Colbert v. State

Cox, J.,

delivered the opinion of the court.

On July T, 1896, pursuant to an act of the legislature approved March 18, 1896, there were sold bonds of the state of Mississippi of the denomination of $500 each, bearing interest at 5 per cent per annum, payable semiannually, to the amount of $400,000. These bonds on their face were to become due and payable on the 1st day of July, 1906, and were designated as “Series B.” On the 4th day of June, 1901, Grov. Longino issued his proclamation, giving notice to all holders of the said bonds to present the same on July 1, 1901, to the treasurer of-the state of Mississippi, at his office in the capitel in the city *773of Jackson, for payment in full with accrued interest. The proclamation announced that interest would cease on the said bonds from and after the 1st day of July, 1901. Oaro'E. Colbert, plaintiff below and appellant liere, was the owner of fifteen of the said bonds. He declined to present them for payment on July 1, 1901, as called for in the governor’s proclamation, but on January 1, 1902, he presented the said bonds, together with the interest coupons then maturing, to the state treasurer for payment. The bonds were promptly paid, but the treasurer refused to pay the coupons on the sole ground that the call of the governor operated to retire the bonds and stop the running of interest after the date fixed for retiring them. Plaintiff thereupon made demand of the auditor to issue a warrant for the amount of the coupons, and the auditor refused to do so; whereupon suit was instituted against the state before J. Fitzgerald, a justice of the peace of Hinds county, and judgment recovered for $187.50, the amount of the said interest coupons, with interest from January 1, 1902, and costs. Upon appeal to the circuit court of Hinds county, judgment was rendered for the state, dismissing the suit. From this judgment an appeal has been prosecuted to this court, appellant assigning for error the action of the court in dismissing his suit.

The principal question arising.upon the record in this case, and one upon which both parties thereto invite a deliverance from this court, is whether or not the governor had authority of law to call in the bonds of series B for payment on July 1, 1901. It is contended on behalf of the state that authority for this act of the governor is found in sec. 7, ch. 34, p. 30, Acts 1896, the same being the act under which the said bonds were issued. It reads as follows: “Sec. 7. The faith and credit of the state of Mississippi are hereby pledged to the punctual payment of both principal and interest of said bonds as they mature, and to that end the legislature shall annually levy a tax on all the taxable property of the state for the payment of *774tbe interest thereof, and at the expiration of five years the state shall have the option to retire any or all of these bonds.” It is urged that the governor, as the chief executive of the state, was 'the functionary whose right and duty it was to exercise the state’s [discretion, thus clearly provided for in the act under which the bonds were issued, to call the same in for payment. It is manifest that the authority to call in the bonds was not given to the governor in express terms by sec. 7 of this act of 1896. It is claimed, however, that this authority is to be clearly inferred in view of the character of the act to be done and the nature of the powers conferred by the constitution upon the governor as chief executive of the state. The general grant of power to the governor under our constitution is to be found in secs. 116 and 123 of that instrument, the one declaring that “the chief executive power of this state shall be vested in a governor,” the other enjoining that “the governor shall see that the laws are faithfully executed.” It is claimed that by virtue of his duty hand obligation to see that the laws are faithfully executed, the [I ¡governor was vested with power to call in the bonds in question. 'A sufficient reply to this contention is that as to the matter in question there was no law to be executed. No provision of the statute under which the governor assumed to act required either absolutely or upon conditions that the bonds should be' called •in before maturity. No. law would have been violated if the call had not been made. The law under which the bonds were issued having provided that they should mature on July 1, 1906, they were not, under the law, subject to payment before that date, save in the exercise of a discretion reserved generally to the state, not granted specifically to the governor. So that to our minds it is perfectly clear that the governor was without authority to call in the bonds, unless the exercise of the state’s discretion as to that matter was in its essential nature an executive function, vested in the governor by the grant to him of the chief executive power. Just here we touch the heart of the controversy. It is maintained on behalf of the state with *775great earnestness and force of reasoning that tlie discretion reserved to tlie statq was an executive discretion, pertaining strictly to tlie executive department of the government, belonging, by its very nature, to that particular magistracy, and not requiring any legislative grant to vest it in the governor as chief executive. We cannot concur in this opinion. We have not so learned the law. The principle contended for is contrary to the genius of republican government. Under all constitutional governments recognizing three distinct and independent magis-tracies, the control of the purse strings of government is a legislative function; indeed, it is . the supreme legislative prerogative, indispensable to the independence and integrity of the legislature, and not to be surrendered or ¿bridged, save by the constitution itself, without disturbing the balance of the system and endangering the liberties of the people. The right of the legislature to control the public treasury, to determine the sources from which the public revenues shall be derived and the objects upon which they shall be expended, to dictate the time, the manner, and the means, both of their collection and disbursement, is firmly and inexpugnably established in our political system. This supreme prerogative of the legislature, called in question by Charles I., was the issue upon which parliament went to war with the king, with the result that ultimately the absolute control of parliament over the public treasury was forever vindicated as a fundamental principle of the British constitution. The American commonwealths have fallen heirs to this great principle, and the prerogative in question passes to their legislatures without restriction or diminution, except as provided by their constitutions, by the simple grant of the legislative power.

In the light of this great dominating principle of republican government, we feel constrained to hold that the option of the state in the instant case fell naturally and peculiarly within the sphere of legislative, rather than of executive, discretion. We do not deny, of course, that the legislature might, in its *776discretion, have provided for the calling in of the bonds by the governor upon such conditions and limitations as it might have seen fit to impose. Such a delegation of power to the governor (if it may he properly called a delegation of power where the legislature exercises its discretion in commanding executive action upon the happening of certain prescribed conditions), is not infrequent under our system, and is maintainable not only by a long line of authorities, hut also upon fully established principles of government. The vice in this branch of the argument for the state is to he found not in the contention that the legislature had the power to confer upon the governor authority to call in the bonds, hut in the assumption that it actually did so. In express terms, most certainly it did not. Such power is not to he conferred by doubtful inference. The failure of the legislature itself to exercise the state’s option, when recommended so to do by Gov. MbLaurin, raises a strong presumption that it was not its purpose that any other- department of the government should do so. It was fully advised of the state’s rights in the premises, it is conclusively presumed to have known of its undoubted prerogative to determine the state’s choice, and its failure to act was in itself an expression of the legislative purpose that the bonds of series B should not he called in at the expiration of five years. The fact that the legislature, at the session of 1900, after making specific appropriation for payment of interest for the ensuing two years on certain designated debts .of the state, appropriated the sum of $58,240 for each of the years 1900 and 1901 for payment of interest on other state indebtedness, strengthens the presumption, if that be possible, that it was not the legislative intent that the bonds of series B should be called in and paid on July 1, 1901. The bonds of series B must necessarily have been included in the words “other state indebtedness,” and the fact that the same amount was appropriated for the payment of interest for each year shows clearly that the legislature contemplated *777that the said bonds would remain outstanding and interest-bearing for the whole of the year 1901.

But even if it should be conceded that the exercise of the state’s option was an executive, rather than a legislative, function, or, this being denied, if it be conceded that the legislature intended, and, in effect, commanded, that the governor exercise the state’s option, still, in our judgment, the governor was without power to order the bonds in question paid, for thé simple reason that the'legislature had made no appropriation for their payment. Such an order, under such cir- , cumstances, was virtually an executive appropriation of thej money required to pay the bonds. The proposition so stated '< is its own refutation. Legislative control over the treasury, which we recognize as the supreme legislativé prerogative, involves the necessity of legislative appropriation in order to the 1 payment of moneys out of the treasury. This is a fundamental-' principle of constitutional law. It is written in express terms or by necessary implication in the constitutions of all free states. Clause 7, sec. 9, art. 1, of the constitution of the United States declares that “no money shall be drawn from the treasury but in consequence of appropriations made by law.” The constitution of Mississippi of 1869 declared that “no money shall be drawn from the treasury, except on appropriations made by law.” Vide sec. 26, art. 4. The constitution of 1832, art 7, sec. 7, declared that “no money shall be drawn from the treasury but in consequence of an appropriation m-ade by law;” and the same provision in the same language is found in the constitution of 1817, art. 6, sec. 8, under which Mississippi was admitted to the federal union. We cannot be persuaded that the omission from the .constitution of 1890 of a similar express provision indicates a purpose upon the part of the great jurists and publicists who framed that instrument to abrogate this essential principle of constitutional government. This fiscal scheme which they provided and ordained negatives the idea. By sec. 63 of the constitution it *778is provided that “no appropriation shall be passed by the legislature which does not fix definitely the maximum sum thereby authorized to be drawn from the treasury.” By sec. 64 it is provided that “no bill passed after the adoption of this constitution to make appropriations of money out of the state treasury shall continue in force more than six months after the meeting of the legislature at its next.regular session, nor shall such bill be passed except by the votes of a majority of all the members elected to each house of the legislature.” " Section 68 declares that “appropriation and revenue bills shall, at regular sessions of the legislature, have precedence in both houses over all other business, and ho such bills shall be passed during the last five days of the session.” Section 69 requires.that: “General appropriation bills shall contain only the appropriations to defray the ordinary expenses of the executive, legislative, and judicial departments of the government, to pay interest on ■state bonds, and to support the common schools. All other appropriations shall be made by separate bills, each embracing but one subject. Legislation shall not be engrafted on appropriation bills, but the same may prescribe the conditions on which the money may be drawn and for what purposes paid.” Section 73 empowers the governor to veto parts of any appropriation bill and approve parts of the same, and declares that the parts approved shall be law. When we consider all these provisions together, and note the jealous and wise restrictions imposed by the constitution upon legislative power in the matter of the appropriation of public moneys, we are constrained to believe that the constitution regards the legislature as the sole repository of power to make appropriations of moneys "to Le paid out of the state treasury. We can no more infer the possibility of an appropriation by executive action of moneys for the payment of public debts than we could the levying of taxes by executive action for the same purpose. If the one may be inferred, the other may also, and thus the entire con*779stitutional scheme for legislative control over the public revenues be subverted.

It cannot be maintained that the act which provided for the issuance of the bonds and reserved to the state an option to pay them at the expiration of five years was in itself an appropriation of money to pay the bonds at the end of five years. The creation of a debt is an entirely different thing from an appropriation for its payment. But even if the act had amounted to an appropriation, it must necessarily have failed, under sec. 64, upon the expiration of six months after the meeting of the legislature at its next regular session. A view almost identical with the one now considered was pressed upon this court by ■counsel widely famed for their great learning and power in the somewhat recent case of State of Mississippi v. Cole, generally known as the “Industrial Institute and College Case.” See 81 Miss., 174 (32 South. Rep., 314). It was insisted with great cogency and persuasiveness of argument that sec. 212 of the constitution, which provides that “the rate of interest on the fund known as the Chickasaw school fund, and other trust funds for educational purposes for which the state is responsible, shall be fixed, and remain as long as said funds are held by the state, at six per centum per annum from and after the close of the fiscal year A.D. 1891, and the distribution of said interest shall be made semiannually on the first days of May and November of each year,” was in itself an appropriation, self-operative and altogether sufficient, of money for the payment of interest on a debt solemnly declared by the constitution itself, which directed that the distribution of. interest thereon should be made semiannually on the first days of May and Movember of each year. Surely, if there could ever be a case in which the creation or declaration of a debt would operate as an appropriation for its payment, that were the case. And yet appellant’s contention as to the appropriations by inference or intendment was repudiated by this court in a very clear and strong opinion delivered-by that learned and righteous judge, *780Justice Terral. We quote at some length from the opinion because it is apposite in the instant case, and states most p;er-spicaeio-usly the views of this court as now constituted: “Who is to make the distribution, and to whom, and out of what funds, and in what manner ? The means of payment and all thevdetails are for the legislature to provide. What means has the state for payment except by taxation? It devolves on the legislature to provide by taxation for the maintenance of the state government in all its departments and the discharge of all its obligations. The state has no means of existence except by the exercise of the sovereign power of taxation. The constitution does not impose any taxes except the poll tax by sec. 243, and must be held to have left the discharge of the obligation declared by sec. 212 to be by the legislature, on which it devolves to provide ways and means for the discharge of all obligations of the state. There is no just ground for the supposition that the framers of the constitution intended to dispense with legislative action as to the payment of interest on trust funds, and to require it as to maintaining the existence of the state government, which cannot live without money, and cannot get money without legislative action. Hot an officer of the state can be paid his. salary except with money raised by taxation and after appropriation therefor by the legislature. The members of the legislature are dependent upon the said provisions for their pay. Uo money can come into the treasury or go out o’f it lawfully except as directed by the legislative act. Collection and disbursement belong to the legislature, and must be done as it directs. . . . Thus the constitution has placed the whole matter of obtaining money by taxation (except as to the poll tax mentioned) and of disbursing it in the hands of the legislature, guarded and restricted as stated. How, as already said, no salary or other obligation of the state can be lawfully paid except out of an appropriation therefor by the legislature definitely fixing the maximum sum which may be drawn on that account.” This opinion evinces a full grasp *781upon the part of the court of the doctrine of legislative control, except as limited by the constitution, over the collection and disbursement of the state’s revenues. It would be difficult to add to its force or to improve upon its admirable terseness and lucidity. . It alone would be determinative of the case at bar. The legislature, under our system,- having control of the public revenues, can alone provide for the payment of the public debts. It therefore is the guardian of the public credit, and is charged with the entire responsibility for the maintenance of the public faith and honor. A mete failure upon its part to make appropriation for the payment of public indebtedness, persisted in, would amount to repudiation; for without a legislative appropriation the creditor of the state is without power to enforce collection.

We will not be deterred from declaring these principles because of any ’administrative construction and practice to the contrary. If such practice has grown up under a mistaken conception of the law, it should be at once abandoned. No false construction of the constitution by any administrative department, however long continued, can ever ripen into law. Nor do we share the fears of the learned counsel for the state, who anticipates appalling consequences from a decision adverse to the state. The creditors whose bonds, were paid on July 1, 1901, have suffered no wrong. Their presentation of them for payment was, in law, purely voluntary. By accepting payment and surrendering the state’s obligations, they absolved the state from all further liability, both for principal and interest. The treasurer who made the payment cannot be injured. Should the state demand and enforce from him payment into the treasury of the money illegally paid upon the bonds, he would be immediately subrogated to the rights of the creditors whose bonds had been paid. The state has not suffered, and cannot suffer, so far as we are able to see, any injurious consequences from a declaration- by this court that the action of the governor was unwarranted and void. It has saved thereby some thou*782sands of dollars of interest, and -will only, by virtue of this decision, be liable to pay the interest, which the statute clearly contemplated should be paid, on those bonds of series B which were not presented for payment under the governor’s call. The demand of appellant was a liquidated demand. The money had been appropriated for its payment. It was á proper claim for audition. The auditor having refused to- audit and.allow it, the appellant had’ the right under the statute to1 bring his suit to have its validity judicially determined.

Reversed and remanded.