Carl AUSTIN et al., Appellants, v. David H. CAMPBELL, Appellee.
No. 6691.
Supreme Court of Arizona. En Banc.
April 11, 1962.
370 P.2d 769 | 91 Ariz. 195
C. A. Muecke and Martin F. Keil, Phoenix, for appellants Carl Austin, C. J. Carreon, William J. Harkness, Neales Kennedy, Patrick W. O‘Reilly, Robert A. Petrie, Del Rogers a. k. a. Delbert Delfino, Harry Ruppelius and Robert E. Wilson.
Stephen S. Gorey, Phoenix, for appellant Norman Lee.
W. L. Farringer, Phoenix, for appellant William Younger Wood.
Stockton & Aldrich, Phoenix, for appellant J. P. Stump.
William H. Rehnquist, Phoеnix, for appellee David H. Campbell.
UDALL, Vice Chief Justice.
This is a taxpayer‘s action to recover for the State of Arizona certain expense reimbursements audited, paid out and received pursuant to a statute later held unconstitutional by this court in Giss v. Jordan, 82 Ariz. 152, 309 P.2d 779 (1957). From a summary judgment for plaintiff Campbell, defendants Jewel W. Jordan, auditor for the State of Arizona, and thirteen members of the Twenty-second Legislature have appealed.
Since 1947 Arizona legislators have been reimbursеd for necessary expenses in
“A. All claims against the state for obligations authorized, required or permitted to be incurred by any state officer or agency, shall be paid only in the following manner:
“The claimant shall present an itemized claim, sworn to by him and approved by the head official of each office or state agency under which thе obligation was incurred * * * The claim shall then be presented to the state auditor and, if approved, the auditor shall draw his warrant therefor on the state treasurer, who shall pay it when countersigned by the governor but only from the appropriation made therefor. * * *” 2 (Emphasis added.)
On January 4, 1956, however, the Governor approved an amendment to the reimbursement statute (
“D. Reimbursement of expenditures made under the provisions of subsections A, B and C of this section shall not be subject to the provisions of
§ 35-181 .“E. All payments provided for in this section shall be paid upon approval of the president of the senate or the speaker of the house of representatives from funds appropriated for the house of the legislature over which he presides.” 3 (Emphasis added.)
On February 27, 1956 plaintiff Campbell (who was also a member of the Twenty-second Legislature) wrote to the Attorney General and asked, inter alia:
“2. What penalty could be imposed on a membеr of the legislature from
Maricopa County when said member resides at his usual place of residence but draws $17.00 per day subsistence instead of $12.00 per day as set forth in Section 41-1103, A-1?” 4
More correspondence between plaintiff Campbell and the Attorney General followed. In one letter the Attorney General admitted having seen a list of the legislators later named defendants in this action. Finally, on May 26, 1956 plaintiff wrote to and requested legal action by the Attornеy General as follows:
“Under the provisions of Sections 35-211, 35-212 and 35-213 Arizona Revised Statutes, you are hereby requested to bring action against certain members of the Maricopa County delegation to the House of Representatives, who have received subsistence payments in excess of those authorized by Section 41-1103.
“The names of these members were given your office in February, 1956. They were also publicly read into the Journal of the House for permanent record on February 22, 1956. Warrant numbers, dates, and the amounts in question are on file in the office of the State Auditor. Receipts, as required by law prior to January 6, 1956, should also be on file in the State Auditor‘s office.”
The Attorney General did not act. Consequently, on August 24, 1956 plaintiff Campbell instituted his taxpayer‘s action pursuant to
Count II then alleges that all of the expense monies paid these defendants were improperly paid and received in that “none of said defendants * * * complied with the provisions of 35-181, A.R.S.1956, in submitting their subsistence claims described in Count I to defendant Jordan.”
The complaint concludes by seeking recovery from each legislator of the differing amounts received (ranging from $1,292 to $1,632 each) and the total of these amounts from defendant Jordan as the State Auditor.6 Plaintiff also asks for the statutory 20% penalty,7 interest, costs and attorney‘s fees.8
Before the action came on for trial this court‘s decision in Giss v. Jordan, 82 Ariz. 152, 309 P.2d 779 (1957), was announced on April 6, 1957. It was there held that subsections D and E of
After the Giss decision plaintiff moved for, and on January 31, 1958 was granted,
“D. Any claim made and approved contrary to subsection A, in the absence of fraud or bad faith on the part of the claimant or disbursing officer, may be amended at any time to conform to the requirements of subsection A and upon amendment such claim shall be exempt from the provisions of
§ 35-211 .“E. Any public funds paid or received pursuant to law, in the absence of fraud or bad faith in the disbursement or receipt of such funds prior to such law being declared unconstitutional by the supreme court of the state of Arizona, shall be exempt from the provisions of
§ 35-211 . As amended Laws 1958, ch. 7, § 1.” 9a
On appeal from the judgment of March 20, 1958 defendant-legislators and the auditor contend:
(1) that the Superior Court had no jurisdiction to entertain the suit because of the insufficiency of plaintiff Campbell‘s “request * * * in writing” that the Attorney General institute the action;
(2) that one is not liable in a taxpayer‘s action for receipt or payment of state monies in “good faith” reliance upon a statute later held unconstitutional; and that in any event
(3) they are protected by the “curative” amendment of March 20, 1958 set out above.
I Sufficiency of Taxpayer‘s Written Request
Section 35-213, subd. A 10 requires that a taxpayer first “request * * * in writing” аction by the attorney general before individually instituting suit in behalf of the state to recover monies illegally paid or received. Plaintiff admits failing
This contention, however, is untenable for two reasons. (1) The аuditor is not, ipso facto, liable on her bond whenever it is shown that someone has wrongfully submitted a claim which she thereafter approves. Cf., Proctor v. Hunt, 43 Ariz. 198, 29 P.2d 1058 (1934). (2) The written “request” specified by
The case is different, however, respecting the sufficiency of plaintiff‘s request that the attorney general institute suit against the defendant-legislators. For although not mentioned in plаintiff‘s letter of May 26, 1956, the names of these men were admittedly known by the attorney general. Moreover the May 26th letter referred the attorney general to a listing of the pertinent names in the House journal. And the same letter referred the attorney general to the auditor‘s files for the necessary supporting receipts, warrant copies, etc.
This information, coupled with the previous correspondence between plaintiff and the attorney genеral, was sufficient to inform the latter that he was being asked to recover unauthorized expense reimbursements from the legislators here appealing. The important thing in such cases is that the attorney general receive actual notice and details of the particular wrongs charged and the names of the persons who allegedly committed them. In construing a similar statute the Oklahoma Supreme Court observed that:
“Fairness and justice require that such a nоtice be sufficient in form and substance to serve the office and purpose of such a notice, but no more is required, and when that requirement is met, fairness and justice require that the notice be held legally sufficient.” 12
To require more of the taxpayer “would emasculate the statute. The plain legislative intent in enacting the statute was to encourage the recovery of state money illegally expended.” United States Fidelity & Guaranty Co. v. Frohmiller, 71 Ariz. 377, 381, 227 P.2d 1007, 1010 (1951). By these standards plaintiff‘s request was sufficient as tо the legislator-defendants.
Plaintiff argues in support of the judgment that an unconstitutional statute is a nullity and that therefore the payments received thereunder by defendant-legislators were “illegal” 13 and must be returned to the state. This contention is grounded upon that concept of an unconstitutional statute enunciated by the United States Supreme Court in Norton v. Shelby County, 118 U.S. 425, 6 S.Ct. 1121, 30 L.Ed. 178 (1886). The Court there observed that:
“An unconstitutional act is not a law; it confers no rights; it imposes no duties; it affords no protection; it creates no office; it is, in legal contemplation, as inoperative as though it had never been passed.” 118 U.S. at 442, 6 S.Ct. at 1125.
Nevertheless this court in Texas Co. v. State, 31 Ariz. 485, 254 P. 1060 (1927) rejected the Norton doctrine and held instead that:
“* * * it would be the height of injustice for the state to penalize, either by criminal process or civil action, one of its citizens for obeying a law which on its face was adopted in a constitutional manner, but which was, after such obedience by the citizen, held to be unconstitutional. And therefore, following the rule laid down in Lang v. Mayor 14 * * * we hold that in Arizona the citizen who obeys such a law cаnnot be penalized by the state for so doing.” 31 Ariz. at 502, 254 P. at 1065.
The Texas Co. case involved reliance upon a Governor‘s veto later held unconstitutional. However, we see no meaningful
Significantly, the United States Supreme Court itself retreated from the broad pronouncement in Norton when it stated in Chicot County Drainage District v. Baxter State Bank, 308 U.S. 371, 374, 60 S.Ct. 317, 318, 84 L.Ed. 329 (1940) that:
“The actual existence of a statute, prior to such a determination, is an operative fact and may have consequences which cannot justly be ignored. The past cannot always be erased by a new judicial declaration. The effect of the subsequent ruling as to the invalidity may have to be considered in various aspects, with respect to particular relations, individual and cоrporate, and particular conduct, private, and official. Questions of rights claimed to have become vested, of status, of prior determinations deemed to have finality and acted upon accordingly, of public policy in the light of the nature both of the statute and of its previous application, demand examination. These questions are among the most difficult of those which have engaged the attention of courts, state and federal, and it is manifest from numerous decisions that an all-inclusive statement of a principle of absolute retroactive invalidity cannot be justified.” 15
The reasons for adhering to the view that citizens are entitled to rely upon an enactment of the legislature until repealed or declared unconstitutional are as cogent today as in 1927 when the Texas Co. case was decided. However desirable the total nullity doctrine of Norton may be from the standpoint of symmеtrical jurisprudence it does not conform to reality. For a statute, until legislatively or judicially excised, is an operative fact which cannot be ignored. This court presumes every legislative act constitutional and indulges in every intendment in favor of its validity. Hudson v. Kelly, 76 Ariz. 255, 259, 263 P.2d 362, 364 (1953). No penalties should be visited upon the citizenry for doing likewise.
III Good Faith Test
Plaintiff further insists that the defense of good faith reliance on a duly enacted statute cannot be invoked by the defendant-
“* * * has no application where the payment later declared invalid was made out of public funds to the public officials themselves as compensation or fees, and not to third parties.” 169 Pa.Super. at 552, 83 A.2d at 413.16
Whatever might be the rule were county commissioners (supervisors) involved, the Loushay rationale is inapplicable where, as here, members of the legislature are accused of causing as well as receiving illegal payments. The good or bad faith of these legislators in voting to enact the statute exempting themselves from
In State for Use and Benefit of Lawrence County v. Hobbs, 194 Tenn. 323, 250 S.W.2d 549 (1952) the Tennessee court assumed that certain private acts were unconstitutional. Nonetheless, in the absence of a charge of bad faith, a demurrer to a bill seeking recovery of salary payments to a county clerk and master pursuant to such private acts was held to have been properly sustained. And in Wichita County v. Robinson, 155 Tex. 1, 276 S.W.2d 509 (1955) the Supreme Court of Texas ruled that certain payments to a county
There is no doubt but that during the times in question defendant-legislators were entitled to reimbursement for their necessary expenses during the lеgislative sessions. Thus, as in Wichita, the defect in the payments involved goes to the manner of payment only.17 Decisions such as Austin v. Barrett, 41 Ariz. 138, 16 P.2d 12 (1932), which involved payments in excess of those authorized by law, are therefore not controlling. Plaintiff does not allege that the monies here sought to be recovered were received by the legislators in bad faith. Accordingly, and also for the reasons stated in section II of this opinion, Count II in plaintiff‘s complaint failed to state a cause of action.
Although we have herein previously indicated thаt the trial court exceeded its jurisdiction in entertaining the suit against the state auditor the following remarks are deemed appropriate. On numerous occasions the auditor has contested payment of claims against the state on the ground that the authorizing statute was unconstitutional. See e. g., Cockrill v. Jordan, 72 Ariz. 318, 235 P.2d 1009 (1951). And this court has stated that before approving payment of a claim the auditor must “satisfy himself * * * that the [appropriation] Act has been regularly and constitutionаlly adopted * * *.” Hudson v. Kelly, 76 Ariz. 255, 264, 263 P.2d 362, 367 (1953). But because the auditor has the duty to scrutinize and the standing to contest the constitutionality of a legislative enactment does not mean that failure to question a statute in court automatically renders the auditor liable for payments made thereunder before the act is adjudged contrary to the Constitution. Good faith reliance is the test for the auditor as well as for anyone else. Cf., Frohmiller v. Board of Regents of University, etc., 64 Ariz. 362, 171 P.2d 356 (1946); Proctor v. Hunt, 43 Ariz. 198, 29 P.2d 1058 (1934). See also Gordon v. Conner, 183 Okl. 82, 80 P.2d 322 (1938); Annot., 118 A.L.R. 787 (1939).
For the reasons above indicated the cause is rеversed with directions to dismiss Count II of plaintiff‘s complaint.18
STRUCKMEYER, Justice (concurring).
I fully concur in the decision in this cause and in its disposition. However, by so concurring I do not wish it to be implied or inferred that I am of any other opinion than as expressed in my dissent to Giss v. Jordan, 82 Ariz. 152, 309 P.2d 779.
LOCKWOOD, Justice (specially concurring).
I concur in the decision and disposition of this case and also in the expression of Justice STRUCKMEYER regarding Giss v. Jordan, supra.