Naftalin v. King

Frank T. Gallagher, Justice.

This is an appeal from a judgment entered pursuant to plaintiff’s motion for judgment on the pleadings.

*499By Ex. Sess. L. 1959, c. 90, the legislature appropriated from the Minnesota State Building Fund to the commissioner of administration $38,049,982; to the commissioner of conservation $487,480; and to the regents of the University of Minnesota $14,457,150; making an aggregate, including reappropriations, of $52,994,612. Such appropriations are by specific items stating the location, institution, and particular purpose of each expenditure.

The question now presented is the constitutionality of c. 90, which was determined in the affirmative by the district court. This court was confronted with the precise issue now before us in Naftalin v. King, 252 Minn. 381, 90 N. W. (2d) 185. There we decided that a state indebtedness is not created within the meaning of Minn. Const, art. 9, § § 5, 6, and 7, where certificates of indebtedness are authorized and issued pursuant to a legislative act which makes them exclusively payable from a special fund, the proceeds of which are derived from the levy and collection of a tax authorized for that particular purpose. It is our opinion that the same rale should be used in the instant case.

In State ex rel. Foster v. Naftalin, 246 Minn. 181, 210, 74 N. W. (2d) 249, 267, with respect to the rale of stare decisis we stated:

* * it is true that stare decisis does not apply with the same strictness in some fields of law as in others. In the field of real estate or property law, for instance, it is applied with the greatest force for the reason that in those fields property rights may have become vested in reliance upon our decision. However, it is not inapplicable in any field. Before decisions of this court should be overruled or ignored in subsequent cases, there should be some good reason for doing so. That is particularly true of decisions construing our constitution. Where such decisions have stood unchallenged for many years they should not be lightly overruled.”

In that case the doctrine of stare decisis was applied even in view of the fact that no business or property rights were involved which would be impaired by the application of the rule. We stated (246 Minn. 205, 74 N. W. [2d] 264):

*500“* * * Government by law instead of by man, which is the main bulwark to our democratic form of government, demands a decent respect for the rule of stare decisis in order that citizens of this state will be assured that decisions of the court are good for more than ‘one trip and one day only.’ ”

The rule of stare decisis is not an inflexible rule of law. It is a guiding policy of the law when all factors involved in following or not following the rule are taken into consideration. 17 Dunnell, Dig. (3 ed.) § 8819. Whether or not the rule of stare decisis should be followed is a question entirely within the discretion of the court which is again called upon to consider a question once decided. Hertz v. Woodman, 218 U. S. 205, 212, 30 S. Ct. 621, 622, 54 L. ed. 1001, 1005; Park v. Employment Security Comm. 355 Mich. 103, 94 N. W. (2d) 407.

In view of the fact that the applicability of the doctrine of stare decisis is discretionary with the court, we must consider the factors here involved. In the present case the appropriations, including reappropria-tions, from the Minnesota State Building Fund involved a total of $52,994,612. This amount is for the construction, alteration, repair, and rehabilitation of various state hospitals — the Minnesota State Sanatorium; Brainerd, Cambridge, and Faribault state schools and hospitals; Ramsey County Preventorium; Braille and Sight Saving School; School for the Deaf at Faribault; Gillette State Hospital for Crippled Children; and the Owatonna State School. In addition the appropriation includes funds to be used in connection with the state reformatories for men and women, state prison, training schools for boys and girls, various youth camps, and the Minnesota Youth Treatment Center. Also funds for use at the five state colleges; the University of Minnesota; and other appropriations for the Capitol group of buildings, land acquisitions, parks, and contingencies.

It might appear at first glance that no vested rights would be impaired by reversing our former decision of Naftalin v. King, supra, and holding c. 90 unconstitutional. However, the complaint in this action indicates that the State Board of Investment has agreed to purchase $3,300,000 of tiie certificates of indebtedness issued pursuant to *501c. 90. Assuming that this allegation is correct inasmuch as there is no denial, then it would appear that vested rights would be impaired by holding c. 90 unconstitutional. Also, although not involving vested rights, certainly the reliance upon our former decision as reflected by the legislature in passing c. 90 would be impaired.

If we failed to follow Naftalin v. King, supra, in connection with c. 90 at this time, the construction, alterations, repairs, and rehabilitation of the various state buildings referred to above would be curtailed and chaos, delay, hardship, and confusion might well result. To tie up the state building program by declaring that the $52,994,612 cannot be made available will create a problem which in our opinion would be far more serious than is now recognized by the public. It can produce hardship in our mental institutions which are already crying for relief; it can retard educational development and progress and cause unnecessary delay in meeting a situation which must be faced before a constitutional amendment can be submitted and approved. After all, a majority of both houses of the 1959 legislature passed c. 90, now under consideration, even though the house and senate did not get together on the matter of submitting the constitutional amendment. The final vote on c. 90, after being submitted to a Conference Committee, was 57 yeas and 5 nays in the senate (Journal of the Senate, 1959, p. 2535), and 71 yeas and 50 nays in the house (Journal of the House, 1959, Ex. Sess., p. 774).

We are not disregarding the fact that a close examination of the decisions upon which the previous Naftalin v. King case was decided indicates that they were decided upon fallacious reasoning. Brown v. Ringdal, 109 Minn. 6, 122 N. W. 469, which was relied on in Naftalin v. King, supra, was in turn resolved by following, as controlling, Fleckten v. Lamberton, 69 Minn. 187, 72 N. W. 65. The Fleckten case did not involve the validity of bonds or certificates of indebtedness payable out of general ad valorem taxes spread over a number of years in the future. The clear language of the opinion is that an indebtedness could not be incurred beyond the constitutional limit. The Brown case, on the other hand, did involve the issuance of certificates of indebtedness in anticipation of the collection of a tax *502thereby directed to be levied. The opinion stated, we believe erroneously, that (109 Minn. 12, 122 N. W. 470) “The certificates in and of themselves create no indebtedness against the state. * * * and they are not general obligations of the state.”

The Naftalin case, although relying on the Brown case, established a proposition relative to certificates of indebtedness which are to be retired from a state building fund, to which fund is appropriated moneys derived from a levy upon all the taxable property in the state. It established that such certificates when once issued are irrevocable obligations of the state and, until paid, pledge the credit of the state toward their repayment out of general ad valorem taxes levied against all the property of the state.

It follows logically from this that the issuance of such certificates creates a debt within the meaning of Minn. Const, art. 9, § 5, and to the extent that such amount exceeds $250,000, it is a violation of that provision.

Nevertheless, the Brown case was followed in Naftalin v. King, supra, which was decided largely because of the prior decisions of long standing.

As previously stated, the application of the doctrine of stare decisis is within the discretion of the court. It should be just as discretionary for the court to follow stare decisis as not to follow the doctrine. It therefore appears that stare decisis, in a given case, should be followed where less injustice will result from the continuation, as under the circumstances here, of an erroneous theory, than will follow from its correction. Also, that the exercise of our discretion in applying the doctrine of stare decisis should not necessarily be restricted to cases where vested contract rights pursuant to contract are involved. State ex rel. Foster v. Naftalin, 246 Minn. 181, 74 N. W. (2d) 249. In the exercise of discretion to invoke the doctrine of stare decisis, we base our opinion primarily on the reliance that has been placed upon the holding in our former Naftalin v. King decision, and on the delay and confusion which could result by the curtailment of that part of the building program provided for in Ex. Sess. L. 1959, c. 90, in the event our former decision were not followed in this case.

*503We do not believe that our decision could declare c. 90 constitutional and at the same time prospectively declare unconstitutional — with binding effect — similar laws which might be passed in the future pledging the credit of the state as security. However, considered dicta can be expressed which would in the future eliminate the primary reason for now adhering to stare decisis and holding Ex. Sess. L. 1959, c. 90, constitutional. It is true that obiter dicta cannot bind future decisions of courts. However, where dicta are found in an opinion which are considered dicta and not merely in the nature of passing comment, they should not be ignored and are even entitled to great weight. In Goodson v. United States (D. Minn.) 151 F. Supp. 416, 420, the court utilized this principle in determining local law, stating:

“* * * ‘Any convincing manifestation of local law, having a clear root in judicial conscience and responsibility, whether resting in direct expression or obvious implication and inference, should accordingly be given appropriate heed’. * * *

“The dicta we have considered here are dicta which the Minnesota court considered, and, therefore, they are entitled to great weight and should be followed unless it can be shown that there is good reason why the Minnesota court would not follow them when presented with the issue.”

In a footnote in our 1958 decision of Naftalin v. King, supra, we said that largely because of our prior decisions of long standing we were holding that the building certificates of indebtedness authorized by the 1955 and 1957 acts did not contravene Minn. Const, art. 9, § § 5, 6, and 7, however, that it was the opinion of all the members of the court at that time that a word of caution as to future state finances was in order.

To the extent that dicta may be binding, and to the extent to which others may rely on the instant decision in passing laws similar to Ex. Sess. L. 1959, c. 90, it is our opinion now that if this court is agáin presented with the issue in connection with future laws pledging the credit of the state as security such laws should be declared in violation of Minn. Const, art. 9, § § 5, 6, and 7.

Affirmed.