author: PER CURIAM

text:
    2000 SD 154
    STATE of South Dakota, Plaintiff and Appellee, v. Dean Desire STAHL, Defendant and Appellant.
    No. 21145.
    Supreme Court of South Dakota.
    Argued Oct. 24, 2000.
    Decided Dec. 13, 2000.

      Mark Barnett, Attorney General, Paul Cremer, Assistant Attorney General, Pierre, SD, Attorneys for plaintiff and ap-pellee.
    Gary D. Blue, Huron, SD, Attorney for defendant and appellant.
   PER CURIAM

[¶ 1.] Dean Desire Stahl appeals from his judgments of conviction and sentence for possession of marijuana, distribution of marijuana, and distribution of marijuana in a drug-free zone. Stahl claims his 24-year sentence constitutes cruel and unusual punishment and an abuse of the sentencing court’s discretion. We affirm.

FACTS AND PROCEDURE

[¶ 2.] Stahl sold marijuana to Avery Sorenson on December 9 and 11, 1998 while Sorenson was assisting law enforcement with controlled drug buys. Two officers of the Huron Police Department had earlier searched Sorenson, provided him with money with which to purchase drugs from Stahl, and outfitted him with a recording device. The two officers maintained audio contact with Sorenson at all relevant times. Both drug buys took place in Stahl’s home, located within 1,000 feet of Jefferson Elementary School in Huron. Sorenson was retrieved by law enforcement immediately after each buy and debriefed.

[¶ 3.] Stahl was arrested March 8, 1999. He was subsequently indicted on two counts of possession of marijuana, two counts of distribution of marijuana, two counts of distribution of marijuana within a drug-free zone and witness tampering. He was convicted by a jury on the possession and distribution charges and acquitted of witness tampering. He was sentenced to two years in the state penitentiary on each of the two distribution counts and ten years on each of the two distribution in a drug-free zone counts. On the possession counts, Stahl was ordered to pay court costs. The penitentiary sentences were ordered to run consecutively, resulting in a 24-year prison sentence.

[¶ 4.] Stahl appeals, claiming his sentence is an abuse of discretion and a violation of his constitutional protection against cruel and unusual punishment.

ANALYSIS AND DECISION

[¶ 5.] The Eighth Amendment’s protection against cruel and unusual punishment “forbids only extreme sentences that are ‘grossly disproportionate’ to the crime.” State v. Bonner, 1998 SD 30, ¶ 15, 577 N.W.2d 575, 579 (quoting Harmelin v. Michigan, 501 U.S. 957, 1001, 111 S.Ct. 2680, 2705, 115 L.Ed.2d 836, 869) (Kennedy, J., concurring).

[T]o assess a challenge to proportionality we first determine whether the sentence appears grossly disproportionate. To accomplish this, we consider the conduct involved, and any relevant past conduct, with utmost deference to the Legislature and the sentencing court. If these circumstances fail to suggest gross disproportionality, our review ends. If, on the other hand, the sentence appears grossly disproportionate, we may, in addition to examining the other Solem factors, conduct an intra- and inter-jurisdictional analysis to aid our comparison or remand to the circuit court to conduct such comparison before resentencing. We may also consider other relevant factors, such as the effect upon society of this type of offense.

Id. at ¶ 17, 577 N.W.2d at 580. We have long stated that we take “an extremely deferential review of sentencing — generally, a sentence within the statutory maximum will not be disturbed on appeal.” Id. at ¶ 10, 577 N.W.2d at 578 (citing State v. Kaiser, 526 N.W.2d 722 (S.D.1995)). We will not “engage in appellate resentencing, or [ ] ‘micromanage the administration of criminal justice’ in South Dakota, even when individual trial judges impose widely different punishments for the same offense.” Id. at 1Í11, 577 N.W.2d at 578.

[¶ 6.] Stahl’s relevant past conduct includes a criminal record of nineteen prior misdemeanor convictions and three violations of the terms of suspended sentences. From 1975 to his arrest for the present offense, there is no significant break in his criminal record except for the ten years he served in the United States Army. From 1975 until he entered the Army, the majority of Stahl’s violations involved motor vehicle violations, including three DUI’s. Following military discharge, Stahl continued collecting misdemeanor convictions. His record spans 24 years and includes offenses such as DUI, open container, furnishing alcohol to a minor, simple assault, and speeding and reckless driving, among others. This history is appropriate for the sentencing court to consider. Id. at ¶ 19, 577 N.W.2d at 580. Although Stahl has not previously been convicted of any crime involving drugs, in his presentence report he admitted past use of illegal substances, specifically marijuana, methamphetamine and LSD.

[¶ 7.] A defendant’s lack of remorse is also appropriately considered by the sentencing court. Ganrude v. Weber, 2000 SD 96, ¶ 12, 614 N.W.2d 807, 810; State v. Chase in Winter, 534 N.W.2d 350, 355 (S.D.1995). In his presentence report statement, Stahl proclaimed his only crime was in caring too much and helping his fellow man and that he was innocent of the charges. He claimed he did not possess or distribute marijuana at any time, yet alone in a drug-free zone, despite the taped recordings documenting both drug sales and the jury’s determination that he did commit these crimes. At the sentencing hearing, Stahl relied on his presentence investigation report and failed to present any additional evidence toward mitigation or his potential for rehabilitation. This report contained several character letters from family members and indicated Stahl had twice participated in alcohol treatment programs.

[¶ 8.] As previously noted, we give great deference to the legislature and to the sentencing court. Stahl was convicted of two counts each of violating SDCL 22-42-6 and 22-42-7. Violation of SDCL 22-42-6, a Class 1 misdemeanor, carries a maximum sentence of one-year imprisonment in a county jail or a fine of $1,000 or both. Stahl’s sentence for both counts of violating this statute was payment of court costs. Violation of SDCL 22-42-7, a Class 6 felony, carries a maximum sentence of two years imprisonment in the state penitentiary or a fine of $2,000 or both. Stahl’s sentence for two counts of violating this statute was two years imprisonment on each count. -

[¶ 9.] Stahl was also convicted of two counts of violating SDCL 22-42-19(1). SDCL 22-42-20 instructs that a violation of 22^42-19 is to be charged as a separate count in the indictment or information. SDCL 22-42-19, classifying the distribution of drugs within a drug-free zone as a Class 4 felony, provides:

Any person who commits a violation of § 22-42-2, 22-42-3, or 22-42-4, or a felony violation of § 22-42-7, if such activity has taken place:
(1) In, on or within one thousand feet of real property comprising a public or private elementary or secondary school or a playground; or
(2) In, on or within five hundred feet of real property comprising a public or private youth center, public swimming pool, or video arcade facility; is guilty of a Class 4 felony. The sentence imposed for a conviction under this section carries a minimum sentence of imprisonment in the state penitentiary of five years. Any sentence imposed under this section shall be consecutive to any other sentence imposed for the principal felony. The court may not place on probation, suspend the execution of the sentence, or suspend the imposition of the sentence of any person convicted of a violation of this section. However, the sentencing court may impose a sentence other than that specified in this section if the court finds that mitigating circumstances exist which require a departure from the mandatory sentence provided for in this section. The court’s finding of mitigating circumstances allowed by this section and the factual basis relied upon by the court shall be in writing. It is not a defense to the provisions of this section that the defendant did not know the distance involved. It is not a defense to the provisions of this section that school was not in session.

Having been found guilty of violating two counts of this statute, Stahl was sentenced to serve ten years on each count, consecutive to each two-year sentence for the principal felony, distribution of one ounce or less of marijuana. The court ordered that all of Stahl’s sentences were to be served consecutively. Stahl’s 24-year sentence is the maximum time that could have been imposed for these four felony convictions.

[¶10.] SDCL 22-42-19, creating drug-free zones in our state, was enacted in 1992. This appeal presents our first opportunity to review application of this statute. It is reasonably presumed, from review of the greater sanctions imposed therein that are not discretionary with the sentencing court, that the legislature was particularly concerned with protecting this state’s youth from illegal drug use. “The sale and use of narcotics causes the greatest scourge on our society today and reaches down into our schools to destroy our most precious asset, the children.” State v. Engel, 465 N.W.2d 787, 792 (S.D.1991) (Henderson, J., concurring); see also State v. Pettis, 833 N.W.2d 717, 720 (S.D.1983). “[T]he effect upon society of this type of offense” is a relevant factor for courts to consider when determining an appropriate sentence. Bonner, 1998 SD 30 at ¶ 17, 577 N.W.2d at 580. Stahl misses this point when he argues that he deserves a shorter sentence because the drug sale “had nothing to do with the school or anyone that had anything to do with the school.” As noted above, SDCL 22-42-19 provides it is no defense “that the defendant did not know the distance involved ... [or] that school was not in session.” Likewise, the statute offers no defense or leniency because the drug sale “had nothing to do with the school” or persons associated with it. The violation is complete if the proscribed criminal activity takes place within the expressed statutory distance from the drug-free zone.

[¶ 11.] Moreover, the minimum mandatory sentence set at five years by SDCL 22-42-19 and the maximum prison term set for all Class 4 felonies at ten years limits the amount of discretion a sentencing court may exercise in determining an appropriate sentence for violation of this statute. The court’s discretion is further limited by the statute’s mandate that the sentence for violation of SDCL 22-42-19 run consecutively to the sentence imposed for the principal felony. Here, Stahl was convicted of two counts of violating SDCL 22-42-19; the court ordered each of these sentences to be served consecutively to the principal felony sentences and consecutively to one another.

[¶ 12.] At Stahl’s sentencing hearing, the judge stated that he had read the presentence report. Therefore, he had the requisite acquaintance with Stahl, his character and history, and previous criminal record to sentence him. Bonner, 1998 SD 30, ¶ 19, 577 N.W.2d at 580; Chase in Winter, 534 N.W.2d at 354-55. The court informed Stahl that “the charges [against him] are severe and the charges are extremely unpopular today. I think that people are absolutely fed up with the drugs and the consequences connected with the use of those drugs and with the consequences of selling them.” In these comments, the sentencing court acknowledged the public policy underlying SDCL 22M2-19.

[¶ 13.] Stahl did not receive the maximum penalty that could have been imposed under our statutes. No fines were imposed for any of his six convictions and his punishment for each of his two convictions for possession of marijuana was payment of court costs only. He was, however, sentenced to the maximum time on each of the four distribution charges. As previously noted, all of these sentences were ordered to run consecutively. It is presumed from the lack of written findings in the record that the sentencing court found no mitigating circumstances in this case. Given Stahl’s lack of remorse or even acknowledgment of guilt, his lengthy criminal record and the limited discretion offered the sentencing court by the legislative mandates in SDCL 22-42-19, no abuse of discretion is shown under this record. The 24-year sentence Stahl received was not grossly disproportionate to the severity of the crimes involving the distribution of drugs within 1,000 feet of an elementary school, a statutorily defined drug-free zone.

[¶ 14.] The judgments of conviction and sentence are affirmed.

[¶ 15.] MILLER, Chief Justice, and SABERS, AMUNDSON, KONENKAMP and GILBERTSON, Justices, participating.

      . Law enforcement explained that the delay between the drug buys and Stahl's arrest was due to their desire to protect the secrecy of their confidential informant's identity which enables them to use an informant for additional buys.

      . The record is silent regarding any history of activities during Stahl’s ten-year military career except for noting his service during the Gulf War.

      . Stahl appeals only his sentence and does not claim any errors at trial.

      . Although Stahl's attorney attempted to argue these points at oral argument before this Court, the time to make the record is before the sentencing court.

      . SDCL 22-42-18 defines "playground,” "video arcade facility,” and "youth center” as these terms are used in SDCL 22-42-19.

      . In addition to the maximum term of ten years imprisonment, a fine of $10,000 may be imposed for violation of a Class 4 felony. SDCL 22-6-1(6).

      . SDCL 22-42-19 allows a sentencing court to depart from the statutory sentence mandates if the court finds that mitigating circumstances exist. The statute requires, however, that ''[t]he court’s finding of mitigating circumstances allowed by this section and the factual basis relied upon by the court shall be in writing.”


source: Caselaw Access Project

author: GILBERTSON, Justice (on reassignment). ECKRICH, Circuit Judge

license: Public Domain

text:
    2000 SD 153
    Michael J. McGILL, Conservator and Guardian for Bernice G.J. Thissell, Plaintiff and Appellant, v. AMERICAN LIFE AND CASUALTY INSURANCE COMPANY a/k/a Conseco Company, Dean Nordseth, and Ennis E. Lund, Defendants and Appellees, and James D. Thissell, Charles W. Thissell, and David R. Thissell, Defendants.
    No. 21247.
    Supreme Court of South Dakota.
    Argued April 25, 2000.
    Reassigned Oct. 17, 2000.
    Decided Dec. 13, 2000.

      Jonathan K. Van Patten, Vermillion, SD, Robert J. Burns, Burns Law Firm, Robert A. Christenson, Sioux Falls, SD, Attorneys for plaintiff and appellant.
    Robert C. Riter, Jr., of Riter, Mayer, Hofer, Wattier & Brown, Pierre, SD, Steven K. Huffer of Huffer & Weathers, Indianapolis, IN, Attorneys for defendants and appellees American Life and Casualty Insurance Company.
    John E. Simko of Woods, Fuller, Shultz & Smith, Sioux Falls, SD, Attorneys for defendant and appellee Ennis E. Lund.
   GILBERTSON, Justice (on reassignment).

[¶ 1.] Michael J. McGill, as Conservator and Guardian for Bernice G.J. Thissell, sued American Life and Casualty Company and two of its agents for negligence, negligent misrepresentation, fraud, deceit, breach of fiduciary relationship and breach of contract. The circuit court granted summary judgment in favor of American Life, finding that as a matter of law, McGill’s claims were barred by the statute of limitation. We reverse and remand for trial.

FACTS AND PROCEDURE

[¶ 2.] On September 2, 1986, American Life and Casualty Company (American Life) agents Dean Nordseth (Nordseth) and Ennis Lund (Lund) called on Bernice Thissell (Bernice), a 79-year-old widow. Nordseth and Lund persuaded Bernice to purchase a “universal life” insurance policy from American Life. The policy required a single premium payment of $100,000 and had a death benefit of $200,000. These policies depend upon the interest generated by the initial payment to pay the premiums due under the policy. Before American Life would issue the policy, it required Bernice to undergo a medical examination. This examination revealed possible heart problems. As a result, the policy was re-rated and issued as “special class.” This reclassification caused an increase of $49,111 in the premiums required to keep the policy performing as represented to Bernice. The re-rating and subsequent increase in premiums was not revealed to Bernice or her family. American Life issued the re-rated policy on November 13, 1986.

[¶ 3.] By 1988, it became apparent that the interest generated by the initial premium payment was not covering the cost of insurance. In an attempt to correct the problem, Nordseth, Bernice, and her attorney, McGill agreed that the death benefit would be lowered to $190,000. The lower death benefit would decrease the premiums required to keep the policy current. In April of 1989, McGill again reviewed the policy due to increased concerns of Bernice’s family. After this review, McGill wrote a letter to Bernice, her sons and Nordseth, setting forth his observations as to the performance of the policy. In that letter, McGill expressed his belief that the policy was not paying for itself due to the decrease in interest rates during the life of the policy in addition to an overly high mortality charge. It was McGill’s belief that because of the lower interest rates, the initial payment was not generating sufficient returns to pay the premiums. At this time, McGill was not aware of the unilateral reclassification and subsequent premium increase performed by American Life. McGill also inquired whether this policy could be converted to “paid-up coverage” and what the amount of that policy would be. He specifically requested Nord-seth to comment on the issues raised in the letter, but Nordseth did not do so.

[¶ 4.] On July 24, 1989, Bonnie Burns, an Insurance Specialist/Consumer Advocate, wrote a letter to Bernice’s son, Charles, after reviewing the policy at issue. She shared McGill’s concerns as to the future funding of the policy and the effects of lower interest rates. When giving her opinion, she was not aware of the unilateral re-rating and accompanying premium increase by American Life.

[¶ 5.] Bernice’s sons were named as attorneys in fact for Bernice on February 19, 1990. In a letter to Charles in May of 1990, McGill warned that Bernice’s mail should be watched for the annual report from American Life. This was necessary to “determine whether the return on the policy [was] paying the premium without consuming an excessive amount of cash value.” On July 13, 1990, Bernice assigned the policy in question to her sons. McGill was appointed as guardian and conservator for Bernice in September, 1997.

[¶ 6.] On April 17, 1998, .McGill filed a complaint, on behalf of Bernice, against American Life, Nordseth and Lund alleging negligence, negligent misrepresentation, fraud, deceit, breach of fiduciary relationship, and breach of contract. It was only after this complaint was filed that the re-rating and premium increase was discovered. McGill now claims that the re-rating and premium increase was the reason that the policy did not perform up to expectations. American Life, Lund and Nordseth filed motions for summary judgment, asserting that the statute of limitations barred McGill’s claims. The trial court granted the motion and McGill appeals.

STANDARD OF REVIEW

[¶ 7.] When reviewing a trial court’s decision to grant summary judgment, we will affirm only if all legal questions have been decided correctly and there are no genuine issues of material fact. Holzer v. Dakota Speedway, 2000 SD 65, ¶8, 610 N.W.2d 787, 791 (citations omitted). The nonmov-ing party will receive the benefit of all reasonable inferences that can be drawn from the facts. Id . It is the responsibility of the moving party to demonstrate the absence of genuine issues of material fact. Id. at 791-92. Only if that burden is met will the moving party be entitled to judgment as a matter of law. Id. at 792. Additionally, summary judgment will be affirmed if it is correct for any reason. Id.

ANALYSIS AND DECISION

[¶ 8.] The issue is whether Bernice or her agents knew of fraud or fraudulent concealment prior to April 17, 1992. There are numerous questions of fact concerning the existence of fraud and fraudulent concealment and the period of time tolled under the applicable statute of limitation which makes summary judgment inappropriate.

[¶ 9.] The duty of an insurance agent towards a client is set forth by statute. Specifically prohibited are “material misrepresentation of the terms of any insurance contract or proposed insurance contract,” “fraudulent or dishonest practices,” incompetence and untrustworthiness. SDCL 58-30-106(6), (7). See Kent v. Lyon, 1996 SD 131, ¶29, 555 N.W.2d 106, 113. Nondisclosure to a client of a material change in a policy falls "within this prohibited conduct. Id. “All insurance contracts contain an implicit contractual duty to act or deal in good faith.” Id.

[¶ 10.] The estate brought forth the following expert opinion testimony from Larry R. Swenson in opposition to defendants’ motion for summary judgment:

This is probably one of the blatant abuses that I’ve seen of universal life. Not only was the lady 79 years old, but there’s evidence in the file that she really didn’t understand her financial position, and what the agent and the manager did was take her an opportunity in a good, strong investment and put her in a high risk investment unless she died.
I think it was sold on greed, greed on the agent’s part and the manager’s part for the commissions, greed on the company’s part for the mortality cost inherent in the policy and their limiting of risk....
My opinion is that Mrs. Thissell would never have bought this if she hadn’t have been lied to or defrauded. I assume that the fraud can be assumed to have been just leaving out some of the pertinent information, that if it had been relayed to her or her advisers that there would not have been any transaction made at that particular time.

The estate also submitted the affidavit of James Brick, an attorney, who reviewed the files and depositions of this case and concluded, “the defendants, Lund, Nord-seth and American Life and Casualty had to have misrepresented the nature, need, risks and benefits of the universal life policy in order to persuade Mrs. Thissell to purchase it.”

[¶ 11.] SDCL 15-2-3 states that fraud “shall not be deemed to have accrued until the aggrieved party discovers, or has actual or constructive notice of, the facts constituting the fraud.” McGill did not become Bernice’s guardian and conservator until September of 1997. Prior to that time he acted only as her attorney. It was during that period of time that he authored the letters relied upon by American Life as evidence of his knowledge of fraudulent activity. Therefore, before 1997, the “aggrieved party” was Bernice, not attorney McGill. McGill testified as to his opinion of the limited nature of his representation of Bernice in this matter prior to 1997:

Bernice Thissell never asked me for my opinion at the time that she purchased the policy as to whether it was a wise investment or not. I was not her investment advisor or financial counselor in 1986 when she purchased the policy. She asked me to investigate whether it was true what Dean Nordseth stated that the growth in the policy was tax free and that there was no inheritance taxes upon her death. She asked me about the stability of the company. She did not ask me if I thought that it was a good investment. So, too, in 1989 when I wrote the letter, I was setting forth my observation as a matter of fact. I was not her financial advisor or investment advisor and she did not rely upon me as such. She did not consult with me and ask me for my opinion in 1989 at the time that I wrote the letter about whether she had a cause of action for negligence and fraud in connection with Nordseth’s and Lund’s investment advice at the time they sold the policy to Bernice.

A lawyer’s acceptance of employment and corresponding charges therefore cannot exceed the scope of the employment agreed to by the client. In re Discipline of Dorothy, 2000 SD 23, 605 N.W.2d 493; Matter of Estate of Schuldt, 428 N.W.2d 251 (S.D.1988). Clearly, prior to 1997, Bernice relied upon McGill only for legal advice and not as guardian of her finances. McGill’s testimony is re-inforced by that of Swenson who testified, “that if [the pertinent information] had been relayed to her or her advisers that there would not have been any transaction made at that particular time.”

[¶ 12.] Thus, the issue of constructive notice should focus primarily upon Bernice, who in 1986 was a 79-year-old widow and housewife. The record establishes that by 1990, Bernice’s mental state was such that she could not be relied upon to recognize the significance of her own mail. In May of that year, McGill wrote her son “we must watch Bernice’s mail for the annual report on the single premium life insurance policy.” What Bernice knew, when she knew it and whether she was able to understand the effect of that knowledge are questions of fact to be determined by a jury.

[¶ 13.] Defendant’s counter that even if fraud is assumed, the Thissell sons and McGill had access to facts that would expose the fraud during the period of 1986-89. Defendants point out that the Thissell sons became owners of the policy in 1990. What the sons knew, and when they knew it are likewise, questions of fact to be determined by a jury. It is clear that by 1989-90, McGill and the Thissell sons were aware of the “interest-sensitive nature of the insurance policy.” They knew that the interest from the premium payment was not covering the cost of insurance. However they, as well as Bernice, were not aware of the re-rating and premium increase, which the estate argues is the real reason for the problem with the policy. The estate also alleges that the unilateral increase in the premium without disclosure of the same or the impact it would have on the cash value of the policy constituted a “bait and switch” scheme. McGill summarized why, in his opinion, he and the This-sells did not pursue the matter during the 1986-89 period:

In 1989 when I wrote the letter I did not think that a cause of action existed for fraud in connection with the policy because I was not aware of anything fraudulent or misleading that was done by Nordseth or Lund at the time that the policy was sold. I did not know that Dean Nordseth took steps to cash in Bernice’s other investments to secure the cash for the purchase price, such as writing letters to the other investment houses to liquidate assets.
In order for a cause of action to have been discovered Bernice Thissell and her three sons would have had to know that they had sustained damages as a result of another’s wrongful conduct and that they knew the identity of the person or entities that caused those damages. As of 1989 it would have been impossible for Bernice or her children, as well as I, to know that premium was artificially high. The only people that knew about the non standard rate were the Defendants. Likewise, it was not until the conservatorship estate was created and the lawsuit started that the family and I learned of the importance of properly funding the policy at the outset. We did not know these facts in 1989.
Moreover, in 1989 when I wrote the letter to Bernice and her sons and to Nordseth, I was passing on my observations and asking for guidance and advice from the insurance expert (Nordseth) that sold the policy to begin with. Bernice relied upon and trusted Nordseth as made evident by her purchase of the policy in litigation as well as the purchase of additional policies from Nord-seth after the single premium policy.

Thus, not only had Bernice relied upon Nordseth as the fiduciary expert on this insurance matter, but so did her attorney, McGill, and her sons.

[¶ 14.] The 1989 letter of McGill expressed his belief that the shortfall had been due to decreasing interest rates and expressly requested Nordseth to comment on the situation. Nordseth, however, chose to remain silent, never revealing the re-rating and premium increase. If a statutory duty exists to not misrepresent the terms of a policy, and prohibits fraudulent, dishonest, incompetent or untrustworthy practices via SDCL 58-30-106(6) and (7), then an agent is clearly under a duty to speak to avoid these practices. Kent, 1996 SD 131, ¶ 29, 555 N.W.2d at 113. Whether that occurred in this case is a question of fact. More specifically, whether Nord-seth’s nondisclosure rose to the level of fraudulent concealment is a question of fact. Whether the extent of this reliance upon Nordseth was justified, is an additional question of fact.

[¶ 15.] It could be that a jury may view the documents and other evidence and conclude there was no fraud or fraudulent concealment, or if there was, that the This-sells and McGill were put on constructive notice more than six years ago that fraud or fraudulent concealment existed. However, a jury may not. A jury should be allowed to determine the nature of the relationship between Nordseth, McGill, Bernice, and her sons as well as what they all knew or should have known, and when they knew it. Therefore, the circuit court’s order granting summary judgment in favor of the defendants is reversed and remanded for trial.

[¶ 16.] MILLER, Chief Justice, and AMUNDSON and KONENKAMP, Justices, concur.

[¶ 17.] ECKRICH, Circuit Judge, dissents.

[¶ 18.] ECKRICH, Circuit Judge, sitting for SABERS, Justice, disqualified.

ECKRICH, Circuit Judge

(dissenting).

[¶ 19.] I respectfully dissent.

[¶ 20.] On November 13, 1986, McGill wrote to American Life regarding the policy. He sought financial information about the company to better “enable [him] to advise her of the prudence of investing all of her assets into your insurance company.”

[¶ 21.] Over the course of the next two and one half years, McGill read the insurance policy, received a policy statement, met with Mrs. Thissell and agent Nordseth regarding the policy and communicated with Mrs. Thissell’s son Charles regarding the policy.

[¶22.] On April'26, 1989, McGill wrote a letter to Mrs. Thissell, her three sons and Nordseth that provided, in pertinent part:

On June 20, 1988 the death benefit of this policy was reduced to $190,000.00. The reason for this was because interest rates had decreased and the mortality charge on the premium was too high.... My two concerns on the policy, and Mr. Nordseth is free to comment on these in any letter that he has in response to this letter, is what is the interest payable on the policy and whether it is possible to convert this policy to paid-up coverage in a certain face amount so that there would be no further mortality charge or premiums due on the policy. ... If it were converted to paid-up insurance, there would be no risk in the mortality charge consuming the principal.

The letter included a copy of American Life’s 1988 policy report.

[¶ 23.] On July 24, 1989, Bonnie Burns, an Insurance Specialist/Consumer Advocate, wrote a letter to Mrs. Thissell’s son Charles, an attorney, following her review of several of Mrs. Thissell’s insurance policies. The letter reiterated the risks associated with the American Life policy and suggested the “future funding of this plan deserves serious consideration and ... the attention of someone with more experience than [she had] in the field of life insurance and financial planning.” In addition, Ms. Burns advised:

If you want to pursue disciplinary action against the agent I will need to examine the code for South Dakota. If the sale of any of these coverages was fraudulent or made under duress or high pressure, or if twisting is involved, you may be able to involve one of the companies. It would seem clear to me that the actual damages pursuant to the sale of the health insurance products are not very high and may not be worth your time and energy. The life insurance sale is another matter. It might be interesting to ask for an opinion from the South Dakota department of insurance on the merits of that sale.

[¶ 24.] The insurance policy was assigned to Mrs. Thissell’s sons in 1990. On February 19, 1990, Mrs. Thissell named her sons as attorneys in fact “to deal with life insurance.” On May 16, 1990, McGill wrote to Charles: “we must watch Mrs. Thissell’s mail for the annual report on the single premium life insurance policy. We have to determine whether the return on the policy is paying the premium without consuming an excessive amount of cash value.”

[¶ 25.] On April 17, 1998, McGill filed a complaint on Mrs. Thissell’s behalf against American Life, Nordseth and Lund alleging negligence, negligent misrepresentation, fraud, deceit, breach of fiduciary relationship, and breach of contract.

[¶ 26.] The substance of McGill’s claims is two-fold: 1) that the insurance product Mrs. Thissell purchased was an entirely inappropriate and risky investment considering her modest estate and advanced age; and 2) that American Life and its agents did not disclose the risky, interest-sensitive nature of her investment, i .&, that her policy “could self-destruct if interest rates continued to decline.”

[¶ 27.] In fact, it appears that as early as 1986, within a month after the purchase was made, McGill actively investigated the appropriateness of the investment. By no later than July 1990, not only were the principals aware that the policy could self-destruct, the possibility of a claim against Nordseth for fraud (among other things) was suggested to one of the new policy-owners, Charles Thissell, himself an attorney, and with whom McGill had been communicating.

[¶ 28.] The statute of limitation begins to toll when McGill became aware of facts giving actual or constructive notice to suspect a fraud. Strassburg v. Citizens State Bank, 1998 SD 72 ¶ 10, 581 N.W.2d 510, 514. McGill argues that Nordseth knew the policy was underfunded by $49,111 and that he had an affirmative dufy to disclose this fact. If so, the legal inquiry is the same: when did McGill know enough to suspect he had a case? Fraudulent concealment tolls the statute of limitations until the claim is disclosed or might have been discovered with reasonable diligence. Id., at ¶ 14, 581 N.W.2d at 515. The discovery of the additional $49,111 doesn’t alter the original causes of action. At best it only supports the original theory that the policy was risky and inappropriate.

[¶ 29.] Furthermore, if a confidential relationship is found to exist between Mrs. Thissell and American Life which may require an affirmative duty to disclose the $49,111 underfunding, the statute is only tolled until McGill had sufficient notice of facts to put him on alert that his causes of action existed. It is clear from the record that by no later than 1990, McGill was in possession of sufficient facts to put him on notice of facts supporting the causes of action that the policy was oversold, was interest sensitive, could self-destruct, was an inappropriate and risky investment, was misrepresented as self-sustaining, and that there existed the potential causes of action which he ultimately pled. For nearly eight years after possessing those facts, McGill was idle. There is no genuine issue of material fact that he was in possession of sufficient facts to put him on actual or constructive notice to suspect fraud or any other cause of action asserted in his complaint.

      . This initial premium represented approximately one-half of Bernice’s net worth and well over half of her liquid assets.

      . These policies were extremely popular during the early 1980’s when interest rates were in double digits. As interest rates fell, so did the popularity of these policies.

      . Bernice’s sons, James, Charles and David are the beneficiaries of the policy and defendants in this action pursuant to SDCL 15 — 6— 19(a) (persons to be joined if feasible).

      . Relevant portions of the letter are quoted herein:
      The death benefit in this policy originally was $200,000.00.... On June 20, 1988 the death benefit was reduced to $190,000.00. The reason for this was because interest rates had decreased and the mortality charge on the premium was too high.

      My two concerns on the policy, and Mr. Nordseth is free to comment on these in any letter that he has in response to this letter, [are] what is the interest payable on the policy and whether it is possible to convert this policy to paid-up coverage in a certain face amount so that there would be no further mortality charge or premiums due on the policy. If it is possible to convert it to paid-up, my next question would be what would [be] the paid-up value in death benefit on that policy? If it were converted to paid up insurance, there would be no risk in the mortality charge consuming the principal.

      . This also becomes an issue of fact as the complaint charges that Bernice was incompetent in July of 1990 when she executed the assignment of the policy. As previously noted in the same year she could not be relied upon to recognize the significance of her own mail.

      . American Life also argues that because Bernice assigned the policy to her sons in 1990, she is not the proper party to bring the present lawsuit. We find this argument to be without merit.


author: MORRIS, Chief Justice.

text:
    BONNIWELL v. FLANDERS.
    No. 7389.
    Supreme Court of North Dakota.
    Dec. 15, 1953.
    Rehearing Denied Jan. 4, 1954.

      Lanier, Lanier & Knox, Fargo, for plaintiff-appellant.
    Elmo T. Christianson, Atty. Gen., and Lee F. Brooks, Sp. Asst. Atty. Gen., for the State.
   MORRIS, Chief Justice.

We have before us appeals from two orders issued by the trial court after entry of judgment by default. The nature of the orders and the appeals therefrom require that they be considered separately.

In August 1951 the plaintiff instituted an action to recover from the defendant hospital, doctor bills, and other expenses incurred by the plaintiff in behalf of his minor son alleged to have been injured through the negligence of the defendant. The amount sought to be recovered is $2,-500. The defendant defaulted. The matter then came on before the court for entry of judgment pursuant to a notice of application for judgment and was heard January 15, 1952. The court ordered judgment in the sum of $585.50, damages and costs, which was entered January 18, 1952. An execution issued on this judgment was returned wholly unsatisfied by the sheriff of Cass County on January 18, 1952.

Chapter 39-17, NDRC 1949 Supp. provides for the exaction from the owner of each motor vehicle registered under the laws of this state of a fee of one dollar for the creation and maintenance of an unsatisfied judgment fund. Under prescribed conditions resort may be had to this fund by court order, Section 39-1705, NDRC 1949 Supp., for the payment up to $5,000 of an unsatisfied judgment for an amount exceeding $300 in any action by a resident of the state for damages resulting from' personal injury or death occasioned by the ownership, maintenance, operation, or use of a motor vehicle by the judgment debtor. Section 39-1703, NDRC 1949 Supp.

Chapter 259, SLND 1951, which amends Section 39-1704, NDRC 1949 Supp., provides :

“The provisions of section 39-1703 shall not apply in the case of any judgment entered by default, unless the state highway commissioner and the attorney general shall have been given at least thirty days notice prior to the entry of such judgment, to which notice shall be attached a copy of the summons and complaint. Upon receipt of such notice, the attorney general may enter an appearance, file a defense, appear by counsel at the trial or take such other action as he may deem appropriate on behalf and in the name of the defendant, and may thereupon, on behalf and in the name of the defendant, conduct his defense, and all acts done in accordance therewith shall be deemed to be acts of the defendant. The attorney general may appear and be heard on any application for payment from the fund and may show cause, if any there be, why the order applied for should not be made.”

The plaintiff failed to give the notices to the attorney general and to the state highway commissioner that this statute requires.

On August 7, 1952, the trial court issued an order to the attorney general to show cause why the state treasurer should not pay the judgment out of the fund. Section 39-1705, NDRC 1949 Supp. He appeared at the designated time by Mr. Lee F. Brooks, as special assistant attorney general, who resisted the application on the ground that notices to the attorney general and to the state highway commissioner had not been given before entry of judgment.

As part of his showing the plaintiff produced a document entitled “Waiver of Notice of Taking of Judgment” signed by the attorney general, which reads as follows:

“The Summons and Complaint in the above entitled matter having been read and the Affidavit of P. W. Lanier, Jr. of the firm of Lanier & Lanier having been considered, the thirty-day notice to the office of the Attorney General of the State of North Dakota, before taking Judgment is hereby waived.
“Dated this' 1st day of December 1951.”

The plaintiff also produced a waiver signed by the state highway commissioner identical in language with that signed by the attorney general except that it is dated March 6, 1952. The affidavit referred to in both waivers was sworn to on February 27, 1952, and recites:

“P. W. Lanier, Jr., being first duly sworn on oath deposes and says that he is one of the attorneys for the plaintiffs in the above entitled actions; that the above entitled actions were personally served upon the defendant on the 10th day of August, 1951; that Notice of Application for Judgment was duly served upon the defendant on the 24th day of December, 1951; that judgment was taken and entered on the 15th day of January, 1952; that through inadvertence and error, affiant overlooked the 1951 Amendment to the Financial Responsibility Act, and particularly 39-1703 and 39-1704 and failed to notify the State Highway Commissioner and the Attorney General thirty days in advance of the taking of default judgment; that the record of said default judgment is in every respect complete and testimony of a highly reputable physician, Dr. Joel C. Swanson, orthopedic surgeon in Fargo, North Dakota clearly sustains all of the allegations of paragraph IV of said Complaint; that if necessary, the judgment in this matter could be withdrawn ánd due and proper no'- ' tice given to the Attorney General and the State Highway. Commissioner and judgment then could be taken and entered; that in order to avoid that delay and duplication of work, affiant would like to have the Waiver of the Attorney General and the State Highway Commissioner to said thirty-day notice.”

From the record thus presented by the plaintiff it is clear that neither notice to nor an attempted waiver by either the attorney general or the state highway commissioner was had until after judgment by default was rendered against the defendant. On March 23, 1953, tire trial court entered an order denying the plaintiffs application and the plaintiff appeals.

The neat question is whether, after a default judgment has been entered without serving the notice required by Chapter 259, SLND 1951, the attorney general and the state highway commissioner can effectively waive service of the notice and the summons and complaint which are required to be attached to it. The judgment, when and as entered, was neither a liability of nor could it be made the basis of a claim against the unsatisfied judgment fund. The waivers upon which the plaintiff seeks to rely were not merely waivers of the formality of service prior to entry of judgment but were in effect stipulations that the judgment 'already rendered be made the basis of an order of the district court directing its payment by the state treasurer out of the fund. Clearly the state highway commissioner had no such authority. He is an administrative .officer whose duty is prescribed by statute. Chapter 259, SLND 1951 requires that service be made upon him thirty days prior to the entry of judgment. He has no authority to agree that a judgment, entered without giving the notice which the law requires,, shall be considered as a claim against the fund as though there had been a compliance with the statute. That is the effect which the plaintiff seeks to give to the waiver. It is an effect clearly beyond the power of the highway commissioner to accomplish by waiver or agreement.

A more plausible argument can be made with respect to the attorney general who is the chief law officer of the-state. Pierce v. Superior Court, 1 Cal.2d 759, 37 P.2d 453, 460, 96 A.L.R. 1020. He may institute legal proceedings necessary-to protect the interests of the state and defend all actions affecting public interest. 5 Am.Jur., Attorney General, § 8; 7' C.J.S., Attorney General, § 8. But it is clear to us that without special statutory authorization the attorney general may not by waiver or .agreement establish as a basis of liability against the state or one of its funds a judgment rendered in an action to which the state .is not a party.

We- are confronted by a novel’ situation.. No help can be obtained from cases where the attorney general has appeared for the state or intervened in an action before judgment. As a general rule the attorney general has control of litigation involving the state and the procedure by which it is conducted. Section 54-1201, NDRC 1943. If the state is a defendant in a civil action, service of the summons may be made upon the governor or attorney general. Section 28-0605, NDRC 1943. Such service is jurisdictional. Company A, First Regiment, National Guard Training School, v. State, 58 N.D. 66, 224 N.W. 661. Under the provisions of Chapter 259, SLND 1951 service on the attorney general and the state highway commissioner is a condition precedent to the right to have an unsatisfied judgment paid out of the unsatisfied judgment fund and is a jurisdictional prerequisite to an order of the district court requiring the state treasurer to make such payment. After entry of judgment waiver of the required notice is no longer a procedural matter. Waiver then affects the substantive right of the state to protect the fund for the attorney general can no longer appear at the trial or enter a defense, as the statute contemplates he may do. Neither can he challenge the amount for which judgment was rendered. The legislature having seen fit to provide a procedure by which a default judgment may be made the basis of an application to the district court for an order directing the payment of the judgment by the state treasurer, it is not within the province of the attorney general or the state highway commissioner, or both, to waive the service provided by such" procedure and thus after entry of judgment transform a liability against a private individual into one which the state treasurer may be required to pay. The trial court did not err in denying plaintiff’s application.

Section 28-2901, NDRC 1943 provides:

“The court, in its discretion, and upon such terms as may be just, at any time within one year after notice thereof, may relieve a party from a judgment, order, or other proceeding taken against him through his mistake, inadvertence, surprise, or excusable neglect, and may supply an omission in any proceeding.”

The default judgment taken against Robert Flanders on January 18, 1952, appears to be a perfectly valid and regular judgment. It was not, however, a judgment that was collectable from the unsatisfied judgment fund because of an omission in the proceedings by which it was rendered. That omission was the failure to serve upon the attorney general and the state highway commissioner the notice provided by Chapter 259, SLND 1951. On February 5, 1953, the plaintiff served on the attorney general the following notice:

“To the Attorney General of the State of North Dakota and Mr. Lee Brooks, Special Assistant Attorney General:
“You Will Please Take Notice that the plaintiff will move to set aside the judgment in the above entitled action. on the 24th day of February, 1953, at 10:30 a. m., before the Honorable John C. Pollock in the Court House in Fargo, North Dakota.”

The notice'was accompanied by the following motion:

■ “Now comes the plaintiff and moves to set aside the judgment in the above entitled action upon the grounds that all of the parties were not 'before-the Court at the time said judgment was taken and that no harm would be done any parties as this motion is made by the plaintiff in the action and the defendant was in default and has made no appearance in the case, and it is desired to set said judgment aside for the purpose of notifying the Attorney General of the later trial so that he can be present to represent the North Dakota Unsatisfied Judgment Fund if he so desires.”

Plaintiff appeals from an order denying this motion..

While the relief provided by Section 28-2901, NDRC 1943 specifically applies to a judgment taken against a party,. the court nevertheless has power to afford relief upon similar grounds to a party in favor of whom a judgment has been rendered.

“It is also claimed ¡by the appellants that a party in whose favor a judgment is entered has no right to apply to have it set aside or modified. No reason is apparent why excusable mistakes should not be remedied on behalf of successful litigants as in case of those not successful. The object to be attained is to do complete justice to all the parties. The right to remedy mistakes is an inherent power with courts and this power extends to all parties to actions.” Dedrick v. Charrier, 15 N.D. 515, 108 N.W. 38, 39.

In Banegas v. Brackett, 99 Cal. 623, 34 P. 344, a similar question was presented and the court said:

“Section 473, Code Civil Proc., provides that the court may relieve a party ‘from a judgment, order or other proceeding taken against him through his mistake, inadvertence, surprise or excusable neglect; provided that application therefor be made within a reasonable time, but in no case exceeding six months after such judgment, order or proceeding was taken.’ Under the provisions of a statute in New York similar to this, it is held that a party in whose favor judgment has been rendered is entitled to relief the same as though the judgment had been rendered against him; that the statute is intended to be remedial, and should receive a liberal interpretation.”

See also Thompson v. Alford, 128 Cal. 227, 60 P. 686.

We reach the conclusion that under the provisions of Section 28-2901 the court has the same power to grant relief to a party from a favorable judgment as it has where the judgment has been rendered against the applicant. But the plaintiff is not within the terms of the statute because he did not seek relief within a year after notice of the judgment, which in this case means within a year after the judgment was entered, for the plaintiff had it entered himself. In order to warrant the court in setting aside a judgment under the provisions of this statute, the party seeking relief must move promptly and within one year after notice. Keeney v. City of Fargo, 14 N.D. 419, 105 N.W. 92.

Another defect in the proceeding also bars the plaintiff from obtaining relief. The judgment is against the defendant Robert Flanders. He was not made a party to the proceedings to have the judgment vacated. The plaintiff completely ignored him and served the notice of motion only on the attorney general. The plaintiff argues that Flanders, having defaulted, no longer had any interest in the matter and was not a necessary party to proceedings looking to the vacation of the judgment. But we cannot say that the defendant had no interest in the judgment merely because it was rendered against him. This is an action for damages in the sum of $2,500 for personal injuries. There is no showing other than his default that he has no interest. The judgment rendered is only a fraction of the amount which the plaintiff sought to recover in the action. The judgment renders plaintiff’s entire claim res judicata. When the judgment is vacated the case is again opened up. There is nothing to prevent the entry of a larger judgment once the present judgment is set aside. It may be to the defendant’s interest to have the judgment remain as it is.

When proceedings are had to set aside a judgment, all parties to the record whose rights would be affected are entitled to the notice. Washko v. Stewart, 44 Cal.App.2d 311, 112 P.2d 306; 31 Am. Jur., Judgments, § 779; 49 C.J.S., Judgments, § 294 ; 49 C.J.S., Judgments, § 337, page 663; Freeman on Judgments, 5th Edition, § 279. The plaintiff, not having served notice on the judgment debtor, was in effect seeking an ex parte order setting aside the judgment. The defendant was the only other party then of record.

Plaintiff complains that the attorney general, not representing a party to the judgment, was not entitled to appear and resist the motion to set it aside. However, he overlooks the fact that he directed to and served upon the attorney general and his special assistant the notice of motion. He is hardly in a position now to contend that the attorney general had no right to appear. He appeared upon invitation of the plaintiff. The trial court did not err in denying plaintiff’s motion to set the judgment aside. The two orders appealed from are affirmed.

GRIMSON, CHRISTIANSON, SA-THRE and BURKE, JJ., concur.


author: GRIMSON, Judge.

text:
    TAYLOE v. CITY OF WAHPETON et al.
    No. 7393.
    Supreme Court of North Dakota.
    Dec. 31, 1953.

      Forbes & Forbes, Wahpeton, and Norton M. Hatlie, Wahpeton, for plaintiff and appellant.
    Clifford Schneller, Wahpeton, for defendant and respondent, City of Wahpeton.
   GRIMSON, Judge.

The plaintiff brings suit to enjoin the City of Wahpeton from enforcing an ordinance which purports to regulate and control the collection, disposition and hauling of garbage and rubbish within the city and the charges therefor. He obtained a temporary restraining order and an order to show cause why that order should not be continued during the pendency of the action. Defendant demurred to the complaint on the ground that it did not state facts sufficient to constitute a cause of action. After argument on the demurrer and on the order to show cause the court sustained the demurrer and dissolved the restraining order. Plaintiff appeals from the order sustaining the demurrer.

In his complaint the plaintiff alleges that he is a taxpayer engaged in the business of collecting and disposing of garbage in the City of Wahpeton and owns $5,000 worth of equipment for that purpose. He objects to the ordinance on the grounds that it is "invalid, void, illegal and unconstitutional” for the following reasons:

(1) That the ordinance provides for the awarding of an exclusive license to collect, dispose of and haul garbage and rubbish in the city to the person that would agree to pay the largest amount for such license and enforces his services upon the people. He claims this amounts to the granting of a special privilege contrary to law.
(2) That the ordinance delegates to the department of sanitation the right to fix and set the charges and fees that should be charged by said highest bidder for the collection, disposal and hauling of such garbage and rubbish without authority of law.
(3) That the ordinance deprives the plaintiff of his property rights and liberty to carry on his garbage collection business without due process of law and without any compensation, contrary to the Constitution of the State and the United States.
(4) That the ordinance is uncertain, unreasonable and arbitrary in its terms and provisions.
(5) That the city council in tire enactment and adoption of said ordinance was guilty of fraud, deceit and collusion in that prior to the preparation of said ordinance the city council agreed upon the fixed and established charges that should be made for the work of garbage disposal and that license should be given and awarded to the defendant, S. F. Mittag and Son.
(6) That the ordinance prevents and prohibits the collection, disposal and hauling of articles of property which are not in and of themselves noxious or dangerous to public health, safety, morals or general welfare of the inhabitants and residents of the City of Wahpeton, and therefore “unauthorized, illegal and void.”

Municipal ordinances intending to protect the public health, safety and welfare are founded upon the police power inherent in the State and granted by the State to the municipality.

“The police power is an attribute of sovereignty itself, under which life, liberty, and property are made safe. It is necessary for the preservation of the state and the welfare of society. It is a legislative function without limitation, except that it must not conflict with the state or federal Constitution, and unless the statute is clearly repugnant to some constitutional guaranty, the courts cannot interfere. The police power is one of the most essential powers of the government, and one of the least limitable, and the imperative necessity for its existence pre-eludes any limitation upon it when not arbitrarily used. All rights are subject to the police power.” City of Bismarck v. Hughes, 53 N.D. 838, 208 N.W. 711, 713.

The plaintiff does not deny that the City of Wahpeton had the authority under the police power granted it by the State to pass an ordinance regulating garbage collection and disposal for the promotion of health and suppression of disease. He, however, contends that the ordinance exceeds the authority so given to the city. The burden is on him to show wherein the ordinance exceeds that authority. State v. Armour & Co., 27 N.D. 177, 145 N.W. 1033, L.R.A.1916E, 380; State v. Ligaarden, 59 N.D. 475, 230 N.W. 729, 70 A.L.R. 126; Baird v. Rask, 60 N.D. 432, 234 N.W. 651.

There is a presumption that the ordinance as passed is valid.

“A legal presumption exists in favor of validity, and unless the contrary appears upon the face of the ordinance, the burden is upon the party attacking it as invalid to show by clear and unequivocal evidence that the regulation imposed by it is so arbitrary, unreasonable, or confiscatory as to amount to depriving such party of property without due process of law. [Citing cases.]” City of Scottsbluff v. Winters Creek Canal Co., 155 Neb. 723, 53 N.W.2d 543, 548.

In passing upon the validity of such ordinances the courts will not declare them invalid unless such ordinances are clearly arbitrary, unreasonable and without relation to public health, safety, morals or public welfare. Soderfelt v. City of Drayton, N.D., 59 N.W.2d 502 and cases cited.

Subsection 1, Sec. 40-0501, NDRC 1943, grants the governing body of a municipality the power to adopt such ordinances not repugnant to the constitution and laws of the State, as may be proper and necessary to carry into effect the powers granted to such a municipality or as the general welfare of the municipality may require. Subsection 45 of that section gives the municipality the specific authority “To make regulations necessary or expedient for the promotion of health or for the suppression of disease.”

Plaintiff claims, first, that the provision of the ordinance which provides for the granting of an exclusive license for the purpose of collection and disposal of garbage is beyond the authority granted by the statute. He contends that the ordinance thus creates a monopoly in restraint of trade contrary to the constitution. The collection and disposition of garbage is not a private enterprise. It is a municipal duty, which the city under the police power granted to it, must carry on by itself or by its agents. The constitutional provision against the granting of special or exclusive privileges does not apply. It is held in Smiley v. MacDonald, 42 Neb. 5, 60 N.W. 355, 27 L.R.A. 540, that such a constitutional provision does not prohibit cities from making an exclusive contract for the removal of garbage and other noxious and unwholesome matter. In the City of Grand Rapids v. De Vries, 123 Mich. 570, 82 N.W. 269, 273, the court passed on a similar ordinance for garbage collection and removal. In reference to the question of awarding the work' to one exclusive individual or concern the court said:

“The gathering of garbage is not a trade, business, or occupation in any proper sense, and such employment does not come under the doctrine in reference to monopolies, or in reference to legislation in restraint of trade. It is a matter in which the public agencies are authorized to pursue the best means to protect the public health.”

In 9 McQuillin, Municipal Corporations, 3d Ed., p. 305, it is said regarding the issuance of license for the removal of garbage:

“Licenses or permits of this character may be limited in number or made exclusive in order to promote efficiency in the removal of these waste products and in order to make police regulation more concentrated and effective. No unlawful restraint of trade ensues as a consequence of thus limiting persons engaged in this activity, since it is primarily governmental in nature and object, although private enterprise is utilized in performing it.”

In 2 Dillon on Municipal Corporations, 5th Ed., Sec. 678, it is said:

“It is therefore within the power of the city not only to impose reasonable restrictions and regulations upon the manner of removing garbage but also, if it sees fit, to assume the exclusive control of the subject, and to provide that garbage and refuse matter shall only be removed by the officers of the city, or by a contractor hired by the city, or by some single individual to whom an exclusive license is granted for the purpose. An exclusive right so created is not open to the objection that is is a monopoly.
“Under a statute giving it power to make regulations to secure the general health, to prevent and remove nuisances, and to compel and regulate the removal of ‘garbage’ and filth beyond the corporate limits, a city may grant an exclusive right to the highest bidder to remove all garbage; * * O’Neal v. Harrison, 96 Kan. 339, 150 P. 551, L.R.A.1915F, 1069.

In Dreyfus v. Boone, 88 Ark. 353, 114 S.W. 718, the court holds that where the regulation adopted by the city is a valid exercise of police power and the business necessarily incident to its enforcement may safely be entrusted to one person, the ordinance providing for the regulation is not invalid on the ground that it creates a monoply. See, also, Ex parte Sozzi, 54 Cal.App.2d 304, 129 P.2d 40; 7 McQuillin, 3d Ed., Sec. 24.242, pp. 77-78.

The statute makes it the duty of the city council to make any necessary regulations for the promotion of health. The legislature has given authority to the cities to regulate the matter of collection and disposition of garbage and has left to the city the use of discretion in the matter of means employed to carry that out.. It becomes the duty of the city council to determine the method that is best suitable and most effective to carry out that purpose. Clearly placing one responsible man or concern at the head of the collection and disposal of garbage with proper equipment in the city or in a district would bring better results than any attempt at dividing that work among several.

“Manifestly obedience to the rules laid down for the handling of garbage may be more easily compelled — the method adopted may be made more efficient — if it is all handled by one concern.” O’Neal v. Harrison, 96 Kan. 339, 150 P. 551, 552, L.R.A. 1915F, 1069.

Similarly, the city council has the right to fix the charges and fees for the removal and disposal of garbage which is the plaintiff’s second objection to the ordinance. That is a part of the means provided in the ordinance for carrying out its general purpose. The complaint does not state what the fees fixed by the ordinance are nor make any objection that they are unreasonable.

“Within the general principle that a municipality, in the exercise of the police power granted to it by the state, may, by reasonable ordinance, regulate the collection and disposal of substances within the municipality which are nuisances per se, or which may become nuisances, it is unquestioned that a municipality may adopt necessary and reasonable regulations for the collection, removal, and disposal of garbage accumulating within its limits.” 37 Am. Jur., Municipal Corporations, Sec. 298, p. 944.

From the fact that the ordinance provides for letting the license to the highest bidder plaintiff argues that the purpose of the ordinance is to raise revenue rather than collection and disposal of garbage, and therefore, the statute is a tax measure and not passed according to law. There is no statement of facts in the complaint to sustain that theory. It is clear that the 'purpose of the ordinance was to provide for the collection and disposition, of garbage. With regard to the letting of the license for carrying on that work Sec. 8 of the ordinance provides that the exclusive license shall be awarded after advertising for two successive weeks for bids. It provides that in the bid, the bidder specify the kind of equipment to be used and the amount he is willing to pay the city for such exclusive license together with an agreement that the bidder shall maintain the dump grounds. Then it provides:

“That said license, after the hearing on said bids, shall be awarded to the highest and best bidder; and in awarding of such bid, the kind and type of equipment, the integrity of the bidder and the amount of the bid shall be considered before a final awarding of such license.”

Thus, it appears that only one of the elements the city council shall consider relates to the amount of the bid. The other two are the kind and type of equipment and the integrity of the bidder. Both those elements refer bads to' the purpose of the ordinance to effect an efifident and reliable method of carrying on the work.

The ordinance further provides the sanitary commission shall fix the fees that the householder pays to the garbage collector for that service within the minimum and maximum of said fees fixed by the ordinance. The cost to the city is for the inspection and policing of the job and is not based in any way upon the fees paid by the 'householder. There is no allegation in the complaint as to the amount of that cost. There is no provision in the ordinance as to what the fee for the license should be. Neither is there any statement in the complaint as to what the bid of the accepted bidder in this case was. The presumption is that it was reasonable. In the case of Goer v. Taylor, 51 N.D. 792, 200 N.W. 898, 899, the Court was considering the annual license required of an attorney for the right to practice in the courts of'this state. The Court said:

“Such charge may be imposed either for the purpose of producing revenue, in which case, as a tax, it is subject to the requirements of section 175 of the Constitution * * * or as a purely regulatory exaction. If imposed for the latter purpose it is subject only to the requirements that the regulatory provisions be reasonable and that the charge or fee be not to any considerable extent greater in amount than is reasonably necessary to carry out the regulatory provisions. [Cases cited.] And since expenditures on account of regulatory provisions in a legislative act must be made subsequent to' the enactment, the requirements can only be estimated or approximated, and more or less latitude will be allowed in determining whether such regulatory charge or license fee is reasonable. And the presumption is that it is reasonable. [Citing cases.]”

Nor does the fact that a license ordinance incidentally raises revenue affect its validity. “We cannot regard the mere fact that the city derives some revenue from the measure as taking it out of the category of police regulations.” O’Neal v. Harrison, supra. See, also, 9 McQuillin, Municipal Corporations, Sec. 26.30, p. 60; City of Fort Worth v. Gulf Refining Co., 125 Tex. 512, 83 SW.2d 610; Fletcher Oil Co. v. Bay City, 247 Mich. 572, 226 N.W. 248.

The test whether or not a particular measure is a welfare measure “is whether it has some relation to the public welfare, and whether such is in fact the end sought to be attained.” Coombs v. MacDonald, 43 Neb. 632, 62 N.W. 41, 42. See, also, Smiley v. MacDonald, 42 Neb. 5, 60 N.W. 355, 27 L.R.A. 540; Union Pac. R. Co. v. State, 88 Neb. 247, 129 N.W. 290, 291.

Clearly the ordinance is a welfare measure for the protection of the public health and not a measure for raising revenue.

In his third and sixth objections the plaintiff claims that the ordinance is invalid on the grounds that it interferes with property rights without due process of law contrary to the State and Federal Constitutions. His first contention on that ground is that his right and liberty to carry on a garbage collection is taken away. That, however, is not a private or competitive business. It is merely the privilege of doing some work that is essentially municipal work and under control of the municipality by virtue of the police power granted to it by the legislature. That is not depriving him of any property.

His next contention on that ground as we understand it, is that the ordinance prevents the collection and disposal and hauling by the owners or anyone except the licensed garbage collectors of articles of private property which are not in and of themselves “noxious or dangerous to public health, safety, morals or the general welfare” of the inhabitants of the City of Wahpeton. This argument refers to the collection of such things as old clothing, paper, paper containers, old rubber boxes, bills, crates, tree limbs and other similar accumulations. Sec. 3 of the ordinance reads: “Garbage, as the term is used in this 'ordinance, shall include all accumulations of household waste matter including dry kitchen refuse” and the ordinance goes on to enumerate many articles including those heretofore mentioned.

It is true, the ordinance places collection of such refuse exclusively in the hands of the licensed garbage collector if it is “waste” matter, or in other words abandoned by the owners. It is common knowledge that such matter might become a fire hazard. Subsection 35 of Sec. 40-0501, NDRC 1943, deals with fire hazards and grants the city power to pass an ordinance “to prevent a deposit or keeping of ashes or refuse in unsafe places.” This portion of the ordinance comes clearly within that power.

“Garbage matter and refuse are regarded by the decisions as inherently of such a nature as to be either actual or potential nuisances. By reason of the inherent nature of the substance, it is therefore not a valid objection to an- ordinance requiring disposal in a specified manner that garbage has some value for purposes of disposal, and that the effect of the ordinance is to deprive the owner or householder of such value. That the owner suffers some loss by destruction or removal without compensation is justified by the fact that the loss is occasioned through the exercise of the police power of the state, and the loss sustained by the individual is presumed to be compensated in the common benefit secured to the public.” 2 Dillon on Municipal Corporations, 5th Ed., Sec. 678.

See, also, 7 McQuillin, Municipal Corporations, Sec. 24.247, p. 85; 37 Am.Jur., Municipal Corporations, Sec. 298, p. 944. This contention of the plaintiff is without merit.

Under his fourth objection plaintiff alleges that the ordinance is “too vague, sweeping, indefinite, uncertain, unreasonable, and is arbitrary in its terms and provisions.” This statement is a pure conclusion. No particulars are pointed out wherein the ordinance is deficient in this respect. On a demurrer only well pleaded facts are admitted. The ordinance does not appear unreasonable nor are any of the other particular attributes enumerated in that objection evident on the face of the ordinance.

Plaintiff’s final objection to the ordinance charges the city council with fraud and collusion in its enactment in that the defendants prior to the preparation of the ordinance had agreed upon and fixed charges which should be paid for the work of collecting and disposing of garbage and rubbish in the city and had further agreed that the job was to be given to the defendant Mittag & Son.

It would only be natural for the councilmen to talk over and agree on the rates to be charged before they enacted an ordinance fixing such rates. They could rightly confer with those in the business and others as to costs, necessary equipment, etc. If there was an agreement that the scavenger job should go to the defendant Mittag & Son, such arrangement could in no event affect the validity of the ordinance.

If the statute or an ordinance has been enacted in a manner provided by law and for a purpose permissible under the Constitution, neither the motives which impel its enactment nor any alleged outside arrangements of the councilmen can be made the object of judicial inquiry for the purpose of invalidating or preventing the operation of the law or ordinance. Courts should not go outside of the record in searching for reasons for annulling a statute. McCoy v. Davis, 38 N.D. 328, 164 N.W. 951.

In Cornelius v. City of Seattle, 123 Wash. 550, 213 P. 17, the court held that the motives of members of a council in voting for an ordinance may not be inquired into for the purpose of determining the validity of the ordinance; but, if any state of facts would sustain it as a proper exercise of the police power, such state of facts will be presumed to have existed.

The fact that determined the necessity of the ordinance was the need of regulating the collection and disposal of garbage. Enacting an ordinance for that purpose was a proper exercise of the police power and makes the enactment thereof valid no matter what the motives of the commission were. See, also, People v. Gardner, 143 Mich. 104, 106 N.W. 541.

As for the constitutional objections to the ordinance attempted to be raised by the plaintiff, there is an additional reason why the demurrer should be sustained. It has long been the rule in this state that anyone who attempts to question the constitutionality of a statute or an ordinance must point out the specific provisions of the constitution that he claims have been violated.

In State ex rel. Linde v. Taylor, 33 N.D. 76, 156 N.W. 561, 564, L.R.A.1918B, 156, Ann.Cas.1918A, 583, this court holds:

“And he who alleges a statute to be unconstitutional must be able to point to the particular constitutional provision violated.”

In Baird v. Rask, 60 N.D. 432, 234 N.W. 651, 653, this court says:

“Specification No. 7 is that the act violates sections 69 and 70 of article 2 of the State Constitution. Section 69 forbids the passage of local or special laws concerning thirty-five subjects which are enumerated in separate paragraphs. Counsel for the appellants do not point out under which subject the act in question falls. So, under the well settled principle that it is incumbent upon one attacking the constitutionality of a law to point out the specific provision of the Constitution which is violated, nothing more need be said as to the contention that it violates section 69.”

See, also, State v. Ligaarden, 59 N.D. 475, 230 N.W. 729, 70 A.L.R. 126; State ex rel. Sathre v. Board of University and School Lands, 65 N.D. 687, 262 N.W. 60; State v. Schmidt, 72 N.D. 719, 10 N.W.2d 868; State ex rel. Rausch v. Amerada Petroleum Corp., 78 N.D. 247, 49 N.W.2d 14, 20; 5 McQuillin, Municipal Corporations, 3d Ed., Section 19.05, pages 478-480; 16 C.J.S., Constitutional Law, § 96, pages 220-222.

Nowhere in the complaint are the specific sections of the constitution which are alleged to be violated pointed out. Under the principle adopted in the foregoing cases, the complaint does not state a cause of action as to the unconstitutionality of the ordinance in question.

We are all agreed that the ordinance of the City of Wahpeton here involved is valid as against all the objections of the plaintiff. The demurrer of the defendants was properly sustained. The order of the district court sustaining: the demurrer is affirmed.

BURKE, SATHRE, and CHRISTIAN-SON, JJ., concur.

MORRIS, C. J., concurs in the result.