ALBERTIS S. HARRISON, JR., ATTORNEY GENERAL OF VIRGINIA v. SIDNEY C. DAY, JR., COMPTROLLER OF VIRGINIA
Record No. 4930
Supreme Court of Virginia
March 16, 1959
200 Va. 750
Present, All the Justices.
M. Harris Parker, Assistant Attorney General (A. S. Harrison, Jr., Attorney General; Collins Denny, Jr.; F. Elmore Butler; Denny, Valentine & Davenport, on brief), for the petitioner.
Frank W. Rogers (Woods, Rogers, Muse & Walker, on brief), for the respondent.
WHITTLE, J., delivered the opinion of the court.
This is a petition addressed to the court by the Attorney General invoking original jurisdiction in accordance with
The Richmond Produce Market Authority, in conformity with the provisions of Title 3, Chapter 7.1, Article 1 of the Code of Virginia, 1950, as amended (
When the application was made the Commissioner of Agriculture and Immigration inquired of Comptroller Day as to whether vouchers issued by the Commissioner would be honored when presented for payment. On September 26, 1958, the Comptroller advised the Attorney General, pursuant to
The sole issue before us is whether there are any constitutional prohibitions against the State, pursuаnt to this act, making a loan to the Richmond Produce Market Authority, established as aforesaid.
There are two sections of the Virginia Constitution (
The first question presented is: Do the “credit” and the “stock or obligations” clauses of
The credit clause provides that “neither the credit of the State, nor of any county, city or town, shall be, directly or indirectly, under any device or pretense whatsoever, granted to or in aid of any person, association, or corporation, * * *“, and the stock or obligations clause provides, “* * * nor shall the State * * * subscribe to or become interested in the stock or obligations of any company, association, or corporation, for the purpose of aiding in the construction or maintenance of its work; * * *.”
The Attorney General contends that the prohibitions of these clauses are not applicable as they are directed against State support of private business ventures.
In Almond v. Day, 197 Va. 782, 91 S. E. 2d 660, we had before us the question as to whether the funds of the Virginia Supplemental Retirement System could be invested in the securities of private corporations. Thеre we considered the prohibitions of
“Use of the State‘s funds for purchase of securities for the State‘s
The issue on this point then is whether the produce market is generally for the “State‘s benefit” or strictly for the purpose of promoting “private enterprise“.
The Richmond Produce Market Authority has been designated by statute (
Section 3-79.9 of the Produce Market Authorities Act provides that “the Authority shall not operate the market for profit.” This would tend to negate the “private enterprise” theory. The purpose of the market as stated in
In Almond v. Day, supra, 197 Va., at p. 792, we considered the “stock or obligations” clause of
“It operates on the State only to prevent it from subscribing to or becoming interested in the stock or obligations of a private company when the transaction in question is for the purpose of aiding in the construction or maintenance of the works of such company.”
Thus it is clear that the prohibition does not operate unless the State is purchasing the stock or оbligations of a “private company”
The next question involves the “internal improvement” clause of
The Attorney General approaches the question by asserting that a produce market such as here contemplated is not an “internal improvement“, or, alternately, is not a “prohibited internal improvement“. The Comptroller takes the other view, that the market is an “internal improvement” such as is prohibited by
We approach the question in light of the rule laid down in Ex Parte Settle, 114 Va. 715, 77 S. E. 496, where it is said:
“The principles by which this court is governed in considering the constitutionality of a law have been too frequently the subject of judicial decision to require the citation of authority. Every presumption is made in favor of the constitutionality of an act of the legislature. A reasonable doubt as to its constitutionality must be solved in favor of the validity of the law, and the courts have nothing to do with the question whether or not the legislation is wise and proper, as the legislature has plenary power, except where the Constitution of the State or of the United States forbids, and it is only in cases where the statute in question is plainly repugnant to some provisions of the Constitution that the courts can declare it to be null and void.” Shenandoah Lime Co. v. Governor (1914), 115 Va. 865, 867, 868, 80 S. E. 753.
The case of Shenandoah Lime Co. v. Governor, supra, involved the question of whether the State, in view of
“Whatever interpretation that term may have elsewhere, it has no such meaning in Virginia, where for nearly if not quite one hundred years it has acquired a definite and well recognized meaning. Each of our Codes, beginning with that of 1819, to and including the Code of 1887, have had chapters entitled ‘Works of Internal Improvement‘. In using this term in articlе 185, the late Constitutional Convention [1902] must be presumed, according to established rules of construction, to have used the term only in the definite sense and meaning that had attached to it throughout the history of the State. Its meaning as thus defined and understood throughout the legislation of the State, and the decisions of her courts, has included
It will be observed that the definition of the term “internal improvement” referred in the main to “channels of trade and commerce.” The use of the words “and other works of a like quasi public character” hardly enlarges this definition to include such an undertaking as the Richmond Produce Market Authority.
It was said in Almond v. Day, supra:
“From the origin of the Commonwealth, down to the present time, it [the State] has constructed many works of internal improvement which are incidental and necessary to the performance of its governmental functions. Among these are the State Capitol, Supreme Court-Library Building, State office buildings, numerous college buildings, and the like. Plainly each of these is a ‘work of internal improvement’ according to the literal meaning of these words, and yet no one would seriously contend that any of these is within the constitutional prohibition.” 199 Va., at p. 7.
Clearly, you may have an “internal improvement“, according to the literal meaning of the term, which does not fall within the constitutional prohibition.
It was contended in the Shenandoah Lime Company case that while the act provided for the working of convicts, in truth and in fact its object was to furnish cheap limestone to farmers and the public generally and thus was in direct competition with private lime companies. There we said:
“We are of opinion that the machinery for grinding oyster shells and limestone rock, and the temporary structures for housing the convicts pending the work contemplated by the act in question, do not come within the meaning of the term ‘internal improvements‘, as that term is used in article 185 of the Constitution.” 115 Va., at p. 871.
The Comptroller argues that while
“* * * The police power of the State is not paramount to the Constitution, but its free exercise is never interfered with unless plainly in conflict with the higher law. * * *”
“* * * (W)e are warranted, upon abundant authority, in holding that the exercise by the State of its police power, in enacting the ‘Convict Lime Grinding Act’ under consideration, cannot be defeated because of any conflict with article 185 of the Constitution.” 115 Va., p. 874.
The holding in the Shenandoah Lime Company case was based on the principle that the provisions of
Cases from jurisdictions other than Virginia which deal with “internal improvement” clauses generally base their holdings on the question of whether or not the undertakings were in furtherance of proper governmental functions. If so, the acts did not violate the constitutional prohibition; if not, they did. See Gillett v. McLaughlin, 69 Mich. 547, 37 N. W. 551; State v. Murphy, 237 Ala. 332, 186 So. 487; State v. Bone Creek Township, 109 Neb. 202, 190 N. W. 586; Bonsal v. Yellott, 100 Md. 481, 60 A. 593; In Re Opinion of Justices, 247 Ala. 66, 22 So. 2d 521.
In Re Opinion of Justices, 247 Ala. 66, supra, is analogous to the instant case. The constitutional provision there involved is similar
“The State shall not engage in works of internal improvement, nor lend money or its credit in aid of such; nor shall the State be interested in any private or corporate enterprise, or lend money or its credit to any individual, association, or corporation.”
In that case the State of Alabama established a State Market Board, cоnsisting of five members-one the Commissioner of Agriculture and Industry; the others being appointed by the governor. The Board was authorized to construct a market, and the legislature appropriated $300,000 to carry out the act. The appropriation being challenged, the court said:
“Legislative power to regulate as well as to established markets is recognized as being within the police power of the State. * * * It can hardly be denied that the public interest lies in the protection and promotion of agriculture. The welfare of the peoplе is so inextricably tied up with agriculture, as to make its well-being a matter of governmental concern.” 22 So. 2d 524.
In discussing the internal improvement clause, the court said:
“Will the State, through the Board authorized by the act, be engaged in works of internal improvement or be interested in private enterprise, if it carries into effect the things authorized by the act? It is clear that such will not be the result.” 22 So. 2d 525.
In concluding the opinion the court referred to its former decision in State v. Murphy, supra, wherein it was said:
“* * * It is the peculiar function of the lawmakers to ascertain and determine when the welfare of the people requires the exercise of the State‘s police powers and what are the appropriate measures to that end, subject only to the power of the courts to adjudge whether any particular law is an invasion of rights secured by the Constitution.” 186 So. 493.
It is an established fact that the Commonwealth of Virginia has the power to regulate agriculture and to aid and support its interests.
Consistent with this constitutional and statutory background, all of which is based upon the police power of the State, the Virginia legislature enacted Article 1, Chapter 7.1, Title 3, Code of Virginia, providing for the establishment of produce markets. In accordance with the act (
The legislature, by
After having authorized the establishment of markets for the purposes indicated the legislature then enacted the Produce Market Loan Fund Act to assist them financially. This act, as previously stated, appears as Article 3, Chapter 7.1, Title 3, Code of Virginia.
“In order to promote the general welfare by promoting the efficient and economic handling of farm and food products at wholesale in the interests of the grower, the food trade and the consuming public; in order to reduce greatly increasing marketing costs of food, excessive waste and spoilage; and in order to combat reduced prices to producers and increased costs to consumers caused by inadequate and obsolete market facilities, there is hereby created a
Loans from this fund are made after “application * * * on forms prescribed by the Commissioner of Agriculture and Immigration,” which application “shall give information as to the financial needs of such facility, the use expected to be made of the requested loan, the anticipated sources of all funds required to build the facility, the anticipated revenue of such facility, wherein the public welfare will be promoted by making the loan, and the reason why such facility is expected to be self-liquidating.”
The Commissioner of Agriculture and Immigration is to satisfy himself “as to the need for such wholesale produce market and as to the financial soundness of such market.”
The Governor then, if he “deems it advisable“, may make such loan upon such security “both as to principal and interest in such manner as the Governor shall prescribe.”
It will be seen from the above enactments that the produce market is closely tied in with the Department of Agriculture and Immigration and in some respects is under its supervision.
We are of the opinion that the internal improvement clause, in the light of its historic development and the broad exception thereto for governmental functions, does not in this instance strike down the right of the legislature to authorize a loan of State funds to mеet what it considers to be a public need under the circumstances expressed in the statutes involved.
It was not contended in the brief filed on behalf of the Comptroller nor was it argued before us that
In our opinion the statutes under consideration do not run counter to the constitutional provisions here relied upon.
Accordingly, the mandamus prayed for is awarded.
Mandamus awarded.
MILLER, J., dissenting.
The wholesale produce market authority authorized by the questioned legislation to be established in every city or county having a population of more than 30,000 inhabitants is sought to be justified
In each county or city wherein such a market authority is activated in accordance with the terms of the act, it is empowered to maintain and operate a produce market for the buying, selling and distribution of perishable farm produce.
Under
It is thus evident that instead of possessing and exercising the attributes, powers and functions usually incident to a political subdivision, which the authority is declared to be, the activities and functions of the market are cоmmercial and competitive. Though it is designated a wholesale produce market authority, yet its grant of powers does not limit it or those to whom it may lease its facilities to wholesale trade. It can enter into competition with privately owned wholesale or retail markets in the area.
Upon authorization by the Governor a loаn not exceeding $300,000 may be made by the Commonwealth to a market authority activated in any county or city.
Aside from the questions of whether the establishment of a market authority is within the concept of the State‘s police power and whether it is, in fact, a political subdivision, I am convinced that each local facility to be established constitutes a work of internal improvement. Though its establishment be asserted under the police power and it is declared to be a political subdivision, yet if forbidden by a constitutional limitation, its validity cannot be sustained. The
The evils sought to be guarded against, the history of the development of works of internal improvement in Virginia and the unfortunate results experienced by the State as a consequence of its having extended credit and aid in the development and operation of these enterprises are set out at length in Almond v. Day, 197 Va. 782, 91 S. E. 2d 660. The history, authorities and treatises there cited impel the belief thаt it was the enunciation of a broad principle that the Constitutional Convention had in mind when it adopted §§ 12, 14, and 15 of Article 10 of the Constitution of 1869, now
In Shenandoah Lime Co. v. Governor, 115 Va. 865, 871, 80 S. E. 753, in defining the term “works of internal improvement,” we referred to its historical meaning in Virginia and said that throughout the years in legislation and decisions, it “has included and had reference to the channels of trade and commerce, such as turnpikes, canals, railroads, telegraph lines, including in more recent years telephone lines, and other works of a like quasi public character. * * *” (Emphasis added.)
In the Debates of the Constitutional Convention of 1869 thе object and prohibitive purposes of §§ 12, 14, and 15, Article 10, Constitution of 1869, now embodied in
“* * * [B]ut taking into consideration the general fact that the State has up to this time derived no real benefit from any interests she had in any internal improvement, in connection with the other fact that capitalists are now to such an extent interested in building up marts of commerce at various points, we thought it wise to leave it to the individual interests of the country, believing that any enterprise hereafter mooted, if it possessed within itself genuine merits, would receive such support as would do away the necessity for the State lending her aid to it.” 1 Dabates and Proceedings of the Constitutional Convention of the State of Virginia (1868) 650.
With knowledge of Virginia‘s unfortunate financial losses and with the hope of protecting the State from like experiences in the future, Chairman Clements, with prophetic foresight named the identical offending activity, i.e., “marts of commerce at various points” to which the State now intends to lend its aid and funds.
How may it now be rightly said that the Commonwealth is not forbidden by
The decision of Almond v. Day, supra, is cited and relied upon in the majority opinion. It is readily distinguishable. There the purpose of the challenged legislation,
Under the definition of the term “works of internal improvement” given in Shenandoah Lime Co. v. Governor, supra, and delegate James H. Clements’ statement as to the purpose and intent of the prohibitions, now embodied in
If these local market authoritiеs may be established in the counties and cities of the Commonwealth, there is no constitutional provision to prevent the establishment and grant of aid by the State to other authorities, such as stockyard market authorities for the buying, butchering, processing, inspection, and selling of meats, or automobile market authorities for the buying, repairing, inspecting and selling of new and used automobiles, and a host of other commercial enterprises of similar character, so long as the authority be classified as a political subdivision of the State.
Here the State is not really investing its funds for its benefit. It is promoting and lending its funds to an activity of unproved financial stability. The evils sought to guarded against in
Wholly aside from the socialistic character of the present undertaking, it appears to be clearly violative of