Kinney v. City of Astoria

• Citation: 217 P. 840,108 Or. 514
• Parties: KINNEY v. CITY OF ASTORIA ET AL.
• Decision Date: 31 July 1923
• Court: Supreme Court of Oregon

217 P. 840

108 Or. 514

KINNEY v. CITY OF ASTORIA ET AL.

Supreme Court of Oregon

July 31, 1923

In Bank.

Appeal from Circuit Court, Marion County; Geo. G. Bingham, Judge.

Controversy without action between Robert C. Kinney and the City of Astoria and another. Decree for defendants, and plaintiff appeals. Affirmed.

This is a controversy which the parties submitted to the court without suit or action in accordance with the procedure outlined in sections 193 to 195, inclusive, Or. L. which by the terms of section 412, Or. L., are also made applicable to controversies which might be the subject of a suit. The facts upon which the controversy depends are as follows:

A very considerable portion of Astoria was on December 8, 1922 literally swept by a fire. Because of this disaster the Legislature enacted chapter 280, Laws 1923, which by force of an emergency clause became effective on February 26, 1923 when the measure was approved by the Governor. The controversy involves the question of the constitutionality of this statute. The plaintiff is a citizen of the United States, and a resident and inhabitant of the state of Oregon and has been and is the owner of real and personal property which is now liable for taxes, and upon which taxes have been regularly paid. The defendant city of Astoria is one of the principal cities of the state, and the defendant, Sam A Kozer is the secretary of state of the state of Oregon.

On or about May 1, 1923, the treasurer of Clatsop county paid to the state treasurer one-half of the amount of all state taxes due the state from Clatsop county, including taxes collected from persons and upon property within the corporate limits of Astoria assessed for the year 1922. Immediately upon payment by the treasurer of Clatsop county to the state treasurer of the first one-half of taxes due from Clatsop county to the state, the state tax commissioner ascertained and certified to the secretary of state what amount and proportion of the state taxes charged to Clatsop county had been apportioned to persons and property wholly within the corporate limits of Astoria, and accordingly the state tax commissioner certified that the amount so apportioned aggregated the sum of $77,591.06, and subsequently, on or about June 4, 1923, the secretary of state, pursuant to the provisions of chapter 280, drew a warrant on the state treasurer payable to the city of Astoria for one-half of the amount named in such certificate, or the sum of $38,795.53, and this warrant for $38,795.53 was subsequently paid by the state treasurer to the city of Astoria. The defendant Kozer, as secretary of state, intends to, and will, immediately upon receipt by the state treasurer of the second half of the state taxes due from Clatsop county, draw a warrant on the state treasurer payable to the defendant city of Astoria for a sum of money equal to the remaining one-half of the amount named in the certificate of the state tax commissioner, unless he is restrained from so doing, The decree of the trial court was for the defendants. The plaintiff appealed.

G. C. &amp A. C. Fulton, of Astoria, for appellant.

Howard K. Zimmerman, City Atty., of Astoria, and I. H. Van Winkle, Atty. Gen., and Willis S. Moore, Asst. Atty. Gen., for respondents.

HARRIS, J. (after stating the facts as above).

The enactment (chapter 280, L. 1923) is prefaced with a preamble which recites that on December 8, 1922, the city of Astoria was swept by a fire which destroyed more than $11,000,000 worth of property; that included in the property so destroyed was municipal public property of the estimated value of $1,500,000, "which said public property, in order to preserve the health, safety, and security of the people of said city, must be immediately replaced and rebuilt;" that the fire "has left the city of Astoria and its people financially prostrate, with a present total assessed valuation of less than $8,000,000, against which there now stands a municipal debt of more than $5,500,000;" that this large bonded indebtedness makes it impossible for the city to place additional liens upon its property for the purpose of raising money, and that it is necessary for the state to give relief in order to preserve and encourage the reconstruction of the city and to preserve its financial credit.

After making the recitals mentioned, it is declared in section 1 of the body of the act that for a period of seven years, commencing with the year 1923, all state taxes collected from persons and upon property within the corporate limits of Astoria are granted and appropriated by the state to the city of Astoria. The statute commands in section 2 that in each of the seven years, immediately after the payment by the treasurer of Clatsop county to the state treasurer of the first one-half of the state taxes due from Clatsop county, the state tax commissioner shall examine the proper records on file in his office, and ascertain and certify to the secretary of state "what amount and proportion of the state taxes charged to Clatsop county in said year have been apportioned, assessed, levied or collected from persons and upon property wholly within the corporate limits of the city of Astoria, and thereupon the secretary of state shall forthwith draw a warrant upon the state treasurer payable to the city of Astoria for a sum of money equal to one-half the amount named in said certificate of said state tax commissioner, and thereafter, to wit: Immediately upon receipt of payment by the state treasurer of the second half of the state taxes due from Clatsop county in said year, the secretary of state shall draw a warrant on the state treasurer payable to the city of Astoria for a sum of money equal to the remaining half of the moneys due the city of Astoria in said year under the provisions of this act; provided, however, that the moneys hereby appropriated to said city in any one year of the period named in section 1 shall not exceed the amount of the moneys appropriated in 1923." Section 3 is as follows:

"The moneys herein and hereby granted and appropriated to the city of Astoria are declared to be a trust fund for the purpose of aiding the city of Astoria in paying the interest and sinking fund upon an issue or issues of bonds, which said bonds are to be used exclusively for rebuilding, reconstructing and replacing public property in the city of Astoria, which was destroyed by fire on the eighth day of December, 1922. The use or diversion of such moneys for any other purpose whatsoever is hereby prohibited."

There are no issues of fact submitted for decision. The parties agreed upon all the facts. The question for decision is whether, based upon those agreed facts, the statute is constitutional. The plaintiff says that the act conflicts with several sections of the state Constitution.

We begin the inquiry by reminding ourselves that every possible presumption of validity will be brought to the aid of a questioned statute, and that the presumption of validity will prevail until the contrary is shown beyond a rational doubt. In order to avoid the possibility of encroaching upon the domain of the legislative department, the judicial department will never exercise its power of declaring an act of the Legislature unconstitutional unless there is a clear, plain, and palpable conflict between the statute and the Constitution. Cook v. Port of Portland, 20 Or. 580, 582, 27 P. 263, 13 L. R. A. 533; Simon v. Northup, 27 Or. 487, 495, 40 P. 560, 30 L. R. A 171; State v. Cochran, 55 Or. 157, 201, 104 P. 419, 105 P. 884.

The statute under examination appropriates state taxes each year, and uses the appropriation to aid Astoria in paying the interest on and in providing a sinking fund for the retirement of bonds to be issued and sold by the city, the proceeds of which bonds are to be used exclusively for rebuilding, reconstructing, and replacing public property in the city. The amount of the continuing appropriation is measured by the amount of state taxes collected from persons and upon property within the corporate limits of Astoria, but with the limitation that the appropriation shall not in any year subsequent to 1923 exceed the amount appropriated in that year. Reference in the statute to the amount of state taxes collected from persons and upon property in Astoria serves no purpose except to measure the amount of the appropriation, and is not in any other respect a circumstance which in any wise affects the validity of the statute. If the enactment in express terms appropriated out of the state taxes each year for a period of seven years the definite sum of $77,591.06, it would not be, so far as any of the legal questions are concerned, diffierent from its present form.

Appropriation of state taxes involves an inquiry into the power of taxation; for the right to appropriate public funds is no greater than the right to tax. Loan Association v. Topeka, 20 Wall. 655, 22 L.Ed. 455; Woodall v. Darst, 71 W.Va. 350, 77 S.E. 264, 80 S.E. 367, 44 L. R. A. (N. S.) 83, Ann. Cas. 1914B, 1278. Can the whole state be taxed for the reconstruction, rebuilding, and replacement in whole or in part of the public property of Astoria, one of the many municipalities existing within the state? Article 9, § 4, of the state Constitution, provides that "no money shall be drawn from the treasury but in pursuance of appropriations made by law." If money is attempted to be appropriated by an invalid statute it is not an appropriation by law; for the invalid statute is not law. If, however, a statute appropriating money is valid, it is law, and therefore is an appropriation made by law. State ex rel. New Richmond v. Davidson, 114 Wis. 563, 573, 88 N.W. 596, 90 N.W. 1067, 58 L. R. A. 739.

It must be constantly borne in...