Williams v. Parnell, 4-2707.

• Decision Date: 27 June 1932
• Docket Number: No. 4-2707.,4-2707.
• Citation: 51 S.W.2d 863
• Parties: WILLIAMS v. PARNELL, Governor, et al.
• Court: Arkansas Supreme Court

51 S.W.2d 863

WILLIAMS v. PARNELL, Governor, et al.

No. 4-2707.

Supreme Court of Arkansas.

June 27, 1932.

Appeal from Pulaski Chancery Court; Frank H. Dodge, Chancellor.

Suit by T. M. Williams against Harvey Parnell, Governor, and others, for an injunction. From a decree dismissing the complaint, plaintiff appeals.

Affirmed.

T. M. Williams, a citizen and taxpayer of the state of Arkansas, instituted a suit against the Governor and certain other designated state officials to enjoin them from proceeding further in the issuance of bonds and carrying out the provisions of Act No. 15, passed at the Special Session of the General Assembly of 1932, whereby the state undertook to provide for refunding the road improvement district bonds on which it is now paying interest, with state revenue bonds, as a means of procuring an extension of the maturity dates of the road district bonds.

The provisions of the act thought to be germane to the decision of this case are in the complaint, but we do not deem it necessary to set them out herein. The act contains twenty-one sections and may be found in the bound copy of the Acts of the Second Extraordinary Session of the General Assembly, called to convene on the 15th day of March, commencing at page 34. The title of the act is to authorize the issuance of the revenue bonds that will bring about the extension of the maturity dates of road district bonds which the state is now paying under the Martineau Road Law, and thereby prevent a default in the payment of such road bonds, and render available sufficient funds for the maintenance of the state highways and for matching federal aid for new construction. A board, including the Governor and other officials, was provided for the administration of the statute.

The chancery court sustained a demurrer to the complaint; and, upon the plaintiff declining to plead further, his complaint was dismissed for want of equity. The case is here on appeal.

R. E. Wiley, of Little Rock, for appellant.

Hal L. Norwood, Atty. Gen., Walter L. Pope, Asst. Atty. Gen., and Coleman & Riddick, of Little Rock, for appellees.

HART, C. J. (after stating the facts).

It is argued that the act is in violation of at least the spirit of section 1, article 16 of the Constitution, which reads: "Neither the State nor any city, county, town or other municipality in this State shall ever loan its credit for any purpose whatever; nor shall any county, city, town or municipality ever issue any interest-bearing evidences of indebtedness, except such bonds as may be authorized by law to provide for and secure the payment of the present existing indebtedness, and the State shall never issue any interest-bearing treasury warrants or scrip."

This provision was construed in the case of Hays v. McDaniel, State Treasurer, 130 Ark. 52, 196 S. W. 934, 936. It was there held that the act of 1917, authorizing the borrowing of a certain sum of money to cover deficiencies in the state's general revenue fund, to issue interest-bearing evidences of indebtedness therefor, and to levy a tax to create a sinking fund to pay the interest and principal of said note, was valid. After considering and defining the meaning of the provisions of the Constitution now under consideration, the court said: "The Constitution is not a grant of power to the state, and we are not required to look to the Constitution for authority for legislative action. The state, acting through its Legislature, may borrow money for its own uses unless that right is denied to it by the Constitution and the only inhibition against the state there contained, in this respect, is that it shall not issue any interest-bearing treasury warrants or scrip."

It is now claimed that that decision contemplated that the state might borrow money for its own use for a "state purpose," but that this did not include money advanced for the building of roads, which is a county purpose as distinguished from a state purpose, and that, therefore, the debt being made for the construction or aid of public roads, the issuance of bonds therefor is a loan of the state's credit within the prohibition of the provision of the Constitution above referred to. We do not think so.

In the case of Sanderson v. Texarkana, 103 Ark. 529, 146 S. W. 105, the court expressly held that the state, in its sovereignty over all public highways, has full power over the streets, as well as over public roads, and, unless prohibited by the Constitution, the Legislature may confer on such agency, as it may deem best, the power of supervision and control over streets. The general rule is that unless specifically restricted by the Constitution, the construction of highways by a state is the exercise of a public function, and it has been held that they may be constructed and maintained, either by the state, or under its authority, by municipal subdivisions or taxing districts created by the Legislature for that purpose. Elliot on Roads and Streets, vol. I, § 465, and cases cited; Ib., §§ 509-514; 13 R. C. L. p. 79, and cases cited.

The Legislature concluded to adopt a state system of public highways, and in 1923 and 1925 an act and an amendment thereto, commonly known as the Harrelson Law, were passed. Under this act and amendment, the state highway commission was authorized to ascertain the amount and dates of the maturity of the principal of the valid unmatured bonds on January 1, 1924, which had been issued by each road improvement district in the...