Wyatt v. State Roads Commission

Bond, C. J., delivered the opinion of the Court. A taxpayer, in this suit, contests the constitutionality of an Act of 1937, chapter 356, looking to the construction of new bridges, and the legality of refunding measures of the State Roads Commission under the authority of an act adopted immediately prior, chapter 355. The case was argued and submitted below on a bill for an injunction to restrain proposed action under the statutes, and an answer to that bill. The court held none of the objections well founded, and dismissed the bill; and the complainant appeals.

Chapter 356, adding eighteen new sections to article 89B of the Code, title “State Roads,” to follow immediately after section 104, provides for construction or other acquisition of highway bridges and tunnels to overcome disadvantages from separation of parts of the state by its broad waterways, the cost to be paid by the issue of revenue bonds payable exclusively from tolls to be charged on the bridges and tunnels, and appropriated to that purpose. Both in the statute and in the form of bonds determined on, it is declared repeatedly that they are to be so payable, and shall not constitute a debt or obligation of the State. “The issuance of revenue bonds under the provisions of this sub-title shall not directly or indirectly or contingently obligate the State to levy or to pledge any form of taxation whatever therefor or to make any appropriation for their payment.” Section 107. These words are repeated in the form of bond. ²⁶² The State Roads Commission is required to build any new bridges or tunnels resolved upon by it, and in section 113 it is provided that by resolution or trust indenture of that body prior to the issue of the bonds it might covenant “to pay the cost of maintaining, repairing and operating any project or projects constructed or acquired under the provisions of this sub-title, and, inasmuch as such project or projects will at all times belong to the State, such resolution shall have the force of contract between the State and the holders of the bonds issued for such project or projects.” The commission is authorized to fix the tolls, and to revise them from time to time, but so fixing and adjusting them as to provide a fund sufficient with any other revenues from the projects to pay the cost of maintenance if that should be left payable from tolls, and the bonds and interest as they should become due. A sinking fund for future financing in connection with the bonds is provided for.

There was, accordingly, no provision for resort to taxation for any outlay on the projects authorized. Plans for carrying highways across or under the State’s waterways have been considered for a number of years, and one of the questions now raised is on the possibility' of conflict with provisions made for a previous plan, under which nothing has been done. The 1938 plan, authorized by the statute now considered, is a comprehensive one, deemed feasible with the aid of funds offered by the Federal Government. Three bridges, forming together a highway from Virginia to the north of the Susquehanna River, and a bridge across the Bay, were resolved upon by the State Roads Commission, a bridge across the Potomac River, below Washington, one across the Patapsco at Baltimore, one across the Susquehanna River to replace an old bridge between Havre de Grace and Perry-ville, and one across the Bay at one of two designated' sites.

Permission of Congress for these crossings was granted in an Act of April 7th, 1938 ( 52 Stat. 205 ), upon the condition that tolls which might be charged to pay ²⁶³ the cost of construction and maintenance should be reasonable, and in no event should continue beyond forty years. The Federal Government having announced its plan to aid projects by its Emergency Administration of Public Works to the extent of forty-five per cent of the cost, the State Roads Commission made application for this aid for the three bridges planned, and duly resolved to proceed with the plan so aided. It resolved to issue revenue bonds under a trust indenture as the act permitted, but only to defray cost. The cost of maintenance and operation was undertaken by the commission itself by its resolution, under the authority of section 113.

The present bill of complaint seeks an injunction, generally, against any action under the authority of the statute, chapter 356, and specifically against constructing the bridges, proceeding with the application to the Federal Government, issuing the revenue bonds, pledging the tolls, exercising a power to condemn, actually charging the tolls, and also against proceeding with a refunding plan under chapter 355. It is questioned whether the statute, (chapter 356) was enacted in compliance with the constitutional requirement, article 3, section 27, that no bill shall “become a law until it be read on three different days of the session in each House, unless two-thirds of the members elected to the House where such bill is pending shall so determine by yeas and nays.” The complaint is that in the House of Delegates the three readings of this bill occurred on one and the same calendar day, although not all on the same legislative day, and occurred without the necessary suspensions of rules. The facts appear to be that all three readings occurred on April 5th, 1937, but that the House, on Saturday, April 3rd, took a recess until the following Monday, and on Monday resumed the unfinished session of April 3rd, until an adjournment in the afternoon, and then met next as of April 5th. During the resumed session of April 3rd, the bill was received from the Senate, and referred to a committee, and during the same ²⁶⁴ session the rules were suspended to receive the report, according to entries in the Journal; but there is no entry of suspension for the separate, additional purpose of the second reading.

The second reading was had, and the bill passed to the third reading and its passage on the session of April 5th. A distinction between legislative days as “days of the session,” and calendar days, has long been observed in parliamentary practice, before the adoption of the present Maryland Constitution, and ever since, and the court is of opinion that continuation of the practice must be presumed to have been contemplated by the draftsmen of the Constitution. “A contemporaneous construction placed upon a particular provision of the organic law by the legislative department of the government, acquiesced in and acted upon without ever having been questioned * * * furnishes a very strong presumption that the intention is rightly interpreted.” Trustees of the Catholic Cathedral Church v. Manning, 72 Md. 116, 130 , 19 A. 599, 603 . The objection that there was no suspension of rules for the second reading as well as for reception of the committee report, is one which may rest on clerical entries rather than on actual occurrences, and the observations of the court in Thrift v. Towers, 127 Md. 54, 61 , 95 A. 1064 , seem especially appropriate. On so narrow a question, the presumption of adherence to the constitutional requirements should prevail over the mere form of the clerk’s entry.

The principal question in the case is whether the issue of revenue bonds under the enactment as described would amount to contracting a debt without annual taxation to meet it, as required by the State Constitution in article 3, section 34: “No debt shall be hereafter contracted by the General Assembly unless such debt shall be authorized by a law providing for the collection of an annual, tax or taxes sufficient to pay the interest on such debts as it falls due, and also to discharge the principal thereof within fifteen years from the time of contracting the same.” In ²⁶⁵ view of the decision in Bonsal v. Yellott, 100 Md. 481 , 60 A. 593 , on the meaning and purpose of this section of the Constitution, it might be necessary to consider, if the decision were not controlled by other considerations, whether a debt for a highway bridge would be within the purview of it; but this is not found necessary. Objections to the policy of resorting to “self-liquidating” improvements, as they have been called, have been cited, and we must assume they were duly considered by the General Assembly in this instance so far as they might have force. They are to be weighed and disposed of by the legislative branch of the State Government, in the exercise of its plenary power, and the courts have only to deal with argued limitations on that power, to be found in some provision of the Constitution. “Whatever the people have not, by their Constitution, restrained themselves from doing, they, through their representatives in the legislature, may do.” Tranter v. Allegheny County Authority, 316 Pa. 65, 75 , 173 A. 289, 294 ; Kenneweg v. Allegany County, 102 Md. 121 , 62 A. 249 . As has been seen, in the present enactment itself, chapter 356, any obligation on the State to repay principal or interest has been excluded, and so it is in the form of bonds to be issued under it.

This was the clear intention, emphatically expressed. Whatever elements of contract by the State, or debt, might be thought to exist in the arrangement, clearly, so far as the cost of construction is concerned, there is no contract to add to the burden of the taxpayers of the State present or future, none to pay anything out of taxes, and no debt incurred for which taxes could be levied. And that is the one kind of debt with which the constitutional clause deals. There is no novelty in the arrangement for self-paying construction.

And it has long been settled that by use of the device no public debt within the meaning of constitutional safeguards and restrictions is incurred. Simonton, Municipal Bonds, sec. 59; 1 Dillon Municipal Corporations (5th Ed.) sec. 198; 6 McQuillin, Municipal Corporations (2nd Ed.) sec. 2389. Analogies in some respects may be found in the charters ²⁶⁶ of toll roads or turnpikes, which were public roads of a higher quality than were otherwise obtainable at the time, procured by franchises to collect tolls for the cost of construction and maintenance. I Elliott, Roads & Streets (4th Ed.) secs. 79 and 80; Douglas v. Turnpike Road Co., 22 Md. 219, 238 ; Washington & Baltimore Turnpike Road v. State, 19 Md. 239 .

The case is not one in which property or income already existing 'and owned by the State is to be applied to repayment of the cost. The special fund of tolls to be created is an entirely new one, to be borne of the subscriptions to the bonds. By means of the grant of tolls the State is to acquire at once new public highways. The case of Mayor etc. of Baltimore v. Gill, 31 Md. 375 , is cited as an authority for a conclusion that the issue of the bonds would constitute the contracting of a debt for which taxes should be provided under the constitutional clause.

It was a case in which stock previously owned was to be pledged to raise money for an investment in railroad stock, but pledged with a stipulation that the lenders should look to the pledged stock alone for repayment, and the pledge was made without compliance with constitutional requirements for creation of a municipal debt. The court decided that the pledge of the existing property was indistinguishable, within the purview of the applicable constitutional clause, from a pledge of credit, and held it the creation of a debt. That is in accordance with the weight of authorities, if not with a unanimous conclusion of them. 1 Dillon Municipal Corporations (5th Ed.) sec. 199; Review of decisions 72 A. L. R. 695, 96 A. L. R. 1393. The action dealt with is not that now questioned, and the decision of that case does not control the decision of this one.

There is a large volume of cases which have decided that no debt, in the constitutional sense, is created by issues of bonds payable out of revenues, only a very few courts having come to a contrary conclusion, and some of those courts having subsequently adopted the view of the majority. See studies in 43 Yale Law Journal, 924, ²⁶⁷ 953; 4 Fordham Law Review, 12; 47 Harvard Law Review, 688; and 84 Univ. of Pa. Law Review, 555. It has been argued that resort to the device is a circumvention of the constitutional purpose, but the courts are not warranted in adding prohibitions to constitutional provisions, beyond those formulated and adopted by the framers.

Only the one specific restriction on the Legislature was adopted to guard against improvidence and bad financing, and restraint beyond that was left to the General Assembly itself. The Assembly was given the chief part of the task of deciding questions of financial policy, and if the courts should govern their decisions on constitutional questions by their views of what was and what was not wise beyond the limitations expressed, they would be usurping functions. And even if the courts were warranted in extending the effect of provisions to carry out supposed general purposes, they would not be warranted in doing it to prevent an action of the legislative branch so long and so widely approved as has been this restort to self-liquidating arrangements to procure new improvements. The burden of paying the cost of maintenance, repair and operation, which the State Roads Commission contracts to undertake, is objected to as unconstitutional under the same clause requiring the contracting of a debt to be accompanied by a law providing for taxes to pay the interest and principal.

Article 3, section 34. But the bridges are to belong to the State from their beginning, and in this the State undertakes only its ordinary function with regard to its highways, to be paid for as a current expense of government. If it should buy or build a bridge, paying for it at once from money in the treasury or money borrowed as usual, it would take up this duty of maintenance, repair, and operation at once from its current funds, and, however great the burden might appear to be, it would not be said that a debt in the constitutional sense, that sort of debt which caused the insertion