Coke v. Shanks, Auditor

273 S.W. 552, 209 Ky. 723, 1925 Ky. LEXIS 588

• Court: Court of Appeals of Kentucky (pre-1976)
• Decided: June 19, 1925
• Status: Published

Opinion

Opinton op the Court by

Judge Dietzman

Reversing.

Alleging that the state highway commission had for and during the fiscal year beginning June 30, 1923, and ending June 30,1924, made contracts and incurred liabilities in at least the .sum of $8,580,615.85, whereas its income and revenues for that period were only $5,016,-118.14, and that it had carried over the deficit of $3,564,-497.71 as a liability against its income and revenue for the fiscal year June 30, 1924-June 30, 1925, and that it had and was certifying to the auditor of public accounts the various claims aggregating this deficit in order that the auditor might issue his warrants therefor on the state treasurer; and further alleging that the auditor had issued and would issue suck warrants wken-so requésted and tkat tke state treasurer kad stamped as “interest-bearing” suck warrants as kad 'been issued, a large number of wkick were outstanding as obligations of tke Commonwealth, and would so stamp tke otkers wken issued,-' and would in due time pay suck warrants, appellants as citizens and taxpayers brougkt tkis suit against tke state kigkway commission and its members-, tke auditor and tke treasurer for a declaration of tke rigkts, duties and liabilities of tke parties; also for a judgment declaring tkat so far as tke obligations of tke state kigkway commission for tke fiscal year ending June 30, 1924, exceeded its revenue by tke alleged sum of $3,564,497.71, tke- same be declared void as unconstitutionally incurred; and, lastly, for an injunction enjoining tke state kigkway commission, tke auditor and treasurer from carrying suck obligations into interest bearing warrants and- eventually paying tke same.

Tkis is a suit under tke Declaratory Judgment Act, chapter 83 of tke Acts of 1922. By -section 6 of tkat act it is provided:

“Tke court may refuse to exercise tke -power to declare rigkts, duties or otker legal relations in any case wkere a decision under it would not terminate tke uncertainty or controversy wkick gave rise to tke action, or in any case wkere tke declaration or construction is not necessary or proper at tké time under all tke circumstances. Tke appellate court in its consideration of tke case, skall not be confined to errors alleged or apparent in tke record. "When, in its opinion, furtker pleadings or proof is necessary to a final and correct decision of tke matters involved, or tkat skould be involved, it skall remand tke case for tkat purpose; or if in its -opinion tke action is prematurely brougkt, or wkere a ruling in. tke appellate -court is not considered necessary or proper at tke time under all tke circumstances, it may direct a dismissal witkout prejudice in tke lower court.”

It seems clear to us tkat tkis case comes squarely within _ tke provisions of tkis section of tke act, wkick authorizes tkis court to direct a dismissal of tke action witkout prejudice wkere a ruling is “not proper at tke time under all the ' circumstances. ’ ’ Under the pleadings and proof in this case, we must hold the alleged deficit either illegal or a binding obligation of the state. -But were we to declare it illegal it would be a brutum fulmen. Section 9 of the Declaratory Judgment Act provides:

“When declaratory relief is sought, all persons shall be made parties who have or claim any interest which would be affected by the declaration, and no declaration shall prejudice the rights of persons not parties to the proceeding. In any proceeding which involves the validity of a statute-, the attorney general of the state shall, before judgment is entered, be served with a copy of the petition, and shall foe entitled to be heard, and if the ordinance or franchise is alleged to be unconstitutional, the attorney general of the state shall also be served with a copy of the petition and be entitled to be heard.”

The section mandatorily requires that all persons who have or -claim any interest which would be affected by the declaration of rights shall be made parties to the litigation. Ezzell v. Exall, 207 Ky. 615, 269 S. W. 752. In this case no one who holds a claim against the state, which it is sought to have declared invalid, has been made a party, and this question was properly raised by appellees in the lower court. Indeed, it is not even pointed out in the petition or proof what particular claims or expenditures of the $8,580,615.85 are comprised within the alleged illegal deficit of $3,564,497.71. It is obvious that any adverse declaration would not be binding on any claimant. The latter would have the right to relitigate the questions here raised as to the legality of the alleged deficit, since the statute itself provides that no declaration shall prejudice the rights of persons not parties to the proceeding. 'Such claimant would further have the right to litigate the question whether or not his particular claim falls within the alleged illegal deficit of $3,564,-497.71, or within the admittedly legal part of the $8,580,-615.85 of expenditures.

Should the court, then, when it is invested with discretion to decline to make a declaration of rights when it is not proper at the time under all the circumstances to make such ruling, undertake to make a declaration which if made one way decides nothing and ends no cion troversy? The impropriety of such a proceeding seems obvious to us.

The lower court dismissed appellant’s petition, but it should have done so without prejudice as the statute directs; hence its judgment is reversed, with instructions so to do.

Whole court sitting.