KOSRAE STATE COURT
FEDERATED STATES OF MICRONESIA
cite as Siba, et al. v. Sigrah, et al., (Kosrae, 1990)
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THURSTON SIBA, et al.,
Plaintiff

vs.

RENSLEY SIGRAH, et al.,
Defendant

Civil Action No. 30-90

OPINION

     This action is a complaint for writ of mandamus and in the alternative injunctive relief brought by the Speaker of the Legislature to require the Director of Finance1 to disburse funds according to State Law 4-126.

     The complaint was filed August 31, 1990. That same day a conference was held where plaintiff's motion to specially set the case for trial was heard and granted. Another conference was held on September 1, 1990, to further establish a briefing schedule for trial. It was determined that plaintiff would first submit a trial brief on September 2, 1990, and that defendants would submit their memorandum the following day. Trial was set for September 4, at which time both parties submitted supplemental briefs.


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     On September 4, 1990, trial was held in this matter. Appearing for plaintiff was Jim O'Brien, and for defendants Glenn Jewel. After a four-hour recess, the Court delivered an oral judgment, declining to issue the writ of mandamus or grant injunctive relief, and reserving judgment on defendants' counterclaim for a declaratory judgment, which was made at trial.

     This opinion contains the Court's reasoning and the ruling on defendants' counterclaim for a declaratory judgment.

FINDINGS OF FACT

     (1) On July 13, 1990 the State Legislature passed Bill No. 4-224 (the "bill") on second reading. The bill appropriated the sum of 14,500 for the funding of September 8, 1990 Liberation Day activities. The Bill apportioned the sum amongst the four municipalities and the Kosraean Community in Pohnpei. The Bill named the Speaker of the Legislature as the allottee.

     (2) Acting Governor Mackwelung issued a veto message on the bill on August 8, 1990.

     (3) On August 14, 1990 the State Legislature overrode the executive veto on the bill.

     (4) On August 22, 1990, Acting Governor Mackwelung advised the State Legislature that he had instructed defendants to freeze access to the funds appropriated by L.B. 4-244 (now S .L . 4-126) .

     (5) On August 29, 1990 plaintiff requested defendant Sigrah to disburse the funds appropriated by S.L. 4-126.


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(6) Defendant Sigrah, by letter dated August 30, 1990 made clear his refusal to release funds appropriated by S.L. 4-126.

ISSUES PRESENTED2

     (1) Are defendants precluded from asserting the unconstitutionality of S.L. 4-126 as a defense to a mandamus action?

     (2) Does S.L. 4-126 violate the principles of separation of powers and the system of checks and balances inherent in the Kosrae State Constitution?

Unconstitutionality as a Defense to Mandamus

     Plaintiff asserts in its trial brief, and through a motion in limine at trial that defendant must be precluded from asserting the unconstitutionality of S.L. 4-126 as a defense to mandamus. Plaintiff phrased the issue in terms of defendants' lack of standing to assert the unconstitutionality of the law, and also in terms of governmental policy. The Court denied the motion in limine at trial. The following reflects the Court's reasoning on the issue.


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Standing

     The essence of plaintiff's argument is that defendant will not be injured personally by complying with S.L. 4-126, therefore, they cannot be heard on the issue. The subject of who may raise a constitutional issue has been the subject of dispute amongst Courts in the United States. Some Courts, such as the Supreme Court of the State of Washington have held in circumstances similar to those present here that the public officer sought to be compelled may raise the issue of constitutionality as a defense.

[I]t [is] acknowledged that the authorities on the question were in conflict; but it was said that the preferable rule was with the cases holding that the question could be thus raised. On principle the ruling seems to be sound. If it b e true that an act of the Legislature authorizing the disbursement of public money is unconstitutional, to inquire into it on the objection of an officer having in charge such disbursement may save an expenditure that would be otherwise lost to the state were the Court to await the suggestion of the question by some private litigant injuriously affected by the act. There is no merit in the objection that the officer is without interest in the proceeding. He is charged with the duty of conserving the public funds, and consequently must be held to have an interest in any proceeding which directly tends to that end. State v. Clausen (1911) 117 p. 1101, 1103.

     Other Courts have made a distinction between so-called ministerial and non-ministerial duties in precluding defendants from raising unconstitutionality of the statute as a defense to mandamus. The Minnesota Supreme Court has stated in that regard:


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Officials acting ministerially are not clothed with judicial authority. To permit them to refuse to perform their duty on the ground that the commanding law is unconstitutional would be a dangerous practice, in that they who have only ministerial duties would be raising questions affecting the rights of third persons while they themselves would have no direct interest in the question and could not in any event be made responsible. State v. Steele County 181 Minn. 427, 232 NW 737.

The distinction between so-called ministerial and non-ministerial duties has been criticized as result oriented. As stated by Professor Antieau:

Courts have customarily said that mandamus is available to control "ministerial" duties, but not "discretionary" ones. Neither of these words are exact terms of art, and judicial affixation of these labels in mandamus actions can often be both perplexing and simply indicative of the result described. Antieau, The Practice of Extraordinary Remedies (1987), p. 305.

Though the Court finds this criticism well-founded, an inquiry into the functions and duties of defendants must be made in order to determine whether defendants have standing to assert the unconstitutionality of S.L. 4-126.

     The Director of Finance is charged with certain powers and duties, which are outlined in KC 10.202, quoted here in relevant part:

          The Director has the power and duty to:

(6) withhold his approval when necessary to prevent misuse of State funds, including the disbursement of funds in excess of appropriation; Id.


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As Treasurer of the State, the Director of Finance also is charged with responsibility for the Treasury:

The Director is the Treasurer and has full responsibility and authority for the Treasury, for the collection, administration, and safekeeping of all public funds deposited in the Treasury as general realizations of the Government and for disbursements from the Treasury pursuant to law. KC 10.203.

These sections show that the Director of Finance is responsible for assuring proper expenditures and safeguarding of public funds.3 These sections imply a certain amount of discretion to be exercised by the Director of Finance. He may withhold his approval of expenditures if it is necessary to prevent misuse of  r public funds.

     The distinction between so-called ministerial and discretionary functions is merely a rephrasing of the standing issue. Is this defendant entitled to raise the issue of unconstitutionality as a defense to mandamus? As stated in State v. Clausen, supra, a fiscal officer is "charged with the duty of conserving the public funds, and consequently must be held to have an interest in any proceeding which directly tends to that


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end." 117 P. 1101, 1103. Phrased in yet another fashion, "If these defendants are not permitted to raise the issue, then who will raise it?" Were the mandamus issued, the Director would disburse the funds to plaintiff, and the money would be spent according to the law. Taxpayers are the only possible parties who might later raise the constitutional issue, and in Kosrae, that seems highly unlikely.

Government Policy

     Plaintiff also argued that defendants should be precluded from raising the issue of unconstitutionality because it is good governmental policy to do so. In essence, the argument is that no public officer should be allowed to refuse to perform a duty mandated by law on the grounds that he feels that the performance of such duty would be in violation of the Constitution. Plaintiff cited American Jurisprudence Second for this proposition:

[E]very act of the legislature is presumably constitutional until judicially declared otherwise, and the oath of office to obey the constitution means to obey the constitution not as the officer decides, but as judicially determined. 52 Amiur2d 423 (footnote omitted).

To allow any public officer to refuse to perform a duty mandated by law under a claim that the officer has taken an oath to uphold the constitution and cannot perform a duty which he personally feels is unconstitutional indeed would lead to chaotic government.


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     The orderly operation of our government contemplates situations such as these. When a public officer is requested to perform a duty mandated by law which he feels would violate the constitution, he may apply to the Court for a declaratory judgment declaring the statute unconstitutional. This is the proper method for determining constitutionality. Nevertheless, though defendants properly should have brought an action for declaratory judgment, this Court cannot allow the standing issue to hinge upon the question of which party should have brought the case. Furthermore, defendants made a motion a trial to amend the answer to include a counterclaim for declaratory judgment that S.L 4-126 is unconstitutional. The Court granted that motion to amend without objection by plaintiff.

     Finally, the nature of the law (fiscal matters) is an area in which the Court must hear constitutional objections in order to save the state an expenditure of funds that may be unconstitutional. State v. Clausen, supra, at 1103. Based upon this reasoning, this Court denied plaintiff's motion in limine at trial to preclude defendants from asserting the defense of unconstitutionality.

     2. Does S.L. 4-126 violate principles of separation of powers and the system of checks and balances inherent in the Kosrae Constitution?

     Defendants contend that a writ of mandamus should not issue to compel defendants to disburse the sums appropriated by S.L.


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4-126 because the allottee named in that law is the Speaker of the Legislature. The Court has further been asked to declare that S.L. 4-126 is unconstitutional in that naming the Speaker the allottee is an encroachment upon executive power.

     Plaintiff contends that S.L. 4-126 is constitutional in that neither the Code or the Constitution explicity limit who may be an allottee of funds other than those appropriated for the various branches of government. Plaintiff also argues that separation of governmental powers into insular categories ignores many of the areas in which certain powers are shared.

     Preliminarily, the Court notes that the burden of proof of unconstitutionality is upon the defense, for they raise the issue. See Queenside Hills Realty Co. v. Saxl, 328 US 80, 90 LEd 1096, 665 S.Ct 850). Plaintiff correctly notes that this burden is unique amongst the burdens commonly found in the courts, in that it is a high standard of proof (See 16 AmJur2d 251,p.708). The degree of proof required is commensurate with the document which the Court is interpreting. Here, the document is the Constitution of our state, the fundamental, founding and supreme document of our state government (Const. Art. I, Section 1). Furthermore, the state law which is questioned is a duly enacted law made by the legislature, and is entitled to a presumption of constitutionality.

     As this Court has stated previously, all constitutional interpretation must begin with the language of the Constitution itself. The relevant sections are as follows:


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ARTICLE IV, Section 1

The legislative power is vested in the Legislature and extends to all rightful subjects of legislation not inconsistent with the Constitution.

     ARTICLE V, Section 1

The executive power of the State is vested in the Governor.

     ARTICLE V, Section 9

The Governor is responsible for the faithful execution of the laws.

It is these three sections which comprise defendants' objection to S.L. 4-126. The key words which must be interpreted are "legislative power" and "executive power."

"Legislative power" has been defined as the power to pass rules of law for the government and regulation of people or property, or as the power to enact laws or to declare what the law shall be, and the "legislative function" has been held to involve the exercise of discretion as to the contents of statutes and their policy. 16 CJS 106.

Thus, it is reasonably clear that the power of the Legislature is to decide what the law shall be, to determine public policy and frame laws which reflect such public policy.

     In order to determine whether S.L. 4-126 violates Article IV, Section 1, the Court must look to the language of 4-126 and the language of relevant provisions of the Kosrae Code regarding the function of the allottee of public project appropriations.


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KC 1.201(4) defines the term "allotment":

"allotment": the delegation of authority to a person to create a legally enforceable financial obligation of funds in accordance with applicable law on the Government's behalf within the limits set forth in an appropriation or imposed by the terms of funding available from another source.  Id.

This section contemplates a delegation of authority, presumably from the Legislature to the allottee. It speaks in terms of creating a financial obligation, and implies that the allottee must determine whether a specific expenditure is in conformance with the appropriation law.

     The Kosrae Code also defines the term "appropriation":

"appropriation": an appropriation or authorization law empowering the government to incur an obligation and to make a disbursement from the Treasury pursuant to law. KC 1.201(8).

The two sections quoted show that the allottee of public funds under an appropriation must ensure that the obligations he creates are "in accordance" with and "pursuant to" law. This assumes that an appropriation law has been duly passed.

     The language of the appropriation law must also be scrutinized here. The relevant portions read as follows:

All funds appropriated by this act shall be allotted, managed, administered, and accounted for in accordance with applicable laws. The allottee of funds appropriated by this act shall be the Speaker who shall be responsible for ensuring that these.funds, or so much thereof as may be necessary, are used solely for the purposes specified in this act, and that no obligations are incurred in excess of the sum appropriated. S.L. 4-126.


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The law speaks in terms of management, administration, and accounting. It places an affirmative duty upon the allottee to ensure that the funds are expended according to the law.

     The question before the Court now is whether being an allottee has anything to do with the legislative function? Or in different terms, is the performance of the duties of an allottee inconsistent with the function of the Legislature?4 In answer to the first question, the Court cannot see how being an allottee of public funds contributes to or in any way promotes the Legislature's power of determining policy and enacting legislation carrying such policy into effect. The incidental powers of the Legislature, such as the power to compel testimony for investigations (Const. Art. IV, Section 12) are powers that are used prior to the enactment of laws, and are not used after enactment except to amend, repeal or enact curative legislation. On the other hand, the duties of an allottee can arise only after legislation.


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     As regards the second question, the Court feels that indeed, some inconsistency exists in naming a member of the Legislature the allottee of public funds. The inconsistency arises only when the power and duty of the Legislature to monitor both the Executive and Judicial Branches' execution and interpretation of the laws is considered.

     Under our system of government, the Legislature has not only the power and duty to determine public policy and the framing of laws carrying into effect those policies, but also the equally important task and power to repeal and enact curative legislation. In this sense, then, the Legislature must monitor the performance of allottees of public funds to ensure that the allottees are furthering the interests of the purposes behind the appropriation in their management and administration. If the allottee fails to perform, or performs in a manner contrary to the purpose behind the legislation, then the only branch which has power to change the allottee is the Legislature. This oversight power of the Legislature is not granted to any of the other branches, and so must be carefully reserved to the Legislature.

     This power of overseeing the allottee can be seen as one of the checks of the system of checks and balances which describes the distribution of power in our State Government. Specifically, the Legislature--through its powers of repeal and re-enactment--serves as a check upon the performance of the allottee.

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     At trial, plaintiff contended that the financial management provisions of Title 10 of the Kosrae Code operate as an effective check upon the performance of the allottee. Essentially, plaintiff argued that the authority of the Director of Finance to withhold his consent to prevent misuse of public funds (KC 10.202(6)), and his authority to promulgate regulations regarding documentation provide the essential oversight of the allottee. This position is untenable for two reasons. First, the Director of Finance is a creature of statute, and may be abolished at any time, at the discretion of the Legislature. Second, the legislative function of overseeing the allottee may not be usurped by or delegated to any other branch of the Government. It is solely the province of the Legislature to enact laws, repeal those which no longer serve the public interest and to re-enact laws which do serve the public interest.

     Though the Court has determined that the Constitution is clear in the establishment of the three-part system of government, the Court feels that other areas of inquiry may shed light upon the constitutional question presented in this case.

Con-Con Committee Reports

     The committee reports of our first constitutional convention in Kosrae are devoid of reference as to who may be an allottee of public funds. More specifically, there is no reference to the duties of the Legislature in conjunction with .the duties of an allottee.


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     There is, however, some discussion in the committee reports with respect to Article IV, Section 7, which prohibits senators from holding another public office or public employment:

The current system under the Charter allows legislature to hold public offices and employment in other branches and agencies of the government. This dual office holding and employment compromises the role of legislators. When the other office or employment is within the state government, there is no true separation of powers and checks and balances between the branches of the state government. When the other office or employment is another branch of the state government or in another level of government, potential conflicts of interest and loyalties exist. Cr.1-83-9, p.4.

     Evidently, the framers of the Constitution were concerned with the "true separation of powers," whatever that may be. Though this Court does not read the "public office" portion of Article IV, section 7 as inclusive of the position of allottee of public funds, the concerns of the framers are indeed relevant to the dispute at hand. The committee report continues at page 5:

This section does not delineate exceptions to the term "public office" as does the Charter. Legislators should not serve in offices created by the Legislature or the FSM Congress. Your Committee does not intend to prohibit members from a minor office such as public notary which is not inconsistent or in conflict with a legislator's role. Your committee does not want to delineate all exceptions to public office. Such a delineation may be deemed exhaustive. Id


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     These excerpts make clear the concern of the framers of our state constitution over members of the Legislature performing functions which are "inconsistent" or in "conflict with a legislator's role." As stated previously, the Court sees inconsistency and conflict with the legislative role in our government when a member of the Legislature is made an allottee of funds for a purpose other than the operation of the Legislature.

     To this Court's knowledge, the constitutional issue of legislative allottees has never been brought before a Court in our nation. The Court is aware that the Second National constitutional convention has recently proposed an amendment to our national Constitution to prohibit members of Congress from being allottees of public funds. Though the Court does not question the integrity or understanding of our esteemed delegates to that convention, this Court cannot be bound by the conclusions of that body.

     Defendants cited and attached to their supplemental brief copies of the documents which embody the above-mentioned dispute. Though national government lawyers have determined that the question of whether a member of the Legislative branch can also be an allottee is an "open question," it must be remembered that it is an open question precisely because the FSM Supreme Court has not had the opportunity to speak on the issue. Though this Court feels in no way bound by the opinions expressed in the above-mentioned attachments, a brief discussion of the United States authorities which they cite seems warranted.


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     Bowsher v. Synar 478 US 714, 92 L.Ed 2d 583, 106 S. Ct. 3181 (1986) involved a dispute over the Gramm-Rudman Act (the "Act"). The executive branch brought an action to declare the Act unconstitutional because it placed an officer under legislative control (the Comptroller General) between the president and one of his departments. In essence, the act would have allowed the Comptroller General to usurp executive functions by dictating which areas of the national budget would be cut. Though there is certainly enough broad language in the opinion to justify either of the positions before this Court, this Court finds the reasoning of the opinion sound. However, as plaintiff points out, the case has only slight relevance to the issues at hand.

     In Bowsher, supra, the intrusion upon the executive function could hardly be more clear. There, the Act mandated the Comptroller General (removable at the will of the Legislature) to direct the chief executive which areas of the budget must be cut in order to comply with the limitations on spending contained in the act. Here, as discussed above, the appropriation in question is for the municipalities, and is not directly related to the operation of the executive branch or any of its functions. Therefore, Bowsher has very limited application here.

     Another case cited by counsels is INS v. Chada 462 US 919, 77 L.Ed. 2d 317, 103 S.Ct. 2764 (1983). That case involved a one-house Congressional resolution which overturned an

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immigration judge's refusal to deport the defendant. The Court held that since the resolution was legislative in purpose and effect, the action must pass readings in both houses of Congress and be presented to the president for his approval. Though there is language in that opinion which discusses the general nature of the doctrine of separation of powers, the facts and holding of that case are not relevant here. The present case presents no bypassing of the proper procedure for enacting legislation; to the contrary, the legislation at issue here was duly enacted.

     Finally, the Court considers Springer v. Philippines 277 US 189 (1927), a case in which Congress retained the power to appoint a majority of the board which held all of the stock of the Government of the Philippines. The court held that such power was essentially executive in nature, and was therefore violative of the separation of powers doctrine. The Court stated:

[The Legislature] must deal with the property of the government by making rules, and not by executing them. The appointment of managers (in this instance corporate directors) of property or a business is essentially an executive act which the legislature is without capacity to perform directly or through any of its members. Id. at 203.

Though Springer dealt primarily with the appointment power, as the quote shows, it also involved the management of governmental funds or property. Though the dissent in that case congently points out other areas of overlap between the branches, and the general principle that the doctrine of separation of powers


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should not be construed to place arbitrary boundries on the respective powers of the three branches, the Court finds the majority position persuasive. The legislature has some discretion as to who it may make an allottee, and complete discretion as to the purpose and policies behind the allotment, but the function of the allottee is definitely not legislative in character.

     The Supreme Court of the State of Idaho has spoken in the following terms on this issue:

[T]here is a distinction between an appropriation, that is the setting aside by the legislature of a specified amount of money for a particular purpose, distinctively and recognizably a legislative function and prerogative, and the manner, method or means by which the money thus provided by the appropriation is spent, that is, applied to the purpose for which appropriated.

The making of expenditures and appropriating public money are different things. The former is the 'act of expending; a laying out of money; disbursement.' The latter is: 'To set apart for, or assign to, a particular person or use, in exclusion of all others.' Suppinger v. Enking 91 P.2d 362, 364-365 (1939)(citations and footnote omitted).

Other courts have recognized this distinction between the functions of the appropriating body (the Legislature) and the spending body (in most cases the Executive):


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Spending money appropriated by the legislature is essentially an executive task, and regardless of how minutely appropriations are itemized, some scope is left to the executive for the exercise of judgment and discretion in making expenditures within the limits of the appropriation. However, the executive branch of the government has no power to impound appropriated funds where to do so will compromise achievement of underlying legislative purposes and goals. 63A AmJur 2d 46, p.444 (footnotes omitted).

     Here, it must be noted that though the language of these opinions state that expending appropriated funds is an executive power, this Court focuses not on the theory that S.L. 4-126 encroaches on executive power, but that it disables the power of the legislature to watch over the allottee.

     Thus, though there is much contradictory language in the opinions of the courts of the United States on the exact scope of the doctrine of separation of powers, this Court finds the concrete distinction between the power of appropriation and the power to expend appropriated funds to be determinative of the present action.

Practical Construction

     The last source to which the Court is directed is the practical construction of these constitutional provisions which the several branches of government have placed upon them in the five years since the enactment of the Constitution. The first question here is what weight should be accorded to the practices of the branches of government. The counsels have cited much authority on this question, and the Court finds the analysis of Professor Antieau again persuasive:


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Especially in litigation involving the proper constitutional scope of legislative power will courts respect legislative practices continuing over many years. The United States Supreme Court has said:

A legislative practice ...evidenced not only by occasional instances, but marked by the movement of a steady stream for a century and a half of time, goes a long way in the direction of proving the presence of unassailable ground for the constitutionality of the practice. Antieau, Adjudicating Constitutional Issues, p.244, quoting US v. Twelve Reels of Film,(1973 413 US 123.

This Court is pursuaded that a practice which has been engaged in by 'a branch of the government for a significant period of time is entitled to great weight in establishing the constitutionality of that practice. In this regard the court keeps in mind the fact that our State government has existed not for a century and a half, but for a mere five years. Therefore, in order to be persuasive, the practice must indeed be more than occasional.

     The Court now turns to the evidence of the practice of making members of the Legislature allottees of public funds other than for the purposes of operating the Legislature. In this phrasing the Court declines to adopt plaintiff's position that the practice should be viewed as the number of instances in which the Governor has not been named the allottee. As stated before, the Court does not see the question in terms of encroachment upon the Executive function, but rather a question of the disabling of the legislative function.


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their own making in spite of the Constitutional duty placed on the Governor to do so. Contrary to Plaintiffs' assertion, the long-standing practice of the Legislature under our Constitution is not to make its members allottees of public money other than for the operation of the Legislature, and that practice will be given great weight.

CONCLUSION

     The defendants have standing to assert the unconstitutionality of SL 2-126, even though it is they who should have brought an action for declaratory judgment prior to the filing of the present action. They are charged with professional duties of competence in the management of the finances of the government, and therefore may be injured by the operation of SL 4-126. It is precisely because of their standing that they should have brought an action for a declaratory judgment instead of refusing to perform their duties as mandated by law and thereby disrupting the orderly operation of our government.

     Nevertheless, State Law 4-126 is unconstitutional insofar as the allottee is a member of the Legislature. The duty of the Legislature to oversee the allottee cannot be properly exercised when one of their own is the allottee. The tripartheid structure of our government, the Constitutional Convention committee reports, United States cases, and the past practice of the Legislature all point to this result. Our Constitution


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established a three-branched government, each with specific duties, each co-equal with the other branches, with a system of checks and balances upon the power thus distributed. The Court's opinion has carefully tried to show that it is protecting the Legislative power by ruling SL 4-126 unconstitutional. The Legislature must remain empowered and diligent in its oversight of those to whom it decides to allot public funds.

     The writ of mandamus and requests for injunctive relief are denied. A declaratory judgment consistent with this opinion shall issue.

     SO ORDERED.


     Dated: September 27, 1990                    /s/     
                                             Harry H. Skilling
                                             Chief Justice

          Entered this 27th day of September, 1990.

                                             /s/
                                             Chief Clerk of Court, Kosrae

FOOTNOTES:

1. The complaint named two defendants: Rensley Sigrah,(Director of Finance) and Frank Lonno(Budget Officer). Because the allegations are identical, reference will be made herein only to the former.(Back to Opionion)

2. The Court determined at trial that the procedural requisites for mandamus were present on the facts presented. Therefore, the Court turned to the substance of the dispute between the parties, embodied in the two issues stated herein. (Back to Opinion)

3. Counsels argued the meaning of KC 10.211(3)-which requires the Director to disburse funds to liquidate a valid obligation within thirty days of its due date. This section is not considered here because there was no evidence of a valid obligation required by that section; therefore, the Court does not decide whether this section grants discretion. (Back to Opinion)

4 Excluded from discussion here is the requirement that the Speaker of the Legislature be the allottee of funds for the operation of the Legislature under KC 10.208(2)(b). It is axiomatic that the head of each branch of government be the allottee of the funds for the operation of their respective branches. (Back to Opinion)

                                                                                                                                                                                                                                                                                                           
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