Court Opinion

ID: 8269335
Source: CourtListenerOpinion
Date Created: 2022-10-16 19:21:39.304249+00
Date Added: 2024-06-11T16:43:28.064187
License: Public Domain

Swayze, J.
(dissenting).
Since I have the misfortune to differ from a majority of the court, and the question is one of great importance and involves substantially the power of the legislature to create a subordinate agency for a public purpose endowed with powers adequate to its work, I think I ought to express the reasons for my dissent. In dealing with any constitutional question, it has been the rule of *161the courts from the very beginning of our constitutional law, laid down by Chief-Justice Marshall himself, not to declare an act unconstitutional unless it was clearly so. Nowhere has this restraint imposed by the courts upon their own action been asserted more strongly than in our own courts in recent years. The careful observance of this restraint, I think, 'is of the utmost importance. Otherwise the courts run the risk of usurping the function of the governor to veto legislation, and of eventually losing the power to act effectively when the constitutional limitations are transgressed. It is in this spirit that I approach the present ease. The question is: Is it clearly beyond the power of the legislature to create a subordinate public agency empowered to acquire property to be paid for out of the property itself and upon the express condition that the mortgage and bonds given for the purchase-money shall in no manner create or constitute any present or future indebtedness or liability of the state ?
I think the present proceeding is not beyond the power of the legislature, first, because the debt, if there be a debt, is that of a subordinate public agency only, and second, because in this case there is no such debt as was meant by the constitutional, provision.
In Van Cleve v. Passaic Valley Sewerage Commission, 71 N. J. Law 183 (at p. 228), Mr. Justice Pitney said that the constitutional provision against a state debt had no applicancy to local or municipal indebtedness, and that a contrary view would overthrow practically all our municipal bond issues. The judgment was reversed (71 N. J. Law 574), but solely upon the ground that the commission in that case was clothed with the power of taxation, and this court was careful to say that its conclusions resulted in sustaining the power of the legislature to engage directly in the undertaking of the purification of the Passaic valley sewerage district, including its right to put forth directly for this purpose its police powers, and to exercise such powers through a board of commissioners selected and appointed in the manner provided in the act. As is well known, that enterprise is now proceeding.
*162The present case is free from the difficulty that arose in the Passaic Valley Sewerage Case. No power of taxation is given to the commission. No property can be held for the payment of the purchase price except the very property itself. It is expressly provided that the claims of bondholders shall not be enforced against other holdings, property or rights of the commission. The authority to use assets of the commission unappropriated is no more than an authority to use funds actually in hand for a legitimate public purpose, very much as the proceeds of sale of riparian lands are used for the school fund. The provision for the payment into a sinking fund of any moneys which shall be appropriated by any legislature toward the principal, leaves it entirety optional with each successive legislature whether to appropriate or not, and in no way contravenes or modifies the express provision that the mortgage and bonds shall not create or constitute any indebtedness or liability of the state. Whatever a legislature may thus appropriate hereafter is a voluntary appropriation for a legitimate public purpose. If the legislature cannot constitutionally make such appropriation for the benefit of this subordinate public agency, we must assume that it will not do so; this provision then becomes nugatory, or may be excised. If the legislature can constitutionally make such an appropriation, I see no objection to the money when appropriated being used for the purpose which the legislature designates. I do not overlook the fact that the powers of the Passaic valley sewerage commission were not co-extensive with the state. There are, however, other subordinate public agencies, incorporated and unincorporated, which incur obligations property called debts for which the state has to answer.
I doubt if there is a day when unpaid obligations of this kind incurred in behalf of hospitals, prisons, reformatories and other charitable institutions do not exceed one hundred thousand dollars. A glance at the report of the state treasurer for 1914 shows more than one day when payments made at the end of a calendar month, for obligations incurred during the preceding month, exceeded one hundred thousand dollars. Whether there was a credit extended in these cases which would prevent the obligations from being past due at the time they were paid, 1 do *163not know, but the present discussion as to the possibility of a deficit in the state’s revenues admonishes us to be careful how we hold that the indebtedness of subordinate agencies in excess of one hundred thousand dollars is forbidden by the constitution. No one has ever suggested, or is likely to suggest, that these debts of the state are within the constitutional prohibition. Some, no doubt, are for current expenses, others for extraordinary expenses, such as buildings. The reason why these debts are not regarded as transgressing the constitution may be in part because revenues to meet them are already in sight, in part because they are obligations of subordinate state agencies. But the revenues are not always in sight and the obligations are not always the obligations of subordinate state agencies. The real reason why such debts have never been supposed to transgress the constitutional provision, is that they are not the kind of debts and liabilities which the constitution meant to prohibit. Some qualification must undoubtedly be placed upon the words “debts and liabilities.” I think that qualification is to be found in the circumstances that existed at the time the constitution of 1844 was adopted, and that the object of the framers was to prohibit the issue of state bonds, or similar obligations, failure to pay which might expose tire state to the reproach of repudiation under which some of our sister states then suffered. That reproach can never be brought in a case like the present, where the whole scheme is carefully drawn to enable the public to secure what the legislature thought was for the public benefit without the state itself incurring any legal or moral obligation whatever. The plan avoids the evils which the constitutional provision was designed to meet, since the specific property acquired must be worth what is paid for it, or the owners would not sell on such favorable terms to the purchaser, and the public can at most lose no more than the specific property. The burden of taxation is not increased. There is no danger of the state repudiating its obligations, since, by the express terms of the contract, it incurs none.
If we look to other states where similar plans have been adopted, under similar statutory or constitutional provisions, the great weight of authority is in favor of their constitutionality. *164It is enough to cite some of the cases collected in the very satisfactory brief of counsel for the respondents: Perrigo v. City of Milwaukee, 65 N. W. Rep. 1025; City of Milwaukee v. Milwaukee Company, 69 N. W. Rep. 819; Burnham v. City of Milwaukee, 75 N. W. Rep. 1018; Winston v. City of Spokane, 41 Pac. Rep. 888; Faulkner v. City of Seattle, 53 Pac. Rep. 365; Dean v. City of Walla Walla, 92 Pac. Rep. 895; Griffin v. City of Tacoma, 95 Pac. Rep. 1107; Brockenborough v. Board of Water Commissioners, 46 S. E. Rep. 28; Kelly v. City of Minneapolis, 65 N. W. Rep. 115.
It is far from clear to me that the present scheme is forbidden by the constitution, and I think the decree should be affirmed. Mr. Justices Trenchard, Minturn and Black and Judges White and Terhune concur in these views.
For affirmance — Swayze, Trenchard, Black, White, Terhune — 5.
For reversal — The Chief-Justice, Garrison, Parker, Bergen, Kalisch, Bogert, Vredenburgh, Heppenheimer, Williams — 9.