Court Opinion

ID: 4001389
Source: CourtListenerOpinion
Date Created: 2016-07-06 10:58:01.776079+00
Date Added: 2024-06-11T13:56:13.427864
License: Public Domain

The crucial question, on the merits of this appeal, is whether, after judgment has been entered upon remittitur from this court, in a condemnation proceeding, the condemnor, a public utility district, may amend or supplement its formal resolution upon which the condemnation action was based and carried to completion, and then, on the basis of such amended or supplemental resolution, issue its bonds in excess of the amount authorized by the original resolution. I am of the opinion that this cannot lawfully be done.
The right of eminent domain possessed by a public utility district is in all respects statutory and that right must be exercised strictly in accordance with the statute relevant thereto; otherwise, the whole proceeding is void and of no effect. We have repeatedly held that statutes of eminent domain, the acknowledged purpose and object of which are to take from the owner his private property and his rights therein, must be strictly construed. Strong language has been used by this court in the enunciation of that principle.
"The power of eminent domain is a power which interferes with an individual's primary right of use, possession and ownership of property, and we are not inclined to extend this power beyond the plain provisions of the law." Dunbar, J., in Spokane v. Colby,16 Wash. 610, 48 P. 248.
"Again, it is the well established and universal law that statutes delegating the right of eminent domain to corporations, being in derogation of common rights, are not to be extended by implication, but are to be strictly construed." Dunbar, J., inSeattle v. Fidelity Trust Co., 22 Wash. 154, 60 P. 133.
"Condemnation statutes, overriding, as they do, the high right of private property, and being in derogation of common right, must be strictly construed." Hadley, J., in State ex rel.Attorney General v. Superior Court for Chelan County, 36 Wash. 381,78 P. 1011. *Page 737 
"Statutes of eminent domain being in derogation of the common right must be strictly construed, both as to the extent of thepower and as to the manner of its exercise." (Italics supplied.) Ellis, J., in State ex rel. Postal Telegraph-Cable Co. v.Superior Court for Grant County, 64 Wash. 189, 116 P. 855.
Identical or similar statements of this principle are made inState ex rel. Bremerton Bridge Co. v. Superior Court, 194 Wash. 7,76 P.2d 990, and State ex rel. Wirt v. Superior Court,10 Wash. 2d 362, 116 P.2d 752.
This principle is so thoroughly embedded in our law and so vitally an element of the "high right of private property" that it is not to be eviscerated or undermined by any so-called rule of "liberal construction" or by any legislative declaration to that effect.
The relevant statutes involved in this proceeding are, as stated in the majority opinion, Rem. Rev. Stat., §§ 11610(b) and 11611. Section 11610(b) prescribes the manner in which the right of eminent domain shall be "exercised," how it shall be "instituted," and how it shall be "conducted." The right is to be exercised and instituted by "resolution of the commission" and is to be conducted in the same manner and by the same procedure as is or may be provided for the exercise of the power of eminent domain by incorporated cities and towns of this state. Section 11611 provides that whenever the commissioners of the public utility district shall deem it advisable to acquire by purchase, condemnation, or construction any public utility
". . . the commission shall provide therefor by resolution, which shall specify and adopt the system or plan proposed, and declare the estimated cost thereof, as near as may be, andspecify whether general or utility indebtedness is to be incurred, the amount of such indebtedness . . ." (Italics supplied.)
In both of these sections of the statute the language is mandatory, not directory or permissive. Throughout the condemnation proceeding, from its initiation to the time of final judgment on remittitur from this court, the commission *Page 738 
recognized and followed these mandatory requirements. On December 21, 1939, the commission adopted resolution No. 17 entitled
"A RESOLUTION establishing a public utility and providing for the acquisition, by purchase or condemnation, of certain works, plants and facilities for the generation, transmission and distribution of electricity, and the construction of certain additions and betterments thereto and extensions thereof, specifying and adopting a system or plan therefor, creating certain special funds, and authorizing the issuance and sale of revenue bonds in an amount not exceeding $2,000,000." (Italics supplied.)
Section 5 of the resolution provides:
"In order to carry out the plan or system herein specified and adopted, the District shall issue and sell its revenue bonds in an amount not exceeding $2,000,000." (Italics supplied.)
At the same time, the commission adopted resolution No. 18 authorizing its attorneys to commence condemnation proceedings for the acquisition of the property here involved and expressly stating that compensation for the taking of such property and for any incidental damages "shall be" paid and payable only from the proceeds of sale of the bonds authorized by resolution No. 17.
Pursuant to these resolutions, and basing its action directly and wholly thereon, the commission instituted a proceeding for the condemnation of the property with which we are here concerned, the resolutions being attached to and made parts of its petition. On June 9, 1941, after an intermediary appeal to this court had been determined, the commission obtained from the superior court a decree adjudging the taking of the property to be a public necessity and for a public use. That decree recited specifically that the taking of the property "is necessary to the carrying out of the system or plan specified and adopted in and by resolution No. 17 of said Public Utility District No. 1 of Okanogan County, adopted December 21, 1939."
On the basis of that same resolution the proceeding was thereafter prosecuted to final judgment entered on October *Page 739 
30, 1944, as directed by this court on a subsequent appeal in the matter.
By the time the final judgment had been entered, resolution No. 17 had accomplished its purpose. It had served as the sole basis for the commencement of the action, and it had set the limits of any bond issue from the proceeds of which the judgment fixing the amount of compensation to the property owner was to be satisfied. In other words, the resolution as such had spent its force and thereafter inhered in the final judgment consequent upon the decree of public necessity and use.
Despite this situation, the commission on November 30, 1944, which was over a month after the above proceeding had been concluded, took the action which has precipitated this controversy. As stated in the majority opinion,
"On November 30, 1944, the district, as a step toward financing the transaction, purported to amend or supplement the resolutions of 1939, upon which the condemnation action was based, by providing for a bond issue of a face value of $2,702,000, a much larger amount [by the sum of $702,000] than that contemplated by the resolutions passed in 1939."
The commission sought to accomplish that objective by passing resolution No. 48, a document consisting of thirty-nine typewritten pages. That resolution began by amending the title to resolution No. 17 so as to authorize the issuance of bonds in a sum not exceeding $2,702,000, instead of $2,000,000. It then specifically repealed a number of sections of the original resolution, amended many others, added twenty new sections, and concluded with a section reciting that "all resolutions or parts of resolutions in conflict herewith, be and the same are hereby repealed." Section 19 of the new resolution provided that the fund thereby created shall be drawn upon solely
". . . for the purpose of purchasing, condemning, constructing, or otherwise acquiring the electric public utility herein provided for, repairs, improvements, extensions and betterments thereto and expenses incurred incidental thereto." (Italics supplied.) *Page 740 
Obviously, the commission and Ballard-Hassett Company, the prospective purchaser of the bonds, thought it necessary to pass resolution No. 48 in order to validate the results of the condemnation proceeding, else they would not have taken the meticulous pains to formulate and pass it. In that conception, I think they were correct, provided the resolution had that legal effect. But it is right at this point that I disagree with respondents' contentions and with the results of the majority opinion.
Resolution No. 17 specified and adopted the system or plan under which the utility was to be acquired, and specified the amount of bonds ($2,000,000) to be issued for that purpose. The provision relative to the issuance of bonds, their purpose, their amount, and their payment was as much a part of the "system or plan" as was the method of acquisition of the utility. Hansardv. Green, 54 Wash. 161, 103 P. 40; Uhler v. Olympia,87 Wash. 1, 151 P. 117, 152 P. 998; Bremerton v. North PacificPublic Service Co., 243 Fed. (D.C. Wash.) 980.
It cannot be gainsaid that the chief factor in this entire proposed venture was the cost of the property to be acquired. The figures before us establish the fact that resolution No. 48 proposed an increase of $702,000, resulting from the verdict of the jury. That constituted an increase of thirty-five per cent over the amount prescribed in resolution No. 17. Certainly, that amount must be considered as an impressive sum and a material change from the contemplated cost. Had the commission proposed to raise that amount by general indebtedness bonds, to be voted upon by the residents of the district, it is at least questionable that such proposition would have carried. Since the amount of the bonds and the method of their payment were as much a part of the "system or plan" as was the method of acquisition of the utility, and since there was a material change in a vital part of the "system or plan," it must follow that the "system or plan" as a whole was materially and vitally changed. In my opinion, such change could neither be imposed upon the former resolution, which had been carried through to final judgment, nor find support *Page 741 
in the proceedings already completed. It would, in my opinion, necessitate a new proceeding, based upon the new and different resolution.
The majority opinion advances a suggestion (made by the respondents) and puts forward two reasons upon which the action taken by the commission should be confirmed.
The suggestion is that, under the rule of "liberal construction" prescribed in the legislative act here involved, the provision requiring that the resolution state the amount of the indebtedness to be incurred, is not mandatory but only declaratory "where the funds to be used to pay for the property condemned are to be secured by issuing bonds having no other security behind them than the rosy prospects of the venture." It seems to me that if a bond issue of $2,702,000 has no greater security behind it than the "rosy prospects of the venture," there is all the more reason for an official resolution making known that intention. Implicit in the suggestion is the disquieting thought that the ultimate purchasers and holders of these bonds may some day sustain a shock that will not be so "rosy." Aside from all that, however, the conclusive answer to the suggestion is that the statute, quoted above, categorically states that the resolution shall specify the amount of the indebtedness, whether general or utility in character.
The majority opinion then expresses the tentative view that the question now under consideration cannot be raised at this time, since it could, and should, have been raised on the appeal in the condemnation proceeding. Strange to say, respondents in their brief assert that while the condemnee "probably" lost all its rights to restrain the action of the commissioners by its (the condemnee's) failure to appeal from that portion of the judgment in the condemnation case which provided that upon payment of a sum in excess of $2,000,000, a decree of appropriation would be entered, still, say the respondents, if the condemnee has not lost its right to thus complain, and if it may raise any question concerning the power of the commissioners to use the money in excess of $2,000,000, that *Page 742 
question should be raised in the condemnation case at the timethe money is paid into court and the decree of appropriationpresented to the court for signature.
In my opinion, that question could not have been raised on the former appeal, for the simple reason that no action had been taken by the commissioners at that time to issue the public utility district's bonds in an amount in excess of $2,000,000. The commission had no assurance at that time that anyone would purchase its bonds aggregating a greater amount. It was not even known that the commission would accept the award of compensation made by the jury. It was not until November 30, 1944, that the commission entered into a final and binding agreement with Ballard-Hassett Company for the purchase and flotation of its bonds in the sum of $2,702,000. It would have been premature for the condemnee to raise the instant question at the time of the former appeal.
Finally, and as the chief reason for its conclusion, the majority opinion declares that if the condemnee receives the full amount adjudged to it in the condemnation proceeding, it will have been denied no right, nor will have suffered any damage. With reference to the appellants other than the condemnee, the majority opinion takes the further position that the powers of the commission are so broad and untrammeled that it could have fixed the amount of bonds to be issued at any figure it desired, even to the extent of $5,000,000; that such action would not have been subject to review by anyone whomsoever; and that the only restraint upon the commission was of a moral nature, "as, for example, not to issue bonds in such amounts that there can be no surety that they can be serviced and finally retired by such revenue as the utility may be reasonably expected to enjoy."
First, with respect to the rights and remedies of the condemnee, the principal appellant: The condemnee was not concerned alone with the amount of compensation to be awarded to it by the jury for the appropriation of its property. It was not a willing vendor seeking a purchaser of a utility which it was then successfully operating; to *Page 743 
the contrary, it was vigorously resisting every effort to deprive it of its ownership, use, and control of the property. In short, its chief concern was in the retention of its property, not in the amount it was to receive for its appropriation. It therefore had the right, and has the right now, to insist that if its property be condemned under the provisions of the statute, the proceeding must be strictly in accordance with such provisions. That right is so intimately and vitally connected with the right of property itself, that without the one the other is seriously jeopardized. If the venture upon which the commission is about to proceed is so highly profitable — so "rosy" in prospect — it would be at least equally so to its present owner. At present market prices of property and at present rates of interest for money, where can it obtain a return comparable to its present investment? Undoubtedly, under our constitution and statute, the commission has the right to condemn and appropriate the property, but in doing so it should be held to comply strictly with the statute.
Second, with reference to the other appellants: True it is that the commission has vast and sweeping, almost unlimited, power, in the matter of conducting the utility and of issuing bonds in the acquisition thereof. However, there is something more concrete than a mere moral restraint upon its activities. The members of that body could not long withstand public opinion in the community contrary to their activities. Their tenure of office is but three years, and already, as the record shows, there have been changes in the personnel of the commission. The right of recall is also a deterrent against a course of conduct which does not receive the endorsement of the general public. The power of the commission is not so unfettered as it might at first blush seem to be.
Believing as I do that the amended resolution furnishes no basis for further steps in the condemnation proceeding and confers no authority upon the commission for the issuance of bonds in excess of $2,000,000, I am constrained to dissent from the majority opinion.
MILLARD and SIMPSON, JJ., concur with STEINERT, J. *Page 744