 1927, c. 20, § 2, 1929 Comp. § 60-205.

Appellant complains that, pursuant to the refunding act of 1931, a suspense fund has been set up, in which there is now more than $25,000, which is being withheld from the state road fund, although there are not now in the treasury, available for the purpose, sufficient funds to pay the debentures outstanding in the sum of $5,600,000; that the act complained of, if put into effect, will materially reduce the amount pledged for the repayment of the debentures, and materially reduces the value of plaintiff's debenture and of all others.

The constitutionality of the act is challenged on four grounds:

First. That it impairs the obligation of appellant's contract, in violation of U. S. Const. art. 1, § 10, and N. M. Const. art. 2, § 19.

Second. That it is in violation of N. M. Const. art. 9, § 16, providing that: “The legislature shall not enact any law which will decrease the amount of the annual revenues pledged for the payment of state highway debentures or which will divert any of such revenues to any other purpose so long as any of the said debentures issued to anticipate the collection thereof remain unpaid.”

Third. That it is violative of N. M. Const. art. 4, § 30, providing: “Except interest or other payments on the public debt,...