Opinion ID: 1890890
Heading Depth: 1
Heading Rank: 3

Heading: Test to be Applied by State Treasurer.

Text: In State ex rel. Lathers v. Smith (1941), 238 Wis. 291, 305, 299 N. W. 43 (hereinafter referred to as the first Lathers Case ), this court held that the state treasurer was bound to honor the state highway commission's order for payment to relator contractor for certain highway work in the absence of fraud or gross error. In the instant appeal, relator requests this court to hold that the fraud or gross error test imposed by the first Lathers Case should be applied in determining the validity of the payment represented by the voucher calling for issuance of the $3,500 check. Because of this request, we deem it advisable to consider what test should have been invoked by respondent in deciding whether or not it was her duty to sign the check. The fact situation in the first Lathers Case markedly differed from that present here. In that case the question before the state treasurer was whether the state highway commission's  engineer had acted within the provisions of a certain public contract in reclassifying certain excavated material as rock excavation rather than common excavation. In this case, the question presented to respondent was whether the $3,500 check represented an expenditure that the attorney general was authorized to make under the governing statutes hereinbefore considered. The trial court in its memorandum decision held that, where the questioned payment from the state treasury presents an issue of possible statutory violation, the test to be applied by the state treasurer is whether or not the proposed payment is palpably illegal. We adopt this test as stated by the trial court. Nevertheless, in the instant case the proposed payment of the $3,500 was not palpably illegal. We believe that one further facet of this case deserves comment. That is the element of discretion which necessarily enters into any action of the governor in directing the attorney general to commence an action in the name of the state to enforce the constitutional rights of its citizenry as a whole, or a substantial portion thereof. Such discretion is implicit in the phrase, whenever in his [the governor's] opinion . . . employed in sec. 14.12, Stats. If there is any reasonable basis for the governor to conclude that the constitutional rights of the state's citizens require protection by such a suit, his action in directing the institution of suit is not palpably illegal even though a court may ultimately decide that such constitutional rights are not being violated, or that the state is not a proper party. A similar element of discretion is inherent in the determination of the attorney general with respect to the propriety of incurring a particular expense in prosecuting such an action. For example, in the instant federal action, although there were five individual plaintiffs in addition to the state,  the attorney general apparently determined that it was proper for the state to incur the whole $3,500 expenditure as security for costs because the constitutional rights of a substantial part, if not all, of the citizens of the state were at stake, in addition to those of the five individual plaintiffs. So long as there exists any reasonable basis for the governor and attorney general's exercising their discretion in the manner described, and there is no affirmative showing that their actions are palpably illegal, the state treasurer is bound to honor such an exercise of discretion by the governor and attorney general.