Court Opinion

ID: 3886455
Source: CourtListenerOpinion
Date Created: 2016-07-06 09:16:05.76736+00
Date Added: 2024-06-11T13:55:34.398484
License: Public Domain

This is a proceeding for injunction instituted by permission in our original jurisdiction. The pleadings involve the constitutionality of Act No. 131 passed by the General Assembly over the Governor's veto on April 25, 1945 (Acts 1945, page 173) providing for the refund of five cents of the six cents gasoline tax to purchasers of gasoline to be used in operating tractors or other farm equipment exclusively in farm operations. The petitioners consist of two taxpayers and certain holders in the aggregate of $621,000.00 of South Carolina bonds designated as State Highway Department Certificates of Indebtedness. They allege that the act is unconstitutional upon the grounds: That it impairs the obligation of the contract between the State and the holders of the outstanding certificates of indebtedness; that it violates Article X, Section 3, of the South Carolina Constitution, in that, in effect it diverts five cents of the gasoline tax by way of an exemption in favor of agriculture; and that, as to the petitioners and others in like situation, it constitutes a denial of the equal protection of the laws. The respondents are the South Carolina Tax Commission, to whom is committed the administration of the act, and the State Treasurer.
For the purpose of preserving the status quo pending the hearing and determination of the cause the Chief Justice *Page 530 
granted a temporary restraining order prohibiting the making of any refunds under the terms of the act. And he also ordered respondents to show cause why the relief sought in the petition should not be granted. The respondents in due time pleaded by way of return and answer, denying the material allegations of the petition and challenging the contentions of the petitioners regarding the constitutionality of the act in the respects above indicated. There was then interposed a demurrer to the return and answer, raising the legal issues as to whether the act is unconstitutional in any of the particulars alleged by the petitioners.
Eliminating the administrative provisions, the vital portions of the body of the act with which we are dealing are contained in Sections 1 and 10, which are as follows:
"SECTION 1: Any person who shall purchase and use gasoline in operating tractors or other farm equipment used exclusively in farm operations, no part of which is used in any vehicle or equipment driven or operated upon the public roads, streets or highways of this State, except when necessary to go from farm to farm, shall be entitled to a refund of all of the State tax on such gasoline except one (1 ¢) cent per gallon.
"SECTION 10: The tax of one cent per gallon to be retained under this Act shall be allocated five-sixths to the State Highway Department and one-sixth to the counties, the ratio now provided."
The other provisions contained in the body of the act deal in the main with administrative matters. It will thus be perceived that subject to the stated limitations and the administrative provisions of the act, the General Assembly has undertaken to provide for the refund of five cents of the six cents gasoline tax paid by farmers for gasoline in operating tractors or other farm equipment used exclusively in farm operations. *Page 531 
If the case as presented to the Court involved nothing more than the bare question whether it is within the power of the General Assembly to deplete the proceeds of the gasoline tax as paid into the treasury by way of a refund to a special class of users, or as the petitioners assert the proposition, to divert a part of the proceeds of the gasoline tax in the manner set forth in the act, we think the contention of the petitioners that the act is unconstitutional under the holdings of this Court in the cases cited below would scarcely be deemed debatable. But the respondents strongly rely upon the preamble to the act in question, which is as follows:
"WHEREAS, the tax on gasoline makes its use in a tractor and other farm equipment as defined in this Act financially impracticable; and
"WHEREAS, by eliminating all of such tax, except 1 ¢ per gallon, the use of gasoline in said farm equipment and tractors will be found financially practical, and more than sufficient additional gasoline will be used to offset any loss in revenue; and
"WHEREAS, the General Assembly finds that to reimburse farmers for all of all of said taxes paid on gasoline, except 1 ¢ per gallon on all gasoline used in such machinery, will not take any tax whatsoever from the total collected, but cause an increase in the total gasoline taxes to be collected, and will greatly aid agriculture in this State."
It is quite apparent that this preamble was drafted in view of the constitutional objections which might be raised, such as those interposed by the petitioners. And the theory is that the effect of the act will so largely increase the amount of gasoline consumed in the operation of farm machinery that the proceeds of five-sixths of the reserved tax of one cent per gallon will exceed the proceeds of five cents of the gasoline tax as now collected, that is to say, that the sale of gasoline for this particular purpose will be more than six times *Page 532 
the amount sold prior to the enactment of the act. Implicit in the preamble is the further proposition that with reference to the constitutional prohibition against legislation denying equal protection of the laws, it is permissible for the Legislature to classify agriculture as an occupation to which a special exemption may be legally granted.
The factual background of the recitals is challenged in the petition as "not supported by the facts"; and it is alleged that on the contrary the proposed refunds would result in a depletion of the revenue derived from the gasoline tax, and to the same extent deplete the funds available to the Highway Department for the payment of its contractual bonded obligations and for the maintenance and development of the highway system of the State in the manner required by law. The respondents on the other hand insist that the preamble represents a legislative declaration that is controlling upon this Court to the extent that the constitutionality of the act is dependent upon the correctness of the conclusions so stated; and we are asked to find in the legislative declarations contained in the preamble and implicit in the same the necessary constitutional support for the statute.
We therefore approach the problems before us with due regard for our constitutional system and the established trend of judicial procedure, pursuant to which definite limitations have been imposed by the Courts themselves upon the exercise of the power to declare a legislative act unconstitutional. As was well stated in the case of State ex rel.Edwards v. Osborne et al., 195 S.C. 295,11 S.E.2d 260 (which may be referred to as the second Edwards-Osbornecase):
"In approaching the problems presented by this case, we are mindful of the constitutional principles that legislative acts may not be invalidated in cases of doubt; that the Courts and the General Assembly are coordinate branches of the State Government and except where constitutional limitations *Page 533 
have been clearly disregarded, it is not for this Court to pass on the propriety or soundness of the exercise of the legislative power.
"We recognize the soundness of the distinction betweenavoiding constitutional restrictions and evading them, and that where a given course of legislative action has been declared by this Court to be unconstitutional, no stigma of illegality attaches to a later statute which recognizes the condemnation of the earlier law and seeks to avoid the defects of that law.
"But we cannot dissipate constitutional provisions by forced construction, or by regarding form rather than substance. A statute is constitutional or unconstitutional by reason of its scope and purpose and effect. Whatever the language used, we test the statute by a realistic consideration of the subject which it encompasses, the purpose which it seeks to serve, and the effect it will have when put in operation.
"If constitutional limitations are directed to these factors, they must be given effect."
Having in mind the controlling principles thus accurately stated, the first question confronting us is the effect of the preamble of the act. May the Court go behind it to determine for itself whether the recitals in the preamble are really factual, supported by considerations of which the Court may take judicial notice or by matters appearing in the record, or whether such recitals are unsupported and are of a speculative or conjectural character? To answer this question in the negative would be in effect to abolish the line of demarcation between the legislative and the judicial branches of the government in regard to the determination of the validity of legislation. If the necessary facts to sustain the validity of a statute against the challenge that it violates constitutional rights can be established by legislative fiat, *Page 534 
the judicial power and duty to determine the constitutionality of an act would be practically nullified.
The act involved in the second Edwards-Osborne case, from which the above quotation is taken, contains a legislative declaration replete with recitals intended to show interalia that the diversion of funds thereby authorized would not as a matter of fact impair the ability of the State Highway Department to discharge its obligations and commitments, including the proper maintenance of the State highway system; but these pointed recitals did not avail to save the constitutionality of this legislation. And in the case ofGentry v. Taylor, 192 S.C. 145, 5 S.E.2d 857, a legislative declaration was held insufficient to warrant the Court in sustaining a certain act as constitutional.
But it is nevertheless earnestly contended by the respondents that the General Assembly has found as a matter of fact that the proportionate refund of taxes paid on gasoline used in farm machinery will not reduce the total of the tax, but will even cause an increase thereof. And it is further argued that such a finding of fact is conclusive upon this Court. It is indeed true that since every reasonable presumption is indulged in favor of the constitutionality of an act, the existence of facts necessary to support it will ordinarily be presumed, and the recital of such facts by the Legislature will be presumed to be correct, provided there is a reasonable or rational basis for the same. South Carolina StateHighway Department v. Barnwell Bros., 303 U.S. 177,82 L.Ed., 734.
This rule, however, does not tend to support the act under consideration, because the recitals obviously do not, andcould not, represent factual findings. On the contrary, they express merely a hope, a conjecture, a bare speculation, that the reduction of the gasoline tax to this particular class will result in the purchase of at least six times the amount of gasoline heretofore sold to such buyers. Such a prognostication *Page 535 
manifestly can have no basis in the experience of this State. And while it is stated by way of argument in behalf of respondents that 36 other States have gasoline tax refund or exemption laws, no statistics relating to the experience of any such State are given (and the terms of such statutes are not before us), save that a reference is made to the State of Mississippi, which is said to have a similar refund law applying to farm tractor gasoline, and is most closely parallel to South Carolina in certain pertinent respects. And it is further stated that during the period of four years from 1940 to 1943, inclusive, the total of such refunds in that State was $772,000.00 or an average annual refund of $193,000.00 — quite a substantial amount. But there is not a single figure given to show the effect of this refund upon the revenues obtained from this particular source. There is indeed a statement in the brief that these refunds "were by no means a net loss in revenue", but this rather cryptic expression of opinion is not supported by the recital of a single fact or figure.
All of which demonstrates that we are in the field of pure conjecture. As was said by Chief Justice Hughes in the opinion delivered by him in the case of Borden's Farm ProductsCo. v. Baldwin, 293 U.S. 194, 79 L.Ed., 281, immunity to a constitutional attack upon a legislative act cannot be (quoting) "achieved by treating any fanciful conjecture
as enough to repel attack." (Emphasis added). Indeed we know of no instance, and none has been cited to us, in which an appellate Court has held that a statute which on its face appears to be constitutionally insupportable can be upheld because of legislative declarations appearing in it, especially those looking to the unknown future, when there is no record before the Court to support such declarations, and no experience of the State involved or any other State is shown as actually justifying the same. *Page 536 
As might have been expected, it is said that one of the problems arising under refund acts is the proper enforcement thereof, to the end that gasoline purchased for use thereunder is not diverted to purposes not included in the refund provisions. On this point it was stated in oral argument that in North Dakota, which is largely an agricultural State, the amount of the refunds had in fact, exceeded one half of the total collections. Merely incidentally it may be observed that while the act under consideration makes false swearing in connection therewith a misdemeanor, it is punishable by a fine but not by imprisonment, and while financial penalties are imposed for unlawful use of such gasoline it is not made a crime.
We are therefore of opinion that the recitals contained in the act cannot be deemed sufficient to validate the same as against the constitutional objections, either as relating to the impairment of the obligation of a contract or to the diversion of a substantial portion of the gasoline tax in violation of Article X, Section 3, of the State Constitution.
Proceeding now to a more specific consideration, in the light of the law, of the constitutional objections urged against the act, it is necessary to have in mind the legislative background of the problems before the Court. And this is fully set forth in the cases of Briggs v. GreenvilleCounty, 137 S.C. 288, 135 S.E., 153; State ex rel. Richardsv. Moorer, 152 S.C. 455, 150 S.E., 269; State exrel. Edwards v. Osborne et al., 193 S.C. 158,7 S.E.2d 526 (which may be referred to as the first Edwards-Osbornecase); and the second Edwards-Osborne case hereinbefore cited.
Without entering into too much detail, it suffices to recall that the State Highway Bond Act of 1929 (Acts 1929, page 670) and the legislation imposing the present six cents gasoline tax (of which five cents goes to the State and one cent to the Counties) provided for two interrelated objectives, *Page 537 
to wit: The construction and maintenance of a Statewide system of highways to be built with accelerated speed out of the proceeds of sale of certificates of indebtedness to be issued against the revenues from five cents of the gasoline tax, and the payment of these certificates and the maintenance of the highway system, as well as the construction of additional roads, out of any remaining funds derived from such revenue. To assure that the certificates would be paid out of the gasoline revenues, notwithstanding the fact that they are general obligations of the State, for which the full faith and credit of the State are pledged, and to give effect to the "promise" of the 1929 Bond Act that the plan of construction of the highway system therein provided for would be accomplished without "costing the taxpayers of the State one cent of property taxes", the revenues derived from the five cents of the gasoline tax allocated to the State are specifically pledged to the payment of such certificates and to the general purpose of the construction and maintenance of the State Highway system as it is projected and expanded from time to time under legislative direction.
See, in addition to the cases above-cited, City of Greenvillev. Query, 166 S.C. 281, 164 S.E., 844, affirmed in286 U.S. 472, 76 L.Ed., 1232; Gregg Dyeing Co. v.Query, 166 S.C. 117, 164 S.E., 588, affirmed in 286 U.S. 472,76 L.Ed., 1232; and Eastern Air Transport, Inc.v. South Carolina Tax Commission, 52 F.2d 456, affirmed in 285 U.S. 147, 76 L.Ed., 673.
The State Highway Bond Act of 1929 provided that the aggregate amount of the certificates of indebtedness that might be issued should not exceed $65,000,000.00. Under subsequent legislation the limit on the aggregate amount has varied from time to time. Pursuant to the 1945 Act (Acts 1945, page 477) the debt limit which theretofore had been fixed at $62,300,000.00 was increased by $4,000,000.00 for the purpose of acquiring the Cooper River bridge known *Page 538 
as the John P. Grace Memorial Bridge. See also Acts 1945, *page 66. 
At the time of the passage of the 1929 legislation the total mileage in the highway system was slightly less than 6,000 miles. As of June 30, 1944, the mileage had been increased by legislative appropriation to approximately 12,000 miles. And by Act No. 167 of the Acts of 1945 (Acts 1945, page 261) approximately 5,000 miles additional were added to the highway system under a statutory direction that these roads shall be constructed and maintained in the same manner as other roads in the system.
Of the outstanding mileage of highways, about 7,000 miles have been paved to date at a cost estimated by the Highway Department to be $167,000,000.00, leaving a total of approximately 10,000 miles yet to be paved, if the statutory directions relating to the same are complied with.
The outstanding funded debt of the Highway Department as of June 30, 1944, was slightly less than $57,000,000.00. This is payable serially through the years ending 1961. With the interest that will accrue, the amount for which provision must be made out of the gasoline revenues is approximately $67,000,000.00.
On the basis of experience, under practices that have been expressly sanctioned by this Court in the Edwards-Osbornecases above-cited and by legislation recognizing the practices, the funded debt of the Highway Department is normally kept constant at a figure in excess of $60,000,000.00. That is to say, as the reimbursement agreements and certificates of indebtedness are reduced or retired from year to year, the Highway Department sells additional certificates up to the amount of the statutory debt limit to enable it to construct and pave the highways in accordance with the legislative program imposed upon it.
(The statistical data above given are derived from the reports of the State Highway Department.) *Page 539 
It will be seen from the foregoing that when the expanded highway program is related to the legislation providing for the issuance of certificates of indebtedness and the construction of improved highways, there is not at any time surplus
revenues available for diversion to some other purpose, without impairing to the extent of the diversion the capacity of the Highway Department to meet its statutory obligations. There is, indeed, a provision for a sinking fund, but the limitations are such that in the whole period since 1929 the amount of this sinking fund is only approximately $1,500,000.00. If the revenues of the Highway Department exceed the estimates made in the budgets prepared by it from year to year, for the benefit of the General Assembly and as the basis for the issuance of certificates of indebtedness, these revenues are allocated in advance to the payment of the certificates and other funded debts of the Highway Department, and to the completion of the highway program. There is, in the language used by this Court in the cases cited above and in other cases, "a continuing annual appropriation" of the gasoline revenues for the purposes expressed in the applicable legislation and stated briefly above.
It is in the light of these statistics, and of the consequent heavy burden of debt resting upon the people of South Carolina in the prosecution of the important highway program, that we must view the act now in question. And the foregoing statement seems sufficient to show that the point argued by counsel for the respondents that there is a surplus which might be applied for the purposes of the refunding act is not at all tenable.
As we have already clearly indicated, the primary constitutional question before us relates to what is frequently termed the contract clause, contained both in our own State Constitution and the Constitution of the United States, to the effect that no law impairing the obligation of contracts shall be passed. State Constitution of 1895, Article I, Section *Page 540 
8; United States Constitution, Article I, Section 10. The controlling factor here is that the revenues derived from the five cents of the gasoline tax which the act in question diverts pro tanto by way of refund are pledged to, and constitute the underlying security for, the payment of the outstanding certificates of indebtedness of the Highway Department, and are specifically allocated by the applicable statutes to that purpose and to the other obligations imposed by law on the Highway Department in connection with the construction and maintenance of the Statewide system of paved highways.
The fundamental legal principles are so well stated in the case of Murray v. Charleston, 96 U.S. 432,24 L.Ed., 760, that we quote the same as follows:
"There is no more important provision in the Federal Constitution than the one which prohibits States from passing laws impairing the obligation of contracts, and it is one of the highest duties of this court to take care the prohibition shall neither be evaded nor frittered away. Complete effect must be given to it in all its spirit. The inviolability of contracts, and the duty of performing them, as made, are foundations of all well ordered society and to prevent the removal or disturbance of these foundations was one of the great objects for which the Constitution was framed."
But we think the question is decisively disposed of in our own case of Martin v. Saye, 147 S.C. 433, 145 S.E., 186. The material facts of this case are that York County sold a million dollars' worth of bonds under a statute providing that the proceeds should be turned over to the Highway Department for the construction of State highways in York County, subject to a reimbursement agreement of the Department. A subsequent statute authorized the County to use a fund of about $45,000.00, representing part of the accrued interest and premium obtained in connection with the sale of the bonds, for any purpose connected with the *Page 541 
hard-surfaced roads in the County. Proceedings were then instituted to obtain an adjudication that the latter act was unconstitutional because of its impairment of the obligation of the contract between the County and its bondholders.
After quoting from certain decisions of the Supreme Court of the United States, the Court said (speaking through Mr. Justice Stabler):
"Read in the light of these principles, we are satisfied that the Act of 1928 impairs the obligation of the contract made between the county and the purchaser and holders of the bonds. It is clear that the fund derived from the premium received on the bonds and the interest paid by purchasers of the bonds is part of the security guaranteed to the bondholders by the terms of the Act; and even though the full faith, credit and taxing power of York County are pledged as security for the payment of the bonds, the taking away of any portion of the pledged security, however small, amounts to a denial and deprivation of a right accruing to the bondholders under the contract. * * *
"The purchasers had a right to rely upon all the provisions of the Act, including those fixing and pledging the security for payment of the bonds, as being part of the contract of sale; and when the Legislature, by the Act of 1928, undertook to divest the holders of the bonds of a vested right accruing under the contract, it exceeded its constitutional power, and such Act is invalid because of its impairment of the obligation of the contract."
A similar holding was made in the earlier case of Stateex rel. McKinlay v. Cardozo, 8 S.C. 71, where it appears that bonds of the State were issued to raise money for the purchase of lands to be sold to settlers thereon. The interest on the purchase money of the lands, when sold, was to be applied to the payment of the interest on the bonds issued under the act. The Legislature attempted to divert the interest money to other purposes than to payment of the interest *Page 542 
on the bonds. A bondholder brought suit to invalidate the diversion, and the Court held that the same impaired the obligation of the contract, in that, in legal effect the State had pledged the proceeds of the sale of the lands as security to the holders of the bonds. As the Court says:
"The security, though not in the form or language of a mortgage, attaches to it all the incidents and obligations of such an instrument, and the debtor can with no more propriety or right divert the funds from the purpose to which he has devoted it by his contract than could the mortgagor affect the priority and validity of his mortgage by converting the subject of it to some other and different use."
In that case, too, the bonds carried a pledge of the full faith and credit of the State. On this point the Court significantly said:
"The greater the certainty of payment to the holder of the bond, the higher would be the market value. If the means of meeting the interest and of reducing the bonds were provided and assured in a fixed and permanent form, there would be a higher guaranty than that promised by the pledge of `the faith and credit of the State,' which could not be practically enforced by the process of the legislative Acts in the conscience of those who chance, from time to time, to constitute the General Assembly."
And in Morton, Bliss  Co. v. Comptroller General, 4 S.C. 430,448, the Court said:
"When a sovereign State enters into a contract of borrowing with an individual it assumes to be bound, in all particulars, as an individual under like circumstances would be bound, by what is expressed or properly implied by the terms of such contract. The measure of its obligation is that applied to individuals. It is only in the consequences that flow from a breach of the contract that there is a difference between the case of a State and an individual. The individual can be sued, the State cannot." *Page 543 
An unconditional act such as that now before us, the normal effect of which would be to reduce the funds pledged by way of security would, we think, in itself impair the obligation of the contract, unless it were not only possible butdemonstrable that there would be no loss of revenue. The Court would hardly be asked to sanction a legislative act reducing the gasoline tax to all buyers upon any theory that this might actually result in an increase of revenue, yet the principle would be the same. And if the act before the Court could be sustained it is apparent that there might be numerous classes of gasoline buyers who would seek like legislative relief by way of reduction of the tax.
The following statement of the law as contained in 12 Am. Jur., 20, seems to be quite correct under the applicable decisions:
"Since the prohibition as to the impairment of the obligation of contracts is absolute, the amount and extend of the impairment is immaterial."
And the instant case seems to come clearly within the rule laid down by the old case of Planters' Bank v. Sharp, 6 How., 327, 12 L.Ed., 458, and confirmed by the relatively recent case of Minden v. Clement, 256 U.S. 126,65 L.Ed., 857:
"One of the tests that a contract has been impaired is, that its value has by legislation been diminished. It is not, by the Constitution, to be impaired at all. This is not a question of degree or manner or cause, but of encroaching in any respect on its obligation — dispensing with any part of its force."
See also W.B. Worthen Co. v. Kavanough, 295 U.S. 56,79 L.Ed., 1298.
Is it not obvious that the value of the contract between the State and the highway bondholders is diminished by this legislation? Even the speculative character of the act before *Page 544 
the Court is sufficient in itself to diminish the value of the contract, and is therefore an impairment of the same.
It is also of interest to observe that the rule usually adopted supporting legislative findings of fact and recitals concerning the same should have a narrower scope (quoting) "when legislation appears on its face to be within a specific prohibition of the Constitution". See footnote toU.S. of America v. Carolene Products Co., 304 U.S. 144,82 L.Ed., 1234. The constitutional provision relating to the impairment of the obligation of a contract in both the State and Federal Constitutions uses the specific and absolute terms that no law impairing the obligation of contracts shall be passed.
It is, however, rather elaborately argued by counsel for the respondents that the law as laid down in the case of Martinv. Saye, supra, should no longer be considered as of full force and effect, but that it has been modified by certain later decisions of the Supreme Court of the United States, and three of these cases are cited and quoted from at some length, to wit: Richmond Mortgage  Loan Corpn. v.Wachovia Bank  Trust Co., 300 U.S. 124,81 L.Ed., 552; Gelfert v. National City Bank, 313 U.S. 221,85 L.Ed., 1299; and Faitoute Iron  Steel Company v. City ofAsbury Park, 316 U.S. 502, 86 L.Ed., 1629. But we do not think the cited cases are in point here, for they do not deal with any act diminishing or reducing the security pledged for a contractual obligation. On the contrary, they relate to moratory legislation, arising out of the historic depression, the first two of them involving the foreclosure of mortgages and the valuation of the property covered thereby, and the last one involving unsecured municipal debts. And it is worthy of consideration that the first one of these cases is referred to in the case of Federal Land Bank ofColumbia v. Garrison, 185 S.C. 255, 193 S.E., 308 (writ of certiorari denied, 302 U.S. 708, 82 L.Ed., 547), wherein *Page 545 
it is held that our own "moratorium" act in one particular impaired the obligation of contracts as respects mortgages existing when the act was passed. And we might add that the case of Martin v. Saye, supra, was cited with approval in that case as well as in other cases, and that its authority has never been impaired by any of our decisions; and we are of opinion that it continues authoritative and binding.
We are therefore unable to escape the conclusion that the present act, in taking away from the State a portion of the revenues from the five cents gasoline tax, directly and substantially impairs the contract between the State and the holders of the outstanding certificates of indebtedness, and that on this ground it must be held to be unconstitutional under the provisions of Article I, Section 8 of the Constitution of South Carolina. For the same reasons we conclude that the statute violates the corrosponding provisions of Article I, Section 10 of the Constitution of the United States.
Viewing the act as one which on its face provides for the collection of the six cents gasoline tax from farmers who use gasoline in the operation of farm machinery, and the refund of five cents of the tax to such of these farmers as comply with the administrative provisions of the act, it appears to us that it is also in conflict with Article X, Section 3, of the Constitution of South Carolina, which provides:
"No tax shall be levied except in pursuance of a law which shall distinctly state the object of the same; to which object the tax shall be applied."
As construed in the two Edwards-Osborne cases hereinbefore cited and in the cases therein referred to the gasoline tax is to be considered as a continuing annual appropriation under the constitutional provision cited; and the revenues having been thus specifically appropriated to the accomplishment of the purposes of the State Highway legislation above *Page 546 
referred to, they are not subject to diversion in whole or in part to any other legislative purpose. We are unable to perceive any fundamental difference between an attempt to divert a part of such revenues to the payment of the general expenses of the State, as was attempted in the Edwards-Osbornecases, and the present attempt to divert such revenues by way of a refund to the special class of gasoline users defined in the act before us.
As applied to a case of the present character, there is indeed very little if any distinction between the principle encompassed within Article X, Section 3, of the Constitution and the provisions of the State and Federal Constitutions prohibiting the impairment of the obligation of a contract Where, as in the present situation, tax funds have not only been specifically appropriated to a stated purpose, within the contemplation of Article X, Section 3, of the Constitution, but also have been allocated and pledged to the payment of an obligation of the State, it is obviously a violation of both of the above-stated constitutional conceptions to undertake to reduce the value of the pledge by diverting a part of the funds to some other purpose than that for which it was appropriated and to the accomplishment of which it was pledged.
See State ex rel. McKinlay v. Cardozo, supra.
The following striking language contained in the opinion of Mr. Justice Fishburne in the first Edwards-Osborne case
seems quite appropriate:
"We think it may not be questioned that the gasoline tax and the motor vehicle license tax constitute a special fund for the payment of State highway certificates of indebtedness, reimbursement agreements, and the other purposes specified in the law, and that this fund is not subject to process of attrition by occasional or systematic diversion that will deplete the primary source with which to pay the heavy outstanding obligations of the State Highway Department." *Page 547 
We do not deem it necessary to deal with the further contention of the petitioners that the act is unconstitutional on the ground that it denies to the petitioners and others the equal protection of the laws.
For the reasons above set forth, I am of opinion that the judgment of this Court should be that the Act of 1945, No. 131, enacted April 25, 1945 (Acts 1945, page 173), is unconstitutional, and therefore null and void; and hence I must dissent from the prevailing opinion herein delivered by Mr. Justice Stukes.