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Kervick v. Bontempo

Decided: April 7, 1959.

JOHN A. KERVICK, STATE TREASURER OF THE STATE OF NEW JERSEY, PLAINTIFF-APPELLANT,
v.
SALVATORE A. BONTEMPO, COMMISSIONER OF THE STATE DEPARTMENT OF CONSERVATION AND ECONOMIC DEVELOPMENT, ET ALS., DEFENDANTS-RESPONDENTS



For affirmance -- Chief Justice Weintraub, and Justices Burling, Jacobs, Francis, Proctor and Hall. For reversal -- None. The opinion of the court was delivered by Jacobs, J.

Jacobs

[29 NJ Page 470] On February 25, 1959 the Law Division entered a declaratory judgment which determined that the New Jersey Water Bond Act of 1958 (L. 1958, c. 35)

N.J.S.A. 58:22-19 note, was lawfully enacted and that bonds issued thereunder would be direct general obligations of the State. Thereafter the plaintiff appealed to the Appellate Division and we certified on our own motion. See R.R. 1:10-1(a).

The New Jersey Water Supply Law of 1958 (L. 1958, c. 34) N.J.S.A. 58:22-1 et seq. set forth the Legislature's water resources and supply program entailing the construction of the Round Valley and Spruce Run Reservoirs. It was passed by the Senate and General Assembly and approved by the Governor but under its terms was to be inoperative until its companion bill, the New Jersey Water Bond Act of 1958, was approved on public referendum. See Const. 1947, Art. VIII, § II, par. 3. On November 4, 1958 an overwhelming majority of the people voting at the General Election approved the Bond Act. Thereafter, question was for the first time raised as to whether the enactment of the Bond Act was in violation of the bill origin clause of the Constitution which provides that "all bills for raising revenue shall originate in the General Assembly." See Const. 1947, Art. IV, § VI, par. 1. The Bond Act had in fact first been introduced in the Senate and there designated as Senate Bill No. 146; it was passed in the Senate on April 7, 1958 by a vote of 15 to 0; it was amended in the Assembly and as amended was passed there on April 24, 1958 by a vote of 53 to 0; on May 5, 1958 the Senate approved the Assembly amendments by a vote of 16 to 0; and on May 12, 1958 the act was approved by the Governor.

The debt limit clause of the Constitution (Art. VIII, § II, par. 3) provides that "The Legislature" shall not create a debt of the State which together with previous debts exceeds (as here) one per centum of the total amount appropriated by the general appropriation law unless it is authorized "by a law for some single object or work distinctly specified therein"; that "Regardless of any limitation relating to taxation in this Constitution" the law shall provide the ways and means of paying interest as it falls due and principal

within 35 years; that the law shall not be repealed until the debt and interest "are fully paid and discharged"; and that the law shall not take effect "until it shall have been submitted to the people at a general election and approved by a majority of the legally qualified voters of the State voting thereon." No one denies that the Bond Act designated the single object or work for which the State's liability was being created, provided the ways and means for paying interest and principal and was submitted for approval by the people of the State in accordance with the terms and spirit of the debt limit clause; but the plaintiff urges, nevertheless, that it was actually a revenue-raising measure within the bill origin clause (Art. IV, § VI, par. 1), that the requirement of that clause should be construed to be applicable to laws enacted in accordance with the debt limit clause (Art. VIII, § II, par. 3) and that since the Bond Act originated in the Senate rather than the Assembly it should be declared invalid and of no effect. Cf. In re Ross, 86 N.J.L. 387, 388 (Sup. Ct. 1914).

In rejecting the plaintiff's contention the Law Division rested on three grounds, namely, (1) that the Bond Act was not a measure for raising revenue within the contemplation of the bill origin clause; (2) that even if the Bond Act were viewed as such a measure the bill origin clause may not now be invoked to invalidate the legislation since the clause is directory rather than mandatory; and (3) that in any event the general terms of the bill origin clause do not govern the specific terms of the debt limit clause or affect its "exclusive method of operation." In State v. Thermoid Co., 16 N.J. 274 (1954), this court held that escheat legislation empowering the State to appropriate abandoned property is not a revenue-raising measure within the bill origin clause; it expressed approval of Justice Story's oft-quoted view that the bill origin clause relates only to bills to levy taxes in the strict sense and does not extend to bills for other legitimate purposes which may incidentally provide governmental revenue. See 1 Story,

Commentaries on the Constitution § 880, p. 642 (5 th ed. 1891). In Millard v. Roberts, 202 U.S. 429, 26 S. Ct. 674, 50 L. Ed. 1090 (1906), the Supreme Court broadly applied Justice Story's approach to sustain an act of Congress which sought to obtain the elimination of grade crossings and the construction of a railroad station in the District of Columbia. The act originated in the Senate and appropriated sums to be paid to the defendant railroads for the stated purposes and to be assessed upon the taxable property in the District. In the course of its opinion the court stressed the fact that there was no congressional intent to raise revenue for the general conduct of the government and that whatever taxes were imposed were "but means to the purposes provided by the act." 202 U.S. at page 437, 26 S. Ct. at page 675, 50 L. Ed. at page 1093. See Twin City Nat. Bank of New Brighton v. Nebeker, 167 U.S. 196, 17 S. Ct. 766, 42 L. Ed. 134 (1897); United States v. Norton, 91 U.S. 566, 23 L. Ed. 454 (1876); cf. In re Opinion of the Justices, 152 N.E. 2 d 90 (Mass. Sup. Jud. Ct. 1958); Chicago, B. & Q.R. Co. v. School Dist. No. 1 in Yuma County, 63 Colo. 159, 165 P. 260 (Sup. Ct. 1917); Rosencranz v. City of Evansville, 194 Ind. 499, 143 N.E. 593 (Sup. Ct. 1924); 51 Am. Jur., Taxation § 298, p. 350 (1944).

However, in Morgan v. Murray, 328 P. 2 d 644 (Mont. Sup. Ct. 1958), a divided court recently held that a bill which provided for a public referendum on a bond issue to obtain funds for the construction of educational facilities was a revenue-raising measure in view of a provision in the bill imposing a new tax to pay principal and interest on the bonds. See Dalton v. State Property and Buildings Commission, 304 S.W. 2 d 342 (Ky. Ct. App. 1957); Wofford Oil Co. v. Smith, 263 F. 396 (D.C.M.D. Ala. 1920), appeal dismissed 256 U.S. 705, 41 S. Ct. 449, 65 L. Ed. 1180 (1921). The court rejected Mikell v. School District of Philadelphia, 359 Pa. 113, 58 A. 2 d 339, 4 A.L.R. 2 d 962 (1948), where the Pennsylvania Supreme Court upheld a statute imposing a personal property tax

for public school purposes though it originated in the Senate rather than the House of Assembly. In the course of its opinion the Pennsylvania court took the position that the statute was not a revenue-raising measure but that even if it were so viewed it would not judicially be declared invalid since the bill origin clause was a directory rather than a mandatory provision of the Constitution. Compare, however, 1 Cooley's Constitutional Limitations 159 (8 th ed. 1927), where the distinguished author noted that "courts tread upon very dangerous ground when they venture to apply the ...


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