Rodin v. State ex rel. City of Cheyenne

• Decision Date: 27 July 1966
• Docket Number: No. 3498,3498
• Citation: 417 P.2d 180
• Parties: Vivian F. RODIN, City Clerk, City of Cheyenne, Appellant-Defendant (Defendant below), and State of Wyoming ex rel. Everett T. Copenhaver, State Treasurer, Appellant- Intervenor (Intervenor below), v. STATE of Wyoming ex rel. CITY OF CHEYENNE, Appellee-Plaintiff (Plaintiff below).
• Court: Wyoming Supreme Court

Page 180

417 P.2d 180

Vivian F. RODIN, City Clerk, City of Cheyenne, Appellant-Defendant (Defendant below) and State of Wyoming ex rel. Everett T. Copenhaver, State Treasurer, Appellant- Intervenor (Intervenor below), v. STATE of Wyoming ex rel. CITY OF CHEYENNE, Appellee-Plaintiff (Plaintiff below).

No. 3498.

Supreme Court of Wyoming.

July 27, 1966.

Thomas O. Miller, of Miller, Suyematsu, Crowley & Duncan, Cheyenne, for appellant-defendant.

John F. Raper, Atty. Gen., Cheyenne, for appellant-intervenor.

Brooke Wunnicke, of Williams, Wunnicke & Fennell, Cheyenne, for appellee-plaintiff.

Before PARKER, C. J., and HARNSBERGER, GRAY and McINTYPE, JJ.

Mr. Justice HARNSBERGER delivered the opinion of the court.

In an action by the State of Wyoming for an alternative writ of mandamus and declaratory judgment, instituted upon the relation of the City of Cheyenne, the plaintiff sought to compel Cheyenne's city clerk to endorse the City's refunding securities and to give notice of prior redemption of certain of Cheyenne's outstanding bond securities which were subject to call. This required determination of the constitutional validity of ch. 91, S.L. of Wyoming, 1965, by virtue of which the refunding program of the City was undertaken, as well as the validity of Cheyenne's Ordinance No. 1491, which authorized the issuance of the refunding securities; the validity of an escrow agreement; the validity of an agreement with underwriters concerning purchase of United States securities; and the validity of provisions for their marketing; the handling and application of refunding proceeds, the call for prior redemption of certain outstanding bonds, the provisions of which authorize prior redemption, and of various other matters incidental to the accomplishment of the ultimate purpose of substituting the refunding bonds for Cheyenne's outstanding bonds.

Upon trial to the district court, sitting without jury, and upon agreed facts, supplemented by the testimony of a single witness testifying in behalf of the City and numerous exhibits which included the schedules of a certified public accountant, authenticated as to their correctness, the trial court made numerous findings of fact and conclusions of law from most of which defendant has appealed and intervenor has appealed in part. Rather than giving any judgment as to the constitutional matters involved, the trial court elected to reserve and certify to this court certain questions as being important and difficult. They are as follows:

'1. Does the title to Chapter 91, Session Laws of Wyoming, 1965, 'An act concerning the refunding of public securities' embrace the subject of the advance escrow-type refunding provisions of said Act in all particulars and express said subject with sufficient clarity so as to comply with Article 3, Section 24 of the Wyoming Constitution?

'2. Do the provisions of Section 10, Chapter 91, Session Laws of Wyoming, 1965, prescribing the powers and duties of the escrow bank with respect to escrowed municipal funds constitute a delegation of power to a private corporation to supervise public moneys, properties, or effects, or otherwise perform municipal functions in contravention of Article 3, Section 37 of the Wyoming Constitution?

'3. Is the refunding authorized by Chapter 91, Session Laws of Wyoming, 1965, and plaintiff's Ordinance No. 1491 for a public purpose as required by Article 13, Section 3 of the Wyoming Constitution?

'4. Do the advance escrow-type refunding provisions of Chapter 91, Session Laws of Wyoming, 1965, contravene Article 16, Section 4 of the Wyoming Constitution in any of the following respects:

'a. Does the concurrent running of interest on both the refunding bonds and on some of the bonds to be refunded during the maximum fifteen-year escrow term, authorized by Section (six) 5 and 10, Chapter 91, Session Laws of Wyoming, 1965, constitute the creation of a debt in excess of taxes for the current year without an approving election?

'b. Does the plaintiff's authorized payment of $79,285.50 refunding bond expenses from refunding bond proceeds pursuant to Section 9 of Chapter 91, Session Laws of Wyoming, 1965, constitute the creation of a debt in excess of taxes for the current year without an approving election, said amount not having been included in plaintiff's 1965-1966 budget (Defendant's Exhibit 1)?

'c. Does the provision of Section 10, Chapter 91, Session Laws of Wyoming, 1965, which authorizes the proceeds of refunding public securities to be placed in escrow instead of immediately applying said proceeds to the retirement of the public securities to be refunded constitute the creation of a debt in excess of taxes for the current year without an approving election?

'5. Does the refunding authorized by Chapter 91, Session Laws of Wyoming, 1965, and plaintiff's Ordinance No. 1491 comply with the municipal debt limitation provisions of Article 16, Section 5 of the Wyoming Constitution?'

Wyoming's state treasurer intervened to contest the City's asserted right to recall, on October 1, 1976 and thereafter, five one-thousand-dollar city bonds which are owned by the State of Wyoming, and to make payment therefor with proceeds from the refunding bonds, claiming that to do so would conflict with the express prohibition contained in § 9-626, W.S.1957. This statute declares that, 'such redemption shall be made only from sinking funds of said political subdivisions, and not from funds obtained by its refunding of such bonds.' (Emphasis supplied.) The trial court found that, as the state-held bonds contained express provision for their prior redemption, the statute was inapplicable. The court's finding amounts to an interpretation of the statute with which we agree and does not involve any constitutional question. Therefore, we shall hereinafter consider only the appeal of the city clerk.

Question No. 1:

Ch. 91, S.L. of Wyoming, 1965, is titled 'An Act concerning the refunding of public securities and repealing (certain sections of W.S.1957).' While this title is brief, it is nevertheless sufficiently comprehensive to encompass all aspects of refunding programs to refinance existing public securities. Art. 3, § 24 of our Constitution demands only that such a statute contain but one subject which must be clearly expressed in the title and prohibits more than one subject being embraced in an act. The single subject of ch. 91, is clearly stated to be the refunding of public securities and in the context of the Act nothing is found but matter dealing exclusively with matter incident to that subject. The portion dealing with advance escrow-type refunding is a proper if not a necessary item to make possible and effective the primary purpose to refund outstanding public securities where some such securities may not be immediately retired.

Question No. 2:

The submitted question regarding § 10, ch. 91, S.L. of Wyoming, 1965, indicates that § 10 prescribes 'the powers and duties of the escrow bank with respect to escrowed municipal funds.' Section 10 is as follows:

'The proceeds of refunding public securities shall either be immediately applied to the retirement of the public securities to be refunded or be placed in escrow in any state or national bank within the State which is a member of the Federal Deposit Insurance Corporation and which has trust powers, to be applied to the payment of the public securities being refunded upon their presentation therefor; and any accrued interest and any premium appertaining to a sale of refunding public securities may be applied to the payment of the interest thereon and the principal thereof, or both interest and principal, or may be deposited in a reserve therefor, or may be used to defray incidental costs, as the governing body may determine. Any such escrow shall not necessarily be limited to proceeds of refunding public securities, but may include other moneys available for its purpose. Any escrowed proceeds, pending such use, may be invested or reinvested in federal securities. Such escrowed proceeds and investments, together with any interest or other yield to be derived from any such investment, shall be in an amount at all times sufficient as to principal, interest, any prior redemption premium due, and any charges of the escrow agent payable therefrom, to pay the public securities being refunded as they become due at their respective maturities or due at designated prior redemption date or dates in connection with which the governing body of the issuer shall exercise a prior redemption option. The computations made in determining such sufficiency shall be verified by a certified public accountant licensed to practice in this state or in any other state. Any purchaser of any refunding public security shall in no manner be responsible for the application of the proceeds thereof by the issuer or any of its officers, agents or employees.'

A most careful examination and study of the section fails to reveal that the statute confers any powers or imposes any duties upon the escrow bank other than those inherently undertaken by all depositories of funds or effects belonging to others, or the discharging of conditions of trust imposed upon it. These do not involve discretionary powers but are positive directions. The duty is merely to safekeep the funds and deliver them up on proper order or demand or in accord with conditions or directions laid down by the depositor. This section directs that the proceeds of the refunding securities be placed in escrow in described banks and be applied immediately or thereafter to the payment of the refunded securities. The section does not authorize or empower the escrow bank to make such payments, but merely provides for the earmarking of such funds for withdrawal only for the restricted purposes of paying interest accruals upon and redeeming of refunded securities. No independent power of disbursing the escrowed funds, except for the designated...