Court Opinion

ID: 9656448
Source: CourtListenerOpinion
Date Created: 2023-08-23 19:48:23.655863+00
Date Added: 2024-06-11T18:13:32.348054
License: Public Domain

GOODWYN, Justice
(dissenting) :
Of concern here is a state statute (Code 1940, Tit. 55, § 155) requiring approval of the proposed loan by the State Director of Finance and containing the following pertinent provisions:
a * * * Such consent shall be granted only after a public hearing and after a petition requesting such consent has been duly filed by the corporation, authority, district, commission or other body seeking such consent with the department more than five days before such public hearing. Such petition shall specify the plan or program of the body seeking such consent and the uses to which it is proposed to put the proceeds of such issue and such other matters as are necessary to fully advise such department of the nature of the proposed project and said petition shall include such other information as may be required by the rules of the department. The department of finance shall grant such consent only after it finds that such issue or sale serves some public need and is in the public interest. It shall be unlawful for the body seeking such consent or anyone to use the proceeds of any such issue or sale contrary to the plan and purposes presented to the department in obtaining its consent thereto, * [Emphasis supplied.]
The modified and extended majority opinion, as I understand it, in effect holds it is of no consequence, in determining whether the loan should be approved, that the proposed use of the borrowed funds, as disclosed by the evidence, is contrary to the federal law (7 U.S.C.A. § 904) authorizing the loan or is contrary to the purposes stated in the petition to the Finance Director (§ 155, Tit. 55, supra). In other words, the Finance Director is rendered impotent to find that the loan is not “in the public interest” even if the evidence shows the proceeds will be used for purposes contrary to the Rural Electrification Act (7 U.S.C.A. § 904, supra) and contrary to the purposes stated in the petition to the Finance Director. I am unable to agree with this. My view is that § 155, Tit. 55, supra, in requiring that such loan shall serve some public need and shall be in the public interest, declares the public policy of this state (Warren v. Alabama Farm Bureau Cotton Ass’n, 213 Ala. 61, 64, 104 So. 264; Denson v. Alabama Fuel & Iron Co., 198 Ala. 383, 391, 73 So. 525); Denton v. Alabama Cotton Co-op. Ass’n, 30 Ala.App. 429, 432, 7 So.2d 504; 16 Am. Jur.2d, Constitutional Law, § 167, p. 379; 82 C.J.S. Statutes § 9, p. 24; 72 C.J.S. Policy, p. 214) ; and that the legislature surely could not have intended that a proposed loan, the proceeds of which will be used for an unauthorized or unlawful purpose (whether under the federal law or the state law), can be said to be in the public interest. The Finance Director acts under the state statute, and action taken by him must be in conformity with the public policy there declared. Significantly, the Rural Electrification Act specifically requires approval of the loan by “the State Authority having jurisdiction in the premises.” This obviously means the State Director of Finance, as provided for in § 155, Tit. 55, supra.
It is of note that appellant’s petition to the Director of Finance shows that the proposed facilities are to be used “for the purpose of furnishing electric energy to consumers not receiving central station electric service.” [Also, the loan contract provides that the loan is to finance the construction and operation of an electric system “for the purpose of furnishing electric energy to persons in rural areas not receiving central station electric service.”] This stated purpose is in accord with the require-*131merits of the Rural Electrification Act (7 U.S.C.A. § 904, supra).
It is my view, also, that when a petition specifies the use “to which it is proposed to put the proceeds” of a proposed loan, as is required by § 155, Tit. 55, supra, the petitioner thereby assumes the burden of showing, at the public hearing provided for by § 155, that the proceeds will be used for the stated purpose. If that premise is correct, and I do not see how it could be otherwise, how can it be said that the Finance Director, in determining whether the proposed use is “in the public interest,” cannot consider the evidence on the issue presented by the petition itself ? In this connection, it seems appropriate to note again that § 155, Tit. 55, supra, makes it unlawful for a petitioner to use the proceeds of a loan “contrary to the plan and purposes presented” in obtaining the Finance Director’s consent to such loan. When the evidence shows that the proceeds will not be used according to the “plan and purposes” stated in the petition, whereby the intended use would be unlawful, how can it be said that the loan is ■“in the public interest” ? The doing of something unlawful cannot be “in the public interest.”
As I see it, there is really no question of a collateral attack being made on the legality of the loan contract. The contract, as already noted, shows that the loan is being made for a purpose consistent with the requirements of the Rural Electrification Act; and as already noted, the petition to the Finance Director also shows this. The question is simply whether there is evidence to support a finding that the proposed loan “is in the public interest,” as required by § 155, Tit. 55, supra; and I do not see how that question can be resolved without considering the evidence on the issue of proposed use presented by the petition.
This further question is posed: What would be the holding in a case where the Finance Director denies approval of a proposed loan, such as the one here involved, on the ground the evidence shows that the proceeds of the loan will not be used for the prescribed (by 7 U.S.C.A., § 904, supra) and proposed (by the petition) purpose of financing the construction and' operation of facilities “for the furnishing of electric energy to persons in rural areas who are not receiving central station service” and, therefore, cannot be said to be “in the public interest”?
I concurred in the original opinion but find, after further consideration on this rehearing, that I must register disagreement as above indicated. Therefore, I respectfully dissent.