State ex rel. Public Utility Dist. No. 1 of Pend Oreille County v. Schwab, 32190

• Decision Date: 21 July 1952
• Docket Number: No. 32190,32190
• Citation: 246 P.2d 1081,40 Wn.2d 814
• Court: Washington Supreme Court
• Parties: STATE ex rel. PUBLIC UTILITY DIST. NO. I OF PEND OREILLE COUNTY, v. SCHWAB et al.

Page 814

40 Wn.2d 814

246 P.2d 1081

STATE ex rel. PUBLIC UTILITY DIST. NO. I OF PEND OREILLE COUNTY, v. SCHWAB et al.

No. 32190.

Supreme Court of Washington, en Banc.

July 21, 1952.

Clarence C. Dill, Spokane, Trumbull & Elk, Ione, for relator and appellant.

Davis, Trezona, Chastek & Lorenz, Spokane, for respondent.

J. Kennard Cheadle, Spokane, for intervenors and for Judge Ott.

HAMLEY, Justice.

This case presents legal questions in connection with the proposal of public utility district No 1 of Pend Oreille county to construct hydroelectric facilities at Box Canyon in that county.

The secretary of the district refused to attest and affix the seal of the district to a plan and system resolution for the construction and financing of this project. The district applied to the superior court for a writ of mandate to compel the secretary to perform these functions. Two taxpayers intervened in opposition to the application. After a trial of several days, the court entered judgment dismissing the application for writ of mandate. The matter comes here on a writ of certiorari.

The district was organized in 1936, but did not begin the distribution and sale of electric energy until February, 1948. It now serves Metaline Falls and Ione in the northern part of the county, and Newport, Dalkena and Diamond Lake in the southern part of the county. The district also has under condemnation, awaiting trial, the properties of the Washington Water Power Company at Cusick and Usk in the center of the county.

Since the beginning of its operation, the district has purchased all of its electric power from the Bonneville power administration. In 1950, however, the commissioners of the district became interested in the possible development of a hydroelectric project in Box Canyon, on the Pend Oreille river, in that county, as a future source of power. After some initial engineering studies, the district applied to the Federal power commission for a preliminary permit authorizing the district to make an engineering study of the project. This permit was granted on February 2, 1951.

The district then authorized the Harza Engineering Company of Chicago, Illinois, to undertake this study and make a project planning report. The district obtained a $175,000 loan from the community facilities branch of the housing and home financeagency to pay for the study. The Harza organization completed its study and filed its report in October, 1951. The project was recommended as being feasible from an engineering standpoint and as being economically justified.

The FPC gave consideration to this report in considering the district's application, then on file, for a fifty-year license. The FPC also had before it two letters from the defense electric power administration urging the commission to give early and favorable consideration to the Box Canyon project. On February 7, 1952, the FPC issued its license for the construction, operation and maintenance of the dam.

The district then had an application pending before the Reconstruction Finance Corporation for a loan sufficient to refund outstanding bonds and finance construction of the Box Canyon facilities. While this application was pending, the defense electric power administration urged the district to expedite construction of the project. The district therefore proceeded to call for bids for the construction of the dam and power plant, without waiting for formal action on the RFC loan, although the district had received informal assurances that the loan would be granted.

The engineer's estimate on this part of the work was $8,046,660. The bids, when opened on March 27, 1952, ranged from $7,585,039 to $10,286,871. The low bid was therefore $461,621 below the estimate. The bids for the generators were opened May 8, 1952, and the low bid was $600,000 less than the engineer's estimates. The expiration dates for acceptance of these two bids were originally May 26, 1952, and August 6, 1952. However, the low bidder on the dam and power plant has extended the time for acceptance of that bid from May 26, 1952, to 'within a week or ten days' after July 15, 1952.

In the meantime, on March 27, 1952, Chester E. Gregg and Otto White, the intervenors in the present action, instituted an action in the superior court of that county to enjoin the district from issuing construction revenue bonds to finance the project. On the next day, March 28, 1952, RFC formally granted the district's application for a loan of $17,541,000. This authorization is subject to a number of conditions, one of which reads as follows:

'The authority of the Issuer to carry out the Project and to issue the Bonds to finance it shall be upheld in a decision by the Supreme Court of the State of Washington, which decision shall also settle favorably any and all other legal questions regarding the Bonds, the Project or the System which may be presented for decision, as required by RFC Counsel, such decision to be satisfactory to RFC Counsel and Issuer's bond counsel.'

On April 7, 1952, the district passed a plan and system resolution for the construction of the Box Canyon project, and for the issuance of revenue bonds in the amount of $17,541,000. Two of the district commissioners voted for this resolution. The third commissioner, F. W. Schwab, voted against it, and, as secretary of the district, declined to attest the resolution or to affix thereto the seal of the district. The application for writ of mandate, previously referred to, was filed on the next day. On May 19, 1952, the RFC counsel wrote to the district, advising it of the legal questions concerning which a ruling of this court was desired.

The mandamus action came on for trial on April 15, 1952, and hearings were held from time to time until June 2, 1952. On that day the trial court handed down a memorandum opinion indicating that the application for a writ of mandate would be denied. Findings of fact and conclusions of law and a judgment denying the application were entered on the following day. Two days later, on June 5, 1952, the district's application for a writ of certiorari was filed with this court. The matter was argued before us, en Banc, on June 30, 1952.

We must first consider respondent's and intervenors' joint motion to quash the writ of certiorari on the ground that relator has a plain, speedy and adequate remedy by appeal. This motion was grgued at the same time that we heard the case on the merits.

It is the contention of respondent and intervenors that the necessity of proceeding by writ of certiorari would have been obviated if relator had instituted a declaratory judgment action in January, 1952, when it first learned that RFC entertained some question as to the district's authority, or if relator had developed these legal issues in connection with the injunction suit which Gregg and White instituted on March 27, 1952. Respondent and intervenors further contend that, since the district proceeded to advertise for and open bids, after learning that legal questions had been raised, and prior to receiving formal RFC authorization, it is not in a position to urge that the 'fruits' of such action will be lost if such litigation follows its normal course.

Trial court judgments may not be reviewed by certiorari where there is a plain, speedy and adequate remedy by appeal. First National Bank of Everett v. Tiffany, Wash., 242 P.2d 169. The adequacy of the remedy by appeal does not depend upon the mere question of delay or expense. State ex rel. Burkhard v. Superior Court, 11 Wash.2d 600, 120 P.2d 477. Such inadequacy is shown only where it is apparent to this court that it will not be able to protect the rights of litigants or afford them adequate redress, otherwise than through use of one of the extraordinary writs. State ex rel. Miller v. Superior Court, 40 Wash. 555, 82 P. 877, 2 L.R.A.,N.S., 395. Adequate redress by appeal does not exist where, by reason of the delay incidental to such procedure, the fruits of the litigation would be lost. State ex rel. Smith v. Superior Court, 26 Wash. 278, 66 P. 385.

The record here indicates that the low bids which have been received, as referred to above, are very favorable to the district, being approximately one million dollars below the estimates. There is evidence to indicate that if these bids must be rejected, the new bids obtained pursuant to readvertisement may be substantially higher. There is also evidence indicating that the delay incident to normal appeal procedure may, for engineering reasons, postpone completion of the project by a full year. In view of the present and prospective serious shortage of power in the Pacific northwest, as shown in the record, the district has a legitimate right to avoid such postponement, if possible.

The legal questions which had to be decided were not definitely known until the plan and system resolution was adopted. This resolution could not be adopted until the loan authorization was received from RFC. The authorization was granted on March 28, 1952; the resolution was adopted on April 7, 1952; and the application for writ of mandate was filed the following day. The mandamus action was therefore instituted as soon as reasonably possible, and it was expeditiously pursued.

While the district advertised for bids with full knowledge that certain legal questions had to be settled, and prior to receiving formal RFC authorization for the loan, its legal right to do so has not been questioned. Moreover, the district's action in this regard was in direct response to the insistent urging of the defense electric power administration.

In Bayha v. Public Utility District No. 1, 2 Wash.2d 85, 97 P.2d 614, we permitted certiorari, where it appeared that the relator would otherwise lose the fruits of a contract it had entered into for the purchase of electric distribution properties in Aberdeen. In the instant case, the fruits of litigation which the district seeks to...