Court Opinion

ID: 5171547
Source: CourtListenerOpinion
Date Created: 2022-01-02 04:56:24.981872+00
Date Added: 2024-06-11T08:26:06.772887
License: Public Domain

LEE, J.,
Dissenting. — I cannot concur in the majority opinion. It is admitted that the bonded indebtedness of the state, which the legislature was authorized to create under the limitations placed upon it by article 8, section 1, of the constitution, had reached the maximum amount which it could create without submitting the proposal for additional bonded indebtedness to a referendum vote of the people, when the 15th Session of the legislature enacted chap. 193, L. 1919, p. 578. This provision of the constitution authorizes the legislature to submit a proposal for additional bonded indebtedness for two purposes: First, “in case of war, to repel an invasion, or suppress an insurrection,” and, secondly, “for some single object or work to be distinctly specified.” The 15th Session authorized the submission of a proposal to issue $2,000,000 of twenty-year five per cent road bonds, which should be sold for not less than par, to a referendum vote, and this proposal was submitted and approved at the November, 1920, general election. It is now claimed that because of the changed .financial conditions, these bonds cannot, at this time, be sold at par and for the maximum rate of interest fixed in the proposal. Accordingly, the 16th Session, by chap. 61, L. 1921, directed the State Treasurer to employ a fiscal agent or broker to procure or assist in procuring a bidder for these bonds, who will buy them at par and the maximum rate of interest, and this act appropriates $97,500 to compensate such broker or fiscal agent for his services in procuring such bidder. The legislative acts of both the 15th and 16th Sessions *783above referred to should be considered and construed in connection with said article 8, section 1, of the constitution, because they are legislative enactments to carry out its provisions in the matter of authorizing the state to increase its bonded indebtedness. Itjs evident that the expenditure of $97,500 directed to be made by the 16th Session for the purpose of procuring a broker or fiscal agent who will secure a purchaser for these bonds upon the terms which the referendum vote authorizes, results in doing that which the original proposal authorized by the 15th Session did not contemplate, and which it forbids, that is, the selling of these bonds below par or at a higher rate of interest than five per cent.
It will not be questioned that the legislature has absolute control over the finances of the state, and that its power over the creation of indebtedness or the expenditure of state funds is plenary, and that the exercise of this power cannot be controlled or reviewed by the courts, except as limited by the constitution. But the legislature is bound by all constitutional limitations, and where it exceeds such limitations, its acts are subject to judicial control. (Nongues v. Douglass, 7 Cal. 65; In re Appropriations by the General Assembly, 13 Colo. 316, 22 Pac. 464.)
“Neither the legislature, nor the officers and agents of the state, nor all combined, can create a debt or incur an obligation for and on behalf of the state, except as to the amount and in the manner provided for in the constitution.” (People v. Supervisors, 52 N. Y. 556, at 563; People v. May, 9 Colo. 80, 10 Pac. 641; People v. Johnson, 6 Cal. 499; Williams v. Louisiana, 103 U. S. 645, 26 L. ed. 595, see, also, Rose’s U. S. Notes; Cooley on Constitutional Limitations, 76, 77.)
By said act of the 15th Session a definite, certain proposal was submitted to the voters, which was, “Shall a bond issue of $2,000,000 be authorized for the laying out, surveying and constructing of state highways?” It further provides for the payment of the bonds authorized to be issued under *784said act, and the interest which should accrue thereon, according to its strict terms; that said bonds should be sold at not less than par, and upon the best terms offered, and at the lowest rate of interest named by any bidder; that the expense of printing or lithographing and securing suitable bonds, with interest coupons attached, for the purpose of carrying out the provisions of said act, should be paid out of the moneys raised from the sale thereof as an expense incident to the laying out, surveying and constructing' of said-system of highways; and that the act should be published in one newspaper in each county throughout the state for a period of three months next preceding the general • election.
If the legislature, after having provided for the submission of a definite proposal of this kind, and after such proposal has been submitted and approved by a referendum vote, may at a subsequent session increase the amount of the indebtedness by a direct appropriation, under the pretense of making an appropriation to employ a fiscal agent to find a purchaser for said bonds, then the constitutional limitation as to the amount of such indebtedness and the manner of creating it is to all practical intents and purposes ineffectual. This provision of the constitution does not admit of any substantial change in the proposal to create additional indebtedness, after it has been approved and ratified by a referendum vote.
There is nothing in the act making the appropriation which forbids the purchaser from receiving this amount, if not directly, then it may be paid indirectly, as far as the terms of the act go under the claim of paying it as compensation to a fiscal agent. It must be apparent that this is only an indirect method of disposing of these bonds below par at a higher rate of interest than that fixed by the proposal as submitted and approved, and in effect nullifies the limitation placed upon the power of the legislature by the constitution. For this reason chap. 61, L. 1921, so far as it attempts to authorize an additional expenditure of $98,000 for the sale of this road bond issue, should be declared unconstitutional.