In this proceeding the relator seeks an injunction restraining the State Highway Commission, the Governor, Secretary of State and State Treasurer from issuing or selling any of the debentures provided for in Chapter 1 of the 1931 Session Laws, which is called the "State Highway Treasury Anticipation Act of 1931."
For the purpose of matching funds set apart by the government in order to build Federal Aid Highways, the Act authorizes the sale of debentures, to be paid from motor fuels' excise taxes, the collection of which is anticipated. It is already provided by statute that all moneys received by the State Treasurer from the collection of motor fuels' excise taxes are to be deposited by him in the state highway fund, and, less refunds, shall be expended by the State Highway Commission "in the construction, reconstruction, betterment, maintenance, administration and engineering on the Federal Highway system of Highways" in this state. (See Chaps. 18 and 19, Session Laws 1927.) The anticipated revenues are greatly in excess of the amount of debentures to be sold.
Chapter 1, Session Laws of 1931, authorizes the sale of State Highway Debentures in the sum of $6,000,000 at the rate of $1,500,000 for each year from 1931 to 1934, inclusive. The proposed debentures bear interest not exceeding five per cent, payable semi-annually, and are to mature serially at the rate of $858,000 during each of the years 1934 to 1939, inclusive, and $852,000 in the year 1940. To pay the principal and interest *Page 209 the Act provides that the excise tax on motor fuels as provided by the twenty-second legislative assembly shall not be reduced so long as any of the debentures are outstanding and unpaid, and a sufficient sum is set aside each year from the proceeds of this tax to meet the debentures maturing the next succeeding year. Chapter 6 of the Laws of 1931 fixes the excise tax on motor fuels at five cents per gallon.
The principal contention made by relator is that Chapter 1 attempts to authorize the creation of a debt or liability in excess of $100,000 without submitting the law to the people, as required by section 2 of Article XIII of our state Constitution, which provides: "The legislative assembly shall not in any manner create any debt except by law which shall be irrepealable until the indebtedness therein provided for shall have been fully paid or discharged; such law shall specify the purpose to which the funds so raised shall be applied and provide for the levy of a tax sufficient to pay the interest on, and extinguish the principal of such debt within the time limited by such law for the payment thereof; 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 people at a general election and shall have received a majority of the votes cast for and against it at such election."
At the threshold we bear in mind that every presumption[1] must be indulged in favor of the constitutionality of the Act; every reasonable doubt must be resolved in favor of legislative action. The question for the court's determination is not whether it is possible to condemn but whether it is possible[2] to uphold the Act. When two constructions are possible, one which will result in declaring the statute constitutional and the other unconstitutional, the court without hesitation will pronounce in favor of its constitutionality. (State ex rel.Public Service Com. v. Brannon, 86 Mont. 200, 67 A.L.R. 1020, *Page 210 283 P. 202; State ex rel. Stephens v. Keaster, 82 Mont. 126,266 P. 387, and cases cited.)
Nor is it any concern of the court whether the Act is[3] expedient, wise or unwise. (State ex rel. Bonner v.Dixon, 59 Mont. 58, 195 P. 841.) It is legislative power, not policy, that is drawn in question. And while we are mindful of the presumptions in favor of legislative Acts, yet, being bound to support, protect and defend the Constitution, when an enactment transgresses the constitutional limitations beyond a reasonable doubt, it is our solemn and sworn duty to so declare it. We are mindful, too, that the declarations of constitutions are placed therein to be obeyed, and are not to be frittered away by construction. (Less v. City of Butte, 28 Mont. 27, 98 Am. St. Rep. 545, 61 L.R.A. 601, 72 P. 140.) Our duty in this respect remains the same no matter how urgent may be the desire to obtain money with which to carry on the much needed program of highway construction. As stated by that able jurist, Chief Justice Taney of the United States supreme court, in the famous Dred Scott decision (Scott v. Sandford, 19 How. (U.S.) 393,15 L. Ed. 692): "No change in public opinion on questions of public policy can ever be given any weight in construing the provisions of a Constitution where the meaning is clear, for the adoption of a Constitution that might be deemed wise at one time and unwise at another would abrogate the judicial character of the court and make it the reflex of the popular opinion or passion of the day." If the Act in question authorizes the creation of a debt or liability in excess of $100,000 there are two available methods of accomplishing what the Act proposes: one is to amend the Constitution and the other is to obtain the consent of the people at an election for that purpose.
Whether the Act before us, strictly speaking, creates a debt within the purview of this section 2, Article XIII, a question upon which respective counsel have spent much effort, we think it unnecessary to decide, for in our opinion the Act clearly imposes a liability within the contemplation of the section. The *Page 211 [4] framers of the Constitution provided two methods of raising revenue for public purposes: one the taxation system and the other the license system. (State v. Camp Sing, 18 Mont. 128, 56 Am. St. Rep. 551, 32 L.R.A. 635, 44 P. 516.) Knowing the tendency of governments to run in debt, to incur liabilities, and thereby to affect the faith and credit of the state in matters of finance, thus imposing additional burdens upon the taxpaying public, the framers of the Constitution placed positive limitations upon the power of the legislative assembly to incur a debt or impose a liability upon the state beyond the limit prescribed, without referring the proposition to the electorate for its approval. As to this the comprehensive language of the section leaves no doubt. The first two sentences employ the word "debt" and refer to debt alone, but the third adds the word "liability," a much broader term than "debt." Liability is a broad term, of large and comprehensive significance. In a broad sense it means an obligation one is bound in law or justice to perform. There are many other definitions. (36 C.J. 1050.) The authors of the Constitution used the term advisedly, with a[5] definite purpose. In construing a constitutional provision it is our duty to give meaning to every word, phrase, clause and[6] sentence therein, if it is possible so to do. So whether the law authorizing a contract for the sale of these debentures creates a debt, such as is contemplated by the first two sentences of section 2, is not material. 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 22d 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[7] the license or excise tax on motor fuels with which to pay the debentures is of no importance.
Under this contention the legislature, or the debt-contracting authority, could divide the public revenue into numerous subdivisions, calling one the "road fund," another the "school *Page 212 fund," another the "agricultural fund," another the "public health fund," and others almost without limit. Debts could then be contracted in unlimited amounts and payable in the far distant future, and still be immune from attack as violating constitutional provisions limiting indebtedness provided each debt was made payable out of some one of the specially designated funds into which all of the revenue collected by taxation from the people had been divided. A mere statement of the proposition carries with it, it seems to us, its own refutation. (Crick v.Rash, 190 Ky. 820, 229 S.W. 63.)
The fund raised from the motor fuels' excise tax results from one of the constitutional methods of raising public revenues. (State v. Sunburst Refining Co., 73 Mont. 68, 235 P. 428.) They are state funds and the state has the right to devote the proceeds of this tax to any public purpose it sees fit. Originally the proceeds were paid to the general fund of the state. (Chap. 156, Laws 1921.) Subsequently, only a part was paid into the general fund. (Chap. 150, Laws 1923, and Chap. 186, Laws 1925.) The proceeds from this tax are unlike the fund involved in the case of State ex rel. Bickford v. Cook, 17 Mont. 529,43 P. 928, 930. In that case the court was dealing with a trust fund, provided for by an Act of Congress, not state funds, and the court in recognition of the importance of that fact said: "The state cannot use the fund created by this Act for any purpose except as provided for by the Act of congress. The state officers have no control over it, except to carry out the trust relation." The same is true of State ex rel. Armington v.Wright, 17 Mont. 565, 44 P. 89, cited and relied upon by respondent. The Act there under consideration did not create a debt nor impose a liability upon the state. The case of Crick v. Rash, supra, also comments upon the importance of this distinguishing feature.
State ex rel. Rankin v. State Board of Examiners, 59 Mont. 557,197 P. 988, also presented an entirely different situation. In that case the debt or liability was already in existence, represented by outstanding warrants when the treasury notes were *Page 213 issued. The issuance of the treasury notes simply changed the form of the existing indebtedness or liability, and did not create one. (Hotchkiss v. Marion, 12 Mont. 218, 29 P. 821;Parker v. City of Butte, 58 Mont. 531, 193 P. 748;Edwards v. Lewis and Clark County, 53 Mont. 359,165 P. 297; State ex rel. Toomey v. State Board of Examiners,74 Mont. 1, 238 P. 316.)
The supreme court of Iowa, in a well considered and powerful opinion, declared a somewhat similar Act unconstitutional (Stateex rel. Fletcher v. Executive Council, 207 Iowa, 923,223 N.W. 737, 743), while the supreme court of South Carolina, by a divided court, sustained an Act also somewhat similar (State v.Moorer, 152 S.C. 455, 150 S.E. 269), but the constitutional provisions in Iowa and South Carolina are unlike ours.
The creation of an obligation, payable from these funds, is a liability of the state; its effect is to divert a large part of the revenues of the state into the State Highway Fund for a period of ten years, which otherwise might be used to pay the public debt or to defray the general expenses of the government, thus relieving the heavy burden of taxes levied upon property. If the process designed by Chapter 1 does not create a state liability then the legislature undoubtedly could do the same thing with other license taxes, the inheritance taxes, and the net proceeds of mines taxes, all of which are properly considered in determining the limitation of expenditures and appropriations under section 12 of Article XII of our Constitution (State exrel. Toomey v. State Board of Examiners, supra), and thus accomplish by indirection what the Constitution prohibits to be done directly.
The people are gravely concerned as to how and the purposes for which their money is spent. They may eagerly desire to sell the proposed debentures, thereby matching the sums provided by a generous Congress, to the end that our state may be afforded good roads without delay; but another measure *Page 214 pledging excise taxes in large amounts for some special purpose might encounter their definite disapproval.
These examples demonstrate, if any demonstration is needed, the salutary purpose of the constitutional provision here under consideration.
We have reached this decision with a due sense of its great importance and only after a faithful effort to sustain the law. Each member of the court has labored upon this case to the exclusion of other court business ever since it was submitted to us. In the language of the supreme court of Iowa, in State exrel. Fletcher v. Executive Council, supra: "The responsibility thus facing us is one not of our seeking, nor of our liking, nor yet one which we would dare evade. We are assured, too, that in the long event the duty we owe, not only to the litigants, but to our co-ordinate departments of government, is to undertake frankly the judicial responsibility which litigation casts upon us, and to declare faithfully our judicial convictions therein. In such a case our primary concern is, and must be, directed to the soundness of our conclusion, and not to its consequences. Consequences are inevitable in every litigation and are commensurate with the magnitude thereof. They are not judicially made nor can we make them less or more." As the great Justice Story said in the Dartmouth College Case (4 Wheat. (U.S.) 518,4 L. Ed. 629): "We have nothing to do but pronounce the law as we find it; and, having done this, our justification must be left to the impartial judgment of our country."
The upshot is that in order to validate the Act it must receive the approval of the electorate.
The last part of section 2, Article XIII, requires that such a[8, 9] law be submitted to the people "at a general election." This provision was a part of the Constitution as originally adopted and was framed at a time when the referendum was comparatively unknown. We think, considering the subject matter of the section, the term "general election" does not mean necessarily the general biennial election. The Constitution *Page 215 does not say so, and Constitutions ordinarily do not provide the machinery for carrying out their commands; they simply declare what may (or must), and what may (or must) not, be done. We think the "general election" named means a state-wide election at which all the people entitled to vote may vote upon a question affecting them as a whole. Should a great calamity occur requiring the immediate expenditure of funds over $100,000 for the public welfare and safety, can one believe that the legislative assembly, being convened to act in the emergency, cannot fix an election prior to the biennial general election? Common sense denies the supposition.
We now advert to section 1 of Article V of the Constitution as amended in 1905 (see Chap. 61, Laws of 1905), which became effective December 7, 1907, by proclamation of the governor. As amended that section declares that "all elections on measures referred to the people of the state shall be at the biennial regular general election, except when the legislative assembly, by a majority vote, shall order a special election." The special election here named means, of course, a special general election, a state-wide election. It will be noted that the provision refers to all measures and no exception is made as to the laws contemplated by section 2 of Article XIII. Indeed, we are inclined to think this amendment is, in a measure, complementary to the provision of section 2, Article XIII, concerning a general election.
A further argument put forth by relator must be noticed. It is[10, 11] that the Act is void because it attempts to bind future legislative assemblies. The statement that one legislative assembly cannot enact a statute which a subsequent assembly may not repeal is correct as an abstract proposition. But one legislative assembly, if not limited by the terms of the Constitution, may enact a statute authorizing a lawful contract, which, if entered into, will be beyond the repealing power of a subsequent assembly. It is true, of course, that a subsequent assembly may, if it sees fit, reduce the exaction of five cents per gallon, if a less exaction will be sufficient to pay the debentures. *Page 216 (State ex rel. Malott v. Board of County Commissioners, ante, p. 37, 296 P. 1.)
It follows that the injunction prayed for must issue, to be in force unless the law be submitted to, and receive the approbation of, the people. And it is so ordered.