Hill v. Rae

158 P. 826, 52 Mont. 378, 1916 Mont. LEXIS 77
Montana Supreme Court·Decided June 2, 1916·No. No. 3,870·Published·Cited by 82 cases

Opinion

MR. JUSTICE SANNER

delivered the opinion of the court.

The plaintiff, alleging his status as citizen and taxpayer of Lewis and Clark county, Montana, brought this suit to enjoin the defendant, as state treasurer, from issuing, negotiating or selling certain bonds pursuant to the provisions of Chapter 28 of the Laws of 1915, commonly called the Farm Loan Act. Claim to the relief sought is based upon the contention that the Act is unconstitutional, and that, in connection with the proposed issue, negotiation and sale of bonds thereunder, the defendant has expended, and, unless restrained, will expend, largo sums of money belonging to the .state. The defendant demurred, questioning the plaintiff’s main contention, his right to maintain the suit, and the power of the court to hear it. The demurrer was sustained, not, however, on either of the technical grounds assigned, and the plaintiff, refusing to plead further, suffered judgment of dismissal to be entered. This appeal is from that judgment.

1. The defendant again insists that the court had no [1] jurisdiction to hear this suit, and the plaintiff none to maintain it—the former because “an injunction cannot be granted * * * to prevent the execution of a public statute, by officers of the law, for .the public benefit” (Rev. Codes, sec. 6121); the latter because it does not appear that the plaintiff will suffer any other or different injury than the taxpayers of the state in general. The assumption that the Farm Loan Act or its execution is for the public benefit begs the whole question; while the plaintiff’s right as citizen and taxpayer to maintain such a suit as this is settled by a long line of decisions in this state, extending from Chumasero v. Potts, 2 Mont. 242, to Poe v. Sheridan County, 52 Mont. 279, 157 Pac. 185.

2. In its general scope and purpose the Farm Loan Act is [2] assailed as obnoxious class legislation, or a denial of the equal protection of the laws, contrary to the Fourteenth Amend[381] ment to tbe national Constitution. “Whether this is so or not depends on what the Act designs to do, how it designs to do it, and what may be its effect upon those without as well as those within its scope. It may be analyzed as: (1) Creating a department of farm loans, for which the state treasurer is the commissioner or head, the several county treasurers are local representatives, the attorney general is the legal adviser, the state examiner is the auditor, and the several county attorneys are, as such, required to render legal service; (2) imposing upon that department the duty to formulate and receive applications for loans on nonurban property, to require and pass upon proof of title, productive value and other facts pertinent to the security offered, to formulate all mortgages given to secure such loans and be named as mortgagee therein, to formulate, issue and offer for sale the bonds intended as evidence of such loans, to collect all payments as they become due, and to pay the bonds as they mature according to the scheme set forth; (3) prescribing the character of property which shall be accepted as security and how it shall be held as such, the general nature of the bonds, the rate of interest they shall bear, how they shall mature, where they shall be payable, the manner in which payments shall be taken up, and the means to be employed in caring for cases of default; (4) appropriating $25,000 out of the state treasury, of which $5,000 is to be used for administrative purposes, but to be recouped, so far as may be, by taking one-eighth of each payment required of the mortgagors, and $20,000 to serve as a guaranty fund to assure the prompt payment of maturing bonds, with interest, and to be recouped by the proceeds of foreclosures against defaulting debtors, or, if necessary, by assessments upon nondefaulting owners whose mortgages are security for the same series of bonds; and (5) exempting from recording fees and from taxation the mortgages given to secure such loans. In short, for reasons not declared in the Act itself, it designs to assist agriculturists in securing loans on their real estate by and through -the activities of a public department, aided to greater or less [382] extent by public funds, and thus to confer upon that particular class certain privileges not as yet enjoyed by any other.

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Hill v. Rae, 158 P. 826, 52 Mont. 378, 1916 Mont. LEXIS 77 (Mo. 1916).

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