Mississippi Valley Trust Co. v. Hofius

The opinion of the court was delivered by

Dunbar, J.

This action was brought to foreclose a lien on certain tide lands in the city of Seattle, arising under the provisions of ch. 99 of the Laws of 1893, p. 241 (Bal. Code, §§ 4080-4089), “An act prescribing the ways-in which waterways for the uses of navigation may be excavated by private contract, providing for liens upon tide and shore lands belonging to the state, granting rights-of way across lands belonging to.the state.” The complaint sets forth two causes of action, stating fully the-facts under which the liens arise; the difference in the causes of action being simply in the description of the-tracts of tide lands against which the lien is sought to be-enforced. It appears by the complaint that on October 27, 1894, the state of Washington, by its duly authorized commissioner of public lands, entered into a written contract with Eugene Semple, said contract consisting of two parts,. both executed and delivered at the same time and as one transaction, one part being designated as “Contract Eo. 1,” and the other part as “Supplemental Contract Eo. 1,” and both constituting one contract, known as “Contract Eo. 1.” Copies of the instruments composing this contract are attached to the complaint. After this contract was executed, Semple, for a valuable consideration, assigned and transferred the contract, and all his rights thereunder, to the appellant Seattle & Lake Washington Waterway Company, so that said company became substituted for Semple in the contract, for all purposes. Later, on February 28, 1895, another contract, known as “Contract Eo. 3,” yas made between the state, through its commissioner of public lands, and the waterway company. Contract Eo. 1 and contract Eo. 3 provide for the excavation of substantially the same waterway, but differ in the description of the lands which the contractor agrees to fill in and raise above high tide. Both contracts were entered into after due proceedings, by advertisement and otherwise, in full compliance with the provisions of the laws of the state on that subject. The waterway company began the work of excavating the waterway and filling in the tide lands according to the contract, and prior to the 24th of August, 1896, had filled and raised above high tide, in full compliance with the contract, the tide lands concerned in this controversy. On the date last named the commissioner of public lands issued to the waterway company the two certificates described in the complaint. They were filed in the office of the county auditor of King county on August 25, 1896, and duly recorded under the provisions of § 4 of the act above referred to, and by reason of said filing the waterway company acquired a lien for the amounts due and to become due under the provisions of said act. The certificates set forth the description of the lands which have been improved and the cost thereof. It further appears by the complaint that, on February 8, 1897, the state of Washington sold by contract to one E. W. Dearborn the two tracts of tide lands above described, each of the tracts being bought and contracted for by Dearborn separately from any other tide lands, and tide land purchase contracts, in the ordinary form, were duly executed on jESTo-vember 8, 1897, said Dearborn paying on each contract the first installment of one-tenth of the purchase price. Later Dearborn sold and assigned his interest to the appellant and defendant Hofius, who is now the holder of the contracts of purchase. The complaint prays for a foreclosure of the liens against the respective parcels of tide lands for non-payment of principal and interest which fell due February 8, 1898. The court rendered judgment of foreclosure. The defendant appeared and demurred, and, after the demurrer was overruled, answered. Plaintiffs •demurred to the affirmative defenses in the answer, and this demurrer was sustained. Thereafter plaintiffs moved for judgment on the pleadings against the defendant; The court thereupon rendered judgment in' favor of the plaintiffs and against the defendant. Both parties appealed.

The questions to be considered here are purely of law. The defendant’s contention is that the judgment and decision of the lower court was erroneous for the following reasons: (1) That the partial certificates mentioned in plaintiff’s complaint were not, and could not be, lawfully issued, for the reason that the contract made with Semple did not contain any provision or provisions regulating what should be such partial completion of the contract as •would render such work capable of separate use for the purpose of navigation, or contain any standard or data from which such determination could be made, as provided by § 4 of said act of 1893 (Bal. Code, § 4083). (2) Said act of March 9, 1893, is null and void and is in conflict with § 9, art. 7, of the constitution of Washington, for the reason that under said constitutional provision the work completed could only he done and performed by the corporate authorities of cities, town and villages. (3) The decree of the court rendered was further erroneous, in that compound interest was allowed thereby; that is, that the interest upon the installment payable February 8, 1898, also bears interest from February 8, 1898.

We think, under the statute, the partial certificates were lawfully issued; that the contracts were drawn in substantial accord with the act; and that the act does not require the contracts to set forth what shall constitute a separate use for the purpose of navigation. This is a fact which we think, under the terms of the whole act, was intended to be left to the determination of the commissioner of public lands. The preceding §§ 1, 2 and 3, fully set forth what is essential to the contract, and § 4 simply sets forth what must be done to evidence the carrying out of the contract. It would be impracticable for the contract to contain all the provisions of the act. Again, this is a construction which the commissioner of public lands placed upon the act, and, under universal authority, such construction will receive the very highest consideration from the courts. Then, too, the filling and raising of the lots described in the complaint was completed and the certificates issued, prior to the purchase by the defendant’s grantor, and the contract of purchase under which the defendant holds expressly provides that the purchase shall be subject to the lien. He assumed under that contract the obligation to pay this lien, and he cannot now be heard to deny its validity. Brown v. Elwell, 17 Wash. 442 (49 Pac. 1068).

We do not think there is anything in the second proposition, that the act of 1893 is unconstitutional; for at the time these waterway contracts were made the state was the absolute owner of all the tide lands affected thereby. No appraisement or plat of the tide lands had been filed at that time, and the state’s power to dispose of the lands was absolute and unlimited. We think the contracts were within the constitutional power of the state, even if the defendant were not estopped to deny the ownership of the state, his right in the premises being based on his purchase from the state.

Nor do we think, under modern authorities, that the third objection can be sustained, viz., that the court erred in allowing interest at seven per cent, per annum upon the installment of interest which fell due February 8, 1898. Under the statute, the interest would become a distinct obligation, the time for payment being fixed by the statute. This being true, the money which was due at that date was unpaid, the state had the benefit of it, and the law will allow legal interest as a measure of damages.

The plaintiffs have also appealed from the judgment of the court, and allege two errors: (1) That the court, instead of allowing the first installment of principal and interest on the whole principal up to the time that the first installment inured, simply allowed the installment of one-tenth of the principal and interest on that installment only; and (2) that the court decreed a right of redemption, and it is argued that redemption is a strictly statutory right and that the statute in this case does not confer it in the case of sales to enforce liens. But we do not think that we can sustain this objection. The language of the act is, “that such lien may be foreclosed in the manner provided by law for the foreclosure of other liens on real estate.” While it may not be exactly a technical construction, we are satisfied that the intention of the legislature was, by the use of the words above quoted, that the foreclosure mentioned included the redemption which then existed in cases of foreclosure of real estate sold under execution of judgment or foreclosure of mortgage. The first alleged error involves simply the matter of the construction of the statute. One provision of § 4 (Bal. Oode, § 4083) is that,

“upon the filing in the office of the county auditor of the county or counties in which such lands are situated, of such certificate of the commissioner of public lands, said contracting parties shall acquire a lien, and the same shall thereupon attach, for the amount specified in such certificate, with fifteen per cent, additional thereon, and interest on such amount and additional percentage from the date of such certificate at the rate of eight per cent, per annum until payment.”

Further along in the same section is the following provision :

“ The amount due on such lien, or any proportionate part thereof separately payable as above provided, shall be payable by any owner of said lands, or any part thereof separately owned, as the case may be, other than the state, in ten equal annual installments, the first installment at the end of the first year after the sale of such lands, or of such separate portion thereof, by the state; and the remaining installments, one at the end of each year thereafter, with accompanying interest on each of such installments, as hereinbefore provided,” etc.

It will be seen that either construction might plausibly be placed upon this provision of the statute; that the words, “with accompanying interest on each of such installments,” might mean interest on the installment which was paid or interest on all of the installments at the time of the payment of each installment. It is insisted by the plaintiffs that the court should take into consideration extraneous facts in aid of the construction of this statute, and, with some plausibility, it is urged that the legislature must have been aware of the customs governing the investment of large sums of money and of capitalists who furnish money for enterprises of this kind; that it is common knowledge that provisions in such cases are always made for the annual payment of the interest on deferred payments ; and that money could not be obtained for the purpose of making these public improvements unless such provisions were made. And again, that the language of the statute is the langauge of a promisor, and that, if there is any ambiguity in the language used, it must be construed against the party using it. Further, it appears that the construction that the interest was to be paid annually on all the installments was the construction which was placed upon this portion of the law by the land commissioner, and, as before said, courts will not, without the most satisfactory reason, overrule the construction placed upon laws by departmental officers on whom the law has imposed the duty of executing such statutes. In addition to this, the construction which the commissioner had placed upon this law was a matter of record at the time this purchase was made, for the certificate setting forth the description of land, in stating the manner of payment, was as follows:

“ The amounts secured by this certificate and lien or any proportionate part thereof,' separately payable as provided by the contract and act of the legislature above referred to and made a part thereof, shall be payable by any owner or owners of said above described lands, or any part thereof, separately owned, as the case may be, in ten equal installments, the first installment together with interest on the gross amount secured by this certificate from the date of this certificate to the date of payment of such installment, at the rate of eight per cent, per annum, at the end of the first year after the sale of such lands, or any separate portion thereof by the state; and the remaining installments, one at the end of each year thereafter, with accompanying interest on the gross amount remaining unpaid to date of such payment, at the rate of eight per cent, per annum.”

This certificate places beyond question the fact that the interest on the gross amount was to he paid at the time of each annual payment. The purchaser bought with reference to the provisions of this certificate. It became incorporated in his contract and he agreed to pay this amount, and, under the doctrine of Brown v. Elwell, supra, he is estopped from denying his obligation. In addition to this, in Scholpp v. Forrest, 11 Wash. 640 (40 Pac. 133), where the legality of this same certificate was brought in question, it was decided by this court that the certificate in all respects conformed to the provisions of the law under which it was prepared. This decision, we think, ought to be held stare decisis, so far as this proposition is concerned, and, for all the reasons announced, we think the judgment should have been given to the plaintiffs for the amount due on the annual payments and for the interest on the gross amount due, in conformity with the provisions of the certificate.

The judgment will be reversed, and the cause remanded with instructions to enter the judgment in conformity with this opinion.

Scott, O. J., and Gordon, Anders and Reavis, JJ., concur.