Hunt v. Fawcett

• Decision Date: 09 March 1894
• Parties: HUNT v. FAWCETT ET AL., COUNTY COMMISSIONERS.
• Court: Washington Supreme Court

36 P. 318

8 Wash. 396

HUNT v. FAWCETT ET AL., COUNTY COMMISSIONERS.

Supreme Court of Washington

March 9, 1894

Appeal from superior court, Pierce county; W. H. Pritchard, Judge.

Bill by E. M. Hunt, a taxpayer, against A. V. Fawcett and others county commissioners, to restrain them from issuing bonds. From a judgment for defendants, plaintiff appeals. Reversed.

Stiles J., dissenting.

Alfred E. Buell, for appellant.

W. H Snell, Pros. Atty., and Chas. Bedford, for respondents.

ANDERS, J.

The appellant, a taxpayer of Pierce county, by this action seeks to restrain the respondents, as the board of county commissioners of said county, from issuing negotiable 5 per cent. 20-year bonds of said county in the sum of $300,000, or delivering the same to the Imperial Loan & Trust Company, a corporation in pursuance of a contract of sale entered into between said board of commissioners and said company. The respondents demurred to the complaint, and their demurrer was sustained by the court, and the action dismissed. It appears from the complaint, the material allegations of which are admitted by the demurrer, that between the 12th day of September, 1892, and the 3d day of May, 1893, inclusive, the board of county commissioners of Pierce county entered into contracts for finishing and furnishing the new courthouse, and thereby attempted to incur indebtedness against said county to the amount of $42,298.60, and during the same period of time issued warrants on the general fund for current expenses to the amount of $68,028.32. At the time this indebtedness was so attempted to be incurred the indebtedness of the county had already reached the limit of 1 1/2 per cent. of the taxable property therein, and the attempted indebtedness in question had not been assented to by three-fifths of the voters voting thereon at an election held for that purpose, and was, therefore, invalid. Const. art. 8, § 6. On May 17, 1893, the board of commissioners of said county passed a resolution to submit to the voters of the county the question of validating the aforesaid attempted indebtedness at an election to be held on June 20, 1893, in accordance with the provisions of the act of March 9, 1893 (Laws 1893, p. 181), and also the further question of authorizing the said board of county commissioners to issue negotiable bonds of said county in the amount of $300,000 above the limit of 1 1/2 per cent. indebtedness allowed by the constitution to be incurred by the commissioners, for the purpose of procuring money to fund outstanding warrants, so as to reduce the indebtedness incurred by the commissioners below the said limit, said bonds to draw 5 per cent. annual interest, and to be payable in gold coin in 20 years from date thereof. Pursuant to the foregoing resolution, an election was held on June 20, 1893, at which three propositions were submitted to the voters, as follows: (1) To validate the courthouse contracts entered into between September 12, 1892, and May 3, 1893; (2) to validate warrants issued between those dates; (3) to authorize the commissioners to issue $300,000 of 5 per cent. gold bonds above the limit allowed by law to be incurred without a vote of the people, for the purpose of procuring money to fund outstanding warrants. Each of these propositions received the assent of more than three-fifths of the voters at said election. On November 11, 1893, the commissioners entered into a contract with the Imperial Loan & Trust Company, which, upon certain conditions therein specified, binds the trust company to take bonds in the sum of $300,000 at par and accrued interest, and by which the county is bound to pay the company the sum of $14,750 "as and for expenses and commissions." These bonds recite upon their face that they are issued under the county funding act of March 21, 1890, and in pursuance of the election held on June 20, 1893. The commissioners are proposing to sell the bonds under this contract, and to use the proceeds to pay outstanding warrants, some of the warrants to be paid being part of the indebtedness attempted to be validated; and then to incur further indebtedness, under the claim that this $300,000 debt must not be reckoned in estimating the 1 1/2 per cent. limit which may be incurred without the assent of three-fifths of the voters of the county.

It appears from the pleadings that only such indebtedness as was incurred after the assessment of 1892 became operative was invalid, and it therefore becomes important to ascertain that date. It is claimed by the appellant that it was the 20th day of August, 1892, because upon that day the county board of equalization adjourned and the rolls were footed; but we are of the opinion that said assessment did not take effect until October 15, 1892. On that day the work of the state board of equalization was completed, and then, and not until then, did the value of the property in the county, for the purpose of state and county taxation, become fixed and certain. See Culbertson v. City of Fulton, 127 Ill. 36, 18 N.E 781. It must be conceded that all indebtedness attempted to be created against the county by the commissioners after the assessment of 1892 became effective was void, because the then existing indebtedness of the county was greater than 1 1/2 per cent. of the value of the taxable property therein, as shown by that assessment. This void indebtedness could only be made valid by legislative authority ( Rehmke v. Goodwin, 2 Wash. St. 676, 27 P. 473), and such authority was granted by the act of March 9, 1893 (Laws 1893, p. 181). Was it, or any part thereof, validated by the election of June 20, 1893, which was held for that purpose? The respondents contend that all of the indebtedness attempted to be created by them, not only before but after March 9, 1893, and up to and including May 3, 1893, was thereby ratified, and thenceforth became, and now is, a legal obligation of the county. On the other hand, the appellant insists (1) that all indebtedness attempted to be created after March 9, 1893, when the validating act took effect, was not, and could not be, validated; and (2) that the joinder of this indebtedness, which could not be validated, with the indebtedness incurred prior to the passage of the statute, in the propositions submitted to the voters at the election, vitiated and rendered nugatory the entire proceedings. We entertain no doubt of the correctness of appellant's first proposition. The first section of the statute conclusively settles that question, for it is therein provided that "any county in this state may ratify, in the manner prescribed in this act, the attempted incurring of any indebtedness of such county by the issuing of warrants, making of contracts or creation of other evidences of indebtedness on the part of such county by the board of county commissioners or other officers of such county at any time prior to the time when this act shall take effect," etc. This statute is essentially a curative statute, and is only operative upon past transactions. It grants no license to create debts, but it provides in clear and explicit language the only method whereby indebtedness honestly attempted to be created for legitimate purposes may be ratified; and an examination of its provisions constrains us to yield our assent to appellant's second proposition also, and to conclude that none of the indebtedness attempted to be incurred has been legally ratified. The second section of the act under consideration provides that "whenever the board of county commissioners of any such county shall deem it advisable that the ratification authorized by this act shall be obtained, they shall provide therefor by resolution, which shall specify separately the amounts of each distinct class of such indebtedness proposed to be ratified, with the date of the...