Omaha daily bee., 1894-01-19
FRIENDLY SUIT Is STARTED
Governor orounse Begins Mandamus
Action Against Treasurer Bartley.
TESTING INVESTMENT or SCHOOL FUNDS
Supreme Court Asked TO settle the Con-
troversy In Regard to the Purchase
OF Outstanding State Warrants
What Are Current FUNDS.


The BEE Another important case was
submitted to the supreme court today
involving the constitutionality Of the law Of
1891 requiring the state treasurer to invest
the permanent school fund in state war
rants The case Is in the nature Of man
damus suit instituted by Governor Crounse
10 compel State Treasurer BARLEY TO pay
him warrant out Of the permanent school
fund. The treasurer declined TO pay the
warrant upon its presentation, and the gov
ernUr brings the matter 70 the attention Of
the supreme court.
The petition cites the law passed by the
legislature of 1891, and sets forth the fact
that on "a designated date the governor pre-
sented q warrant for $40 to the treasurer
drawn upon the general fund. He was In
formed that there was no money in the gem
eral fund with which the warrant could be
paid. The governor thereupon demanded
the payment Of the warrant out Of the idle
money IN the treasurer's hands belonging TO
the permanent school fund. The treasurer
declined to so pay the warrants for the
reasons set forth in the following letter,
which is attached to and is made part Of
= the governors petition:
Bart,ey States His Reasons.
L1HcoLN Dec. 13.-To Governor Crounse,
and Funds: DEAR SIR Section !, article viii
of the constitution OF the state provides that
the governor. secretary Of state, treasurer
attorney general and commissioner of public
lands and buildings, shall, under direction of
the legislature. constitute IA bonrd uf commis-
Boncrs for the investment of the school funds
in such manner as may be prescribed by law
In the Complied Statutes OF 1887, chapter
xxx. section Of article l. provision Is MADE
for the commissioners created by section l,
article viii OF the constitution, TO invest the
: school fund. Section 20 of article J., chapter
Xxx, of the said statutes OF 1887 says that the
said board Of commissioners above referred to
shall at regular meetings make the necessary
orders for the Investment of the fund. The
legislature of this state In 1891 amended sec
1897 3S9 20 Oh article l. 'HHp'er AANA statutes o'
1t now provides that said board OF commits
sioners shall, at a regular meeting, provide
tion to United States and stale securities and
registered county bonds II makes state war
my opinion, could not relieve the commits
sioners of their responsibility, and do not be-
1ieve it was its intention TO do so, In chapter
xviii, Session Laws of 1891. My idea is that
the legislature, when the commissioners at
regular meeting passed upon certain securi
ties including state warrants; and approved
them, made II the duty OF the treasurer TO
invest the fund in the securities as approved.
The board OF commissioners should, in my
judgment, do three things: First it should
ascertain that there is levy behind the war
rants presented; second it should see that
they are regularly issued and upon proper
appropriaton; third, that the party present.
ing them is the rightful owner. Having ascer-
tained these facts il is then the duty of the
commissioners under the law to direct the
treasurer by resolution to purchase the war
= rants. To do otherwise is TO give the treasurer
? privilege which do not think he is entitled
TO. In view of the action taken by the board
in refusing my request for authority to place
the warrants now hand IN the school fund,
shall be obliged to discontinue the purchase
of warrants until the question is decided by
the supreme court which. trust, will be done
in a few days, Your obedient servant,
j. 8 BARTLEY, State Treasurer.
Filed Demurrer.
who will conduct the case for the state
treasurer in the supreme court, files a gen.
eral demurrer to the petition filed by Gov
ernor Crounse, in which he not only makes
the customary allegation that the facts set
forth in the petition are rot sufficient TO con-
stitute cause of action, but in which he
also attacks the constitutionality of the law
passed by the Legislature in 1891, requiring
the state treasurer to invest the school fund
IN state warrants. Thus the whole case will
rest upon constitutional grounds and the de-
cision of the court will be final solution of
a controversy which involves many thou
sands of dollars belonging to the people of
Nebraska.
The case grows out OF controversy which
arose at meeting of the Board of Educa-
tional Lands and Funds on December b. At
that meeting Treasurer Barley reported
that he had purchased nearly 100000 worth
Of state warrants and he offered them to the
board as an investment for the permanent
school fund. A lengthy discussion arose. in
wDlcl Governor CrOuuSe bOOK the position
that the treasurer did not require any au-
thorty from the Board of Educational
Lands and Funds to purchase the warrants.
: After some further discussion it was deter
mined 10 submit the matter TO the supreme
court. The suit is friendly one, arranged
for the sole purpose of testing, first, the
constitutonality of the law. and second, the
source of authority under the law in case it
is declared constitutional.
Argued and Submitted.
The test case commenced yesterday to
decide the meaning of the words current
funds in the state depository law was
argued before the supreme court this fore
noon. Hon. J. G. Cowan of Omaha and Hon
j. w. Dawes of Crete appearing for the First
Nauonai bank Of Crete, while ATTORNEY
General Hastings and Hon. j. A. Ames of
this city represented the state treasurer. In
Its argument the plaintiff assumed the ground
that the only question involved in the con
troversy at issue was the construction to
be placed upon the words current funds"
Cooley on constitutional Limitations
was quoted TO show "that 1t was the
duty OF the court TO uphold statute when
the conflict between it and the constitution
Is not clear, and the Implication, which
must always exist that no violation has
been intended by the legislature, may re-
Auire IL in some cases, when the meaning OF
the constitution Is not IN doubt TO lean in
favor of such construction of the statutes
ms might not at first seem obvious and
natural For as q conflict between the
statute and the constitution Is not to be i'm
piled, 1t would seem TO follow that the court
II possible, must give the statute such a con-
btruclion as will enable it to have effect
This is only saying in another form of words
that the court must construe the statute in
accordance with the legislative intent, since
1t is always TO be presumed that the legisla-
lure designed the law TO take effect and not
10 be nullity."
Three Points to Consider.
1t was argued by Messrs. Cowau and
Dawes that when doubtful provision of
statutory law is presented for the consider
alton of the court there are three cardinal
tests which may be applied 10 it in order TO
ascertain the legislative intent. First, the
Inspection of the statute itself; second, the
Equity of the statute; third, the comparison
of the statutes upon the same subject mat
ter. The statutes should be interpreted In
the most beneficial way which their Ian
guage will permit TO prevent absurdity,
hardship or injustice, 10 favor public con-
venience and to oppose all prejudice TO pub
lie interest.
Taking up the argument upon the case
specifically in point, the attorneys contended
that the existing evils which this law was
Intended to correct were of long standing,
and often either directly claimed thB aLten-