Opinion ID: 1174938
Heading Depth: 1
Heading Rank: 4

Heading: the personal liability statute

Text: In 1931, the predecessor of ORS 294.100 was enacted and made a part of the local budget law. Or Laws 1931, ch. 380, § 1, p. 796. The proscriptive language of that statute remains essentially unchanged. [8] Since its enactment in 1931, this court has had occasion to cite the predecessor of ORS 294.100 only twice, and we have yet to apply the statute in a case seeking personal liability. In Tuttle v. Beem, 144 Or. 145, 24 P.2d 12 (1933), we held that the directors of a school district violated the local budget law by indebting the district for well drilling when that expenditure had not been submitted to the voters for approval. We made reference to the predecessor of ORS 294.100 as providing personal liability for unauthorized expenditures, although the remedy taxpayers sought was injunction to prevent the unlawful expenditure. Glines v. Bain, 157 Or. 358, 72 P.2d 33 (1937), involved another violation of the local budget law. The school district set teachers' salaries in excess of that approved by voters in the school budget. Taxpayers brought a declaratory judgment action to determine the validity of the district board's resolution fixing compensation in excess of the approved amount. We held that the board had no authority to exceed the budget and cited the predecessor of ORS 294.100. However, as in Tuttle, payments had not yet been made, and the issue of personal liability of public officials was not presented. The Court of Appeals has addressed this statute on previous occasions, all directly involving personal liability of public officials. Porter v. Tiffany, 11 Or. App. 542, 502 P.2d 1385 (1972); Bahr v. Marion County, 38 Or. App. 597, 590 P.2d 1240 (1979); Bear Creek v. Hopkins, 53 Or. App. 212, 631 P.2d 808 (1981); and Umrein v. Nelson, 70 Or. App. 104, 688 P.2d 419 (1984). In Porter v. Tiffany and Bear Creek v. Hopkins , the public officials had neither express nor implied authority for their expenditures. In Bahr v. Marion County , and Umrein v. Nelson , the court remanded the case to determine whether the source of authority defendants relied upon actually authorized the challenged expenditure. What triggers an obligation to repay improperly expended funds under ORS 294.100, is an expenditure for a different purpose    than authorized by law. Two important questions are, first, whether the expenditures challenged here were authorized but for the alleged violation of the election law, ORS 260.432, or were unauthorized irrespective of that alleged violation, and second, whether the reference to unauthorized expenditures in ORS 294.100 includes the unlawful use of otherwise authorized expenditures or only expenditures for which no authority exists in the first place. The answer to the second question has importance well beyond the particular kinds of expenditures challenged in this case. As we read ORS 294.100, it includes the unlawful use of otherwise authorized expenditures. We have already pointed out that the older cases from other states interpreted statutes of authorization restrictively and limited government advocacy unless such activity was explicitly authorized. The analysis seems artificial now, however, because with expenditures other than for speech activities, it is unlikely that the same restrictive interpretation would be applied. The better analysis is to recognize that broad grants of authority were intended to be broadly construed. In this way, activities which further a government's or agency's delegated responsibility may be pursued without undue limitation. On the other hand, broad grants of authority cannot save expenditures illegal under other laws. In this case the same law-making body which delegated authority has prohibited certain uses of public funds. We read the authorizing and prohibiting statutes as a coherent whole, that is, the authorizing statute must be read in conjunction with prohibitions found in other laws so that authority for government action, though broad, extends only to those activities not prohibited by law.