City of Salem v. Oregon-Washington Water Service Co.

KELLY, J.

(dissenting). Inter alia, section 2-1411, Oregon Code 1930, provides that:

“When declaratory relief is sought, all persons shall be made parties who have or claim any interest which would be affected by the declaration, * * * ”

Under the charter amendment in suit, the issuance and sale of negotiable coupon bonds of the city of Salem are authorized. The amendment also specifically provides:

“ (F) That said common council shall, each year at the time of making the annual tax levy for city purposes, make a special levy in a sum sufficient to pay the interest due on the outstanding bonds of this issue, and to retire the principal thereof as it matures; # * *

The declaration sought by this proceeding is that this charter amendment was regularly and legally

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adopted by the voters of the city of Salem, and that it is now a valid and subsisting amendment to the charter of the city of Salem in full force and effect.

In my opinion, every taxpayer of Salem, resident and nonresident, has an interest which will be affected by that declaration. The provision in the amendment “that such tax levy shall not be made when and if the income on hand derived from such water plant applicable thereto shall be sufficient to pay such interest due on such outstanding bonds of this issue and to retire the principal thereof as it matures”, in my opinion, does not deprive the taxpayers of their interest nor render those interests unaffected by the amendment. It only imposes a condition which may at some time avoid the necessity of a levy for that particular year. Moreover, this condition emphasizes rather than abates the obvious fact that every taxpayer’s interest is to be affected by the character of the water plant to be acquired, its capacity and its efficiency. In a large measure, those factors will be determinative of its income producing power which in turn determine^ whether the special tax levies so authorized shall be few or many.

As I read the cases cited and reviewed, in every one of them, where this question has been directly presented, as in the case at bar, it has been held that taxpayers thus treated are affected by the proposed declaration and are necessary parties.

It is well stated in the opinion of the court that any declaration of rights announced in this proceeding will not become res adjudicata as to the taxpayers. In my opinion, therefore, in the present state of the record nothing will be settled and no relief from uncertainty and insecurity afforded by the declaration herein.

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Section 2-1406, Oregon Code 1930, provides:

“The court may refuse to render or enter a declaratory judgment or decree where such judgment or decree, if rendered or entered, would not terminate the uncertainty or controversy giving rise to the proceeding.”

While the word “may”, in the foregoing section is not necessarily to be construed as meaning must, in my opinion, wisdom points that way.

With the greatest deference to the opinion of the court and my learned and able brother, who wrote it, I am unable to say that where the validity of a measure is involved proposing a tax, the extent and frequency of which are to be determined by the earning power of a municipal water plant, the taxpayers’ interests are unaffected by the acquisition of a particular plant when there is an alternative course available with respect to securing such water service.

In the opinion of the court, it is indicated that only where there is a controversy, is declaratory relief proper and that the record does not disclose that any other than the water company and the city are parties to any controversy; and yet the record discloses that at the election purporting to have adopted the amendment in suit there were 1661 negative votes. It is a reasonable deduction that some of those negative votes were cast by taxpayers of Salem. There is certainly nothing in the record tending to show that these negative voters now are any less controversial than when they cast their ballots.

I think that the purpose of the declaratory judgment statute is to afford a means to terminate uncertainty or controversy and prevent extended litigation. Only when such purpose may be served should a de

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claratory judgment or decree be rendered. Taking the course approved by the opinion herein, as I view it, merely adds one more to the series of suits and appeals available to the parties hereto without affording anything further than an expression of what this court now thinks ought to be done. It may be good counsel, but certainly it does not rise to the dignity of an adjudication.

It is stated in the opinion that, although the declaration therein made is not res adjudicata as to taxpayers, it will, nevertheless become a precedent, and, as such, will exert the effect that the doctrine of stare decisis yields to it in any ensuing litigation by whomsoever begun.

As to the taxpayers, in my opinion, this is a substitution of the supposed potency of a well-established doctrine for compliance with a statutory jurisdictional prerequisite. If the doctrine of stare decisis yields to a declaration, the effect of creating in it a precedent when such declaration is unsupported by the required statutory procedure with respect to necessary parties, then no necessity arises for any particular person to be made a party. All that is necessary is for the court to speak. Let us remember that this remedy is the creature of the statute and of the statute only. I am unable to concur in the thought that we may disregard the mandate of the statute as to making all persons parties who have interests affected by the declaration and, in lieu thereof, call to our aid the well-known doctrine of stare decisis and thereby breathe the breath of life and the power of a precedent into a declaratory judgment or decree.

In saying this, I am aware that the difference in my view and that of the majority is that I think that

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taxpayers have interests .which are affected by a declaration to the effect that a law is valid which imposes additional taxes for them to pay, while the majority opinion, as I understand it, holds that such taxpayers’ interests are not thereby affected. If I am in error in this regard, the only other alternative is that the majority opinion holds that the taxpayers have interests which are thus affected, but, for some reason not stated, persons with interests so affected need not be made parties even though the statute expressly requires it. I cannot entertain either of these alternatives.

In my opinion, the learned circuit judge was right when he sustained the demurrer herein and dismissed the suit.

Belt, J., concurs in the dissent.