HENRY J. BEHNKE, PLAINTIFF-APPELLANT, v. NEW JERSEY HIGHWAY AUTHORITY, THEODORE D. PARSONS, ATTORNEY-GENERAL OF THE STATE OF NEW JERSEY, AND WALTER T. MARGETTS, JR., TREASURER OF THE STATE OF NEW JERSEY, DEFENDANTS-RESPONDENTS.
Supreme Court of New Jersey
Argued March 23, 1953-Decided May 25, 1953.
13 N.J. 14
Mr. Roger Hinds submitted a brief for reversal on behalf of New Jersey Taxpayers Association, as amicus curiae.
Mr. Theodore D. Parsons, Attorney-General, submitted a brief pro se and on behalf of respondent Walter T. Margetts, Jr., Treasurer of the State of New Jersey. Mr. Benjamin Van Tine, Deputy Attorney-General.
*
**
The opinion of the court was delivered by
HEHER, J. We have here a proceeding under the
It was directed that, “For the purpose of complying with the provisions of the State Constitution,” the act authorizing the creation of state liability for the guaranty of the bonds “be submitted to the people” at the general election of 1952. L. 1952, pp. 95, 100. There was such submission, and the act was “approved.”
The Superior Court, Judge Ewart sitting, sustained the Guaranty Act as not in contravention of state constitutional limitations upon the use of the State‘s credit, moneys, and taxing power (Behnke v. New Jersey Highway Authority, 25 N. J. Super. 149); and this court certified the cause for appeal at the instance of plaintiff.
The Authority Act itself is not under attack. The Authority is constituted “an instrumentality exercising public and essential governmental functions,” and it is provided that the exercise by the Authority of the powers cоnferred by the act “in the construction, operation and maintenance of projects shall be deemed and held to be an essential governmental function of the State.” L. 1952, c. 16, sec. 4. The body is given perpetual succession; capacity to contract, to sue and be sued in its own name, and to use an “official seal“; and to acquire, hold and dispose of real and personal property in the performance of its functions and duties, and to exercise the right of eminent domain; and it is empowered to construct and operate highway projects, including feeder roads; to issue bonds or notes of its own “and to provide for the rights of the holders thereоf as provided” in the act; to establish and collect tolls or other charges for transit over or use of its highway facilities; to receive and accept, subject to the approval of the Governor, federal grants in aid of the acquisition or construction of any project within its domain, “and to receive and accept aid or contributions, except appropriations by the Legislature, from any source, of either money, property, labor or other things of value, to be held, used and applied only for the purposes for which such grants and contributions may be made“; to adopt by-laws for the regulation of its affairs and the conduct of its business, and to еstablish rules and regulations for the use of any project; and to hire such employees and agents, administrative and technical, as it may deem necessary, and to fix compensation for the service. Section 5. The Authority is authorized, subject to the limitations of the act, to set the terms of its bonds and notes, and to pledge all or any part of its tolls and revenues as security for their payment, and otherwise to safeguard its issued securities and regulate the rights of the holders. Sections 8, 9. Except “as otherwise provided by or pursuant to any law” thereafter “submitted to the people” under Section II of Article VIII of
The Guaranty Act provides that all money to be raised by the issuance of bonds guaranteed thereunder by the State “shall be applied only to finance the Garden State Parkway
The insistence is that the State‘s guaranty of the bonds of “a public corporation, although created and commissioned to perform an essential public function,” constitutes a loan of the State‘s credit in contravention of
It is urged that this is a peremptory command all inclusive in its operation, interdicting the State‘s unconditional guaranty of “the obligations of a corporation, either public or private.” Significance is seen in the omission from this provision of the recently revised Constitution of a specific exception of “public corporations, to accomplish governmental purposes,” of which the particular type had then
Amicus curiae suggests that the Constitution itself makes what is termed the obvious distinction between “a donation or appropriation, on the one hand, and a loan of the credit of the State, on the other hand,” by laying down in
We seek for the reason and spirit of the provision, considered in the context of related limitations and provisions of the instrument embodying the organic law. What is its essential quality and meaning when compared with kindred provisions operative in the same area of governmental action?
A state constitution, unlike the Federal Constitution, is not a grant but a limitation of legislative power. The State Legislature exercises a portion of the sovereign power residing in the people, subject to the limitation imposed by the Federal Constitution and its own organic law, and, as well, those so fundamental in the social compact and the Anglo-Saxon principles of natural justice as to be necessarily implied; and, in the determination of the operative scope of such constitutional limitations, courts are enjoined, as in the construction of statutes and all other written instruments, to collect the sense and meaning of the clause by comparing one part with another, and by considering all the parts as a whole, and not one part as a separate and independent provision bearing no relation to the remainder. This is the primary rule of exposition of constitutional provisions. The thing sought is the intent of the people in imposing the particular restraint. Words and clauses are not to be isolated, but related to each other and to the whole of the instrument, if the real sеnse of the expression is to be had. The purpose of judicial interpretation is the discovery of “the true sense of the form of words which are used * * *, taking all its parts into consideration, and, if fairly possible, giving them all effect.” Inhabitants of Orvil Tp. v. Borough of Woodcliff, 64 N. J. L. 286 (E. & A. 1900). Whether the subject matter of such interpretive inquiry be an agreement between parties, a statute, or a
But, in the quest for the intention and meaning of a constitutional limitation, its essential character must ever be kept in mind. The primary design of a constitution is to put the fundamentals of government beyond the control of “the varying moods of public opinion,” to use the language of Judge Cooley; and it is therefore to be presumed that the words employed have been carefully measured and weighed to convey a certain and definite meaning, with as little as possible left to implication. Wolcott v. Wigton, 7 Ind. 44 (Sup. Ct. 1855); People v. Purdy, 2 Hill 31 (N. Y. Sup. Ct. 1841); Cooley‘s Constitutional Limitations (8th ed.), 124, 128. A constitutional interdiction against the exercise of a particular power is in the nature of an exception; and it is the settled rule of judicial policy in this jurisdiction that a legislative enactment will not be declared void unless its repugnancy to the Constitution is so manifest as to leave no room for reasonable doubt. The limitation upon the exercise of the legislative function must be clear and imperative. This constitutes a basic restraint upon thе power of the courts, federal and state, to nullify a statute for want of constitutional congruity. A forced or unnatural construction is to be avoided. The limitation is to be established and defined by the words of the instrument, assessed in relation to the context and kindred provisions, and not by some supposed underlying spirit that is not given tangible expression. State v. Murzda, 116 N. J. L. 219 (E. & A. 1936); State Board of Milk Control v. Newark Milk Co., 118 N. J. Eq. 504 (E. & A. 1935); Attorney-General v. McGuinness, 78 N. J. L. 346 (E. & A. 1910).
While constitutional limitations are in their very nature inflexible in meaning and immune to varying public opinion, social and economic needs arising from the complexities of modern life call for new applications of the principle; and the Constitution would not serve its essential purpose were it insensitive to the demands of a changing society and economy. Home Building and Loan Association v. Blaisdell, 290 U. S. 398, 54 S. Ct. 231, 78 L. Ed. 413 (1934); Euclid v. Ambler Realty Co., 272 U. S. 365, 47 S. Ct. 114, 71 L. Ed. 303 (1926). The principle itself is unalterable except by the will of the people expressed in the constitutional mode, but accommodation to new needs without a violation of the essence of the principle does not contravene the intent of the instrument. We are concerned with the spirit of the limitation, and in that inquiry related provisions must be held in view. The true rule of construction “is not to consider one provision of the Constitution alone, but to contemplate all, and therefore to limit one conceded attribute by those qualifications which naturally result from the other powers granted by that instrument, so that the whole may be interpreted by thе spirit which vivifies, and not by the letter which killeth.” Downes v. Bidwell, 182 U. S. 244, 21 S. Ct. 770, 797, 45 L. Ed. 1088, 1116 (1901), White, J.
The literal sense of the terms of the credit ban embodied in paragraph 1 of the article and section of the Constitution cited supra is modified by paragraph 3, forbidding the crea
E converso, the State‘s power in this regard is circumscribed only as therein delineated. It may incur “debts” or “liabilities” upon compliance with the constitutional formula. It would seem to be axiomatic that, if there be adherence to the constitutional directive, the State could, in the exercise of the essential governmental function, directly consummate the particular project for the public good and welfare and itself incur the absolute liability arising from the sale of its bonds to finance the project; and by the same token the State may fulfill the project by means of an instrumentality such as we have here, and provide in the service of the public interest the financial support necessary for an economical and efficient performance of the undertaking, in the form of an unconditional guaranty of the
Such is the spirit and the indubitable reason of these provisions of the Constitution, taken and compared together; and there must needs be this relation of the one to the other if we are to arrive at the intention which is the life of the expression and the true object of judicial interpretation. The injunction of paragraph 1 of Section II of Article VIII of the Constitution against the loaning of the State‘s credit is subject to the exercise of the authоrity encompassed by the specific terms of paragraph 3.
Strictly, the word “debt” imposes an absolute liability; but the term “liability” is broader and includes in addition existing obligations which may or may not in the future eventuate in an indebtedness. City of Camden v. Allen, 26 N. J. L. 398 (Sup. Ct. 1857); Coulter Dry Goods Co. v. Wentworth, 171 Cal. 500, 153 P. 939 (Sup. Ct. 1915); McCrea v. First National Bank, 162 Minn. 455, 203 N. W. 220 (Sup. Ct. 1925); Irving Bank Columbia Trust Co. v. New York Ry. Co., 292 F. 429 (D. C. S. D. N. Y. 1923). “Liability” is a word of “most comprehensive significance,” including almost every character of hazard or responsibility, absolute, contingent or likely. Wentz v. State, 108 Neb. 597, 188 N. W. 467 (Sup. Ct. 1922); Brewster v. Deschutes County, 137 Or. 100, 1 P. 2d 607 (Sup. Ct. 1931). It connotes legal responsibility-the state of one who is “bound or obliged in law and justice” to do something. Joslin v. New Jersey Car-Spring Co., 36 N. J. L. 141 (Sup. Ct. 1873). And the word “debt” has no fixed legal meaning; it takes shades of meaning from the occasion of its use and color from accompanying words. Electric Reduction Co. v. Lewellyn, 11 F. 2d 493 (C. C. A. 3 1926); Morrow v. Hayes, 226 Mich. 301, 197 N. W. 554 (Sup. Ct. 1924); Liberty Mutual Insurance Co. v. Johnson Shipyards Corporation, 6 F. 2d 752 (C. C. A. 2 1925).
The case differs fundamentally from New Jersey Turnpike Authority v. Parsons, cited supra. There, the bonds issued by the Authority to finance the particular highway project imposed no liability upon the State, directly or indirectly. Unlike the case now before us, there was no state guaranty of the bonds issued by the Authority; and the validity of this exclusive obligation of the Authority was not dependent upon approval by the electorate under the cited constitutional
And, by the same reasoning, the State‘s guaranty of the Authority‘s bonds does not constitute an “appropriation of money to a corporation” within the intendment of
This provision has no application to “apрropriations or loans to a public corporation to finance a public purpose.” City of Camden v. South Jersey Port Commission, 4 N. J. 357, 368 (1950); Rutgers College v. Morgan, 70 N. J. L. 460 (E. & A. 1904), affirmed 71 N. J. L. 663 (E. & A. 1905); Romano v. Housing Authority, Newark, 123 N. J. L. 428 (Sup. Ct. 1939), affirmed 124 N. J. L. 452 (E. & A. 1940).
It is next urged that the appropriation of state revenues for debt service “over the term of State guaranteed bonds of a public authority” transgresses the requirement of
The Guaranty Act in this regard complies with the directive of
Finally, it is insisted by plaintiff that the proposed Parkway constitutes a “local improvement,” and the execution of the plan to levy real and personal property taxes for its support does violence to the basic principle of
Without assessing the intrinsiс quality of this provision of the Constitution, it suffices to say, in the words of Chief Justice Vanderbilt, that the project here is “designed to serve the best interests of the entire State and not merely those of particular localities.” City of Newark v. New Jersey Turnpike Authority, 7 N. J. 377, 387 (1951). The Parkway was conceived as an essential contribution to the State‘s transit facilities that will also alleviate congestion on existing highways and substantially reduce traffic hazards.
These points are additionally made by amicus curiae: (a) The object of the Guaranty Act is not expressed in the title as required by
But it is certainly not that in regard to the expression of the оbject of the act in the title. It is not essential that the title be an abstract or synopsis of the contents of the statute. The title is a label, not an index. It suffices if the title give expression to the leading or general subject of the act and a succinct indication of the legislation respecting it. The “object” of a law is not to be confused with its “product.” Bucino v. Malone, 12 N. J. 330 (1953).
(b) And the Guaranty Act satisfies the constitutional requirement (
The criticism is that there is “nothing ‘distinct’ about the specification of the ‘work’ or object authorized” by the act; “neither the route nor the extent, nor the character, nor the cost to the taxpayer was ‘distinctly specified therein,‘” it is said. Such particularity is not required, nor would it be feasible. The design of this constitutional limitation is the confinement of the debt or liability to a “single object or work.” The money thus provided cannot be expended for one purpose under the guise of another. This for the protection of the State‘s revenue and credit as well as for an understanding appraisement of the project by the electorate.
(c) “Existing law” has not been made “a part” of the Guaranty Act in violation of
Judgment affirmed.
OLIPHANT, J. (dissenting). I reluctantly find myself forced to dissent from the views of the majority as expressed in the opinion filed in this case.
The majority opinion holds that this section must be read in conjunction with
A reading and study of chapter 17 of the Sessions Laws of 1952 poses several questions fundamental to any decision in this case. The first is-what is guaranteed under the act? Section 2 thereof states that no bonds shall be guaranteed except bonds that will mature within thirty-five years from their respective dates and bear interest at a rate or rates not exceeding 3% per annum. The total amount of bonds authorized is $285,000,000. This provision of the act attempts to stay within the limitation contained in
While chapter 16, L. 1952, is not directly under attack here its provisions are in pari materia with chapter 17, L. 1952. They are both part of the same statutory scheme. Paragraph 8(a) of the former statute gives the Authority unlimited power to issue from time to time not only original bonds but bonds and notes for the payment of or for refunding the payment of the principal and interest of bonds or the redemption of bonds or notes. Such bonds or notes are payable out of any revenue of the Authority. By paragraph 9 of the same act not only can the tolls be pledged but the proceeds of bonds and notes can be pledged, and the Authority may also make covenants as to the issuance of additional bonds and notes.
So that it seems to me the guarantee of the State is bеing extended far into the future, beyond the constitutional limits, and that instead of being a guarantee of a debt as it is called it is in fact permitting an almost unlimited use of the credit of the State for the purpose of furnishing or issuing other bonds in payment of outstanding obligations.
The effect of these two statutes read together indicates that the Authority can use the credit of the State far beyond any period starting from a reasonable time after the approval of the Act by the voters and that is not what I understand to be the meaning of the constitutional provision. The constitutional provision refers to the creation of a debt or liability of the State in any fiscal year, and the 35 year period must run from some date in that fiscal year. My reading of the provisions of chapter 16 of the Laws of 1952 does not comport with that conception of the constitutional provision.
Now as to the parts of the old freeway which are already in existence, parts of which are called “The Garden State Parkway.” If the part between Cranford and Woodbridge is to be taken over by the Authority under chapter 16, section 21, it can be leased or conveyed at a price fixed by the State House Commission. But that is not so of the parts
As to the ways and means by which the money is to be derived for the guarantee of the bonds, here again sections 5, 6 and 7 of chapter 17 proceed blithely on their way without any reference to the constitutional 35 year period. Further, by section 4, under which the State must fulfill its guarantee, it only obtains subrogation to the rights of the bondholders and all the bondholder can look to is a pledge of the tolls and the cash on hand from the sale of bonds and notes. Of course, the State may be fortunate since the Authority is authorized to issue its bonds at an interest rate not exceeding 6% per annum. Chap. 16, sec. 8, par. (e).
I doubt that anyone voting for the act in the manner in which it was presented to the electorate or that even some of the prospective bond purchasers realize that the State is only pledging a partial guarantee of the interest on the bonds if the Authority issues them at an interest rate of over 3%; and with the money market as it is at present the pragmatic argument about saving $80,000,000 will rapidly disappear into thin air.
I cannot but conclude that under the act what is being created is not a debt as contemplated under
For affirmance-Chief Justice VANDERBILT, and Justices HEHER, BURLING, JACOBS and BRENNAN-5.
For reversal-Justices OLIPHANT and WACHENFELD-2.