161 P. 309 | Mont. | 1916
Lead Opinion
delivered the opinion of the court.
At the general election in 1914 the people of this state, acting under the authority reserved to them in section 1, Article Y, of the Constitution, adopted by the initiative a statute familiarly known as the Farm Loan Act (Laws 1915, p. 486). Because the state board of land commissioners (for brevity designated the board) failed and refused to perform certain duties devolved upon it by the Act in question, and failed and refused to receive or consider an application for a loan on improved farm lands within this state, made by Charles Evert Evans, this proceeding in mandamus was instituted. In defense of its action the board insists that the statute is: (1) Unconstitutional and void in whole or in part, and (2) in any event impossible of administration.
Counsel for the board assume in the first instance that the Act in question provides but a single plan for loaning these funds upon farm lands, and upon that assumption condemn the entire measure. The assumption is unwarranted. The statute in very clear terms provides two distinct plans of procedure, one of which we shall designate the “primary” and the other the “contingent” plan.
1. The Primary Plan. Sections 1 and 2 above impose upon the board the duty to invest the specified funds in the securities enumerated therein, including the farm mortgages. Section 5 commands the board and the attorney general to prepare necessary blank forms for applications and for mortgages; each mortgage form to “contain a provision that default in the payment of interest thereon at any time for a period of thirty days after the same shall become due, shall cause the whole principal and interest on said mortgage to become at once due and payable, and said mortgage may be foreclosed in the manner provided by law.” This completes the primary plan, and the statute, in so far as it provides this plan of procedure, is proof against any attack made upon it. It does not conflict in the least with any
With respect to the lands granted for common school purposes, the Enabling Act fixes a minimum sale price and declares that the proceeds from such sales, together with five per cent of the proceeds from the sales of public lands in the state, shall constitute a permanent school fund the interest from which only shall be expended. It also provides that the lands granted may be leased under regulations prescribed by the legislature o'f the state, with a limitation upon the term of any such lease and upon the quantity which may be let to any individual, company or corporation. (Secs. 11 and 13.) Of the lands granted for university purposes, it declares that they shall not be sold for less than $10 per acre, but may be leased in the same manner as provided in section 11. With reference to the grants for capitol building and penitentiary purposes, it prescribes no restrictions or regulations whatever. (Sees. 12 and 15.) The only limitation imposed with reference to the other grants enumerated above is that: “The lands granted by this section shall be held, appropriated, and disposed of exclusively for the purposes herein mentioned, in such manner as the legislatures of the respective states may severally provide.” It will thus be seen that the Enabling Act does not attempt to regulate the manner in which the permanent funds derived from these grants shall be invested; .and, as the Farm Loan Act deals only with the investment of those funds, no possible conflict can be discovered between the two Acts.
But what, if any, authority has the legislature over the investment of the public school funds constituting the first group ? Section 3, Article .XI — the only constitutional provision touching the subject — goes no further than to declare that: They shall “be invested, so far as possible, in public securities within the state, including school district bonds issued for the erection of school buildings, under the restrictions to be provided by law.” This concluding clause must be given meaning. The framers of our Constitution were discriminating in their choice and use of language. They apparently experienced no difficulty in choosing apt words to express the particular shade of meaning which they intended to attach to any provision; and therefore, when they employed the expression “under the restrictions to be provided by law,” we must assume that they meant to
Whenever the contingency contemplated actually arises, the apportionment and distribution of such residue is to be made among the several counties according to population as nearly as may be done. Applications for loans are to be made to the county auditor (or, if there be no auditor, to the county clerk); the county attorney then examines the abstracts of title; the county commissioners appraise the lands offered as security, and loans may be made directly by the county, but the mort
Section 8 provides that, if any county receiving its distributive share of these funds is unable to loan them after giving the required notice, it shall return such funds to the board, with interest thereon for sixty days.
Section 9 provides that, if a borrower fails to meet the requirements of his obligation, the county attorney shall foreclose the mortgage. The same section then proceeds: “If no other person shall bid the full amount due upon said mortgage upon the foreclosure sale of the same, with the cost and expenses of the foreclosure and sale, the county attorney or county auditor shall bid in the land in the name of the county for the amount due and all costs and expenses incurred, and such county shall at once pay to the state board of land commissioners such full amount due and interest out of the general fund of the county, and if the same is not redeemed, as provided by law, the sheriff’s deed shall be made to the county and the county shall thereby become the owner of said land.”
• By section 12 each county is made responsible and accountable for the principal and interest of all moneys received by it, and in case of loss such county shall, out of its common revenues, repay the same to the board.
Notwithstanding such funds are distributed to the several counties, and the board releases all control over them, and the counties are charged with the duty to loan or return them with interest, the state nevertheless retains title to such funds. They belong to the state in the sense that they are realized out of the grants to the state by the federal government. (County of Des Moines v. Harher, 34 Iowa, 84.)
By sections 8, 9 and 12 of the Farm Loan Act every county is made primarily liable for the funds received by it. It is required by section 8 to return the funds if no loans are made, in
The primary liability for the integrity of the funds distributed is sought to be fastened upon the counties by this Act, while the Constitution imposes such liability upon the state. (Sections 3 and 12, Article XI.) By the terms of this Act a county is compelled to pay out of its general revenues raised by taxation all the expense of operating under this plan, including interest on funds not loaned, and the principal and interest of loans foreclosed [in the absence of another purchaser at the foreclosure sale], excepting only the cost of abstract and recording fee; and if the funds to make these payments- are not on hand in the county treasury, the county must perforce issue its warrant or evidence of indebtedness, and all this without reference to its outstanding obligations. Section 5, Article XIII, of the Constitution limits the indebtedness which a county may incur for any pui’poses whatever to an amount not exceeding five per cent of the value of its taxable property; but the Act in question makes no distinction between the county which has reached the limit of indebtedness and the one which has not. It attempts to impose this additional burden upon all alike, doubtless to avoid the charge that the measure is obnoxious class legislation. The borrower who secures his loan from
Whatever may be said of other provisions constituting this plan — for instance, of the provision of section 2 requiring the funds to be distributed to the several counties according to population, without any means available to the board for ascertaining the population, or of the provision of section 3 requiring the board to relinquish control of these funds without any additional security from the county treasurer who receives the funds for the county, or of the provision of section 2, subdivision (c), requiring the county auditor to give public notice of the funds on hand available for farm loans, and the apparently contradictory provision of section 6, which requires such notice to be given by the county commissioners, or of the provision of section 10, which requires the county in its own name to give a release and satisfaction for a debt due to the state and paid by the borrower, or of the provision of section 6 (a), which attempts to impose upon a judicial officer purely ministerial duties — this much is certain: Sections 9 and 12 violate the plain mandates of the Constitution.
It is beyond the power of legislation to compel a county, or the several counties, to assume a burden imposed upon the state itself by terms of the Constitution which are mandatory and prohibitory.
A county cannot be compelled to loan its credit in aid of an individual or to make good the loss incurred by 'a delinquent borrower’s failure to discharge his obligation to the state.
The county which has already reached the constitutional limit of indebtedness cannot be burdened by further liabilities of this character imposed by statute, or at all, without an amendment to the Constitution itself.
Whether the invalid provisions of sections 9 and 12 shall operate to defeat the contingent plan depends upon the answer to the inquiry: Are those provisions so intimately related to the remaining portions of the statute creating the plan that it may be said fairly they were an inducement to the lawmaker to provide the plan?
The people of this state, acting as a legislative body, can no more transgress the provisions of the state Constitution than can their representatives in the legislative assembly. The terms
Under the views herein expressed, the county auditor of Cascade county is not a necessary or proper party to this proceeding, and he is dismissed from further consideration.
The peremptory writ will issue directed to the remaining defendants constituting the state board of land commissioners, commanding them to receive and consider the application of this relator, and to take such further steps as will render effective the primary plan of the Farm Loan Act as indicated herein.
Concurrence Opinion
: "While I did not hear the argument in this case, I have examined carefully the provisions of the statute and the sections of the Constitution by which its validity must be determined. I am satisfied that Mr. Justice Holloway has stated the only conclusion permissible, and therefore concur therein.