Grout v. Kendall

195 Iowa 467
CourtSupreme Court of Iowa
DecidedMarch 13, 1923
StatusPublished
Cited by40 cases

This text of 195 Iowa 467 (Grout v. Kendall) is published on Counsel Stack Legal Research, covering Supreme Court of Iowa primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Grout v. Kendall, 195 Iowa 467 (iowa 1923).

Opinion

Evans, J.

The ground of plaintiff’s prayer for relief is predicated upon the alleged unconstitutionality of the act in question. The act is too lengthy to be incorporated herein. Sufficient to say that it consists of fourteen sec-tions, and was passed in due form by the leg'is-lature, and was duly approved by the executive Qn March 23, 1921, and duly ratified by vote of the electors, as provided by Section 13 thereof,.at the general election held November 7, 1922. It provided an additional compensation of 50 cents per day of active service for every person who, being a resident of the state of Iowa, served in the military or naval service of the United States at any time between April 6, 1917, and November 11, 1918, subject to a maximum limitation upon such additional compensation of $350; it provided for the issue and sale of $22,000,000 of bonds for the purpose of [469]*469obtaining the funds with which to make the proposed payment; it provided the administrative method of distributing such funds to the appropriate beneficiaries; it provided for the levy of an additional direct annual tax upon all the taxable property o'f the state, at a rate sufficient to pay the annual interest and to pay and wholly retire the bonds progressively within a period of 20 years. The defendant officers were proceeding to carry out the duties laid upon them by this act, when this suit was instituted and temporary injunction was issued therein. The grounds upon which the constitutionality of the act is assailed may be briefly stated as follows:

1. That it is in violation of Section 1 of Article 7 of the Constitution.

2. That it is in violation of Section 2 of Article 7.

3. That it is in violation of Section 3 of Article 7.

4. That it is in violation of Section 4 of Article 7.

5. That it is in violation of Section 5 of Article 7.

6. That it is in violation of Section 6 of Article 1.

7. That it is in violation of Section 24 of Article 3.

8. That it is in violation of Section 29 of Article 3.

9. That it is in violation of Section 31 of Article 3.

10. That it is in contravention of the Fourteenth Amendment to the Constitution of the United States.

The emphasis of appellant’s argument is put upon the first five sections of Article 7 of the Constitution, and especially upon Sections 1 and 5. To these sections we shall, therefore, devote the principal part of our discussion herein. For convenience of reference, we here set forth such sections:

“Article 7. — State Debts.
“Section 1. The credit of the state shall not, in any manner, be given or loaned to, or in aid of, any individual, association, or corporation; and the state shall never assume, or become responsible for the debts or liabilities of any individual, association, or corporation, unless incurred in time of war for. the benefit of the state.
“Sec. 2. The state may contract debts to supply casual deficits.or failures in revenues; or to meet expenses not otherwise provided for; but the aggregate amount of such debts, direct and contingent, whether contracted by virtue of one or [470]*470more acts of the general assembly, or at different periods of time, shall never exceed the sum of two hundred and fifty thousand dollars; and the money arising from the creation of such debts shall be applied to the purpose for which it was obtained, or to repay the debts so contracted, and to no other purpose whatever.
“Sec. 3. All losses to the permanent school, or university fund of this state, which shall have been occasioned by the defalcation, mismanagement, or fraud of the agents or officers controlling and managing the same, shall be audited by the proper authorities of the state. The amount so audited shall be a permanent funded debt against the state, in favor of the respective fund sustaining the loss, upon which not less than six per cent annual interest shall be paid. The amount of liability so created shall not be counted as a part of the indebtedness authorized by the second section of this article.
“Sec. 4. In addition to the above limited power to contract debts, the state may contract debts to repel invasion, suppress insurrection, or defend .the state in war; but the money arising from the debts so contracted shall be applied to the purpose for which it was raised, or to repay such debts, and to no other purpose whatever.
“Sec. 5. Except the debts hereinbefore specified in this article, no debt shall be hereafter contracted by, or on behalf of this state, unless such debt shall be authorized by some law for some single work or object, to be distinctly specified therein; and such law shall impose and provide for the collection of a direct annual tax, sufficient to pay the interest on such debt, as it falls due, and also to pay and discharge the principal of such debt, within twenty years from the time of the contracting thereof; but no such law shall take effect until at a general election it shall have been submitted to the people, and have received a majority of all the votes cast for and against it at such election; and all money raised by authority of such law, shall be applied only to the specific object therein stated, or to the payment of the debt created thereby; and such law shall be published in at least one newspaper in each county, if one is published therein, throughout the state, for three months preceding the election at which it is submitted to the people. ’ ’

[471]*471By way of preliminary observation, let it be noted that Section 1 is an unqualified prohibition. Whatever is prohibited thereby is prohibited without benefit of clergy. But Sections 2, 3, 4, and 5 are each a qualified permission to contract debt. Under Section 2, the purposes for which the debt may be contracted are general and undefined, but the power to contract is qualified by a maximum of $250,000. Under Section 3, there is no maximum in amount; but the object for which an unlimited indebtedness may be created is limited and specific. The same may be said of Section 4. Under Section 5, a,wide door and an open sky are offered, provided that the indebtedness created thereunder shall be approved by a referendum to the electorate. No maximum is fixed. With these general observations, we may proceed to a consideration of the specific assignments of error:

I. Does the act in question violate Section 1 of Article 7'? We quote it again:

“Sec. 1. The credit of the state shall not, in any manner, be given or loaned to, or in aid of, any individual, association, or corporation; and the state shall never assume, or become responsible for the debts or liabilities of any individual, association, or corporation, unless incurred in time of war for the benefit of the state.”

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Bluebook (online)
195 Iowa 467, Counsel Stack Legal Research, https://law.counselstack.com/opinion/grout-v-kendall-iowa-1923.