NESBETT, Chief Justice.
Appellant taxpayer commenced this suit asking the court to declare unconstitutional certain acts of the legislature which created the Alaska State Mortgage Association.
The stated purpose of the legislation is to promote the health, safety and welfare of its citizens by creating a corporation to provide additional financing for the secondary housing mortgage market, thereby improving and stimulating the distribution of investment capital for housing. The purposes are declared to be necessary and to be public purposes for which public money may be spent.
After the appellees had answered the complaint and had stipulated with appellant, the following issues remained:
After the case was at issue the affidavit of M.G. Gebhart, President of the Alaska State Mortgage Association and Executive Director of the Alaska State Housing Authority,
No opposing affidavit was filed and hearing was had on a motion by appellees for summary judgment. The hearing consisted entirely of oral argument by counsel. The trial court eventually published its memorandum decision and later signed a judgment in appellee's favor.
The only evidence adduced at the hearing was that of the appellee and consisted of an ex parte sworn statement of Mr. Gebhart submitted in the form of an affidavit in support of the appellee's motion for summary judgment. We find that evidence to be wholly inadequate since it affords us no basis for resolving the questions raised by the appellant's eight specifications of error.
One of the major issues raised was whether the purposes for which the Association was formed were public purposes. In order to determine this broad issue intelligently a court would need to know considerably more about the secondary market for home mortgages in Alaska than was contained in Gebhart's affidavit, which was the only evidence before the court. Mr. Gebhart held a high position in the Alaska Housing Authority and no doubt was an expert in the housing and home financing fields. His affidavit could have been enlightening and of great assistance to the court. Instead, it contained only conclusions unsupported by any statement of fact.
For example, the statement that available funds for purchasing secondary mortgages is inadequate, should have been supported by respectable evidence establishing the status of the market. Facts should have been supplied describing the Federal National Mortgage Association's Special Assistance Program No. 4 for Alaska, the effect of that program on the market, and the effect it might have if terminated. Evidence showing how the activities of the Alaska State Mortgage Association would reduce or eliminate the adverse effect resulting from termination of the Special Assistance Program should have been produced. Evidence tying all of the foregoing into the claim that the activities of the Association would promote the health, safety and welfare of the citizens of Alaska should also have been produced.
With a complete factual background, the court could weigh the evidence pro and con and determine whether the Association would be serving a public purpose or merely the private purpose of stimulating the housing mortgage market for the benefit of a few, as appellant suggests.
Counsel to some extent, but particularly the trial judge, seemed to be under
We gather from the record that this was a friendly contest to determine the constitutionality of the Association, its purposes and proposed plan of operation prior to offering bonds to the investing public. The appellant made numerous allegations of illegality and supported them with no evidence whatsoever. The appellees supported their motion for summary judgment with an affidavit containing approximately six conclusions and two statements of fact.
The issues in this case are too important to be processed in so casual a manner. It has been held that a constitutional issue should not be disposed of by summary judgment.
In DeArmond v. Alaska State Dev. Corporation
We are not holding that summary judgment procedure in cases of this nature is unacceptable. We do hold that if summary procedure is employed in cases involving important public issues where any
Our discussion of the inadequacy of the evidence on the issue of public purpose applies to many of the other issues raised in this case.
For the reasons set out in this opinion the findings, conclusions and judgment are set aside. The case is remanded for further proceedings consistent with the views expressed herein.
"In determining the question presented this court adopts for its guidance the general rule, supported by the great weight of authority, that where the legislature has found that a public purpose will be served by the expenditure or transfer of public funds or the use of public credit, this court will not set aside the finding of the legislature unless it clearly appears that such finding is arbitrary and without any reasonable basis in fact."
and where we held, after considering all of the evidence, that the announced purpose of the act had a sound basis in fact and was a public purpose.