Goer v. Taylor , 51 N.D. 792 ( 1924 )

Chapter 69 of the Laws of 1919, known as the State Bar Board Act, amended certain sections of the Compiled Laws of 1913 relating to the admission to practice and regulation of attorneys-at-law within the state of North Dakota, and created a board known as the State Bar Board. The act provided for the appointment of the board by the governor, fixed the term of office of the members thereof, prescribed their duties, provided for their compensation, and at § 9 thereof amended § 811 of the Compiled Laws of North Dakota for the year 1913 to read as follows:

"No person shall be entitled to practice law or act as attorney or counsellor at law in this State unless such person shall first secure a certificate of admission to the Bar. In addition to the fee provided for securing such certificate, he shall pay the Clerk of the Supreme Court an annual license fee of $15.00. The said Clerk of the Supreme Court shall, in his ex-officio capacity as treasurer of such State Bar Board, deposit such license fee with the State Treasurer, to be kept in a fund known as the State Bar Fund, to be disbursed therefrom only in the manner hereinbefore provided to defray the expenses of the State Bar Board. . . ."

At the 1923 regular session, the legislature enacted and the Governor subsequently approved chapter 134, Session Laws, 1923, amending chapter 69, Session Laws, 1919. The 1923 act abolished the old bar board and provided for the creation of a new board to be appointed by the Supreme Court and re-enacted the remainder of the 1919 act in substantially its original form, excepting that by § 9 of the 1923 act § 811, Comp. Laws, 1913, as amended by chapter 69, Session Laws, 1919, was amended to read as follows:

"No person shall be entitled to practice law or act as attorney or counsellor at law in this state unless such person shall first secure a certificate of admission to the bar. Such certificate shall be issued upon payment of the fee provided therefor, and in addition thereto, the further payment of the annual license fee of ten dollars. From the moneys heretofore accumulated and now onhand in the State Bar Fund, there is hereby appropriated the sumof $10,000 to be expended under the direction of the SupremeCourt for purchase and repair of books in the State Law Library. The Clerk of the Supreme Court shall, in his ex officio capacity, as the Treasurer of said Bar Board, deposit all license fees with the State Treasurer to be by him kept in a fund known as the State Bar Fund, the same to be disbursed therefrom only in the manner herein provided. . . ."

The plaintiffs, R. Goer, S.E. Ellsworth and C.J. Fisk were appointed members of the State Bar Board under the provisions of chapter 69, Session Laws, 1919. They constituted the State Bar Board at the time of the initiation of this action. The defendants are E.J. Taylor, Supreme Court Reporter and State Law Librarian; J.H. Newton, Clerk of the Supreme Court; D.C. Poindexter, State Auditor; and John Steen, State Treasurer, of the State of North Dakota.

Chapter 134, Session Laws, 1923, went into effect July first, 1923. In May, 1923 the plaintiffs began this action bringing the same as individuals and as the State Bar Board. In their complaint they alleged that they were appointed as members of and were qualified and acting as the State Bar Board; that the defendants held the respective official positions as hereinbefore set out; that unless enjoined from so doing, defendants would purchase and repair law books for and in the state law library, and pay therefor from the State Bar Fund, under the terms of chapter 134, Session Laws, 1923; that the plaintiffs individually have paid and contributed the license fee of $15.00 annually to the said bar fund since the enactment of chapter 69, supra, and therefore, have a personal interest in such fund to the extent of such contributions; that, as the State Bar Board, they are concerned with the performance of the duties of such board and the payment of the bills incurred thereby; that as such they are the trustees of the said state bar fund; and that, therefore, officially and as a board, they have an interest in and are concerned on account of the said bar fund; that chapter 134, Session Laws, 1923, is unconstitutional and void by reason of the fact that it contravenes various provisions of the Constitution of the State of North Dakota, and the plaintiffs pray:

"(1) A declaratory judgment from this Court, declaring that the funds aforesaid cannot and shall not be impressed with or to other purposes than those expressed in the said Act, chapter 69 of Session Laws of North Dakota, 1919.

"(2) That the said Act, Senate Bill, No. 284 (chap. 134, Session Laws, 1923), passed by the Legislative Assembly of North Dakota for the year 1923, be declared null and void for the reasons and on the grounds hereinbefore set out, and that this Court issue its declaratory judgment under the enactment of the North Dakota Legislature, being House Bill No. 210, passed and approved by the 1923 Legislative Assembly of North Dakota, and that said enactment be declared of no force or effect and as unconstitutional under §§ 61, 62 and 282 (182) of the Constitution of North Dakota.

"The Plaintiffs further pray that the Defendants, and each of them, severally and jointly, be forever restrained and forbidden to use any of said funds, aforesaid, under the § 9 of the Senate Bill, No. 284, being in lieu of § "811" of the 1913 Compiled Laws of North Dakota, for the purpose of purchasing or repairing State Law Library Books, and that the whole of said Senate Bill, No. 284, be set aside as null and void for the reasons hereinbefore set forth, and for such other and further relief as to this Honorable Court may seem meet, proper, and just in the premises, and for costs and disbursements."

The attorney general, appearing for the defendants, interposed a demurrer to the complaint on the ground:

"1. That the Court has no jurisdiction of the subject of the action.

"2. That the Plaintiffs and the Petitioners have not legal capacity to sue.

"3. That there is a defect of parties defendant, in this that the Supreme Court of North Dakota has not been made a party defendant.

"4. That the petition and complaint does not state facts sufficient to constitute a cause of action."

The matter came on to be heard before the district court of Burleigh County, and the demurrer so interposed was sustained. The case is now here on appeal from the order sustaining such demurrer.

The demurrer interposed by the attorney general challenges the right of the plaintiffs or either of them to maintain the action, and further challenges the sufficiency of the allegations of the complaint to warrant the court in awarding any relief. It appears to us that the first question which presents itself in the consideration of the propositions which are raised in this case is the question of the character of the license fee imposed by the Bar Board Act and the fund resulting therefrom. It will be noted, first, that there is no question here raised as to the constitutionality of the act insofar as it provides for the imposition of an annual license fee as a prerequisite to the right of an attorney to practice in the courts of record of this state. In any event, we think it is clear that the legislature has the right to impose a proper occupational charge. Such charge may be imposed either for the purpose of producing revenue, in which case, as a tax, it is subject to the requirements of § 175 of the Constitution (see State v. Klectzen, 8 N.D. 286, 78 N.W. 984, 11 Am. Crim. Rep. 324), or as a purely regulatory exaction. If imposed for the latter purpose it is subject only to the requirements that the regulatory provisions be reasonable and that the charge or fee be not to any considerable extent greater in amount than is reasonably necessary to carry out the regulatory provisions. See State v. Klectzen, supra; Bartles Northern Oil Co. v. Jackman, 29 N.D. 236, 150 N.W. 576; State ex rel. Gaulke v. Turner, 37 N.D. 635, 653, 164 N.W. 925; Cooley, Taxn. 3d ed. p. 1141. And since expenditures on account of regulatory provisions in a legislative act must be made subsequent to the enactment, the requirements can only be estimated or approximated, and more or less latitude will be allowed in determining whether such regulatory charge or license fee is reasonable. And the presumption is that it is reasonable. State ex rel. Gaulke v. Turner, 37 N.D. 635, 653, 164 N.W. 925; Minneota v. Martin, 124 Minn. 498, 51 L.R.A.(N.S.) 40, 145 N.W. 383, Ann. Cas. 1915B, 812; Sperry H. Co. v. Melton,69 W. Va. 124, 34 L.R.A.(N.S.) 433, 71 S.E. 19; Cooley, Taxn. 3d ed. p. 1142 et seq.; 17 R.C.L. 537. And if there is an excess above the actual cost of carrying out the regulatory provisions, the licensees cannot recover the difference between the amount exacted and such cost. Atlantic P. Teleg. Co. v. Philadelphia, 190 U.S. 160, 47 L. ed. 995, 23 Sup. Ct. Rep. 817; Postal Teleg. Cable Co. v. Taylor, 192 U.S. 64, 48 L. ed. 342, 24 Sup. Ct. Rep. 208.

An examination of the provisions of the Bar Board Act discloses beyond any doubt that it is a regulatory act. It provides for the appointment of the bar board and prescribes the duties of that board with reference to the bar of the state. It provides for the board's passing upon the qualifications of the candidates for admission to the bar; and for the investigation by the board of any charge relative to misconduct on the part of any member of the bar when such matter shall have been referred to the board by the Supreme Court. It provides for the prosecution at the order and direction of the Supreme Court of proceedings for disbarment, suspension or other discipline of any member of the bar on account of accusations made; and provides for the annual licensing by the board of practitioners at the bar. The act further provides with reference to the moneys paid on account of such licenses that the same shall be paid to the clerk of the Supreme Court in his ex-officio capacity as the treasurer of the bar board to be deposited by him with the state treasurer to be kept in a fund known as the State Bar Fund. Otherwise than in section 9 of the acts heretofore quoted neither the 1919 act nor the 1923 act states the object of the imposition of the license fee or the purposes to which the moneys obtained therefrom shall be applied, or otherwise provide for the disposition of the same, excepting that the fourth sections of the respective acts, being amendments of § 787, Comp. Laws, 1913, provides for the compensation of the members of the bar board and the payment of their personal expenses and such expenses as might otherwise be incurred in carrying on and performing their duties as such bar board, the 1919 act providing that "such expenditures shall all remain within the sums derived from the fees paid to said State Bar Board. All claims for such salaries, fees and expenses of such Board shall be submitted to the Auditing Board of this State on sworn vouchers as now required by law, and shall be paid by the treasurer of the State Bar Board out of the state bar fund," and the 1923 act providing that "such expenditures shall all remain within the sums derived from the fees paid to said State Bar Board. All claims for such compensation, fees and expenses of such Board shall be submitted to the Auditing Board of this state on sworn vouchers as now required by law, and shall be paid by the treasurer of the state out of the State Bar Fund." So it is beyond question, considering the act in all its various aspects that it is a regulatory measure, and the license fee imposed is a purely regulatory exaction.

The apparent theory of the complaint in this case in so far as it touches the right of the plaintiffs individually to maintain the action, is that they have a particular interest in the Bar Board Fund distinct from any other individual or class of individuals in the state who may not have contributed thereto; that by reason of such peculiar personal interest they are entitled to be heard as to the disposition that might be made by the legislature of any moneys accumulated in such fund. It must be remembered that it does not appear that any of the contributions to such fund in the way of license fees paid by these individual members were paid involuntarily or under protest. So far as appears, any payments they may have made were voluntary payments. That being the case, the moment that such payments were made, they as individual contributors ceased to have any right in or to such moneys as may have been so paid by them. Thereafter their interest in such funds and the expenditure thereof was at most identical with the interest of every taxpayer in the state of North Dakota. But they do not assert any right to be heard in complaint as to the expenditure and disposition of such funds as taxpayers. They predicate their individual right to be heard as attorneys who have as such participated in the creation of a trust fund.

It is further asserted that even though the complaint does not disclose any right in the plaintiffs as individuals to maintain the action, nevertheless it does disclose such right in them as a board; that, as the State Bar Board, they are the custodians and trustees of this State Bar Fund, charged with the supervision of the same, and thereby, as a board, have a particular and special interest in the funds therein. The act, as we have heretofore shown, gives the board no control over the fund. They are not its custodians. Surely there is no possibility that the board may be held liable if such funds be disbursed by the state treasurer in accordance with the mandate of the legislature as expressed in the act. While the license fees may be said to be paid to such board, they are in fact paid to the clerk of the Supreme Court, the ex-officio treasurer of the board, and deposited by him with the state treasurer. The board is clothed with no authority to disburse such funds. It is true that the compensation of the members of the board and the expenses necessarily incident to the performance of their duties are to be paid therefrom. But by whom and how? Section 4 of the 1919 act, amending § 787, Comp. Laws 1913, provides: "All claims for such salaries, fees and expenses of such board shall be submitted to the Auditing Board of this state on a sworn voucher, as now required by law, and shall be paid by the treasurer of the State Bar Board out of the State Bar Fund." Further than this, the board had and has nothing to do with and no interest in the moneys in such fund. It has no different or greater interest therein or control thereof than has any person who might in the future have a claim against the fund for services rendered in carrying out the provisions of the law. The act is wholly silent as to what shall be done with any balance that may remain in the fund at the expiration of any annual licensing period or in case the board shall be abolished. We think there is no question but that the legislature in the first instance might properly have provided that any surplus remaining unexpended after carrying out the provisions of the act should be covered into the general fund of the state, or have made such other provision for the disposition of any resulting surplus as it saw fit; and likewise we think there is no question but that the legislature had and has the power at any time to wholly abolish the board or to make any changes that it sees fit with reference to its membership, their terms of office or compensation. See Cooley, Const. Lim. 7th ed. p. 388 and cases cited at note 2; State ex rel. Langer v. Crawford, 36 N.D. 385, 407, 162 N.W. 719, Ann. Cas. 1917E, 955, and authorities cited. And since the individual contributors who paid voluntarily have no personal and individual interest in the fund, the conclusion is irresistible that the disposition of any unexpended balance remains wholly with the legislature which created it, and which unquestionably possesses the right to abolish the board or change its membership. Having the power to abolish the board at any time, it likewise must have the power to determine and say when the purposes for which it was created have been accomplished. The fund is not analogous to a sinking fund, a special assessment fund or to any other tax fund created for a particular purpose which has not been accomplished or discharged. Thus the case is wholly different from the cases of Red River Valley Nat. Bank v. Fargo, 14 N.D. 88, 103 N.W. 390, and State ex rel. Viking Twp. v. Mikkelson, 24 N.D. 175, 139 N.W. 525, cited and relied on by the appellants.

It is plain upon a reading of § 811, supra, as amended, that in 1923 the legislature was of the opinion that the license fee of $15.00 first imposed resulted in a greater fund than was necessary to carry out the regulatory provisions of the act, and that in legislative contemplation an excess resulted which was not needed to accomplish those purposes. Therefore, the legislature, acting within a field exclusive to it and exercising the judgment which it had the right and which it was its duty to exercise, reduced the license fee to $10.00 and sought to dispose of the unused surplus theretofore accumulated. This same legislative intent was evidenced by the enactment of chapter 25, Laws 1921, creating the State Bar Association and providing for the payment of its expenses from the State Bar Fund in an amount not to exceed $3.00 per member annually. Said chapter 25, by § 3 thereof, provides:

"That such sum of money or any part thereof, shall be paid only upon vouchers drawn by the President and Secretary of the Bar Association duly submitted as required by law showing the expenses of making, printing and distributing the reports of its annual and special meetings and expenses of the association in connection therewith."

And again, evidence such intention, chapter 25 was amended by chapter 133, Laws 1923, which increased the amount payable to the State Bar Association from $3.00 to $5.00 per member. Both of these enactments plainly indicate that in the judgment of the legislature the requirements of the Bar Board Act were less than the revenues resulting from the fees imposed by the respective acts, and a reduction was therefore necessary and thus made. It may be that if it should appear that the Bar Board required such surplus so disposed of or any part of the same in order to discharge obligations already incurred under the act that the board might have such an interest in the fund as would warrant it in bringing the action. But it does not appear from the complaint, nor is any contention made, that such unexpended balance or any part of it is thus necessary for the board. Nor does it appear, nor is such contention made, that the reduced license fee of $10.00, taking into consideration the payments therefrom to the State Bar Association, will not result in the production of such an amount as will be necessary for the future purposes of the board.

To recapitulate: The Bar Board Act is regulatory. The license fee imposed thereby is a regulatory exaction. The money in the fund, the subject of the legislative action which is sought to be challenged by the plaintiffs in this suit, is an accumulated excess resulting from the license fees above the amount required to carry out the regulatory provisions. The plaintiffs, having voluntarily paid their license fees as individuals, have no interest in such excess peculiar to them alone. They are not seeking relief as taxpayers. As a board, they are not the custodians or trustees of the fund; as such, they are not financially responsible for any disbursements that may be made therefrom by legislative authority. The accumulated surplus in the fund is not necessary or required in order to discharge obligations heretofore incurred or to enable the board to perform the duties prescribed by the act or to compensate the members thereof.

The above conclusions being warranted, we think that the plaintiffs have not shown themselves to be clothed with the right to invoke injunctive relief. The plaintiffs attack the act in question on the ground that it is unconstitutional. They ask the court to declare it void for the reason that the legislature has disregarded constitutional restraints. "A court will not listen to an objection made to the constitutionality of an act by a party whose rights it does not affect, and who has, therefore, no interest in defeating it." Cooley, Const. Lim. 7th ed. p. 232; Mohall Farmers' Elevator Co. v. Hall, 44 N.D. 430 at pp. 435 et seq. and cases cited, 176 N.W. 131; State ex rel. Miller v. Leach, 33 N.D. 513, 157 N.W. 492; Burk-Waggoner Oil Asso. v. Hopkins (D.C.) 296 Fed. 492. See also note to People v. Pitcher, Ann. Cas. 1918D, 1185.

From what we have heretofore said, it is plain that this case may well be disposed of on other than constitutional grounds. We think that such other disposition should be made of it. As was said by Judge Cooley in his work on Constitutional Limitations:

"Neither will a court as a general rule pass upon a constitutional question and decide a statute to be invalid unless a decision upon that very point becomes necessary to the determination of the question. "While courts cannot shun the discussion of constitutional questions when fairly presented, they will not go out of their way to find such topics. They will not seek to draw in such weighty matters collaterally nor on trivial occasions. It is both more proper and more respectful to a co-ordinate department to discuss constitutional questions only when that is the very lis mota. Thus presented and determined, the decision carries a weight with it to which no extra-judicial disquisition is entitled." In any case, therefore, where a constitutional question is raised, though it may be legitimately presented by the record, yet if the record also presents some other and clear ground upon which the court may rest its judgment, and therefore, render the constitutional question immaterial to the case, that course will be adopted, and the question of constitutional power will be left for a consideration until a case arises which cannot be disposed of without considering it, and when consequently a decision upon such question will be unavoidable." Cooley, Const. Lim. 7th ed. p. 231."

This language is wholly pertinent in this case.

The order of the district court sustaining the demurrer to the complaint should be and is affirmed.

JOHNSON, J., and McKENNA and PUGH, Dist. JJ., concur.