Parkin Prtg. & Stat. Co. v. Ark. Prtg. & Litho. Co.

354 S.W.2d 560, 234 Ark. 697, 1962 Ark. LEXIS 750

• Court: Supreme Court of Arkansas
• Decided: February 26, 1962
• Docket: 5-2692
• Status: Published

Opinions

Ed. F. McFaddin, Associate Justice.

This litigation concerns Article 19, Section 15, of our Arkansas Constitution, which reads:

“All stationery, printing, paper, fuel, for the use of the General Assembly and other departments of Government, shall be furnished and the printing, binding and distributing of the laws, journals, department reports and all other printing and binding, and the repairing and furnishing the halls and rooms used for the meetings of the General Assembly and its committees, shall be performed under contract to be given to the lowest responsible bidder, below such maximum price and under such regulations as shall be prescribed by law. No member or officer of any department of the government shall in any way be interested in such contracts, and all such contracts shall be subject to the approval of the Governor, Auditor and Treasurer.”¹

At the outset, we identify some of the persons and companies whose names appear herein:

(a) Appellant Parkin Printing & Stationery Company (hereinafter called “Parkin Company”) is an Arkansas corporation engaged in the printing and stationery business. Parkin Company is a family corporation, with 2,226 shares of capital stock outstanding, of which amount Harry W. Parkin (President of the corporation) owns 980 shares, and the remaining shares are owned by Mr. Parkin’s sister, brother-in-law, mother, and wife; and that stock situation has existed since January, 1957.

(b) Harry W. Parkin is, and has been since 1957, a member (and now Chairman) of the State Highway Commission of Arkansas, having been appointed and confirmed for a 10-year term in accordance with Amendment No. 42 to the Arkansas Constitution, which is the organic law creating the State Highway Commission.

(c) Cross-appellees are the Governor, Secretary of State, State Treasurer, and State Auditor.

(d) The appellee Arkansas Printing & Lithographing Company (hereinafter called “Arkansas Printing Company”) is an Arkansas corporation engaged in the printing and stationery business in competition to Parkin Company.

(e) The Arkansas Stationery & Furniture Company is a subsidiary corporation wholly owned by the Arkansas Printing Company and will sometimes be referred to under that name.

(f) Keith J. Arthur is an individual taxpayer and citizen of the State of Arkansas.

In accordance with <§> 14-301 et seq. Ark. Stats., the Secretary of State duly advertised for bids on contracts of printing and supplies for the biennium beginning July 1, 1961 and ending June 30, 1963. Several scores of separate contracts were to be awarded. Parkin Company was the low bidder on fifteen of the contracts,² which were awarded to it on July 11, 1961, with all legal requirements observed, i.e., the signing of the contracts and the approval by the designated State Officials. The performance bonds of the Parkin Company on the fifteen contracts were signed by Harry W. Parkin as guarantor.

On November 24, 1961, Arkansas Printing Company and its subsidiary company, and Keith J. Arthur, as a citizen and taxpayer, filed this suit in the Pulaski Chancery Court against Parkin Company and the four State Officials, alleging that all of the fifteen contracts awarded Parkin Company ‘ ‘. . . are void as contracts on behalf of the State of Arkansas because they are in violation of the Constitution of the State of Arkansas. Harry W. Parkin is and was at all times mentioned herein the president and a principal stockholder of the defendant Parkin Printing-& Stationery Co. Said Harry W. Parkin is also a member and the chairman of the Arkansas State Highway Commission. Under Amendment No. 42 to the Constitution of the State of Arkansas, said Highway Commission is ‘vested with all the powers and duties now or hereafter imposed by law for the administration of the State Highway Department, together with all powers necessary or proper to enable the commission or any of its officers or employees to carry out fully and effectively the regulations and laws relating to the State Highway Department.’ As chairman of said commission, Harry W. Parkin is the highest ranking member and officer of the State Highway Department, a department of the government of the State of Arkansas. Section 15 of Article 19 of the Constitution of the State of Arkansas provides in part ‘No member or officer of any department of the government shall in any way be interested in such contracts . . .’ ”

The four State Officials, appearing by the Attorney General, filed a general denial. The Parkin Company, after admitting some allegations as to the status of officials, denied all other material allegations of the complaint. Upon issues joined, the cause was heard by the Chancery Court on evidence ore tenus and resulted in a decree finding and declaring the said fifteen contracts awarded the Parkin Company to be void as in violation of Article 19, Section 15, of the Constitution. Prom that decree Parkin Company has appealed, urging two points.³ There is also a cross-appeal: the Arkansas Printing Company alleged that its subsidiary was the next lowest bidder on Contract No. 40 awarded to Parkin Company and prayed that the State Officials be required to award Contract No. 40 to Arkansas Stationery & Furniture Company as the next low bidder. Such relief was refused, and from that portion of the decree the Arkansas Printing Company and its subsidiary have cross-appealed.⁴

As we stated at the outset, this opinion requires a study of Article 19, Section 15, of the Arkansas Constitution, which section consists of two sentences. The first sentence identifies certain items for contract letting. These are stationery, printing, fuel, binding, furnishing and repairing the halls and rooms of the General Assembly, etc. As to the contracts on these items identified in sentence one, there is this clear prohibition in sentence two: “No member or officer of any department of the government shall in any way be interested in such contracts. . . .” Just why the framers of the Constitution selected the items in sentence number one is of no concern. The fact remains that the Constitution named these items definitely and clearly and there is no denial that all of the fifteen contracts awarded to Parkin Company contain items specified in sentence number one. The defense of Parkin Company is that sentence number two does not apply to Harry W. Parkin for the reasons hereinafter to be considered.

The fact that the Parkin Company which received the fifteen contracts is a corporation and a separate entity from Harry W. Parkin, the individual who is a member of the Highway Commission, is a distinction of no consequence, and is not even relied upon by Parkin Company in this case. Our holding in Peoples Savings Bank v. Big Rock Stone Co., 81 Ark. 599, 99 S. W. 836, eliminates any such “separate entity” defense. In the cited ease, Mr. Lenon as Mayor of Little Rock was President of the Board of Public Affairs which let paving contracts and determined performance thereof; and Mr. Lenon was also a stockholder and President of the Peoples Bank. Torbert held a contract from the City of Little Bock for paving, and in obtaining a loan from Peoples Bank, Torbert made an assignment of his claim against the City on the contract. In deciding the case, Judge Biddiek said:

“The only question in this case is whether it is against public policy to permit a bank, of which- the mayor of a city is a stockholder and president, to take an assignment of the claim of a contractor against the city for the price of work which he has performed for the city, and which work must be inspected and accepted for the city by a board of which the mayor is chairman.”

And the question was answered by the Court in this language:

“By this assignment the mayor, as president and stockholder of the bank, became interested in a contract, the work done under which he, as member of the board of public affairs, had to approve and accept for the city. The statute, declares that all such contracts ‘shall be utterly null and void,’ and this is only a restatement of the rule of the common law. Such contracts being illegal, no court can enforce them, for to do so would be for ‘the law to aid in its own undoing.’ Berka v. Woodward, 125 Cal. 119, 45 L. R. A. 420; Melliss v. Shirley Local Board, 16 Q. B. Div. 446; Brown v. Tarkington, 3 Wall (U. S.) 377; Oscanyan v. Winchester Arms Co., 103 U. S. 261; 15 Am. & Eng. Enc. Law (2 Ed.) 971.”⁵

With all the above explanation, we come to the insistence of Parkin Company that Harry W. Parkin is not a member or officer of “any department of the government” as those words were understood and meant in the Constitution. Parkin Company points out that in Article 4, Section 1, the Constitution provides:

“The powers of the government of the State of Arkansas shall be divided into three distinct departments, each of them to be confided to a separate body of magistracy, to-wit: Those which are legislative to one, those which are executive to another, and those which are judicial to another”;

that Article 5, Section 1, describes the legislative ;⁶ that Article 6, Section 1, describes the executive;⁷ and that Article 7, Section 1, describes the judicial department.⁸ The appellant insists that the State Highway Commission is not in any of these three departments of government and so Harry W. Parkin is not a member of “any department of the government.”

We cannot agree with appellant in this very adroit argument which, if accepted, would permit the Legislature to create an agency not in any department and thereby make such agency exempt from Constitutional restraints. This novel and intriguing argument apparently overlooks the fact that our present State Highway Commission was created by Amendment No. 42 to our Constitution, which amendment was proposed by the General Assembly (under Article 19, Section 22 of the Constitution), and adopted by the People.in the General Election in November 1952. Section 1 of the Amendment No. 42 provides:

“There is hereby created a State Highway Commission which shall be vested with all the powers and duties now or hereafter imposed by law for the administration of the State Highway Department, together with all powers necessary or proper to enable the Commission or any of its officers or employees to carry out fully and effectively the regulations and laws relating to the State Highway Department.”

The quoted languáge says that the State Highway Commission shall have charge of the “State Highway Department.” So, if the Highway Department is not a subdivision of the Executive Department (as it is), then the People have created a fourth department of government. The People who adopted the Constitution in 1874 reserved the right to amend it; and if they wanted to create a fourth, fifth, or sixth department of government, they had and have the right to do so. And all such newly created departments would necessarily come within the purview of Article 19, Section 15, because an Amendment to the Constitution becomes a part of the whole document for the purpose of uniform construction. (Cooley on Constitutional Limitations, 8th Ed. p. 129.) So even if the Highway Department should not be a sub-department of the Executive Department (and that is what it is, just as the Bank Department,⁹ the Insurance Department,¹⁰ and other departments or branches are sub-departments of the Executive Department), still the use of the word “Department” in Amendment No. 42 would bring the officers of the Highway Department within the purview of Article Í9, Section 15.

We held in State Highway Comm. v. Nelson, 191 Ark. 629, 87 S. W. 2d 394, that a suit against the State Highway Commission was a suit against the State. That Harry W. Parkin is an officer of the State cannot be gainsaid when his appointment was confirmed by the Senate as provided in Amendment No. 42; he took the Constitutional oath of office (Ark. Const. Art. 19, Sec. 20); and then also took the special oath of office required of State Highway Commissioners (§ 76-215 Ark. Stats.). So we conclude that Harry W. Parkin was a “member or officer of any department of the government’' within the purview of the inhibition contained in Article 19, Section 15 of the Arkansas Constitution.

The appellant insists that by Act of November 28, 1874, the Legislature made a contemporaneous interpretation of Article 19, Section 15 of the Constitution, and that such contemporaneous construction should have great weight with this Court; and also that by other enactments over the years, the Legislature has made interpretations of this Constitutional provision. The appellant also insists that, over the years, the Executive Department has made interpretations of this Section 15 in that members of various Boards have dealt with the State, even in printing matters. The appellant argues that this Court should follow such Legislative and Executive interpretations, but we reject this argument of appellant. It is the duty of the Judicial Department to interpret the Constitution, and we cannot abrogate our duty by adopting interpretations made by either of the other Departments in conflict with plain language. Legislative and/or Executive interpretations are to be given consideration only when the Constitutional provision is ambiguous. (Cooley on Constitutional Limitations, 8th Ed. p. 149.) There is no ambiguity in the plain language which says: “No member or officer of any department of the government shall in any way be interested in such contracts . . .” The Constitution says what it means and means what it says, and we are sworn to follow it. The words of Chief Justice Hart in Hargraves v. Solomon, 178 Ark. 11, 9 S. W. 2d 797, are like a clarion call:

“"We are not concerned with the wisdom or expediency of the provision of the Constitution under consideration. Our duty is to carry out the provisions of the Constitution as indicated by its plain language. ’ ’

The appellant’s second point is that the “. . . policy of Arkansas does not prohibit a member of the State Highway Commission from holding and performing printing contracts let by the Secretary of State in a procedure prescribed by law and including competitive public bidding.” This second point becomes immaterial since all of the contracts must fall because of the Constitutional prohibition, and so the public policy argument becomes of no moment. Such was the view of the Chancery Court. "We do, however, desire to specifically point out that in affirming the decree we are merely concerned with the items specified in Article 19, Section 15 of the Constitution. As regards items not contained in that section, and as concerns relationship of board members selling such other items, we call attention to our case of Fiser v. Clayton, 221 Ark. 528, 254 S. W. 2d 315, in which members of one board were permitted to sell to other agencies. That holding resulted from statutory enactment, as distinguished from the Constitutional prohibition here presented. There is not the slightest indication of any irregularity, overreaching, or fraud in this ease. The bids were publicly opened and read, and the Parkin Company was the low bidder; and the saving to the State on the Parkin bid over the next lowest bidder is estimated to be more than $28,000.00 for the biennium. Everything was honest and above-board; but as aforesaid it is not for us to substitute our views against the plain wording of the Constitution.

Finally, we come to the cross-appeal of the Arkansas Stationery & Furniture Company. It was the next lowest bidder on Contract No. 40 awarded to Parkin Company and claimed that since the Parkin bid was void, the State Officials should have awarded Contract No. 40 to Arkansas Stationery & Furniture Company. The prayer was that the State Officials be required to make such award. The Chancery Court was correct in denying the prayed relief, since a petition for mandamus in the Chancery Court was not the proper remedy. Democrat Printing & Lithographing Co. v. Parker, 192 Ark. 989, 96 S. W. 2d 16; and Consumers Co-op. v. Hill, 233 Ark. 59, 342 S. W. 2d 657. With the Parkin contracts can-celled, there must be a new advertisement and submission of bids, and the Arkansas Stationery & Furniture Company will then have an opportunity to submit a bid.

Affirmed on direct and cross appeal.

1 This section of the Constitution has been before us in the following cases: Woodruff v. Berry, 40 Ark. 251; Ark. Democrat v. Press Ptg. Co., 57 Ark. 322, 21 S.W. 586; Hodges v. Lawyers Co-op. Co., 111 Ark. 571, 164 S.W. 294; Ellison v. Oliver, 147 Ark. 252, 227 S.W. 586; Hopper v. Fagan, 151 Ark. 428, 236 S.W. 820; Muncrief v. Hall, 222 Ark. 570, 262 S.W. 2d 92. Our research discloses that Art. 19, Sec. 15, of our 1874 Constitution is identical with Art. 3, Sec. 12 of the Pennsylvania Constitution adopted in 1873; and also with Art. 4, Sec. 30 of the Alabama Constitution of 1875. For somewhat similar provisions in other constitutions, see: Art. 4, See. 107 of Mississippi Constitution of 1890; Art. 5, Sec. 29 of Colorado Constitution of 1876; Art. 15, Sec. 8 of Delaware Constitution of 1897; Art. 5, Sec. 30 of Montana Constitution of 1889; and Sec. 247 of Kentucky Constitution of 1891.

2 The fifteen contracts so awarded to Parkin Company were:

Contract No. 1 — Production of poll tax receipts.

Contract No. 2 — All permanently bound blank books, books of record, miscellaneous binding, loose leaf bookkeeping sheets, machine bookkeeping sheets, and loose leaf binders.

Contract No. 8 — Printing the biennial report of Department of Education.

Contract No. 9 — Printing the biennial report of the State Treasurer.

Contract No. 15 — Embossed, engraved, or printed letterheads and envelopes for all state departments.

Contract No. 20 — Furnishing of school registers.

Contract No. 30 — Printing the annual report of the Insurance Commissioner.

Contract No. 31 —Printing the monthly Arkansas State Plant Board news for the Arkansas State Plant Board.

Contract No. 40 — Blank stationery and office supplies.

Contract No. 42 — Printing the bulletin announcements of the University of Arkansas.

Contract No. 44 — Printing blank books for the annual reports of County Supervisors.

Contract No. 52 — Production of special reports in pamphlet form of the department of Planning and Research of the Arkansas State Highway Commission.

Contract No. 60 — Printing of the monthly Arkansas Highway magazine for the State Highway Department by offset process.

Contract No. 62 — Printing the bulletin announcement of the University of Arkansas Graduate Institute of Technology.

Contract No. 63 — Producing bulletins for the geological division of the Arkansas Geological and Conservation Commission.

3 Appellant Parkin Company relies on two points in its brief on appeal, being:

“I. The trial court erred in holding that the Arkansas State Highway Commission is included in the term ‘any department of the government’ as employed in Article 19 Section 15 of the Constitution of Arkansas.

“II. The public policy of Arkansas does not prohibit a member of the State Highway Commission from holding and performing printing contracts let by the Secretary of State in a procedure prescribed by law and including competitive public bidding.”

4 The brief on cross-appeal has this one point:

“I. The trial court erred in failing to require the state officials who are cross-appellees to enter into a contract with the cross-appellant Arkansas Stationery & Furniture Company for the stationery and supplies to be furnished under the proposal for Contract No. 40.”

5 There is an annotation in 140 A.L.R. 344, entitled “Public officer’s relation to corporation as officer or stockholder as constituting' interest within statute or rule of common law against public officer being interested in contract with public,” which cites and approves the quoted holding of our Court and collects authorities generally.

6 This section reads: “The legislative power of this State shall be vested in a General Assembly, which shall consist of the Senate and House of Representatives.”

7 This section reads: “The executive department of this State shall consist of a Governor, Lieutenant Governor, Secretary of State, Treasurer of State, Auditor of State, and Attorney General, all of whom shall keep their offices in person at the seat of government and hold their offices for the term of two years and until their successors are elected and qualified, and the General. Assembly may provide by law for the establishment of the office of Commissioner of State Lands.”

8 This section reads: “The judicial power of the State shall be vested in one Supreme Court, in circuit courts, in county and probate courts, and in justices of the peace. The General Assembly may also vest such jurisdiction as may be deemed necessary in municipal corporation courts, courts of common pleas, where established, and, when deemed expedient, may establish separate courts of chancery.”

9 See §67-101 Ark. Stats.

10 See §66-101 Ark. Stats.