Court Opinion

ID: 9631873
Source: CourtListenerOpinion
Date Created: 2023-08-22 10:53:39.008247+00
Date Added: 2024-06-11T12:29:53.669509
License: Public Domain

BRAND, C. J.,
DISSENTING.
I dissent. I join in the opinion of Mr. Justice Lusk and shall not duplicate the able discussion of the authorities which appears in his opinion.
In the welter of authorities, pro and con, we are in danger of overlooking the reasons of public policy which underlie statutes and decisions relative to the methods by which the validity of annexations to cities may be tested. We will first consider what the plaintiff, being aggrieved by the proposed annexation, had a right to do in the protection of his interests. It is undisputed that the attempted annexation was undertaken pursuant to Chapter 210, Oregon Laws of 1949. Under that statute the city was required to give notice of the election for four successive weeks, both by publication and by posting. The plaintiff was therefore fully advised concerning the proposed annexation before the election, which was held on 10 February 1950. Under the same statute, the legislative body of the *221city of Estacada was required to proclaim such, annexation by a proper order or ordinance “which will create an official city record.” The recorder of the city was then required to transmit a certified copy of such order to the Secretary of State. Under the statute, an annexation becomes complete only upon the filing of the required instruments with the Secretary of State. I think it is clear that the plaintiff might have brought a suit for injunction to restrain the recorder from filing with the Secretary of State the certification of the election. Although there may be a conflict of authority on the point, I think it is also clear that the plaintiff might have sought, by proper proceeding, a declaratory judgment prior to the filing with the Secretary of State. The remedy which was open to it at that time involved no collateral attack upon any de facto public corporation. Any rights which the plaintiff had could have been asserted and adjudicated in such a proceeding.
We will next consider the results which necessarily follow from the procedure actually adopted by the plaintiff. The undisputed evidence in this suit, which was brought as one for injunction, but which the majority considers to be for a declaratory judgment, shows that since the purported annexation, the city of Estacada has put in 2300 feet of new water main in the annexation area at a cost of over $4000, and has done “a lot of improvement work on the road down through this new annexed territory. ’ ’ The evidence also shows that further improvements were intended but were discontinued when the suit was filed by the plaintiff. The record also shows that following the purported annexation the city proceeded with an election for the adoption of a new charter for the city, as enlarged by the election of 10 February 1950. The legislative *222charter of the city established no procedure for the adoption of a new charter by the voters nor was any such provision made in any charter amendment prior to the adoption of the Estacada charter of 1950 which was adopted by the voters of the city as enlarged by the annexation proceedings. We must assume that the new charter was enacted pursuant to the powers vested in every municipality as to “local, special and municipal legislation, of every character, in or for their respective municipalities * * Constitution of Oregon, Article IV, § la. The new charter is on file in the Supreme Court Library. It accomplished no annexation of territory. It merely purported to adopt an entirely new charter for the city, as enlarged by the previous annexation procedure. It is apparent that the preparation of the new charter following the annexation proceedings, its consideration by the city council, and the publication of required notices of election, must have consumed most of the time from the date of the annexation proceedings until the filing of plaintiff’s suit herein. The suit was filed on 4 May 1950 and the charter amendment was adopted on 18 May 1950, after which the supplemental complaint herein was filed. The resolution proclaiming the adoption of the charter of 1950 shows that the votes cast in the entire area, including the annexed portion, were counted without segregation.
In the majority opinion it is suggested that the construction of water mains in the annexed area immediately following the annexation election was done under a statute, OCLA, § 114-121, authorizing cities to furnish water outside of their corporate limits. This is a tortured construction of plain evidence. Furthermore, the evidence concerning the road work done in the annexed area and the facts concerning the prepara*223tion of the new charter are undisputed. On what authority does the majority say that evidence of the exercise by the city of its municipal functions in the annexed area was “inadmissible’ ’ ? And by what other method could de facto status be established? It is apparent that this little city was actively engaged in the exercise of its municipal functions over the purportedly annexed area and that in such exercise it must have entered into contracts, expended money, and have taken all of the preliminary steps necessary for the submission to the voters of the 1950 charter. Under the authorities exhaustively examined by Mr. Justice Lusk it is clear that the city of Estacada, as enlarged by the annexation proceedings, was a de facto corporation.
The reason for the rule which makes quo warranto the exclusive remedy in cases of this ldnd is apparent. A private party should not be permitted to take action which will retroactively invalidate official action by the city when it could have obtained complete relief at an earlier time without hardship to anyone. The result of the bringing of this private suit will be the invalidation of the entire attempted annexation. Thus, a private litigant will be permitted to assume the function which expressly vested in the state under the quo warranto statute. We are not dealing with mere rules of procedure which may be adopted or rejected at the option of the court. The public policy of the state has been expressed in statutory form and the decisions of this court which have held that quo warranto is the only available means of collateral attack upon a de facto corporation constitute merely the necessary application of the statutory policy. If the plaintiff prevails in this suit, then in what position will the city find itself ? Who will be liable for the money expended ? *224Will some contractor lose because he cannot sue the city under an improvement contract, or will the city officials be required to pay all of the expenses incurred in the public improvements and in the preparation and submission of the charter amendment to the people? It is unnecessary to decide where the loss will fall, but fall it will, and all because the private plaintiff who could have enjoined the filing of the certificate with the Secretary of State saw fit to wait until the damage was done.
This is a little ease involving a small municipality with only 150 or 200 voters, as indicated in the resolution adopting the 1950 charter. But it is a case with big implications in the law. If a private taxpayer can retroactively invalidate a municipal annexation after four or five thousand dollars have been expended, then he could do it in another case when a hundred thousand dollars had been expended, and he could do it after sitting by and watching the city officials taking the action which might bankrupt them or the city they represent.
I agree with all of the members of the court upon one point. In a proper action, taken by a proper party-plaintiff, at a proper time, the purported annexation should be held void in its entirety. But, if this kind of action can be brought in this case, it can also be brought when untenable grounds or no grounds exist for the invalidation, and municipalities can be hounded and compelled to defend themselves against suits brought too late at the individual whim of a private litigant. It was for the purpose of preventing this very type of litigation that the quo warranto statutes were enacted in this state. Under the provisions of OCLA, § 8-804, the action may be maintained in the name of the state upon the relation of a private party, but *225“The actions provided for in this chapter shall be commenced and prosecuted by the prosecuting attorney * * *.” OCLA, §8-806. The relator merely verifies the pleadings in behalf of the state “as if he were the plaintiff in the action * * *.” OCLA, § 8-806. If the relator has an interest in the question he “shall be deemed a co-plaintiff with the state.” OCLA, § 8-806. Under the provisions of OCLA, § 8-807, it is made the duty of the prosecuting attorney to commence such action in every case of public interest “whenever he has reason to believe that a cause of action exists and can be proven, and also for like reasons in every ease of private interest only in which satisfactory security is given to the state to indemnify it against the costs and expenses that may be incurred thereby.” OCLA, § 8-807. These sections of the statute contemplate that the proceedings brought for the purpose of testing the incorporation or enlargement of a municipal corporation should be under the control of the state acting through its district attorney. It would be of interest to inquire why these precautions were adopted by the legislature for the protection of de facto corporations when attacked in the conventional manner by quo warranto if the identical relief sought could be obtained by a suit for injunction or for a declaratory judgment under the sole control of a private litigant. In determining whether a given procedure is appropriate, this court should not be influenced by the fact that it has decided in advance who ought to win. If the'procedure adopted is correct, then it is correct regardless of the question as to whether the plaintiff or the defendant is entitled to win on the merits.
In State ex rel. v. School District No. 23, 179 Or 441, 172 P2d 655, an action was brought by the state *226upon the relation of a private person seeking an adjudication that an order consolidating several school districts was invalid. The order was entered on 14 June 1945 and became effective on 1 July 1945. In September, pursuant to an election which had been held, a resolution was adopted for the sale of bonds, and on 19 November the bonds were awarded to the successful bidder, whereupon the action in quo warranto was instituted seeking an adjudication that the district was invalidly organized and seeking an injunction restraining the delivery of the bonds. The case has been reviewed in the dissenting opinion by Mr. Justice Lusk, but it is appropriate to mention here that the district was at least a de facto corporation, that it was not exempt from quo warranto proceedings, but that:
“* * * it does not necessarily follow that every person who chooses to denominate himself a relator and who seeks to challenge the validity of a municipal body which is engaged in administering public affairs, is at liberty to select his own time for launching the attack. * * *”
In a learned opinion by Mr. Justice Rossman, this court said:
“* * * When a relator is seeking to avail himself of such an extraordinary remedy, the courts are justified in viewing his application with scrutinizing eyes, especially if it appears that the defendant whose office is attacked is serving the public interests without compensation.”
The court then quoted with approval from State ex rel. Jackson v. Mansfield, 99 Mo App 146, 72 SW 471 as follows:
“ * * We think every interest of the state, such as the public peace, the security of person and property and the payment of the city’s debts would *227be impaired rather than promoted by setting aside the incorporation at this late date and leaving the citizens without organization, administration or corporate privileges.’ ”
Again we quote:
“* * * Nowhere is it averred that the state has displayed any interest whatever in this proceeding or in the questions and claims which the relator seeks to present. So far as appears from the agreed statement of facts, the state is satisfied with the defendant school district and does not challenge its validity. Again, returning to the agreed statement of facts, we find the following: ‘The relator demands judgment against the defendants * * *.’ Thus, it is the relator, and not the state, which seeks to blot out the defendant school district and throw into a condition of chaos the schools of that large area.”
The court pointed out that “a scant year passed from the entry of the consolidation order to the filing of this proceeding” and that no explanation of the delay had been given. It called attention to the deplorable results which would follow an adjudication of invalidity at that late date and said:
“* * * When anyone asks for a judgment attendant with such deplorable consequences, he should come prepared to explain his delay. * * *”
The court pointed out that the School District as a de facto corporation could defend itself against any proceeding which the plaintiff as an individual could maintain. It then held that even in quo warranto proceedings the plaintiff was barred by laches.
The essence of this recent case is that even though an action in the nature of quo warranto was brought, it savored so much of a private proceeding that the court refused to pass upon the issues concerning the *228legality of the consolidation. If this was good law in a quo warranto case, and I think it was, then how can this court adopt a more lenient rule when this suit is brought by a private party without even the semblance of any participation therein by the state, and where the only relief sought is the protection of that portion of the annexed territory owned by the plaintiff.
In School District v. School District, 34 Or 97, 55 P 98, District No. 115 brought mandamus against District 54 for purposes which need not be described here. The defense was that the plaintiff was not an existing corporation. After reciting the defendant’s contentions, Mr. Justice Bobekt S. Bean for this court said:
“These objections are, in our opinion, not available to the defendant, because the law is well established that the corporate existence of a school district, or other public or governmental corporation, created and organized under color of law, and in the exercise of its corporate powers, cannot be attacked, except in a direct proceeding instituted by the state for that purpose. * * *”
The court then quoted with approval from Clement v. Everest, 29 Mich 20, as follows:
“ * * it would be dangerous and wrong to permit the existence of municipalities to depend on the result of private litigation. Irregularities are common and unavoidable in the organization of such bodies, and both law and policy require that they shall not be disturbed except by some direct process authorized by law, and then only for very grave reasons. * * * ”
In State ex rel. v. School District No. 9, 148 Or 273, 31 P2d 751, 36 P2d 179, quo warranto proceedings were brought upon relation of a private party. The court cited with approval State ex rel. v. Cook, 39 *229Or 877, 65 P 89, to the effect that whether an action is brought on the information of the prosecuting attorney or on the relation of a private party “ ‘in either case, it is made the duty of the prosecuting attorney to commence and prosecute the action’.” (Italics mine.) The court then pointed out that it was the intention of the statute:
“* * * to confer upon private persons the right to have their interests determined by the court whenever the district attorney has reason to believe that a cause of action exists and can be proved, and the required indemnity has been given, and, in such case, to make it the duty of the district attorney to commence and prosecute the action to a final determination * * *"
In School Dist. No. 1 v. School Dist. No. 45, 148 Or 554, 37 P2d 873, this court quoted with approval from State v. Consolidated Independent School District, 193 Iowa 856, 186 NW 426, as follows:
“ ‘With full knowledge relators remained silent and permitted the organization of the district; witnessed the annual election in the following March; allowed the inauguration of a central school system; knew that the board of directors was entering into contracts with teachers and that taxes were being levied upon the property of the entire district, and finally upon the day a bond issue was voted asked leave of court to commence this cause of action. A recognition of such a right under the circumstances would cause irreparable injury to the district. ’ ’ ’
If the issue is to be considered one involving laches, then we should recognize that mere lapse of time in bringing a suit is not of the essence. It is delay which works injury to another which will bar relief to a litigant. If officials are acting to their detriment in reliance upon the existence of a valid annexation, then a short period of delay might well bar an action. If *230no action is being taken by the city, the mere lapse of many months might not constitute laches. See McIver v. Norman, 187 Or 516, 205 P2d 137, 213 P2d 144; City of Pendleton v. Holman, 177 Or 532, 164 P2d 434. The essential issue, however, is not laches, though it is related to that doctrine. The point is, that during the delay in the bringing of the suit, the defendant city acted promptly and aggressively in exercising its corporate functions, and that the action thus taken was of such a nature as to constitute the enlarged city a de facto municipal corporation.
It is argued that any person threatened with substantial injury by the enforcement of a void act of a municipality has the right to protect himself by injunction, but I find no rule of law which holds that an injunction is a proper remedy in all cases. Bemedies must be enforced at the time and in the manner provided by statute if an orderly system of procedure is to be maintained. It may be observed further that acts of municipal authorities involved in cases of this kind are not void if done by a de facto corporation, unless and until such acts are declared void in an action by the state. Furthermore there is no rule of law which provides that an injunction suit or a suit for a declaratory judgment may be brought by one party alone, when, by statute, the right to relief is vested only in two parties, the relator and the state. It is for this reason that we cannot construe the declaratory judgment statute as covering the case at bar. This case is not here on the pleadings alone. It was tried on the merits. Undisputed evidence was presented proving that the attack Avas being made against a de facto corporation. It then became the duty of the court to apply the rules applicable to such cases.
One other matter requires notice. The complaint *231alleges that the annexation was for the sole purpose of subjecting the plaintiff’s property to annexation without benefit. These allegations are denied by the answer. The case was tried upon the merits. In the concurring opinion by Mr. Justice Rossman it is said that we must assume that the city admits the foregoing allegation of the complaint, but the issue before us does not arise upon a demurrer to the complaint. "We are to determine on the entire record and testimony whether the remedy adopted is appropriate to the relief sought. The complaint itself alleges the adoption of the new charter for the enlarged area of the city. The undisputed evidence discloses that the city was in the active exercise of its municipal functions. If the pleadings and evidence show this to be an attack upon a de facto corporation, as I think they do, then it is our duty to apply the law as we find it.
The statute provides that an action at law may be maintained in the name of the state upon the information of the prosecuting attorney or on the relation of a private party when any number of persons act as a corporation without being duly incorporated. OCLA, § 8-804. The defendants are charged with acting as a corporation, having the boundaries which resulted from the annexation election, and the very essence of the case is that the city, as thus acting, was not duly incorporated. When enacted this statute was considered the exclusive remedy in eases of this kind. Our decisions have so held. The result of the majority decision is to render the statute mere surplusage in a wide field to which it has been held to apply. Hard cases make bad law, and this I think is such a case.
I am authorized to say that Mr. Justice Lusk and Mr. Justice Hay join in this opinion.