Elliott v. Tillamook County

• Decision Date: 26 October 1917
• Citation: 168 P. 77,86 Or. 427
• Parties: ELLIOTT v. TILLAMOOK COUNTY ET AL. [*]
• Court: Oregon Supreme Court

168 P. 77

86 Or. 427

ELLIOTT v. TILLAMOOK COUNTY ET AL. ^[*]

Supreme Court of Oregon

October 26, 1917

In Banc.

Appeal from Circuit Court, Tillamook County; Geo. R. Bagley, Judge.

Injunction suit by Smith W. Elliott against Tillamook county and others. From a decree granting an injunction, both parties appeal. Perpetual injunction granted.

This is a suit by Smith W. Elliott, a resident taxpayer of Tillamook county, Or., against that quasi municipality, A. M. Hare as county judge, and F. L. Owens and H. V. Alley as county commissioners thereof, to enjoin the issue and sale of county bonds, the proceeds from which were intended to be used in constructing permanent roads within the county. The complaint details the proceedings employed to secure an issue of the bonds, and alleges the petition therefor was insufficient because it did not set forth or specify the length of time the bonds should run, as required by section 3 of chapter 103, Gen. Laws Or. 1913, and that the bonds were ordered to be sold at a discount, in violation of section 15 of that act. A demurrer to the complaint for that it did not state facts sufficient to constitute a cause of suit was overruled as to the first ground so stated, but sustained as to the second. Thereupon the plaintiff declined further to plead and a decree being rendered enjoining the sale of the bonds below par, both parties appeal.

H. T Botts, of Tillamook, for plaintiff-appellant. T. H. Goyne, of Tillamook, and C. W. Fulton, of Portland, for defendants-appellants.

MOORE J. (after stating the facts as above).

Section 10 of article 11 of the organic law of the state was amended by a vote of the electors November 8, 1910, pursuant to an exercise of the initiative power, and that clause now reads:

"No county shall create any debts or liabilities which shall singly or in the aggregate exceed the sum of five thousand dollars, except to suppress insurrection or repel invasion, or to build permanent roads within the county, but debts for permanent roads shall be incurred only on approval of a majority of those voting on the question." Gen Laws Or. 1911, p. 11.

In order to execute the authority thus specified, chapter 103, Gen. Laws Or. 1913, was enacted. Section 1 thereof provides that bonds may be issued for the purpose mentioned. Section 2 declares that an exercise of such authority shall be invoked by petition. Section 3, as far as material herein, reads:

"The petition mentioned in section 2 of this act shall set out and specify the amount of bonds proposed to be issued, the length of time they shall run, and the maximum rate of interest they shall bear. * * * The petition shall be in substance the following form"

--setting forth the pattern. The act to which reference has been made was attempted to be changed by chapter 12, Gen. Laws Or. 1917. The proposed alteration is entitled, "An act to amend chapter 103, General Laws of Oregon for 1913, by inserting therein an additional section." Omitting the enacting and emergency clauses, chapter 12 is as follows:

"Section 1. That chapter 103, General Laws of Oregon for 1913, be and the same is hereby amended by inserting therein an additional section which shall be numbered section 16(a), to read as follows: Sec. 16(a). After the issuance of bonds has been authorized by an election held in accordance with the provisions of this act, the county court may, in its discretion, in lieu of bonds redeemable only at the time stated in the notice, issue bonds, reserving the right to redeem them or any portion thereof serially each year, and make such reservation in the order providing for their issuance. When bonds are issued with such reservation, the redemption fund provided for in this act may be used each year, as it is collected, for the redemption of such proportion or percentage of such bonds as will redeem all of them at the end of the time fixed in the prior proceedings for the maturity of such bonds, instead of being kept and deposited or loaned as provided in this act until the final maturity of the bonds."

The validity of chapter 12 may well be questioned, since it appears to be violative of the provisions of section 22, art. 4, of the Constitution of Oregon, which declares:

"No act shall ever be revised or amended by mere reference to its title, but the act revised or section amended shall be set forth and published at full length."

Chapter 12, Gen. Laws Or. 1917, will in this instance be treated as in full force and effect.

The petition referred to in the complaint was subscribed by more than the required number of registered voters, each of whom noted opposite his name the precinct in which he resided and his post office address. Omitting the signatures, the petition is as follows:

"To the honorable county court of Tillamook county, Oregon: We, the undersigned registered voters, respectively petition that you call a special election for the purpose of submitting to the voters of this county the question of issuing bonds, to provide for the construction of permanent roads in this county, to the amount of four hundred and twelve thousand dollars ($412,000), to run not to exceed twenty years each, provided, however, the county may reserve the right to redeem same or any portion thereof serially each year. The aforesaid bonds shall bear interest at not to exceed five (5) per cent. per annum.

"Name.

Precinct.

P. O. Address."

This petition was filed with the county clerk May 4, 1917, and a week thereafter the county court, complying with the requirements of section 4 of said chapter 103, examined the petition, found that it substantially conformed to the requirements of section 3 of that act, and was in all other required particulars correct. Thereupon it made an order directing that a special election should be called and held in the county June 4, 1917, for the purpose specified in the petition, which order further stated the facts required by section 4 of the act, and directed that the bonds proposed to be issued were "to run for a term of 12 years each and to bear interest at the rate of 5 per cent. per annum, said bonds to be redeemed one-tenth annually, beginning at the end of the third year, no more than $200,000 of bonds to be issued in any one year." The order also prescribed the form of notice to be given as specified in section 6 of the act, and directed the county clerk to have the notices printed and to post them 20 days prior to the election. This order was strictly obeyed.

The election was held in the several precincts of the county at the time designated, where and when were cast 1,499 votes in favor of the measure and 687 against it. The judges and clerks of the election made due returns thereof, which being properly canvassed and reported, the county court on June 12, 1917, made and caused to be entered in its journal an order declaring that a majority of the voters voting at such election had voted in favor of issuing such bonds, which order further stated all the facts required to be detailed by section 11 of

the act.

The county court duly advertised a sale of the bonds, receiving several bids therefor, and accepted as the most favorable that of Messrs. Keeler Bros., of Denver, Colo., who offered to pay the face value and accrued interest of the bonds and a premium of $5, less, however, $6,900, as the cost of printing such evidences of indebtedness and as attorney's fees in ascertaining and determining the validity of such securities. Thereupon this suit was instituted and terminated as hereinbefore stated.

An examination of the petition as set forth above will show an attempt to comply with the requirements of section 3 of chapter 103, and also to conform to an exercise of the discretion which is conferred upon the county court by section 16 (a) of chapter 12. If that attempted enactment is valid, the power conferred can be employed without any request therefor or limitation thereof by the registered voters as to the payment of the bonds serially. The statement of such matters in the petition and notices was superfluous, but probably would not have impaired the efficacy of the proceedings if the petition was adequate in other particulars. Clark v. Hood River County, 73 Or. 336, 143 P. 897.

It will be remembered that section 3 of chapter 103 demands that the petition inaugurating the proceedings, "shall set out and specify (1) the amount of bonds proposed to be issued (2) the length of time they shall run, and (3) the maximum rate of interest they shall bear." The statement in the petition that the bonds were "to run not to exceed twenty years each, provided, however, the county may reserve the right to redeem same or any portion thereof serially each year," would, if this quoted clause were controlling, permit the bonds to run 20 years as the maximum and two as the minimum, assuming that the phrase "serially each year" means a succession of payments which would necessarily embrace a period of at least two years. Such a variance would not be a compliance with the second requirement of section 3 of chapter 103. Section 4 of that chapter provides that if the county court from an examination of the petition is satisfied that it "substantially conforms" to the requirements of section 3 of the act, an order shall be made directing a special election to be called and held in the county for the purpose specified. It will be kept in mind that the county court made a finding to the effect that from an inspection of the petition it "substantially conformed" to such requirements. A clause of section 3 of the act under consideration, in referring to the means prescribed for inaugurating proceedings to be employed to obtain an issue of county bonds, reads: "The petition shall be in substance the following...