School District of Seward Education Ass'n v. School District

Newton, J.,

dissenting.

I find that I cannot agree with the majority opinion adopted as the law of this case. For a great many years the states have opposed and decried the steady and *786 seemingly inexorable growth of federalism and the centralization of governmental powers in the national capitol. This decision and the legislative act on which it is based is a step toward the creation of similar centralized powers in the Nebraska State Capitol on a 'statewide basis. It deprives local political subdivisions of the right to manage their own affairs in regard to employment practices. The law of supply and demand is nullified as is also ability to pay. It is replaced by the arbitrary decisions of a Commission operating on a statewide level. Since the wages of employees constitute a very major item in the budgets of all political subdivision's, the decisions of the Commission necessarily interfere with and, to some extent, govern the governmental duties of making budgets, appropriations, and ascertaining the levels of taxation. Although our political subdivisions are, at least for the most part, restricted in authority to powers granted by the Legislature, the theory of local self-government is recognized by our constitutional provisions relating to counties and cities. As was aptly stated in Schulz v. Dixon County, 134 Neb. 549 , 279 N. W. 179 : “Local self-government, having always been a part of the American system, finds recognition in the provisions of our State Constitution; and even if not expressly recognized, it is still to be understood that these instruments are framed with its present existence and anticipated continuance in view.”

The powers conferred by Chapter 48, article 8, R. R. S. 1943, on the Industrial Commission are very broad. If construed as applicable to the State and its political subdivisions, they necessarily conflict with existing statutes, theories of government, and constitutional provisions. Tax levies of certain municipalities, school districts, townships, and other governmental subdivisions are limited by legislative enactment and, in the case of counties, by the Constitution. The power to make appropriations and to levy taxes has been vested in the local governing bodies. There are penalties assessable *787 for violations such as excess levies or spending unbudgeted and unappropriated funds. Furthermore, tax leyies and appropriations are made on an annual basis and are not thereafter subject to change. Can the Commission, under the guise of settling a labor dispute regarding wages or other expense items, direct the governing bodies of these organizations to expend additional funds and, in so doing, violate statutory or constitutional provisions expressly passed or adopted for their government? Can it take over the powers of taxation and appropriation specifically granted these political subdivisions by the Constitution and statutes? This situation would indicate that Article XV, section 9, Constitution of Nebraska, did not contemplate placing public bodies under the Commission’s jurisdiction. Furthermore, not a single one of the statutes governing these political subdivisions in the manner mentioned has been amended to make the taxation and appropriation authorities subject to tinkering by the Commission. In this respect there has been a violation of Article III, section 14, of the State Constitution.

Also of interest is a situation which could develop on the state level. Nebraska has the standard republican form of government with its basic three-way division of powers. The most fundamental of all constitutional powers awarded to the legislative branch is the exclusive power to appropriate funds and levy taxes. This is a power which it cannot delegate. See, 16 C. J. S., Constitutional Law, § 133, p. 552; Opinion of the Justices, 54 Del. 366 , 177 A. 2d 205 ; Crane v. Frohmiller, 45 Ariz. 490 , 45 P. 2d 955 ; Blaine County Inv. Co. v. Gallet, 35 Idaho 102 , 204 P. 1066 ; El Dorado Independent School Dist. v. Tisdale (Tex. Com. App.), 3 S. W. 2d 420 ; Opinion of the Justices, 244 Ala. 386 , 13 So. 2d 674 ; Cook v. Up-to-Date Silk Yarn Dyeing Co., 155 Misc. 435 , 278 N. Y. Supp. 348 .

What then is the effect in an instance where the Legislature has appropriated a sum to recompense state *788 employees and provided for raising this money by taxation, then in a dispute over wages, the Industrial Commission raises wages? Any excess over the legislative appropriation cannot be paid under constitutional provisions and the attempt to delegate power to the Commission to settle the dispute by raising wages is an attempt to delegate power to the Commission to make a state appropriation. As such it is void and unconstitutional. “It is just as fundamental that the power to tax and the power to provide for the disposition of taxes raised are identical and inseparable, and the Legislature is clothed with full power and control over the disposition of revenues derived from taxation, including those raised by political subdivisions of the state under authority of the state, subject only to constitutional restrictions. * * *

“It should also be construed when the meaning is not clear to conform with fundamental principles of taxation in the levy and collection of taxes and in the apportionment and distribution thereof unless a contrary intent is indicated by its terms. The fundamental principle that the powers of the Legislature on matters of taxation are plenary except where clearly restricted by the Constitution, must also be considered. The powers of the Legislature on matters of taxation cannot be limited by implication or interpretation, and the restriction upon the legislative power must be clear and unequivocal. The construction given the constitutional provision by the Legislature and by administrative officers since its enactment must likewise be given the effect to which it is entitled.” State ex rel. School Dist. of Scottsbluff v. Ellis, 168 Neb. 166 , 95 N. W. 2d 538 .

The act creating the Commission purports to derive its authorization from Article XV, section 9, Constitution of Nebraska. The language of that section and the powers it intended to confer are not clear. Was it intended to apply to the State and its governmental sub *789 divisions? I submit that the foregoing indicates it was not.

Article XV, section 9, Constitution of Nebraska, provides: “Laws may be enacted providing for the investigation, submission and determination of controversies between employers and employees in any business or vocation affected with, a public interest, and for the prevention of unfair business practices and unconscionable gains in any business or vocation affecting the public welfare. An Industrial Commisison may be created for the purpose of administering such laws, and appeals shall lie to the Supreme Court from the final orders and judgments of such commission.” (Emphasis supplied.)

The scope covered is limited to “any business or vocation affected with, a public interest” Just what businesses can the Legislature authorize the Industrial Commission to deal with? It will be noted that this section uses the words “any business or vocation.” What is the common and accepted meaning of these words? A business is “a commercial or industrial enterprise.” A vocation is “the work in which a person is regularly employed.” Webster’s Third New International Dictionary, p. 2561. The terms refer to occupations, activities, and enterprises for gain, advantage, or livelihood. See Black’s Law Dictionary (De Luxe, 4th Ed.), p. 248. No governmental unit, whether it be the state or a subdivision, can be classified as a business or vocation. They are only governmental agencies supplying governmental services on a nonprofit basis. As such, the powers conferred in Article XV, section 9, Constitution of Nebraska, are clearly inapplicable to them. Employment by the State, for example, is not a vocation. Vocation means type of employment such as stenographer, accountant, secretary, laborer, etc. In adopting Chapter 48, article 8, R. R. S. 1943, as amended, the Legislature has exceeded its constitutional powers in its attempt to bring governmental agencies within the ambit *790 of the act and the act is unconstitutional. “The words and terms of a constitutional provision are to be interpreted and understood in their most natural and obvious meaning, unless the subject indicates or the text suggests that they have been used in a technical sense.” State ex rel. Caldwell v. Peterson, 153 Neb. 402 , 45 N. W. 2d 122 . See, also, State ex rel. Johnson v. Chase, 147 Neb. 758 , 25 N. W. 2d 1 .

What is meant by the term “affected with a public interest”? It is a fundamental principle of constitutional construction that effect must be given to the intent of the framers of the organic law and of the people adopting it. See 16 Am. Jur. 2d, Constitutional Law, § 64, p. 239. In State ex rel. State Railway Commission v. Ramsey, 151 Neb. 333 , 37 N. W. 2d 502 , it is held: “The meaning of a constitutional provision is to be determined as of the time of its adoption, and the intent and understanding of its framers and the people who adopted it is the principal inquiry in construing it.” In Ramsey v. County of Gage, 153 Neb. 24 , 43 N. W. 2d 593 , it is stated: “* * * this court will take judicial notice of the proceedings of the Constitutional Convention.” The decision of the court is embodied in the following statement: “It is quite apparent from an examination of the Proceedings of the Constitutional Convention with reference to the subject matter here involved that the people did not only change the language of the provision of the Constitution in question but the construction as well.” See, also, Swanson v. State, 132 Neb. 82 , 271 N. W. 264 .

The constitutional provision in question was adopted pursuant to the Constitutional Convention of 1919-1920. An examination of the Convention proceedings and of the statement made by the drafter of the provision make it crystal clear that it was not intended to bear upon or affect governmental units. The amendment was denominated “Proposal No. 333.” As originally introduced, it provided in part as follows: “Section 1. Laws *791 may be enacted providing for the investigation, submission and determination of controversies between employers and employees in which the public welfare is affected; providing against unfair business practices and unconscionable gains in any business or vocation affected with a public interest; and the interest of the public may be protected by law against interruption, either in the public service, in the operation of public utilities or in the production and distribution of commodities essential to the public welfare.” (Emphasis supplied.) Note it specifically included public service, as well as public utilities, and commodities essential to the public welfare. Considerable discussion ensued resulting in its amendment as finally adopted. At that time the delegate offering the amended version defined the term “affected with a public interest.” He distinguished it from the general welfare and then stated: “Business, as I understand it, affected by a public interest is business in which the public surrenders to some person, firm, association or corporation, some right in which the public gives to some individual or corporation, some privilege which it might not otherwise have the right to enjoy. If the Convention will permit me I will read from as good an authority as we have upon definitions, Bouvier’s Law Dictionary:

“ ‘PUBLIC INTEREST. If by public permission one is making use of public property and he chances to be the only one with whom the public can deal with respect to the use of that property, his business is affected with a public interest which requires him to deal with the public on reasonable terms.’ That is quotation from Cooley on Constitutional Limitations.

“ ‘Business affected with a public interest:

“ ‘1. Where the business is one, the following of which is not of right, but is permitted by the state as a privilege or franchise. 2. Where the state on public grounds renders to the business a special assistance by taxation or otherwise. 3. Where for the accommo *792 dation of a business special use is allowed to be made of public property or of a public easement. 4. Where the special privileges are granted in consideration of some special return to be made to the public.’

“In other words business that is affected by a public interest is business for which the public as a whole, which society because of some person or corporation and special right, privilege or franchise, and in consideration of the granting of that right of franchise the public interest is affected and the conduct of such corporation or person may be regulated by law.”

It is clear that the term “business or vocation affected with a public interest” was used in its narrow legal sense and that this usage was understood by the delegates. The original reference to “public service” which might be interpreted as extending to governmental services was deleted, presumably for good reason. The businesses referred to include only private businesses.

“Respecting regulation consistently with due process, businesses ‘affected with public interest’ are merely those subject to exercise of police power. Wholesale Tobacco Dealers Bureau of Southern California v. National Candy & Tobacco Co., Cal., 82 P. 2d 3, 14 , 118 A. L. R. 486.

“A business is ‘affected with a public interest’ when by law or legal authority it is given a virtual monopoly in its field or where the public adapt their business or conduct to the methods used by it. Western Buse Telephone Co. v. Northwestern Bell Telephone Co., 248 N. W. 220, 229 , 188 Minn. 524 . * * *

“Constitutional provisions requiring ‘due process of law’ and ‘equal protection of the laws’ do not preclude a state Legislature from regulating a business ‘affected with a public interest,’ which • means subject to the ‘police power,’ where regulation is not unreasonable, arbitrary, capricious, or discriminatory, and means are related to object of regulation. Bohannon v. Duncan, 196 S. E. 897, 898 , 185 Ga. 840 . * * *

*793 “A business is ‘affected with a public interest,’ where the one engaged in it is acting under a franchise, or has a virtual monopoly in it, or where from the nature of the business the one carrying it on is necessarily intrusted with the property or money of his customers, or where the business has been conducted in such manner that the public have adapted their business to the methods used; but the fact that a license is required does not make the business a public employment. People v. Steele, 83 N. E. 236, 238 , 231 Ill. 340 , 14 L. R. A., N. S., 361, 121 Am. St. Rep. 321 ; City of Chicago v. Powers, 83 N. E. 240 , 231 Ill. 560 .

“The, phrase ‘affected with a public interest’ can mean no more than that an industry, for adequate reason, is subject to control for the public good, and there is no closed class or category of such businesses affected with a public interest. Respecting regulation consistently with due process, businesses ‘affected with public interest’ are merely those subject to exercise of police power; touchstone of public interest not being enjoyment of any franchise or monopoly. Nebbia v. People of State of New York, N. Y., 54 S. Ct. 505 , 291 U. S. 502 , 78 L. Ed. 940 , 89 A. L. R. 1469.” 5A Words and Phrases, Business Affected, pp. 675, 676.

Public or governmental business has never been a subject of the police power. Such an exercise of power is unnecessary because this type of business is subject to direct legislative control at all times and in all respects without resort to the extraordinary remedy provided by the police power. It seems clear that Article XV, section 9, does not authorize legislation bringing political subdivisions or governmental agencies within the jurisdiction of the Industrial Commission. I conclude that insofar as present statutes attempt to delegate such, power, they are unconstitutional and void.

In passing it may be well to note that Article XV, section 9, was adopted as a result of similar activity in the State of Kansas, yet in defining businesses “affected *794 with a public interest,” the Kansas statute omits governmental units. See Kansas Statutes Annotated, section 44-603.

Another fundamental rule is that every statement in a state constitution must be interpreted in the light of the entire document, rather than as a sequestered pronouncement and because fundamental constitutional principles are of equal dignity and none must be so enforced as to substantially impair the other, if there is an apparent repugnancy between different provisions, the court should harmonize them if possible. See 16 Am. Jur. 2d, Constitutional Law, § 66, p. 243. In State ex rel. Johnson v. Chase, 147 Neb. 758 , 25 N. W. 2d 1 , it is said: “The language of the Constitution is to be interpreted with reference to the established laws, usages and customs of the country at the time of its adoption. * * *

“The Constitution must be read in connection with the facts of history and the development of a representative form of government. * * *

“The Constitution as amended must be construed as a whole.” See, also, Swanson v. State, 132 Neb. 82 , 271 N. W. 264 .

If Article XV, section 9, is limited in its application to public service companies and other private or corporate businesses which bear directly and materially on the public welfare and are therefore “affected with a public interest,” there will be no conflict with other constitutional provisions, but if it is not, there is an obvious conflict. As heretofore pointed out, on the state level, the Legislature, and the Legislature only, can control the appropriation of money and the taxes to be levied. See Article III, sections 22 and 25, Constitution of Nebraska. Even the Legislature cannot incur indebtedness in excess of $100,000. See Article XIII, section 1. The division of governmental powers is provided for in the following language: “The powers of the government of this state are divided into three *795 distinct departments, the legislative, executive and judicial, and no person or collection of persons being one of these departments, shall exercise any power properly belonging to either of the others, except as hereinafter expressly directed or permitted.” Article II, section 1, Constitution of Nebraska. No direct constitutional provision authorizes such an encroachment by the executive or judicial departments upon the budgetary and appropriative powers of the Legislature.

There is also, as has been pointed out, a conflict with Article VIII, section 5, which places a limit on the amount of taxes which counties may assess or levy. Counties are presently hard pressed to finance their customary duties. To permit a foreign body to impose additional financial burdens by means of increased wages and salaries on a county which is already levying the maximum tax allowed will compel an excess levy or will simply require the abandonment or curtailment of county services rendered in connection with the maintenance of roads and bridges, the administration of social welfare, and of the numerous activities engaged in by various county officers. In the latter case, they will be unable to fulfill the duties imposed upon them by law.

From a practical standpoint, the Commission, by following guidelines it might see fit to adopt, can bring about a statewide wage scale for school district employees with a complete disregard for individual fitness and irrespective of the size and ability to pay of the respective districts. In so doing it can bring about the demise of many school districts and may well impair the operation of Article VII, section 6, which requires the Legislature to provide for free instruction in the common schools. In attempting to interfere with school curriculums, teachers’ duties and hours, and local conditions under which teachers are employed and work, it will also clash with Article VII, section 14, which gives to the State Department of Education the general *796 supervision and administration of our school system.

The conflict with other constitutional provisions indicates two things. First, that Article XV, section 9, was never intended to be so broadly construed. Second, that in construing it in the light of the Constitution as a whole, it cannot be interpreted as a grant of authority over the State and its political subdivisions if it is to be reconciled with other constitutional directives.

I submit that Chapter 48, article 8, R. R. S. 1943, as amended, is unconstitutional and void.

White, C. J., joins in this dissent.