1 IN KING COUNTY et al, Parkinson v. Seattle School Dist. No. 1 in King County

• Decision Date: 17 April 1902
• Citation: 68 P. 875,28 Wash. 335
• Court: Washington Supreme Court
• Parties: PARKINSON v. SEATTLE SCHOOL DIST. NO. 1 IN KING COUNTY et al.

68 P. 875

28 Wash. 335

PARKINSON v. SEATTLE SCHOOL DIST. NO. 1 IN KING COUNTY et al.

Supreme Court of Washington

April 17, 1902

Appeal from superior court, King county; Boyd J. Tallman, Judge.

Injunction by Edward J. Parkinson against Seattle school district No. 1 in King county, and others, as directors thereof, to restrain the issuance of bonds. Judgment dismissing the complaint, and plaintiff appeals. Affirmed.

James Kiefer, for appellant.

Walter S. Fulton, for respondents.

MOUNT J.

Seattle school district No. 1, King county, Wash., by proper resolution, submitted to the qualified electors of that district a proposition of issuing and selling $275,000 of 20-year 4 per cent. bonds for the purpose of purchasing sites and erecting necessary buildings for the use of the school district. An election was regularly and properly called for the 30th day of November, 1901, on which day more than three-fifths of the electors voting at such election voted in favor of the issue and sale of the bonds named. In pursuance of the authority thus given, the board of directors of said district passed a resolution as follows: 'Be it resolved that the proposition of issuing bonds in the sum of $275,000 running for a period of twenty years, and drawing interest at the rate of four per cent. per annum, payable semiannually has been duly and legally carried and authorized by more than three-fifths of all the votes cast at a special election held for that purpose in this district on Saturday, the 30th day of November, A. D. 1901: Therefore the secretary is instructed to notify the treasurer of King county, Washington, to advertise the sale of said bonds in the Post-Intelligencer and Times of the city of Seattle. Bonds to be for $1,000 each, to run for twenty years, with no option for redemption, to be dated March 1, 1902. Bids must be accompanied by a certified check for $5,000, and must specify a flat price for bonds plus accured interest. Bonds will be delivered by the board as follows: $100,000 March 1, 1902, $100,000 June 1, 1902, and $75,000 September 1, 1902. Bonds and interest payable in Seattle or at the state's fiscal agency in New York City. Bids will be received up till 2 o'clock p. m., Friday, January 10, 1902. The above resolution was adopted by unanimous vote.' Upon proper request the county treasurer of King county issued and published a notice calling for bids for the purchase of the bonds as follows: 'Notice is hereby given that pursuant to a special bond election held by school district No. 1 of King county, state of Washington, in the city of Seattle, on the 30th day of November, 1901, at which election more than three-fifths of the votes cast were, 'For Bonds, Yes,' said school district No. 1 hereby offers for sale coupon bonds of said school district to the amount of $275,000, to be of the denomination of $1,000 each, bearing interest at the rate of four per cent. per annum, and to be payable twenty years after date at the office of the treasurer of King county, state of Washington, or at the office of the fiscal agency of the state of Washington in the city of New York, in the state of New York, at the option of the purchaser. The interest to be payable seminannually, and evidenced by coupons payable at the said treasurer's office or at the said fiscal agency, at the option of the purchaser. Sealed bids for the purchase of said bonds will be received by the county treasurer of King county, state of Washington, up to 2 o'clock p. m. on Friday, January 10, 1902, at the office of said county treasurer in the city of Seattle, state of Washington, at which time said bids will be considered as required by law. Bidders must specify flat price for bonds plus accrued interest from March 1, 1902. Said bonds will be dated March 1, 1902, and will be delivered as follows: $100,000 on March 1, 1902, $100,000 on June 1, 1902, and $75,000 on September 1, 1902. Said bonds will not be sold below par. All bidders for said bonds, excepting the state of Washington, are required to deposit with the said county treasurer a certified check for $5,000, made payable to said county treasurer, when depositing with said treasurer their bids. No commissions will be allowed on the sale of said bonds. The directors reserve the right to reject any and all bids. The purpose of this bond issue is for the purchase of school sites and erection of school buildings.' In response to this notice two bids were received. The one accepted was as follows: 'Chicago, January 6, 1902. J. W. McConnaughey, Esq., County Treasurer, Seattle, Wash.--Dear Sir: We will purchase the $275,000 twenty years straight 4 per cent. semiannual interest bonds of school district No. 1 of King county, Washington, dated March 1, 1902, interest and principal payable at the fiscal agency of the state of Washington in the city of New York, and delivered in the amounts and at the times stated in your official advertisement, and will pay for the said bonds the sum of $275,000 and accrued interest from the date of said bonds to the date or dates of the several deliveries thereof, and a premium of $6,225. It is understood that prior to the delivery of the bonds you will furnish us such certified papers as we may require to evidence satisfactorily to our attorney that the bonds as issued are a legal and valid indebtedness of the said school district. We inclose herewith our check by the First National Bank of Chicago in the sum of $5,000 in compliance with your advertisement as an evidence of good faith. Respectifully submitted, Thompson, Tenny & Crawford Co., by H. C. Barroll, Manager.' This action was brought by appellant, who is a resident, property owner, and taxpayer of the district, to enjoin the issuance of the bonds. The complaint alleged the facts substantially as above set out. Respondents demurred to the complaint upon the ground that the same does not state facts sufficient to constitute a cause of action. This demurrer was sustained by the lower court, and plaintiff elected to stand upon his complaint, and a judgment of dismissal was entered. From this judgment plaintiff appeals. Appellant argues that the bonds are illegal, unauthorized, and void for two reasons, viz.: (1) That in the notice of election and in the formal proposition submitted to the voters upon these bonds the rate of interest is fixed at 4 per cent.; (2) that the notice, as published, fixed a flat rate of interest, instead of requesting a tender of such rate of interest as the bidder or bidders would be willing to accept.

1. It is contended by appellant that the election at which the bonds were authorized was invalid, because the notice thereof arbitrarily fixed the rate of interest at 4 per cent., instead of leaving the rate of interest open to competition. Sections 117 and 118 of the Code of Public Instruction (Laws 1897, pp. 401, 402), are as follows:

'Sec. 117. The board of directors of any school district in this state may borrow money and issue negotiable coupon bonds therefor to an amount not to exceed five (5) per cent. of the taxable property in such district, as shown by the last assessment roll for county and state purposes: provided, that in incorporated cities the assessment shall be taken from the last assessment for city purposes, for the purpose of funding outstanding indebtedness, or bonds heretofore issued or issued under the provisions of this act, or for the purchase of school house site or sites, building one or more school houses and providing the same with all necessary furniture and apparatus, or for any or all of these purposes, when authorized by vote of the district so to do, as provided in section 118 of this act: provided further, that the bonds so issued shall bear a rate of interest not to exceed ten (10) per cent. per annum, interest payable annually or semiannually, payable and redeemable at such time as may be designated in the bonds, but not to exceed twenty (20) years from the date of issue.

'Sec. 118. The question whether bonds shall be issued, as provided in section 117 of this act, shall be determined at an election to be held in the manner prescribed

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