In re State Bonds

Citations

• 7 S.D. 42
• 63 N.W. 223
• 1895 S.D. LEXIS 34

Syllabus

<p>1. Act March 12, 1895, directing the issue and sale of state bonds to make good losses to the permanent school fund and to the interest and income funds, caused by the defalcation of the late state treasurer, is not repugnant to Const, art. 13, section 2, limiting- the state’s power to “contract debts.”</p> <p>2. Const, art. 8, sections 2, 13, provide that the state shall make good all losses to the perpetual school fund; and that losses caused by the defalcation or mismanagement of the officer controlling the fund shall be a permanent funded debt against the state, which shall not be counted as a part of the indebtedness to which the state is limited by Const, art. 13, sec. 2.</p> <p>3. Article 8, sec. 3, declares that no part of the fund, “either principal or interest,” shall be diverted from its purpose. Held, that the state must make good all losses to the interest and income funds as well as to the permanent fund, and for this purpose the legislature may authorize the issue of bonds.</p>