Langer v. State

The plaintiff, and the defendants, North Dakota Workmen's Compensation Bureau and the Board of Railroad Commissioners have petitioned for a rehearing.

The petition is directed at what was said in our former opinion in this case regarding the effect of § 186 of the Constitution, as amended, upon "special funds." Attention is called to former decisions of this court involving the State Bonding Fund (State ex rel. Linde v. Taylor, 33 N.D. 76, 156 N.W. 561, L.R.A. 1918B, 156, Ann. Cas. 1918A, 583), and the Workmen's Compensation Fund (State ex rel. Stearns v. Olson, 43 N.D. 619, 175 N.W. 714), and it is said that some of the language in the former opinion in this case runs counter to what was said and ruled in the decisions in those cases.

It should be borne in mind that what was said in those decisions had reference to § 186 of the Constitution as it then was and now is; and that what was said in the former opinion in this case had reference to § 186 of the Constitution, as it will be after the amendment recently adopted takes effect on July 1, 1939.

In order that the differences between the two may be visualized, we set forth in parallel columns § 186, prior to the amendment, and as amended.

Before Amended As Amended

"No money shall be paid out of "Section 1. All public the state treasury except upon moneys, from whatever source appropriation by law and on derived, shall be paid over warrant drawn by the proper monthly by the public officer, and no bills, claims, official, employee, agent, accounts or demands against the director, manager, board, state, or any county or other bureau, or institution of the political subdivision, shall be state receiving the same, to audited, allowed or paid until a the State Treasurer, and full itemized statement in deposited by him to the writing shall be filed with the credit of the state, and shall officer or officers, whose duty be paid out and disbursed only it may be to audit the same." pursuant to appropriation first made by the legislature; provided, however, that there is hereby appropriated the necessary funds required in the financial transactions of the Bank of North Dakota, and required for the payment of losses, duly approved, payable from the State Hail Insurance Fund, State Bonding Fund, and State Fire and Tornado Fund, and required for the payment of compensation to injured employees or death claims, duly approved, payable from the Workmen's Compensation Fund, and required for authorized investments made by the Board of University and School Lands, and required for the financial operations of the State Mill and Elevator Association, and required for the payment of interest and principal of bonds and other fixed obligations of the state, and required for payments required by law to be paid to beneficiaries of the Teachers' Insurance and Retirement Fund, and required for refunds made under the provisions of the Retail Sales Tax Act, and the State Income Tax Law, and the State Gasoline Tax Law, and the Estate and Succession Tax Law, and the income of any state institution derived from permanent trust funds, and the funds allocated under the law to the State Highway Department and the various counties for the construction, reconstruction, and maintenance of public roads.

"This constitutional amendment shall not be construed to apply to fees and moneys received in connection with the licensing and organization of physicians and surgeons, pharmacists, dentists, osteopaths, optometrists, embalmers, barbers, lawyers, veterinarians, nurses, chiropractors, accountants, architects, hairdressers, chiropodists, and other similarly organized, licensed trades and professions; and this constitutional amendment shall not be construed to amend or repeal existing laws or acts amendatory thereof concerning such fees and moneys.

"Section 2. No bills, claims, accounts, or demands against the state or any county or other political subdivision shall be audited, allowed, or paid until a full itemized statement in writing shall be filed with the officer or officers whose duty it may be to audit the same, and then only upon warrant drawn upon the treasurer of such funds by the proper officer or officers.

"Section 3. This amendment shall become effective on July 1, 1939."

In State ex rel. Linde v. Taylor, supra, the constitutionality of the act creating the state bonding fund was assailed, among others, on the ground that it authorized moneys in the state bonding fund to be paid out according to a procedure other than that provided by § 186 of the Constitution. In State ex rel. Stearns v. Olson, supra, the same question arose. In that case it was claimed that moneys in the Workmen's Compensation Fund might not be disbursed except by warrant drawn by the state auditor.

It was held in the decisions in each of these cases that the moneys in the respective funds there involved did not fall within the provisions of § 186 of the Constitution; that the moneys in such funds did not belong to the state, but were moneys collected for the special purposes designated in the respective acts, and were not subject to the provisions of § 186 of the Constitution. In each of the cases, the disbursements were made in the manner which the acts provided, and the question involved in each case was whether the Legislature had the power to provide for the mode of disbursement prescribed in the acts, or whether § 186 of the Constitution inhibited them from so doing. Of course, it goes without saying that if the legislature, in establishing the state bonding fund and the Workmen's Compensation Fund, had desired to do so, it might have provided that the disbursement and expenditure of the moneys should be made in strict conformity with the provisions of § 186 of the Constitution.

The question here is whether the change, as wrought in § 186 of the Constitution by the recent Amendment thereof, was intended to, and will, make that section, as so amended, applicable to the State Hail Insurance Fund, the State Bonding Fund, the State Fire and Tornado Fund, and the Workmen's Compensation Fund. In the former opinion in this case, we held that question must be answered in the affirmative. And it seems to us that if the language of the amendatory provisions is given effect, no other conclusion can be reached.

Section 186 of the Constitution, as amended, provides: "All public moneys, from whatever source derived, shall be paid over . . . to the State Treasurer, and deposited by him to the credit of the state, and shall be paid out and disbursed only pursuant to appropriation first made by the legislature; provided, however, that there is hereby appropriated the necessary funds . . . required for the payments of losses, duly approved, payable from the State Hail Insurance Fund, State Bonding Fund, and State Fire and Tornado Fund, and required for the payment of compensation to injured employees or death claims, duly approved, payable from the Workmen's Compensation Fund, . . ."

It is an established general rule that constitutional provisions are to be construed as mandatory, unless a different intention is manifested. 12 C.J. p. 740; 55 R.C.L. p. 55. In this state this rule has been embodied in the Constitution in the following express terms: "The provisions of this Constitution are mandatory and prohibitory unless, by express words, they are declared to be otherwise." N.D. Const. § 21.

There is nothing in § 186 of the Constitution, as amended, or in any other provision in the Constitution, to indicate any intention that the above quoted provisions of said § 186 should not be given the full meaning which they convey. Manifestly, there could be no intention to appropriate moneys to which the Section did not apply.

Attention is called to the general rule that "constitutional provisions are not to be construed as themselves making appropriations unless they are clearly so intended." 59 C.J. p. 237. It is true, it is rather unusual to make appropriations in a constitutional provision. Ordinarily, appropriation is a matter for the legislature. But, if the people determine to make an appropriation in a constitutional provision, and manifest that determination by what is said in the provision, that is an end of the matter.

"Self-executing provisions of the constitution specifically appropriating particular funds or sums for designated purposes exempt the matters therein dealt with from the necessity of legislative appropriation established by other provisions of the constitution, and the constitutional provisions are themselves a sufficient appropriation for the purposes and to the extent comprised within their terms; and no legislation may be enacted such as will impair the operation of a constitutional appropriation." 59 C.J. pp. 237, 238.

The language used in § 186 of the Constitution, as amended, clearly manifests an intention to "appropriate the necessary funds" required for payment of duly approved claims, of the character stated in the Amendment, against the State Hail Insurance Fund, the State Bonding Fund, the State Fire and Tornado Fund, and the Workmen's Compensation Fund. But, the appropriation is expressly limited to, and disbursement thereunder may be made only for, the purposes stated.

In the petition for rehearing it is said that in the former opinion "the court overlooked and failed to distinguish between special funds created by law for the deposit of public moneys of the state and special funds created by statute for the deposit of funds impressed with a trust;" that some of the language in that part of the opinion relating to special funds is uncertain, and renders it susceptible of two wholly different interpretations, namely, that it is susceptible of the interpretation (1) that § 186 of the Constitution, as amended, operates to abolish all special funds that have been created by law, in which are deposited public funds collected for and belonging to the state, and earmarked for certain definite purposes, and prohibits the establishment of similar funds; and (2) that it is, also, susceptible of the interpretation that such special funds are neither abolished nor prohibited by said § 186, as amended.

It is further asserted in the petition for rehearing that what is said in the former opinion regarding the special funds "is susceptible to the interpretation that the Commissioner of Insurance and the Workmen's Compensation Bureau have now no authority in law to invest their trust funds in securities authorized by law without legislative authority in the form of an appropriation having been first made for that purpose."

In the former opinion, after having considered at some length the legal duties and obligations of the respective parties, we said:

"It follows from what has been said, that there is presented here a justiciable controversy between adverse parties in so far as it relates to, and involves, the duty of such of the answering defendants as have refused to file with the state auditor the statements required by the State Budget Board Law. . . .

"No question is presented here as regards the information to which the Budget Board is entitled, or which it has requested. The sole question is whether the defendants, or any one of them, who have failed to file the requested statements are required to do so. The only justiciable question, therefore, which presents itself for determination here, is which of the defendants, who have failed to prepare and file the requested reports, are required to do so under the provisions of the State Budget Board Law?"

It was argued in this case that no duty existed under the State Budget Law to submit reports for the State Hail Insurance Fund, State Bonding Fund, State Fire and Tornado Fund, and the Workmen's Compensation Fund, because, it was said, the moneys in these several funds do not belong to the state, but are merely held in trust by the state for the benefit and protection of those who, under the terms of the acts creating these funds, may become claimants against such funds. It was further argued that § 186 of the Constitution, as amended, contemplated that "all public moneys . . . paid over to the state treasurer" under its provisions must be deposited by him in the general fund of the state, and thereupon become subject to appropriation and available for disbursement for general governmental purposes, and it was asserted that the moneys were impressed with a trust, and could not be made a part of the general fund, and subject to expenditure as such even by constitutional amendment.

In disposing of the contentions thus advanced, we said, in part: "Section 186 of the Constitution, as amended, does not say that all public moneys shall be deposited in the general fund of the state, or made available for appropriation by the legislative assembly for any general purpose it may choose. It says: `All public moneys, from whatever source derived, shall be paid over . . . to the state treasurer, and deposited by him to the credit of the state, and shall be paid out and disbursed only pursuant to appropriation first made by the legislature.' If moneys are collected for a special purpose (as for instance premiums for the Fire and Tornado Fund) they must be deposited by the state treasurer to the credit of the state; but it is not contemplated that they shall become part of the general revenue of the state, and disbursed for general governmental purposes. Section 186, as amended, does not abolish or prohibit special funds. It restricts the use of moneys in such funds to the purposes that are designated in the appropriations set out therein, and such further appropriations as may be made by the legislature. . . .

"It will be noted that the appropriations made (in § 186, as amended) from the various funds, is limited to certain definite purposes. There is no general appropriation from any of the funds. There is no appropriation, for instance, for administrative purposes. It is apparent, therefore, that no disbursement may be made for such purposes, or for any purposes other than those specified in the Constitutional Amendment, except pursuant to specific legislative appropriation. Hence, it is the duty of the Commissioner of Insurance to file statements with the state auditor, as required by the State Budget Board Law, for the State Hail Insurance Fund, the State Bonding Fund, and the State Fire and Tornado Fund. It is, also, the duty of the Workmen's Compensation Bureau to file such statement."

This language seems clear. It was directed at the contention that had been advanced that the State Hail Insurance Fund, the State Bonding Fund, the State Fire and Tornado Fund, and the Workmen's Compensation Fund were not subject to the provisions of § 186 of the Constitution, as amended, and that no appropriation would be needed to carry on those activities. The language was employed to show that a duty rested upon those in charge of those several funds to submit the required reports under the State Budget Board Law.

The question of the status of other special funds that have been created by law in which public moneys belonging to the state and earmarked for certain definite purposes have been deposited, such for instance as the Auto-Transportation, and the Scale Inspection funds, the moneys in which are earmarked for expenditure in carrying on certain functions assigned to the Board of Railroad Commissioners, was wholly foreign to the subject under consideration. The moneys in the funds last mentioned are clearly public moneys and fall within the purview of § 186, as amended, both as regards the requirements that they be paid over to the state treasurer and deposited by him to the credit of the state, and the requirement that they shall be paid out and disbursed only pursuant to appropriation first made by the legislature. This being so, the board in charge of the particular activities in which the moneys in such funds are expended were, and are, required to submit reports under the State Budget Board Law. This is true whether the special funds as established remain, or are abolished. Obviously, therefore, the question whether the statutes establishing such funds and requiring moneys earmarked for certain purposes to be placed therein, were, or were not, abolished by § 186 of the Constitution, as amended, has no bearing upon the question whether the Board of Railroad Commissioners were required to make a report under the State Budget Board Law, and that question was not, and is not, considered or decided.

The same is true as regards the matter of investment of moneys in the State Hail Insurance Fund, the State Bonding Fund, the State Fire and Tornado Fund, and the Workmen's Compensation Fund. Of course, the laws now in force relating to, and authorizing, such investments will remain wholly unaffected by the amendment of § 186 of the Constitution until July 1st, 1939. Whether the present laws relating to, and authorizing, such investments will remain in force after that date, or whether additional legislation will be required to authorize the paying out and disbursement of moneys in such funds in order to make possible the investment of the moneys in such funds subsequent to July 1st, 1939, is of no controlling effect upon the question, as to whether those in charge of these several funds and the activities carried on by them are required to submit statements under the State Budget Board Law. Therefore, that question was not, and is not, considered or determined in this case. What was said in the former opinion regarding the limited purposes for which appropriations are made in § 186 of the Constitution, as amended, was said to show that the appropriations in that section were not in and of themselves sufficient to dispense with further appropriations by the legislature; and that inasmuch as further appropriation by the legislature would be required to enable the several funds to carry on their prescribed activities, there was, and is, a duty incumbent upon those in charge of the several funds to file the statements prescribed by the State Budget Board Law.

Rehearing denied.

NUESSLE, Ch. J., and BURR and MORRIS, JJ., and ENGLERT, Dist. J., concur.