Court Opinion

ID: 3845992
Source: CourtListenerOpinion
Date Created: 2016-07-06 08:19:42.476294+00
Date Added: 2024-06-11T13:47:18.755450
License: Public Domain

The majority opinion holds the General State Authority Act breaches the state Constitution in only one respect and that is, that it creates a debt contrary to the prohibition of section 4, article IX, of the Constitution. On the record now before us — and that alone is what our decision must be based on — I am clear that section 4, article IX, is not breached and I dissent from the conclusion arrived at by the majority.
The majority says: "We are of the opinion that the lease which the Commonwealth proposes to execute, . . . and otherleases like it [italics supplied], are within the prohibition of that section [section 4, article IX]." In my judgment, this court, in passing on the question whether the expenditures involved in the single lease on this record are unconstitutional, a lease calling for a maximum rental of only $2,800 a year, has no right whatsoever to consider the effect on our state revenue of "other leases like it." No such other leases are before us. We know nothing of their terms and for all that appears they may all be leases on self-liquidating projects. Whatever they prove to be is no concern of ours atthis time. When the State proposes to enter into other leases with the General State Authority, then and not until then will the court have any power to pass on the constitutionality of the expenditures they call for.
In connection with the question here, there are at least two relevant things which are absolutely settled in the law. The first is the meaning of "debt" as used in section 4, article IX. It does not mean an obligation arising from the acquisition of something the State does not pay cash for at the moment of acquisition. If the State acquires something to-day which can be paid for a little later out of current revenues that is not a debt within the constitutional prohibition quoted. Mr. Justice *Page 468 
MITCHELL, speaking for this court, made that very clear in Keller v. Scranton, 200 Pa. 130, 49 A. 781. This court in Com. v. Liveright, 308 Pa. 35, 161 A. 697, made it clear that the debts prohibited by the constitutional provision quoted were those "beyond revenue in hand or anticipated through a biennium." It is firmly-established law that if current revenues are not overreached by an obligation incurred, that obligation is not a debt within the meaning of the constitutional prohibition cited.
A second question arising here and which is absolutely settled in this State is that he who asserts that an act is unconstitutional has the burden of proving it. In Erie 
North-East R. R. Co. v. Casey, 26 Pa. 287, this court, speaking through Mr. Justice BLACK, said: "The right of the judiciary to declare a statute void, and to arrest its execution, is one which, in the opinion of all courts, is coupled with responsibilities so grave that it is never to be exercised except in very clear cases; one department of the government is bound to presume that another has acted rightly. The party who wishes us to pronounce a law unconstitutional, takes upon himself the burden of proving, beyond all doubt, that it is so."
In the case of Com. v. Moir, 199 Pa. 534, 49 A. 351, this court, in an opinion by Mr. Justice MITCHELL, held that where the power which is exercised is legislative in its character, the courts can enforce only those limitations which the Constitution imposes; not those implied restrictions which, resting in theory only, the people have been satisfied to leave to the judgment, patriotism and sense of justice of their representatives.
In the instant case, we have a statute which was passed unanimously by both houses of the General Assembly of Pennsylvania and approved by the governor. The judgment of everyone constituting the executive and legislative departments of the government was in favor of this act. If we are to strike it down, it must be because the facts under the Constitution clearly demand it. Since we have no proof offered that the debt incurred *Page 469 
in the instant case will be beyond the current revenues, we must presume that the debt incurred is within the current revenues. This being so, the act does not breach the constitutional provision invoked.
There is nothing in Brown v. Corry, 175 Pa. 528, 34 A. 854, cited by the majority opinion, which supports in the slightest degree the conclusion reached in that opinion. In that case the court clearly pointed out that "the indebtedness of the city [of Corry] now existing exceeds the constitutional limit." The limit then referred to was the one imposed by section 8, article IX, of the Constitution, providing that "the debt of any county, city, borough, township, school district, or other municipal or incorporated district, except as herein provided, shall never exceed 7% of the assessed value of taxable property therein. . . ."
The contract proposed to be entered into in that case was one to purchase the plant of a waterworks, to be paid for by 20 annual installments out of the "current revenues and not otherwise" of the city. The court below, starting with the fact that the then indebtedness exceeded the constitutional limit, said the question whether the city under the proposed contract was incurring a debt prohibited by section 8, article IX, of the Constitution, depended upon the answer to the question: "Is its purpose to provide for the paying of what may be called a part of the ordinary expenses? If the answer is 'yes,' it is within the power of the council to enter into if it is, 'together with other like expenses, within the limits of its [the city's] current revenues.' " The court said further that "when a contract made by a municipal corporation pertains to its ordinary expenses, and is, together with other like expenses, within the limit of its current revenues, and such special taxes as it may legally and in good faith levy therefor, such contract does not constitute the incurring of an indebtedness within the meaning of the constitutional provision limiting the power of municipal corporations to contract debts." The *Page 470 
lower court then added: "Our own Supreme Court has said, 'This is a sound constitutional interpretation,' and its reason must be apparent to all. The ordinary expenses, at least many of the ordinary expenses, must be incurred and paid, or the city cannot exist. It cannot be supposed that the framers of the Constitution intended to prevent municipalities from deriving the benefit that may accrue from favorable contracts for a term of years for supplying what must certainly be had, and must be otherwise provided for annually, at perhaps additional expense and inconvenience. And any expense that recurs with regularity and certainty, and is necessary for the existence of the municipality or for the health, comfort and perhaps convenience of the inhabitants, may well be called an ordinary expense."
The court then held that the purchase of the waterworks on an installment plan was not an "ordinary expense," and that sincethe constitutional debt limit for the city was alreadyexceeded, the city could not go into debt further for this "extraordinary expense." This court in a per curiam opinion sustained the conclusion of the court below.
Applying the logic of the opinion in that case, it makes no difference in the instant case whether the proposed lease is for a water supply or is for the purchase of waterworks on the installment plan so long as the stipulated payments are within the current revenue and therefore not a debt within the meaning of section 4, article IX, of the Constitution. As we have already pointed out, those who assert that the obligations of the proposed lease create a debt which overreaches current revenues, must prove it. Not a particle of such necessary proof has been offered in this case by those who attack the constitutionality of the proposed expenditure, or by any one else. On that phase of the case the record is totally barren.
The majority opinion says: "It cannot be doubted that the purpose of the arrangement contemplated is the *Page 471 
acquisition by purchase of a capital improvement or improvements, for which the State cannot now pay and payment for which is therefore to be made in annual installments extended over a period of 30 years. We are not confronted with an ordinary expenditure, nor is it a case in which the means of payment is provided at the time the obligation is incurred." The answer to that is that for aught that appears on this record the Commonwealth could agree to pay the entire cost of the Selingsgrove project, which is only $50,909, within one biennium without incurring such a debt as is prohibited by article IX, section 4, of the Constitution. The State does not have to prove its solvency every time it incurs a financial obligation. To hold otherwise would be to assert that every time the State leases a liquor store or other building for a term of years and some taxpayer objects, the Commonwealth must go into court and prove that its current revenues and prospective revenues will be sufficient to meet the obligations incurred. A statement was made at bar, without contradiction, that the proposed rentals of the Selingsgrove project are not beyond the current revenues. It is a matter of official record in this Commonwealth that the rentals paid by this Commonwealth for the fiscal year, June 1, 1934, to May 31, 1935, for the rental of real estate was $894,297.79. This included rentals paid for the leasing of State Liquor Stores, this alone amounting to $466,231.06. The citation of these figures shows the absurdity of the contention that an annual rental ranging from $2,240 to $2,800 a year will be so far beyond the current revenues of the State as to amount to the incurring of a debt prohibited by article IX, section 4, of the Constitution.
The majority opinion says further: "The particular waterworks described in the record is but a single instance of a program of public works to which no limit has been set either by the act or by the officers of the Commonwealth and the authority. It was stated at the bar of the court that the Authority is expected to receive *Page 472 
some $60,000,000, of which some $33,000,000 must be repaid." I submit that this court cannot decide present cases upon statements made at bar as to someone's future expectations. If the state authority is expected to receive $60,000,000 from the federal government and attempts to obligate the State to pay back $33,000,000 of that sum in thirty, or more or fewer, annual installments as rentals for structures not yet even blue printed, the time to rule on the constitutionality of the obligations which the State may then be asked to assume is whensuch obligations are about to be entered into and when theirprecise nature and extent are on the record then before us.
The majority opinion calls attention to the fact that there is "a clause, entitled 'Conditions Precedent to the Government's Obligations,' in the form of loan and grant agreement between the authority and the federal government [and this] provides: 'The government shall be under no obligation to pay for any of the bonds [of the state authority] or to make any part of the grant: . . . (e) If the Supreme Court of the State [of Pennsylvania] shall not render a decision satisfactory to the administrator holding that: (i) Act No. 190 [the General State Authority Act] is constitutional." As I read the majority opinion, the clause just cited is construed by the majority as making it obligatory on this court to determinenow the constitutionality of the General Authority Act in "a decision [which may or may not be] satisfactory to the administrator, holding that the act is [or is not] constitutional." The answer to that is that not even the federal government can command this court to decide the constitutionality of any act of our assembly prematurely. We decide the constitutionality of acts only when the record before us raises such a question. The majority opinion does not hold the State Authority Act intrinsically unconstitutional. All the alleged eight pleaded breaches of the Constitution are found to be nonexistent, save one — and that one becomes *Page 473 
visible to the judicial eye only when a department of the state government executes a lease with the authority to supply water for thirty years to the state's epileptic wards, in one colony, at a cost slightly in excess of $200 a month. To me the invalidation of this act for this reason appears absurd. It is settled law in this Commonwealth that no state expenditures can be construed as creating a debt within the prohibitions of section 4, article IX, of the Constitution, until facts arepresented showing that such expenditures will overreach currentrevenues. This court has nothing before it now on which to base a determination as to whether any future lease or leases which the State may attempt to enter into with the authority, will involve expenditures amounting to a constitutionally prohibited debt. That is fundamentally a problem in arithmetic and one does not normally proceed to a solution of mathematical problems until all the factors are presented. The duty of presenting facts supporting an assertion that a state obligation imposes an unconstitutional strain on current revenues rests exclusively upon the asserter.
I can see no application to the question presented here, of the common-law maxim that "acts of parliament derogatory from the power of subsequent parliaments, bind not." (Blackstone, volume 1, page 91.) That simply means that if one legislature or one parliament passed a law defining some crime and providing for its punishment, it could not in such an act, by any language, prevent a succeeding parliament from repealing it or modifying it. Likewise, if one legislature passed a law providing for a certain devolution of property, it would have no power to make that law irrepealable or unamendable. The very illustrations Blackstone uses as applications of the maxim he cites prove that the maxim has only that application herein stated and no other. This maxim, if given full acceptation, does not mean that the legislature of Pennsylvania cannot authorize the State as a body-corporate to enter into any contracts *Page 474 
for more than two years' duration. If that were the law, a state could not issue valid bonds for terms longer than the life of a legislature, and a city could not issue valid bonds for a term longer than the life of a city council. If this were the law, it would mean that the State could not enter into a contract for a public improvement that could not be completed within a period of two years. It could as well be argued that the legislature could not create any salaried public position for a term longer than a single biennium of the legislature.
The efficient administration of government frequently requires that business contracts be entered into by the State as a body-corporate for a longer period than two years. It is a matter of common knowledge that the State frequently leases buildings and office space for a longer period than two years. No one has ever suggested that such an administrative act when authorized by the legislature was an unconstitutional attempt by the legislature to derogate from the power of succeeding legislatures.
In considering the laws of a state as related to questions such as the one now before us, and particularly in considering the question of the right of one legislative body to bind its successors, one must keep in mind the distinction between, on the one hand, those laws which are intended to govern the relations of citizens with one another and to define the rights of property, and, on the other hand, those laws which relate to the business of a state as a body corporate. In a book greatly respected by the legal profession, to wit, "Law, Its Origin, Growth and Function," written by James C. Carter, that eminent lawyer said (page 116): "We find from the numerous volumes of statute books vast masses of matter which, though in the form of laws, are not law in any proper sense. These consist in the making of provision for the maintenance of the public works of the State, for the building of asylums, hospitals, schoolhouses, and a great variety of other similar matters. This is but the *Page 475 
record of the action of the State in relation to thebusiness in which it is engaged."
This dual capacity of bodies corporate has often received judicial recognition in the case of municipal corporations. In 43 C. J., section 290, 272, it is said: "A municipal corporation acts and functions in a dual capacity, one governmental, the other municipal."
That municipal corporations acting in their ministerial or business capacity may enter into long-term contracts is well recognized. In 44 C. J., section 2127, 72, it is said: "In the absence of limitation either by charter or general statute, contracts have been sustained as valid when made for a reasonable term of years, three, ten, twenty, twenty-one, twenty-five, thirty, and even thirty-one years being held not unreasonable."
In Seitzinger v. The Boro. of Tamaqua et al., 187 Pa. 539,41 A. 454, this court held: "The passing by a borough council of a resolution awarding a contract for lighting streets is not a legislative, but a ministerial act 'in the nature of a business transaction relating to the municipal affairs of the borough.' " In that case this court said: "In Black v. Chester City,175 Pa. 101 [34 A. 354], and in Metropolitan Elec. Co. v. City of Reading, 175 Pa. 107 [34 A. 565], the sole question raised was stated thus: 'Has a city of the third class, incorporated under or governed by the Act of May 23, 1889, P. L. 277, the right to enter into a contract for lighting its streets for a term of five years?' The decision of the question depended upon the construction of the act referred to in it. We held that such cities may lawfully make such a contract. As bearing on the question whether prior to the Act of 1889 cities and boroughs, not expressly or by implication restricted to contracts for one year by the statutes under which they were incorporated or by other statutes applicable to the government of them, could lawfully enter into contracts for a term of years, we refer to City of Erie's App., 91 Pa. 398, and Wade v. Oakmont Boro.,165 Pa. 479 [30 A. 959]. In each of the *Page 476 
cases cited the contract in question was for a term of years, and in each it was decided that 'if the contracts of municipal corporations do not overreach their current revenues no objections can be lawfully made to them.' We may add, as showing the trend or consensus of opinion on this subject, that in Metropolitan Elec. Co. v. City of Reading, supra, the learned counsel for the appellant presented a list of thirty-four cities and boroughs in Pennsylvania which had then entered into contracts for lighting the streets for terms exceeding one year, which list appears in 175 Pa. on page 109." See also Scranton Elec. Co. v. Old Forge, 309 Pa. 73,163 A. 154.
It follows that if the legislature can authorize municipalities to enter into long-term contracts, in the efficient administration of the purely business affairs of government, as distinguished from purely governmental, the legislature can itself authorize a commonwealth, whose legislative arm it is, to enter into contracts for more than two years for furnishing water to institutions administered by the State. What the legislature's creatures (cities) may do, the legislature itself ought to be able to do.
It may be, as argued, that "an existing legislature cannot bind succeeding legislatures to raise the revenue necessary or to make the appropriations to meet the periodic payments provided by the state's contract with the Authority." That is a risk that the authority has to run, just as a judge or any other public officer who is appointed or elected for a term of years has to run the risk that some future legislature may not appropriate money sufficient to pay his salary. That fact, however, would not make the "debt" incurred by his appointment or election for a term of years a breach of the constitutional provision against the incurring of debts in excess of current revenues. As a matter of fact these future rentals provided for in the proposed lease merely become "fixed charges" of the Commonwealth, like salaries of its public officials, and we can take judicial notice of the fact that *Page 477 
the fiscal affairs of this Commonwealth have never been so recklessly conducted as to make the State's fixed charges so great as even to approach the exhaustion of current revenues. Most of a state's appropriations are not for such charges.
With the wisdom of the Authority Act this court has nothing to do. The wisdom of statutory enactments is always for legislative determination, and as to the wisdom of this act the entire membership of both houses of the General Assembly was a unit. Courts pass on legislative power, never on legislative wisdom. I have no doubt of the power of the legislature to pass the General Authority Act and no doubt of the validity of the single rental contract challenged in this record. Since what the respondents are attempting to do in the instant case, under the authority of that act, to wit, bind the State to pay for thirty years, rentals ranging from $2,240 to $2,800 a year, for a proper purpose, does not impinge in the slightest degree upon any provision in the Constitution, the injunction asked for should be refused. What expenditures of public moneys may be attempted in the future, under the same act, we do not now know, and we can pass on the validity of such potential expenditures only when we, in an appropriate proceeding, are confronted with attempts to obligate the State to make them.