Automobile Club of Wash. v. City of Seattle

• Decision Date: 27 November 1959
• Docket Number: No. 34974,34974
• Citation: 55 Wn.2d 161,346 P.2d 695
• Parties: AUTOMOBILE CLUB OF WASHINGTON, a corporation, William A. Bugge, Director of the Department of Highways of the state of Washington, and Ray L. Moisio, Oscar E. Stone, Harry E. Morgan, Ernest A. Cowell and R. E. Hensel, Highway Commissioners of the state of Washington, Respondents, v. CITY OF SEATTLE, a municipal corporation, and Carl G. Erlandson, City Comptroller and ex-officio Clerk, and G. H. Culver, City Treasurer, Appellants.
• Court: Washington Supreme Court

Page 161

55 Wn.2d 161

346 P.2d 695

AUTOMOBILE CLUB OF WASHINGTON, a corporation, William A Bugge, Director of the Department of Highways of the state of Washington, and Ray L. Moisio, Oscar E. Stone, Harry E Morgan, Ernest A. Cowell and R. E. Hensel, Highway Commissioners of the state of Washington, Respondents, v. CITY OF SEATTLE, a municipal corporation, and Carl G Erlandson, City Comptroller and ex-officio Clerk and G. H. Culver, City Treasurer, Appellants.

No. 34974.

Supreme Court of Washington, En Banc.

Nov. 27, 1959.

A. C. Van Soelen, Corp. Counsel, A. L. Newbould, Asst. Corp. Counsel, Seattle, for appellants.

Arthur J. Lambo, Seattle, for respondent Automobile Club of Washington, Inc.

John J. O'Connell, Atty. Gen., Douglas Hartwich, Asst. Atty. Gen., for respondents.

DONWORTH, Judge.

This action was initiated by the Automobile Club of Washington, Inc., one of the respondents herein, as a taxpayer, against appellants, the city of Seattle and its comptroller and treasurer, seeking (1) a declaratory judgment to the effect that the transfer of funds from the 'city street fund' to the emergency fund for the purpose of paying a certain death and bodily injury judgment rendered against the city, by reason of the negligence of its bridge tenders in the operation of the Montlake bridge was an unconstitutional diversion of state gasoline excise tax funds, being in violation of the Eighteenth Amendment to the state constitution; and (2) a writ of mandamus compelling appellant to reimburse the 'city street fund' from the general fund for any moneys transferred therefrom, pursuant to the provisions of ordinance No. 83598, and used by appellant to satisfy the tort judgment above referred to. ¹

The case was orginally tried in the superior court for King county, which held that the transfer of funds was lawful and dismissed the action.

The Automobile Club then appealed to this court, and we set aside the judgment of the trial court and remanded the cause with instructions to cause the director of highways of the state of Washington to be made a party defendant. See Automobile Club v. Seattle, 1956, 49 Wash.2d 262, 300 P.2d 577, 305 P.2d 809.

Accordingly, the Automobile Club filed an amended complaint containing essentially the same allegations, except that venue was changed to the superior court for Thurston county, and the director of highways and the highway commissioners of the state of Washington were made parties to the action.

The case was tried to the court, sitting without a jury, upon stipulated facts and resulted in the court's concluding, as a matter of law, that the use of moneys in the city street fund to reimburse the city's general fund for the payment of the tort judgment was an improper charge against the city street fund and constituted an illegal and unconstitutional diversion thereof.

The attorney general appeared in the trial court on behalf of the state officials named as respondents herein. On this appeal, he submitted a brief and participated in the oral argument in support of the position taken herein by respondent Automobile Club.

The city of Seattle (hereafter referred to as appellant) has taken this appeal and presents three assignments of error. Since assignments No. 2 and No. 3 are substantially the same as assignment No. 1, we shall refer to only the first assignment of error, which reads as follows:

'That the trial court erred in concluding that the payment of the judgment in the case of Perrigo v. City of Seattle was an improper charge against the City Street Fund and constituted an illegal and unconstitutional diversion of said fund.'

The case was tried upon a written stipulation of facts entered into by the parties hereto, which states in part:

'V. That on or about November 15, 1954, in the case of Joyce P. Perrigo, individually and as Administratrix of the Estate of Leonard A. Perrigo, deceased, and Guardian ad Litem of Mark P. Perrigo, a minor, as City of Seattle, King County Cause No. 471293, a judgment was rendered against the city and in favor of the plaintiff for the death of Leonard A. Perrigo, injuries to Joyce P. Perrigo and to her minor child by reason of a collision with the south leaf of the Montlake Bridge in the City of Seattle on March 18, 1954. That the Montlake Bridge is a movable span bridge within the city limits of Seattle, is a part of the city street and the state highway system and the operation of said span bridge is a 'highway purpose' within the 18th Amendment to the State Constitution; that the City of Seattle, acting for and in behalf of the state, operates and maintains said bridge and employs bridge tenders to operate said movable span bridge and is reimbursed by the state therefor, all pursuant to a written contract between the city and the state dated March 27, 1953, and authorized by Ordinance No. 81863, copy of which agreement is marked Exhibit 'A', attached to this stipulation and by this reference is made a part thereof. That the maintenance of said bridge was at the time of the accident giving rise to the judgment upon the payment of which this action is brought provided for by a special maintenance contract between the City of Seattle and the State of Washington, a copy of which is attached hereto and designated as Exhibit 'B'.

'That the accident which gave rise to the aforesaid judgment arose out of the raising of the south leaf or span of said Montlake Bridge, without any warning, by bridge tenders employed by the city as aforesaid who were, in the course of their employment, testing the operation of said leaf for defects.

'VI. That the City of Seattle passed Ordinance No. 83598, entitled:

"An Ordinance making an appropriation from the Emergency Fund to the Judgment Fund, reimbursable from the City Street Fund, to pay the judgment against the city in King County Cause No. 471293 (Montlake Bridge case); and declaring the emergency therefor."

Pursuant to the above ordinance, appellant provided funds for the payment of the Perrigo judgment, in the amount of $118,585 (plus costs), by appropriating this sum from its emergency fund to its judgment fund and then reimbursing the emergency fund from the city street fund. Thus, the Perrigo judgment was, in effect, paid from the city street fund. If appellant should be held liable for wrongful diversion of moneys from this fund, the ultimate source of payment would be the city's general fund.

It is to be noted that there is no question as to appellant's liability for the Perrigo judgment. In fact, no appeal was taken by the city to this court therefrom. ² The only question involved in the present case is whether the payment of such judgment from the city street fund violates the constitution of this state.

The city street fund was created by RCW 47.24.040, which reads:

'All funds accruing to the credit of incorporated cities and towns in the motor vehicle fund shall be paid monthly to such cities and towns and shall, by the respective cities and towns, be placed in a fund to be designated as 'city street fund' and disbursed as authorized and directed by the legislative authority of the city or town, as agents of the state, for salaries and wages, material, supplies, equipment, purchase or condemnation of right of way, engineering or any other proper highway or street purpose in connection with the construction, alteration, repair, improvement or maintenance of any city street or bridge, or viaduct or underpassage along, upon or across such streets. Such expenditure may be made either independently or in conjunction with any federal, state or any county funds.'

Thus, the money in the city street fund is derived from the motor vehicle fund, which is the special fund created by the Eighteenth Amendment to the state constitution, adopted by the people in 1944. The material portion of the amendment provides:

'All fees collected by the State of Washington as license fees for motor vehicles and all excise taxes collected by the State of Washington on the sale, distribution or use of motor vehicle fuel and all other state revenue intended to be used for highway purposes, shall be paid into the state treasury and placed in a special fund to be used exclusively for highway purposes. Such highway purposes shall be construed to include the following:

'(a) The necessary operating, engineering and legal expenses connected with the administration of public highways, county roads and city streets;

'(b) The construction, reconstruction, maintenance, repair, and betterment of public highways, county roads, bridges and city streets; including the cost and expense of (1) acquisition of rights-of-way, (2) installing, maintaining and operating traffic signs and signal lights, (3) policing by the state of public highways, (4) operation of movable span bridges, (5) operation of ferries which are a part of any public highway, county road, or city street; * * *.' (Italics ours.)

The amendment was designed to insure that the highway fund would be used exclusively for highway purposes. State ex rel. Bugge v. Martin, 1951, 38 Wash.2d 834, 232 P.2d 833.

Appellant contends that payment of the Perrigo judgment is for a 'highway purpose' because it is a part of the 'cost and expense of * * * [the] operation of movable span bridges,' as that language is used in the eighteenth amendment. It is asserted that it cannot be logically argued that the cost and expense of a personal injury verdict arising out of the operations of a movable span bridge is any less a 'cost and expense' to the city of the 'operation of movable span bridges' than the 'cost and expense' of payrolls, electric energy, cleaning, or any other activities directly related to the operation of such bridges.

Appellant cites various cases from other jurisdictions to the effect that personal injury claims and claims for loss or damage to freight shipments against railroads are properly classed as operating and maintenance expenses...