Multnomah County v. First Nat. Bank of Portland

• Decision Date: 22 October 1935
• Citation: 50 P.2d 129,151 Or. 342
• Parties: MULTNOMAH COUNTY v. FIRST NAT. BANK OF PORTLAND et al.
• Court: Oregon Supreme Court

50 P.2d 129

151 Or. 342

MULTNOMAH COUNTY v. FIRST NAT. BANK OF PORTLAND et al.

Supreme Court of Oregon

October 22, 1935

In Banc.

Appeal from Circuit Court, Multnomah County; James W. Crawford Judge.

Suit for a declaratory decree under section 2-1401 et seq., as amended, Oregon Code 1930, by Multnomah County against First National Bank of Portland and I. H. Van Winkle, Attorney General of the state, to determine the constitutionality of chapter 197, p. 287, Or. Laws 1935, and the validity of a certain contract about to be entered into between plaintiff and the bank by virtue of chapter 197. From a decree on the pleadings, the bank appeals.

Reversed and remanded with directions.

C. E. Zollinger, of Portland (Pendergrass, Roehr &amp Zollinger, of Portland, on the brief), for appellant.

Frank S. Sever, Deputy Dist. Atty., of Portland (James R. Bain Dist. Atty., of Portland, on the brief), for respondents.

CAMPBELL Chief Justice.

Between the dates of January 1, 1934, and May 23, 1935, the board of county commissioners of said county, acting as the old age pension commission of said county, made orders granting old age pensions to some 2,200 persons in said county by authority of the provisions of chapter 284, p. 433, Oregon Laws 1933, which persons are entitled to receive pensions for the month of July, 1935. The estimated sum necessary was budgeted and provision made in the budget of said county for the year 1935 for the payment of said pensions.

Thereafter on May 27, 1935, the auditor of said county advised the board of commissioners for said county that the amount of the aforesaid claims to be audited and approved by said county auditor would aggregate the sum of $25,000; that there would be no funds in the hands of the county treasurer available to pay said claims at the time of the issuance of the orders by the said auditor on the treasurer of the said county for the payment of said claims and said orders would be indorsed "not paid for want of funds."

The county auditor thereupon advised the said board of county commissioners that defendant bank had offered to take an order drawn upon the county treasurer in the aggregate amount of said claims, which offer is as follows:

"The First National Bank of Portland, Oregon, offers to pay to the County Treasurer of Multnomah County, Oregon, the amount of an order to be drawn on the County Treasurer payable to the order of the First National Bank of Portland, for the aggregate amount of Old Age Pension claims for the month of July, 1935, when the same shall have been audited and approved by the County Auditor of Multnomah County, subject to the following conditions: Prior to such payment, the County Treasurer shall tender said order and the order of the County Commissioners authorizing its issuance to the First National Bank of Portland, and it shall be determined by the Supreme Court of the State of Oregon in a suit to be instituted for such purpose.

"1. That Chapter 197 of the Laws of Oregon for 1935 does not offend the provisions of Section 20, Article IV, of the Oregon Constitution.

"2. That the obligation of Multnomah County to pay the amount of said order is not a debt or liability within the meaning of Section 10, Article XI, of the Oregon Constitution.

"3. That the order of the County Commissioners authorizing the issuance of said order upon the County Treasurer is a sufficient authority therefor.

"4. That the acts of the County Auditor, in auditing and approving the pension claims, establish conclusively that such claims are 'lawful, just and valid', or that the obligation to pay the amount of said order upon the County Treasurer does not depend upon the validity of the claims to be satisfied out of the proceeds of the same.

"5. That the First National Bank of Portland is not under any obligation to see that the amount paid by it to the County Treasurer is applied to the payment of claims included in the amount of said order.

"6. That the order upon the County Treasurer, when issued, will be a valid and enforceable obligation of Multnomah County, Oregon, payable as other warrants are payable in order of presentment to the County Treasurer.

"If this offer is acceptable, kindly indicate your acceptance of the same, and we shall request our counsel to cooperate with the District Attorney in joining issues for the determination of the questions of law mentioned above."

Thereafter the board of commissioners passed an order approving the issuance of an order payable to the First National Bank of Portland, defendant herein, in the aggregate amount of said old age pension claims for the month of July, 1935, to be delivered to the defendant upon the payment by it to the county treasurer of the sum stated in said order, which sum was to constitute a special fund in the hands of the county treasurer for the payment of old age pension claims for the month of July, 1935. Said order will hereafter be referred to as the "master warrant."

On May 28, 1935, plaintiff, Multnomah county, accepted the above offer of defendant First National Bank and instituted the instant suit in compliance therewith.

Under section 27-2207, Oregon Code 1930, prior to its amendment in 1935 (Laws 1935, p. 287), all demands, accounts, or claims against the county should be presented to the county auditor with the necessary evidence in support thereof and examined and audited by him. And if found to be correct and lawful and authorized by the board of county commissioners and by the budget of the county, he should indorse them as audited and approved, and draw an order or warrant on the county treasurer for the payment thereof. When presented to the county treasurer, these claims would be paid if there was money on hand for that purpose, or if there was no money on hand, the treasurer would indorse the same "not paid for want of funds." Thereafter (section 27-1720) such warrants should draw legal interest or such less rate not less than 5 per cent. per annum as might be prescribed by the county commissioners; that when money came into the hands of the county treasurer for the purpose of paying such warrants, he should give notice thereof by publication at which time they should cease to draw interest.

The large number of claimants on the old age pension fund makes it necessary to draw a great many warrants, and when there is no funds on hand, it requires a considerable amount of bookkeeping to indorse them "not paid for want of funds" and afterwards call said warrants. It would save considerable inconvenience and perhaps some expense if the county treasurer would be permitted to issue the so-called "master warrant" as authorized by chapter 197, supra, and pay the individual claimants in cash, and that was the purpose of the enactment of the law. These facts are all alleged in the complaint and admitted in the answer. The circuit court granted a decree on the pleadings in favor of the plaintiff, and defendant appeals.

1. It is first contended by appellant that the amendatory act, chapter 197, Oregon Laws 1935 (page 287), by reason of its title being defective, is violative of article 4, § 20, of the Oregon Constitution , which reads as follows: "Every act shall embrace but one subject, and matters properly connected therewith, which subject shall be expressed in the title."

Chapter 197, supra, is entitled: "Amending section 27-2207, Oregon Code 1930, relating to the duties and powers of the county auditor of Multnomah county in auditing of claims; and declaring an emergency."

The amendment consists of inserting into the body of said section the following language: "1930; provided, however, that at any time it is known to the county auditor that the county treasurer has not on hand in the general fund of the county sufficient funds with which to pay orders drawn by him against such fund, and that orders so drawn will be endorsed not paid for want to funds, the county auditor may, with the approval of the board of county commissioners, in addition to drawing orders for claims audited and allowed by him, draw an additional order or orders in the aggregate amount of such claims, payable to a bank, trust company or other person or corporation, which said bank, trust company, other person or corporation shall pay to the county treasurer, upon the delivery of such order or orders, the full amount named in the face of said order or orders, and which sums so paid to the county treasurer shall constitute a special fund in his hands for the payment of the orders drawn by the county auditor in payment of claims allowed by him and included in the amount of said order or orders issued to such bank, trust company, other person or corporation."

It is immaterial what the proceeding is named by which the appellant is to let the county treasurer have the money to pay off the claims of the pensioners; it cannot change the transaction into anything other than a loan from the appellant to the county. The title of chapter 197, supra, makes no reference to anything except to "the duties and powers of the county auditor." Such title does not embrace the subject of borrowing money for and on behalf of the county, that being the principal object of the statute. The body of the act requires that the county auditor, before entering into the contract with ...