Vette v. Childers

• Decision Date: 12 February 1924
• Docket Number: Case Number: 14627
• Citation: 1924 OK 190,228 P. 145,102 Okla. 140
• Parties: VETTE v. CHILDERS, State Auditor, et al.
• Court: Oklahoma Supreme Court

1924 OK 190

228 P. 145

102 Okla. 140

VETTE v. CHILDERS, State Auditor, et al.

Case Number: 14627

Supreme Court of Oklahoma

Decided: February 12, 1924

Syllabus

1. Injunction--Right of Taxpayer to Enjoin Misappropriation of State Funds.

A resident taxpayer has an equitable ownership in funds in state treasury, and although no private interest, he may invoke the interposition of a court of equity to restrain the payment of money appropriated by the Legislature in violation of the Constitution.

2. Same--Illegal Appropriation as Basis for Action.

The unlawful appropriation of public funds is an invasion of the legal rights of a taxpayer, and a suit may be maintained to restrain such expenditure without waiting for the state officers to take further steps toward the expenditure of the funds appropriated.

3. Statutes--Validity of Appropriation Act--Public Purpose.

Under section 14, art. 10, of the Constitution no tax can be levied and collected except for public purposes, and under section 19, art. 10, of the Constitution, no tax levied and collected for one purpose shall ever be devoted to another purpose. It follows, therefore, that no appropriation of funds in the state treasury can be made for other than a public purpose.

4. Same--"Public Purpose."

Under sections 14 and 19, art. 10, of the state Constitution money in the state treasury can only be appropriated and used for public purposes, and in order to constitute a public purpose within the meaning of this constitutional provision, such purpose must not only be affected with a public interest, but must be performed by the state in the exercise of its governmental functions, and public funds cannot be used to assist individuals in a business which is affected with a public interest, as the Constitution neither authorizes nor contemplates the exercise of governmental functions by any person, association, or corporation, except the duly constituted officers of the state.

5. Same--Invalidity of State Appropriation for Warehouse System Owned by Others.

Section 18 of the act of the Legislature of 1923, entitled: "An Act providing for the incorporation, organization, and operation of a warehouse system for the state of Oklahoma, making an appropriation therefor, and declaring an emergency," which appropriates out of any funds in the state treasury, not otherwise appropriated, the sum of $ 1,250,000, or so much thereof as may be necessary to be invested in first mortgage bonds on warehouse property owned, operated, and controlled by farmers' co-operative associations for the purpose of assisting in the establishment of a state warehouse system for the storage of grain, cotton, broomcorn, hay, wool, and any or all other agricultural, live stock, or poultry products, and poultry, is an appropriation for the purpose of assisting a group of individuals in owning and operating a warehouse system, and is not an appropriation of money for public purposes as required by sections 14 and 19 of the state Constitution, and such appropriation is therefore unconstitutional and void.

Error from District Court, Oklahoma County; William H. Zwick, Judge.

Action by John Vette against Charles C. Childers, State Auditor, and another. Judgment for defendants, and plaintiff brings error. Reversed and remanded, with directions.

H. O. Glasser and Nathan Scarritt, for plaintiff in error.

George F. Short, Atty. Gen., and C. W. King, Asst. Atty. Gen., for defendants in error.

COCHRAN, J.

This action was instituted by John Vette against the State Auditor and State Treasurer, to restrain them from paying out of the funds in the treasury of the state of Oklahoma, certain money appropriated by Senate Bill No. 37, chap. 22, Session Laws 1923, for the purpose of assisting in the establishment of a state warehouse system.

Before determining the merits of this case it is necessary to consider a preliminary question presented by counsel for the defendants in error. It is contended that an injunction will not lie upon relation of a private taxpayer to restrain the misappropriation of public funds unless the taxpayer can show some injury special in its nature and different from that inflicted upon the community or state at large. This suit was instituted by John Vette, as a taxpayer, to enjoin the payment of funds out of the state treasury, under an appropriation made by the Legislature, which is alleged by the taxpayer to be in violation of various constitutional provisions. The defendants in error rely on Thompson et al. v. Haskell, Governor, 24 Okla. 70, 102 P. 700, in which case it was said:

"When a party seeks the intervention of a court of equity to stay the administration and execution of the law by the executive department of state, he must bring himself clearly within the rule, and show an irreparable injury or otherwise a clear right thereto, before equity will lend its strong arm to stay the administration or work of the co-ordinate branch of the government."

In that case, the question under consideration was the right of the taxpayer to maintain an action for the purpose of contesting an election, and it was held that the taxpayer could not maintain the action, but the court referred to the case of Kellogg v. School District No. 10, 13 Okla. 285, 74 P. 110, and said:

"The Kansas rule was to the effect that one taxpayer could not enjoin a tax levied against another taxpayer; that each must sue for himself, either in an action brought by himself alone or in an action brought by himself and others with a like interest. And this appears to be the rule recognized in the case of Stiles, Treasurer, v. City of Guthrie, 3 Okla. 39, 41 P. 388, but the case of Kellogg v. School District No. 10, supra, seems to have extended this rule so as to permit a taxpayer to maintain an action to prevent the levying of a tax unauthorized, or the disposition of public funds other than as authorized by law."

Thompson et al. v Haskell, Governor, supra, therefore, does not support the contention of the defendants in error, and the rule announced in the Kellogg Case has never been overruled. It is contended by the defendants in error, however, that although that rule applies to municipal corporations, it can have no application to an injunction brought against state officers, and they rely upon the statement made in Pomeroy on Equity Jurisprudence (4th Ed.) vol. 4, sec. 1748, as follows:

"Hence, it would seem that an injunction should not issue against a state officer unless some special and direct injury to the plaintiff is shown. It is clear that it should not issue to restrain state officers from erecting a public building at a place other than that prescribed by law, where no special injury is shown and the burden of taxation is not increased; nor to restrain a state grain inspector from employing deputies under an unconstitutional law, when this is not shown to cause any injury to the plaintiff."

In State v. Huston, 27 Okla. 606, 113 P. 190, the court said:

"However, the great weight of authority is that courts of equity will not restrain the action of state officers in misappropriating public funds merely on the relation of citizens and taxpayers, the executive law officers of the state being the proper parties to institute suits involving the disposition of the revenues of the state."

The language used in that opinion is clearly dicta, as the suit in that case was not instituted in the name of a taxpayer. That case does not overrule Kellogg v. School District No. 10, supra, which has been followed in numerous cases, some of which are Town of Afton v. Gill, 57 Okla. 36, 156 P. 658; Sexton v. Smith, 32 Okla. 441, 122 P. 686; Perry v. Lobsitz, 35 Okla. 576, 130 P. 919; Greer v. Austin, 40 Okla. 113, 136 P. 590; Marlow v. School District, 29 Okla. 305, 106 P. 797. While none of these cases dealt with the misappropriation of funds by state officers, but only with misappropriation by officers of school districts and cities, the taxpayer has the same right to prevent, by injunction, the misappropriation of funds in the state treasury under an unconstitutional act of the Legislature. In State ex rel. Cruce v. Cease, 28 Okla. 271, 114 P. 251, and numerous other cases, this court has held that an act of the Legislature must be treated and acted upon by subordinate executive officers as constitutional and legal until the unconstitutionality and illegality have been judicially established, and, in view of this holding, it is difficult to understand how the Attorney General could institute and prosecute an action for the purpose of determining the unconstitutionality of this act of the Legislature. We are of the opinion that the correct rule is announced in Fergus v. Russel (Ill.) 110 N.E. 130, in the first syllabus, as follows:

"Because of their equitable ownership of the funds in the state treasury, and their liability to replenish the treasury for a deficiency which would be caused by a misappropriation, taxpayers may maintain a bill in equity to restrain the payment from the state treasury of moneys appropriated by the General Assembly on the ground that such appropriations are unconstitutional; there being no distinction between suits to restrain the payment of funds from a municipal treasury and a suit to restrain payments from the state treasury, as a municipality, in exercising the delegated authority to raise funds by taxation, is exercising a part of the power of the state, and the sovereignty of the state is no less involved, except in degree, in a taxpayer's suit to enjoin the misappropriation of the funds of a municipality than in a suit to enjoin the misappropriation of the public funds in the state treasury."

A full discussion of the question here involved will be found in the note to Pierce v. Hagans (Ohio) 15 Am. & Eng. Ann. Cas. 1174.

The defendants in error contend, further, that the petition in this case fails to show that the plaintiff is entitled to equitable relief, as a court of equity will not...