169 Ga. 435 | Ga. | 1929
(After stating the foregoing facts.)
1. As appears from the executive order of the Governor of September 26, 1929, the warrant was issued at the request of the State Highway Board, made on September 25, 1929. The act which authorized the Governor to issue the warrant after setting apart not exceeding forty per cent, of the revenues allocated to the State Highway Department during the period beginning September 1, 1929, and ending December 31, 1930, derived monthly from the taxes upon distributors of fuels as a special fund, and to discount the same for the purpose of meeting the obligations of the State Highway Department lawfully incurred, was approved August 26, 1929. Section 2 of that act, which authorized the Governor “to discount and/or sell said warrants so drawn against said special fund, and to place the proceeds arising therefrom in the treasury to the credit of the State Highway Department for the purpose of enabling the State Highway Department to meet its obligations lawfully incurred,” required these warrants to be duly countersigned by the Comptroller-General. Section 3 of the act provides that “it shall be conclusively presumed in every court of law or equity that the monthly amount designated and set apart by the Governor by executive order in accordance with section 1 hereof has been correctly determined and set apart by the Governor pursuant to the
It can well be said from what will later appear in the discussion that the axis around which the validity of the judgment of the trial court revolves is whether the act is constitutional, as it must be presumed to be, or is unconstitutional as contended by the Comptroller-General. The scheme of the act under consideration in the present case is very similar to, though not identical with, the act passed by the General Assembly approved August 5, 1921 (Ga. L. 1921, pp. 230, 231). This act, which was construed in Wright v. Hardwick, 152 Ga. 302 (109 S. E. 903), was “An act to authorize the Governor, from time to time, to set apart the rental of the Western and Atlantic Eailroad, for limited periods, as a special fund, and to authorize the Governor to draw warrants against said special fund, to discount the same, and to place the proceeds in the treasury for the purpose of meeting the obligations of the State
The act of 1921 contained a provision which is not found in the act of 1929 which we are now called upon to construe. The provision in the act of 1921 presented a very material and im
What, then, are the general rights of holders of warrants “drawn by the Governor and countersigned by the Comptroller-General”? A warrant does not evidence a debt on the part of the State. It creates no contract. This was settled by the decision of this court in Fletcher v. Renfroe, 56 Ga. 674. Learned counsel for the plaintiff in»error, recognizing the binding force and the natural effect of the rulings announced in that case, have asked that the decision be reviewed and overruled. In the Fletcher case Judge Bleckley, speaking of executive warrants, said: “What are they? Not bills or notes. The Governor has no power to execute bills or notes and bind the State. Are they contracts at all, or in the nature of contracts? We think not. They are not engagements between party and party, but the mere license of the Governor, authorizing the Treasurer to pay money. The creditor need not have possession of them at all. He need never see them. They are official documents passing between two officers of the State, and may be handed from one to the other without the intervention of anybody. Usage has established a different course of dealing, but there is nothing-in the nature of things that requires it. If the Governor pleased to do so, he might send every warrant he issues to the Comptroller-General, and, after its approval by that officer, have it brought back to his own office and there held till paid. This would, perhaps, involve a change in bookkeeping and in the system of receipts, but nothing more. It would change no legal right of the creditor, for his right is to have the money, not to have the warrant. The warrant creates no debt. It is the letter of the attorney which the State, by the Governor, with the approval of the Comptroller-Genera], sends to the treasurer, authorizing ln'm to make payment. Like any other, mere power, it is revocable while it has not been carried into execution.” The ruling concurred in by a unanimous court was: “An executive warrant upon the treasury of the State,
The act now under consideration, instead of preserving to former obligees of the State all the former rights of such obligees in case the funds sought to be provided from the rental of the Western and Atlantic Eailroad did not materialize, reserves no special privileges to the purchasers of these warrants, and warrants them nothing except their right to be paid out of the fund which will be set aside during the period between September 1, 1929, and December 31, 1930. It is argued by counsel for the plaintiff in error that this would be a mere speculation on the part of purchasers, and in another portion of the brief the proposed discount of the fund already allocated to the highway department is designated as a “gamble.” We can not concur in the view that it would be either gambling or speculation in a very wild sense on the part of those who may see fit to avail themselves of the discount of the warrants proposed by the act of the General Assembly, and no implication to that effect can be drawn from the terms of the act, unless in the unexpected, not to say marvelous, contingency suggested in the argument of learned counsel for the plaintiff in error, that the people of Georgia may cease to buy gasoline, and the State fail to collect a tax of six cents per gallon upon distributors of this fuel. It is a matter of common knowledge that instead of the consumption of gasoline decreasing, there has been a constant increase in its consumption ever since the tax upon distributors was imposed. We merely hold that no debt is imposed upon the State of Georgia by the terms of the act of August 26, 1929. The general principle was clearly stated and supported by much authority in the case of Wright v. Hardwick, supra. We have already referred to the distinction which differentiates the two acts, but the same principle must be applied in construing the act of 1929 as controlled the court in its construction of the act of 1921. For more than fifty years it lias been the policy of this State to have a large number of special funds or distinct accounts in the treasury department which are available only for the specific purpose for which they have beén appropriated by the General Assembly; and it has frequently happened, that, while there might be ample funds appropriated for a
The State Highway Department, ever since the act of 1919, has been a department distinct and separate from all other executive departments. Under the provision of the act approved August 19, 1929 (Ga. L. 1929, p. 99), in which a tax upon fuel distributors was placed at six cents per gallon, four and one half cents thereof is appropriated and allocated to the State Highway Department. The act now before us deals only with this provision, and the Governor in his estimate (which no court, under section 3 of the act, can question) has estimated that the sum of $4,000,000 would be available if he were requested by the State Highway Board to set aside the entire amount permitted by the act as a special fund under the terms of the act. He has set aside, in the order now before us, only $2,000,000. The act proposes to pay to the highway department only this amount in advance of the collection of the fuel tax accruing up to December 31, 1930, provided the warrants can be sold or discounted at six per cent. Judged by the doctrine of probabilities as deduced from past experience in the collection of the tax on fuel distributors, this would seem to be a high-class investment for 'persons having money to invest. The State Highway Department, as just stated, is the department having in charge the construction of permanent roads in this State and the only medium through which the State can avail itself of Federal aid to highways in this State, but it was created a corporation and still enjoys its corporate existence as such, and the act in question is not novel in that the State assumes no liability for the obligations of the State Highway Department. To do this would perhaps require an amendment to the constitution. The facts of this case, however, are very similar to the power by which various municipalities in this State issue bonds upon the property of citizens fronting on streets a majority of whom desire to have paved, and the bonds are actually issued by the municipality; and yet this court has several times held that the municipal debt was not increased by these bond issues. Likewise the legislation now under consideration is somewhat similar to the provisions of the drainage act, where parties desiring their lands drained organize a drainage district and
2. The second ground of illegality urged by .the plaintiff in error is that the act is illegal and unconstitutional in that it contravenes the entire fiscal policy and financial plan as embodied in the constitution, as it attempts to permit the Governor to anticipate revenues which may never be paid into the treasury of this State and to create obligations against revenues which' are indefinite and which may never be available to the State for any purpose. In the first division we have already held that the act does not create any obligation on the part of the State, and we have attempted to show that the revenues in question which have already been appropriated to the State Highway Department are not altogether indefinite, and most probably will become available so as to provide for the payment of the warrants which may be discounted by the Governor. As to the statement as to anticipating revenues which may never ba paid into the treasury of the State, this can be said as to any appropriation made by the General Assembly; for it is possible that anticipated revenue even for ad valorem taxes on property will fall far below the estimates of a legislative budget and leave the funds in the treasury greatly depleted, as has frequently been the case in this State. As to the contention that the act is illegal and unconstitutional in that it contravenes the entire fiscal policy and financial plans embodied in the constitution, because the constitutional scheme for administering the finances of the State prohibits the anticipation of revenues for the purpose of meeting obligations already incurred, we have already pointed out that on account of the fact that in the case of Wright v. Hardwick, supra, if the State was raising the funds to pay its own obligations, the ease came very much nearer to the creation of a debt on the part of the State than this case, where the legislature has empowered the Governor merely as the State’s chief executive and representative to discount anticipated revenues already lawfully appropriated by the General
3. It is insisted that the warrant is a debt of the State within the prohibition of the constitution against the creation of a debt and is not for any purpose specified in the constitution as exceptions. We consider that this ground of the illegality as stated in the brief of counsel for the plaintiff in error has been ruled in the first division of the opinion.
4. It is argued that it does not appear from the petition that the sum stated in the warrant would be used or is necessary to meet the obligations of the highway department lawfully incurred, and it is further insisted that it does not appear what obligations of the highway department shall be paid with the proceeds of the warrant, nor that the obligations were lawfully incurred and were legal obligations of said department, as provided in said act of August
I conclude that the trial judge did not err in making the mandamus absolute. I am authorized to say that Justices Atkinson and Hill concur in the views above expressed.
1. By paragraph 1 of section 3 of article 7 of the
constitution of this State it is provided that “No debt shall be contracted by or on behalf of the State, except to supply such temporary deficit as may exist in the treasury in any year from necessary delay in collecting the taxes of that year, to repel invasion, suppress insurrection, and defend the State in time of war, or to pay the existing public debt; but the debt created to supply deficiencies in revenue shall not exceed, in the aggregate, five hundred thousand dollars, and any loan made for this purpose shall be repaid out of the taxes for the year in which the loan is made.” Civil Code (1910), § 6558, as amended by the act of August 19, 1911 (Ga. Laws 1911, pp. 49, 50); 5 Park’s Code, § 6558; Michie’s Code, § 6558. The language of this section is as broad and comprehensive as could possibly be used. It provides that “No debt shall be contracted by or on behalf of the State, except” as therein specified. None of these exceptions authorizes the contraction of a debt by or on behalf of the State to pay obligations of its Highway Department. So if this transaction in its last analysis amounts to the
2. But it is said that the warrant drawn under this act by the Governor upon the Treasurer, even if countersigned by the Comptroller-General, would not create a debt; and in support of this proposition Fletcher v. Renfroe, 56 Ga. 674, is invoked. In
3. But it may be urged, conceding that the transaction created a debt against the State, that it is not such a one as is inhibited by paragraph 1 of section 3 of article 7 of the constitution, which declares that “No debt shall be contracted by or on behalf of the State, except” in certain named instances, among which the present transaction does not fall. As we have stated, this provision of the constitution is exceedingly broad and comprehensive. Under it no debt of any kind or character can be contracted by or in behalf of the State. It prohibits the creation of a debt which may be paid out of current taxes, as well as those which must be paid out of the taxes for future years. But it is insisted that this warrant is to be paid out of the taxes imposed upon distributors of fuel in this State, and that for this reason the debt created by the issuing of this warrant does not come within the inhibition of this constitutional provision. To sustain this proposition it is further urged that there is no provision in the constitution which prohibits the payment of debts contracted in one year from the proceeds of taxes of a future year. This proposition is unsound. This debt can be upheld only upon the theory that it is one contracted to supply a temporary deficiency in revenue in a given year, arising from necessary delay in collecting the taxes of that year. If it could be held to be such a debt, the above section of the constitution expressly provides that “any loan made for this purpose shall be repaid out of the taxes levied for the year in which the loan is made.” Such a debt can not be paid from the proceeds of taxes of a future year or years. Furthermore, the debt contracted by the issuing of this warrant is not one to supply a deficiency in revenue within the meaning of this provision of the constitution of this State.
It is further insisted that the debt created by this warrant does not come within the purview of this provision of the constitution, for the reason that it is created in anticipation of the collection of imposed taxes, the proceeds of which are pledged to its payment.
4. But it is insisted that no debt by or in behalf of the State is created by the issuance of the warrant involved in this case, because the contrary has been held in Wright v. Hardwick, supra. The decision in that case is not authority for the proposition that the transaction involved in this case does not, in its essence and last analysis, create a debt by or in behalf of the State. This court there dealt with a situation entirely different from that involved in the present case. The State owned the Western & Atlantic Railroad, and had leased it for a number of years at an annual rental of $540,000 per annum, payable monthly in advance. The State wished to borrow money, and passed an act authorizing the Governor from time to time to set apart the rental of said railroad for limited periods, as a special fund, and to draw warrants against said special fund, to discount them, and to place the proceeds in the treasury for the purpose of meeting .the obligations of the State then created and incurred by law. That act provided a method by which the State set aside the rental of the railroad as a special fund, and authorized the drawing of warrants against that fund and their sale; and the transaction amounted to an assignment of the rental which the State would receive to persons who purchased these warrants. Under that act the State was disposing of the rents and issues of a piece of property which it owned and had leased. Under the act of 1929 the State is in effect procuring a loan of funds to discharge the current expenses of its Highway Board, and in carrying out the scheme promulgated by the act the State is undertaking to create a debt, which, as we have shown, is prohibited by the constitution, although the funds procured would go to pay current expenses of the State Highway Department. So there is nothing in the decision cited which in any way conflicts with the ruling that should be made in this case.
5. Under the principles above announced, it seems clear that this transaction amounts to the creation of a debt within the meaning of the provision of the constitution which prohibits the incur