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Hudson v. Kelly

Supreme Court of Arizona

November 13, 1953

HUDSON
v.
KELLY, State Treasurer.

[76 Ariz. 257] Darrell R. Parker, Phoenix, for petitioner.

Page 363

Ross F. Jones, Atty. Gen., Timothy D. Parkman, Sp. Asst. to the Atty. Gen., Perry Ling, Special Counsel, Phoenix, for respondent.

R. G. Langmade, Phoenix, amicus curiae.

LA PRADE, Justice.

On July 18, 1953, this court ordered a peremptory writ of mandamus to issue in this proceeding which was determinative of the issues involving the constitutionality of the financial administration act of 1953. Due to the exigencies of the situation then existing no written opinion was delivered. Now having had time to prepare a written decision we hereby state the reasons for the issuance of the peremptory writ and the holding that the act was unconstitutional in its entirety.

On July 11, 1953, C. A. Hudson, doing business as Hudson Tire Company, invoked the original jurisdiction of this court to secure a writ of mandamus directed to J. W. Kelly, as state treasurer of the State of Arizona, to compel the latter to honor and pay a certain warrant theretofore issued by the state auditor to petitioner in payment of automobile tires that had been purchased from him by the state highway department.

Under the procedure that existed prior to June 29, 1953, this warrant would ordinarily have been paid as a matter of course. In this instance the respondent refused to pay the warrant for the reason that the Legislature, by Chapter 89, Laws of First Regular Session of the 21st Legislature, effective June 29, 1953, had enacted a completely new law providing, among other things, for the creation of a state purchasing agent in the division of purchase and property control of the newly created department of finance, and that the purchase from petitioner had not been made by the state purchasing agent. The treasurer offered the additional reason that the Act, Section 30(b), specifically declared that all purchases made contrary to the Act to be null and void. The respondent took it to be his duty, as custodian of the state's funds, not to pay them out on an order of an officer not authorized to audit the claim or order its payment by a warrant.

Petitioner claimed that said Chapter 89, creating a department of finance, was unconstitutional and void, and that as a consequence the treasurer had no legal excuse for not paying the warrant. Petitioner asserted that the Act was unconstitutional for the following reasons: (a) That the title of the Act as fatally defective and in contravention of Section 13, Part 2, of Article 4 of the Constitution of the State of Arizona, which provides as follows:

'Every act shall embrace but one subject and matters properly connected[76 Ariz. 258] therewith, which subject shall be expressed in the title; but if any subject shall be embraced in an act which shall not be expressed in the title, such act shall be void only as to so much thereof as shall not be embraced in the title.'

(B) That the Act purports to revise, amend and repeal existing statutes by reference, in contravention of Section 14, Part 2, of Article 4 of the Constitution of the State of Arizona, which provides as follows:

'No act or section thereof shall be revised or amended by mere reference to the title of such act, but the act or section as amended shall be set forth and published at full length.'

(C) That the Act and the whole of the operative portions thereof seek to repeal existing statutes by implication and by undertaking to override the specific with the general provisions of the said Chapter 89; (D) That the Act constitutes an unlawful attempt to delegate legislative authority in contravention of Article 3 of the Constitution of the State of Arizona, providing for distribution of powers; (E) That the Act is unconstitutional and void for the reason that Section 10(a) thereof purports to strip the state auditor of all the powers, duties and authority of that office, and thereby violates Section 1 of Article 5 of the Constitution of the State of Arizona, enumerating executive officers of the state; and (F) That the Act is in its entirety so vague, indefinite and uncertain, both as to title and content, as to be unenforceable and unconstitutional under the rule of this court as announced in Hernandez v. Frohmiller, 68 Ariz. 242, 204 P.2d 854.

Page 364

Prior to the effective date, June 29, 1953, the state's many offices, institutions, departments and agencies directly made necessary purchases of supplies and materials for their maintenance for which there was statutory authorization. Immediately after the effective date of the Act of most serious situation arose in that it was not until July 8, 1953, that the department of finance was activated by the appointment of board members who qualified the following day. A commissioner of finance was appointed on July 8th and qualified the same day. By the provisions of the bill, Section 8, there was created 'a division of purchases and property control' to be supervised and controlled by a state purchasing agent. All purchases of supplies and materials are, by the terms of the Act, funneled through the division of purchases and property control. By the provisions of Section 30, all state agency purchases must be through the state purchasing agent, and all contracts for supplies made by him. All contracts otherwise made are declared to be null and void and the department head or employee making such contract is liable for the cost thereof. Serious penalties are set up for violation of the terms of the Act, and as a further penalty and officer or employee of a state agency found guilty of a violation of any of the provisions of the Act might also forthwith be removed from office or employment. [76 Ariz. 259] Although the board was nominally activated on the 9th of July, 1953, two days before the purchases in the instant case were made the department of finance had not begun to function. The various heads of divisions had not been appointed other than the commissioner of finance, and there existed an aggravated state of uncertainty wherein the state's many offices, departments and agencies were in a serious state of quandary as to where and how to proceed in the matter of securing and paying for purchases and supplies. The Act made no provision for a transition period during which the state's offices, departments and agencies could functionally exist within the law, and a virtual state of paralysis of operation existed. This was the stage setting at the time the petition for the writ was filed. This court concluded to take jurisdiction, being of the opinion that under prior decisions of this court a writ should issue and that the constitutionality of the Act could be determined in such a proceeding. Tillotson v. Frohmiller, 34 Ariz. 394, 271 P. 867; Hudson v. Brooks, 62 Ariz. 505, 158 P.2d 661; Cockrill v. Jordan, 72 Ariz. 318, 235 P.2d 1009. See also Stockman v. Leddy, 1912, 55 Colo. 24, 129 P. 220, 221. Although the petition was for an alternative writ it was heard upon notice and was treated by the court and all the parties as an application for a peremptory writ. This hearing was had on the 17th day of July, 1953, at which time extensive arguments were heard. Written briefs had theretofore been filed with the court. The following day the court unanimously concluded that the financial administration act of 1953 was unconstitutional and void in its entirety, at which time it ordered that a peremptory writ issue directing the state treasurer to honor and pay the warrant under consideration.

At the time we directed the peremptory writ to issue we were mindful of the general rule that every legislative act is presumed to be constitutional, and every intendment must be indulged in by the courts in favor of its validity, and on many occasions had voiced its acknowledgment of the existence of this rule and had been guided by it. As late as March 30, 1953, in our case of State v. Gastelum, 75 Ariz. 271, 255 P.2d 203, 204, we said, referring to previous holdings of the court:

'* * * we have said that we would not declare a legislative act unconstitutional unless satisfied beyond a reasonable doubt of its unconstitutionality, * * *.'

In the early case of Gherna v. State, 1915, 16 Ariz. 344, 361, 146 P. 494, 501, wherein an attack was made on the constitutionality of a law, this court made the following pronouncement with reference to the rule of construction to be followed:

'A pronouncement of the invalidity of an act or any part of an act of the people in their legislative capacity is, and must always be, approached with a delicacy which the situation invites. Under our oaths as judges, this power [76 Ariz. 260]

Page 365

must be exercised in cases; but nevertheless it is our plain duty to uphold an act of the law-making power whenever it is possible to do so. Every presumption is in favor of its validity, and the conflict between the legislative act and a constitutional provision must be very clear and utterly irreconcilable by any reasonable interpretation before this court would be called upon to annul the act or any separable part of it.'

For other statements of the rule see Laney v. State, 20 Ariz. 416, 181 P. 186; State v. Davey, 27 Ariz. 254, 232 P. 884, 885; State v. Harold, 74 Ariz. 210, 246 P.2d 178; Duhame v. State Tax Commission, 65 Ariz. 268, 179 P.2d 252, 171 A.L.R. 684, and cases therein referred to.

At the time of the issuance of the writ we concluded that the Act parently violated Section 1 of Article 5 of the Arizona Constitution enumerating who shall constitute the executive officers of the state. We are still of the same opinion. This constitutional provision provides that

'The executive department of the state shall consist of governor, secretary of state, state auditor, state treasurer, attorney-general, and superintendent of public instruction * * *.'

The section then in referring to these officers concludes by providing that

'* * * They shall perform such duties as are prescribed by this constitution and as may be provided by law.'

This latter provision was repeated in Article 5, Section 9, which says:

'The powers and duties of secretary of state, state treasurer, state auditor, attorney-general, and superintendent of public instruction shall be as prescribed by law.'

Clearly under the constitution the auditor is a member of the executive department of the state. Under our system of government, and of the state governments of the United States from the organization of the colonies and the states under our federal constitution, the offices of governor, secretary of state, state auditor, state treasurer and attorney general, have had a well-understood meaning and statute. They are words of long antiquity and in reference to officers of a government refer to offices occupied by these officers at common law.

In Wright v. Callahan, 1940, 61 Idaho 167, 99 P.2d 961, 964, it was said:

'At the time of the adoption and ratification of our Constitution the terms 'state auditor' and 'controller,' as evidenced by the constitutions and statutes of that period, were generally and commonly understood to connote a supervising officer of revenue whose duties were to audit all claims against the state. We must presume that the framers of our Constitution so employed the term 'state auditor". Citing cases.

The duties of a governmental auditor at common law are well set forth in People ex [76 Ariz. 261] rel. Brown v. Green, 5 Daly, N.Y., 194, 200, where it is said:

'What is an auditor? Originally it meant an officer of the king, whose duty it was, at stated periods of the year, to examine the accounts of inferior officers and certify to their correctness (Blount's Dictionary of 1681; Cotgrove's Dictionary of 1632; Rastall's Termes de la Ley; Defoe's English Dictionary of 1732), and was afterwards used to designate those officers of the Court of Exchequer whose duty, according to Coke, was to take the accounts of the receivers of the king's revenue and 'audit and perfect them,' without, however, putting in any changes, their office being only to audit the accounts--that is, ascertain their correctness. (4 Coke's Inst. 107). The very object of examining and auditing an account is to ascertain whether there are any errors or mistakes in it, and hence the definition of the verb 'to audit,' which is to examine, settle and adjust accounts--to verify the accuracy of the statement submitted to the auditing officer or body. (McElrath's Com. Dict.) 'At the present day,' says Wedgewood, one of the last writers upon the meaning of English words, 'this term is confined to the investigation

Page 366

of accounts, the examination and allowance of which is termed the audit.''

It was determined by this court in Shute v. Frohmiller, 1939, 53 Ariz. 483, 90 P.2d 998, that no common-law powers or duties attach to the above enumerated constitutional officers, but only those prescribed by statute. Nevertheless generally speaking, those duties that have been prescribed for the office of auditor have been those of auditing, adjusting and settling the amount of claims against the state and payable out of funds of the state. See Code of 1877, Ch. 25; Rev.St. of Ariz. 1887, Tit. 60, Ch. 9; Rev.St. of Ariz. 1901, Tit. 1, Ch. VII; Rev. St. of Ariz. 1913, Tit. 1, Ch. VIII; Rev. Code of Ariz. 1928, Ch. 2, Art. 3; A.C.A.1939, Ch. 4, Art. 3, § 4-301 et seq. In Arizona Territory these duties were first performed by a Board of Territorial Auditors, composed of the governor, secretary and attorney general. See Howell Code 1863, Ch. 20, p. 159. By act of the legislature in 1866, Acts of 1866, p. 27, the office of territorial auditor was created (annual salary $500, plus $150 for office expense), and to it was transferred the duties formerly performed by the Board of Territorial Auditors. From the creation of the office to statehood it retained its original status as a free and independent executive office, to audit the accounts of the state.

With the advent of statehood the auditor became a constitutional officer, with its incumbent being elected by the people and placed under bond. The duties of the officer now are and always have been those of general accountant of the state, and as such [76 Ariz. 262] has long been termed 'the watchdog of the treasury'. Such officer has always been independent, responsible only to the law, his bond and the electors at the polls.

It was undoubtedly intended by the framers of our Constitution that in the matter of auditing the accounts of all public officials and state agencies that this function was to be performed by an officer independent of the officers and agencies to be audited. This concept is violated in the Act under consideration in that the board of finance, through its division of purchases and property control, purchases all supplies and materials required by the state and its agencies, and then the board, through its divisions of accounts and control, audits its own purchases and expenditures. The result of this procedure is that the board of finance audits itself and sits in judgment on its own acts.

It is strenuously argued that the holding in the Shute case (supra) is to the effect that the constitution contains no implied limitations on the power of the legislature to take away all of the duties of any constitutional officer. Perhaps the opinion is susceptible of being so interpreted. The case said that there are no implied restrictions [53 Ariz. 483, 90 P.2d 1003]

'* * * other than that forbidding the imposition of duties that would interfere with the maintenance and preservation of the independence of the three branches of government. Any act of the legislature imposing upon an executive officer duties properly belonging to one of the other two branches would necessarily be invalid, even if enacted pursuant to the constitutional provision empowering it to prescribe what the functions of that office should be. With this exception the legislature's power to add to or take from these duties from time to time is full and complete under the provision stating that his duties 'shall be as prescribed by law,' as well as under section 2, Article XXII of the constitution which provides that the laws of the Territory of Arizona, and this includes those prescribing the duties of the attorney general, 'shall remain in force as laws of the State of Arizona until they expire by their own limitations or are altered or repealed by law.' Clearly, the framers of the constitution did not intend to authorize the legislature to alter or repeal the territorial statutes that prescribed his duties and remained in force as laws of the state and at the same time withhold from it the power to take similar action as to any common-law duties he may have had. People v. Santa Clara Lumber Co., supra [55 Misc. 507, 106 N.Y.S. 624].'

Page 367

We think the court was in error when it said that the only implied restriction on the legislature was that of forbidding the imposition of duties that would interfere with the maintenance and preservation of [76 Ariz. 263] the independence of the three branches of government.

In addition to any implied restrictions, Sections 1 and 9 of Article 5 of the State Constitution have been construed to mean that there is an implied mandate to the legislature to prescribe the powers and duties of the executive officers created by the Constitution in Section 1 of Article 5. Shute v. Frohmiller, supra; Lockwood v. Jordan, 72 Ariz. 77, 231 P.2d 428. The mandate considered the grant of such powers and duties as would enable the auditor to perform the functions for which the office was created. Under the terms of the mandate the legislature has the power to enlarge or remove the duties and powers of the office as the future might require. But the language of the sections as construed negatives the power to destroy the offices created by removing all of the duties it was mandated to confer.

Judge Cooley, in his work on Constitutional Limitations, Chapter 5, p. 88, says:

'The frane of the Government, the grant of legislative power itself, the organization of the executive authority, the erection of the principal courts of justice, create implied limitations upon the law making authority as strong as though a negative was expressed in each instance.' (Emphasis supplied.)

On the subject of limitations Judge Ross, speaking for this court, said:

'An limitation on the legislative power may be by direct prohibition or by implication, and when it is by implication its restraints on the Legislature are no less binding than when expressly prohibited.' Consolidated Arizona Smelting Co. v. Egich, 22 Ariz. 543, 199 P. 132, 135.

There was a purpose in the creation of the office of auditor which, by this Act, has been frustrated. We are not hesitant in holding that there exists the implied restriction against abolishing a constitutional office, in fact, if not in name. In any event the problem now under consideration was not before the court in that case where the only question before the court was the power of the legislature to ...


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