Special Judge, (after stating the facts). The records of this case present one main central question, to which all other questions to be considered naturally gravitate.
That question is, whether the act of 1909, by its terms, divested the Auditor of the State of all those official functions, judgments and discretions vested in him by the Constitution and laws ordinarily incident to his official duties, in respect to the subject-matter under consideration, and thereby left this official to perform merely a bare act of ministerial duty? Or did the Legislature by the passage of said act intend that the Auditor should retain his prerogatives and powers as the special chosen arbiter of the State to make the estimate and settlement with the appellee as to the amount legally due the estate of Urquhart, and, if necessary, issue his warrant for payment of same?
After a consideration of the whole of the subject-matter as presented by this record, if it should manifestly appear that in the passage of the act under consideration it was the legislative intent that this State official should be stripped of all official discretion and judgment relative to the State’s rights on all questions which had arisen or might arise in making a settlement under the contract of purchase of the land in question, irrespective of the justice or merits- of such demands, then this action is proper, and should be upheld.
If, upon the other hand, by a fair construction of said act, it can be reasonably inferred that the Legislature did not intend to take the whole matter from the Auditor and deprive him of the exercise of the functions of his office in making his estimates of the amount legally due under the contract of purchase, and he might refuse to issue his warrant for a sum demanded by the appellee which he believed was clearly illegal and unfair to the State, then under the law the Auditor would be justified in refusing the warrant demanded by the appellee, and this suit must fail, by reason of the well recognized rule of law, adhered to by both the Federal and State courts, that an officer of the executive branch of the government can not be controlled by the courts in the exercise and performance of his official acts, involving his judgment and discretion. When the courts are called on to review and control the official acts of an officer in a-co-ordinate branch of the government, they should proceed with extreme caution and circumspection, and the right of the courts to exercise this power should be manifestly clear and free from doubt and not made to depend upon uncertainties or the doubtful construction of a statute.
Having premised the consideration of this case, we will now pass to a discussion of the questions involved.
It is contended by the defendant, and made a part of his answer, that the Board of Commissioners of the Penitentiary, when they made and entered into the contract of purchase of the land in question, exceeded their authority in obligating the State to pay interest on the deferred payments, and for this reason the contract to pay six per cent, interest on the balance of the purchase money is to that extent void.
The act approved June 4, 1897, authorized said board to purchase or lease a farm or farms upon which to work State convicts, and to pay for the same out of the labor or product of any of the convicts, provided the board shall only apply such proceeds for the payment of said farm as are not actually needed for the support and maintenance of the State convict farm. The act further provides that said board is impowered to perform any and all acts necessary in the purchase or lease and equipping of said farm.
The contract for the purchase of the land in controversy was not made until November, 1902, whereby, according to the pleadings, the board bound the State to pay $140,000 for the land, $30,000 of which was paid in cash, and $110,000 to be paid at some future date or dates; but as to the maturity of this balance the records before us do not disclose. However, the records show there was a stipulation in the contract for the State to pay six per cent, interest per annum on this balance.
The appellee concedes in her brief that the State is not bound by the unauthorized acts of its agents in agreeing to pay interest, but contends; that “this authority may be expressed or implied.”
The court can not subscribe to this doctrine to its fullest extent. The General Assembly is the sole and supreme legislative power of the State, and that body has the inherent right to legislate upon all questions affecting the general welfare of her people, except in so far as it is restrained or limited by the Constitution.
The General Assembly has plenary powers to contract for and create interest-bearing indebtedness on the part of the State,' except to issue interest-bearing treasury warrants or scrip. But the authority to bind the State to the payment of interest on her indebtedness must be plainly expressed and not implied.
If the State could be bound to pay interest by implication, then, to extend a rule of this kind to its legitimate results, every debt of the State could or should draw interest.
It is well settled both upon principle and authority that a State can not be held to the payment of interest on her debts unless bound by an act of the Legislature or by a lawful contract of her executive officers made within the scope of their duly constituted authority. State v. Thompson, 10 Ark. 61; United States v. North Carolina, 136 U. S. 211; United States v. Sherman, 98 U. S. 565; Angarica v. Bayard, 127 U. S. 251; Western & Atl. Rd. Co. v. State, 14 L. R. A. 438; Sawyer v. Colgan, 102 Cal. 283; Molineux v. State, 109 Cal. 378; Auditorial Board v. Arles, 15 Tex. 72.
The act under discussion is silent on the question of interest. In no part of the act is any mention made of interest or any authority given to the board to contract for the payment of interest.
It is a matter of universal custom with legislatures, which has grown into a common knowledge in the business world, that in the passage of laws authorizing the State, or any subdivision thereof, or any district therein, to make and issue any interest-bearing indebtedness, the act authorizing the same, without exception, fixes the rate, or the maximum rate, of interest the indebtedness should bear.
It therefore follows that, if the Legislature really intended to confer authority on the board in the purchase of the farm to bind the State to pay interest on the unmatured part of the debt, then in the exercise of ordinary wisdom they would have had the forethought to fix the rate, or the maximum rate, the same should bear, and hot turn the board loose with unlimited discretion in contracting for interest. Adopting the construction of the act, as the appellee would have us make, the board might have fixed any rate of interest emergency, as it seemed to them, might suggest, and fixed a much higher rate. This circumstance presents to us a very potential reason for believing that the Legislature did not intend that the board should bind the State by contract to pay interest on the deferred payments. It is therefore the opinion of this court that that part of said contract of purchase, in so far as it attempted to bind the State to the payment of interest, is invalid and not binding on the State.
But the appellee insists that, if the board was not authorized to contract for interest, its action in so doing was ratified by the subsequent action of the Legislature in the passage of the act approved May 31, 1909. In answer to this position, it must be conceded in the outset that the Legislature had the power and the right to extend the legal liability of the State in respect to the item of interest and to provide for its payment by appropriation of a fund for that purpose; but this must be done in the manner pointed out by the Constitution.
Prefacing what we may say upon this point, we assume that it has been clearly shown by principle and authority that the State was not bound by the contract to pay interest, and so much of that part of the contract was a nullity.
The parties to the contract will be held to a knowledge of •the law in respect to the same, and under this rule of the law the appellee’s testator knew he held a contract against the State which was void as to the interest feature. Therefore he had no legal demand against the State for the interest;and, if anything was paid in the shape of interest, it was in excess of what he could rightfully claim under the law.
Considering the question of interest from this viewpoint then, any money paid to him as interest would be a gift or donation, as it would be in excess of his legal demands.
The case of Molineux v. State, 109 Cal. 378, is a case very similar in principle to the one under consideration.
In 1851 certain Indian war bonds were issued under the authority of a statute. The bonds drew interest, which was evidenced by interest coupons. The plaintiff, Molineux, was the holder of a considerable amount of these interest coupons, which were long past due, having matured prior to September 1, 1856. On the 3d of March, 1894, he presented these coupons to the proper authority for allowance with a claim for legal interest from their maturity. This demand for interest on.the cqupons was rejected. The plaintiff sued the State, and secured judgment for the coupons and the legal interest. The State appealed.
It appears that in 1893 the Legislature of the State of California passed an act and the fifth section of the act reads as follows: “In case judgment be rendered for the plaintiff in any suit, it shall be for the amount actually due from the State to the plaintiff, with legal interest thereon from the time the obligation accrued.” And the plaintiff based his claim for interest on this statute, contending that under and by virtue of same he was entitled to interest on his coupons. But the Supreme Court of the State held, first, “that the State was not liable for interest on its debt, unless its consent to be so bound is manifested by an act of its Legislature, or by some lawful contract of its executive officers.”
The court further held that if the plaintiff was not legaily entitled to interest on his claim (coupons), either by reason of the nature of the claim or the immunity of the State from an obligation to pay interest, then the latter statute did not authorize its recovery; and as there was no liability on the State, at the time, to pay interest on the coupons, there was no legal interest for which a recovery could be had, irrespective of the provisions of the statute itself. It was contended that the statute was retrospective, and by its terms included the right to recover interest from the maturity of the coupons, but the court met this contention with the proposition that the interest claimed was prior to the passage of the act; there was no obligation on the part of the State to pay, and for the Legislature to attempt to make provision for the payment of such claim would be making a gift or donation to the claimant, and, therefore, under the restrictions of the Constitution, this could not be done.”
If by the passage of the act approved May 31, 1909, the Legislature intended to fix the payment of interest on the contract made by the board, then this act must comply with the constitutional requirement.
By reference to section 26, art. 5, of the Constitution, we are confronted with this limitation:
“No extra compensation shall be made to any officers, agents, employee, or contractor after the services shall have been rendered, or the contract made; nor shall any money be appropriated or paid on any claim, the subject-matter of which shall not have been provided for by pre-existing laws, unless such compensation or claim be allowed by bill passed by two-thirds of the members elected to each branch of the General Assembly.”
It is a fixed rule of this court, of long duration, and well established, that in construing the legality of acts of the Legislature this court will take judicial knowledge of the recitals and records of the journals of both branches of the General Assembly to aid the court in determining the validity of any act.
Applying this rule to the question under consideration, we have resorted to and examined the journals of the General Assembly, and from these records we gather the facts attending the passage of the act approved May 31, 1909.
The bill for the act originated in the Senate as Senate Bill No. 237. This bill took its regular course in that body, and passed without a negative vote. Upon reaching the house the bill took its regular course, and was placed on third reading and final passage. The roll of the house being called, 54 members voted in the affirmative — 21 members in the negative, and 25 members were absent and not voting. (See House Journal of the session of 1909, page 887.) It necessarily follows that, the bill having failed to receive a two-thirds vote of all the members of the house elected as required by the Constitution, that part of the act attempting to appropriate a sum of money to pay interest for which the State was not legally bound is void.
Regardless of the validity or invalidity of the act under consideration, the records of this case presents another reason fatal to the maintenance of this suit.
The defendant sets up in his answer a partial failure of consideration — alleging that the deed tendered by the appellee contained more than 280 acres of land less than the amount sold and agreed to be conveyed by the terms of said contract, and for that reason he justified himself in refusing a warrant for the entire amount.
For the purpose of reaching a conclusion on the point presented, we must presume that this allegation is true.
Both the appellant and the appellee cite the court to the case of Jobe v. Urquhart, 98 Ark. 525.
An examination of that case will disclose the fact that this identical point, of the partial failure of consideration, was before the court in that case. In that suit the plaintiff, who is the plaintiff in this suit, filed her complaint in the Pulaski Chancery Court against the Board of Commissioners of the State Penitentiary, asking for reformation of the contract of purchase of the land in controversy, so as to show that the 280 acres of land which was short of the amount agreed to be conveyed was not in fact a part of the land embraced in the contract of purchase. The court held in that case that the suit, while against the Board of Commissioners of the Penitentiary, was in reality and in fact a suit against the State, and, regardless of the merits of the defense interposed, could not be upheld, and the suit was dismissed.
We are unable to draw any discrimination or distinction in principle between the case referred to and the one under consideration, in so far as the right to prosecute the suits and the jurisdiction of the court are concerned.
The appellee is trying to accomplish in this suit, by other methods and processes adopted, that which the court held could not be done in the former suit.
By referring to the act approved May 31, 1909, it will be seen that the Legislature directed the Auditor “to calculate the amount owing to the estate of E. Urquhart according to the terms of the contract between the Board of Penitentiary Commissioners and E. Urquhart and draw his warrant,” etc.
The amount of land agreed to be conveyed under the said contract is as much a part of the terms of the contract as the amount of money to be paid by the State; and when a deed was tendered the Auditor with a considerable portion of the land embraced in the contract omitted, he was not in a position to make a settlement with the appellee according to the terms of the contract as authorized or directed by the act.
As guardian of the rights of the State, as her auditing agent, in passing on claims and demands, the action of the Auditor in refusing to issue his warrant for the entire balance of the debt claimed by the appellee, with a material shortage of the land in the deed offered, was highly proper and justified under the law.
It was not within the province of the Auditor to pass on the equity or justice of the controversy, nor inquire into the fact whether or not this shortage of land was a result of a mistake made in the contract. It was his duty to pass on the face of the papers, and when he discovered this shortage of land in the deed to refuse his warrant and refer the matter back to the proper tribunal for determination and settlement.
It will be borne in mind that these proceedings are directed against the Auditor alone, while the suit in the-case of Jobe v. Urquhart, supra, was directed against the Board of Commissioners of the Penitentiary, of which the Auditor was a member.
It will be further observed that the Auditor, in so far as this case is concerned, is acting under the directions of the entire board, by virtue of a resolution passed by it, directing the Auditor to pay no further sums of money on the appellee’s debt; assigning, among other reasons for this action, the fact that there was a shortage of land contracted to be conveyed. Thereupon in effect the action of the Auditor in refusing the warrant is only a reflection of the action of the entire board; and, under the rule announced in the case of Pitcock v. State, 91 Ark. 527, and subsequently adhered to in the case of Jobe v. Urquhart, supra, this suit can not be maintained.
In the consideration of this case, it has been suggested, and pressed to the point of a contention, that the payment of interest by the State on the unmatured part of the debt was a part of the consideration to be paid for the land, and the State is morally bound to pay the interest, regardless of the legality or binding force of that part of the agreement.
■ In other words, the State should not be permitted to hold the land and refuse to pay the full consideration for same, and the courts should enforce the obligation.
This position is not tenable for several reasons. In the first place, as against the State, no one can acquire vested rights in a void contract. Ordinarily, all contracts with the State must rest upon some legislative enactment, or be specially provided for by law, and no agent or officer has the power to bind the State by contract independent of a special or general statute authorizing the same. In this respect the law governing the contracts of the State is different and not so general in its application as the law regulating contracts between individuals. A void contract is in legal effect no contract. By it no rights are divested. From it no rights can be obtained. The law treats the contract as a nudum pactum, and the courts can not.breathe life and vitality into a void contract, forsooth it may point to a moral. If contracts are to be enforced on bare moral obligations, regardless of their illegality under the law, but few contracts would escape enforcement. All contracts void for usury, contracts void as against public policy, and the like, would be subjected to the same enforcement, for like reasons.
In the next place, it does not lie within the province of the courts to speak for the State and determine and enforce her moral obligations. The courts are not the keepers of the conscience of the State. The honor and integrity of the State or sovereignty are lodged in the people — -her citizens and the subjects — and in turn the honor and integrity of her people are reflected through the Legislature of the State. The people or sovereignty speak by legislative enactment, and on all questions involving the moral obligation of the State, the Legislature is the sole and exclusive tribunal to determine and adjust such matters. Should any officers or agents in the executive branch of the government, by their acts, while in the exercise of their official discretion and duty, deny to any one their just and legal rights, an appeal can be taken for review by the legislative branch of the government to correct and redress the wrong.
In this case, if the State Auditor denied to the appellee any right which was hers to demand, the law has provided an appeal to the Legislature for review and redress. ■
Subdivision 1, of section 3401 of Kirby’s Digest defines the duties of the Auditor, and reads as follows:
“To audit, adjust and settle all claims against the State payable out of the treasury,” etc.
' Section 3408 provides: “That if any person interested shall be dissatisfied with the decision of the Auditor in any claim, account or credit, it shall be the duty of the Auditor at the request of such person to refer the same with the reasons of his decision to the General Assembly.”
The necessity that called for the above statute was doubtless predicated on the theory that the Auditor of the State is immune from interference in the performance of his official duties by the courts of the State,- and the suitor is by virtue of this statute remitted to the Legislature for redress.
Furthermore, it is a sufficient answer to this contention to call attention to the fact that the question of the State holding the land without a complete compliance with the contract made with the board of commissioners is not before this court for a decision on that point. The appellee is not seeking a cancellation of the contract on that ground. This question is not raised by the pleadings. She is attempting to enforce a provision in a contract with the State which the law declares invalid.
Should this court entertain this contention and throw itself into the breach for the purpose of deciding this question, it would be changing the whole purpose of the suit, and would be engaged in deciding a controversy between an individual and the State, in which controversy the State would be placed in the position of a defendant; and this could not be done without doing violence to that provision of the Constitution, which say: “The State shall never be made defendant in any of her courts.”
The moment this court turns to consider questions in this case, other than the mere bare right to a writ of mandamus as asked, that moment we would be crossing well-defined lines and venturing upon forbidden grounds; so it will be seen that, instead of paving the way for this court to take jurisdiction on these grounds, and determine these questions, it only emphasizes the position taken by the court that these questions properly belong to another tribunal for determination.
We have been ijnduced to go thoroughly into the history of this litigation, and review all the questions involved, under the apprehension that the Legislature would again be called in to pass on and adjust the rights of the State and the appellee under the contract in question; and, should the Legislature again pass on this controversy, it is to be hoped that it will do so in such plain and unmistakable terms as to leave no room for doubt.
For the reasons above assigned, it is the judgment of this court that the Pulaski Circuit Court erred in overruling the defendant’s demurrer to the plaintiff’s petition and in sustaining the plaintiff’s demurrer to the defendant’s response and answer. The judgment of the lower court is therefore reversed, and plaintiff’s petition is dismissed.