(209 P.) General, C. W. King, Assistant Attorney General, Attorneys for Defendant. Exhibit 1. Exhibit 2 Financial Condition of the State of Oklahoma, Surplus over requirements, 3,184,302.65 year ending June 30, 1919 $979,741.11 es the esti Statement showing the earnings (column 1) of the state accruing to general revenue, from sources other than ad valorem taxes, for the fiscal year ending June 30, 1920; mated earnings (column 2) from same sources for fiscal year ending June 30, 1921, as computed by F. C. Carter, State Auditor; the estimated earnings (column 3) from same sources for said fiscal year as computed by Fred Parkinson, State Examiner and Inspector; and the estimated earnings (column 4) from same sources for said fiscal year as computed by J. B. A. Robertson, Governor. Column 5 shows the amounts collected by the various named departments and institutions for the months of July and August, 1920. Column 6 shows the actual earnings collected during the fiscal year ending June 30, 1921, and credited to the general revenue fund for 1921. 6,225,682.80 7,295,492.21 491,640.19 $10,389,726.56 4,229.30 8,210,955.01 36,000.00 $8,174,955.01 $ 2,214,771.55 Appropriations made by Bond accruals for fiscal $6,528,036.64 Eighth Legislature (1921) 307,500.00 199,268.24 7,034,804.88 $ 5,263,368.36 3,006,665.05 $2,256,703.31 1,256,555.53 $3,513,258.84 It being agreed that the foregoing are the actual facts in the case, the court is controlled by such facts in its determination and application of the law. In determining whether the levy in ques tion is wholly invalid and whether any par ticular items in the foregoing estimate are of such character as the board has no authority to include, and whether such items, if any, are unlawfully included and therefore invalid, we must look to the constitutional and statutory provisions which govern such matters. It is agreed in the eighth paragraph of the foregoing agreed statement of facts that the sum of $1,721,401.44 was estimated as and for accraing deficiencies, and said sum included by the Board of Equalization in its estimate of the revenue required for the fiscal year ending June 30, 1921; and further agreed that no part of said sum had theretofore been appropriated by the Legislature. It appears that this item of $1,721,401.44 was intended to meet deficiencies which the board estimated would result from the then growing increase in costs of state supplies, traveling, and other necessary expenses, salaries of clerks, employees, etc., and that the board made an estimate of what it thought the approximate amount of such increase in costs would be, and fixed the above sum ($1,721.401.44) as an amount sufficient to meet such increase and computed a rate sufficient to cover same. The law does not authorize the board to include such items in its estimate of needed revenue, nor authorize a rate to be computed so as to cover such an estimate. Section 55, article 5 of the Constitution provides: "No money shall ever be paid out of the treasury of this state, nor any of its funds, nor any of the funds under its management, except in pursuance of an appropriation by law, nor unless such payments.be made within two and one-half years after the passage of such appropriation act, and every such law making a new appropriation, or continuing or reviving an appropriation, shall distinctly specify the sum appropriated and the object to which it is to be applied, and it shall not be sufficient for such law to refer to any other law to fix such Now, bearing in mind the provisions in section 55, article 5, supra, of the Constitution, that no money shall ever be paid out of the treasury of this state except in pursuance of an appropriation by law, and the further provision in said section that every law making an appropriation shall distinctly specify the sum appropriated and the object to which it is to be applied, and keeping these provisions in mind in connection with the provision in section 7375, R. L. 1910, that, "The amount of the levy so computed by the State Board of Equalization shall specify distinctly the purpose for which tax is levied and shall in no case exceed the amount appropriated by the Legislature for such purpose," we must conclude that the Board of Equalization had no authority to include the item of $1,721,401.44, agreed to in paragraph 8 of the stipulation, as the amount estimated for deficiency expenses and for which it is agreed that no appropriation was made by the Legislature. Under the foregoing provisions of the Constitution and statutes, we see no room for controversy as to the powers of the Board of Equalization in such matters; and as to the limitations placed upon its authority in this regard, we cannot see how language could make it plainer than, "that no money shall be paid out of the state treasury except upon an appropriation," and that the Board of Equalization, in making its estimate of the rate, shall in no case exceed the amount appropriated by the Legislature. As to the wisdom of these limitations it is unnecessary to discuss. The conditions presented, in the present case would seem to explain their wisdom, and it may suffice that such are the plain provisions of both the Constitution and the statutes. There is but one thought conveyed by these provisions, to wit, that no money shall be paid out of the state treasury except by an appropriation, and that the rate estimated by the board shall in no case exceed the amount appropriated. Hence the levy in Section 23, article 10, of the Constitution question is invalid as to said item of $1,721,provides: sum." 401.44, estimated as a possible deficiency, for the reason the board had no power to include it. In deciding whether the levy was valid in all other respects, the court should be governed by the question' whether the board had power, under the law, to do the things which it did, rather than by the question of actual necessity. It is contended further by plaintiff that no levy at all was necessary; that the cash Section 7375, Revised Laws of 1910, pro- balance on hand, at the time the estimate vides: "The amount of the levy so computed by the State Board of Equalization shall specify distinctly the purpose for which tax is levied and shall in no case exceed the amount appropriated by the Legislature for such purpose." was made, plus the lowest estimated sum which might reasonably be expected from other sources than from the tax about to be levied, was sufficient to meet all expenses and every valid requirement without making any level at all, and therefore the board had (209 P.) no authority to add the item of 20 per cent. of the estimated expenses for the ensuing year as an allowance for delinquency in the payment of the taxes about to be levied; that the cash on hand over and above all legal requirements and outstanding claims, plus the amount expected from other sources than the levy about to be made, being sufficient to meet all legal requirements, the 20 per cent. item, added to the total expenses as an allowance for delinquent taxes, was purely arbitrary and fictitious; that, no levy being necessary, there would be no delinquent taxes, if no levy was made, and, there being no delinquent taxes, there was no authority or reason for adding the 20 per cent. item as an allowance for delinquent taxes, and that such 20 per cent. item was therefore arbitrary and void. The basis of this contention is the fact that at the end of the fiscal year 1920 and at the beginning of the fiscal year 1921 there was an unexpended cash balance over and above all legal requirements in the general fund amounting to $2,214,771.55, and that the lowest estimate made as to what might reasonably be expected from other sources than from the levy in question, the lowest estimated earnings or collections expected from other sources during the ensuing year, was $5,405,000. of the fiscal year 1921, over and above all estimated expenses, the sum of $2,256,703.31, without including any revenue collected from the 1.5 mill levy involved herein. In other words, the cash balance on hand at the beginning of the fiscal year 1921, plus the amount collected during the year, was sufficient to meet, and did meet, all legitimately estimated expenses and appropriations, and left an unexpended cash balance of $2,256,703.31. Now, in consideration of the fact that under the board's lowest estimate, the cash on hand, plus the amount estimated as the amount expected to be collected during the ensuing year, they would have had over $584,000, without making any levy at all, and this fact, taken in connection with the actual facts stipulated herein and shown by the public records, to wit, that the amount collected from other sources than the levy in question far exceeded the estimate made by the Governor, and that, had no levy at all been made, all legitimately estimated expenses for the year could have been met, and were met, and the state had over $2,500,000 left in the treasury, without any necessity for a levy and without using any of the new levy. provision: * For the purpose of computing the amount of the levy hereby made, the State Board of Equalization shall, at its annual meetor as soon thereafter as the total valuation of ing on the third Monday in June of each year. all the property in this state subject to taxation under the provisions of this chapter shall have been ascertained, and from day to day thereafter, until such time as they shall compute the amount appropriated to pay the expenses of the state government for the period aforesaid with twenty per cent. added thereto as an allowance for delinquent taxes. Now these facts must be taken into consideration in interpreting the statutes which authorize the board to add 20 per cent. to the It appears from the pleadings and from estimated expenses for delinquency in the the stipulation of facts, set out above, that payment of taxes for the ensuing year. Secthree estimates were made, one by the Gov-tion 7374, R. L. 1910, contains the following ernor, one by the State Auditor, and one by the State Examiner and Inspector; that the Governor's estimate of what might be expected to be derived from other sources was the lowest of the three, and it is contended that, taking this lowest estimate, $5,405,000, and to that sum adding the cash balance on hands made the sum of $7,619,771.55, which sum according to the board's own estimate, was $584,966.62 more than was necessary to meet all the legitimately estimated expenses without making any levy at all; that the legitimately estimated expenses and the amount appropriated by the Legislature The foregoing allowance for delinquent amounted to $7,034,804; that the amount of taxes refers to the delinquency in payment cash balance on hand, plus the lowest es- of taxes levied for the ensuing year, and not timate of the amount expected to be collect- to delinquency to taxes theretofore levied. ed from other sources than the levy about To illustrate, should the board make a levy to be made, amounted to $584,966.62 more of 2 mills, then they are authorized, under than was necessary to meet all the estimated the foregoing statute, to estimate that 20 expenses without making any levy at all. In other words, it is contended that, had no levy at all been made, and no 20 per cent. item been added, the state, with the amount on hand, plus the amount collected during a cash basis for the ensuing year. the ensuing year, would have paid all legit- Now we do not construe the above statute imately estimated expenses, and had $584,- as a mandatory provision requiring the 966.62 left unexpended, and this contention Board of Equalization to add such 20 per is based upon the estimate which the board cent. item to the estimated expenses, whether made upon the showing June 30, 1920. The it be necessary or not, but as we view and stipulated facts show in Exhibit 3, supra, interpret the above section, said provision that the state in fact did have, at the close for adding 20 per cent, for delinquency is per cent. of such levy will be delinquent in payment, and they are authorized to add such 20 per cent. to the other estimated expenses in order that the state may be upon made in contemplation that there will be a necessity for levying a tax, but if there be no necessity for levying a tax at all, then the board is not compelled to add the 20 per cent. for delinquent taxes, and the stipulated facts in this case show that the board, under its own lowest estimate, would have had more than $584,000 necessary to pay the year's expenses, and that as an actual fact it had over $2,500,000 more than was necessary without making any levy at all. was purely fictitious and arbitrary, and added for the purpose of increasing the amount of expenses to be raised in order to justify a levy. [12] It is contended also, in justifying the addition of the 20 per cent. item that, inasmuch as the statute reads: the levy hereby made, the State Board of We But the foregoing is not all the undisputed evidence of arbitrariness and lack of authority of the board to make the levy in question, or to add the 20 per cent. as delinquency in the collection of same, for it is stipulated that at the time the levy was actually made, September 30, 1920, there had been collected for the two preceding months, the board is compelled to add the 20 per not counting what had been collected in Sep-cent. item for delinquent taxes in order to tember, but for July and August there had estimate the total expenses, or as a means of been collected from other sources than ad estimating the total expenses, and that the valorem taxes the sum statute requires it to be done in order to of $1,982,217.06. Therefore, at the time the estimate was ac- complete the estimate of the total expenses. tually completed and the rate certified, there With this contention we cannot agree. was on hand in the state treasury $2,214,- find nothing in the statute to warrant or 771.55, and from July 1, 1921, to September support such contention. Beginning with 13, 1921, the time the estimate was actually the first part of the above quotation, this 20 completed, $1,982,217.06 had been collected, per cent. item is authorized, as we interpret making a cash balance on hand in the treas-it, for the purpose of computing the amount ury amounting to $4,196,988.61, which, added to the $5,405,000, the lowest estimate expected to be collected, and which lowest estimate was little over half of what was actually collected, makes a sum of $9,601,988.61 actually on hands at the time the estimate was actually completed, and was $2,566,183.73 more than was necessary without adding the 20 per cent. item, and the sum of $1,160,222.75 more than was necessary with the 20 per cent. item added. This showing, being disclosed by the actual facts stipulated to in the record, is nothing less than conclusive that the 20 per cent. item amounting to $1,406,960.98 was purely arbitrary and without authority of law, and even with that estimate added it had on hands, including what they estimated as being able to collect, over $1,160,000 more than was necessary to run the state's expenses with the 20 per cent. item added. The stipulated facts show further that the sum of $1,620,052.44 was collected from ad valorem taxes which the board had refused to consider in its estimate of what might be collected, and the sum of $8,463,349.25 was actually collected during the year from other sources than ad valorem taxes. All these stipulated facts being taken into consideration with the stipulated fact that at the time the estimate and rate were actually computed, September 13, 1920, the amount of cash on hand in the treasury, plus the amount the lowest estimation which they expected to collect, was $2,566,183.73 more than the state would need for that year's expenses, shows conclusively that the 20 per cent. item of the levy to be made, and is authorized only when a levy is necessary, and if no levy plenty of money in the treasury to pay the is made and no levy necessary, and there is expenses of the state from the ensuing year without making any levy, then and in such event there is no authority for adding the 20 per cent. as delinquent taxes in a levy that is not going to be made. In other words, the authority for adding the 20 per cent. item is coupled and depends upon the necessity for making a levy. In view of this condition and these facts it appears to us that the 20 per cent. item was fictitious and unnecessary, and that the board was without authority to make it. This being true, no levy at all was necessary, and the 1.5 mile levy thus made was an unnecessary and unauthorized burden upon the taxpayers of the state, and was void. [13] It is contended also that the board was not required to take into consideration the amount of surplus balance on hand in making its estimate. It is even contended that the board had no authority to do so, and that it exceeded its authority by doing so. And it is further contended as the amount of surplus balance on hand exceeded the amount of said deficiency item, and that if the board had not included said surplus balance in its estimate, but had left it as an unexpended balance in the treasury, there would have been sufficient funds to take care of the deficiency item, and for this reason the deficiency item should be sustained and the levy held valid as to such item, although the board had no authority to include such item in its estimate. But this logic seems (209 P.) to pay all expenses for the ensuing year, then no levy is necessary and no authority for adding the 20 per cent. item unless a levy is necessary. too flimsy to constitute a basis for the validity | levy, including said deficiency item, on the of a deficiency item. We cannot understand ground that to hold a portion of the levy inhow two wrongs may make a right, nor how valid will work a hardship on taxpayers, two violations of the law may make a com- who have already paid their taxes for the pliance with the law. We cannot compre- year in question, but the court are not rehend how the fact that the board violated sponsible for such condition, nor for the law the law by including the deficiency item can being as it is. The law says the board has be justified in so doing by violating the law no authority in any case to make a rate as to the cash balance item, nor how the greater than for the amount appropriated. deficiency item can be made valid by violat- | And if there be an amount on hand sufficient ing the law as to the cash balance item. Section 7375, supra, plainly and positively enjoins "that the tax so levied shall in no case exceed the amount appropriated by the Legislature." This being the plain provision It is contended though that the entire of the statute, we feel it our duty to con-levy should be sustained because of such strue the law as it is. But in our opinion condition-contended that with smaller taxneither the Constitution nor the statute sup- payers unable to employ counsel to protect port the theory that the board was without them while larger taxpayers have paid their authority to include the surplus cash balance taxes under protest and will thereby be enin its estimate. The clear intent of the law abled to recover the amount of taxes they refutes such theory. The clear purpose of have paid and the smaller taxpayer left to the law is that if the expenses of state gov-bear the burden; but the answer to this ernment should have been less than was ex-contention is that such condition would not pected during the preceding year, and the have existed had not the Board of Equalizaamount of revenue collected during such tion exceeded the positive injunction of the year were greater than was expected, there- law in including such deficiency item in its by leaving a cash balance in the treasury overestimate, and we indulge the hope that this and above all legal requirements and out-clear statement of the law may serve to prestanding indebtedness, such cash balance vent its violation in the future. should serve toward lessening the burden of the taxpayer for the ensuing year, otherwise the very condition would be brought about which plaintiff claims was intended to be brought about by the Board of Equalization, namely, the creation of a large surplus fund for the purpose of exploitation. In our opinion the entire levy was void, and that plaintiff is entitled to the relief prayed for. The defendant is hereby enjoined from collecting the tax herein involved. ELTING, NICHOLSON, MILLER, and The proposition is too simple to need fur-KENNAMER, JJ., concur. ther discussion. In our opinion the Board MCNEILL, J., dissents. JOHNSON, J., not voting. of Equalization, not only had authority to KANE, J., desires to express his views in include the surplus cash on hands, but it was a separate opinion. its duty, under the law, to do so in order thereby that the rate upon the taxpayer would be lessened for the ensuing year. It has been moved by defendant for judgment on the agreed statement of facts on the ground that, as contended by defendant, the Legislature, having made emergency appropriations amounting to $3,006,665.05, thereby ratifying and confirming the act of the board in making the aforesaid deficiency estimate, such deficiency estimate should be sustained. This contention we cannot sustain. The fact that the Legislature made emergency appropriations greater than the amount of said deficiency items does not establish the validity of such deficiency item. Both the Constitution and statutes say that such character of items shall not be included, and there is nothing in the emergency bills, passed by the Eighth Legislature, which either repeals, or attempts to repeal, any existing constitutional or statutory provisions on the subject, nor is there anything in said emergency appropriations which attempts expressly to validate such deficiency item. It is further sought to sustain the entire MCNEILL, J. I am unable to agree with the conclusion reached by the majority opinion announced in the twelfth and thirteenth syllabus or that part of the opinion as discussed and announced as the law in those two syllabi. In view of the vast importance of the decision and the force and effect of the law as announced, I feel it my duty to give my reason for dissenting. The case is of importance because the real question is whether a few taxpayers may, by reading into the statute language that it does not contain, escape paying their just proportion of the taxes levied for maintaining the state government. I say this because section 7, subdivision B, chapter 107, Session Laws 1915, provides, where a person has paid his tax even under protest, if he fails to file suit for recovery of the money paid within 30 days, he has no remedy. Such was the holding of this court in the case of A., T. & S. F. R. Co. v. Eldredge (Okl. Sup.) 169 Pac. 1071; Duling Co. Treas. v. First National Bank of Weleetka (Okl. Sup.) 175 Pac. 554; |