Raynor v. King County

• Court: Washington Supreme Court
• Writing for the Court: JEFFERS, Justice.
• Citation: Raynor v. King County, 97 P.2d 696, 2 Wn.2d 199 (Wash. 1940)
• Decision Date: 06 January 1940
• Docket Number: 27792.
• Parties: RAYNOR v. KING COUNTY et al.

97 P.2d 696

2 Wn.2d 199

RAYNOR v. KING COUNTY et al.

No. 27792.

Supreme Court of Washington, En Banc

January 6, 1940

Action by L. G. Raynor against King County, a Class A. County of the State of Washington, Ralph S. Stacy, as Treasurer of King County, and Earl Millikin, as Auditor of King County, to enjoin the issuance of general obligation bonds to fund outstanding warrants. From the judgment, the defendants appeal, and the plaintiff cross-appeals.

Judgment modified with instructions to the trial court to enter judgment in accordance with opinion.

MILLARD J., and BLAKE, C.J., dissenting.

Appeal from Superior Court, King County; Clinton H Hartson, Judge pro tem.

B. Gray Warner, Lloyd W. Shorett, and Harry A. Bowen, all of Seattle for appellants.

Weter, Roberts & Shefelman, of Seattle, for respondent and cross-appellant.

JEFFERS Justice.

Plaintiff, L. G. Raynor, brought this action to enjoin defendant King county from issuing general obligation bonds to fund outstanding warrants, the total amount of the principal of which is $1,919,505.75. The complaint alleges that, at the time such warrants were issued, King county was indebted in excess of its statutory debt limit of one and one-half per cent, and was so indebted at all times since; that such warrants were not issued either for mandatory expenses or for expenditures necessary for the existence of the county; that the emergency warrants were issued when, in fact, no emergency existed.

Resolution No. 7358 is marked exhibit 'A', and is attached to and made a part of the complaint. This resolution, passed by the county commissioners of King county on May 22, 1939, wherein the bond issue is authorized to fund the outstanding emergency current expense warrants involved herein, recites in part as follows, as to the warrants issued in 1936, 1937, 1938 and 1939:

'Whereas, King County, by resolutions duly passed by the board of county commissioners of said county on the respective dates hereinafter set forth, at meetings of the said board of county commissioners duly and regularly called and held and after due notice as required by law, by unanimous vote duly adopted and entered into their minutes resolutions in form and substance as required by law in such case finding that emergencies existed in the case of each of said resolutions for incurring indebtedness not included in the budget for 1936 [37-38-39], and duly and regularly authorized emergency current expense fund warrants of the said King County for the purposes hereinafter indicated, and in addition thereto, by competent court order and the mandatory requirements of the constitution and statutes of the state of Washington, for the performance of necessary and essential governmental duty, emergency current expense fund warrants of said county were duly issued for Mothers' Pension, Juvenile Court Probation and Care of Insane. * * *

'Whereas, the said current expense warrants issued in the years 1936, 1937, 1938 and 1939, and described in this resolution, are all outstanding and unpaid, but all of the same are immediate and pressing obligations of the said King County payable in the order of their numbers, and said King County has no funds on hand with which to pay the same; and

'Whereas, no provision has been made to raise any of the money necessary to retire the said warrants, or to make good the deficit in the said current expense fund. * * *'

The answer of defendant King county denied the material allegations of the complaint.

Since all of the records and other evidence was in the possession of defendants, the county assumed the burden of going forward with the proof.

The warrants in question were issued during the years 1936, 1937, 1938 and 1939. As a general basis for its contention that it had not exceeded its debt limit at the time such warrants were issued, the county introduced exhibits Nos. 2 and 8. Exhibit No. 8, as corrected, shows the assessed valuation, gross indebtedness, available assets, net indebtedness and additional debt permissible, as of December 31, 1936. This exhibit shows:

Assessed valuation ........................ $297,665,886.00
                One and one-half per cent limitation
                 on assessed valuation of .................... 4,464,975.00
                Gross indebtedness ......... $8,578,686.40
                

As to the above items in the exhibits, there is no dispute. The county then lists as available assets, which it contends it should be allowed to offset against the gross indebtedness, the following items:

Cash on hand ............................ $ 652,734.52
                Estimated revenue to be collected......
                Taxes receivable ........................ 2,390,252.39
                Accrued interest on taxes ............... 1,462,656.00
                Accounts receivable ....................... 178,287.91
                Real estate subject to sale ............. 1,558,000.00
                                                         -------------
                   Total available assets .............. $6,241,930.82
                   Net indebtedness ..................... 2,336,755.58
                   Additional debt permissible .......... 2,128,219.42
                

Exhibit No. 8, as corrected, also shows the assessed valuation, gross indebtedness, available assets, net indebtedness and additional debt permissible as of December 31, 1937, as follows:

 Assessed valuation ............................. $308,948,037.00
                One and one-half per cent limitation
                 on assessed valuation ............................ 4,634,220.57
                Gross indebtedness .............. $8,558,526.81
                Available assets:
                Cash on hand ........................................ 235,942.80
                Estimated revenue to be collected..............
                Taxes receivable .................................. 1,843,986.68
                Accrued interest on taxes ......................... 1,189,760.00
                Accounts receivable ................................. 392,662.61
                Real estate subject to sale ....................... 1,958,000.00
                                                                 ---------------
                   Total available assets ......................... 5,620,352.09
                   Net indebtedness ............................... 2,938,174.72
                   Additional debt permissible .................... 1,696,045.85
                

Exhibit No. 2, as corrected, shows the assessed valuation, gross indebtedness, available assets, net indebtedness and additional debt permissible as of June 30, 1939, as follows:

 Assessed valuation ................................ $303,033,617.00
                One and one-half per cent limitation
                 on assessed valuation ............................... 4,545,504.25
                Gross indebtedness ................. $9,968,493.94
                Available assets:
                Cash on hand ........................................... 611,009.58
                Estimated revenue to be collected ...................... 293,324.61
                Taxes receivable ..................................... 1,870,257.29
                Accrued interest on taxes .............................. 903,643.06
                Accounts receivable .................................... 370,466.07
                Real estate subject to sale .......................... 1,359,500.62
                                                                    ---------------
                   Total available assets ............................ 5,408,201.23
                   Net indebtedness .................................. 4,560,292.66
                   In excess on debt limitation ......................... 14,788.46
                

At the trial, plaintiff contended generally that, of the items listed as available assets, the items of cash on hand, taxes assessed and not more than six years delinquent, and interest on such taxes, were the only items that should be considered as cash assets, while defendant county contended they were all proper items to be offset. Warrants issued by the defendant county pursuant to some ninety-three emergency resolutions were involved, and of these, plaintiff contended the greater part were wrongfully issued, for reasons which we shall hereinafter give, while defendant county contended they were properly issued, and that the county had the right to issue bonds to fund such warrants.

After all the evidence had been submitted to the trial court, it decided that a considerable portion of the warrants were valid and could be funded, and disallowed the others, also deciding that at all times herein mentioned, King county was indebted in excess of the statutory limitation.

Defendants have appealed from that part of the judgment adverse to them, and plaintiff has cross-appealed from that part of the judgment holding that certain of the warrants were valid for bond funding purposes.

Plaintiff, L. G. Raynor, will hereinafter be referred to as respondent, and defendants as appellants.

Appellants made twenty-four assignments of error, based upon that part of the judgment hereinBefore referred to, and respondent forty-two assignments of error.

In order that there may be no misunderstanding, may we say now that, since the holders of the warrants involved herein are not Before this court, we desire it to be understood that we are not ruling on the rights of the warrant holders as such, but that we are only determining the authority or appellant King county to fund the various warrants herein.

It is admitted that if the warrants were valid when issued, the fact that King county may have since exceeded its debt limit, or that it is now so indebted, would not prohibit such warrants being funded.

It is also admitted that the bonded and warrant indebtedness making up the gross indebtedness for the years 1936, 1937, 1938 and 1939, was not authorized by a vote of the people, and that the warrants involved in this action were not authorized by the electorate.

We desire to first consider and discuss the items which appellants contend are proper offsets against the county's gross indebtedness, in determining its net indebtedness. Inasmuch as this entire case deals with the powers and duties of the county commissioners of King county it might be well to consider generally the powers of county...