JACOB KLEIN, Appellant, v. JOHN H. KINKEAD, Governor, et al., Respondents
Klein v. Kinkead
JACOB KLEIN, Appellant, v. JOHN H. KINKEAD, Governor, et al., Respondents.
[No. 1,080.]
JACOB KLEIN, Appellant, v. JOHN H. KINKEAD, Governor, et al., Respondents.
Statute to Embrace but One Subject — Section 17 oe Aeticle IV. of the Constitution Construed. — Held, that tlie general purpose of section 17 of article IV. of the constitution, that “each law shall embrace but one subject, and matter properly connected therewith, which subject shall be briefly expressed in the title,” is accomplished when a law has but 'one general object which is fairly indicated by its title.
Idem — Statute 1881, 59, Construed — Care of Insane. — The “ act to provide for the taking care of the insane of Nevada” provides for the construction of an asylum; that the money appropriated for that purpose shall bo taken from the state school fund, and in its place there shall be deposited state bonds, bearing interest, etc., and provides for the levy and collection of a tax to meet the payment of said bond: Held, that the act embraces but one subject, the care of the insane, which is fairly expressed in its title.
Idem. — The different steps by which the result is to be accomplished are not different subjects, but minor parts of the same general subject.
Bonded Indebtedness of State — Sections 2 and 3 of Article IX. of the Constitution Construed. — In construing these provisions of the constitution: Held, that the object in authorizing a bonded indebtedness was to enable the state to maintain its business upon a cash basis, and that the legislature has the power to direct the issuance of bonds at any time, so long as it does not conflict with the limitation as to the amount
Idem — Amount of Indebtedness. — In construing the various statutes relative to the territorial indebtedness: Held, that the act in question does not contemplate an indebtedness in excess of that authorized by the constitution. .
Idem — School Funds — Section 3, Article XI., Constitution. — Under section 3, article XI., of the constitution, the legislature is commanded to invest certain moneys received for educational purposes in United States bonds or the bonds of this state: Held, that the issuance of the bonds provided for in the act in question is not an evasion of the investment directed by the constitution.
Appeal from the District Court of the Second Judicial District, Ormsby County.
The facts appear in the opinion.
G. S. Varían, for the Appellant:
I. The title of the act does not embrace, the subject of sections 11 and 12. The act embraces- more than one subject. Neither the purpose to make a state loan and public debt, nor to invest school moneys, is indicated by the title. It may be that.members of the legislature who voted for the bill, as well as the people lured into security by its title, although willing to provide for the insane, would have found good and convincing objection to the contracting of a public debt, or the diversion of school moneys by a misnamed investment for such purpose. The ordinary mode of raising money to conduct aud maintain the public business is by taxation. The question of contracting a public debt involves grave considerations of necessity and public policy. The rate of interest and time of payment, together with the taxation required to meet the obligation, all present questions of great interest to the people, and upon which they are entitled to be heard. This is also true of the question of investing school moneys. There is a general law on the statute book giving the management and control of school moneys to a state board of education. (2 Comp. L. 3322.) There is no language in the title of the act which is elastic enough to include the purposes and subjects embraced in sections 11 and 12. The courts can not enlarge the scope of the title. The constitution has made the title the conclusive index to the legislative intent as to what shall have operation. {Mewherter y. Price, 11 Ind. 199; State v. Kinsella, 14 Minn. 524; Gaskin v. Meek, 42 N. Y. 186; People v. Allen, Id. 404; People v. Hills, 35 Id. 449; People v. O'Brien, 38 Id. 193; Byerson v. ZJtley, 16 Mich. 269; Gutlip v. Sheriff, 3 W. Ya. 588; People v. Father M. Society, 41 Mich. 67; Shepherd y. Helmers, 23 Kan. 507; State v. Silver, 9 Nev. 227.) Three subjects are embraced in the law: 1. Providing for the insane; 2. Providing for a state loan; 3. Providing for the investment of school funds.
II. The loan authorized is not “for the purpose of enabling the state to transact its business upon a cash basis.” (Secs. 2, 3, art. IX., Con.; sec. 1, art. XII., Con.) If building an insane asylum is to be considered as a part of the ordinary business of the state, the expense of doing so should be defrayed in the ordinary way out of the annual revenue. No necessity exists for the creation of a public debt to build an asylum. The power to contract such a debt is limited to the purpose “ of enabling the state” to do its business. If it already has the power and is able in another and the usual way to carry out its purpose, the constitutional provision does not apply. Eliminating sections eleven and twelve from the law, and there still remains an appropriation to carry it into effect. As an appropriation in anticipation of revenue, it is within the power of the legislature and can be made effective. (Const. Debates, 754-756, 762 et segr., 879; Ash v. Parkinson, 5 Nev. 15; Const., sec. 2, art. IX.; Slate v. School Fund, 4 Kan. 269.)
III. These sections authorize and direct the creation of a public debt in the sum of eighty thousand dollars, and the public debt of the state now exceeds the sum of three hundred thousand dollars. The territorial debt is wiped out by payment. (Stat. 1871, 81; 1873, 94; 1877, 191; 1879, 15; Const., art-. XYll., secs. 7, 24.) The constitution does not say that upon payment of that debt, the state may go on forever, under pretense of revivifying it under different forms and names, and contract debts equal in amount to-those paid. What it does say is that the assumption, i. e., the undertaking to pay the old debt, shall not prevent the state from contracting the additional indebtedness. {People v. Johnson, 6 Cal. 499; Ñongues v. Douglass, 7 Id. 65; Poclman v. Munson, 13 Barb. 188, 63; Scott v. Davenport, 34 Iowa, 208; State v. School Fund, 4 Kau. 270.)
IY. These sections direct the diversion and transfer of the moneys pledged to educational purposes to another fund and for other purposes, and are unconstitutional. (Art. SI., sec. 3.) To preserve the fund it is apparent that all investments must be made in securities that some time or other can be made available to repay the money. To invest moneys in bonds means to loan them, so that they will produce returns by v’ay of interest, and upon the expectation of realizing the principal upon the maturing of the bonds. The bonds of a state or of the general government are, within the contemplation of our constitution, always negotiable in open market. When such bonds are once upon the market they are the subject of purchase and sale, i. e., of investment; and it is in this sense only that the moneys belonging to the school fund can be “invested” by the trustees of the fund. It is vain to attempt to fritter away the express provisions of the constitution by contending that the words “investment” and “bonds” have any other meaning than that known to commerce and the business world everywhere. By “ state bonds” is meant something of value for purchase, investment, and income; not to the debtor state, but to the creditor capital, which owns it. There is no security in a paper never delivered by a state, and which remains in the vaults of its treasury. The power of the state is limited to an investment in constitutional bonds, already on th¿ market, containing an obligation to pay some one, a sum certain and at a time .certain, and secured by a revenue provided by authority. {State Treasurer v. Horton, 6 Kan. 354.)
Lewis & Deal, for Respondents:
. I. The act in question embráces but one subject and matters properly connected therewith, which subject is briefly expressed in the title. (Sec. 17, art. IY., Const., is mandatory; State v. Silver, 9 Nev. 231.) In the construction of the provisions of this section in state constitutions the courts have adopted a liberal rule in favor of their validity. (State v. Ah Sam, 15 Nev. 27; Murphy v. Menard, 11 Tex. 673; Cooley’s Const.. Lim. 146; Sun Mutual Ins. Go. v. New York, 4 Seld. 241; Brewster v. City of Syracuse, 19 N. Y. 117; People v. Mahaney, 13 Mich. 495.) When the title of an act expresses a general purpose or object, all matters fairly and reasonably connected with it, and all necessary measures which will facilitate its accomplishment, are proper to be incorporated in the act, and are germane to its title. (People v. Briggs, 50 N. Y. 562; Sedg. on Stats. 41; People v. Banlcs, 67 N. Y. 572; People v. Brinkerhoff, 68 Id. 265; Kerrigan v. Force, Id. 384; Billings v. The Mayor, Id. 415; Gloversville v. Hoioell, 70 Id. 290; Worthen v. Badgett, 32 Ark. 496; Gibson v. State, 16 Fla. 291; Gould v. Chicago, 82 111. 472; Farmers’ Ins. Co. v. High-smith, 44 Iowa, 330; Howland Coal Co. v. Brown, 13 Bush (Ky.), 681; Neio Orleans v. Dunbar, 28 La. Ann. 722; People v. Bradley, 36 Mich. 447; Perkins v. Du Val, 31 Ark. 236; Prescott v. City, 60 111. 122; People v. Wright, 70 Id. 388; People v. Brislin, 80 Id. 423; Crescent Gas Light Co. v. New Orleans, 27 La. Ann. 138; New Orleans v. New Orleans JR. JR. Co., Id. 414; Ohio v. Covington, 29 Ohio St. 102; Shields v. Bennett, 8 W. Ya. 74; Woodson v Murdoch, 22 Wall. 351; Tallahassee Mfg. Co. v. Glenn, 50 Ala. 489; State v. Price, Id. 568; Burke v. Munroe Co., 77 111. 610; Williams v. Slate, 48 Ind. 306; Harris v. People, 59 N. Y. 599; Morton v. Comptroller General, 4 S. C. 430; Hingle v. State, 24 Ind. 32.)
II. The act. is not special. It embraces all the insane, it is general in all its provisions, and it operates uniformly throughout the state. (McGrath v. Slate, 46 Md. 634; Cooley’s Const. Lim. 128, n.; State v. Commissioners, 29 Md. 520; Wheeler v. Philadelphia, 77 Pa. St. 348.)
III. The erection of buildings for the care of the insane is a part of the business of the state. This duty is enjoined upon the legislature in the most comprehensive terms. (Sec. 1, art. XIII.) At the time the constitution was adopted there was no insane asylum in the state, and it was the intention of the framers of that instrument, that proper laws should be adopted with provision for the support of the insane. The authority given to provide for the support of the insane carries with it the power to clo everything necessary to attain that end.
IY. The tenth and eleventh sections of the act do not authorize the transfers of moneys pledged for educational purposes to another fund for other purposes. (Sec. 3, art. XI. of the Constitution.) The state is prohibited by it from ever using for any purpose any part of the principal of the proceeds from the sources mentioned, but the interest of the principal is permitted to be used for the benefit of the public schools. In order that any benefit can be derived from the moneys in the state school fund, it is necessary that the principal should be invested either in United States bonds or Nevada state bonds. In obedience to this section the legislature has from time to ‘ time provided for the investment of ■ the moneys belonging to the state school fund. It is .made the duty of the proper state officers to cause the investment of the moneys in the state school fund, whenever there is any to invest, in United States securities, or in bonds of this state. There is no transfer of funds from the state school fund to any other fund authorized by sections 10 and 11 of the act in question within the prohibition of section 3, art. XI., but the authority is given to the state to borrow eighty thousand dollars upon the security of its bonds, as provided in that section. By the deposit of the state bonds in the state school fund, the credit of the state is pledged for the repayment of the money borrowed, and interest thereon. The test of. this is whether a debt is created by the transaction in favor of the state school fund. If there is, there is no transfer of moneys from the state school fund to another fund for other uses, but there is a strict compliance with the provisions of section 3, art. XI. of the constitution, and the laws passed to carry that section into effect.
Y. The public debt of this state does not exceed three hundred thousand dollars, and it will hot exceed it when the whole eighty thousand dollars appropriated by sections 10 and 11 is negotiated. (The various statutes and constitutional -provisions bearing upon this subject are discussed at length.)
By tlie Court,
Belknap, J.:
By an act passed at the last session of the legislature the respondents herein were, with others, created a board of commissioners for the care of the insane of this state. (Stats. 1881, 59.)
They are required by the act in question to cause to be erected upon land belonging to the state, near the town of Reno, an asylum of sufficient capacity for the care of one hundred and sixty patients. The act directs the time within which the building shall be completed, the material of which it shall be constructed, its maximum cost, and the manner in which contracts for its construction shall be made. It appropriates the sum of eighty thousand dollars for constructing and furnishing- the asylum, and in the eleventh section provides as follows: " The 'money herein appropriated shall be taken from the state school fund, and in its place shall be deposited eighty bonds of one thousand dollars each, bearing interest at the rate of four per cent, per annum; said bonds shall run for twenty years, but shall be redeemable by the state at its pleasure, after two years; said bonds shall be signed by the governor and state controller, countersigned by the state treasurer, and authenticated by the great seal of the state, and shall state in substance that the state of Nevada owes to the state school fund eighty thousand dollars, the interest on which sum, at four per cent, per annum, she agrees to pay during the life of said bonds, for the benefit of the common schools of the state; said bonds shall be lithographed, as is usual in similar cases, and deposited with the treasurer of the state. The interest on said bonds shall be, paid semiannually; on the first days of January and July of each year, on the written order of the state board of education to the state controller, directing him to draw his warrant for the amount of such semi-annual interest on the indigent insane interest and sinking fund herein created. All sums derived from the interest of said bonds shall go into the general school fund, for the support of the common schools of the state, and for the regular and prompt payment of which the faith and credit of the state is hereby pledged."
The twelfth section provides for the levy and collection of a tax, the proceeds of which are appropriated for the payment of the principal and interest of the bonds mentioned in the preceding section. Subsequent sections provide for the care of the insane pending the completion of the building, their management thereafter, and other matters, which are not drawn in question. Appellant claims that so much of the act as is contained in the eleventh and twelfth sections is unconstitutional, and seeks by this action to restrain respondents from issuing the moneys in the state school fund, as they are directed to do by the twelfth section.
The first ground of objection to the validity of the act is that it does not comply with the requirements of section 17 of article IY. of the constitution. This section provides that each law enacted by the legislature shall embrace but one subject and matter properly connected therewith, and that such subject shall be briefly expressed in the title. The title of the act is "an act to provide for the taking care of the insane, ,-f the state of Nevada," and it is inshted that the act not only embraces the subject expressed in the title, but two other subjects; that is to say, provision for a state loan and for the investment of moneys of the state school fund.
The restriction upon the legislature contained in section 17 of article 4, was considered by this court in the case of State v. Silver, 9 Nev. 231. It was then declared that the design of the constitution in requiring that each enactment should contain but one subject and matter properly connected therewith, was to prevent improper combinations to secure the passage of laws having no necessary or proper rel diou, and which, as independent measures, could not be carried; and that the object of the other requirement, that the subject of the act should be expressed in the title, was that neither the members of the legislature nor the public should be misled by the title.
"The constitution does not require that the title of an act should be the most exact expression of the subject which -could be invented," said the court of appeals of New York in the matter of the petition of Mayer (50 N. Y. 504). "It is enough if it fairly and .reasonably announces the subject of the act."
"The general purpose of these provisions is accom-lished, " says Judge Cooley in his Treatise on Constitutional Limitations, page, 143, ' ' when a law has but one general object, which is fairly indicated by its title. To require every end and means necessary or convenient for the accomplishment of this general object to be provided for by a separate act relating to that alone, would not only be unreasonable, but would actually render legislation impossible."
It has accordingly been held in Kentucky, under a similar constitutional provision, that an act entitled ' 'An act to amend the charter of the Cincinnati and Covington bridge company," a provision that the bridge company might sell and the city of Covington might subscribe for one hundred thousand dollars of the stock, and sell the bonds of the city and levy a tax to pay them, was valid. The court said: "None of the provisions of a statute should be regarded as unconstitutional where they all relate directly or indirectly to the same subject, have a natural connection, and are not foreign to the subject expressed in the title. The power to sell stock to the city of Covington necessarily requires that a power should be conferred on the latter to subscribe and pay for it; for without.such a power the power to sell would be nugatory. The subject is the same, although it relates to a transaction to which two corporations are parties, one of which only is named in the title of the act. If by the act a power had been conferred on the city of Cov-ington to subscribe for the stock of any other corporation but the one named in the title of the act, then the provision would fall within the constitutional prohibition, and be clearly null and void. But as it is restricted in its operation to matters pertaining to the bridge company, and the provisions of the act, so far as they relate to the city of Cov-ington, are apposite to the purpose which was intended to be effected by its passage, and are sufficiently indicated in its title, it is not liable to this constitutional objection. It was certainly not necessary for the legislature to pass two separate acts to effect the object it had in view — one to enable the company to sell the stock to the city, and another to enable the city to subscribe and pay for it. The constitutional provision must receive a rational construction, and not one that would lead to such an unnecessary and absurd result." (2 Met. (Ky.) 219.)
In People ex rel. Hayden v. City of Rochester, 50 N. Y. 525, it was held that, in an act entitled "an act in relation to the erection of public buildings for the use of the city of Rochester," a provision for selecting and procuring a site for the contemplated buildings was valid under a similar constitutional provision, upon the ground that it was a necessary step towards the erection thereof. The court said: "But buildings can no more be erected without sites than without materials or means to defray the expense. All these are details, and no reference thereto in the title is required. • The act in all its parts may and will, with the site selected;' be fully executed without any violation of the constitution."
So, under a similar clause in the constitution of Illinois, it was held that an act entitled "an act to authorize the town of Ottawa to erect two bridges across the Illinois and Michigan Canal," and containing provisions for raising money to defray the cost of such bridges, did not embrace more than one distinct subject, that the title was properly expressed and the act valid. (Ottawa, v. The People, 48 Ill. 233. See also Brewster v. City of Syracuse, 19 N. Y. 116; Gordon v. Cornes, 47 Id. 608; People ex rel. Rochester v. Briggs, 50 Id. 555; People ex rel. Burroughs v. Brinkerhoff, 68 Id. 259.)
We are unable to find anything in the act under consideration that does not relate to the care of the insane. The general subject of the act includes not only the construction of an asylum but necessarily the means- by which the work is to be accomplished, and the proceedings necessary to be adopted for the purpose of defraying the expense to be incurred. Certainly no one interested in the act would fail to comprehend from its title that it contem plated the expenditure of money, for the care of the insane necessarily involves such expenditure.
The legislature is the sole judge of the mode by which this money shall be provided, and was equally authorized to raise it'by loan or appropriate it from the general revenues. The act has but one subject, and that is the care of the insane. All of its provisions have this common object in view. The different steps by which the result is to be accomplished are not different subjects, but minor parts of the same general subject, and legislation would be impossible if all of these details were required to be provided for by distinct enactments.
The second objection to the validity of the act arises under sections 2 and 3 of article IX. of the constitution. By section 2 the legislature is required to provide for an annual tax sufficient to defray the estimated expenses of the state for each fiscal year, and in case the expense shall in any year exceed the revenue, the legislature shall provide for levying a tax sufficient, with other sources of income, to pay the deficiency as well as the estimated expenses of the ensuing year or two years. Section 3, for the purpose of enabling the state to transact its busiuess upon a cash basis, authorizes a bonded debt which shall never, in the aggregate, exceed the sum of three hundred thousand dollars, except in certain enumerated cases. It is contended that the building of an insane asylum is a part of the ordinary business of the state, and in view of the provisions contained in the sections mentioned, the expense of constructing such building should be taken from the revenues arising from taxation.
The authority to create a bonded debt is subject to no restrictions or conditions whatever save that such debt shall not exceed the sum of three hundred thousand dollars, and the law authorizing it shall provide for its payment within twenty years by taxation. The constitution nowhere declares the necessity which shall exist as prerequisite to the issuance of bonds or the making of a loan under this section, nor the use to which money obtained by such loan shall be applied. From the language employed by the instrument itself, as well as from the debate in the convention upon those portions of the constitution relating to state .finances, the object in authorizing a bonded indebtedness was to enable the state to maintain its business upon a cash basis, notwithstanding financial exigencies, without resorting to onerous taxation.
For the first three years subsequent to the adoption of the constitution, the legislature was restricted from levying a tax for state purposes exceeding one per cent, per annum. (Sec. 24, art. XVII.) In the discussion of this restriction in the constitutional convention it was in several instances urged that if this rate of taxation failed to produce the necessary revenue to defray the expenses of the state, relief could be had by the issuance and sale of the bonds of the state to the amount of three hundred thousand dollars, under the provisions of section 3 of article IX. No suggestion was ever made, so far as appears from the debates, of the right of the legislature to seek relief at any time by this means. It has the power to direct the issuance of bonds under this clause at any timé so long as it does not conflict with the limitation as to amount.
The next objection is that the act contemplates an indebtedness in excess of that authorized by the constitution. Under section 7 of article XYII. of the constitution, the state was required to assume all debts and liabilities of the territory of Nevada unpaid at the time of the admission of .the state into the Union, but it was provided that such assumption should not prevent the state from incurring the three hundred thousand dollars indebtedness as provided in section 3 of article IX. already mentioned. At the session of 1871 the legislature determined the territorial indebtedness to be three hundred and eighty thousand dollars, for which amount a loan, bearing interest at nine and one half per cent, per an-num, payable in fifteen years, was by authority of law negotiated. (Stats. 1871, 80.)
Before this loan became due, and for the evident purpose of reducing the rate of interest which the state was paying upon it, the legislature, by acts approved March 8, 1877, and January 28, 1879, respectively, authorized the purchase and retirement of the bonds issued under the act of 1871, and the issuance of a new bond for three hundred and eighty thousand dollars, bearing interest at the rate of five per cent, per annum. In the purchase of the bonds of 1871 the sum of three hundred and twenty-five thousand dollars belonging to the school fund was used, and the new bond was executed to and became the property of the school fund.
These proceedings it is claimed amounted to a payment of the bonds of 1871, and extinguishment of the territorial indebtedness; that the three hundred and eighty thousand dollars in bonds now outstanding, and in the school fund, exceeds the maximum indebtedness allowed by the constitution, and'therefore the legislature has no authority to issue the eighty thousand dollars'of bonds provided for by this act. But this position is untenable. The proceedings by which the bonds of 1871 were retired, and the three hundred and eighty thousand dollar bond, now in the school fund, issued, did not extinguish the territorial indebtedness. That indebtedness still exists, but it is evidenced by a different obligation; that is to say, by a'bond for three hundred and eighty thousand dollars, bearing five' per cent, per annum interest, instead of bonds for the same amount, bearing nine and one half per cent, interest per annum.
Finally, objection is made that the eleventh section of the act directs a transfer of the moneys of the school fund to another fund and for another purpose. "Under section 3 of article IX. of the constitution, the proceeds of the sales of public lands donated to the state by the general government, as well .as moneys received from other sources, are solemnly pledged for educational purposes, and required to be placed in the school fund, and not be transferred to any Other fund or for other use. This fund the legislature is commanded to invest in "United States bonds or the bonds of this state," and the interest only of the capital of the fund shall be used for educational purposes.
In this behalf it is urged that the issuance of the bonds provided for in this act is an evasion of the investment di rectecl by tbe constitution; tbat tbe constitution contemplates tbe purchase. of bonds existing at tbe time of tbe passage of tbe enactment authorizing tbe loan. This objection is without force. It is manifest that tbe bonds provided for by this act are as much tbe bonds of tbe state as if they bad been outstanding at tbe time of tbe passage of tbe act, and were thereafter to be purchased for tbe benefit of tbe school fund. Tbe legislature primarily directs tbe investment of tbe moneys in this fund, and so long as it complies with tbe directions of tbe constitution, and makes tbe loan upon tbe securities required by tbat instrument, the loan will be valid. A discretionary power is conferred to invest tbe fund either in the bonds of tbe state or of the general government, and any attempt on tbe part of courts to supervise 'such discretion would be an invasion of tbe authority of tbe legislature.
Tbe act being constitutional, tbe judgment of tbe district court refusing to restrain respondents from proceeding, should be affirmed, and it is so ordered.