Court Opinion

ID: 6642391
Source: CourtListenerOpinion
Date Created: 2022-07-20 20:46:49.308199+00
Date Added: 2024-06-11T15:59:17.741278
License: Public Domain

Gantt, J.
An alternative writ of mandamus was allowed in this case. The cause was tried before the court upon the alternative writ, the answer thereto, and facts admitted by stipulation of the parties.
It appears that prior to and during the year 1866, W. H. B. Stout was contractor for building the state penitentiary, and that during the months of April, July, September, October, and November, 1866, the inspectors of the penitentiary issued to him, for work done under the contract, certificates of indebtedness, numbered 162, 177, 181, 192, 197, 198, and 204, amounting in the aggregate to the sum of $39,507.96; that afterwards the Omaha National Bank, the relator, purchased all said certificates, and became the owner and holder of them; that under the act of Februury 14, 1877, providing for the funding of all outstanding indebtedness of the state, the relator presented said certificates to the respondent for payment, who paid thereon the sum of $37,466.09, leaving a balance unpaid of $2,041.87, which, upon demand for payment thereof by the relator, he refused to pay. This refusal to pay is based upon an order of the state auditor directing the respondent to retain said balance *512upon monthly estimates made by the warden of the penitentiary for prison labor let to said W. H. B. Stout.
The respondent contends that under the provisions of the second section of the act of February 25, 1875, the auditor shall retain from the fund appropriated to the contractor the amount of such estimates for prison labor, and that this order from the auditor is, in law, a sufficient justification for the refusal to pay the amount so retained. On the contrary, the relator insists that under the act of February 14, 1877, the state auditor has no authority to make such order in respect of the certificates in question in this case, and the relator is legally entitled to the full amount of the same.
The decision of the question raised by this controversy depends alone upon the interpretation of section 22, Art. III., and section 8, Art. IX, of the constitution, and the funding act of 1877, and acts relating to the erection and revenues of the state penitentiary.
There is a seeming conflict between the two sections of the constitution, but if they shall be expounded according to the purposes for which they were severally designed and adopted, this apparent conflict will be removed.
Section 22, Art. Ill, declares that “ no money shall be drawn from the treasury except in pursuance of a specific appropriation made by law, and on presentation of a warrant issued by the auditor thereon;” and section 8, Art. IX, declares that “ the legislative at its first session shall provide a law for the funding of all outstanding warrants and other indebtedness of the state, at a rate of interest not exceeding eight per cent, per annum.” The former establishes a permanent rule in regard to the mode in which all future disbursements of the public funds and revenues shall be made. It requires a specific appropriation made by law, and the presentation of a warrant issued by the auditor, to authorize the payment *513of money by the treasurer. The latter relates exclusively to the existent indebtedness of the state at the time, and declares that “ the legislature at its first session shall provide a law for the funding ” of this debt, including both ‘‘ outstanding warrants and other indebtedness of the_ state.”
It is clear that the sole and only object of this section was to provide for the payment of the outstanding state debt whatever might be the nature and character of the same, and the execution of this one object exhausts the power conferred by the section.
There is no limitation to warrants only issued by the auditor, nor does the language employed, either by express terms or necessary implication, require any act to be done by the auditor in the completion of this one object; but on the contrary, from the fact that not only the outstanding warrants but all other indebtedness of the state must be included incite law, it seems that the legislature alone must, under the power conferred, ascertain and determine the outstanding indebtedness whatever might be its character, and provide the fund to pay and the mode of payment of the same.
It is therefore very clear that these two sections of the constitution were designed to accomplish two different and distinct purposes — the one to establish a permanent rule in regard to the future payments of expenditures of the state, and the other to ascertain, determine, and provide by law for the payment of the existent state debt. This interpretation removes all apparent conflict between the two sections, and gives full force and effect to both, without conflict.
Now by the provisions of section ten of the act of March 4, 1870, as the work progressed on the penitentiary, the inspectors were required to “ certify to the auditor of state the value of the work done on the building at the time, and on such certified statement the au*514ditor shall issue a warrant on the state treasui’er for a sum not exceeding ninety per cent, of the value of the work so certified to have been done; ” and section thirty-five provides that the revenue derived from convict labor, etc., “ shall be paid to the warden and by him paid into the state treasury.” This policy was continued by acts of March 10, 1871 and February 23, 1875, and the revenues collected by the warden and paid into the treasury were held “ as a fund for the care and support of state prisoners.”
But the second section of the act of February 25, 1875, provides “ that hereafter the auditor of state shall retain from the fund appropriated to the contractor of the state penitentiary the amount of each monthly, estimate due for prison labor to the state from said contractor,” and transfer the same to the penitentiary fund.
What the legislative intent was in passing the two latter acts so nearly at the same time, and so repugnant to each other, or whether that of February 25 infringes the contract with W. H. B. Stout, it is not essentially necessary now to inquire. For the new constitution adopted by the people took effect on the first day of November, 1875, and according to the interpretation given to section 22, Art. Ill, and section 8, Art. IX, of this constitution, the act of February 14, 1877, passed in pursuance of the latter section, must govern in respect to the payment of the existent indebtedness of the state.
This act is entitled, “ An act to provide for the funding of all outstanding warrants and other indebtedness of the state.” The preamble which immediately follows the title, sets forth that: “ Whereas the state of Nebraska is indebted in divers sums on outstanding warrants and other forms of indebtedness as follows, to-wit:” and then follows itemized statements of four distinct classes of state indebtedness — the fourth class being “ certificates *515of indebtedness issued by the inspectors of the penitentiary on balance due upon the contract for the building' of the penitentiary, and other expenses connected therewith.” Then section one provides “ for the purpose of funding the foregoing indebtedness,” that state bonds shall be issued and sold under certain regulations prescribed, and that “ persons or corporations owning any of said warrants or certificates of indebtedness may be bidders therefor,” and “ upon the sale of said bonds, if the bid of any person holding any such warrants or certificates of indebtedness be accepted, the said warrants or certificates shall be received by the treasurer in exchange for said bonds;” and provides further that “it shall be the duty of said treasurer to pay all such warrants and certificates, together with the interest thereon * * * out of the sales of the said bonds when presented to him for payment.” It is quite clear from the terms here employed in the act that the four classes of indebtedness ascertained, specified, and itemized, were considered and determined by the legislature as absolute indebtedness of the state, to be paid upon presentation of the warrant or certificate to the treasurer, without any condition or abatement whatever. It authorizes and directs the money to be paid, not to the person to whom the warrants and certificates were issued, but to be paid to the persons and corporations owning and holding them.
Therefore, when the question in controversy in this case is viewed in the light of the constitutional provision and the positive provisions of the act of 1877, it seems clear that the auditor has no authority to audit, adjust, or draw warrants, or make any orders in respect of any part of the indebtedness specified in this act; and that his order to the treasurer directing him to deduct and retain from the amount of the certificates in question, the sum of $2,041.87, is a nullity, and constitutes no justification for the refusal to pay the money.
*516It must not, however, be inferred from the exposition of the law of this ease, that the act of February 14, 1877, does, either in express terms or by necessary implication, repeal any of the prior acts referred to; it merely provides the fund for and the mode of payment of the state debt existing at the time, and when this is accomplished, the legislative authority conferred by section 8, Art. IX, of the constitution is exhausted. Hence, the act effects this one object only, and does not affect the operation of prior laws relating to the revenues accruing thereafter from convict labor.
Again, the act makes it the duty of the treasurer “ to pay the warrants and certificates with interest thereon, as herein provided, * * * provided that all interest shall cease on any of said warrants or certificates, if not presented for payment on or before the first day of May, 1877.” This language seems to admit of only this construction, namely: that when either warrants or certificates are presented for payment before the time mentioned, and not paid, then interest shall be paid thereon, but if not so presented, then interest thereon shall cease. The legislature deemed it proper to allow interest on the •certificates of indebtedness in question, and it is the duty of the court to expound the law as it finds it, when not subversive of the constitution. Therefore, the peremptory writ of mandamus is granted to compel the payment of the balance of $2,041.87, together with interest thereon.
Writ granted.