State ex rel. O'Connell v. Public Utility Dist. No. 1 of Klickitat County

• Decision Date: 29 April 1971
• Docket Number: No. 41592,41592
• Court: Washington Supreme Court
• Parties: The STATE of Washington, on the relation of John J. O'CONNELL, Attorney General, Petitioner, v. PUBLIC UTILITY DISTRICT NO. 1 OF KLICKITAT COUNTY, a municipal corporation et al., Respondents.

Page 237

79 Wn.2d 237

484 P.2d 393

The STATE of Washington, on the relation of John J.

O'CONNELL, Attorney General, Petitioner, v. PUBLIC UTILITY DISTRICT NO. 1 OF KLICKITAT COUNTY, a

municipal corporation et al., Respondents.

No. 41592.

Supreme Court of Washington, En Banc.

April 29, 1971.

Rehearing Denied Aug. 9, 1971.

Slade Gorton, Atty. Gen., Robert F. Hauth, Asst. Atty. Gen., Olympia, for petitioner.

Houghton, Cluck, Coughlin & Riley, Paul Coughlin, Seattle, Schumacher & Charette, Robert L. Charette, Aberdeen, for respondents.

WRIGHT, Associate Justice.

This is an action for a declaratory judgment brought by the then attorney general to enforce the provisions of the Washington Constitution, article 8, § 7, as the same applies to the transactions hereinafter described. Respondent, Public Utility District No. 1 of Klickitat County, is a municipal corporation organized under the provisions of RCW 54.16. The powers of a public utility district are set forth in RCW 54.16.040 as follows:

A district may purchase, within or without its limits, electric current for sale and distribution within or without its limits, and construct, condemn and purchase, purchase, acquire, add to, maintain, conduct, and operate works, plants, transmission and distribution lines and facilities for generating electric current, operated either by water power, steam, or other methods, within or without its limits, for the purpose of furnishing the district, and the inhabitants thereof and any other persons, including public and private corporations, within or without its limits, with electric current for all uses, with full and exclusive authority to sell and regulate and control the use, distribution, rates, service, charges, and price thereof, free from the jurisdiction and control of the public service commission, in all things, together with the right to purchase, handle, sell, or lease motors, lamps, transformers and all other kinds of equipment and accessories necessary and convenient for the use, distribution, and sale thereof: Provided, That the commission shall not supply water to a privately owned utility for the production of electric energy, but may supply, directly or indirectly, to an instrumentality of the United States government or any publicly or privately owned public utilities which sell electric energy or water to the public, any amount of electric energy or water under its control, and contracts therefor shall extend over such period of years and contain such terms and conditions for the sale thereof as the commission of the district shall elect; such contract shall only be made pursuant to a resolution of the commission authorizing such contract, which resolution shall be introduced at a meeting of the commission at least ten days prior to the date of the adoption of the resolution: Provided further, That it shall first make adequate provision for the needs of the district, both actual and prospective.

Respondent has not sold electrical appliances since 1940. However, since December of 1962, it has engaged in the business described in the trial court's finding of fact No. 2, as follows:

Beginning in December, 1962 and continuing to the present time, the District has carried on an Installment Sales Program under which it takes assignments of sellers' interests in conditional sales contracts from dealers or electrical contractors who have sold the electrical equipment covered by the contracts to customers of the District under which it acquires the seller's interest in the contract and in the chattel covered thereby. It pays to the dealers an amount equal to the balance after down-payment owing by the vendee under the contracts.

In October, 1967, the relator, who was then attorney general, instituted this action in the Superior Court of the State of Washington, for the County of Klickitat, seeking a declaratory judgment declaring the activities in question to be ultra vires and in violation of the Constitution of the State of Washington; and in particular, in violation of article 8, section 7. The intervener, Washington Public Utility Districts' Association, Inc., was permitted to intervene by the agreement of all parties. Upon a trial to the court, a judgment was rendered in favor of defendant. Relator thereupon appealed to the Court of Appeals and the judgment was affirmed. 2 Wash.App. 366, 469 P.2d 922 (1970).

Relator petitioned for review in this court. The petition was granted.

Const. art. 8, § 7 reads as follows:

No county, city town or other municipal corporation shall hereafter give any money, or property, or loan its money, or credit to or in aid of any individual, association, company or corporation, except for the necessary support of the poor and infirm, or become directly or indirectly the owner of any stock in or bonds of any association, company or corporation.

If the language of the constitution is clear, there can be no interpretation thereof. This court said in State ex rel. Swan v. Jones, 47 Wash.2d 718, 289 P.2d 982 (1955) in part, as follows:

(T)he authorities are numerous in support of the proposition that interpretation is improper if the particular constitutional language or provision is clear and unambiguous. In United States v. Sprague, 282 U.S. 716, 731, 75 L.Ed. 640, 51 S.Ct. 220, 222, (71 A.L.R. 1381) 75 L.Ed. 640, the court said:

'The Constitution was written to be understood by the voters; its words and phrases were sued in their normal and ordinary as distinguished from technical meaning; Where the intention is clear there is no room for construction and no excuse for interpolation or addition.' (Italics ours.)

To the same effect is State ex rel. Lemon v. Langlie, 45 Wash.2d 82, 273 P.2d 464 (1954), and State ex rel. Troy v. Yelle, 27 Wash.2d 99, 176 P.2d 459, 170 A.L.R. 1425 (1947).

On another occasion, this court has said in State ex rel. State Capitol Commission v. Lister, 91 Wash. 9, 156 P. 858 (1916):

Constitutions being the result of the popular will, the words used therein are to be understood ordinarily in the sense that such words convey to the popular mind. The meaning to be given to the language used in such instruments is that meaning which a man of ordinary prudence and average intelligence and information would give. Generally speaking, the meaning given to words by the learned and technical is not to be given to words appearing in a constitution. Bronson v. Syverson, 88 Wash. 264, 152 P. 1039; Epping v. Columbus, 117 Ga. 263, 43 S.E. 803; Cooley, Constitutional Limitations, p. 92; 1 Story, Constitution, § 451, p. 345; Black, Constitutional Law, p. 79. Other authorities might be cited in support of this rule of construction, but it is so generally recognized that further citation of authority hardly seems necessary.

The transaction in question is clearly a loan of the money of the respondent district. Respondent Presently pays out money in exchange for the right to receive Future repayment, together with interest. This court said in Hafer v. Spaeth, 22 Wash.2d 378, 384, 156 P.2d 408, 411 (1945):

The word 'loan' imports an advancement of money or other personal property to a person, under a contract or stipulation, express or implied, whereby the person to whom the advancement is made binds himself to repay it at some future time, together with such other sum as may be agreed upon for the use of the money or thing advanced. State v. Larson, 119 Wash. 259, 205 P. 373; Embola v. Tuppela, 127 Wash. 285, 220 P. 789; First Bank of Cordova v. Tjosevig, 138 Wash. 231, 244 P. 736; * * *.

Respondent placed much importance upon its right to decline to buy any particular contract and that the contracts bought were good ones and were mostly large transactions. The constitution, however, makes no distinction; it prohibits all such transactions, good or bad, large or small.

We, therefore, hold the transactions in question to be in violation of article 8, section 7. Having made this determination, it is unnecessary to consider any of the other questions raised.

The decision of the Court of Appeals and that of the trial court must be reversed.

FINLEY, ROSELLINI, HALE and STAFFORD, JJ., concur.

HUNTER, Associate Justice (dissenting).

I disagree with the majority's conclusion that the practice of the PUD of Klickitat County, in taking assignments to certain conditional sale contracts for the sale of electrical equipment in consideration of paying the balance due to the vendors, constitutes a loan of money in violation of article 8, section 7, of the state constitution. The majority opinion overrules Sub silentio recent decisions of this court interpreting that constitutional provision.

In Washington Natural Gas Co. v. PUD No. 1 of Snohomish County, 77 Wash.Dec.2d 90, 459 P.2d 633 (1969), we were faced with the same constitutional attack under facts analogous to those presented in the instant case. In that case the public utility district agreed to install at its own expense underground electric distribution systems and ornamental street lighting systems on the property of private land developers. The land developers agreed to pay the PUD for this service the sum of $225 per lot so improved. This amount could be paid over a 3 year period with interest at 6 per cent on the unpaid balance. If the developer were to erect a total electric dwelling on the lot within a 3 year period, the PUD agreed to allow the developer a $150 credit or payment on this $225 contractual payment owing. After carefully considering the operative details of the transactions, we concluded that the PUD's agreements to install at its own expense underground systems for a speciifc price to be paid in the future did not constitute loans of money within the meaning of Const. art. 8, § 7, even though payment was to be made at a future time with interest, and in some instances, at a discount. We stated at pages 99--100, 459 P.2d at page 639 as follows:

Thus, even though the developer will be...