State Ex Rel. Thompson v. Board of Regents , 305 Mo. 57 ( 1924 )

This is an original proceeding by mandamus brought by the relator as State Treasurer to compel the respondent as the Board of Regents of the Northeast Missouri Teacher's College to pay certain money into the State Treasury. The issuance of an alternative writ was waived and the return of the respondent was made to the petition as and for the writ.

Baldwin Hall and the Library Building, with their contents, constituting a part of the buildings and property of the said college, were destroyed by fire in January, 1924. The board had insured these buildings and their contents and other property of the college against loss and damage by fire; the policies issued were made payable to the board, and the premiums thereon were paid by the board out of unappropriated money in its hands, derived from students' fees for junior high school, extension and other work. This character of funds it had been the custom of the board to collect from the sources named since the creation and organization of the college in 1870 and to expend the same as discretion prompted. The insurance companies, in satisfaction of the losses incurred by the destruction of the buildings named and their contents, paid the board the sum of $110,000, and an additional sum of $7,355.33 for damages to other buildings not destroyed. Upon the receipt of these payments the board proceeded to expend a portion of same amounting to the sum of $26,166.47 for necessary repairs to buildings not entirely destroyed, and in the purchase of books to partially replace the library.

The relator contends that the money received by the board from the insurance companies is, within the meaning of the Constitution and statutes, state money, and should be paid into the State Treasury.

Constitutional and statutory provisions are invoked to sustain this contention. Chiefest among these and that which may be said to constitute a basis for the others is the constitutional provision that all money collected and received by the State from any source whatsoever shall go into the State Treasury. [Sec. 43, Art. IV, Const. Mo.] Supplemental to this section is the further constitutional provision that "all moneys now, or at any time hereafter, in the State Treasury belonging to the State, shall immediately, upon receipt thereof, be deposited by the treasurer to the credit of the State for the benefit of the funds to which they respectively belong" (Sec. 15, Art. X, Const. Mo.); and a statutory provision (Sec. 12309), made applicable by designation to educational and other public institutions, to the effect that: "Whenever any moneys are paid into the State Treasury under the provisions of this article (Art. VIII, Chap. 111, R.S. 1919), they shall be receipted for by the State Treasurer and placed to the credit of the fund to which they respectively belong, so that money derived from each institution may be placed to the credit of the fund herein provided for that institution." Section 12310 requires the moneys in the State Treasury to the credit of the institutions named in Section 12309 to be appropriated by the General Assembly for the support or improvement of the institution to which the fund belongs. Sections 12311 and 12312, are in express terms, limited in their application to penal and eleemosynary institutions and hence need not be considered.

1. The constitutional provision invoked by relator as the underlying authority for the issuance of this writ is but one of the many restrictions to be found in the Constitution of 1875 concerning the custody and expenditure of the revenue. The moving cause for the incorporation of these restrictions inMandamus. the Constitution was to put an end to an era of extravagance and waste in the use of the revenue which had prevailed for more than a decade prior thereto — the Constitution of 1865 containing no such limitation as is found in the provision under consideration. This provision, it will be seen from its terms, which are wisely chosen as a limitation upon power, is restricted to "revenue collected and money received by the State from any source whatsoever." By revenue, whether its meaning be measured by the general or the legal lexicographer, is meant the current income of the State from whatsoever source derived which is subject to appropriation for public uses. This current income may be derived from various sources as our numerous statutes attest, but no matter from what source derived, if required to be paid into the Treasury, it becomes revenue or state money; its classification as such being dependent upon specific legislative enactment or, as aptly put by the respondent, state money means money the State, in its sovereign capacity, is authorized to receive — the source of its authority being the Legislature. With this limitation — and the Constitution itself is but an instrument of limitations — it should be strictly construed. Thus construed the spirit which prompted the adoption of the provision is fully recognized and its purpose is promoted. Unless, therefore, it can be successfully contended in harmony with well recognized rules of interpretation that the Board of Regents of the College is the State and that moneys received by it other than from appropriations is state money, the constitutional provision will afford no support to the relator's contention.

While the board, in a sense, represents the State in the performance of its duties, it is but one of the many necessary instrumentalities through which the former is enabled to act within the scope of the powers conferred by law. These powers embody no attributes of sovereignty which would entitle them to be designated as the State's alter ego. While in a sense, the board is an agent of the State with defined powers, the importance of its duties, with their attendant responsibilities, is such as to necessarily clothe the board with a reasonable discretion in the exercise of same. This is inevitably true, first, because of the difficulty in framing a statute with such a regard for particulars as to cover every exigency that may arise in the future; and, second, because a restriction of the board's powers to the letter of the law would destroy its efficiency and to that extent cripple the purpose for which the institution was created. Legislatures, therefore, moved by that wisdom which is born of experience whether conscious or not of that aphorism that "new occasions teach new duties; time makes ancient acts uncouth," have contented themselves with defining in general terms the powers of such boards as are here under review, leaving the discharge of duties not defined and which may, under changed conditions, arise in the future, to the discretion of the board.

The case at bar which is but one of many in the management of our state institutions is illustrative of this fact. When the college was organized fifty-four years ago, it was evidently not within the contemplation of the framers of the law that the board would receive or be charged with the expenditure of other funds than those appropriated by the Legislature and hence no provision was made in reference thereto. In addition, for what reason it is profitless to discuss, no express power was conferred upon the board to protect the State's property from loss occasioned by fire or other destructive forces. The board, upon the college becoming operative, with the increase in the student body and the extension of its work, deemed it proper to charge students certain fees for junior high school, extension and other work. This custom has continued, not only in this institution but others of like character, during the terms of their respective existences. No criticism has ever been made of same and as proof of its approval no General Assembly during the more than fifty years of this college's operation has sought to either regulate the collection or disposition of the funds thus obtained. The fund arising from such collections has been retained by the board and expended by it for the college. [State ex rel. v. Walker, 240 Mo. l.c. 724.]

Among other expenditures which have been made by the board in the exercise of its discretion is that for insurance upon the buildings and equipment of the college. Lacking express statutory authority for its action the beneficiary named in the policies thus obtained, was the board. When the loss occurred the amounts due under the contract was paid, as it should have been, to the board. In furtherance of its discretion it proceeded at once to expend a portion of the money thus received in repairs necessary for the protection of certain damaged buildings and to partially replace the library. When this writ was served the board was taking steps to replace the destroyed buildings. It is charged with no wrong doing or the usurpation of any power which has not at least received tacit legislative and public approval for a half century. These facts are entitled to more than persuasive consideration in determining the question here seeking solution. Absent qualifying incidents they may arise to the dignity of ruling decisions. [State ex rel. v. Gordon, 266 Mo. 412; Folk v. St. Louis, 250 Mo. 141.] The sum of its offending is, that having made a valid contract in the State's interest and for its protection and the fruits of same having been received, that it shall pay this money into the State Treasury instead of using it to partially restore the buildings destroyed, and await legislative action authorizing its use for that purpose. Such a course disregarding the implication which the application for this writ involves as to the integrity and business judgment of the board after its years of experience, is fraught with injury to the college in interfering with its operation and thus lessening its opportunities for the advancement of higher education. The result of the granting of this writ will be to take money out of one of the State's hands and put it in another, which other must remain tightly closed until opened by a legislative sesame. Such a procedure can serve no beneficial purpose and savors of folly. Mandamus was never intended to subserve such an end as is here sought to be accomplished. A drastic writ at best, it is properly invoked to remedy "rights that lack assistance or wrongs that need resistance." It was never intended to be invoked simply to demonstrate the existence of the State's power, which, when thus exercised, cannot be denominated as other than tyranny.

II. In the foregoing discussion of the constitutional provision invoked by relator, we have stated generally that no statute required the payment into the State Treasury of the money here in controversy; and, that a statutory enactment wasStatutory a prerequisite to such payment and its receiptClassification and deposit by the Treasurer to entitle it, underNecessary. the Constitution, to be classified as state money. A review of the statutes in relation to the State Teacher's Colleges is therefore not inappropriate as confirmatory of this conclusion. These statutes, so far as applicable to the matter here under review are to be found in Chapter 102, Article 17, Revised Statutes 1919, as follows:

Under Section 11491, the board of regents is empowered to sue and be sued, to take, purchase and hold real estate and to sell and otherwise dispose of same. This section invests the board with powers akin to those of a corporation and within the limits defined recognizes the board as a legal entity without in any wise lessening the State's sovereignty.

Sections 11498 and 11500 confer upon the board the entire management of the college, including the right to determine the qualifications of students seeking admission therein.

Section 11505 requires the president of the board to make an annual report each year to the Superintendent of Public Schools of all receipts of money from appropriations, incidental fees and all other sources and the disbursements thereof and for what purpose, and the condition of said college. The terms of this section indicate by reasonable implication the power of the board to hold and disburse without covering into the State Treasury the funds here in question. If, as is contended by relator, all moneys received by the board were required to be paid into the State Treasury the only money that could be disbursed by the board and for which it would have to render an account would be that which had been appropriated for the college by the Legislature. The authorized disbursements of the board are not thus limited by the section which includes "appropriations, incidental fees and moneys received from all other sources." In addition, the board is required to state the purposes for which these disbursements were made. Certainly it cannot, under any rule of construction, be held that a payment into the State Treasury of incidental fees received by the college is in any sense a disbursement. Even the tyro in the use of our mother tongue, attributes no other meaning to the word than to pay out or expend. A payment into the Treasury, therefore, cannot be so classified, as it simply effects a change in the custodian and the place of deposit of the fund. The correctness of our construction of Section 11565 is further attested by Section 11506 which requires the treasurer of the board to make an itemized statement to the Legislature of the receipts and expenditures of the board showing all disbursements of money received from the State and from other sources. In harmony with the construction given to the foregoing sections in Section 11508, which requires the board at its annual meeting to set apart "all money derived from incidental or other fees paid by students," etc., thus clearly recognizing that the college has funds within its control which were never in the State Treasury nor appropriated by the Legislature.

III. Much space is devoted in the lucid brief filed by respondent to the non-application to the matter at issue of numerous other sections of the statutes relating to the management of public institutions and the receipt and disbursement of their funds from whatever sourceOther derived. Without burdening this opinion with theirStatutes. review, it seems sufficient to say that in none of these statutes, either by express enactment or reasonable implication does it appear that it was within the contemplation or intention of the Legislature that moneys received by the managing boards of educational institutions in the nature of incidental fees should, as a condition precedent to their use by the respective boards, be required to be first paid into the State Treasury and appropriated therefrom by the Legislature. In the absence of a mandatory requirement to that effect no duty is devolved upon such boards to thus dispose of these funds. Their duty in the premises in the presence of that discretion with which the law has clothed them is to expend such funds for the college, and account for same in the manner required by the plain provisions of the governing statutes.

No reason existing for the exercise of this court's mandatory power under the facts in this case, the writ is denied. All concur except White, J., absent; David E. Blair, J., concurs in result.