Heberer v. Board of Com'rs of Chaffee County

• Decision Date: 03 November 1930
• Docket Number: 12699.
• Parties: HEBERER v. BOARD OF COM'RS OF CHAFFEE COUNTY et al. (MATLOCK, Intervener).
• Court: Colorado Supreme Court

293 P. 349

88 Colo. 159

HEBERER v. BOARD OF COM'RS OF CHAFFEE COUNTY et al. (MATLOCK, Intervener).

No. 12699.

Supreme Court of Colorado, En Banc.

November 3, 1930

Error to District Court, Chaffee County; James L. Cooper, Judge.

Action by Max Heberer against the Board of County Commissioners of the County of Chaffee, Colorado, and others, in which Charles Matlock intervened.

Judgment for defendants, and plaintiff and intervenor bring error.

Affirmed.

Omar E. Garwood and Everett Bell, both of Denver for plaintiff in error intervener.

Wallace Schoolfield, of Salida, for defendant in error Board of Com'rs.

William S. Rush, of Salida, for plaintiff in error.

Pershing Nye, Tallmadge, Bosworth & Dick, of Denver, for defendants in error Ray Lines Post No. 64, American Legion, and Joseph D Grigsby & Co.

BUTLER, J.

Max Heberer, a taxpayer, sued the board of county commissioners of the county of Chaffee, Ray Lines Post No. 64 of the American Legion, and Joseph D. Grigsby & Company to enjoin them from performing a contract and to have the contract annulled. Charles Matlock, also a taxpayer, intervened. The court sustained the defendants' demurrers to the complaint and the intervener's petition. The plaintiff having elected to stand upon his complaint and the intervener having elected to stand upon his petition, judgment was rendered in favor of the defendants. The plaintiff and the intervener seek a reversal of the judgment.

The county seat of Chaffee county having been removed from Buena Vista, where there is a courthouse, to Salida, where there is none, the county commissioners found themselves under the necessity of providing a suitable place for the transaction of the business of the district court and of the county. Section 8682, C. L., confers upon county commissioners, where there are no county buildings, power to provide suitable rooms for county purposes. Section 5656, C. L., requires district courts to be held at the county seats of the several counties. By section 8829, C. L., the clerks of district and county courts are required to keep their respective offices at the county seat and in the office or place provided by the county. Section 471, Code of Civil Procedure 1921, provides that terms of court shall be held 'at such times and places as provided by law,' and that, 'If a room for holding the court be not provided by the county, together with attendants, fuel, lights and stationery, suitable and sufficient for the transaction of business, the court may direct the sheriff to provide such room, attendants, fuel, lights and stationery, and the expense shall be a county charge.' By section 8658, C. L., each county is given power 'to make all contracts, and do all other acts in relation to the property and concerns necessary to the exercise of its corporate or administrative powers.'

In an effort to perform the duty imposed upon them by law, the county commissioners entered into a contract with Ray Lines Post No. 64, American Legion, whereby the Legion Post leased to the county for 25 years a parcel of land in Salida, together with the building to be erected thereon. The lessor agrees to erect a building suitable for a courthouse, the plans to be satisfactory to the lessee, the cost of both building and land not to exceed $100,000. The money for the purchase of the land and the erection of the building is to be derived from the sale of bonds issued by the Legion Post and secured by its trust deed of the property. Such bonds as are '25-year bonds' are to be 'optional after 10 years.' The lessor reserves the right, during the term of the lease, to use a part of the building to be known as the Legion hall. The rent is to be $670 per month, the lessee agreeing to provide therefor in its annual levy and appropriation resolutions. The lessor agrees to apply the rental to the payment of the bonds and the interest thereon. The rent is to be paid by the lessee to the trustee under the deed of trust securing the bonds. The lessee is to pay all taxes and assessments and for insurance, power, heat, light, water, and repairs. The lessee is given the option to purchase the property in ten years, or at any time thereafter during the term of the lease, upon paying the principal and accrued interest on all the bonds then outstanding, less the amount of any sinking fund then existing. Upon the lessee's thus purchasing under the option, the property is to be conveyed to the lessee free and clear of all liens and incumbrances. If the lessee exercises its option to purchase, or if it constructs another courthouse, the lessee, to quote from the intervener's brief, 'must rent a part to the Legion upon rental terms then to be agreed upon.' Joseph D. Grigsby & Company made an agreement with the Legion Post to purchase the bonds, the lease to be assigned to them by the Legion Post as additional security. In short, the plan contemplates that the rentals (if the option to purchase is not exercised) will be sufficient to retire the bonds. and shall be used by the lessor for that purpose, and when the bonds are paid the property shall be conveyed to the lessee. It is alleged that the question of making the lease was not submitted to a vote of the qualified electors of the county. Neither in the complaint nor in the petition is is alleged that $670 per month is an excessive rental.

1. It is said that the lease creates an indebtedness of $201,000, the aggregate of the rentals for twenty-five years, and that as the incurring of such indebtedness has not been authorized by a vote of the qualified electors, the lease is void. According to the pleadings, the assessed valuation of property in the county is $9,582,685, and the bonded indebtedness is $135,000. If, as contended by the plaintiff and the intervener, the lease creates an indebtedness for the aggregate amount of the rentals for twenty-five years, section 6, article 11, of the state Constitution is violated and the lease must fall. We do not think that such an indebtedness is created.

Denver v. Hubbard, 17 Colo.App. 346, 68 P. 993, 995, concerned a contract whereby a city agreed to pay a stipulated price per year for ten years for electric lights. It was doubted whether this created any indebtedness. 'There is much force,' said the court, 'in the contention that a contract like this does not create a debt within the meaning of the constitution. * * *' The court, however, did not pass upon the question.

In Shields v. Loveland, 74 Colo. 27, 218 P. 913, 916, the city of Loveland issued bonds to be paid out of the revenue derived from the operation of a municipal light plant. Of course, the bonds, being payable only out of such revenue, did not create an indebtedness within the meaning of section 8, article 11, of the Constitution, or section 8987, C. L. But there was this provision: 'For street lighting purposes the city of Loveland hereby irrevocably covenants with each and every holder of said revenue bonds issued under the provisions of this ordinance, that it will pay into said fund not less than five thousand dollars ($5,000) per annum.' Such payments were to be made for not less than ten years. Concerning this provision, we said: 'Fundamentally this is a method of paying annually for street lighting annually furnished, and it has been held that such contracts do not create debts within the meaning of laws like those now in question. Leadville Gas Co. v. Leadville, 9 Colo.App. 400, 49 P. 268; Denver v. Hubbard, 17 Colo.App. 346, 68 P. 993; Valparaiso v. Gardner, 97 Ind. 1, 49 Am.Rep. 416; Uhler v. Olympia, 87 Wash. 1, 14, 151 P. 117, 152 P. 998.' We held that the contract did not create an indebtedness within the inhibition of the Constitution or the statute.

Giles v. Dennison, 15 Okl. 55, 78 P. 174, involved a contract for the construction of a courthouse and jail, and the payment of an annual rental for ten years, at the end of which time the title was to vest in the county. The contract was made pursuant to a territorial statute. The question was whether the contract violated section 4 of an act of Congress of July 30, 1886, 24 Stat. 171 (48 USCA § 1472), reading: 'That no political or municipal corporation, county, or other subdivision in any of the Territories of the United States shall ever become indebted in any manner or for any purpose to any amount in the aggregate, including existing indebtedness, exceeding 4 per centum on the value of the taxable property within such corporation, county, or subdivision, * * * and all bonds or obligations in excess of such amount given by such corporation shall be void. * * *' If the contract created an...