Court Opinion

ID: 6739102
Source: CourtListenerOpinion
Date Created: 2022-07-20 23:20:39.367676+00
Date Added: 2024-06-11T16:01:54.037131
License: Public Domain

Birdzell, J.
(concurring). In 1916-1917 the state Constitution was amended so that its provisions with respect to the public debt read as follows:
“Section 182. The state may issue or guarantee the payment of bonds provided that all bonds in excess of two million dollars shall be secured by first mortgages upon real estate in amounts not to exceed one half of its value; or upon real and personal property of state-owned utilities, enterprises or industries, in amounts not exceeding its value, and, provided further, that the state shall not issue or guarantee bonds upon property of state-owned utilities, enterprises, or industries in excess of ten million dollars.
“No future indebtedness shall be incurred by the state unless evidenced by a bond issue, which shall be authorized by law for certain purposes, to be clearly defined. Every law authorizing a bond issue shall provide for levying an annual tax, or make other provisions, sufficient to pay the interest semiannually, and the principal within thirty years from the passage of such law, and shall specially appropriate the proceeds of such tax, or of such other provisions, to the payment of said principal and interest, and such appropriation shall not be repealed nor the tax or other provisions discontinued until such debt, *545both principal and interest, shall have been paid. No debt in excess of the limit named herein shall be incurred except for the purpose of repelling invasion, suppressing insurrection, defending the state in time of war, or to provide for the public defense in case of threatened hostilities.
“Section 183. The debt of any county, township, city, town, school district or any other political subdivision shall never exceed five per centum upon the assessed value of the taxable property therein; provided, that any incorporated city may, by a two-thirds vote, increase such indebtedness three per centum on such assessed value beyond said five per centum limit. In estimating the indebtedness which a city, county, township, school district or any other political subdivision may incur, the entire amount of existing indebtednesswhether contracted, prior or subsequent to the adoption of this Constitution shall be included: provided, further, that any incorporated city may become-indebted in any amount not exceeding four per centum on such assessed value without regard to the existing indebtedness of such city, for the purpose of constructing or purchasing waterworks for furnishing a supply of water to the inhabitants of such city, or for the purpose of constructing sewers and for no other purpose whatever. All bonds or obligations in excess of the amount of indebtedness permitted by this Constitution, given by any city, county, township, town, school district, or any other political subdivision shall be void.”
Section 183 has been a part of the Constitution from the beginning, ‘ but the portion of the article preceding it takes the place of § 182 as it originally stood. Prior to the amendment the state was indebted on account of the assumption of territorial indebtedness and other items to the extent of $412,000. The sole question here is the constitutionality of § 1 of House Bill 49, which direct certain officers to issue negotiable bonds of the state in the aggregate • amount of $2,000,000. The petitioner contends that it is the ministerial duty of the secretary of state, under the act referred to, to attest the bonds; but the respondent contends that to do so would involve a violation of the Constitution, as amended, in that it would result in the creation of an unsecured bonded indebtedness greater than that authorized by the Constitution.
*546The question can only be resolved by a construction of those provisions of the existing Constitution which are above set forth. These provisions’ constitute the fundamental law of the state on the subject of public indebtedness and they must be so construed that the purpose therein manifested may be subserved and the meaning given effect. The Constitution says that the state may issue or guarantee the payment of bonds provided that all bonds in excess of $2,000,000 shall be secured, etc. Does this language relate in any way to bonds already issued ? That is the question. The language of the first clause is both permissive in form and indicative of future acts, and it would seem to be clear that the bonds referred to in the second clause are such as may be issued or guaranteed by the state under the first clause. In other words, it is as though it were stated, “The state may issue or guarantee the payment of bonds, provided that all bonds (so issued or guaranteed) in excess of $2,000,000 shall be secured,” etc. Gray, in his work on Limitations of Taxing Power & Public Indebtedness, says that constitutional debt limits are not retrospective in any sense except when expressly made so. § 2156. It would seem to be clear, that the constitutional permission to issue or guarantee unsecured bonds is a permission to be exercised without regard to existing indebtedness unless the intention to qualify the authority by acts done in the past is indicated. Such an intention is not expressed in the Constitution, nor can it be clearly implied from any of its provisions.
The true implication is, in fact, contrary to the respondent’s contention. It will be noted that § 183, which limits the debts of municipal subdivisions to 5 per centum upon the assessed value of the taxable property, expressly provides that in estimating the indebtedness “the entire amount of existing indebtedness, whether contracted prior or subsequent to the adoption of this Constitution, shall be included.” The absence of any such language in § 182, as amended, rather implies that outstanding indebtedness was not to be considered as embraced within the $2,000,000 unsecured issues authorized.
The reasoning employed by Chief Justice Christianson in his dissenting opinion in the case of State ex rel. Byerly v. State Canvassers, ante, 126, 172 N. W. 105, with reference to the different methods of expressing the requirement of the number of votes necessary to carry *547constitutional amendments is directly applicable here. It was there held that an amendment providing for future amendments to the Constitution by the process of initiative, which required a majority of all the votes cast at the general election, showed a purpose to distinguish between the number of votes required for passing such an amendment and the number required for passing an amendment proposed by the legislature as previously expressed in the Constitution; where it was provided that such amendments were passed, by the favorable vote of a majority of the electors voting thereon. In other words, it was submitted in that opinion that the failure to reincorporate in the amendment providing for initiatory amendments the express statement originally contained in the Constitution, with respect to the number of votes required to pass amendments submitted by the legislature, indicated an intention to differentiate between the two. This reasoning, persuasive as it is, was not considered by the majority to be applicable to the question then in hand, for the reason that the language employed in the amendment to express the requirement had been repeatedly construed by the court previous to its adoption in the amendment. In the light, however, of the'general principle that constitutional limitations upon the power to incur indebtedness are prospective in their operation, and of the further fact that where it is desired to limit authority to incur indebtedness by reducing it to the extent of outstanding indebtedness expressions, to that effect are generally employed, the reasoning of the Chief Justice in the case referred to applies with peculiar force to such a situation as is here presented.
Eeading §§ 182 and 183 of the Constitution, as it now stands, together, it appears to me that the failure to incorporate in § 182 any language referring to existing indebtedness of the state, such as is found in § 183 with respect to the minor municipalities, taken together with the fact that the language of § 182 is permissive and prospective and, as such, applicable only to future issues and guaranties, I am of the opinion that the authority therein conferred is not reduced by-the amount of outstanding indebtedness! I am consequently of the opinion that § 1 of House Bill No. 49 is constitutional and that the writ should issue.