Lakeland Joint School Dist. Authority v. School Dist. of Scott Tp.

• Decision Date: 27 May 1964
• Parties: LAKELAND JOINT SCHOOL DISTRICT AUTHORITY, Lakeland Joint School District, et al., Appellants, v. SCHOOL DISTRICT OF TOWNSHIP OF SCOTT.
• Court: Pennsylvania Supreme Court

200 A.2d 748

414 Pa. 451

LAKELAND JOINT SCHOOL DISTRICT AUTHORITY, Lakeland Joint

School District, et al., Appellants, v. SCHOOL DISTRICT OF TOWNSHIP OF SCOTT.

Supreme Court of Pennsylvania.

May 27, 1964.

Charles S. LeLaney, Carbondale, Thomas D. Nabors, Jr. Oscar M. Hansen, Philadelphia (Morgan, Lewis & Bockius Philadelphia, of counsel), for appellants.

Oliver Price & Rhodes, Paul H. Price, Scranton, for School District of the Township of Scott, appellee.

John D. Killian III, Deputy Atty. Gen., Walter E. Alessandroni Atty. Gen., Harrisburg, for Commonwealth of Pa.

Before JOHN C. BELL, Jr., C. J., and JONES, COHEN, EAGEN, O'BRIEN and ROBERTS, JJ.

JONES, Justice.

This is an appeal from an order of the Court of Common Pleas of Lackawanna County refusing to entertain jurisdiction of a declaratory judgment proceeding.

On December 11, 1959, the school districts of the Boroughs of Jermyn and Mayfield and the Townships of Carbondale, Greenfield and Scott, [member districts], all in Lackawanna County, entered into a written agreement, [jointure contract], for the purpose of forming the Lakeland Joint School District, [joint district], to establish and operate a joint school system to be administered by a joint school board, [Joint board], initially composed of all members of the participating school district boards. Inter alia, this jointure contract provided for the construction of a junior-senior high school [high school] in Scott Township, [Scott], to accommodate all high school students in the system and, further, provided that the effective date of the contract would be the first Monday in July 1959 and would continue for a two-year period and, thereafter, for three-year periods, unless one or more of the districts elected to discontinue the contract by giving notice thereof one year prior to the expiration of any such period.

Pursuant to the Municipality Authorities Act (Act of May 2, 1945, P.L. 382, as amended, 53 P.S. § 301 et seq.) the member districts formed the Lakeland Joint School District Authority, [Authority], to construct and equip the high school. Initial financing of the project was to be through the sale of the Authority's revenue bonds and, upon completion, the school was to be leased to the joint district at a rental to be paid by the member districts in proportionate shares specified in the jointure contract.

Thereafter various steps were taken toward construction of the school. The Department of Public Instruction of the Commonwealth approved the project; the school site in Scott Township was selected and approved by the necessary public agencies; the site was duly authorized for transfer to the Authority. Provisional plans were prepared by architects and test borings, well drillings and rough site clearing were completed. In order to expedite the financing, the Authority borrowed from several banks in Pennsylvania and obligated itself to make further expenditures so that by May 1962 the Authority had incurred obligations amounting to approximately $280,000. ^[1] Final plans and specifications for the project were approved by the joint board and, thereafter, by necessary public agencies, and the property selected as the site for the school was conveyed to the Authority. As of September 1, 1962, the Authority, the joint board and all of the member districts, with the exception of Scott, had approved and executed an agreement and lease providing for the construction and equipment of the school, the lease of the school by the Authority to the joint district, the operation and maintenance of the school by said district and payment of the rentals and other expenses in connection with the school.

On May 4, 1962, the school directors of Scott adopted a resolution purporting to withdraw Scott from the joint district as of the first Monday of July 1964. This resolution provided that Scott would not be bound by any indebtedness incurred after May 4, 1962, and would not consider itself a party to any obligation thereafter incurred. Since that time Scott has refused to take any part in the joint school program, including the proposed construction and equipping of the school.

The Authority filed a petition in the Court of Common Pleas of Lackawanna County against Scott seeking a declaration of the right of Scott to withdraw from the jointure contract and of its right to absolve itself of liability for a share of the rentals and other charges in connection with the school to be built by the Authority. Scott filed preliminary objections and an Answer to the petition raising New Matter to which the Authority filed a Reply. The Court upheld the preliminary objections as to jurisdiction in declaratory judgment and dismissed the petition. The Authority appealed to this Court and, by an equally divided Court, the court below was affirmed. We granted reargument and this opinion is in disposition of the matter after such reargument.

In its opinion, the court below set forth as reasons for its refusal to entertain this proceeding: (a) that the Authority was not a party to the original jointure contract and, therefore, lacked the requisite standing to maintain this action; (b) that the objective of the proceeding was to obtain an advisory opinion; (c) that the jointure contract was 'largely executory'; (d) that there are appropriate remedies available to enforce this contract, i. e., mandamus, an action in equity to enforce specific performance of the contract and assumpsit; (e) that the joint school district has now been abolished by statute; (f) that 'there is no clear manifestation that a declaration [of rights] will be of practical help in terminating the difficulties.' In our view, such reasons are insupportable.

Were the Authority the sole party seeking this declaration there might be some merit in the view that the Authority lacked standing to maintain this action, i. e., it is not a 'person interested' within Section 2 of the Declaratory Judgments Act. ^[2] However, in the posture of this litigation at the time the court made its ruling, all the parties to the jointure contract were before the court and the joint district and the member districts, as plaintiffs joined by stipulation, were necessarily joined in the request for declaratory relief. Any lack of standing which might have existed at the inception of this proceeding was cured and eliminated by the joinder of the joint district and the member districts.

Is this proceeding simply an attempt to secure an advisory opinion or a bona fide endeavor to secure a declaration of rights now in controversy within the purview of the Act, supra? It is clear beyond any question that between the parties to this litigation an actual controversy exists. In Cryan's Estate, 301 Pa. 386, (p. 395, 152 A. 675, p. 679, 71 A.L.R. 1417, this Court stated: 'If differences between the parties concerned, as to their legal rights, have reached the stage of antagonistic claims, which are being actively pressed on one side and opposed on the other, an actual controversy appears; where, however, the claims of the several parties in interest, while not having reached that active stage, are nevertheless present, and indicative of threatened litigation in the immediate future, which seems unavoidable, the ripening seeds of a controversy appear.' In the case at bar, the Authority, the joint district and the member districts maintain that, under the provisions of the jointure contract, Scott, as a signatory thereto, is under a legal obligation to cooperate in the construction and equipment of this high school and to pay its proportionate share of the rentals, etc., in connection therewith; on the other hand, Scott maintains, apparently, that it has no such legal obligation and it refuses to assume any responsibility whatsoever in the matter. As a result of this diversity of opinions, all plans for the construction of this school are necessarily held in abeyance and, until such diversity of opinions is resolved by a court, the construction of the school cannot be financed and, a fortiori, the school cannot be built. The obviously antagonistic views and positions adopted by the parties indicate not only the existence of an 'actual controversy' but of a controversy which will imminently, unavoidably and inevitably lead to litigation and there is no other adequate remedy. Under such circumstances, relief by declaratory judgment provides the only efficient and expedient method of terminating the controversy. The relief sought herein is not advisory in any sense.

In the opinion of the court below the jointure contract was 'largely executory', hence declaratory judgment would not lie. The averments of fact in the petition for declaratory relief--facts, which for the purpose of this appeal, must be assumed to be true since they are well pleaded--reveal: that the site for construction of the high school has been duly approved by the proper authorities on both local and state levels; that an investment firm, to aid in the financing, and an architect have been chosen; that the land which will constitute the site of the new school has been condemned and physical possession thereof taken; that on both local and state levels, the construction plans have been approved; that the land site has been conveyed to the Authority; in reliance on the jointure contract, the Authority has authorized temporary...