Hillier v. Public Utility Dist. No. 3

• Court: Washington Supreme Court
• Writing for the Court: GERAGHTY, Justice.
• Citation: Hillier v. Public Utility Dist. No. 3, 63 P.2d 392, 188 Wash. 602 (Wash. 1936)
• Decision Date: 16 December 1936
• Docket Number: 26249.
• Parties: HILLIER et ux. v. PUBLIC UTILITY DIST. NO. 3 et al.

63 P.2d 392

188 Wash. 602

HILLIER et ux. v. PUBLIC UTILITY DIST. NO. 3 et al.

No. 26249.

Supreme Court of Washington

December 16, 1936

Department 1.

Appeal from Superior Court, Mason County; John M. Ralston, Judge.

Suit by A. E. Hillier and wife against Public Utility District No. 3 and others. From a decree, all defendants except Omar Dion as County Treasurer of Mason County, appeal.

Reversed and remanded, with direction.

Yantis & Brodie, of Olympia, for appellants.

J. W Graham, of Shelton, for respondents.

GERAGHTY Justice.

This appeal is from a decree of the superior court enjoining the appellants, officers of Public Utility District No. 3, Mason county, from levying, and the county treasurer (ex officio assessor) from spreading upon the tax rolls, taxes for utility district purposes for the year 1936.

The questions raised call for the construction of certain provisions of the Grange Power Act, so-called adopted by the electors at the 1930 general election. Chapter 1, Laws 1931, p. 3 (Rem.Rev.Stat. § 11605 et seq.).

By section 3 of the act (Rem.Rev.Stat. § 11607), two types of districts are authorized: First, districts coextensive with the limits of the county; and second, districts embracing lesser areas than a whole county. County-wide districts are to be initiated by the petition of 10 per cent. of the qualified electors of the county. As to such districts, no preliminary hearing, on the question of benefits, for the purpose of fixing the district boundaries is required, but the county commissioners are directed, upon the certification of the county auditor that a petition contains the requisite number of signatures of qualified electors, to transmit the proposition to the county election board for submission to the voters at the next general election. In Royer v Public Utility District No. 1 (Wash.) 56 P.2d 1302, we held that the failure to provide for a hearing did not render the act vulnerable to constitutional objection, since the boundaries of county-wide districts are fixed by the legislation itself.

Section 3 also provides that a petition for the formation of a public utility district may prescribe a less area than the entire county, and, upon the filing of such a petition and the certification by the county auditor that it contains the requisite number of signatures, the board of county commissioners is required to hold a hearing upon notice. If, at this hearing, the board shall find that any lands have been unjustly or improperly included within the proposed district and will not be benefited by inclusion therein, the board shall change and fix the boundary lines in such manner as it shall deem reasonable and just and conducive to public welfare and convenience, and make and enter an order establishing the boundary lines of the proposed district. Thereafter, the procedure prescribed for the formation of county-wide districts is to be followed, 'except that the petition and election shall be confined solely to the lesser public utility district.'

December 17, 1930, a petition was filed with the board of county commissioners of Mason county requesting the organization of a public utility district to embrace a limited number of voting precincts in the county adjacent to Hoodsport. By reason of delay caused by the institution of legal proceedings, the question of the formation of this district was not submitted to the voters until the 1934 general election.

On July 2, 1934, a petition, signed by the requisite number of electors, was filed with the county officers, requesting the formation of a county-wide utility district in Mason county, designated in the record as District No. 3. While this petition was pending Before the county commissioners, a suit was instituted in the superior court of Mason county by a resident and taxpayer of that county against the members of the board of county commissioners and election board, to enjoin its submission to the electors. A demurrer to the complaint having been overruled, and the defendants having declined to plead further, judgment was entered enjoining submission of the proposal. The judgment of the superior court was reviewed and reversed in this court on certiorari. No opinion was filed, but the order of reversal, embodied in the remittitur, recited that it was entered 'without prejudice to the right of any party or persons, at some future date, to raise any question concerning the subject matter of this litigation, save the question of the submission of the proposition to the electors of Mason county at the general election to be held November 6, 1934.' State ex rel. Webb v. Superior Court, No. 25394.

The proposition for the formation of county-wide District No. 3 was, accordingly, submitted to the electors on November 6, 1934, together with the proposition to form Utility District No. 1, the smaller district. Both propositions were adopted at the election, and the districts were subsequently organized.

In 1935, the commissioners of District No. 3 proceeded to prepare a budget for the year 1936 and to levy taxes on the property in the district, in accordance with the provisions of the act authorizing a tax levy of not exceeding two mills for district purposes.

Both suits, here consolidated for trial and appeal, were brought by the same parties to enjoin the levy of these taxes on their property in Mason county. In the first suit, the plaintiffs alleged they were the owners of property in District No. 1, which it was sought to tax for the support of District No. 3. As the commissioners of District No. 3 later disclaimed a purpose to levy taxes on property embraced within District No. 1, the second suit was brought by the plaintiffs to enjoin the levy on property owned by them in Mason county outside the boundaries of District No. 1.

The trial court made the following findings of fact pertinent to the issues:

'5. That Public Utility District No. 1 filed its petition for formation of such district on Dec. 17, 1930, being the first petition filed under said Act in Mason County and was placed upon the election ballot at the 1934 general election and established by a vote of the electors.

'6. That said Utility District No. 1 is the owner of and is operating a public utility, supplying light and power to the inhabitants of said district.

'7. That Petition for the formation of Public Utility District No. 3 was filed July 2, 1934 and that its powers, privileges and purposes are identical with those of District No. 1 under the provisions of said Act. That the Petition filed, included within its boundaries, which are co-extensive with Mason County, the territory previously included in District No. 1.

'8. That District No. 3 did not give notice or hold a hearing on the question of benefits to the property included within its boundaries.

'9. That District No. 3 prepared a budget in 1935. That the notice of hearing on said budget was first published on Sept. 26, 1935; that a second notice was published on Oct. 3, 1935, and a hearing was held on said budget on Oct. 7, 1935.'

The court also found that the plaintiffs admitted certain facts appearing in the affirmative answer of the defendants in the first suit. One of the facts so admitted, material here, was:

'That, the Treasurer of Mason County, proposes, under direction of the officers of District No. 3, to tax the property of plaintiffs and others similarly situated, outside of the boundaries of District No. 1 and to refrain from taxing all property within District No. 1.'

From its findings, the court deduced the following conclusions of law:

'1. That Public Utility District No. 1 of Mason County, is prior in time, as to the initial steps in its organization, and therefore prior in right as to exclusive jurisdiction over the territory included within its limits, and that said Public Utility District No. 3 has no power or right to levy taxes or assessments upon property within said District No. 1.

'2. That by reason of the failure of said District No. 3 to give notice of budget hearing on Oct. 7, 1935, for the period of time required by law, the attempted levy thereunder is illegal and void.

'3. That plaintiffs are entitled to a decree enjoining the said defendants, their officers, agents and employees from extending or causing to be extended upon the tax rolls of Mason County, and from the levy and collection thereof of any and all taxes against any and all property within the boundaries of said District No. 3.'

A decree was, accordingly, entered restraining the defendants 'from extending upon the rolls of Mason county, levying or collecting any taxes, either within the boundaries of Public Utility District No. 1 or within the boundaries of Public Utility District No. 3, for public utility purposes of said Public Utility District No. 3.'

While the court, concluding the levy to be invalid for insufficiency of notice on the budget hearing, did not specifically pass upon the legality of the organization of District No. 3, that question is suggested by the findings and is discussed at length in the briefs. Even though we might differ from the views of the court on the question of notice, yet if, from the facts found by the court, it should appear that District No. 3 had no legal existence, then the judgment of the court would have to be affirmed.

Since the court based its judgment upon the lack of a sufficient notice of the budget hearing, we shall first consider that issue.

Section 6, subd. (g) (Rem.Rev.Stat. § 11610, subd. (g), of the act provides that the commission shall prepare a proposed budget of its contemplated financial transactions for the ensuing year and file the same in the records of the commission on or Before the first Monday in September. Notice of...