State v. West

Mr. Justice Burnett

delivered the following dissenting opinion:

It is laid down in Section 79, L. O. L., that:

“At any time when the pleadings in the suit or action are complete, or either party fails or declines to plead further, the court may, upon motion, grant to any party moving therefor, such judgment or decree as it may appear to the court the moving party is entitled to upon the pleadings.”

The object of this section was to confer upon the court a power hitherto deemed to be doubtful, to declare the proper judgment to be deduced from uncontroverted allegations.

Taking all the pleadings together, it appears in this case a certain fund accrued to the State of Oregon from the sources mentioned. It is admitted that the *120 defendants treated this fund as if the same had been regularly appropriated by the legislative assembly for the expenses connected with the maintenance of the penitentiary, and, under the forms of law prescribed for the disbursement of the actual appropriation, they disbursed the same in addition to and beyond the fund created for the purpose by the legislative assembly. The only substantial difference between the parties on the facts is that the plaintiff charges the expenditure of $16,518.83, for which it demands judgment, while the defendants only concede the payment of $16,191.33.

Article IX, Section 4, of the State Constitution declares that:

“No money shall be drawn from the treasury but in pursuance of appropriations made by law.”

It is said also in Article III of the same instrument that :

“The powers of the government shall be divided into three separate departments — the legislative, the executive, including the administrative, and the judicial; and no person charged with official duties under one of these departments shall exercise any of the functions of another except as in this Constitution expressly provided. ’ ’

It is thus clearly apparent that the appropriation of public funds is a legislative function; for they are only to be “made by law,” Neither of the defendants is vested with any legislative authority. The limit of their power in the expenditure of public funds is, and must be, defined by the utterances of the legislative department. To admit a contrary principle would open the doors to unlimited extravagance in the administration of public affairs. It is for this reason that the people reserved to themselves, through their representative in the legislative assembly, the exclusive *121 right to limit the disbursement of money belonging to the state. When, therefore, the defendants assumed to pay out state funds without the same having been appropriated by an act of the legislative assembly, they did so without any authority, and can claim nothing on account thereof. As stated by Mr. Justice Eakin in State v. Ross, 55 Or. 450 ( 104 Pac. 596 , 106 Pac. 1022 , 42 L. R. A. (N. S.) 601, 613), in discussing conversion of public money:

“We understand from these authorities, and many others we have examined, that, in relation to trover, the term ‘conversion’ necessarily means conversion to one’s own use, and is fully accomplished by any exercise of a dominion over a chattel without the authority of the owner, whereby the true owner is deprived of the enjoyment of his chattel. And it is wholly immaterial whether the person so converting did it for his own personal advantage or not.”

It is urged by the defendants, in substance, that it was necessary that these expenditures should be made, but our attention has not been directed to any statute declaring such necessity. It was manifestly only the judgment of the defendants that the same was necessary. In this they usurped the legislative prerogative. It is stated also that by receiving the benefit the state has ratified the act. Such a principle is well applicable to transactions between private parties and their agents; but, in the absence of any authentic exercise of the legislative power, ratification does not attach. The only actors in the transactions mentioned are the defendants themselves, who are the official servants or agents of the people within the respective powers conferred upon them by the Constitution and laws of the state. It cannot be said that the defendants may perform acts contrary to and in excess of their official *122 authority, and at the same time ratify them on behalf of the state. It cannot be admitted that official malfeasance is self-sustaining. Ratification is an act that can-be performed only by a principal. Even if the same could be applied in this case, it is a function not attributable to, nor to be exercised by, the agent whose acts are in question. The principles applicable to the expenditure of public funds are exemplified in Shattuck v. Kincaid, 31 Or. 379 ( 49 Pac. 758); Boyd v. Dunbar, 44 Or. 380 ( 75 Pac. 695 ); and Calbreath v. Dunbar, 46 Or. 580 ( 81 Pac. 366 ).

In short, the pleadings show that the defendants, without authority of law, have expended from the state treasury some amount of money, or, in other words, have converted that amount of money to their own use within the meaning of State v. Ross, 55 Or. 450 ( 104 Pac. 596 , 106 Pac. 1022 , 42 L. R. A. (N. S.) 601, 613). The measure of damages in a case of conversion is the value of the property converted, and the only legal way in which the matter can be adjusted is to require the defendants to replace the money which they have unlawfully disbursed.

The legislative assembly of 1911 passed a law to provide for the payment of the maintenance, improvements, buildings, equipments, betterments and repairs at the Oregon State Insane Asylum, Oregon State Penitentiary and other state institutions named in the title of the act, and for such other purposes and items of expense as in that statute were expressly enumerated: Laws 1911, c. 183. Section 1 of the enactment begins by stating that:

“The following sums, or so much thereof as may be necessary and no more, are hereby appropriated out of the moneys in the general fund in the state treasury *123 not otherwise appropriated, for the several objects and purposes hereinafter named, for the two years commencing on the first day of January, 1911, and ending on the thirty-first day of December, 1912.”

Among other items it then makes the following appropriations :

For the payment of the salaries of the officers and employees, and for the maintenance and general and contingent expenses of the Oregon State Penitentiary .........$142,000

For the payment of the expenses of purchasing material, etc., for new roof over cell-house at the Oregon State Penitentiary.. 3,000

For the payment of the expenses of purchasing material and for labor replumbing old cells, wiring cells for electric lights, and rewiring cell-houses, offices and guards’ quarters, at the Oregon State Penitentiary................................... 2,000

For the payment of the expenses of purchasing two 1,000 gallon (each) automatic air-tanks for the Oregon State Penitentiary 1,500

For the payment of the expenses of purchasing pump and connections conducting water to the Oregon State Penitentiary.. 450

For the payment of the expenses of purchasing material for repainting cells, houses and other buildings at the Oregon State Penitentiary......................... 800.

For the payment of the expenses of purchasing material for repairing stock barns and other out buildings at the Oregon State Penitentiary .................... 250

For the payment of the expenses of making necessary repairs and maintaining pumping plant at Oregon State Penitentiary.. 1,200

For the payment of the expenses of making repairs, etc., to the hospital at the Oregon State Penitentiary .................... 500

*124 For the payment of expenses of making incidental repairs, etc., at the Oregon State Penitentiary......................... 300

For the payment of the expenses of purchasing and installing 24 new steel cells at the Oregon State Penitentiary ............ 11,250

For purchasing supplies to be sold to convicts 1,000

These expressions of the legislative will, about the necessity of expending public moneys and the extent thereof are paramount to the judgment on that subject of any officer in the administrative department of the government. If that were a judicial question, actual damage to the state and its people could well be predicated upon unauthorized and extravagant disbursement of public money, and the standard by which such damage should be estimated is found in the statute providing for the expenses of the public service.

The essence of the second defense is that out of the funds appropriated by law the defendants have paid out $80,375.45, and that they have on hand $61,624.55, making the total appropriation of $142,000. They expressly avow that they made the expenditures described in the complaint to the amount of $16,191.33 outside of and in addition to the money appropriated by law. If the transaction had been regular as measured by the appropriation, their account would be stated substantially thus:

To amount of appropriation.............$142,000.00

Contra credit ...............$80,375.45

By revolving fund paid out... 16,191.33 96,566.78

$45,433.22

The defendants, however, explicitly aver that they still have on hand an unexpended balance of the legislative allowance in the sum of $61,624.55. The mathematical deduction is that the $16,191.33 was money *125 they were not authorized to disburse, and when they allege they still have $61,624.55, we cannot rightly say they have only $45,433.22, and thus cover up the unauthorized payment in face of their own answer.

But they say, in substance, that they paid fair prices, and the state got the worth of its money. To uphold such business, in the absence of any legislative validation, is to allow an administrative officer to substitute his own judgment for that of the legislative branch of the government and pay out public money in his hands in any manner or for any purpose finding favor in his sight. In this case it seems that the defendants have profitably operated a state institution on state capital, and claim the right to expend the gains in enlarging the business, unhampered by legislative appropriation. This is a palpable invasion of the lawmaking prerogative and constitutionally cannot be upheld.

If the legislative assembly had deemed it wise or prudent to make the expenditures in question, it probably would have made appropriations out of the general fund for those items, but, not having done so, it is not within the constitutional power of either the administrative or the judicial department of government to make such payments or to sanction them after they are made. Whether we consider the source from which the money was obtained or the objects to which it was applied, the transaction is equally in excess of the authority conferred by the legislative assembly. That body prescribed in detail, as stated above, the amounts of money apropriated and for what it was to be expended, and that is the limit of the defendant’s authority. All in excess of that constitutes conversion of public funds for which they should be held responsible on their own answer.

*126 The allegations in the answer properly might he addressed to the legislative assembly as an argument for increased appropriation in the first place or for a relief bill in the interest of the defendants in the present juncture, but, as those averments involve legislative functions beyond the power of this court, they ought not to be regarded here. There being at least an undetermined issue as to the amount of money expended in excess of the appropriation, we cannot render judgment upon the pleadings. The Circuit Court, however,, was in error when it overruled the demurrer to the new matter in the answer, and also was mistaken in deciding for the defendants on the case stated.

For these reasons, the judgment should be reversed, and the cause remanded to the Circuit Court for further proceedings.

Mr. Justice Moore and Mr. Justice Eakin concur in this dissent.