No. 14458 

IN THE SUP- COUHT OF THE STATE OF MXfTANA 

1979 

Plaintiffs and Appellants, 

CITY OF BILLINGS, et al., 

Defendants and Respondents. 

Appeal £ram: District Court of the Thirteenth Jdicial District, 

Hon. Charles Luedke, Judge presiding. 

Counsel of Record: 

For Appellants: 

Fillner and Pitet, Billings, Mntana 

Russell K. Fillner argued, Billings, Mntana 

For Respondents: 

Peterson and Hunt, Billings, Mntana 

K. D. Peterson argued, Billings, bntana 

Submitted: March 16, 1979 

Decided: JUN 2; 1979 

Filed: JUN 2. 19@ 
Mr. Justice John C. Sheehy delivered the Opinion of the Court. 

Plaintiffs Arthur and Rachel Schanz appeal from 

the judgment of the District Court, Yellowstone County, 

which dismissed their claim that annexation by the defendants 

City of Billings, et al., of certain property known as the 

Hayes Subdivision was ineffective, dismissed their claim 

that the Hayes Subdivision should not have been zoned R-7200 

when it was annexed, and ordered that plaintiffs' application 

for a zone change be heard and reconsidered in accordance 

with criteria set forth in this Court's decision in Lowe 

v. City of Missoula (1974), 165 Mont. 38, 525 P.2d 551. 

Arthur Schanz has been in the construction business since 

1953. In December 1971, Schanz purchased real property known 

as the Hayes Subdivision, comprised of twenty lots situated 

outside of, but contiguous to, the city limits of Billings, 

Montana. During construction of a four-plex apartment on the 

land, which began in June 1972, Schanz discovered that the 

City's water and sewer services would not be extended to 

the subdivision unless the property was annexed. 

Schanz took no action on the matter for approximately 

one year, but in the meantime enlisted the services of a 

registered engineer, made arrangements with a contractor 

to install water and sewer lines, and continued with his construction work in the subdivision. 

On July 5, 1973, the registered engineer, acting in 

Schanz's behalf, applied to the City for permission to extend 

water and sewer lines to the Hayes Subdivision. The Public 

Utilities Board approved the application, and on July 16, 
the City Council approved the requested extensions 

"subject to annexation". 

A request to extend city boundaries to include the 

Hayes Subdivision appeared on the City Council agenda on 

August 6, 1973, and the resolution of intent to extend the 

boundaries of the City of Billings was adopted the same day. 

Notice of the resolution was published and the matter came 

before the City Council for final action on September 10, 

1973, resulting in an expansion of the City's boundaries to 

include the Hayes Subdivision. 

The City Zoning Commission sent its recommended zoning 

classification to the City Council on September 10, the same 

day the resolution was passed to extend the City's boundaries. 

A notice of public hearing fixing October 1, 1973, as the 

date of hearing before the City Council was posted September 

13, 1973, by the City clerk. No one appeared to speak in 

favor of or against the Commission's recommendation and the 

City Council adopted the recommendation by passage of Ordinance 

No. 3744 on October 1. The land on which the four-plex 

had been built was classified R-6000 (multi-family dwellings) 

and the remainder was given a R-7200 classification (single 

family dwellings and duplexes only). 

Schanz did not attend any of the proceedings affecting 

the property. However, he did continue his construction 

activities, and by October 1973, Schanz had built or had 

under construction two four-plexes and three single family 

dwellings. When Schanz applied to the City for more building 

permits and was refused because of the R-7200 zoning classification, he began what was to be a continuous series of efforts 

to be exempted from zoning regulations. 

On or before February 11, 1974, Schanz applied for 

a zone change to allow for construction of more four-plexes. 

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Persons living adjacent to the subdivision filed a protest 

(the subdivision is surrounded by a R-9600 classificationsingle family dwellings only). After failing to secure 

a zone change, Schanz applied for a variance. The variance 

was denied, and on March 3, 1975, Schanz again petitioned for 

a zone change. The City Council denied the zone change on 

April 28, 1975, reconsidered the application and denied it 

again on May 19, 1975. The procedure was repeated with 

the same result in June 1976. 

This action was filed in District Court, Yellowstone 

County, on September 3, 1976, to have the annexation resolution 

declared null and void, to have the zoning classification 

removed, or alternatively, to secure a zone change. On 

July 24, 1978, the Honorable Charles Luedke entered judgment 

dismissing the first and second claims and ordering that 

the application for a zone change be reconsidered in accordance 

with the criteria set forth in Lowe. 

On appeal, plaintiffs present three issues: 

1. Can an initial zone classification be made when 

the notice and hearing on the matter by the City Zoning 

Commission and City Council came before the affected area 

was annexed by the City? 

2. Can an initial zone classification be made when 

the City Zoning Commission and City Council failed to comply 

with the twelve-point test set forth in section 11-2703, 

R.C.M. 1947, now section 76-2-304 MCA, and this Court's 

decision in Lowe? 

3. Are plaintiffs estopped from asserting that the 

procedure for annexing the land was fatally defective, 

rendering the annexation void? 

The Zoning Commission for the City of Billings held a 

hearing on September 10, 1973, to consider the zoning 

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recommendation to be sent to the Billings City council 

for the Hayes Subdivision. Notice of the hearing had been 

published August 16, 1973. Following the hearing, the 

Commission decided on a recommendation and sent it to the 

City Council. The recommendation reached the City Council 

approximately five (5) hours before the resolution annexing 

the Hayes Subdivision was passed. Plaintiffs contend this 

procedure violated section 7.03 of the Billings Zoning 

Ordinance, and Article 11, Section 8 of the 1972 Montana 

Constitution. Section 7.03 of the zoning ordinance provides: 

"When a parcel of land lying outside the 

corporate limits of the City of Billings 

and within the Yellowstone County Zoning 

jurisdiction is annexed to the City of 

Billings, the property shall retain the 

classification it has in the County but 

will be reviewed by the City Zoning Commission and a recommendation sent to the 

City Council either reaffirming the County 

classification or change the zoning classification, within (90) ninety -- days of 

passage -- of the final resolution of annex- - ation." (Em~hasis added.) 

Practically the same rules of construction apply to 

an ordinance as apply to a statute. State ex rel. Bennett 

v. Stow (1965), 144 Mont. 599, 399 P.2d 221. If the language 

of an ordinance is plain and unambiguous, it is not subject 

to interpretation or open to construction but must be accepted 

and enforced as written. Sheridan County Electric Co-op, 

Inc. v. Montana-Dakota Utilities Co. (1954), 128 Mont. 84, 

Section 7.03 does not prohibit the Zoning Commission 

from sending a recommendation before the final resolution of 

annexation is passed. It merely requires that the recommendation 

be sent no later than ninety days after the annexation resolution 

is passed. There is no problem here with property being zoned 

prior to annexation. The annexation resolution, passed on 

September 10, 1973, went into effect on October 10, 1973, 
pursuant to section 11-1106, R.C.M. 1947, now section 7-5- 

4203(1) MCA. The actual zoning ordinance was not passed 

until October 1, 1973, and similarly did not take effect 

until thirty days later, on October 30, 1973. Consequently, 

the Hayes Subdivision was given a zoning classification some 

twenty days after the property was annexed by the City of 

Billings. The problem here is that the City Zoning Commission 

transmitted its recommendation to the City Council approximately 

five hours before the Council acted on the annexation resolution. 

Section 7.03 of the zoning ordinance does not require that 

the recommendation be sent after the annexation resolution 

passes and this Court will not impose such a requirement. 

Plaintiffs fail to explain how their rights under 

Article 11, Section 8 of the 1972 Montana Constitution have 

been violated. Article 11, Section 8 provides: 

"Riaht of 

to afford 

Participation. The public has 

to expect governmental agencies 

such reasonable opportunity for 

citizen participation in the operation of 

the agencies prior to the final decision 

as may be provided by law." 

The City Zoning Commission published a notice of public 

hearing on August 16, 1973. The hearing was held on September 

10, 1973. Then the City clerk of Billings published a notice 

of public hearing by the City Council on the subject of the 

Zoning Commission's recommended classification. The hearing 

was held on October 1, 1973 and no - person attended. Plaintiffs 

were given a reasonable opportunity to participate and failed 

to do so. 

On July 22, 1974, this Court decided the case of Lowe, 

which involved an appeal from a judgment of the District Court 

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upholding an ordinance passed by the Missoula City Council 

rezoning certain residential property. The plaintiffs 

challenged the adoption of the ordinance on the grounds that 

the ordinance had not been adopted in accordance with the 

provisions of section 11-2703, R.C.M. 1947. 

Section 11-2703, R.C.M. 1947, now section 76-2-304 MCA 

sets forth guidelines a City Council must follow in its 

regulation of land: 

"11-2703. Purposes -- of act. Such regulations 

shall be made in accordance with a comprehensive 

plan and designed to lessen congestion in the 

streets; to secure safety from fire, panic, and 

other dangers; to promote health and the general 

welfare; to provide adequate light and air; to 

prevent the overcrowding of land; to avoid undue 

concentration of population; to facilitate the 

adequate provision of transportation, water, sewerage, schools, parks, and other public requirements. 

Such regulations shall be made with reasonable 

consideration, among other things, to the character 

of the district and its peculiar suitability for 

particular uses, and with a view to conserving the 

value of buildings and encouraging the most 

appropriate use of land throughout such municipality." 

In Lowe, this Court concluded that the record made by 

the City Council and relied on by the District Court was so 

lacking in fact information that it could not be said that 

the requirements of section 11-2703 had been followed. 

Precisely, the Court held that the District Court had abused 

its discretion in upholding the zoning ordinance in disregard 

of the contention that statutory law had not been followed 

in the enactment of the ordinance. 

A contention similar to that in Lowe was presented to 

the District Court in this case. The District Court failed 

to find merit in the contention however, and did not examine 

the City Council's record because passage of the zoning 

ordinance on October 1, 1973, predated the decision in Lowe. 

Plaintiffs seek to have the District Court's conclusion 

overturned for the reason that the statute providing the steps 

a City Council must follow in its regulation of land was in 
existence long before the Lowe decision was handed down. 

We agree with the plaintiffs on this point. It was not 

the Lowe decision that created a twelve-point test for 

adopting zoning ordinances. Rather, section 11-2703, originally 

enacted in 1929, mandated the consideration of twelve independent 

factors prior to the passage of any zoning ordinance. 

Defendants do not dispute plaintiffs' allegation concerning 

the inadequacy of the record, but instead contend that, due 

to language in Lowe, an initial zoning classification may not 

be disturbed by the courts. In Lowe, we said: 

"The city argues that under Montana's section 

11-2703, R.C.M. 1947, it cannot be charged 

with an abuse of discretion if the record 

indicates the City Council and the district 

court had before them reasonable evidence 

or testimony upon which they could find 

that one or more of the purposes of the 

enabling statute had been accomplished. Further, 

that the matter was largely within the council's 

legislative authority and there is a presumption 

that it had investigated and found the conditions 

to be such that the legislation which it enacted 

was appropriate and that the courts must hold 

that the action of the legislative body (the 

City Council) is valid. 

"While neither the trial court nor this Court can 

substitute its discretion for that of the City 

Council, the judiciary does have the power to find 

whether or not there has been an abuse of discretion. Freeman v. Board of Adjustment, 97 Mont. 

342, 34 P.2d 534. There is under Montana statutes 

and case law a sound distinction between "zoning" 

and the act of "rezoning" or granting or refusing 

a variance. The former constitutes a legislative 

act while the latter is more of an administrative 

or quasi-judicial act in applying provisions of 

existing ordinance or law. In such application 

the exercise of sound discretion is limited by 

the provisions of the statute, including such 

standards as are set forth therein. Low v. Town 

of Madison, 135 Conn. 1, 60 A.2d 774." 165 Mont. 

at 43. 

A review of authorities reveals no elemental distinction 

between the act of "zoning" and the act of "rezoning". A 

rezoning ordinance, like a zoning ordinance, is a legislative 

enactment, and is entitled to the presumptions of validity 

and reasonableness. Sundance Hills Homeowners Association 
v. Board of County Commissioners for Arapahoe County 

(1975), 188 Colo. 321, 534 P. 2d 1212, Smith v. Washington 

County (1965), 241 Or. 380, 406 P.2d 545; Bishop v. Town 

of Houghton (1966), 69 Wash.2d 786, 420 P.2d 368. See also: 

82 Arn.Jur.2d Zoning - and Planning S18, p. 414, and 1 Anderson 

American -- Law of Zoning S4.28. 

Although we depart here from the distinction expressed 

in Lowe between the acts of zoning and rezoning, we nonetheless continue to hold that where the information upon 

which a City Council and District Court act is so lacking 

in fact and foundation, it is clearly unreasonable and constitutes an abuse of discretion. An ordinance, whether it 

be enacted for the purpose of zoning or rezoning areas 

within City boundaries, is invalid unless made in accordance 

with the provisions of section 11-2703, now section 76-2- 

304 MCA. Therefore, this case must be remanded to the 

District Court in order that the City Council's record of 

considerations may be examined and reviewed in light of the 

twelve statutory requirements of section 11-2703. 

Finally, the District Court found that the City Council's 

resolution of intention to annex did not describe plaintiffs' 

property with sufficient particularity, but held that 

plaintiffs were estopped from challenging the annexation for 

lack of notice because (1) the annexation process was initiated 

by the plaintiffs, (2) because the annexation was for the 

plaintiffs' benefit, and (3) because the plaintiffs enjoyed 

the benefit of water and sewer services for three years before 

challenging the legality of the annexation ordinance. 

"The general rule that property owners are estopped by 

reason of a long-continued acquiescence to question directly 
the validity of the extension of the boundaries of a 

municipality seems to be well-settled". 56 Arn.Jur.2d 

Municipal Corporations 880, p. 134; see also, 101 A.L.R. 

581. An explanation of the rule appears in Finucane v. 

Village of Hayden (Idaho 1963), 384 P.2d 236: 

"The general rule which respondents seek to 

invoke is stated in McQuillin Municipal 

Corporations, 3rd Ed., Vol. 2, 57.09, in the 

following language, "If the elements of 

estoppel are present, the owners of land 

over which the municipal corporation has 

exercised the powers and functions of government for a long period of time will be 

estopped from questioning the location of 

the municipal boundaries.' Such rule has 

application even though the proceeding by 

which the municipal boundaries were extended 

are void, when by reason of lapse of time 

the municipal authority has been exercised 

and there has resulted changed conditions 

involving extensive public and private 

interests. State ex rel. West v. City of 

Des Moines, 96 Iowa 521, 65 N.W. 818, 31 

L.R.A. 186. 

"Such holdings are based upon public 

policy. Where a municipal corporation and 

the parties affected acquiesce in such action 

by the officials of the corporation, and transact 

business upon the theory that the land is 

located within the boundaries of the municipality 

it is in the interest of the general public that 

such a rule be applied." 

Plaintiffs contend the City's requirement that property 

be annexed prior to extension of water and sewer services 

is tantamount to coercion and thereby renders principles 

of estoppel inapplicable to this case. However, plaintiffs 

have not considered section 11-1001(4), R.C.M. 1947, now 

section 7-13-4314 MCA which states: 

"(4) Any person, firm or corporation receiving water 

or sewer service outside of incorporated 

city limits may be required by the city or 

town as a condition to initiate such service 

to consent to annexation of the tract of 

property served by the city or town. The 

consent to annexation is limited to that 

tract or parcel or portion of tract or parcel 

that is clearly and immediately and not 

potentially being serviced by the said water 

or sewer service." 
Under the facts presented in this case, the District 

Court properly concluded that plaintiffs were estopped 

from challenging the legality of the annexation ordinance. 

Remanded with directions. 

We Concur: 

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Chief Justice 

Ju ces