Trapp v. Dykes , 140 Okla. 63 ( 1929 )

I am unable to agree with the opinion in this case, and desire to express my reasons for my dissent thereto.

I agree with the law as announced in the first and second paragraphs of the syllabus and disagree with the law as announced in the third paragraph of the syllabus for two reasons: First, in my opinion, it is not a correct statement of the law; and second, the law announced has no application to the facts as shown by the record before this court.

The authority of the county commissioners is limited, and under the provisions of section 26, art. 10, of the Constitution no county shall be allowed to become indebted in any manner, for any purpose, to an amount exceeding, in any year, the income and revenue provided for such year, without the assent of three-fifths of the voters thereof voting at an election, to be held for that purpose. An election was called by the board of county commissioners pursuant to a resolution, and the purpose of the call was disclosed closed in the caption and body thereof. In the caption the proposition was stated to be:

"* * * For the Purpose of Constructing Bridges and Permanent County Roads,"

— and in the body of the resolution the purpose was shown in the proposition to be voted on, as follows:

"* * * the purpose of, in conjunction with an equal amount of federal or state aid, constructing permanent roads and bridges. * * *"

The proclamation for the election and the ballot submitted to the voters stated the purpose in the language of the resolution.

A constitutional majority of the voters voted favorably to the proposition submitted, and the bonds were issued.

The county commissioners were unable to procure from the State Highway Commission an equal amount of federal or state aid, and believing, as stated by the plaintiffs in their petition,

"* * * that the board of county commissioners of Garvin county, Okla., were authorized to issue said bonds, only in strict conformity with the provisions of said election proclamation and said resolution hereto attached"

— passed a resolution in words and figures as follows:

"Second Resolution for Destruction July 7th, 1926.

"Resolution of the board of county commissioners of Garvin county, Okla., relating to the cancellation and destruction of the $720,00 road bond issue of Garvin county, Okla.

"Whereas, heretofore at an election duly called and had in Garvin county, Okla., the county commissioners of Garvin county, Okla., were authorized by vote at said election to issue $720,000 worth of negotiable bonds of the county for the construction of certain roads and said bonds have been heretofore issued, signed and approved and are ready to be sold; and,

"Whereas, said bonds were voted and authorized to be sold only upon condition that the amount to be expended on the different roads contemplated by the bonds issued, be matched and met by an equal amount of state or federal aid to be used in the construction of said roads, and the county commissioners are not authorized to sell said bonds except upon such contingencies; and,

"Whereas, a part of said proceedings in the issuance of said bonds by resolution of said board of county commissioners it is provided that the said funds should be apportioned to certain roads beginning with certain designated roads and beginning with the north and south road through Pauls Valley, and the funds to be derived from said bond issue to be apportioned according to the said resolution of the county commissioners; and,

"Whereas, the board of county commissioners of Garvin county, Okla., have heretofore on numerous and divers occasions attempted to secure proposals from the State Highway Commission for the purpose of meeting the requirements of the said bond issue, and the resolution of this board, to the end that said bonds might be disposed of and said moneys expended in accordance with said resolution of this board and the said State Highway Commission had announced as its intention not to meet and match said funds, except in certain instances; and,

"Whereas, it has become impossible to secure a compliance by the State Highway Commission with the conditions under which said bonds were issued, and we as county commissioners are authorized to dispose of said bonds, unless it be done in violation of said resolution and the agreement and conditions under which said bonds were issued; and,

"'Whereas, the board of county commissioners have made repeated trips to interview the State Highway Commissioners, and have expended much time, labor and effort in their endeavor to secure some favorable action by the State Highway Commission by which the conditions under which said bonds were voted could be met, but have been wholly unable to do so, and it now appears wholly impossible for the conditions under which said bonds were voted to be met and the county commissioners are unauthorized to sell said bonds under the circumstances, and it appears that such conditions cannot and never will be met; and,

"Whereas, we have been petitioned by many of the voters of Garvin county, Okla., and we believe a majority of the voters of said county under the conditions as they now exist are in favor of the cancellation and destruction of said bonds:

"Now, therefore, be it resolved by the board of county commissioners of Garvin county, Okla., in regular session, that the said road bonds of the par value of $720,000 together with the coupons attached thereto be, and the same are hereby canceled, set aside and held for naught, and all acts of the board of county commissioners in issuing said bonds, be, and the same are hereby set aside and held for naught, and said bonds be and they are hereby declared to be of no force and effect, and are wholly canceled and destroyed and that the county treasurer of Garvin county, Okla., be required to forthwith secure said bonds and present said bonds to the board of county commissioners in the city of Paula Valley, and is hereby directed and instructed to cancel said bonds and cause the same to be marked canceled by order of the board of county commissioners to the end that said obligation may be wholly canceled and discharged as obligations of Garvin county, Okla.; and,

"Be it further resolved that the record of said cancellation be made, showing the time, place and the manner of the cancellation of same, and that the board of county commissioners cause notice in writing to be served upon the county treasurer when and where to produce said bonds, to the end that the same may be wholly destroyed in the presence of said board and a proper record thereof made.

"Dated this 7th day of July, 1926.

"C.A. Rotenberry "Ernest Kimberlin "S.M. Muse "R. Roquemore, County Clerk.

"Filed July 7, 1926."

— and after notice given proceeded to destroy the bonds that had been issued.

The first question presented by the record is, Did the county commissioners have authority to destroy these bonds? The second is, Did the county commissioners conform to the statutory requirements for the destruction of bonds?

The only authority claimed for the destruction of the bonds is that contained in sections 8603 and 8604, C. O. S. 1921. I agree with the law announced by the Commissioner's opinion that these sections are constitutional and that pursuant thereto the board of county commissioners has authority to destroy bonds. But when that authority is asserted and bonds are destroyed pursuant thereto the provisions of the statute authorizing the destruction must be followed.

Section 8603, Id., provides that bonds may be destroyed when "* * * it is determined that the purpose for which said bonds were issued has ceased to exist. * * *" It appears to me that in the case of county bonds, that determination is required to be by the board of county commissioners. Under the provisions of section 8604, Id., the determination must be "* * * by resolution, * * *" and the resolution must "* * * declare that the purpose for which said bonds were issued has ceased to exist. * * *"

The resolution passed by the board of county commissioners, which has been hereinabove quoted, nowhere declares that the purpose for which said bonds were issued has ceased to exist.

That instrument recites the issuance of the bonds; that the bonds were

"* * * to be sold only upon condition that the amount to be expended on the different roads contemplated by the bonds issued, be matched and met by an equal amount of state or federal aid to be used in the construction of said roads, and the county commissioners are not authorized to sell said bonds except upon such contingencies. * * *" — that the said State Highway Commission had announced its intention not to meet and match said funds; that it was impossible to secure a compliance of the State Highway Commission with the conditions under which said bonds were issued; that the county commissioners were unauthorized to dispose of the bonds unless it was done in violation of the conditions under which the bonds were issued, and that it now

"* * * appears wholly impossible for the conditions under which said bonds were voted to be met and the county commissioners are unauthorized to sell said bonds under the circumstances, and it appears that such conditions cannot and never will be met. * * *" — wherefore, the board of county commissioners determined by the resolution that the bonds should be canceled, set aside, and held for naught.

It nowhere appears, either in that resolution or elsewhere, that the board of county commissioners determined that the purpose for which these bonds were issued had ceased to exist. The most that can be said of that resolution is that it determined that the bonds could not be sold.

The statute does not authorize the destruction of bonds for the reason that they cannot be sold. The statute authorizes the destruction of bonds when the purpose for which they were issued has ceased to exist. So I say that, while the board of county commissioners had authority to determine by resolution that the purpose for which the bonds were issued had ceased to exist, and, thereafter, destroy the bonds, the board of county commissioners did not make that determination required by the statute, and that in the absence thereof there was no authority to destroy these bonds. The board of county commissioners is not a judicial tribunal with powers to interpret statutes of the state, whose decisions have a conclusive effect. Board of County Commissioners v. Eastern Oklahoma Publishing Co.,120 Okla. 122, 250 P. 496; Board of County Commissioners of Kay County v. Smith, 47 Okla. 184, 148 P. 111.

I must conclude that there was no compliance with the statutory authority, and therefore no authority to destroy the bonds.

It must be kept clearly in mind that this case came to this court on a transcript from an order sustaining a demurrer to the answer of the board of county commissioners and a judgment rendered thereon. The record shows that the defendants elected to stand on their answers after the demurrers were sustained, and that the judgment was rendered without evidence.

What is the effect of a demurrer? Under the rule announced and followed by this court over a long period of years, a demurrer to an answer admits the truth of all facts properly pleaded therein with all the inferances which can reasonably be drawn or indulged in behalf of the answer. A demurrer to an answer may be sustained only where the pleading is so defective that the court is authorized, considering all of the facts therein properly pleaded as admitted, to conclude that no defense as stated. Hall v. Smith, 126 Okla. 206, 259 P. 537; Wilson v. Hornecker, 119 Okla. 120, 249 P. 317.

The answer of the board of county commissioners to which the demurrer was sustained in this case denies

"* * * generally and specifically each and every, all and singular the allegations and statements of fact contained therein, except such as might be hereinafter specifically admitted."

That answer admitted the resolution calling the election and the resolution for the cancellation of the bonds. The answer further stated:

"* * * that their reason in the cancellation and destruction of said bonds was that the purpose for which said bonds were voted had ceased to exist and that the real reason for the cancellation and destruction of said bonds was that these defendants were wholly unable to secure a satisfactory agreement with the State Highway Department of the State of Oklahoma with regard to the matter of funds so that the roads and bridges could be constructed as provided in said election proclamation. These defendants further state that at the time of the passage of the resolution authorizing the cancellation of said bonds to the effect that it was impossible for said roads to be constructed as provided in said election proclamation was the inability of said defendants to secure an agreement or arrangement with the State Highway Commission for the matching of certain funds derived from said bond issue with state and federal aid"

— and that since the 1st day of January, 1927,

"* * * a satisfactory agreement and arrangement has been perfected with said commission whereby the funds to be derived from the sale of said bonds can be matched with state and federal aid as provided in the said election proclamation and that the roads set out and described in said election proclamation can be constructed as provided therein and that substantial compliance with all the terms of said election proclamation can be had."

There was the further allegation in the answer:

"For further answer to said petition these defendants allege and state that at the time of the passage of their resolution authorizing the cancellation and destruction of said bond issue that they were in good faith and believed at that time that it would be impossible to secure a satisfactory arrangement or agreement with the State Highway Department whereby the funds derived from the sale of said bond issue could be matched with state and federal aid as provided in said election proclamation and that was the sole and only reason for their action authorizing said cancellation and destruction"

— and

"* * * they desire to put into execution the will of the people as manifested in said bond election and that the necessity for the building and construction of the roads and bridges specified in said election proclamation is apparent and acute at this time and if the court is of the opinion that they should be allowed to proceed with the sale of said bonds and the construction of said roads and bridges they will do so at the earliest possible date and complete said construction as rapidly as possible in accordance with the specifications of said election proclamation and according to the will of the people as shown by the result of said bond election."

I am unable to agree with an opinion that holds that the facts stated in this answer, which were admitted by the demurrer to be true, did not constitute a complete defense to this action.

The resolution providing for the cancellation of the bonds may be ambiguous, but when construed in connection with the admitted facts as shown by the record, I can come to no conclusion other than that the board of county commissioners canceled these bonds because they could not sell them without first obtaining an equal amount of money from state or federal aid, and that it was not their intention to and they did not cancel the bonds because the purpose for which they were issued had ceased to exist. The purpose for which these bonds were issued was to procure funds with which to build county roads and bridges. The record shows that the need for the construction of county roads and bridges was more urgent at the time of the passage of the resolution for cancellation of the bonds than it had ever been.

The opinion in this case can be justified only on the theory that the people of Garvin county authorized the issuance of these bonds for the purpose of securing state and federal aid. I do not believe that that was their purpose, and the admitted facts shown in the record deny that to be the purpose.

In my opinion the trial court committed reversible error in sustaining the demurrer to the answer of the board of county commissioners and rendering judgment for the plaintiffs.

I am authorized to state that Mr. Justice SWINDALL concurs in this dissenting opinion.

Note. — See "Counties," 15 C. J. § 52, p. 420, n. 6. "Statutes," 36 Cyc. p. 969, n. 91.