Brewster v. Deschutes County

• Decision Date: 14 July 1931
• Citation: 1 P.2d 607,137 Or. 100
• Parties: BREWSTER v. DESCHUTES COUNTY et al.
• Court: Oregon Supreme Court

1 P.2d 607

137 Or. 100

BREWSTER v. DESCHUTES COUNTY et al.

Supreme Court of Oregon

July 14, 1931

En Banc.

Appeal from Circuit Court, Deschutes County; T. E. J. Duffy, Judge.

Suit by George H. Brewster, for himself and others similarly situated, against Deschutes County, Oregon, and others. From a decree dismissing the complaint, plaintiff appeals.

Reversed and remanded.

This is a suit for an injunction to restrain the defendants from entering into a lease of a building which the defendant Phil Brooks proposes to erect as a combination courthouse and city hall. After the defendants had filed an answer and after both the plaintiff and defendants had moved for judgment on the pleadings, a decree was entered dismissing the complaint. The plaintiff appealed.

George H. Brewster, of Redmond, for appellant.

R. B Parsons, of Bend, for respondents.

ROSSMAN, J.

The only pleadings which were filed in this suit are the complaint and the answer. Since disposition was made of the suit, upon a motion for judgment upon the pleadings, no evidence whatever was received. We shall therefore proceed to state the contents of the pleadings. The complaint, having described the plaintiff as the owner of real property and a taxpayer in the city of Redmond Deschutes county, Or., alleges that Deschutes county is a regularly organized county of which the defendant city of Bend, a municipal corporation, is the county seat. It alleges that three of the defendants, De Armond, Peck, and Whitlock constitute the county court of Deschutes county; that the defendants Gove, Hosch, and Gilbert are the city commission of the city of Bend; that since 1917, Deschutes county, owing to its lack of a courthouse, has been compelled to rent quarters for the use of its officers and employees in the administration of the affairs of the county; that the lease upon the space now occupied by the county officials will expire December 1, 1931; and that it exacts a monthly rental of $1,049. The complaint likewise alleges that the city of Bend does not own the office space used by its officials and is also compelled to pay rent. The complaint next alleges that Deschutes county has issued unpaid warrants to the extent of $160,000 which constitute general obligations of the county. We now quote from the complaint: "That the aforesaid city commission, acting for the City of Bend, and being desirous of obtaining quarters for the housing of the various officers and functions of said city and said county, have entered into negotiations with the defendant, Phil Brooks, wherein and whereby it is proposed that the aforesaid Phil Brooks construct a building on lands now owned by the City of Bend, and proposers to rent said building to said city and county, jointly, at a rental approximating $750.00 per month, of which the City of Bend will pay three-tenths of said rental and Deschutes County will pay seven-tenths of said rental; said rentals to be paid by said city and county to be in proportion to the actual space occupied and used by each of the respective governments; that it is proposed that said city and county shall enter into a contract and lease with the said Phil Brooks for a term of seventeen and one-half years, said contract to contain an option for the purchase of said property, all rentals paid to apply on the purchase price in case the option to purchase is exercised and said option to purchase shall be exercised by the payment of all the reserve rentals; that the aforesaid city and county have adopted said plan, have called for plans and specifications for the aforesaid building, and are threatening to and will, unless restrained by order of court, enter into the aforesaid contract ***; that said contract is unlawful in that Deschutes County has at present voluntary obligations and liabilities in excess of the sum of $5,000.00 and that said contract, together with previous debts and liabilities, will exceed the sum of $5,000.00 ***; that plaintiff has demanded of defendants and all of them, that they desist from the plan and proposal to build ***, but that the defendants and each and all of them have refused to desist, and continue with their unlawful attempts and plan to enter into said contract."

The answer admits all of the foregoing recitals of the complaint except the allegation that the proposed contract is an unlawful one and conflicts with provisions of the Oregon Constitution. The latter allegation it denies. These admissions and denials are followed with allegations that the present quarters occupied by the county for the conduct of its business are unsuitable and unsanitary; that the lease upon the aforementioned quarters will expire Decxember 1, 1931, and that a necessity exists for obtaining other quarters; that if the proposed lease mentioned in the complaint is executed, Deschutes county and the city of Bend will effect a saving of more than $600 per month upon the sums paid by them as rentals, and secure quarters better adapted for their use; and that if the defendants are permitted to enter into the contract proposed by the defendant Phil Brooks, the rental will be paid from county revenue derived from the annual levy of taxes.

Article 11, section 10, Oregon Constitution (p. 176, Oregon Code 1930), provides: "No county shall create any debt or liabilities which shall singly or in the aggregate, with previous debts or liabilities, exceed the sum of $5,000 except to. ***" It will be observed from the recitals of the complaint which we have quoted above that the only reason assigned by the plaintiff for his contention that the proposed lease is invalid is an averred conflict between it and the above-quoted section of our Constitution. Sections 27-118 and 27-119 (Code 1930) provide as follows:

"The county court or county commissioners of any county in the state of Oregon, and the city council or governing body of any city or town therein, are empowered and authorized to enter into contracts for leasing or rental, or for the purchase of any real property in the state of Oregon, which, in the judgment of said bodies, may be necessary for the proper and convenient housing of the officers, or the conducting of the business of said bodies. Said leases or contracts, if made by a city or town, shall be made subject to the terms of the charter thereof.

"Said contracts or rentals may be construed to include contracts for the rental thereof on long time leases under an optional contract for purchase."

The plaintiff contends that since the total rental exacted by the proposed lease exceeds the sum of $5,000 the lease will be invalid. We are, therefore, called upon to determine whether the rent payable under the provisions of the lease from time to time will constitute a debt or a liability within the contemplation of the above section of our Constitution. In the early case of Salem Water Co. v. City of Salem, 5 Or. 29, this court held that a contract, extending over a period of seventeen years which required the city of Salem to pay $1,800 per annum in quarterly installments to the water company for water supplied to the city, conflicted with the following provision of the charter of the city: "The City Council shall not in any manner create any debt or liabilities which shall singly, or in the aggregate, exceed the sum of one thousand dollars." The decision pointed out: "The words 'any debt or liabilities,' as used in the charter, are general, and may include any kind of debt or liability, either absolute or contingent, express or implied. A debt exists against the city whenever it agrees to pay money in return for services performed, or, as in this case, for water furnished for the use of the city. *** The moment the contract was made, it created a present obligation on the part of the city to pay money to the company at future periods. Now, whether this obligation can be called a debt in the technical sense or not, it is at least a liability." After the court reviewed many adjudications of other courts including Coulson v. City of Portland, Deady, 481, 6 F. Cas. 629, No. 3,275, it announced its...