State ex rel. Dunbar v. Board of Trustees of Cheney State Normal School

• Decision Date: 14 June 1928
• Docket Number: 21264.
• Citation: 148 Wash. 126,268 P. 862
• Parties: STATE ex rel. DUNBAR v. BOARD OF TRUSTEES OF STATE NORMAL SCHOOL AT CHENEY et al.
• Court: Washington Supreme Court

268 P. 862

148 Wash. 126

STATE ex rel. DUNBAR v. BOARD OF TRUSTEES OF STATE NORMAL SCHOOL AT CHENEY et al.

No. 21264.

Supreme Court of Washington, En Banc.

June 14, 1928

Appeal from Superior Court, Thurston County; John M. Wilson, Judge.

Action by the State, on the relation of John H. Dunbar, against the Board of Trustees of the State Normal School at Cheney. Judgment of dismissal, and relator appeals. Reversed and remanded, with direction.

John H. Dunbar and H. C. Brodie, both of Olympia for appellant.

John E Blair, of Spokane, for respondents.

MITCHELL J.

This action was brought to enjoin a bond issue proposed by the trustees of the Cheney Normal School in providing additional dormitory and dining room facilities at that school, under chapter 91, Laws Extraordinary Session 1925. The action was commenced in the superior court.

The facts as stated in the complaint are substantially as follows: That Monroe Hall and Senior Hall were constructed on the school campus in 1915 and 1920, respectively and that they are the property of the state and used wholly in connection with the school. The one is used as a dormitory and for dining room purposes and the other only as a dormitory. That Sutton Hall was built in 1923 and has been used and operated as a dormitory at all times since under a lease under which there has been expended out of the net income arising from all of the dormitories approximately $25,000, which amount has been received by the owner of the building as a pro rata payment for that hall, leaving a balance of $75,000 due on the purchase price. That the three halls have been operated and managed by the board of trustees together under a system of receipts and expenditures as a single fund under the supervision and authority of the state bureau of accountancy, without any objection and as a fund belonging to the school and subject to disbursement by and upon requisitions of the board of trustees. That it would not be practical but wasteful to provide help and supplies to maintain an accounting system for each dormitory--a method which would appreciably increase the charges for dormitory and dining room facilities to the students of the school. That, in order to provide for proper housing and boarding for the students and faculty of the school, the board of trustees by resolution ordered the erection of another building upon the campus to be known as the Commons Building, at a cost of $175,000. That the trustees propose to pay the cost of this building and the remaining $75,000 due on Sutton Hall by proceeds from the sale of bonds in the sum of $250,000, which bonds shall be payable on the amortization plan over a period not exceeding 20 years and payable only out of the moneys derived from the net income arising from the rentals and other income from all four buildings. That the resolution further provides that the state of Washington shall incur no liability by reason of the resolution or anything done pursuant thereto, under the authority granted by chapter 91, Session Laws 1925. That the board of trustees on April 16, 1928, adopted a formal resolution reaffirming the contract for the purchase of Sutton Hall and the one for the construction of Commons Building, and that to pay for them there should be executed and issued by the board of trustees of the school bonds in the aggregate sum of $250,000, dated March 1, 1928, bearing interest at 4 1/2 per cent. per annum, payable semiannually, the principal payable on the amortization plan as provided by the act, the ultimate maturity of the bonds to be March 1, 1948, and which bonds shall expressly provide that the payment of all principal and interest thereof shall be limited to a special fund derived from the joint net income from the rooming and boarding privileges arising from all four halls, and from such special fund only. The complaint further states that upon the construction of the proposed Commons Building, which will include housing and dining room facilities it will likewise be operated and managed with the other three buildings, and the income received from all four buildings will be handled in one general fund and accounted for as planned. By allegations contained in the complaint it is stated that the purchase and use of Sutton Hall and the construction and use of the Commons Building are reasonably necessary for the interest and economical conduct of the school and in effect admitted that without the expenditure and pledging of the net income and rentals arising from all of the existing dormitories and the proposed Commons Building the funds for the payment of the proposed bond issue would be wholly insufficient and that Sutton Hall could not be purchased and paid for out of its own earnings and that the Commons Building could not be paid for out of its own earnings.

The respondents demurred to the complaint on the ground that it did not state facts sufficient to constitute a cause of action. The demurrer was sustained, and the appellant, refusing to plead further and electing to stand upon its complaint, has appealed from a judgment dismissing the action.

The act, omitting the title and enacting clause, is as follows:

'Section 1. The Boards of Regents of the University of Washington and of the State College of Washington, and the boards of trustees of the Washington state normal schools at Ellensburg, Cheney and Bellingham, Washington, are hereby authorized to enter into contracts with persons, firms or corporations for the erection of buildings for dormitory, housing and boarding purposes and for student activities; and said boards are further authroized to purchase or lease lands and other appurtenances necessary for the construction of such buildings, and to purchase or lease lands with buildings constructed thereon suitable for the purposes aforesaid; and said boards are also authorized to lease to any persons, firms or corporations such portions of the campus of their respective institutions as may be necessary for the construction of buildings for the purposes aforesaid and the reasonable use thereof: Provided, that the state of Washington shall incur no liability by reason of exercise of the authority hereby granted to the said Boards of Regents and trustees aforesaid other than as hereinafter specifically set forth, and provided further, that such lands, buildings or appurtenances shall be used solely for such dormitory, housing, boarding or student activities in such institutions. Said Boards of Regents and trustees are hereby authorized to contract to pay as rental or otherwise a sum sufficient to pay, on the amortization plan, the principal and interest thereon, of the purchase price of said lands and buildings or the erection costs of said buildings or appurtenances, such contracts to run not over twenty years. The rate of interest on the principal on any such purchase or erection cost shall not exceed seven per cent. per annum payable semiannually or annually as determined by said boards.

'Sec. 2. Said Boards of Regents and trustees are hereby authorized to expend on the amortization plan any part of the rentals on any or all rooms, dormitories, dining rooms, housing or student activity buildings, lands or the appurtenances thereon, and to plege on behalf of said institutions aforesaid, the net income from said rentals for the payment of all rental or erection or other contract charges agreed to be paid on account of such dormitory or dormitories, dining room, housing, and student activity buildings, lands or appurtenances.'

Thus section 1 of the act authorizes the respective Boards of Regents of the University and of the State College and the respective boards of trustees of the several normal schools to enter into contracts for the erection of buildings for dormitory, housing, and boarding purposes, to purchase or lease lands necessary in the construction of such buildings and to purchase or lease ...