Holtz v. Babcock

• Decision Date: 19 December 1963
• Docket Number: No. 10536,10536
• Citation: 389 P.2d 869,143 Mont. 341
• Parties: Larry Lewis HOLTZ, Plaintiff and Appellant, v. Tim BABCOCK, Governor of the State of Montana, the State Aeronautics Commission, of the State of Montana, and Clarence R. Anthony, et al., as members of said State Aeronautics Commission, Charles A. Lynch, Montana Aircraft Company, a Montana Corporation, Mid-Continent Leasing Company, Incorporated, a Texas Corporation, Colorado National Bank, a National Banking Corporation, Midland National Bank, a National Banking Corporation, John Holmes, State Auditor of the State of Montana, Walter Anderson, State Controller and Ex Officio Purchasing Agent; and the State of Montana, Defendants and Respondents.
• Court: Montana Supreme Court

Page 869

389 P.2d 869

143 Mont. 341

Larry Lewis HOLTZ, Plaintiff and Appellant, v. Tim BABCOCK, Governor of the State of Montana, the State

Aeronautics Commission, of the State of Montana, and

Clarence R. Anthony, et al., as members of said State

Aeronautics Commission, Charles A. Lynch, Montana Aircraft

Company, a Montana Corporation, Mid-Continent Leasing

Company, Incorporated, a Texas Corporation, Colorado

National Bank, a National Banking Corporation, Midland

National Bank, a National Banking Corporation, John Holmes,

State Auditor of the State of Montana, Walter Anderson,

State Controller and Ex Officio Purchasing Agent; and the

State of Montana, Defendants and Respondents.

No. 10536.

Supreme Court of Montana.

Dec. 19, 1963.

Rehearings Denied March 19, 1964.

See 390 P.2d 801.

Erickson & Richards, Helena, Leif Erickson, Helena (argued), for appellant.

Loble & Picotte, Helena, Gene A. Picotte, Helena (argued), Kenneth D. Beyer, Helena (argued), for respondents.

JAMES T. HARRISON, Chief Justice.

This is an appeal from an order denying plaintiff's application for an injunction and dismissing plaintiff's amended complaint, entered in the district court of Lewis and Clark County.

At the outset defendants have filed suggestion of diminution of the record filed by plaintiff upon this appeal on the ground that such record does not contain certain documents of record in the district court, and defendants move that such documents be added to the record on appeal. This motion is granted, thus bringing before the court the complete record of the district court.

The action was commenced on May 9, 1962, by the filing of a petition for a writ of mandate by the plaintiff. In the same action plaintiff sought to enjoin and restrain defendants from further enforcing or attempting to perform an agreement which will hereafter be further referred to. On the date of the filing of the petition, an order was entered for the issuance of an alternative writ of mandate, returnable on June 6, 1962. On May 31, certain defendants filed motion to quash the alternative writ, and contemporaneous therewith a motion to dismiss the complaint. Thereafter other defendants appeared by motions to quash and dismiss.

The various motions were heard before the court on June 8, and on June 26 an order was entered quashing the alternative writ of mandate on the grounds that the relief sought did not justify the issuance of the writ, and secondly, that a mandamus action could not be joined with an injunction action. The motions to dismiss were denied and plaintiff was ordered to file an amended complaint within ten days, the order continuing:

'* * * so that prompt trial may be had on the Plaintiff's contentions urged at the hearing on the Motions, which are the Plaintiff's claim that the Aeronautics Commission does not have the power to expend funds for the purpose, and second the plaintiff's claim that if the power exists the law relative to competitive bids has not been followed.'

Pursuant to this order on July 9, an amended complaint was filed which sought to permanently enjoin and restrain the defendants from further enforcing the agreement or attempting to perform it or expending any further sums thereunder, and that the defendants be required to restore certain funds to the state aviation fund.

Various motions seeking to strike portions of the amended complaint and to dismiss the same were filed by the various defendants, and notice given that they would be brought on for hearing on August 1 and pursuant thereto such hearing was held. On August 27 an order of dismissal was entered providing that the several motions to dismiss plaintiff's amended complaint be granted; that the application for injunction be denied; and that plaintiff's action be dismissed on the ground that the amended complaint failed to state a claim upon which relief can be granted. Notice of entry of such order was given and this appeal taken.

The amended complaint, inter alia, alleges, so far as pertinent here, that the defendant Charles A. Lynch is an employee of the Montana State Aeronautics Commission, hereafter called the Commission, and that Lynch entered into an agreement with defendant Mid-Continent Leasing Company, Incorporated, hereafter referred to as Mid-Continent, for the purchase of a 1962 Beechcraft 65 Queen Air airplane, the agreement being dated March 15, 1962, and copy is attached to the complaint as an exhibit. It is further alleged that this agreement according to the understanding of all defendants constitutes a purchase agreement although it is called an airplane lease. The agreement is entitled 'Aircraft Lease', and entered into between Mid-Continent, as Lessor, and the State of Montana, Montana Aeronautics Commission, Helena, Montana, as Lessee. The agreement is signed for Mid-Continent by its President and by 'State of Montana, Montana Aeronautics Commission by Charles A. Lynch, Its Director'. Also that the defendant state purchasing agent has never entered into the agreement, nor have the defendants, State of Montana nor the Commission signed it, although it purports to be signed for them by their agent; that Lynch purporting to act for the Commission requisitioned the purchase of the airplane from the Montana Aircraft Company and pursuant to the requisition, the state purchasing agent, with the consent and approval of the Governor, authorized the purchase from the defendant Montana Aircraft Company, pursuant to purchase order, copy being attached to the complaint as an exhibit. The purchase order does not indicate the consent or approval of the Governor thereto, but does show 'Approved Board of Examiners: February 19, 1962.' (The Board of Examiners consists of the Governor, Attorney General and Secretary of State.) The purchase order in describing the property, terms and conditions provides:

'For the LEASE OF A 1962 BEECHCRAFT 65 QUEENAIR EQUIPPED AS PER THE ATTACHED AGREEMENT AND EXTRA EQUIPMENT LIST:

LEASE TO COMMENCE MARCH 15, 1962, AND TO CONTINUE UNTIL MARCH 15, 1967

LEASE RATE FROM MARCH 15, 1962 TO MARCH 15, 1967, 5 YEARS, $2,990.00 PER MONTH ($2,990.00) IF PURCHASE OPTION IS EXERCISED, AS PER THE ATTACHED AGREEMENT:

FOR THE LEASE PURCHASE OF 1962 BEECHCRAFT 65 QUEENAIR EQUIPPED AND PRICED AS PER THE ATTACHED AGREEMENT

($155,951.00)

AIRCRAFT TO BECOME THE PROPERTY OF THE MONTANA AERONAUTICS COMMISSION AT THE END OF THE LEASE AGREEMENT, UPON THE PAYMENT OF $50.00

($50.00)

OUTRIGHT PURCHASE OF THE AIRCRAFT MAY BE MADE BY THE MONTANA AERONAUTICS COMMISSION AT ANY TIME ON AN ADJUSTED PRICE BASIS BY THE TERMS OF THE ATTACHED AGREEMENT, ALL INSURANCE REQUIRED, THEREBY, INCLUDING HULL, LIABILITY & PROPERTY DAMAGE, MUST BE PROCURED & PAID FOR BY THE MONTANA AERONAUTICS COMMISSION'

The complaint further alleges that Lynch, acting for the Commission, requisitioned payments and the Controller directed the Auditor to draw warrants in payment and that the Controller will upon receipt of requistions direct issuance of warrants and the Auditor will issue them 'unless they are restrained therefrom by order of this Court.'

Further, that the principal use of the airplane is by the Governor and such use will continue in the future unless restrained; that the Commission and Controller have never completed the formal requirements to enter into the agreement, and the State and the Commission are not bound by it, but nevertheless defendants have acted, and will continue to act, as though the agreement is binding unless they are enjoined and restained.

That neither the Commission nor Controller advertised for bids; that the agreement is illegal and void but defendants will continue to act as though it is binding upon the State and the Commission, unless and until defendants are enjoined and restrained.

That the plaintiff has no adequate remedy at law; that it was and is the duty of the Commission to disavow the actions of Lynch; to take action to recover the sums already paid out and to take no further action which will result in further expenditures; it is the duty of the Governor to disapprove the agreement and to instruct the Controller and Auditor to cease taking action to implement them; it is the duty of the Controller to refuse to authorize any more expenditures and that of the Auditor to refuse to draw any more warrants, which will result in such expenditures; that such defendants, however, continue to treat such agreement and arrangement as valid and subsisting and is or should be binding upon the State, and that any demand that they perform their duty is futile and would be useless.

That the payments made from the State Aviation Fund and those threatened have been and will be an injury to said fund, and have been and will be an irreparable damage to plaintiff and to all other licensed taxpayers similarly situated.

Plaintiff then prayed for an order permanently enjoining and restraining defendants from further enforcing the agreement for the purchase of the airplane or from further attempting to perform it or expending any further sums under the agreement, and that the defendants be required to restore the funds to the State Aviation Fund.

Plaintiff contends that the Court erred in granting the motions to dismiss the amended complaint, and in making its order of dismissal. Plaintiff states that only two questions are raised by the amended complaint, and the motions to dismiss, being:

(1) May the State Aeronatuics Commission purchase an airplane without advertising or calling for competitive bids?

(2) If so, may funds of the State Aviation Fund be expended to provide transportation for the Governor traveling on business not connected with the duties of the State Aeronautics Commission?

While this may be plaintiff's contention in this Court, it is apparent from the order of June 25, 1962, when the amended complaint was ordered filed, the only questions to be raised were:

(1) Does the Aeronautical Commission have power to...