Public Utility Dist. No. 1 v. Superior Court In and For Whatcom County

• Decision Date: 19 May 1939
• Docket Number: 27385.
• Citation: 90 P.2d 737,199 Wash. 146
• Court: Washington Supreme Court
• Parties: PUBLIC UTILITY DIST. NO. 1 et al. (INGERSOLL, Assessor, et al., Intervenors v. SUPERIOR COURT IN AND FOR WHATCOM COUNTY et al.

90 P.2d 737

199 Wash. 146

PUBLIC UTILITY DIST. NO. 1 et al. (INGERSOLL, Assessor, et al., Intervenors v. SUPERIOR COURT IN AND FOR WHATCOM COUNTY et al.

No. 27385.

Supreme Court of Washington

May 19, 1939

Department 2.

Action by Public Utility District No. 1 of Whatcom County, Wash and others, against John W. Sheets, individually and as mayor of the city of Blaine, and another, for a declaratory judgment adjudicating the right of plaintiff to levy a tax on property within the boundaries of the city of Blaine and the city of Sumas wherein Harry M. Ingersoll and another filed their complaint in intervention for a declaratory judgment adjudicating that it was their right to levy and collect the tax levied by plaintiff district. From a judgment of the superior court of the state of Washington in and for Whatcom County rendered by Hon. Edwin Gruber as judge thereof determining that the district was validly organized but that the district might not levy taxes on property within the two cities for certain purposes, plaintiff and interveners appeal, and defendants cross-appeal.

Affirmed.

Appeal from Superior Court, Whatcom County; Edwin C. Gruber, judge.

Houghton Cluck & Coughlin, of Seattle, and Brown & Millhouse, of Bellingham, for appellants.

Sather & Livesey, of Bellingham, R. S. Lambert, of Sumas, and Orville K. Algyer, of Blaine, for respondents.

BEALS Justice.

Public Utility District No. 1, of Whatcom county, and its commissioners, instituted this action by filing their complaint against John W. Sheets, individually, and as mayor of the city of Blaine, and Carl A. May, individually, and as mayor of the city of Sumas, alleging the organization of the district, with boundaries coextensive with Whatcom county and that the commissioners had proposed the levy by the district of a two mill tax upon all property within Whatcom county, for the purpose of acquiring electric utilities and the other utilities contemplated by chapter 1, Laws of 1931. It was alleged that the defendants, individually, and as mayors of their respective cities, claimed that the district and its commissioners had no authority to cause to be levied or collected any tax upon property located within the corporate limits of the cities above named, plaintiffs asking that a declaratory judgment be entered, adjudicating the right of plaintiff district to levy a tax for its corporate purposes upon the property within the boundaries of the cities.

Defendant Sheets, individually, and as mayor of Blaine, answered, denying the material allegations of the complaint, and affirmatively alleging that he had been authorized by the city to appear in the action and present certain questions of common interest to the taxpayers of the city; that the city of Blaine owns and operates a complete water system, adequate for all purposes; that the city also owns and operates facilities for the distribution of electricity within its limits, which is used for the purpose of distributing electric current purchased by the city at wholesale from Puget Sound Power & Light Company, a public service corporation, which current the city sells at retail to its customers within its boundaries; that the city is under contract to purchase such electric current until some date during the year 1939. The defendant also pleaded the contention that, Before any tax could be imposed upon property within the city of Blaine, pursuant to the levy made by plaintiff district, it would be necessary for plaintiff to establish that the money to be raised pursuant to the levy would be expended solely for the acquisition or operation of a utility which the city does not own or operate; that the budget adopted by plaintiff district shows no segregation of items of proposed expenditure for different utilities; that many of the items appearing in the budget do not refer to any particular utility; and that the tax imposed upon property within the boundaries of the city of Blaine is therefore illegal and void.

Defendant May answered, individually, and as mayor of Sumas, denying many of the allegations of plaintiffs' complaint, and affirmatively pleading that he was mayor of the city of Sumas, and a taxpayer of that city; that the city owns and operates facilities for the distribution of electricity within its boundaries, purchasing the current from Puget Sound Power & Light Company, and selling the same at retail to its customers within its boundaries.

Both answers referred to chapter 1, p. 3, Laws of 1931, authorizing the establishing of public utility districts, alleged that property within the limits of the cities was exempt from taxation by plaintiff district, for the purpose of furnishing electricity to the inhabitants of the district, and the answer of defendant May attacked the organization of plaintiff district under the act.

Plaintiffs replied to the answers.

Harry W. Ingersoll and R. C. Atwood, as assessor and treasurer, respectively, of Whatcom county, filed their complaint in intervention, asking for a declaratory judgment adjudicating that it was the right and duty of interveners to levy and collect the tax levied by plaintiff district, as set forth in its complaint, against all property within the boundaries of the district, including property located within the two cities above referred to.

The action was tried to the court sitting without a jury, and resulted in a declaratory judgment to the effect that plaintiff district is a municipal corporation, duly and regularly organized pursuant to Chapter 1, p. 3, Laws of 1931, having boundaries coextensive with Whatcom county; that a municipal corporation such as defendant cities might be included within the territorial limits of a county-wide public utility district, but nevertheless, might not be within such district for all the purposes authorized by the statute above referred to; that the cities above named are not included within plaintiff district, for the purpose of establishing, acquiring or operating electrical distribution systems, and the property within the cities cannot be taxed by plaintiff district for that purpose; and that the city of Blaine is not included in plaintiff district, for the purpose of establishing a water system, and the property within that city cannot be taxed for that purpose.

The court further held that items 3, 4 and 9, of the 1938 budget adopted by plaintiff district, being the following items of that budget,

'Engineering services, including those necessary and proper to enable the district to acquire and place into operation the properties of the private electric companies doing business within Whatcom county, and/or other utilities, including the preparation of maps and surveys, preliminary valuations and operating schedules, formulation of plan and system of development.

'Legal services, including those necessary and proper to establish the valid organization of the district and to enable the district to acquire and place into operation the properties of the private electric companies doing business within Whatcom county, and/or other utilities, by methods of acquisition other than condemnation.

'Expenditures for purposes of condemnation of the properties of private electric companies, and/or other utilities doing business within Whatcom county, in event such proceedings are prosecuted, including preparation of the filed inventory and appraisals, court costs and payments on account of legal services,'

are for the primary purpose of acquiring an electrical distribution system, and that no property located within the two cities above named could be taxed to raise funds for the purposes referred to in the items above quoted.

The court further held that the district could levy taxes on the property within the two cities, for purposes mentioned in the district's budgets for 1938 and 1939, save for the items referred to above.

From this judgment, plaintiffs and intervenors have appealed. Defendants have also appealed from the judgment, save in so far as the same is in accord with their contentions.

Appellants assign error upon the entry of judgment holding that appellant district and its commissioners have no authority to levy any tax upon property within the limits of the cities of Blaine and Sumas, for the purpose of establishing, acquiring or operating an electrical distribution system, and that appellant district cannot levy a tax upon property within the boundaries of the city of Blaine for the purpose of establishing, acquiring or operating a water system. Appellants also assign error upon the refusal of the trial court to enter judgment, as prayed for in the complaint, holding that appellants have the right, and that it is their duty, to levy the taxes which are the subject matter of this action, uniformly upon all property in Whatcom county, incluidng that located within the cities of Blaine and Sumas.

Respondents and cross-appellants assign error upon the judgment of the trial court in so far as the same holds that appellant utility district was organized in accordance with the statute providing for the organization of such districts, and upon that portion of the judgment holding that the district may impose taxes upon property within the boundaries of the cities of Blaine and Sumas, pursuant to its budgets for the years 1938 and 1939.

Appellants also, as relators, applied to this court for a writ of certiorari to review the judgment above referred to, but as the matter is also Before us on their appeal from the judgment, we consider the case as presented by the appeal.

For convenience, we shall refer to plaintiffs and intervenors as appellants, and to defendants and cross-appellants as respondents.

We shall first consider the questions presented by respo...