Appeal
from the District Court of Burleigh County, Jansonius, J.
Action
for injunctive relief. From an order of the district court
sustaining the defendants' demurrer to his complaint
plaintiff appeals.
Reversed.
McIntyre
Burtness, & Robbins, for appellant.
By
§ 25 of the state Constitution the legislative power of
the state is vested in the legislative assembly, and in the
people through the initiative and referendum. State v
Hall, 48 N.D. 11, 186 N.W. 284.
Any
delegation of legislative power to an administrative board is
contrary to both the spirit and letter of the
Constitution. State v. Budge, 14 N.D. 532, 105 N.W
724; State v. Taylor, 27 N.D. 77, 145 N.W. 425.
The
general rule is that any statute or ordinance that purports
to vest arbitrary discretion in public officers without
prescribing a rule or standard for their guidance is
unconstitutional. Yick Wo v. Hopkins, 118 N.E. 356;
36 L.Ed. 220; State v. Duberry, 44 La.Ann. 1119, 11 So. 718.
The
building of schoolhouses does not come within any
well-defined acceptation of "support of the common
schools." Sheldon v. Purdy, 17 Wash. 135, 49 P.
228.
In the
instant case, not only is the income for the other
dormitories pledged, but is used for the payment of the debt
incurred by the construction of the dormitory. Therefore the
situation brings the obligation within the debt limit.
Lobdell v. Chicago, 227 Ill. 218, 81 N.E. 354.
"No
refinement of contracts or technical rule of law can make
this transaction less than a loan of credit--to the parties
primarily liable for the cost." Martin v.
Tyler, 4 N.D. 278.
George
F. Shafer, Attorney General, George I. Reimestad, Assistant
Attorney General, and C. L. Young, for respondents.
It is
within the power of the legislature to authorize a contract
to be made which is not in the nature of a state obligation
in the usual sense, but is a special, limited obligation,
payable only out of a special fund. Sargent County v.
State, 47 N.D. 561.
"Although,
according to the weight of authority, the amount of an
appropriation must be definite and certain, and the sum is
not specified in the act in question, it becomes definite and
certain when the moneys from such sources are collected and
turned in to the state treasurer. All such revenues shall be
appropriated under the terms of the statute." Holmes
v. Olcott (Ore.) 189 P. 202.
"The
legislature may exclude from the provisions of a statute such
classes of objects or persons as are not similarly situated
with those included therein, in respect to the nature of the
legislation." Edmonds v. Herbrandson, 2 N.D.
270.
NUESSLE,
Ch. J. BURKE, BURR, and CHRISTIANSON, JJ., and MCKENNA, Dist.
J., concur.
OPINION
NUESSLE, Ch. J.
Plaintiff, a resident and taxpayer of the state of North
Dakota, by this action seeks to challenge the
constitutionality of chapter 257, Sess. Laws 1927. This
chapter provides:
"For
the purpose of providing dormitories or residence halls to be
used in connection with the University, agricultural college
or any of the normal schools or other state educational
institutions, and to permit the construction, financing and
ultimate acquisition thereof, the state board of
administration may convey a site for any such building upon
the campus of any state educational institution (or) to an
institutional holding association for a term not exceeding
fifty years, upon condition that such association shall
construct on the leased premises such building, with
necessary appurtenances for dormitory or residence hall
purposes, as the state board of administration shall approve,
and shall lease the same to the state board of
administration, upon such terms regarding rentals,
maintenance, payment of indebtedness, and the ultimate
transfer of title to the state for the use of the educational
institution affected, as such board shall prescribe. . . .
"The
state board of administration may contract to pay as rental
for such property out of the net income derived therefrom and
from other dormitory buildings on the same campus,
a sum sufficient to pay the principal and the interest
thereon of any indebtedness of the holding association
incurred for the construction of such building; on the
amortization plan, or otherwise, and may pledge such income
for that purpose and enter into any other
contract with such association as may be for the best
interest of the educational institution affected. Provided,
that the state shall incur no liability by reason of the
exercise of the authority hereby granted to the state board
of administration, and provided further, that any building
and its appurtenances so constructed together with the site
upon which it is located and all bonds or other evidences of
debt issued by such association shall be exempt from
taxation."
Chapter
258, companion statute to chapter 257, provides:
"Non-profit
sharing corporations to be known as institutional holding
associations, may be formed for the purpose of erecting and
managing buildings and their necessary appurtenances on the
campus of the state university, the agricultural college, or
any of the normal schools or other state educational
institutions, in the manner, and with the rights, and subject
to the restrictions and liabilities, prescribed by chapter 12
of the Civil Code of the Compiled Laws of 1913, except as
herein otherwise provided. . . .
"The
articles of incorporation shall set forth the name of the
association, the place where its business is to be
transacted, the term for which it is to exist, the number of
members and the conditions of membership and succession
therein, the number of its directors and the names and
residences of those who shall serve until their successors
are elected and qualified, the purpose for which it is
formed, and the amount of indebtedness authorized, and the
plan for the payment thereof, and shall provide that the
association is non-profit sharing, that its indebtedness
shall be paid out of its net income from rentals, and that
when all debts are paid its right and interest in the
building site shall terminate and its property, including all
buildings and improvements, shall become the property of the
state. . . .
"Such
association may construct buildings with their appurtenances
only upon the campus of any such educational institution,
according to plans and specifications therefor approved by
the state board of administration, and as a prerequisite to
its right so to do shall secure a site therefor from such
board. The association may contract debts and issue bonds or
other evidences of indebtedness to construct such buildings,
and to secure the payment thereof may mortgage its property
and pledge all rentals to be received therefor, but its debts
shall not exceed in amount the value of the
property, both real and personal, actually owned by the
association, and the provisions for the payment thereof shall
be approved by the state board of administration. The
association shall not issue corporate stock, nor shall any
member thereof have or acquire any divisional share in its
property, and all of its net income shall be applied to the
payment of its indebtedness. When such indebtedness is paid
the title to all buildings and improvements of the
association shall be conveyed to and shall vest in the state.
The transfer or conveyance of the property of the
association, except in accordance with the provisions of this
act, is prohibited."
The
complaint after setting forth other appropriate matters of
fact, alleges that a corporation to be known as the
University Dormitory Association of Grand Forks, North
Dakota, has been organized pursuant to the provisions of
chapter 258, supra; that this corporation was organized for
the purpose of erecting a dormitory or dormitories on the
campus of the state university; that the defendants, the
board of administration, have approved the organization of
such corporation and intend to proceed pursuant to the
provisions of chapter 257, supra, to convey to such
corporation a portion of the campus of the state university
and enter into a contract or contracts with the corporation
to lease such dormitories as may be erected thereon; that the
acts in question are unconstitutional and void for that they
are contrary to many of the prohibitions of the constitution
of the state; and prays for injunctive relief. The defendants
demurred to the complaint. The district court sustained the
demurrer and this appeal is from the order entered
accordingly.
In
considering the challenge to the constitutionality of the act
thus interposed by the plaintiff, we must remember certain
rules that control in the consideration of such questions.
Every reasonable presumption is in favor of the
constitutionality of a statute enacted by the legislature.
State ex rel. Linde v. Taylor, 33 N.D. 76, L.R.A.
1918B, 156, 156 N.W. 561, Ann. Cas. 1918A, 583;
O'Laughlin v. Carlson, 30 N.D. 213, 152 N.W.
675. And the contrary will not be held unless its
unconstitutionality clearly appears. Buttfield v.
Stranahan, 192 U.S. 470, 48 L.Ed. 525, 24 S.Ct. 349.
Where the constitutionality of a statute depends upon the
power of the legislature to enact it, its validity must be
tested, not by what has been or is being done
under it, but by the things which may be done under it.
State ex rel. Frich v. Stark County, 14 N.D. 368,
103 N.W. 913; State ex rel. Hughes v. Milhollan, 50
N.D. 184, 195 N.W. 292.
Plaintiff
strenuously contends that chapter 257, the act in question
violates...
