McNichols v. City of Denver

74 P.2d 99, 101 Colo. 316, 1937 Colo. LEXIS 304
CourtSupreme Court of Colorado
DecidedOctober 25, 1937
DocketNo. 14,229.
StatusPublished
Cited by36 cases

This text of 74 P.2d 99 (McNichols v. City of Denver) is published on Counsel Stack Legal Research, covering Supreme Court of Colorado primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
McNichols v. City of Denver, 74 P.2d 99, 101 Colo. 316, 1937 Colo. LEXIS 304 (Colo. 1937).

Opinion

Mr. Justice Knous

delivered the opinion of the court.

*320 On April 9,1935, the city council of the City and County of Denver adopted an ordinance which provided for submitting to the taxpayers of Denver the question of incurring a bonded indebtedness of $750,000 to buy land for donation to the United States to be used by the federal government as a site for an air corps technical school and bombing field, to be located in or near the City and County of Denver, the ultimate issuance of the bonds being conditioned upon the investment by the federal government of the funds necessary in establishing and maintaining such training school and bombing field.

At an election held on May 21, 1935, the taxpayers of Denver by a vote of 39,395 for the bonds to 15,083 against the bonds, approved their issuance. After extended- efforts and with the delays incidental to such matters, the project, with some modifications, was authorized by an Act of the Congress appropriating the sum of $2,275,000 therefor, which Act was approved by the President of the United States on August 26,1937. By the Act the Secretary of War was authorized to accept, on behalf of the United States, as a site for a “branch of the Air Corps Technical School at Chanute Field, Illinois,” title to 960 acres of land within and without the city limits of the city of Denver, and also an additional tract of land within the state of Colorado, “suitable for use as an aerial gunnery and bombing range by the Army Air Corps,” being the tracts to be donated by Denver.

Shortly thereafter the Denver city council, in pursuance of the authority given by the taxpayers at the election mentioned, adopted ordinance No. 58 of the series of 1937, which provided for the issuance and sale of all or a portion of the bonds as might be necessary in carrying out the purpose so authorized. Thereupon the plaintiff in error, as auditor of the City and County of Denver, an elected official charged by law with the duty of protecting all funds of the city and given general auditing powers over all of its finances, commenced this action in the district court of the City and County of Denver under the *321 provisions of the Uniform Declaratory Judgments Act, chapter 93, sections 78 to 92, inclusive, ’35, C. S. A. Plaintiff asked the court to declare, in substance, that neither the city nor any of its officers had power to issue any of said bonds or to levy taxes for the payment of the principal and interest thereon; and with reference to the plaintiff in error in his official capacity, to determine that he was under no duty to countersign or register the bonds or recognize them in any way whatsoever. Issue was joined by the defendants in error who requested that the court enter a judgment determining and declaring that the proper officers of the City and County of Denver have the power to issue the bonds in question and that the levying of direct ad valorem taxes on the property in the City and County of Denver to produce sufficient revenue to pay installments of principal and interest on the bonds as the same fall due, was lawful. The judgment of the trial court upheld the validity of the bonds, granted the relief sought by the defendants in error, and this proceeding in error is prosecuted to review the judgment of the district court.

The evident and admitted purpose of the action is to secure an advance judicial declaration as to the legality of these bonds and the right to levy taxes for their payment, in order that the officials of the City and County of Denver, and those who invest in such bonds, shall be fully advised in these particulars before the issuance and sale of the securities. One of the essential purposes of our Uniform Declaratory Judgments Act, supra, is to enable proper parties, in a proper case, to obtain such a determination of rights and duties in advance of the time when litigation might possibly arise with respect to a specific transaction. Section 78 of the Act reads in part : “Courts of record within their respective jurisdictions shall have power to declare rights, status, and other legal relations whether or not further relief is or could be claimed. * * And section 79 provides: “Any person * * * whose rights, status or other legal relations are *322 affected by a * * municipal ordinance * * * may have determined any question of construction or validity arising under the * * * ordinance * * * and obtain a declaration of rights, status or other legal relations thereunder. ’ ’

The plaintiff in error, as auditor of the City and County of Denver, being a person whose rights and legal relations are affected by the ordinance which authorizes the issuance of these bonds, properly instituted these proceedings. By the complaint and the assignment of errors here he seemingly has raised every question which possibly could be conceived with respect to the transaction, all of which have been fully argued orally, and in extensive briefs, by especially able and painstaking counsel.

Some question developed under the briefs and in the oral argument—although not directly involved under the assignment of errors—with reference to the binding force and effect of a judgment in a suit of this character, particularly as against taxpayers not joined in the proceeding. We are definitely of the opinion that where such a suit, designed to test the validity of a bond issue, is brought by a public official charged with ministerial and executive duties in connection therewith, in which proceedings the political subdivision proposing the issuance of the bonds as a body politic and corporate and its elected and appointed officials who have duties to perform in connection with the issuance of such bonds, are joined as here, that a judgment rendered therein is res judicata as to the validity of the bonds against all persons, including taxpayers, even though they are not parties to the suit. To hold otherwise would, to a great extent, render nugatory to all intents and purposes the Declaratory Judgments Act. The reason for such a rule is well stated in 1 Freeman on Judgments (5th ed.), page 1090, where it is said: “The position of such a governmental body towards its citizens and taxpayers is, upon principle, analogous to that of a trustee towards his cestui que trust, when they are numerous and the management and control *323 of their interests are by the terms of the trust committed to his care. A judgment against it or its legal representatives in a matter of general interest to all its citizens is binding upon the latter, though they are not parties to the suit. ’ ’

Van Fleet in his work on Former Adjudication, volume 2, page 1153, says: “A judgment against municipal officers compelling them to levy or to collect a tax, binds all the taxpayers.” There also is an adherence to this theory in the case of Stockman v. Leddy, 55 Colo. 24, 129 Pac. 220.

The most important question presented relates to whether the expenditure here contemplated by the city of Denver is for a local and municipal purpose of the municipal corporation. If the proposed donation by the city to the United States of sites for the federal air corps technical school and bombing field in or near Denver is not a local or municipal matter, it is conceded by both parties that Denver is not authorized to exercise its borrowing power for the intended purpose.

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Bluebook (online)
74 P.2d 99, 101 Colo. 316, 1937 Colo. LEXIS 304, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mcnichols-v-city-of-denver-colo-1937.