127 P. 1065 | Okla. | 1912
This is a proceeding brought in the district court of Oklahoma county by the state, through the Governor, Secretary of State, and the State Treasurer, for the purpose of refunding certain outstanding state warrants, alleged to be legal and valid, aggregating an amount somewhat in excess of $2,000,000. These warrants, it is made appear, were issued from time to time, principally during the fiscal year ending June 30, 1911, in payment of the ordinary current expenses of maintaining the state government, and pursuant to valid legislative appropriations of the current revenues of the state, for which provision had been made by a levy of a tax, which, in addition to revenue derived from other sources, was believed to be sufficient to meet the appropriations against» which the warrants were drawn.
It is alleged that the state has no funds with which to pay these warrants, and desires to fund the same by issuing its negotiable bonds, pursuant to law, and that its plan of refunding is agreeable to the holders and owners of the warrants. At the hearing certain citizens of the state filed protests raising the following legal questions: (1) That to issue funding bonds in excess of $400,000 would be in violation of section 23, art. 10, of the Constitution. (2) That article 7, Comp. Laws 1909, containing sections 4-08 to 4-21, inclusive, is a general act and repeals article 1, c. 8, Comp. Laws 1909, containing sections 372 to 381, inclusive, and therefore there is no lawful authority to fund or bond the indebtedness. (3) That section 3, art. 10, of the Constitution, and certain legislative enactments, provide for the payment of these warrants by the levy of a tax. (4) That to issue said bonds for a serial period as proposed in this proceeding would be in violation of section 4, of article 10 of the Constitution. (5) Revenue levied and collected for defraying expenses of state government for the fiscal year ending June 30, 1911,
The protests were treated as a demurrer in the. court below and were sustained, and the right to refund the said warrant indebtedness was denied, to reverse which action and holding of the court this proceeding in error was commenced.
Whether the issuance of the proposed bonds is in violation of the section of the Constitution invoked depends upon whether or not issuing warrants or the incurring of obligations for the payment of the ordinary current expenses of maintaining the state government against legislative appropriations therefor, and within the estimated amount of the current revenues of the state, provided for the year in which the warrants are issued, is the creation of an indebtedness within the meaning of that section. Section 23, art. 10, Williams’ Ann. Const. Okla., is as follows:
“The state may, to meet casual deficits or failure in revenues, or for expenses not provided for, contract debts; but such debts, direct and contingent, singly or in the aggregate, shall not, at any time, exceed four hundred thousand dollars, and the moneys arising from the loans creating such debts shall be applied to the purpose for which they were obtained or to repay the debts so contracted, and to no other purpose whatever.”
Section 2Í of the same chapter empowers the state to contract debts to repel invasion, etc., and section 25 provides that:
“Except the debts specified in section twenty-three and twenty-four of this article, no debts shall be hereafter contracted by or on behalf of this state, unless such debt shall be authorized by law for some work or object, to be distinctly specified therein; and such law shall impose and provide for the collection of a direct annual tax to pay, and sufficient to pay, the interest on such debt as it falls due and also to pay and discharge the principal of such debt within twenty-five years from the time of the contracting thereof. No such law shall take effect until it shall, at a general election, have been submitted to the people and have a majority of all the votes cast for and against it at such election. On the final passage of such bill in either House of the Legislature, the question shall be taken by yeas and nays to be duly entered on the journals thereof, and shall be: 'Shall this bill pass, and ought the same receive the sanction of the people.’ ”
The contention made here by those opposing the issuance of bonds, bold!}' stated, and stripped of its verbiage, is in its legiti
It is well to remember that the state was created by the people to perform for them certain functions, and the necessity for the performance of these functions is the sole and only object of the creation of the state. The Constitution provides for a
In this day of enlightened thought there is much controversy among students of government as to the proper and necessary limitations upon the powers of government; but it is now beyond the stage of contrpversy, agreed to and admitted by all learned men, that certain necessary and fundamental functions of government must always he expressed and actively exercised. The duty . of protecting life, liberty, and property, and preserving peace and order cannot be delayed, nor can the power so to do be abdicated without the destruction of the state. These functions are elementary and indestructible. To say that warrants issued in payment of services and supplies under the express and necessarily implied commands of the other sections of the Constitution, to be paid out of cash in the treasury or current funds in process of collection, are in violation of section 23, as to any sum in excess of the limitations, is to subordinate these other sections of the Constitution to this one. It would render some of them contradictory or nugatory; and is a construction we do not believe was ever intended. To so construe it would mean that the section which
These provisions are not peculiar to the Constitution of this state. The same, or provisions of similar import, are found in many of the later Constitutions. They have been reviewed and considered by the courts of the various states from many different angles, and under many different situations, but in our examination we have failed to find any case involving the identical conditions presented here. We do find, however, where constitutional provisions limiting the debt-creating power of municipal subdivisions of the state have been construed, in many cases, in relation to the extent of such limitations on the creation of indebtedness in the carrying on of the ordinary governmental functions. The language of these provisions is quite as absolute and sweeping as is that of the section of our Constitution under consideration. A fair example of these provisions is found in section 26, art. 10, of our Constitution, which provides that:
“No county, city, town, township, school district, or other political corporation, or subdivision of the state shall be allowed to become indebted, in any manner, or for any purpose, to an amount exceeding, in any year, the income and revenue provided for such year without the assent of three-fifths of the voters thereof, voting at an election to be held for that purpose,” etc.
The authorities we shall cite and review will therefore, while, dealing with municipal indebtedness, be equally applicable and in point in principle in dealing with state indebtedness.
It is frankly conceded that the adjudicated cases on this question are not in harmony. When these provisions first came before the courts; there was a decided tendency towards a strict construction of the language employed, and in many of the earlier cases they were held to include within their operation debts and liabilities for the ordinary current expenses of the municipal government. Springfield v. Edwards, 84 Ill. 626; Law et al. v. People ex rel., 87 Ill. 388; Fuller v. Chicago et al., 89 Ill. 282; Prince v. City of Quincy, 128 Ill. 443, 21 N. E. 768; Chicago v.
“When a contract made by a municipal corporation pertains to its ordinary expenses, and, together with other like expenses, within the limit of its current revenues and such special taxes as it may legally and in good faith intend to levy therefor, such contract does not constitute the incurring of indebtedness within the meaning of the constitutional provision limiting the power of municipal corporations to contract debts.”
And Justice Gordon, of the Pennsylvania Supreme Court, in Appeal of City of Erie, 91 Pa. 398, quotes the above language from the Iowa court, and adds:
“This we hesitate not to say is a sound constitutional interpretation, and in a similar case might well be adopted in the construction of our own Constitution. If the contracts and engagements of municipal corporations do not overreach their current revenues, no objections can lawfully be made to them, however great the indebtedness of such municipalities may be; for in such case their engagements do not extend beyond their present means of payment, and so no debt is created.”
And in the case of Johnson v. Board of County Commissioners, 7 Okla. 686, 56 Pac. 701, the Supreme Court of Oklahoma Territory, speaking through .Justice Hainer, quotes with approval the following from the Supreme Court of South Dakota (Town Lot Co. v. Lane, 7 S. D. 1, 62 N. W. 982) :
“The fact that a municipality is indebted to the full constitutional limit does not prevent the same from levying such taxes as*804 it is authorized to levy by law, and issuing its warrants, within the limits of such levy, in anticipation of their collection; and, so long as the warrants issued are within the amounts lawfully levied, they do not create an additional debt. To render such warrants invalid, it must affirmatively appear therefore that no tax had been provided for their payment when the warrants were issued.”
Sackett v. City of New Albany, 88 Ind. 473, 45 Am. Rep. 467; Valparaiso v. Gardner, 97 Ind. 1, 49 Am. Rep. 416; Brashear v. Madison, 142 Ind. 685, 36 N. E. 252, 42 N. E. 349, 33 L. R. A. 474; Foland v. Frankton, 142 Ind. 546, 41 N. E. 1031; Board of Commissioners of Perry Co. v. Gardner, 155 Ind. 165, 57 N. E. 908; Grant v. City of Davenport, 36 Iowa, 396; French et al. v. City of Burlington, 42 Iowa, 614; Tuttle v. Polk et al., 92 Iowa, 433, 60 N. W. 733; Creston Waterworks Co. v. City of Creston, 101 Iowa, 687, 70 N. W. 739; City of Cedar Rapids v. Bechtel, 110 Iowa, 196, 81 N. W. 468; Adams v. City of Waterville, 95 Me. 242, 49 Atl. 1042; City of Alpena v. Kelley, 97 Mich. 550, 56 N. W. 941; McGrath v. Grout, 171 N. Y. 7, 63 N. E. 547; Darling v. Taylor, 7 N. D. 538, 75 N. W. 766; Reuting v. Titusville et al., 175 Pa. 512, 34 Atl. 916; Addyston Pipe & Steel Co. v. City of Corry, 197 Pa. 41, 46 Atl. 1035, 80 Am. St. Rep. 812; Shannon v. City of Huron, 9 S. D. 356, 69 N. W. 598; In re State Warrants, 6 S. D. 518, 62 N. W. 101, 55 Am. St. Rep. 852; Western Town Lot Co. v. Lane, 7 S. D. 1, 62 N. W. 982; Rauch v. Chapman, 16 Wash. 568, 48 Pac. 253, 36 L. R. A. 407, 58 Am. St. Rep. 52; Hull v. Ames, 26 Wash. 272, 66 Pac. 391, 90 Am. St. Rep. 743; Gladwin v. Ames, 30 Wash. 608, 71 Pac. 189; Herman v. City of Oconto, 110 Wis. 660, 86 N. W. 681.
It must be noted, however, that the authorities recognize a distinction in the character of the obligation incurred, where the same is to be paid out of the revenues of future years. The test of this distinction is whether the obligation is within the ordinary and necessary current expense and essential to its regular corporate business and the performance of its ordinary governmental functions. If not, such obligations, intended to be a charge upon the revenues of future years, are regarded as debts within the meaning, and therefore violative of the constitutional limitations. This principle is applied in the case of Campbell v. State,
From an examination of the foregoing, and many other authorities which could be cited, it will be seen that the courts have found that it is necessary, not only to consider the language used in a section, but to also consider the practical situation to which it is intended to apply, in connection with the other
Section 2, aid. 10, Williams’ Ann. Const. Okla., provides for maintaining the state government by an annual tax, which with other resources shall be sufficient to meet the estimated ordinary expense for each fiscal year. The only limitation on this amount (section 9, art. 10) is that it shall not exceed in any one year three and one-half' mills on the dollar for state purposes. Section 3, art. 10, subject to no other limitation, provides :
“Whenever the expenses of any fiscal year shall exceed the. income, the Legislature may provide for laying tax for the ensuing fiscal year, which with other resources, shall be sufficient to pay the deficiency, as well as the estimated ordinary expenses for the state for the ensuing year.”
This section by its terms shows that it was not intended that, because the expenses of a year might exceed the income for that year, such excess should be invalidated. And we may add that we find no purpose in the Constitution to attach any penalty or forfeiture to obligations for current expenses, honestly incurred in the reasonable anticipation that the revenues provided therefor would be sufficient to meet them. It is be
There is no contention here that the debts which were incurred, and are evidenced by the warrants sought to be funded, exceeded, at the time the debts were incurred, the revenue provided in good faith for that year. We therefore have the right to assume that such is. not the case, and that, if the revenue provided had been collected and properly applied, they would have been paid. Tyler v. Jester, 97 Tex. 344, 78 S. W. 1058. If it has been made clear, as we believe it has, that the debts represented by the warrants were legal at the time when made, and that, therefore, the warrants sought to be funded are legal warrants, it ought to be then conceded as fundamental that no subsequent act or misappropriation, or failure of the funds in good faith provided for, can operate to render them invalid. We cite, however, a few authorities in point. In Judge Dillon’s work on Municipal Corporations (5th Ed.) sec. 195, it is said:
“Although the constitutional limit has been reached, warrants may be issued for the ordinary current expenses of the fiscal year to the full amount levied for that year, without incurring indebtedness beyond the constitutional limit. So long as the amounts of such warrants do not in the aggregate exceed the current revenues, no additional indebtedness has been incurred thereby, and usually warrants thus drawn are payable in the order of presentment for registration. Being legal warrants when issued, no subsequent act or misappropriation of funds by the municipal authorities can operate to render them invalid.”
And in Addyston Pipe & Steel Co. v. City of Corry, 197 Pa. 49, 46 Atl. 1036, 80 Am. St. Rep. 812, we find the following:
“It is not, however, always possible to adapt present action to future results with absolute precision, and if means are adopted which in good faith, according to reasonable expectation, will produce a sufficient fund, the contract entered into on the faith of them should not be held unlawful on account of an unintentional miscalculation, or an accidental and unexpected failure*808 to produce the full result. Thus if a city at the time of making a contract levies a special tax in good faith supposed to be adequate to meet it, but in consequence of fire or flood or decline in values the result is an insufficient fund, it cannot be held that the contract good at its inception would thereby be made bad. The constitutional restriction was not intended to make municipalities dishonest, nor to prevent those who contract with them from collecting their just claims, but to check rash expenditure on credit,, and to prevent loading the future with the results of present inconsiderate extravagance.”
See, also, Cedar Rapids v. Bechtel, 110 Iowa, 196, 81 N. W. 468; Shannon v. Huron, 9 S. D. 356, 69 N. W. 598; In re State Warrants, 6 S. D. 518, 62 N. W. 101, 55 Am. St. Rep. 852; Western Town Lot Co. v. Lane, 7 S. D. 1, 62 N. W. 982.
If the state, in fact, then owes the sums represented by these warrants, it is within the power of the Legislature to provide for their payment in any manner it may choose, so long as it does not violate a constitutional provision. These constitutional limitations under discussion, being obviously directed against the contracting of debts, can have no application to the manner in which valid debts may be evidenced. That the issuing of funding bonds in lieu of a valid pre-existing indebtedness neither creates a debt nor increases the indebtedness of the municipality issuing'them has been held in Re Menefee, 22 Okla. 365, 97 Pac. 1014, and in State ex rel. Bd. of Education of Oklahoma City v. West, 29 Okla. 503, 118 Pac. 146, and is so held by the weight of authority in other states. Independent School Dist. v. Rew, 111 Fed. 1, 49 C. C. A. 198, 55 L. R. A. 364; Los Angeles v. Teed, 112 Cal. 319, 44 Pac. 580; Lake County v. Standley, 24 Colo. 1, 49 Pac. 23; Powell v. Madison, 107 Ind. 106, 8 N. E. 31; Marion County v. Harvey County, 26 Kan. 181; Gaulbert v. Louisville (Ky.) 97 S. W. 342; Opinion of the Justices, 81 Me. 602, 18 Atl. 291; Hotchkiss v. Marion, 12 Mont. 218, 29 Pac. 821; Poughkeepsie v. Quintard, 136 N. Y. 275, 32 N. E. 764; Blanton v. McDowell County, 101 N. C. 532, 8 S. E. 162; Morris v. Taylor, 31 Ore. 62, 49 Pac. 660; McCreight v. Camden, 49 S. C. 78, 26 S. E. 984; Lawrence County v. Meade County, 10 S. D. 175, 72 N. W. 405; Miller v. School Dist.,
This leads us to the question: Has the Legislature provided procedure fo'r the refunding of state indebtedness such as is herein involved? Sections 372 to 381, inclusive, Comp. Laws 1909, furnish such procedure if in force. The funding act was passed in 1895 (Laws 1895, p. 63), and was amended in 1897-1899. The amendment of 1897 (Laws 1897, p. 75) is section 372. The amendment of 1899 (Laws 1899, p. 100) is article 3 of chapter 8, being section 394, Comp. Laws 1909. In 1905 (Laws 1905, p. 87) an act entitled “An act to enable counties, municipal corporations, the boards of education of any city or school districts to refund their indebtedness,” was passed by the Legislature, the same being article 7, c. 8, Comp. Laws 1909, and consisting of sections 408 to 421, inclusive.
The contention is made that this act of 1905 repeals the former acts, thereby leaving no statutory provisions affording authority for refunding the warrant indebtedness of the state. We cannot agree to this construction.
It is a familiar rule that repeals by implication are not favored, and, where two statutes covering in whole or in part the same matter are not absolutely irreconcilable, effect should be given, if possible, to both. Carpenter v. Russell’s Adm’r, 13 Okla. 277, 73 Pac. 930. In Sutherland on Stat. Const. 138, we find:
“Subsequent legislation repeals previous inconsistent legislation whether it expressly declares such repeal or not. In the nature of things it would be so, not only on the theory of intention, but because contradictions cannot stand together. The intention to repeal, however, will not be presumed, nor the effect of repeal admitted, unless the inconsistency is unavoidable, and only to the extent of the repugnance. Implied repeals are not favored. One statute is not repugnant to another, unless they relate to the same subject, and are enacted for the same purpose. When there is a difference in the whole purview of two statutes*810 apparently relating to the same subject, the former is not repealed. Such is the general doctrine, in which all the cases concur.”
Endlich on Stat. Const, sec. 741, says:
“But, in order to constitute a repeal oí a statute by implication, such later act must not only refer to the same subject, and also have the same object in view as the earlier, but it must cover the whole subject-matter of the same.”
While the act of 1905 expressly repealed all “acts and parts of acts in conflict herewith,” and while it covered' fully the matter of refunding the warrants of municipal corporations, school districts, etc., as named therein, the matter of state warrants is nowhere mentioned. Therefore it could hardly be 'said that the provisions for funding state warrants • collide with the provisions of an act that has no reference to state warrants, and, in fact, does not deal with the subject in any way. This being so, the presumption must be indulged that there was no intention to make any change in the law relating to state warrants. State v. Oldfield, 22 Okla. 863, 98 Pac. 925. This court has held in State ex rel. Bd. of Ed. v. West, Atty. Gen., 29 Okla. 503, 118 Pac. 146, that the act of 1905 (article 7, c. 8, Comp. Laws 1909) was not repugnant to section 26, art. 10, Williams’ Ann. Const. Okla., and was therefore extended over and put in force in the state by section 2 of the Schedule. There can be no reason why the same rule should not apply to article 1, c. 8, Comp. Laws 1909, which provides for funding state warrants, and notwithstanding the fact that section 3, art. 10, of the Constitution provides a method of extinguishing this indebtedness by the levy of a tax for the ensuing year.
The provision made in section 3, art. 10, of the Constitution as vitalized by section 7621, Comp. Laws 1909, while a remedy, is not exclusive. We have held that, the indebtedness represented by these warrants being valid at their inception, no subsequent act or failure of the revenues can operate so as to invalidate them. To hold that section 3, art. 10, and section 7621, Comp. Laws 1909, provide an exclusive remedy, would in practical effect have that result. It would leave the state with a large valid debt outstanding, and with no practical means of ex
It would be a great hardship for the people to be compelled to pay this entire indebtedness in one year, in addition to the necessary expenses of government, by immediate taxation. It would seem to be much wiser if this indebtedness is met by the issuance of long time, low interest bearing bonds as is proposed. In the meantime our financial policy and revenue laws will have become settled, and the taxation of much of the Indian lands, now nontaxable, which fact contributed towards this deficiency, will have become liable to bear their share of the burdens of government.
The next point made is that the State Treasurer has applied the revenues collected for one fiscal year to the payment of indebtedness of another fiscal year, and that certain funds in the hands of the Treasurer ought to be applied to the payment of some of the warrants involved in this proceeding. It is clearly contemplated by the Constitution that the funds provided and collected for a particular fiscal year should be applied to the payment of the current indebtedness of such year. The condition here was brought about through the Treasurer following an old precedent in force in that office for several years prior to his incumbency whereby warrants were paid in the order of their registration; but the record shows that the Treasurer is now keeping his accounts in such a way as to meet the views herein expressed.
We have already shown that warrants valid in their inception cannot be rendered invalid by any subsequent apt or omission of the officers of the state; hence it follows that the mere fact that revenues accruing in one year have been improperly applied to the extinguishment of the indebtedness of another year cannot have that effect. Any funds in the hands of the Treasurer
We think the time and manner of the payment of bonds to be issued for the purpose designated herein are controlled by section 377, Comp. Laws 1909, and that section 4, art. 10, Const., which requires the Legislature to provide for the payment of the state debt within 25 years, has reference to a debt created by the passage of a law, inasmuch as it provides that provisions must be made “to pay the annual interest and principal of such debt within twenty-five years from the final passage of the law creating such debt.” It has been shown that the issuance of bonds to take up outstanding legal indebtedness is not the creation of a debt. This section of the Constitution has reference to debts created under sections 23-25, art. 10, of the Constitution.
The judgment of the trial court is accordingly reversed, and the cause remanded to be proceeded with in accordance with the views herein expressed.