197 P. 988 | Mont. | 1921
delivered the opinion of the court.
This is an original application for a writ of mandate directed to the state board of examiners and the governor and secretary of state, constituting a majority of the board, to compel it to publish notice calling for bids on the sale of treasury notes of the state of Montana and to make sale of same, as required by law.
The state board of examiners is composed of the governor, secretary of state and attorney general. (Sec. 20, Art. YII, of the Constitution; sec. 226, Bev. Codes.) By Chapter 13 of the Laws enacted by the Seventeenth Legislative Assembly in Extraordinary Session (Laws 1921), it is made the duty of the state board of examiners, prior to' the close of the fiscal year of 1922, by resolution to be entered in the minutes of its proceedings, to order the sale of treasury notes in such amount as in their discretion may appear best, provided that there must not be issued or sold during the year 1921 an amount exceeding in par value, plus interest to date of maturity, the total tax levy in the year for general state purposes, nor shall there be sold or permitted to be sold during the year 1921 more than one-half of the treasury notes authorized by the Act. And as to the year- 1922, the board is required not to order sold nor sell such treasury notes in amount exceeding
From the affidavit made the basis of this application, it appears that the state board of examiners, on March 28, 1921, pursuant to the terms of such Act, by proper resolutioh. entered of record, directed the sale and issuance of a total principal sum of one million dollars ($1,000,000) par value of treasury notes of the state of Montana for the year 1921; but that the board has failed and refused to direct publication of notice of the sale of such treasury notes or to take further steps looking to the negotiation and sale thereof. One member of such board, the relator herein, insists that it is the plain duty of the board to now proceed with publication of notice of sale of the treasury notes and to make sale thereof as authorized by law and the resolution adopted by the board.
It is provided by the Act that “immediately upon the passage and adoption by the board of any such resolution, the said board of examiners shall publish for ten (10) days in two daily newspapers of general circulation published in the state of Montana, a notice specifying the notes to be sold, the amount thereof, the place of payment and the maximum interest rate, that the denominations will be made to suit such purchasers; that interest will be payable semi-annually and asking that bids therefor, specifying in addition to the price offered, the rate of interest at which the bidder will purchase the said notes and likewise the denominations desired, be submitted to the said board at or prior to the day and hour to be specified in the notice, which time shall not be less than ten (10) days from the publication of the’notice."
It appears that there is now, and at the time of the adoption of the resolution authorizing the sale of such treasury notes was, outstanding in taxes levied for the current year for general state purposes and payable into the general fund of the state in the year 1921, the sum of $1,028,000, in addition to revenue accruing to the general fund from sources other than taxation, exceeding the total amount of the treasury notes ordered
The purpose of the Act is made clear from the preamble, which reads as follows: “It appearing that there are outstanding and unpaid valid claims chargeable against the general fund of the state of Montana in an amount greatly in excess of the actual cash on hand in said fund available for the payment thereof, and that in addition thereto the current expenses of the state and lawful charges against said fund are constantly accruing in an amount exceeding for the time being and temporarily, the actual cash income of said fund, but that there is outstanding in taxes levied, in addition to revenue constantly accruing to said fund from sources other than taxation, an amount in excess of three million dollars, available for- the payment of any warrants, claims or charges against the said general fund immediately upon receipt of the same in cash in the treasury of the state: Now, therefore, be it enacted,” etc. By demurrer filed, question is raised as to the constitutionality of the Act authorizing the issuance and sale of the treasury notes. (Chap. 13, Laws of the Seventeenth Legislative Assembly in Extraordinary Session.)
Section 2 of Article XIII of the Constitution provides in
The Act under consideration became a law March 24, 1921. and long prior thereto, on June 11, 1919, the supreme court of Idaho, in the ease of State v. Eagleson, 32 Idaho, 276, 181 Pac. 924, in upholding the constitutionality of the Idaho statute, speaking through Mr. Chief Justice Morgan, said: “The Chapter under consideration authorizes the state board of examiners to order the sale of such amounts of treasury notes as it may deem best, provided it shall not order, nor permit to be sold during the year 1919 an amount of the total par value, plus interest to date of maturity, exceeding the total tax levy in that year for general state purposes payable into
“The defendant answered, in effect, that if treasury notes be issued as prayed for, the indebtedness thereby created will, together with the bonded indebtedness of the state now outstanding, be in excess of the amount permitted by Article VIII, par. 1, of the Constitution which, so far as it is material to this case, provides: ‘The legislature shall not in any manner create any debt or debts, liability or liabilities, which shall * * * exceed in the aggregate the sum of two million dollars. * * * ’ The answer was demurred to, on the ground that it does not state facts sufficient to constitute a defense, and the only question presented is as to whether or not the treasury notes in question will, if issued and sold, constitute an indebtedness within the meaning of that section of the Constitution.
“This court, in Stein v. Morrison, 9 Idaho, 426, at page 451, 75 Pac. 246, at page 254, said: ‘The appropriations for current expenses and the raising of revenue to meet those appropriations have been treated by the people in framing and adopting the organic law as a cash transaction.’ The decision of the court upon this point is summarized in the syllabus as follows: ‘The public revenues may be appropriated by the legislature in anticipation of their receipt, # * * and it is not necessary to the validity of such an appropriation that funds should be in the treasury at the time to meet the same.’ ‘ Such appropriations do not constitute a debt or liability against the state within the provisions of section 1, Article VIII, of the Constitution, * * * .’ (See, also, State v.
“A question similar to the one before us arose in South Dakota, where the legislature had provided for the issuance and sale of state warrants, in anticipation of the payment of taxes already levied to procure cash with which to pay the current expenses of state government. The court held that ‘appropriations from the assessed, but uncollected, revenues of the state, and the issuance of warrants in pursuance thereof, is not the incurring of an indebtedness,’ within the meaning of a constitutional provision of that state which, so far as this question is concerned, is the equivalent of our Article VIII, par. 1. (In re State Warrants, 6 S. D. 518, 55 Am. St. Rep. 852, 62 N. W. 101.) See, also, Bryan v. Menefee, 21 Okl. 1, 95 Pac. 471.) This is the correct rule, and it applies to treasury notes with equal force as to state warrants.”
The South Dakota decision referred to in the Idaho case construes a statute of the state of South Dakota (Chap. 91, Laws of 1895), providing for the issuance of state warrants to defray current expenses based upon revenues not yet collected under constitutional provisions (sec. 2 of Art. XIII of the Constitution) quite similar in effect to our own. In passing upon the validity of the warrants authorized to be issued in anticipation of available revenues, the supreme court of South Dakota, in In re State Warrants, 6 S. D. 518, 55 Am. St. Rep. 852, 62 N. W. 101, used the following language by us quoted with approval with respect to the Montana Act under consideration: ‘‘By general law the legislature has provided for the levy of an annual tax for meeting the ordinary expenses of the state. ' By so providing, in a constitutional manner for the levy of a sufficient tax, it has provided a revenue, to the extent of the tax, for the payment
“At first thought, it may seem difficult to maintain that the issuing of an obligation to pay is not the incurring of an indebtedness; but as aptly said by the court in State v. Parkinson, supra, ‘similar language [prohibiting state indebtedness beyond a designated limit] in the constitutions of other states,
In the very recent case of State ex rel. Bonner v. Dixon, ante, p. 58, 195 Pac. 841, this court, in passing upon the constitutionality of the initiative measure authorizing the issuance of state bonds in the aggregate amount of $5,000,000 for the construction, repair and equipment of buildings for state educational institutions named, said: “It is not necessary, to constitute a valid appropriation, that the funds be then in the treasury. As a matter of fact, it is very rarely the case that there are funds to meet an appropriation at the very time the appropriation' is made.”
In construing our constitutional provision applicable,
In State v. McCauley, 15 Cal. 429, quoted from with approval in the South Dakota case, in discussing the effect of California’s constitutional limit of indebtedness, the language of which is almost identical with our own, it is said: “The eighth article was intended to prevent the state from running into debt and to keep her expenditures, except in certain cases, within her revenues. These revenues may be appropriated in anticipation of their receipt as effectually as when actually in the treasury. The appropriation of the moneys when received meets the services as they are rendered, thus discharging the liabilities as they arise or rather anticipating and preventing their existence. The appropriation accompanying the services operates, in fact, in the nature of a cash payment.”
In our opinion, the debt or liability intended to be prohibited by section 2 of Article XIII of our Constitution is such as is in excess of revenues available or provided for for the appropriation years—that is, for the two years intervening between sessions of the legislative assembly; and not current obligations of the state arising during such period of time for which revenues are actually available or provided. The constitutional limitation has reference to such a liability as singly or in the aggregate will obligate the state to an amount in excess of $100,000 over and above cash on hand and revenues having a potential existence by virtue of existing revenue laws. In the ease before us, the funds must be considered in esse for the payment of the treasury notes, provision having been made for their levy and collection. The state, in conducting its business by such methods, is in no
No valid reason appearing why the defendants herein refused to publish notice for the sale of the treasury notes as authorized and required by the Act, or for refusing to proceed with the sale thereof, the writ of mandate will issue commanding the board to proceed with the publication of notice of sale and the sale of the treasury certificates authorized to be sold in the year 1921 pursuant to the Act for the amount authorized by the resolution heretofore adopted by it.
Writ issued.