Ladd & Tilton Bank v. Frawley

| Or. | Dec 14, 1920

Lead Opinion

BEAN, J.

No question is raised in regard to the regularity of the proceedings had in the issuance of the bonds. The questions for determination are: (1) Was the amendment to Section 10, Article XI, of the Constitution, in 1919, raising the debt limitation of counties for building and maintaining permanent roads to 6 per cent of the assessable value of the property in the counties, in effect when the bonds in question were issued? This involves two questions: (a) Was the amendment self-executing? and (b) If not, was there any law then upon the statute books putting the amendment into execution? (2) Did the amendment of 1919 to Section 10, Article XI, of the Constitution, amend or repeal Section 19 of Chapter 103, of the Laws of 1913, by necessary implication?

Section 10, Article XI, of the Constitution, as originally adopted in 1859, reads as follows:

“No county shall create any debts or liabilities which shall singly or in the aggregate exceed the sum of five thousand dollars, except to suppress insurrection or repel invasion; but the debts of any county at the time this constitution takes effect shall be disregarded in estimating the sum to which such county is limited.”

The original Section 10 was a limitation upon the creation of debts or liabilities by the counties as such. It is worthy of note that during all of the time this section remained unchanged no legislative enactment was placed upon the statute books authorizing counties to contract debts within the limitation of the $5,000. It is apparent that the section was construed to be both an inhibitiofi and a permission to counties, without further legislative authority, to contract debts within the prescribed limit. As said by this court, speaking through Mr. Justice Burnett in Andrews v. Neil, 61 Or. 471" court="Or." date_filed="1912-01-23" href="https://app.midpage.ai/document/andrews-v-neil-6902508?utm_source=webapp" opinion_id="6902508">61 Or. 471, at page 474 (120 P. 383" court="Or." date_filed="1912-01-23" href="https://app.midpage.ai/document/andrews-v-neil-6902508?utm_source=webapp" opinion_id="6902508">120 Pac. 383, 123 P. 32" court="Or." date_filed="1912-04-16" href="https://app.midpage.ai/document/armsby-v-grays-harbor-commercial-co-6902605?utm_source=webapp" opinion_id="6902605">123 Pac. 32):

“Every county has always had the power to create debts for the purpose of building permanent roads, provided the voluntary liabilities of the county should not be increased thereby to exceed $5,000.”

In 1910 the people of the state by an initiative measure amended Section 10, Article XI, of the Constitution to read thus:

“No county shall create any debts or liabilities which shall singly or in the aggregate exceed the sum of five thousand dollars, except to suppress insurrection or repel invasion, or to build permanent roads within the county; but debts for permanent roads shall be incurred only on approval of a majority of those voting on the question”: General Laws of Oregon 1911, p. 11.

Again in 1912, by means of the initiative, the people of the state amended Section 10 by adding thereto the following words:

“And shall not either singly or in the aggregate with previous debts and liabilities incurred for that purpose exceed two per cent of the assessed valuation of all the property in the county”: General Laws of Oregon 1913, p. 9.

In order to furnish election machinery by which the amendment could be put into execution, and elections held and bonds issued by the counties for the construction of permanent roads, Chapter 103, General Laws of Oregon 1913, was enacted by the legislature. The title of the act, which indicates its scope and purpose, is as follows:

“To authorize the county courts of the State of Oregon to issue and sell bonds or county warrants of the county for the purpose of building and maintaining permanent highways within the respective counties, and to provide a sinking fund for the purpose of retiring the bonds at maturity; to authorize the several counties of the State of Oregon to hold special elections for the purpose of submitting to the voters of the county the question of the issuance of bonds and warrants; and generally to provide a complete manner of procedure for the issuance of county bonds for the purpose of the building, construction and maintenance of permanent highways.”

After detailing all of the provisions indicated hy the title of the act, Section 19 provides as follows:

“No bond shall be issued under this act that will in the aggregate, together with the bonds outstanding, and the bonds offered to be sold, be in excess of two (2)' per cent of the assessed valuation of the county at the time the bonds are issued.”

Several counties availed themselves of the authority granted by the Constitution, and in conformity to the procedure provided by Chapter 103 held elections and authorized the issuance of bonds for building permanent roads, and in this manner expended large sums of money, approximating the 2 per cent limitation. In 1919, in answer to a demand for a further construction of good roads, and in order to be able to raise funds therefor, the legislature of that year submitted to the people a further amendment to Section 10, Article XI, of the Constitution, which was regularly adopted, and reads as follows:

“No county shall create any debts or liabilities which shall singly or in the aggregate, with previous debts or liabilities, exceed the sum of $5,000, except to suppress insurrection or repel invasion or to build or maintain permanent roads within the county; and debts for permanent roads shall be incurred .only on approval of a majority of those voting on the question, and shall not either singly or in the aggregate, with previous debts and liabilities incurred for that purpose, exceed six per cent of the assessed valuation of all the property in the county”: Oregon Laws, Yol. 1, p. 170.

1. The rule is stated in 12 C. J., Section 106, page 729, thus:

“Constitutional provisions are self-executing when there is a manifest intention that they should go into immediate effect, and no ancillary legislation is necessary to the enjoyment of a right given, or the enforcement of a duty imposed. That a right granted by a constitutional provision may be better or further protected by supplementary legislation does not of itself prevent the provision in question from being self-executing; nor does the self-executing character of the constitutional provision necessarily preclude legislation for the better protection of the right secured. A constitutional provision which is merely declaratory of the common law is self-executing. A constitutional provision designed to remove an existing mischief should never be construed as dependent for its efficacy and operation on legislative will.”

2. If a county could create general indebtedness for any purpose under the original Section 10, Article XI, of the Constitution, as has been the ruling and policy of the state since 1859, then it must follow as a necessary sequence that when the $5,000 limitation was changed, and upon approval of a majority of the legal voters voting on the question, a county might incur an additional indebtedness for the purpose of building permanent roads, the authority to do so must be considered as granted by the amendment, Or, in other words, the amendment adopted is permissive. Therefore the authority of the people of the county to issue road bonds was not granted by Chapter 103, Laws of 1913, but by the Constitution.

While it may be that a portion of the amended section as it now reads is prohibitive, that part which reads, “debts for permanent roads shall be incurred only on approval of a majority of those voting on the question, and shall not either singly or in the aggregate, with previous debts and liabilities incurred for that purpose, exceed 6 per cent of the assessed valuation of all the property in the county,” must be considered as conferring authority. Although it is to a certain extent stated in the negative, by changing the limitation, it has granted authority for the creation of indebtedness up to the prescribed limit. This construction is emphasized by the fact that, when the last amendment of 1919 was submitted to the people there appeared in the voters’ pamphlet an affirmative argument setting forth the effect and provisions of the amendment, wherein the reason given why the amendment should be supported, and the provisions of the measure, were stated as follows:

“(1) The measure is intended to grant to counties the option of voting bonds up to 6 per cent of assessed valuation for road purposes. It is a matter left entirely with the particular county. As to whether or not, after the passage of this measure, a county votes bonds, will be no concern of any other county.

“(2) Many counties desiring more funds for road work are asking that you consent that they burden themselves if they so desire. Your affirmative vote on this measure does not prejudice you in the least, nor cost you a penny.

“ (3) If, in the opinion of a county, good roads are a paying investment and badly needed, is it not your duty to vote to allow that county to put the question to' its people?

“ (4) A private corporation cannot do business with only 2 per cent of its capital available; much less can a public corporation make necessary improvements on that amount; 6 per cent is little enough.

“(5) This is a purely local option measure; no county need assume burdens unless it desires.

“Appeal is made to the sense of fairness of voters to grant the opportunity and privilege for which the measure provides.”

3. Prohibitive and restrictive provisions in a constitutional amendment are self-executing, unless it clearly appears from the language of the entire provision and the circumstances of its adoption that the enactment of legislation was contemplated as requisite to put it into effect. The scope and purpose of such provisions may not be restricted by adverse legislation, and all statutes then existing or which may- thereafter be passed inconsistent with such provisions are null and void: Long v. Portland, 53 Or. 92" court="Or." date_filed="1908-12-01" href="https://app.midpage.ai/document/long-v-city-of-portland-6901000?utm_source=webapp" opinion_id="6901000">53 Or. 92 (98 Pac. 149, 1111); State v. Harris, 74 Or. 573" court="Or." date_filed="1914-10-17" href="https://app.midpage.ai/document/state-v-harris-6904501?utm_source=webapp" opinion_id="6904501">74 Or. 573 (144 Pac. 109, Ann. Cas. 1916A, 1156); Wren v. Dixon, 40 Nev. 170" court="Nev." date_filed="1916-10-15" href="https://app.midpage.ai/document/wren-v-dixon-8042279?utm_source=webapp" opinion_id="8042279">40 Nev. 170 (161 Pac. 722, 167 Pac. 324, Ann. Cas. 1918D, 1064); 12 C. J. 731; Cooley Const. Lim. (7 ed.), 121.

In 12 C. J., 739, Section 143, it is said:

“A constitutional provision that is not self-executing does not affect existing statutes until the enactment of legislation putting it into effect; but if a portion of such provision is repugnant to a statute in force when the Constitution was adopted, it abrogates such statute, notwithstanding the remainder of the constitutional provision is not self-executing, and is left without legislation in aid of it.”

See Griebel v. State, 111 Ind. 369" court="Ind." date_filed="1887-06-30" href="https://app.midpage.ai/document/griebel-v-state-ex-rel-niezer-7048940?utm_source=webapp" opinion_id="7048940">111 Ind. 369, 12 N. E. 700), and Hawley v. Anderson, 99 Or. — (190 P. 1097" court="Or." date_filed="1920-07-06" href="https://app.midpage.ai/document/hawley-v-anderson-6907268?utm_source=webapp" opinion_id="6907268">190 Pac. 1097, 1099), dissenting opinion of Chief Justice McBride. The latter opinion thoroughly presents the question involved, and it is not the intention of the writer to add anything thereto.

In Chew Heong v. United States, 112 U.S. 536" court="SCOTUS" date_filed="1884-12-08" href="https://app.midpage.ai/document/chew-heong-v-united-states-91233?utm_source=webapp" opinion_id="91233">112 U. S. 536, at page 549 (5 Sup. Ct. Rep. 255, at page 260, 28 L. Ed. 770" court="SCOTUS" date_filed="1884-12-08" href="https://app.midpage.ai/document/chew-heong-v-united-states-91233?utm_source=webapp" opinion_id="91233">28 L. Ed. 770, see, also, Rose’s U. S. Notes), Mr. Justice Harlan, delivering the opinion of the court, quotes from Wood v. United States, 16 Pet. 362 (10 L. Ed. 987" court="SCOTUS" date_filed="1842-03-10" href="https://app.midpage.ai/document/wood-v-united-states-86221?utm_source=webapp" opinion_id="86221">10 L. Ed. 987), as follows:

“Mr. Justice Story, speaking for the court upon a question of the repeal of a statute by implication, said: ‘That it has not been expressly or by direct terms repealed is admitted; and the question resolves itself into the narrow inquiry whether it has been repealed by necessary implication. We say by necessary implication, for it is not sufficient to establish that subsequent laws cover some, or even all, of the cases provided for by it, for they may be merely affirmative, or cumulative, or auxiliary. But there must be a positive repugnancy between the provisions of the new laws and those of the old, and even then the old law is repealed by implication only pro tanto, to the extent of the repugnancy.’ ”

The same principle was recognized by this court in the case of State v. Portland, R. L. & P. Co., 56 Or. 32" court="Or." date_filed="1910-03-15" href="https://app.midpage.ai/document/state-ex-rel-v-portland-ry-light--power-co-6901524?utm_source=webapp" opinion_id="6901524">56 Or. 32 (107 Pac. 958). The Constitution as amended in 1919, in effect said to the counties:

“You may create debts for permanent roads in your county not exceeding 6 per cent of the assessed value of the property of the county, on approval of a majority of those voting thereon.”

The constitutional ameiidments of 1912 and 1919 both contain two elements — one an express grant to counties to create debts for permanent roads, and the other a limitation on the amount of the debts created for such purposes. The grant is the right to create debts up to a certain limit for road purposes on approval of a majority of electors voting thereon. The right to create debts'is granted, the limit upon the debts so created is fixed, and the conditions upon which the right may be exercised are named. Neither the right to create the debts, nor the amount of debts that may be created, nor the conditions upon which the debts' may be created, are left to legislative control, but are granted, limited and named in the amendment- to the Constitution itself.

Under onr form of government the sovereign will resides in the people. That will is expressed in a written Constitution, which constitutes the fundamental law of the state. The people, in their sovereign capacity, assumed the function of limiting, by the amendments of 1912 and 1919 to Section 10, the amount of indebtedness that counties could incur for building and maintaining permanent county roads, and thereby withdraw that subject from legislative authority.

4. If Section 10 in its present form grants to counties authority to create indebtedness for the purpose of constructing and maintaining permanent roads, on approval by a majority vote, to the extent of 6 per cent of the assessed valuation of all the property in the county, as we think it does, then the provision of Section 19 of Chapter 103, General Laws of Oregon, 1913, directing that no bond shall be issued under the act which will make the bonded indebtedness exceed 2 per cent of the assessed valuation of the county at the time the bondsx are issued, is inconsistent with the late amendment to Section 10, and is null and void. The other provisions of Chapter 103 are not repugnant to the constitutional amendment, and are therefore in full force and effect.

The language of Section 19 of Chapter 103, and of the whole act, clearly indicates that it -was the purpose of the legislature to simply provide a modus operandi for counties in the issuance of bonds, and not to grant or restrict the authority for incurring indebtedness conferred by. the Constitution. Section 19 merely called attention to the then existing limit prescribed by the Constitution. It does not refer to the incurring of debts or liabilities by counties. It only relates to the bonds, which are merely evidences of such indebtedness. The legislature has been in session since the amendment of Section 10, Article XI, of the Constitution in 1919, and submitted another amendment to that section by adding a proviso authorizing Crook and Curry Counties to issue bonds for additional purposes, which amendment was adopted in 1920. The lawmakers evidently did not deem it necessary, in order to make the amendment operative, to enact any further legislation. .

5. A constitutional amendment designed to cure a defect in the law or remove an existing mischief, should never be construed as dependent for its efficacy and operation on legislative will: 12 C. J., p. 730, §106.

6. When Section 10 was amended in 1910, granting the power to counties to contract debts for permanent roads, without limitation, but only on approval of the majority of those voting upon the question, it was held in Andrews v. Neil, 61 Or. 471" court="Or." date_filed="1912-01-23" href="https://app.midpage.ai/document/andrews-v-neil-6902508?utm_source=webapp" opinion_id="6902508">61 Or. 471, at page 474 (120 P. 383" court="Or." date_filed="1912-01-23" href="https://app.midpage.ai/document/andrews-v-neil-6902508?utm_source=webapp" opinion_id="6902508">120 Pac. 383, 123 P. 32" court="Or." date_filed="1912-04-16" href="https://app.midpage.ai/document/armsby-v-grays-harbor-commercial-co-6902605?utm_source=webapp" opinion_id="6902605">123 Pac. 32), that the amendment clearly contemplated that the question of incurring an indebtedness for this purpose should be submitted to the voters of the county, that this rendered necessary an election, and that before an election could be held, the machinery for holding such election must be provided. Consequently in 1913 the legislature enacted Chapter 103, General Laws of Oregon 1913, which, as its title indicates, provides a complete manner of procedure for holding an election and the issuance of county bonds for the purpose of the construction and maintenance of permanent highways. Therefore when Section 10 was amended in 1919, Chapter 103, eliminating Section 19, provided a means for furnishing all the machinery for holding an election to authorize the issuance of road bonds, and to put the amendment into operation.

"While it may be conceded that the amendment to Section 10, Article XI, of the Constitution, in 1919, is not wholly self-executing, it is by reason of Chapter 103 rendered operative. There was no necessity for further legislation on this subject to render the amendment of 1919 effective. In Ladd v. Holmes, 40 Or. 167" court="Or." date_filed="1901-11-25" href="https://app.midpage.ai/document/ladd-v-holmes-6898771?utm_source=webapp" opinion_id="6898771">40 Or. 167 (66 Pac. 714, 91 Am. St. Rep. 457), where the primary election law was before the court, an objection was made that the primary law had no effect, inasmuch as it made no provision for any special .election. To this objection this court, speaking through Mr. Justice "Wolyerton, said, 40 Or., on page 190 (66 Pac. 722, 91 Am. St. Rep. 457):

“Objection is made that the law makes no provision for any special election that may become necessary, but this is not vital, as the effect would be to relegate the parties to the law heretofore governing primary elections.”

In considering the question of whether or not a constitutional amendment was self-executing, the court in Winchester v. Howard, 136 Cal. 432" court="Cal." date_filed="1902-05-28" href="https://app.midpage.ai/document/winchester-v-howard-3300693?utm_source=webapp" opinion_id="3300693">136 Cal. 432, at page 440 (69 Pac. 77, at page 79, 89 Am. St. Rep. 153, at page 158), says:

“The procedure need not be provided by the Constitution, if the Code of Civil Procedure and other remedial laws supply what is necessary.”

After a careful examination and reconsideration of the question involved, we hold that the amendment of Section 10, Article XI, of the Constitution, taken in connection with Chapter 103, General Laws of Oregon 1913, is in full and complete effect. The bonds in question were regularly issued and are valid obligations of the county of Union.

The demurrer to the answer to the writ is sustained, and a peremptory writ is awarded.

Peremptory Writ Allowed.

Benson, J., dissents.

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Dissenting Opinion

BURNETT, J.,

Dissenting. — The state Constitution has always been construed as a restriction, and not a grant, of power. Constantly since the organization of the state government the rule has been that the legislative assembly lawfully can enact any statute it chooses, unless forbidden by the Constitution of the state or of the United States. Section 10 of Article XI of the state Constitution reads thus:

“No county shall create any debts or liabilities which shall singly or in the aggregate, with previous debts or liabilities, exceed the sum of $5,000, except to suppress insurrection or repel invasion or to build or maintain permanent roads within the county; and debts for permanent roads shall be incurred only on approval of a majority of those voting on the question, and shall .not either singly or in the aggregate with previous debts and liabilities incurred for that purpose, exceed six per cent of the assessed valuation of all the property in the county.”

The language is restrictive throughout. It does not grant any power affirmatively. Its prohibitions are laid upon the counties only. It does not profess to prevent the legislative assembly from further limiting the indebtedness which counties may incur. It well may be conceded that the legislature could not authorize county indebtedness for roads in excess of the 6 per cent limit; but the power of that body is not limited in the other direction. The question ought not to be settled by consideration of this section alone. It is only a part of the Constitution, and that instrument ought to be construed and enforced so that, if possible, all its parts shall harmonize. In the adoption of this section there was no intention to abridge the power of the legislature to enact laws to promote economy and lower taxation. The positive limit of 2 per cent established by law is not affected by the, constitutional negative of 6 per cent. In construing the new section we must bear in mind the former and older Section 1 of Article IV, vesting the legislative power in the legislative assembly, subject, of course, to the people’s reservation of the powers of initiative and referendum.

The amendment does not in any sense profess to divorce counties from the control of the legislature in limiting their expenditures or to repeal any of its previous enactments. To give the amendment the effect of an affirmative direction or license to counties to go in debt 6 per cent of their property valuation, is to cripple the legislative power unwarrantably.

I concur in the dissent of Mr. Justice Benson.