State v. Hastings

• Decision Date: 20 May 1922
• Docket Number: 16899.
• Citation: 207 P. 23,120 Wash. 283
• Court: Washington Supreme Court
• Parties: STATE ex rel. FIRST NAT. BANK OF CENTRAL CITY, COLO., v. HASTINGS, Mayor, et al. STATE ex rel. EMERSON v. SAME. STATE ex rel. WELDRICK v. SAME.

207 P. 23

120 Wash. 283

STATE ex rel. FIRST NAT. BANK OF CENTRAL CITY, COLO., v. HASTINGS, Mayor, et al.

STATE ex rel. EMERSON v. SAME. STATE ex rel. WELDRICK v. SAME.

No. 16899.

Supreme Court of Washington, En Banc.

May 20, 1922

Appeal from Superior Court, Jefferson County.

Petitions by the State, on the relation of the First National Bank of Central City, Colo., and on the relation of William H Emerson, and two causes on the relation of George Weldrick for writs of mandamus against, L. B. Hastings, as Mayor of the city of Port Townsend, and others, and from judgments therein, the relators appeal. The first and last cases are reversed and remanded, with instructions, while the second and third are reversed in part and remanded, with instructions.

In a proceeding in mandamus to compel city officials to levy general taxes to pay warrants issued in payment of judgments against the city, where the proceedings were begun several years ago, held, that relief should in no event call for the levying of taxes in excess annually of those authorized by Laws 1897, p. 222, Rem.Code 1915, § 5129 et seq., RCW 35.37.010 et seq.

Charles E. Shepard and E. H. Guie, both of Seattle for appellants.

Jas. W B. Scott and U. D. Gragey, both of Port Townsend, for respondents.

PARKER C.J.

The relators in these three cases sought in the superior court for Jefferson county writs of mandamus to compel the mayor and councilmen of the city of Port Townsend to levy taxes upon the taxable property within that city in pursuance of the provisions of chapter 84, Laws of 1897, for the purpose of paying certain indebtedness fund warrants of the city held and owned by relators, which warrants were issued in satisfaction of certain judgments rendered against the city by the superior court for that county. While the cases were not formally consolidated in the superior court for all purposes, they were all tried therein together by consent of all parties; some of the questions both of law and fact being common to all. The trial so had in the superior court resulted in findings and judgment in each case denying to relators any relief whatever, the judgments being rested upon the theory that all of the judgments in payment of which the warrants were issued were 'fraudulent and void,' and that therefore all warrants issued in payment thereof were issued without consideration, and do not now evidence any legal obligation or indebtedness against the city. From this disposition of the cases in the superior court the relators have appealed to this court.

Port Townsend was incorporated as a city by a special act of the territorial Legislature in 1881 (Loc. § Priv. Laws, p. 115). It became a city of the third class in the year 1896 under the general laws of the state enacted after its admission into the Union. The city has at all times since then been and remained a city of the third class, having less than 10,000 inhabitants. Being such a city, it concededly possesses powers and has imposed upon it duties, as provided by chapter 84, p. 222, Laws of 1897, reading in part as follows:

'Section 1. In all municipal corporations, having less than twenty thousand inhabitants, there shall be maintained a fund to be designated as 'current expense fund,' and, after the first day of February, 1898, a fund to be designated as 'indebtedness fund.' * * *

'Sec. 3. Such municipal corporations shall levy and collect annually a property tax for the payment of current expenses, not exceeding tne mills on the dollar, a tax for the payment of indebtedness (if any indebtedness exists) not exceeding six mills on the dollar, and all moneys collected from the taxes levied for payment of current expenses shall be credited and applied by the treasurer to 'current expense fund;' and all moneys collected from the taxes levied for payment of indebtedness shall be credited and applied to a fund to be designated as 'indebtedness fund."

Rem. Code, §§ 5129 and 5131.

It is to compel the city authorities to make sufficient tax levies in pursuance of this law, from year to year, to the end that relators' warrants be paid, that these cases were commenced and are being prosecuted. It is at once apparent that the principal questions to be here decided are as to the validity and binding force, as against the city, of the several judgments of the superior court for Jefferson county in payment of which the warrants here in question were issued.

Prior to the year 1893 the city constructed several local street improvements, and in payment therefor issued warrants against local improvement funds to be raised by special assessments to be levied against the property benefited thereby. The city failed to produce by special assessments sufficient funds to pay any of the warrants issued in payment of the improvements, which were held and owned by those who obtained the judgments here in question, at the time of their rendition. In October, 1893, the Bank of British Columbia, E. M. Johnson, the First National Bank of Port Townsend, and Emil Heuschober, each being then the owner and holder of certain of the unpaid local improvement warrants, commenced separate actions in the superior court for Jefferson county, being numbered 1258, 1259, 1260, and 1261, respectively, of the records of that court, seeking recovery of judgments against the city as general indebtedness of the city; each resting its or his claimed right of such recovery upon the ground that the city had negligently failed to produce from special assessments, contemplated to be levied to pay for the improvements and the warrants issued therefor, sufficient funds to pay any portion of such warrants then held and owned by each of those plaintiffs. The superior court sustained demurrers to the complaints in each of those actions, holding in effect that no cause of action was stated therein rendering the city liable as a general indebtedness. The plaintiffs in each of those actions electing not to plead further, judgment of dismissal was accordingly rendered against them, from which they appealed to this court. Those judgments were all thereafter, on February 11, 1897, reversed by this court and remanded to the superior court for further proceedings; this court holding that the complaints stated facts constituting causes of action against the city. Bank of British Columbia v. Port Townsend, 16 Wash. 450, 47 P. 896; Johnson v. Port Townsend, 16 Wash. 701, 47 P. 1103; Heuschober v. Port Townsend, 16 Wash. 701, 47 P. 1103; First National Bank of Port Townsend v. City of Port Townsend, 16 Wash. 702, 47 P. 1103.

Thereafter the city answered in each of those cases, and they proceeded to trial upon the merits, resulting in judgments in each case against the city, as a general indebtedness of the city in the several amounts prayed for, all of which judgments were rendered on February 1, 1898, and none of which were ever appealed from or in any manner set aside. In May, June, and July, 1895, the Merchants' Bank of Port Townsend, the Commercial Bank of Port Townsend, the Manchester Bank of New Hampshire, and Marcus A. Sawtelle, as receiver of the Port Townsend National Bank, each being the owner and holder of certain of the unpaid local improvement warrants, commenced actions in the superior court for Jefferson county, being numbered 1536, 1537, 1538, and 1539, respectively, of the records of that court, seeking recovery of judgments against the city as general indebtedness of the city; each resting its or his claimed right of such recovery upon the ground that the city had negligently failed to produce from special assessments, contemplated to be levied to pay for the improvements and the warrants issued therefor, sufficient funds to pay any portion of such warrants then held by each of those plaintiffs. The city answered in each of those cases, and they thereafter proceeded to trial upon the merits, resulting in judgment in each case against the city, as a general indebtedness of the city, in the several amounts as prayed for, all of which judgments were rendered February 5, 1898, and none of which were ever appealed from or in any manner set aside; the judgment in the case commenced by Sawtelle as receiver being finally rendered in favor of John Barneson, who had become assignee of the receiver's rights while that case was pending, and he being substituted as plaintiff therein. These eight judgments, as we view them, all have the same standing as to their validity. They all rest upon causes of action which are in substance of the same nature. There are involved in each of the three cases here on appeal warrants issued in payment of one of more of these eight judgments.

We first inquire as to the validity of those eight judgments, in so far as their validity is challenged upon the ground of fraud in procuring their rendition. It is contended in behalf of the mayor and council that they were all rendered in pursuance of an agreement between the local improvement warrant holders and the city authorities made in fraud of the rights of the city and its general taxpayers, upon causes of action which were not general obligations against the city. All of these judgments were rendered after the city had answered to the merits and after a trial upon the merits, as appears by the record in each case; in other words, upon the face of the records the judgments all appear valid in all respects. Touching the question of the alleged agreement between those judgment creditors and the city officials before the rendering of any of those judgments, we have the testimony of Mr. Hastings, as follows:

'Q. Do you remember whether or not during the year 1898 and 1897 you occupied any official position in the city of Port Townsend? A. About that time, I do not remember

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