Court Opinion

ID: 9550524
Source: CourtListenerOpinion
Date Created: 2023-08-07 18:36:18.32651+00
Date Added: 2024-06-11T15:21:42.809603
License: Public Domain

MR. CHIEF JUSTICE HARRISON:
This is an appeal from the judgment of the district court of the first judicial district dismissing the action of the plaintiff and dissolving the temporary restraining order theretofore granted.
Initiative Measure No. 54 (Laws of 1951, page 781), hereinafter referred to as “Initiative 54,” adopted by the general *4electorate at the 1950 general election, provided for payment of an honorarium to Montana veterans of World War II; the sale of bonds to provide funds for such payment; and the levy of a cigarette tax, the proceeds of which were to be used to redeem and pay interest on the bonds. The constitutionality of Initiative 54 was established in the case of State ex rel. Graham v. Board of Examiners, 125 Mont. 419, 239 Pac. (2d) 283.
The Thirty-fifth Montana Legislative Assembly enacted an amendment to Initiative 54 by passage of Substitute House Bill No. 3 (Chapter 44 of the Laws of 1957, hereinafter referred to as “Chapter 44”) providing for payment of an hororarium to Montana veterans of the Korean war on substantially the same basis as veterans of World War II were paid under Initiative 54; the sale of $6,000,000 worth of bonds to provide funds for such payment; and the levy of an additional cigarette excise tax, the proceeds of which were to be used to redeem and pay interest on the bonds.
Pursuant to Chapter 44, collection of a one cent per package excise tax was commenced on February 26, 1957, and has continued to the present time. On the authority of Chapter 44, respondent, State Board of Examiners, passed a resolution on June 12, 1957, authorizing issuance and sale of certain described bonds in the amount of $6,000,000 for the purpose of providing funds for the payment of the Korean veterans’ honorarium, the bonds to be redeemed with funds collected from the cigarette excise.
On July 23, 1957, appellant filed a complaint and petition for writ of injunction in the district court of the first judicial district, in which the alleged Chapter 44 is invalid and cannot ever become effective in that:
(1) It creates a debt or liability in excess of $100,000 without having been submitted to the people at a general election as required by section 2, Article XIII, of the Montana Constitution ;
(2) It creates a debt or liability without having been submitted to the taxpaying electors of the State of Montana at an *5election as required by section 2, Article IX, of tbe Montana Constitution;
(3) It violates section 27, Article III, of tbe Montana Constitution and section 1 of the Fourteenth Amendment to the Constitution of the United States, in that it deprives persons of their property without due process of law by levying an excise tax on cigarettes which is excessive;
(4) It impairs the obligation of the State of Montana to the holders of War Veterans’ Compensation Bonds dated April 1, 1952, issued under the provisions of Initiative 54, in violation of section 2, Article III of the Montana Constitution;
(5) It is void for uncertainty in that it provides in section 14-A, added to Initiative 54 by section 6 of said Chapter 44, that the money arising from the sale of the $6,000,000 bonds authorized thereby shall be used to pay the expense of administration of Chapter 44, and also provides in the amendment of section 84-5621 of the Revised Codes of Montana of 1947, made by section 7 of Chapter 44, that the War Veterans’ Compensation Bond Retirement Fund No. 2, into which the proceeds of the additional cigarette excise tax levy are to be paid, shall be used not only for payment of the bonds and the interest thereon but also for the payment of the expenses of administration of Chapter 44; and
(6) It provides in the amendment of section 84-5621, R.C.M. 1947, which amendment is made by section 7 of said Chapter 44, that the War Veterans’ Compensation Bond Retirement Fund No. 2 shall be used for the payment of the expenses of administration of Chapter 44, thereby requiring payments out of the state treasury without appropriation therefor, in violation of section 34, Article V, of the Montana Constitution, and, if held, to be an appropriation for a longer term than two years, in violation of section 12, of Article XII, of the Montana Constitution.
Appellant prayed that Chapter 44 be declared null and void and not a law of the State of Montana; that the court temporarily restrain respondents from issuing bonds under the au*6thority of Chapter 44; and that respondents be directed to show cause why said temporary restraining order should not be made permanent.
The court below issued the temporary restraining order prayed for by appellant and granted an order to show cause returnable August 15, 1957.
On his petition and by stipulation of the parties, the court allowed intervention of Harvey Sanders in behalf of the respondents.
On August 15, respondents demurred generally to appellant’s complaint, and argument of counsel for respondents, appellant, and intervenor was duly heard.
Respondents’ demurrer was sustained August 20, and, appellant electing not to plead further, judgment was given for respondents, the court dismissing the action with prejudice and dissolving the temporary restraining order. Appellant now appeals from the judgment of the district court. The issues presented are set out in the appellant’s complaint above.
The pertinent parts of Chapter 44 necessary to be considered are as follows:
“Whereas, the Korean war began before the submission of Initiative No. 54, adopted by the vote of the people of Montana at the regular general election of November 7, 1950, but too late to permit the inclusion in the provisions of said act of persons in the military service during said Korean war; and
“Whereas, it was the intent of the people of Montana to recognize by the honorarium provided in said Initiative No. 54 all residents of Montana rendering military service on behalf of said state in the then emergency; and
“Whereas, said Korean war was a recrudescence of said World War II and properly includable within the provisions of said Initiative No. 54, Now Therefore,
“Be in enacted by the Legislative Assembly of the State of Montana:
******
*7“Section 5. That Section 12 of said Initiative No. 54 be, and the same is hereby amended so as to read as follows:
“ ‘Section 12. For the purpose of providing for the payment of the honorarium, or adjusted compensation, herein provided for and for paying the expenses of administration of this law, there shall be issued and sold under the direction and supervision of the board of examiners, limited obligations bonds of the State of Montana in the sum of twenty-two million dollars ($22,000,000.00) or in such sum within that amount as may be necessary for such purposes. Such bonds shall distinctly state that they are not and shall never be or become a general obligation of the State of Montana, but shall be payable only from the proceeds of a cigarette tax in the manner in this law provided; shall contain the pledge of the State of Montana to continue to levy and collect the cigarette tax in this law provided for and place the proceeds thereof in the War Veterans’ Compensation Bond Retirement Fund, until all bonds issued hereunder, and the interest accruing thereon, shall have been paid; shall draw interest at the rate of not more than four and one-half percent (4% %) per annum, payable semiannually; * * * Such bonds shall be signed by the members of the board of examiners and be issued under the great seal of the State of Montana, and a record of all such bonds issued and sold shall be made in the office of the state treasurer. * * * Provided, however, that if the moneys derived from said first issue of twenty-two million dollars ($22,000,000.00) of bonds as in this Section above provided shall be insufficient to pay all claims heretofore filed with and heretofore ór hereafter allowed by said board of examiners under the original provisions of said Initiative No. 54 as heretofore amended, and to pay all claims filed and allowed under this amendatory act, together with the expenses of administration of this amendatory act, there shall be issued and sold under the direction and supervision of the board of examiners of the State of Montana limited obligation bonds of the State of Montana in the further sum of six million dollars ($6,000,000.00) or in such sum within that amount as may be *8necessary for such purposes. The issuance of such bonds shall be made in the same manner and such bonds shall be subject to the same limitations, restrictions, and provisions as apply to said original issue of twenty-two million dollars ($22,000,000.00), except that such bonds shall draw not more than four and one-half per cent (4% %) interest and shall be payable only out of a cigarette tax as hereinafter provided in this amendatory act.’
“Section 6. That there is hereby added to said Initiative No. 54 a new section to be numbered Section 14-A, to read as follows:

“Section 14-A. The money arising from the sale of such said additional bonds in the amount of six million dollars ($6,000,-000.00) in this amendatory act above-provided for as may be sold as herein provided shall be deposited in the state treasury to the credit of the special fund created by said Initiative No. 54 and known as the ‘War Veterans’ Compensation Fund,’ and the moneys now in said fund, after payment of all claims heretofore filed with and heretofore or hereafter allowed by the board of examiners under the original provisions of said Initiative No. 54, shall, together with such additional funds as may be derived from the sale of bonds under the said issue of six million ($6,000,000.00) authorized by this amendatory act, be used to pay said honorarium granted by subdivisions (b), (c), and (d) of Section 2 hereof, and by Section 3 of said Initiative No. 54 as hereby amended, and the expenses of administration of this amendatory act. For the purpose of carrying out the provisions of this amendatory act there is hereby appropriated from the War Veterans’ Compensation Fund, in addition to the appropriation made by Section 14 of said Initiative No. 54 as originally enacted, the moneys now remaining in said fund and not needed for the payment of the honorarium to persons who served in World War II, and the sum of six million dollars ($6,000,-000.00), or so much thereof as may be necessary to pay said honorarium to the persons who served in the military forces in ■said Korean War.

*9“Section 7. That section 16 of said Initiative No. 54 be, and the same is hereby amended to read as follows:
******
“ ‘Section 84-5621. * * * All taxes levied, imposed and assessed under the provisions of subdivision (2) of said section 84-5606 shall, when collected, be paid to the state treasurer and credited to a special fund known as the War Veterans’ Compensation Bond Retirement Fund, which fund shall be kept segregated from all money in the state treasury and shall, while any of the bonds hereafter issued and sold for the purpose of paying an honorarium, or adjusted compensation, to the residents of Montana who were in military service in the military forces of the United States in World War II, or any of the interest thereon, remain unpaid, be available for the payment thereof.
“ ‘All moneys derived from such additional tax shall be paid to the state treasurer and credited to a special trust fund to be known as the War Veterans’ Compensation Bond Retirement Fund, which shall be kept segregated from all money in the state treasury and shall, while any of the bonds herein authorized or any interest thereon remain unpaid, be available solely for the payment thereof.’

“All taxes levied, imposed and assessed under the provisions of Subdivision (3) of said Section 84-5606 shall, when collected? be paid to the state treasurer and credited to a special fund to-be known as the War Veterans’ Compensation Bond Retirement Fund No. 2, which fund shall be kept segregated from all other money in the state treasury and shall, while any of the bonds-hereafter issued and sold, in addition to the tiventy-iwo million dollars ($22,000,000.00) authorized by said Initiative Measure-No. 54, as originally enacted, or any of the interest upon such, additional bonds, remain unpaid, be used only for the payment thereof, and of the expenses of administration of this act.”

“Section 11. If any provision contained in this amendatoryact shall for any reason be held invalid, such decision shall not; invalidate the remaining provisions of this act.”
*10Before entering into a discussion of the issues involved, we should restate certain rules of law applicable to the problem facing this court. First, we should consider certain features of our state’s organic law, and certain rules of construction governing interpretation of that organic law. Certain of the maxims hereinafter referred to are well-worn, some of them so oft-quoted as to appear trite. Nevertheless they are a fundamental part of our law and serve legitimate functions in aiding the court to arrive at the correct result.
Article III, section 1, of the Constitution of Montana, provides: “All political power is vested in and derived from the people; all government of right originates with the people; is founded upon their will only, and is instituted solely for the good of the whole.”
Article III, section 2, provides that the power to alter and abolish their constitution resides in the people of this state.
Article III, section 29, states: “The provisions of this constitution are mandatory and prohibitory, unless by express words they are declared to be otherwise.”
Article IV, section 1, provides for the separation of powers into three separate branches, the legislative, executive and judicial. In this regard see Mills v. Porter, 69 Mont. 325, 329, 222 Pac. 428, 35 A.L.R. 592; State ex rel. Schneider v. Cunningham, 39 Mont. 165, 168, 101 Pac. 962.
Article V, section 1, provides for the initiative and referendum.
The constitutionality of a legislative act is presumed, and this  presumption must be overcome beyond a reasonable doubt before this court may overturn an expression of legislative will. As was said in State ex rel. Mills v. Dixon, 66 Mont. 76, 84, 213 Pac. 227, 229: “In approaching a discussion of the constitutionality of the act in question, we are governed by the axiomatic rule of constitutional law, oft repeated by this court, that the constitutionality of a legislative enactment is prima facie presumed, and every intendment in its favor will be made un*11less its nnconstitntionality appears beyond a reasonable doubt. [Citing numerous eases.] ”
Also to be kept in mind is this court’s admonition in Arps v. State Highway Commission, 90 Mont. 152, 160, 300 Pac. 549, 553:
“As we have observed hitherto, the Constitution must receive  a broad and liberal interpretation consistent with the purpose of the framers and the people in adopting it, that it may serve the needs of a growing state; ‘the proper interpretation of any constitutional provision requires us to remember that it is a part of the organic law — organic not only in the sense that it is fundamental, but also in the sense that it is a living thing designed to meet the needs of a progressive society, amid all the detail changes to which a progressive society is subject.’ State ex rel. Fenner v. Keating, 53, 371, 163 Pac. 1156, 1158.”
It has also frequently been stated that the Montana Constitution, unlike the Constitution of our United States, is a prohibition upon legislative power, rather than a grant of power. Hilger v. Moore, 56 Mont. 146, 167, 182 Pac. 477; State ex rel. Evans v. Stewart, 53 Mont. 18, 161 Pac. 309; Butte & Superior Mining Co. v. McIntyre, 71 Mont. 254, 229 Pac. 730; State ex rel. Bonner v. Dixon, 59 Mont. 58, 195 Pac. 841.
The rules governing the consideration of the validity or invalidity of legislative acts were clearly stated in State ex rel. Du Fresne v. Leslie, 100 Mont. 449, 454, 50 Pac. (2d) 959, 962, 101 A.L.R. 1329:
“In considering the validity or invalidity of legislative acts,  we are governed by well-established rules. One is that every doubt must be resolved in favor of the validity of the legislative act. Hale v. County Treasurer, 82 Mont. 98, 265 Pac. 6; O’Connell v. State Board of Equalization, 95 Mont. 91, 25 Pac. (2d) 114, and eases cited. A second is that while legislative construction of a statute is entitled to consideration,, it is not binding on the courts. State ex rel. Judith Basin County v. Poland, 61 Mont. 600, 203 Pac. 352; Wells Fargo & Co. v. Harrington, 54 Mont. 235, 169 Pac. 463; McClintock v. City of *12Great Falls, 53 Mont. 221, 163 Pac. 99; Northern Pacific Ry. Co. v. Brogan, 52 Mont. 461, 158 Pac. 820. A third is that with reference to the subjects upon which the Constitution assumes to speak its declarations are conclusive upon the Legislature. State ex rel. Pierce v. Gowdy, 62 Mont. 119, 203 Pac. 1115. A fourth is that constitutional provisions are conclusive upon the Legislature and prevent the enactment of any law which extinguishes or limits the powers conferred by the Constitution. State ex rel. Bonner v. Dixon, 59 Mont. 58, 195 Pac. 841. A fifth is that the state government being divided into three separate and distinct branches, the officials of one branch may not usurp or exercise the powers of either of the others. Section 1, article 4, Constitution of Montana; State ex rel. Hillis v. Sullivan, 48 Mont. 320, 137 Pac. 392; Fulmer v. Board of Railway Commrs., 96 Mont. 22, 28 Pac. (2d) 849. A sixth is that the Constitution vests in the courts the exclusive power to construe and interpret legislative acts, as well as provisions of the Constitution. Section 3, article 8, Constitution. The soundness of these provisions of law and the rules enumerated will not, we think, be questioned.”
With these considerations in mind we enter upon a discussion of the issues presented in this case
The first question presented is whether the Legislative Assembly has the inherent power to amend an initiative of the people of Montana. The question was first answered in State ex rel. Goodman v. Stewart, 57 Mont. 144, 151, 187 Pac. 641, 652, in which the court held that laws proposed and enacted by the people under the initiative clause of the amendment .are subject to the same constitutional limitations as are other statutes, and may be amended or repealed by the Legislature at will.
Mr. Justice Holloway dissented from a holding in the majority’s decision, but concurred in the result that “The legislature of this state possesses plenary law making power, except in so far as it is limited by the state Constitution and by the supreme law of the land * * *; and this rule was not af*13fected in the least by the adoption of the initiative and referendum amendment.”
In State ex rel. Bonner v. Dixon, 59 Mont. 58, 82, 195 Pac. 841, this court followed the holding in the Goodman case, supra, and stated that an initiative measure, insofar as it created a debt or liability within the provisions of section 2 of Article XIII, could be amended from time to time by the Legislature if the Legislature determined that the revenue to pay the principal and interest on the bonds proved insufficient to retire them.
The most recent pronouncement of the court on this subject may be found in Bottomly v. Ford, 117 Mont. 160, 169, 157 Pac. (2d) 108, 113, wherein it was said: “It is, of course, well-established that initiative acts may be repealed; amended or changed by the legislative assembly.”
While it is well-settled that the Legislature has the power to amend, repeal, or change initiative measures, this power is plenary only insofar as the legislation proposed does not contravene an express limitation or prohibition of the Constitution of either Montana or the United States. See in this regard State ex. rel. Goodman v. Stewart, 57 Mont. 144, 151, 187 Pac. 641, supra. Therefore the amendment before this court, Chapter 44, must be tested in the light of the constitutional objections made. If there is no express constitutional prohibition, the law is valid, the amendment is valid.
We come now to the first contention made by the appellant, which is that Chapter 44 violates section 2, Article XIII, of the Montana Constitution, insofar as it creates a debt or liability in excess of $100,000, without submission of the question to a vote of the people.
Section 2 of Article XIII, in part, provides: “* * * * but no debt or liability shall be created which shall singly, or in the aggregate with any existing debt or liability, exceed the sum of one hundred thousand dollars ($100,000) except in case of war, to repel invasion or suppress insurrection, unless the law authorizing the same shall have been submitted to the *14people at a general election and shall have received a majority of the votes cast for and against it at such election.”
As authority for his contention, appellant cites State ex rel. Diederichs v. State Highway Comm., 89 Mont. 205, 296 Pac. 1033. In that ease the Legislature had passed a law, Chapter 1, Session Laws of 1931, authorizing the sale of State Highway Debentures in the sum of $6,000,000 to be retired out of a special highway fund composed of revenue from an excise tax upon the sale of gasoline. The law pledged that the Legislature would not reduce the gasoline excise tax until the bonds were redeemed. Diederiehs, the appellant in the case, sought to enjoin the sale of the bonds on the grounds that they created a debt or liability within the constitutional debt limitation of section 2, Article XIII, supra, and therefore should have been submitted to the people for approval. In upholding the contention of Diederiehs, the court held that the bonds created a “liability” under the provisions of section 2 of Article XIII, and 89 Mont. at page 211, 296 Pac. at page 1035, we find the following statement: “It certainly creates a liability, which includes a debt, for the state is expressly obligated not to reduce the excise taxes on motor fuels fixed by the Twenty-Second Legislative Assembly and to cause the tax to be collected and paid to the debenture holders. This is prohibited by the plain terms of the Constitution, unless approved by the people.
“The fact that a special fund is created by the imposition of the license or excise tax on motor' fuels with which to pay the debentures is of no importance.”
Mr. Justice Angstman specially concurred, stating that the contention that section 2 of Article XIII referred only to an ad valorem tax as distinguished from an excise tax was clearly without merit. Mr. Justice Matthews dissented on the ground the Legislature had created a special fund and therefore not a debt or liability of the state.
The holding in the Diederiehs case has subsequently been approved in Graham v. State Board of Examiners, 116 Mont. 584, 594, 155 Pac. (2d) 956; State ex rel. State Aeronautics *15Commission v. Board of Examiners, 121 Mont. 402, 429, 194 Pac. (2d) 633.
While the reasons given in the Diederichs case were sufficiently sound to warrant the court declaring the act unconstitutional in the light of the Constitution and the law appertaining at that time, assuming that Chapter 44 is sufficiently similar to Chapter 1, Laws of 1931, to warrant comparison, has there been any subsequent change in the Organic Law of Montana to persuade this court to overthrow the reasoning in the Diederichs case?
In 1932 the people of Montana amended section 2, Article IX, by inserting the following qualifications relevant to persons voting on debt or liability issues in an election:
“If the question submitted concerns the creation of any levy, debt or liability the person, in addition to possessing the qualifications above mentioned, must also be a taxpayer whose name appears upon the last preceding completed assessment roll, in order to entitle him to vote upon such question.”

It will be remembered the Diederichs case was decided in 1931.

In Pioneer Motors, Inc., v. State Highway Comm., 118 Mont. 333, 338, 340, 165 Pac. (2d) 796, this court held that section 2, Article IX, in effect amended section 2, Article XIII, insofar as the latter provision stated that a debt or liability in excess of $100,000 should be submitted to “the people.” “The people” were qualified by the amendment in 1932, and thereafter the court said any question submitted which creates a debt or liability would only of necessity have to be submitted to those appearing on the assessment rolls. The rule in the Pioneer ease was subsequently followed in Thomas v. Board of Examiners, 122 Mont. 564, 569, 207 Pac. (2d) 553, and see Habel v. High School District “C” of Cascade County, 129 Mont. 588, 292 Pac. (2d) 349; Martin v. State Highway Commission, 107 Mont. 603, 615, 88 Pac. (2d) 41.
Who are the people appearing on the assessment rolls? Those who have been assessed a tax on their property, real or per*16sonal. See R.C.M. 1947, section 84-501; Habel v. High School District “ C ” of Cascade County, supra, 129 Mont. at page 592, 292 Pac. (2d) at page 351.
Now this court has held from an early date that taxes are levied and assessed, whereas licenses are imposed. State v. Camp Sing, 18 Mont. 128, 144, 44 Pac. 516, 32 L.R.A. 635, 56 Am. St. Rep. 551. In the Camp Sing case the court held that when the Constitution used the words “levy,” “assess,” and “rate,” it referred to taxes, whereas, when it used the word “imposed” it referred to licenses.
In Hilger v. Moore, 56 Mont. 146, 168, 182 Pac. 477, 481, Mr. Justice Holloway speaking for the court said: “In the Camp Sing Case, the court reviewed at great length the several provisions of article 12, explained their purpose, and reached the conclusion, in effect, that all the restrictions imposed upon the Legislature by that article are restrictions with reference to property taxation. We are asked now to overrule these decisions, but in our judgment the correctness of each of them is beyond question.” Approved in State v. Silver Bow Refining Co., 78 Mont. 1, 20, 252 Pac. 301.
In the instant case the tax is levied upon “each package of cigarettes containing not more than twenty (20) cigarettes, and when a package shall contain more than twenty (20) cigarettes, then one cent (1)c for each twenty (20) or fraction of twenty (20) cigarettes in such package.” Chapter 44, section 7. While the tax is levied on the cigarettes themselves and is collected at the time of sale, nevertheless there is no formal assessment made within the purview of the Camp Sing case, supra. The people who pay the tax do not appear on the assessment rolls — the guide to determine those who vote on a “debt or liability.”
Was this the intent of the people when they enacted the amendment to section 2, Article IX?
Such a conclusion would effectually take away the voting franchise from those people who actually paid the tax. Such a result is at once manifestly unjust and unfair. Although it *17will be observed that in the Pioneer Motors case, supra, the court had before it a license tax, factors here considered were never brought to the attention of the court at that time. Therefore, it must be presumed that the decision was not made in the light of these observations.
In the instant case we are confronted with a debt retired from a special cigarette excise tax fund. The tax is collected from the purchaser before sale and delivery to the taxpayer. Chapter 44, section 7; B.C.M. 1947, section 84-5606, subd. 1. Thus the situation exists where many persons appearing on the assessment rolls may be nonsmokers, while many persons not appearing on the rolls are smokers. While we do not deny that this result could perhaps legally follow, it is so apparently unjust and manifestly unfair that we do not think such a result was intended.
“A constitution, or provisions thereof, should receive a  reasonable and practical interpretation in accord with common sense.” 16 C.J.S. Constitutional Law, section 14, pages 66, 69; See also United States v. Wainer, D. C. Pa., 49 F. (2d) 789; State ex rel. Jones v. Lockhart, 76 Ariz. 390, 265 Pac. (2d) 447; McMillan v. Siemon, 36 Cal. App. (2d) 721, 98 Pac. (2d) 790; Higer v. Hansen, 67 Idaho 45, 170 Pac. (2d) 411.
All of the provisions of the Constitution bearing upon the  same subject matter are to receive appropriate attention and be construed together. Hilger v. Moore, supra, 56 Mont. 146, 182 Pac. 477; Martien v. Porter, 68 Mont. 450, 219 Pac. 817; State ex rel. Corry v. Cooney, 70 Mont. 355, 225 Pac. 1007; State ex rel. Hinz v. Moody, 71 Mont. 473, 230 Pac. 575; State ex rel. Palagi v. Regan, 113 Mont. 343, 126 Pac. (2d) 818.
The construction which appeals to an innate sense of justice  and fairness is that section 2 of Article IX, in adding the property holding qualification to voting on debts or liabilities, confined the additional qualification to only those debts or liabilities which look to ad valorem taxes for their retirement. In this way we avoid an unreasonable construction and *18arrive at a just, and we believe, correct interpretation of that section. It logically follows that section 2 of Article XIII, insofar as there is a “debt” or “liability” limitation imposed, refers to only those debts or liabilities which look to the property or ad valorem taxes for their retirement, and that only those debts or liabilities must first be presented to the “people,” now restricted to taxpayers.
In effect, section 2, Article IX, amended the words “debt or liability” as they appear in section 2, Article XIII, and has effectively confined them to debts or liabilities which must be retired out of ad valorem taxes. In this manner we avoid a conflict and unreasonableness.
Looking now to the instant case, we find that the bonds, assuming they create a “debt or liability,” do not create the type of “debt or liability” which section 2, Article XIII, proscribes, since in this case retirement of the bonds looks to the levy of an excise tax without the taxpayer being enrolled on the assessment rolls.
It is apparent that the court in the Diederichs case was not confronted with the logic as developed in this opinion for the very reason that the amendment to section 2 of Article IX was not enacted until 1932, after the court had decided the Diederichs case. Had the amendment been enforceable at that time we do not think the court would have arrived at the conclusion it did. That the conclusion reached by this court lends itself to judicial approval is amply verified in State ex rel. Capitol Addition Bldg. Commission v. Connelly, 39 N. M. 312, 46 Pac. (2d) 1097, 100 A.L.R. 878, approved in Stone v. City of Hobbs, 54 N. M. 237, 241, 220 Pac. (2d) 704 (unanimous opinion); and see Banner v. City of Laramie, 74 Wyo. 429, 289 Pac. (2d) 922.
In the first above-cited ease the Legislature had provided for the issuance of bonds and debentures in excess of the constitutional debt limitation, payable out of a special fund created from a fee imposed upon the filing of every civil action in the office of the clerks of the various district courts. The state *19pledged the fees so collected to the fund until the bonds were completely retired. The court held that the fee was “in the nature of an excise” tax. [39 N. M. 312, 46 Pac. (2d) 1103.] Contention was made that the act created a debt or obligation of the state in contravention of express constitutional provision.
The constitutional provision in question (Constitution of New Mexico, Article 9, section 8) provided that no debt should be contracted on the part of the state in excess of $200,000 without submission of the question to a vote of the qualified voters of the state. Although the constitutional limitation referred to “debt” as distinguished from “debt or liability” found in our Constitution, this distinction is not important since the sole question to be determined is the type of debt or liability proscribed. Thus, whether the limitation be confined to “debt” or be broadened to “debt or liability” is not material.
In holding the act did not contravene the constitutional provision the court, in the Capitol Addition Bldg. Commission ease, reviewed the debt limitation provisions of their Constitution, and 39 N. M. on pages 319-320-321-322, 46 Pac. (2d) on page 1101, said: “Significantly, by Constitutional Amendment No. 2, submitted as Senate Joint Resolution No. 7 by the Eleventh Regular Session in 1933 (Laws 1933, page 538), and subsequently adopted, ownership of real estate in the district was added as a qualification to the right to vote upon the question of creating the debt proposed. * * *
“Certainly, when the Constitution framers in section 8 limited the amount of any such debt as they had in mind to 1 per centum of the assessed valuation of all property subject to taxation in the state, ‘as shown by the preceding general assessment,’ or when in sections 10 and 12 they enjoined payment of a property tax during the preceding year as a condition of the right to vote, they must have conceived that said assessment bore some relationship to the debt. Could the thought have been other than this, that such assessment roll and the property there listed would be resorted to from year to year *20by tbe general taxing power as the source of funds for repayment of the debt so created? We think not, but, if so, no explanation so naturally arises as the one suggested. * * *
“Now, either the debentures here assailed are to be condemned because not repayable from the proceeds of a property tax levy, or they are not within the interdiction of article 9, section 8, because not the kind of debt therein contemplated. One or the other conclusion seems inescapable. The framers of the Constitution were not unacquainted with the excise taxation as a source of revenue, as witness the language of article 8, section 2, as originally adopted. They thus either purposely denied to the state, through its Legislature, the power to employ same as a basis of credit to any extent whatsoever, and deliberately imposed the whole burden of repaying such indebtedness as lawfully might be created upon property taxpayers; or they left the Legislature in possession of its plenary powers touching the subject.
“It is not unusual to find words employed in a Constitution in a less comprehensive sense than they are capable of bearing. ‘Taxes’ is surely a term broad enough to cover excise as well as property taxes. And yet we have held in accordance with the courts of other states that the word ‘taxes,’ as used in the constitutional guaranty of equality and uniformity, does not apply to excise taxes. State ex rel. Taylor v. Mirabal, 33 N. M. 553, 273 Pac. 928, 62 A.L.R. 296. Construing together these companion sections of article 9, in order to arrive at the true meaning and intent of the framers of the Constitution [Citing cases.], we hold the debt contemplated in section 8 thereof is one secured by a property tax, and not an excise tax. * * *
“Counsel for respondent argue that the 1921 amendment of section 16 of article 9, involved in State v. Graham [32 N. M. 485, 259 Pac. 623], constitutes a legislative interpretation, entitled to weight, that a constitutional amendment was necessary to authorize the debentures there assailed. Even so, such interpretation should have controlling persuasiveness only in the case of doubtful meaning or construction, a condition not *21here present. The submission by the Eleventh Regular Session of the Amendment to section 11 of article 9, adding the ownership of real estate within a school district as a condition to the right to vote upon the proposed creation of a debt by such district, might be argued with almost the same force as reflecting the view of that Legislature that the debt so to be created was to be repayable by a property tax affecting the owners of real estate.”
The above language utilized in the Capitol Addition Bldg. Commission case amply illustrates the proposition promulgated by this court.
Many courts have reached the conclusion arrived at by this court without the benefit of property holding qualifications as a prerequisite to voting on the debt. In this regard see Gruen v. State Tax Commission, 35 Wash. (2d) 1, 211 Pac. (2d) 651-679; State ex rel. Roddey v. Byrnes, 219 S. C. 485, 66 S. E. (2d) 33; State ex rel. Fatzer v. Board of Regents, 167 Kan. 587, 207 Pac. (2d) 373; State ex rel. Boynton v. Kansas State Highway Commission, 138 Kan. 913, 917-918, 28 Pac. (2d) 770; 49 Am. Jur., States, Territories, and Dependencies, section 67, page 280; Annotation 100 A.L.R. 900, holding that the debt limitation refers to those debts which look to ad valorem taxes for their extinction, rather than license or excise taxes. There are also many cases and jurisdictions which have expressly refused to apply the holdings of the above cases to their constitutional debt provisions. In this regard see State ex rel. Kemp v. Board of Liquidation of State Dept., 214 La. 890, 39 So. (2d) 333, 336; Taxpayers and Citizens of Town of Georgiana v. Town of Georgiana, 265 Ala. 654, 93 So. (2d) 493; Lyons v. Bottolfsen, 61 Idaho 281, 101 Pac. (2d) 1; People ex rel. City of Chicago v. Barrett, 373 Ill. 393, 26 N. E. (2d) 478; Boswell v. State, 181 Okl. 435, 74 Pac. (2d) 940; Hamilton’s Appeal, 340 Pa. 17, 16 A. (2d) 32, 36; Boe v. Foss, S. D. 1956, 77 N. W. (2d) 1, 9. However, it should be noted that none of the above jurisdictions have property assessment as a prerequisite to voting on the debt or liability to be created, *22and therefore the reasoning in those eases does not apply here. In addition the Illinois provision for a debt limitation clearly was intended to include the possibility of debts payable from excise taxes (Illinois Constitution, Article 4, section 18, S.H.A.), for it includes debts payable from a tax levy (property tax) and those payable from “other sources of revenue.” See People ex rel. City of Chicago v. Barrett, supra. The court in Boswell v. State, supra, also emphasized the fact that their constitutional debt limitation referred to “revenues” thus, by implication including all sources of revenue. See Boe v. Foss, supra.
For the reason that the constitutional provisions of the states holding contrary to the New Mexico rule are materially different, we are constrained to follow the precedent and the reasoning in the Capitol Addition Bldg. Commission case, supra.
Appellant’s second argument against the validity of Chapter 44 is that it has not been presented to the qualified electorate as demanded by section 2, Article IX.
It will be noted that section 2 of Article IX does not require that a question of a debt or liability be submitted to the people, but rather, if a question involving a debt or liability is presented to the people then it must be submitted to only the qualified electorate, those appearing on the assessment rolls. Pioneer Motors, Inc., v. State Highway Commission, supra, 118 Mont. 333, 165 Pac. (2d) 796; Thomas v. Board of Examiners, supra, 122 Mont. 564, 207 Pac. (2d) 553. Therefore the first question to determine is whether the question must be submitted to the people under the particular constitutional provision in question. In the instant case, the propriety of the legislation without submission to the people is tested by section 2, Aj’tivle XIII. The answer to the question has been given in the foregoing part of this opinion and needs no further discussion. Since we have held that Chapter 44 was not a debt or liability proscribed by section 2, Article XIII, this contention is without merit.
The third constitutional- objection raised by appellants is *23that Chapter 44 deprives persons of their property without due process of law within the meaning of state and federal constitutional provisions.
The same argument raised by the appellant was also raised with regard to Initiative 54, and with regard thereto this court said: “This contention is wholly without merit. The practice of levying an excise tax upon tobacco is so well established that it is no longer open to question.” State ex rel. Graham v. Board of Examiners, supra, 125 Mont. 419, 433, 239 Pac. (2d) 283, 291.
The arguments made by the appellant with regard to the “due process” issue are eloquent but futile.
An attempt to discuss each of the arguments made would lend nothing to this opinion because the questions raised have been settled with finality in this and other jurisdictions.
The fourth argument made is that Chapter 44 impairs the  contractual obligation of the State of Montana to holders of bonds issued under Initiative 54 in violation of section 11, Article III, of the Montana Constitution.
The basis of this argument is twofold: (1) That the increased cigarette tax enacted to fund the bonds issued under Chapter 44, resulting in a price increased on cigarettes, will result in less cigarettes being sold, therefore “drying up” the source of revenue originally provided for the payment of the bonds issued under Initiative 54; (2) That the bonds issued under Chapter 44 provide for interest on the loan in the amount of 4% percent whereas, the interest provided for by Initiative 54 was only 4 per cent, thus making the latter bonds less desirable, which tends to depress the market for them and thereby reduce their cash or pledge value.
Both of the contentions made are purely speculative in nature, and appellant has not pointed out the particulars in which the obligations created by Initiative 54 are impaired, if impaired.
• A contract is analyzable into two elements: the agreement, which comes from the parties, and the obligation which comes *24from the law and makes the agreement binding on the parties. When are the obligations of a contract impaired? Chief Justice Hughes, in Home Building & Loan Ass’n., v. Blaisdell, 290 U.S. 398, 431, 54 S. Ct. 231, 237, 78 L. Ed. 413, 88 A.L.R. 1481, states:
“The obligations of a contract are impaired by a law which renders them invalid, or releases or extinguishes them * # # and impairment * * * has been predicated of laws which without destroying contracts derogate from substantial contractual rights.”
Mr. Justice Black, commenting on the Blaisdell decision said:
“The Blaisdell decision represented a realistic appreciation of the fact that ours is an evolving society and that the general words of the contract clause were not intended to reduce the legislative branch of government to helpless impotency.” Wood v. Lovett, 313 U.S. 362, 383, 61 S. Ct. 983, 993, 85 L. Ed. 1404.
In the instant case the obligation imposed by Initiative 54 obliged the State of Montana to continue the tax on cigarettes in the amount provided, and to deposit the revenue from this tax in a special fund to retire the bonds. Did Chapter 44 alter these obligations? Obviously not; the obligation remains in force and effect in exactly the manner in which it was enacted. The fact that some portion of the revenue of the state is tied up in retiring bonds does not prevent the state government from seeking new revenue from the same source upon which the former tax was imposed. If such were the result, it would reduce the taxing power of the state to “helpless impotency. ’ ’
The same logic can be applied to the interest rate. As was so aptly stated by the respondent: “If there were any materiality to such an allegation the State could never increase the rate of interest on its obligations above the lowest existing rate on any of its outstanding obligations.” The fact that the bonds issued are for the same subject matter and are funded by the *25same tax source does not alter the fact that one in legal effect does not affect the other.
Nor has the agreement been impaired. No substantial rights of the bondholders have been derogated by Chapter 44. Under Initiative 54 there was no agreement by the State to maintain the entire cigarette tax at its then level, nor did it obligate itself to issue bonds on any subsequent date at a mere 4 percent interest rate. If these were not part of the agreement how could they be impaired? Obviously, they could not. For these reasons we find that the fourth contention is without merit.
The last contentions of appellant have hereinbefore been  set out and deal with certain ambiguities which exist in the act. Of course the conflict between sections 6 and 7 ■of Chapter 44, relating to the payment of administrative expenses is patent, however, this court is pledged to reconcile •conflicting statutory provisions and make them operative in accordance with the legislative intent, insofar as it is possible to do iso. In re Naegele, 70 Mont. 129, 224 Pac. 269; Fletcher v. Paige, 124 Mont. 114, 220 Pac. (2d) 484, 19 A.L.R. (2d) 1108.
In Initiative 54 the law provided that the money raised from  sale of the bonds would be used “For the purpose of providing for the payment of the honorarium, or adjusted compensation, herein provided for and for paying the expenses of administration of this law * * Emphasis supplied. Section 12, Initiative 54.
Section 5 of Chapter 44 retained this provision of the original Initiative 54. Section 6 of Chapter 44 also directs that administrative expenses shall be paid from the proceeds of the sale of the bonds.
From the foregoing portions of the act it is self-evident that the Legislature, in amending Initiative 54, intended to provide for payment of the administration of the act from the proceeds of the sale. However, in amending section 84-5621 by section 7 of Chapter 44, the Legislature provided:
“All taxes levied, imposed and assessed under the provisions *26of Subdivision (3) of said Section 84-5606 shall, when collected,, be paid to the state treasurer and credited to a special fund to be known as the "War Veterans’ Compensation Bond Retirement Fund No. 2, which fund shall be kept segregated from all other money in the state treasury and shall, while any of" the bonds hereafter issued and sold, in addition to the twenty-two million dollars ($22,000,000.00) authorized by said Initiative Measure No. 54, as originally enacted, or any of the interest upon such additional bonds, remain unpaid, be used only for the payment thereof, and of the expenses of administration of this act.” (Emphasis supplied.)
It is obvious this latter-quoted provision was a mere oversight on the part of the Legislature, and that their governing-intent, as gleaned from the foregoing parts of the act is that the administrative costs should be paid from the fund created by the proceeds of the sale of the bonds. Given this interpretation there is no conflict or ambiguity. Under the severability clause of the act (section 1.1, Chapter 44), this court is authorized to strike “and of the expenses of administration” to avoid illegality.
Appellant maintains that section 7 of Chapter 44, insofar as it attempts to appropriate proceeds of the cigarette license-tax for a period of more than two years, is unconstitutional as conflicting with section 12 of Article XII of the Montana Constitution which provides in part: “No appropriation of public moneys shall be made for a longer term than two years”, and with section 34, Article V, which provides in part: “No money shall be paid out of the treasury except upon appropriations made by law * * * ”.
Appellant admits that under section 6, Chapter 44, there  would be no violation of section 34, Article V, or section 12, Article XII. With this we agree. See State ex rel. Graham v. Board of Examiners, supra, 125 Mont. 419, 435, 436, 239 Pac. (2d) 283, and cases cited therein; State ex rel. Normile v. Cooney, 100 Mont. 391, 409, 47 Pac. (2d) 637; State *27ex rel. Blume v. State Board of Education, 97 Mont. 371, 380, 34 Pac. (2d) 515.
Since we have held that section 6, Chapter 44, reveals the governing intent of the Legislature, then that portion of section 7, Chapter 44, and section 84-5621, R.C.M. 1947, seemingly to the contrary should be read so as to express that intention.
Putting the construction upon the act heretofore set out clearly avoids the consequences which follow from attempting to make an appropriation from the “General Fund” for more than two years. The fund created is a “special fund” and neither section 34 of Article V, nor section 12 of Article XII, have any application. We believe this is the correct construction of Chapter 44 — a construction which will not emasculate the intent of the Legislature, but effectuate it.
For the reasons set out in this opinion the judgment of the trial court is affirmed.
MR. JUSTICES CASTLES and ANGSTMAN, and THE HONORABLE W. M. BLACK, District Judge, sitting in place of MR. JUSTICE BOTTOMLY, concur.